Middle East Oil Futures: Saudi Arabia and Egypt

Saudi Arabia has the worlds' second largest known oil reserves (second to Venezuela), but it is finite and expected to last another 70 years, based on current estimates as reported by Bloomberg:

The nation’s wealth is based mainly on oil, with crude sales accounting for 75 percent of total export earnings, according to the prospectus. 

The country is seeking funds to shore up public finances that have been hit by the drop in oil prices to about half their 2014 levels. At the same time, the kingdom plans to wean itself off dependence on oil for state revenue by selling part of its state oil company to help develop industries including auto manufacturing and technology.

To be sure, The Economist is not all that sanguine about the ability of the Saudis to diversify the economy, but without a dramatic increase in the price of oil, they have to do something to keep their style of patronage of the population government going. The population of Saudi Arabia is currently estimated by the UN Population Division to be 32 million and the UN projects an increase over the next 70 years (the life of the oil reserve) to 49 million. But that number in 2086 is based on a projected drop in fertility to well below replacement level. Is that possible? Yes, but is it probable? It will require significant changes in the status of women in Saudi society. In the meantime, 37 percent of the Saudi population is under the age of 20 and expecting help from the government.

Nearby, Egypt needs oil but doesn't have any of its own and just today Saudi Arabia announced that it was stopping its shipments of oil to Egypt.

Saudi Arabian Oil Co. halted shipments of oil products to Egypt indefinitely, Egyptian Oil Minister Tarek El-Molla said, forcing the Arab world’s most populous nation to buy fuels on world markets at higher cost.

This is going to hurt and of course could lead to new rounds of destabilization in Egypt, whose population is already 93 million, but is projected to increase to 193 million in 70 years, even with a projected drop in fertility to replacement level. In the meantime, 42 percent of Egypt's population is under the age of 20 and they are not getting much help from the government.

Does a Census in Lebanon Make Sense?

As I point out in my book, Lebanon's last census was in 1932, when Christians represented a majority of the population. That matters because seats in Lebanon's parliament are based on religion, with half of them going to Christians based on that 1932 census. Everyone knows that Christians are a minority, due to emigration and a lower than average birth rate (Courage and Todd have a nice summary of this), but it wasn't clear exactly how the demographics had changed until The Economist managed to snag some voters registration data that were posted online (probably by mistake) for a short time before being taken down. The results can be seen in the graph below:

It is clear that Christians are not a majority among voters, except at the very oldest ages. So, why not take a new census and straighten this out?

Change will be hard, though. “Any new formula will lead to sectarian strife, which no one wants to see in Lebanon,” says Randa Slim of the Middle East Institute, a think-tank based in Washington. “The Christians have half of parliament, the Sunnis have the prime minister’s office and Hizbullah are too busy in Syria. The men who run this country have no interest in renegotiating the status quo. It would lead to conflict.”

So, for the time being, it seems that a census still makes no sense. The status quo is better than the threat of violence in an already violent part of the world. 

Melinda Gates Promotes Contraception

A little more than four years ago, I was very pleased to learn that Melinda Gates had helped to organize a family planning conference in London and had put together a Ted Talk about the importance of contraception in the lives of all young women. However, for some reason, these efforts of the Gates Foundation were not discussed in their annual report this year, as I complained when that report came out. So, I was again very pleased this week to learn that Melinda Gates has kept her commitment to the importance of contraception. A new report came out on the topic that was jointly authored by the UN Population Fund and the Gates Foundation, and the New York Times caught up with Melinda Gates for an interview.

Since 2012, she has [Melinda Gates] helped lead an international campaign to get birth control to 120 million more women by 2020. Four years later, a report explains why achieving that goal is proving tougher than expected. This is a condensed and edited version of our conversation about family planning.

Why is this the cause of your life?

If you allow a woman — if you counsel her so it’s truly voluntary — to have a contraceptive tool and she can space those births, it unlocks the cycle of poverty for her. In the early days, I’d be out traveling for the foundation, I’d be there to talk to women about vaccines, I’m going be frank, for their children, and what they would say to me is: ‘O.K., I have questions for you. What about that contraceptive, how come I can’t get it anymore?’ To me, it’s one of the greatest injustices.

One of the statistics in the report that most struck me was that contraception prevented tens of millions of unsafe abortions by preventing unwanted pregnancies. You’re Roman Catholic. Is that part of the moral imperative for you?

Yeah. I mean this is obviously something I’ve had to wrestle with very deeply. The Catholic Church doesn’t even believe in these forms of modern contraceptives. I’m in the developing world minimum three times a year now, and I’m out in slums, in townships, in the rural area, and when you see a needless death of a woman or a child because she literally just didn’t have a very inexpensive tool that we not only believe in, we use in the United States — more than 93 percent of married Catholic women report using contraceptives — the moral imperative is that we give these women what we believe in and actually use.

There is more to the interview and I encourage you to review it and the report. Overall, though, you clearly come away with the impression that Melinda Gates is someone with the resources and the will to make it real in the campaign to improve women's lives by providing them with contraception. This is what leadership is all about, in my opinion. 

Race and Space: The Spatial Demography of U.S. Elections

Jonathan Rodden, a political scientist at Stanford, published a piece in the Washington Post this week with the provocative title "This map will change how you think about American voters — especially small-town, heartland white voters." He and his colleagues have put together a very nice data set of geospatial precinct level voting results from the 2012 presidential election, along with the demographics of the precincts--as best as can be done when the boundaries don't exactly line up. His takeaway is that small town America is not actually where Republicans live.

One of the most striking lessons from exploring these maps is that the red nonmetropolitan counties on election-night maps are internally heterogeneous, but always following the same spatial pattern: Democrats are clustered in town centers, along Main Street, and near the courthouses schools, and municipal buildings where workers are often unionized. They live along the old railroad tracks from the 19th century and in the apartment buildings and small houses in proximity to the mills and factories where workers were unionized in an earlier era.

 I looked at his maps and immediately drew the conclusion that race was a key factor. Minority groups tend to cluster near the centers of almost every city of any size in the U.S. Professor Rodden did not mention this in his article, however, and I had a good deal of difficulty accessing his maps online because they loaded very slowly. Perhaps that was because Emily Badger and Quoctrung Bui of the NYTimes Upshot section were busily tapping into the data to draw those same conclusions. The map below uses Rodden's data to track the increasingly strong relationship between population density and voting patterns. Democrats do better in the denser city centers and Republicans do better in the less dense suburbs. As a result of white flight over the years, the dense city centers have increasingly become ethnic enclaves, while the suburbs are predominantly white (although not as white as they used to be). These spatial demographic patterns are in play in the current presidential election, just as they were in 2012. The real question, though, will be voter turnout in the red and blue areas. We'll find out the answer pretty soon...

Secondary Cities and Slum Health: Long Term Connections

The Secondary Cities Project of the U.S. State Department has been organized by Dr. Debbie Fugate, Chief of the U.S. State Department's Humanitarian Information Unit (and a former PhD student of mine). This morning I listened in to a webinar about the project which will be archived online in a few days, but the overview of which is available here. By the middle of this century, the UN projects that nearly 6 out of every 10 humans will be living in a city of some kind or another, but more of them will be in smaller (i.e., secondary) cities than in the huge metropolises of the world. The latter get most of the attention, but the greatest needs are likely to be in the former.

Among the needs are those related to health. In less developed nations, the typical resident lives in a slum and health issues are bound to be more intense in those parts of town, as I and my colleagues have demonstrated in our research in Accra, Ghana (go here for an overview paper). Another of my former PhD students, Dr. Justin Stoler at the University of Miami (and a co-author on the paper just mentioned), recently sent me a link to a paper from the latest issue of The Lancet, which is the first in a series of papers about slum health (and the paper is available without a subscription, although you have to register with the journal to read it). 

In the first paper in this Series we assessed theoretical and empirical evidence and concluded that the health of people living in slums is a function not only of poverty but of intimately shared physical and social environments. In this paper we extend the theory of so-called neighbourhood effects. Slums offer high returns on investment because beneficial effects are shared across many people in densely populated neighbourhoods. Neighbourhood effects also help explain how and why the benefits of interventions vary between slum and non-slum spaces and between slums. We build on this spatial concept of slums to argue that, in all low-income and-middle-income countries, census tracts should henceforth be designated slum or non-slum both to inform local policy and as the basis for research surveys that build on censuses. We argue that slum health should be promoted as a topic of enquiry alongside poverty and health.

Our own research has led us to similar conclusions, reinforcing the views of these authors, several of whom we have referenced in our publications, that where you live is as important to your health as are your own personal characteristics. Capturing this kind of spatial variability is an important part of the Secondary Cities Project, since resilience and emergency preparedness (the foci of that project) are closely associated with poverty and health in urban areas. Nothing less than the sustainability of human society is at stake here.