The recent unrest that is spreading across the Middle East and North Africa is far from benign and is set to deepen into ‘regional civil war’, according to David Murrin, CIO of Emergent Asset Management and author of Breaking the Code of History.

He said that the Middle East will have regional civil wars before the new regime can be established, as has also happened in England, where the Protestants challenged the established Catholic monarchy, and in America, where the new industrialised north challenged the values of the conservative south.

According to Murrin, this civil war will leave the West as the main loser, as the countries move away from their affiliation with the US and seek to find their own fully independent expressions of Islamic power.

Murrin said: “The crisis will lead to an ‘energy shock’ for the West in the wake of their loss of influence in the region, and will accelerate stagflation, with oil prices continuing to rise as high as $200. China, on the other hand, will become a closer trade ally with the oil-rich Sunni regions in addition to its current strong links with Iran, which, despite the expectations of many, has become the only stable country in the region having already clearly established its mode of leadership and collective values.”

“Importantly, the problems we are seeing in the Middle East will expose how poorly placed the Western economies are. The crisis will burst the QE2 bubble and shatter the illusion of recovery that the US is trying to portray, sending equity markets into a destructive bear decline of some 30%,” he continued.

He added that Emergent has clear strategies to avoid geopolitical risk and they have avoided North Africa as an investment region, despite being a strong proponent of the Sub-Saharan region.

“The Islamic North will ultimately bifurcate with the predominantly Christian Sub-Saharan region,” said Murrin. Emergent holds that the Sub-Saharan countries, especially those within SADAQ, are stable in contrast to the unrest in the North fired by the rivalry between the Sunni and Shia branches of Islam.

Amongst Murrin’s other short term predictions, he expects the next country to experience mass protests is likely to be Saudi Arabia, whose diminishing middle class has made them more vulnerable to dissent. He believes the Shekel is set to depreciate rapidly by up to 40% in the next year.

As well as this, he warned the unrest will have serious implications for Western foreign policy since the leadership that will come to reign in the region will not be pro-Western.

Share Story: