We are barely cleaning up the confetti from last weekend's New Year's celebrations and here we are, already talking about our first mini-crisis in the global economic world.
I'm speaking about Iran, where protests have led to several deaths in recent days. I must confess to being surprised by these developments. I had thought that many other world hot spots were more likely to erupt than Iran.
However, the unrest there has spread to several cities across the country and caused something of a ripple in markets, with the headline number for the week being that oil is trading at levels not seen since 2015.
As I read more about the situation and talked with some people who are familiar with what is going on there, it became clear that this is not the typical unrest we might expect to see in Iran. For many Americans, religious strife and the history of the 1970's hostage crisis – popularized in Ben Affleck's movie “Argo” – are what we assume must be going on.
But the dynamics of this situation are very different.
These protests started over - of all things - egg prices. They started in the city of Mashhad, which is one of the holiest cities in Iran and formerly believed to be one of the least vulnerable to anti-government protests.
Here's the framework needed to understand what's going on: It is economic and generational. When international sanctions were lifted following the 2015 nuclear deal reached by six world powers and Iran, and again in that country's election last May, there were high expectations for economic reform, development and growth.
Instead, most of the benefits appear to have gone to oil companies and government departments. Those who have been hurt most are young people.
Consider these statistics: More than half of Iran's population is under 35. Outside estimates hold that 40 percent of them are unemployed. Add to that the fact that this population knows how to communicate instantly on social media, and you can see how the country is fertile ground for discontent.
My View: How will this all play out? That's beyond this scope of this commentary. But this situation could be indicative of what is likely to come on the global economic scene in 2018. We are facing a world where economics, geopolitics and culture seem like a three-way intersection with no stop signs. And we will have to be prepared for some more surprises like this one: In the flurry of financial prognostications published over the last few weeks on what are likely to be the top energy stories of 2018 many barely mentioned Iran.
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