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Sunday, May 21

Not a metaphor: "The Lights Are Going Out in the Middle East"

"The world’s most volatile region faces a challenge that doesn’t involve guns, militias, warlords, or bloodshed, yet is also destroying societies. The Middle East, though energy-rich, no longer has enough electricity. From Beirut to Baghdad, tens of millions of people now suffer daily outages, with a crippling impact on businesses, schools, health care, and other basic services, including running water and sewerage. Little works without electricity."

"I called on the technician at his home because electricity is now such a political flashpoint that he didn’t want to be seen hosting a journalist at work."

The above quotes are from Robin Wright's May 20 report for The New Yorker. I don't often tell readers that a report is a "must-read" but this is one of those times. And it's not long; she succinctly outlines the electricity crisis in the Middle East, which extends at least to Libya in North Africa, in a series of eye-popping anecdotes and observations.

As to what governments in those countries can do to resolve the crisis -- it can't be resolved at this time in history. Even if the refugee situations, armed conflicts and rampant corruption end, the Middle East is up against the limits of urbanization and rising lifestyle expectations.

Look, credit cards are doomsday in a wallet. But as long as relatively few people could live above their means via credit, critical resources such as water could absorb the impact. With rising incomes across the world and the advent of satellite TV, people want the same lifestyle they see middle-income earners enjoy in the most prosperous countries. And if credit is the way to get that lifestyle, they want credit too.

What nobody stopped to consider until it was too late is that when possessions and even food can be bought on credit, this stimulates demand for products that are easily substituted by newer and more attractive products. This in turn leads to massive waste of resources that can't be replaced as quickly as manufactured goods and agricultural produce.

Again, when relatively few people were doing this, the hits to resources caused by waste could be absorbed. Today, it's getting increasingly hard to absorb because so many people are piling into the same system of living above their means.  

This doesn't even speak to governments and manufacturers spending above their means via different types of credit arrangements, which also leads to massive waste of resources. 

Only up to a certain point is credit the fuel of modern societies; when that point is reached, it becomes a destroyer of societies.  

How long have we got? Too many variables to call it at this point. But read Robin Wright's report to understand that the Middle East's electricity crisis is the proverbial canary in the coal mine.      

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