Arabia 2006: Another Financial Bubble Bursts, A Sectarian Cold War Is Waged

Gulf Financial Markets-2006:
Reports indicate that Arab financial markets sustained heavy losses during 2006. Some estimates put total losses in market value of the Gulf GCC shares for the year at over $ 440 billion, exceeding 150% of the total oil revenues of the six states. The biggest losses were in the Saudi market, where the index declined by more than 50%, the UAE market which lost 41% , and Qatar (35%) and Kuwait 12%. Oman was the only market that gained (14.3%), while Bahrain’s index was up by less than 1%.

During the year 2006, the Saudi market, which was established in 1985, achieved its highest lever when the index broke through then 20,000-point level in February. The index reached 20,635 points, growing by 24% during the first 50 days of the year, before crashing down through the rest of the year to reach a low of 7,600.

Most Saudi traders and analysts seem to blame market mechanisms and regulatory measures rather than fundamentals for the decline. Much of the blame is put on changes in marker rules that deal with such issues as commissions/fees, periods of trading, allowing stock splits, etc. The analysts in this case are dealing with small ‘bugs’ while ignoring the huge elephant in the room. These are clearly improbable factors for the huge decline in the share prices. A 53% decline in the market index can only be blamed on fundamentals: a combination of company financial performance and perhaps macroeconomic factors.

Persian Gulf Sectarian Tensions and Saddam:
Some Arab media, especially in the Gulf region, have tended to interpret Saddam’s execution in sectarian terms. Saudi Arabia, perhaps aiming at leading a possible Sunni line of defense, against what, it is not clear yet,. was also critical. The Saudi media, as always following the official line, were severely critical. The media in Jordan, the country where Saddam was the most popular, much more popular than in Iraq, was also critical.

The Saudi official line, as well as its accommodating media, criticized the insufficiency of the trial period- three years, probably longer than the trial of Goering after World War II. They criticized the process itself- yet Saudi Arabia chops off people’s heads in public squares, mostly the heads of poor people and foreign laborer convicts, after speedy trials, often with no recourse to appeal. Kuwait, having suffered invasion and genocide by the Iraqi Ba’ath Party, welcomed the execution- they are still turning up remains of Kuwaiti captives from 1990-91 in Iraqi mass graves.

2006 was also the year that ‘moderate’ Arab regimes and their media chose to start a public sectarian cold war against the Shi’as (Shiites) in their midst. By so doing, they have fanned the flames of once-dormant sectarian suspicions and hatreds. There has always been discrimination against the Shi’as in the Persian Gulf region, with the most flagrant violations of their human rights being committed in Saudi Arabia, where they sit atop the country’s vast petroleum fields abut are denied the basic educational and economic rights that the dominant Wahabis are granted.

This new approach of subtly demonizing the native Shi’as has been clearly a deliberate policy, led by Wahabi extremists in Saudi Arabia who control much of the Arab satellite televisions stations and major newspapers published from overseas, particularly London and Beirut. It started as a reaction to the end of Sunni-Ba’ath dominance in Iraq, but was fueled by fears of growing Iranian influence in Syria, Lebanon and the Palestinian territories. Saudi-owned newspapers like Asharq Alawsat, Al-Hayat, and Alarabiya TV are full of stories of Shia’s converting people from Sunni countries to their “faith”- as if there are certain rites of conversion from Sunnism to Shi’ism, as if Shi’as are not Moslems. The latter is probably what some actually believe.
Arab rulers have always instructed their ubiquitous censors to single out pro-Israeli, or just plain Jewish, works of media and art. Now they seem to have added works about the history and the faith of Shi'ism as subversive as well.

So far the offensive in this war of the media has come from the Sunni side, mainly Saudi religious leaders, as well as some of the media. A few reactive pot-shots are taken by some Shi’a media which cannot match, in terms of resources, the massive funds available to the other side.
Cheers & Happy New Year
Mohammed