Global markets paid scant attention to the Egyptian and Tunisian revolutions. Both were seen as lacking systemic economic and financial significance.
This is now changing as youth-inspired uprisings spread to other countries in North Africa and the Middle East. While political and social issues rightly dominate the headlines, this past weekend could also prove a tipping point when it comes to the global economy; and there is little that western countries can do to offset short-term stagflationary winds.
It is understandable that Egypt and Tunisia had essentially not registered on the markets’ traditional scale of systemic influence. The two countries are not significant global economic powers; they do not owe much money to western banks and governments; and they are not large exporters of commodities.