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MENA billionaires’ wealth increased

MENA billionaires’ wealth increased

On 27 August 2020, OXFAM found that all MENA billionaires’ wealth increased by $10 billion, enough to pay Beirut blast repair bill.


The 21 billionaires in the Middle East and North Africa (MENA), all of them men, saw their wealth increase by nearly $10 billion since the start of the COVID-19 crisis, almost double the estimated amount required to rebuild Lebanon’s shattered capital, while 45 million more people in the region could be pushed to poverty as a result of the pandemic, a new Oxfam report revealed today.

For a Decade of Hope Not Austerity in The Middle East and North Africa’ shows that since March, the region’s richest have amassed more than double the regional emergency funds provided by the International Monetary Fund (IMF) to respond to the pandemic, and almost five times the United Nation’s COVID-19 humanitarian appeal for MENA. 

“The pandemic has exposed the deep inequalities and massive failures in our economic systems, leaving millions in the region without jobs, healthcare, or any kind of social security, while allowing billionaires to add more than $63 million to their fortunes each and every day since the beginning of the pandemic,” said Nabil Abdo, Oxfam in MENA’s senior policy advisor.

“Unless governments immediately prioritize people over profits and the rich pay their fair share, millions more will be pushed to the brink of poverty and denied their basic rights. For too long profit has been prioritized at the expense of the public good and safety. The result of this could not be starker in the aftermath of the catastrophic explosion in Beirut, which has further exposed the fragility of the economy and will only exacerbate existing inequalities.”

Governments in the region need to act quickly and raise revenues to protect the most vulnerable in society. In Lebanon, if a 5 percent solidarity net wealth tax had been introduced last year, $3.7 billion in tax revenues would have been generated to help rebuild the electricity and water infrastructure and provide services to keep people safe in the aftermath of the blast

Before the virus hit, the MENA region was already one of the most unequal in the world; and COVID-19 has further deepened the gap between the rich and the poor. 76 percent of the region’s income goes to just 10 percent of the population, with 37 billionaires owning as much wealth as the poorest half of the adult population.

If Jordan, Lebanon, Egypt and Morocco had implemented a two percent wealth tax from 2010, these countries could have raised $38 billion in tax revenues, which could have been invested in improving public healthcare and rebuilding social protection systems.

At the same time, measures to protect the poor have fallen short. It is estimated that only 11 percent of stimulus packages in the region focused on social protection and health measures. Against this backdrop, an estimated 89 percent of the region’s 16 million informal workers have been severely affected by pandemic measures. Foreign investment is also projected to drop by 45 percent and 1.7 million people are expected to lose their jobs, 700,000 of them women, costing $42 billion in lost wages.

“The crushing austerity in recent years could have been avoided if the wealthiest in the region had paid more tax, a cost they can easily afford. This alternative could have given countries more flexibility on their spending policies and crucially, seen the region enter the coronavirus crisis with less inequality and debt”, added Abdo.

To avoid millions more being pushed to the brink of poverty, the region’s governments must urgently adopt deliberate inequality-busting policies like healthcare and education for all, and must raise the minimum wage and taxing wealth fairly to build better, more equal economies and societies.
 

Notes to editors

Download ‘For a Decade of Hope Not Austerity in The Middle East and North Africa’.

Oxfam’s calculations are based on the most up-to-date and comprehensive data sources available. Figures on the very richest in society come from Forbes’ Billionaires List and Forbes‘ Real-Time Billionaires ranking. We compared the net wealth of MENA billionaires on March 18, 2020, to their net wealth on August 16, 2020.

PWC has estimated the cost of damage to 30-40 destroyed buildings, 3,400 uninhabitable buildings and a total of 40,000 buildings affected by the blast to be $5 billion. 
 

Contact information:

Roslyn Boatman in Tunis, Tunisia | roslyn.boatman@oxfam.org | +216 21359002 

For updates, please follow:

@Oxfam 

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Indian billionaire Ambani accelerates debt plan

Indian billionaire Ambani accelerates debt plan

Oil, telecom and retail conglomerate Reliance Industries now expects to reach zero net debt ahead of the March 2021 target as reported by Arabian Business of 1 May 2020. Here is the story of how and why Indian billionaire Ambani accelerates debt plan as stake sale to Saudi drags.

Indian billionaire Ambani accelerates debt plan as stake sale to Saudi drags

Ambani’s focus on paying down debt and attracting investors comes as Reliance on Thursday reported its biggest profit slump since 2008

Mukesh Ambani, Asia’s richest man, accelerated the timeframe for wiping out $21 billion in net debt at his Reliance Industries Ltd., seeking to quash skepticism that emerged as talks to sell a stake in some assets to Saudi Arabian Oil Co. have dragged on.

The oil, telecom and retail conglomerate now expects to reach zero net debt ahead of the March 2021 target Ambani had set in August, the Mumbai-based company said in a statement Thursday. A $7 billion share sale to existing investors was approved by the board on Thursday, a week after Facebook Inc. agreed to invest $5.7 billion in Reliance Industries’ Jio Platforms business.

The rights issue — the latest in a series of fund-raising efforts — may help Ambani, 63, pay down borrowings that piled up as the company spent almost $50 billion to roll out a wireless network. Building investor confidence has become all-the-more crucial after the pandemic caused a crashin oil prices, undermining prospects for Reliance’s proposal to sell an estimated $15 billion stake in its oil and chemicals business to Saudi Arabian Oil.

Talks on the investment by the world’s biggest oil producer are on course, Reliance said Thursday in the statement. The company also said it has sought regulatory approvals to carve out the oil and chemicals division. Investors have sought clues to the progress of negotiations with Aramco, as the Saudi company is known, helping drag the stock to a two-year low in March. The shares have rebounded, gaining about 66% since the March 23 close, on renewed confidence in Ambani’s ability to attract investors.

“Reliance Industries has demonstrated excellent timing for fund raising,” said Chakri Lokapriya, chief investment officer at TCG Asset Management. “The Jio Platforms-Facebook deal provides Reliance a huge, scalable business venture with first-mover advantage. The rights issue is a smart way of raising capital.”

Ambani’s focus on paying down debt and attracting investors also comes as Reliance on Thursday reported its biggest profit slump since 2008, missing analyst estimates, on a plunge in oil prices and slumping demand.

Profit plunged by nearly 40% in the March quarter as the coronavirus outbreak slammed fuel demand. To cut costs, Ambani is foregoing his pay and has cut salaries at the oil unit, the company said Thursday.

The billionaire has vowed to shift Reliance away from dependence on profit from its energy-related businesses to faster-growing consumer segments including its digital platform and retail.

Reliance said Thursday that it has received interest from new potential global partners in taking a stake of similar size to Facebook’s agreement to buy a 10% stake in the company’s platform business.

Reliance “has received strong interest from other strategic and financial investors and is in good shape to announce a similar sized investment in the coming months,” it said in a statement. The company “is set to achieve net zero debt status ahead of its own aggressive timeline.”

The Facebook-Jio Platforms transaction is to be closed by end of this quarter, the company said in a presentation to investors on its website.

Under the planned rights offering, Reliance will issue shares worth 531.3 billion rupees, it said Thursday. The deal includes one rights share for every 15 held, at 1,257 rupees each, or 14% lower than the closing price on Thursday. Ambani and other members of the founding family who own stakes will subscribe to their entire entitled portion and will buy any stock left over, under the plan.

The offering comes at a tumultuous time for many companies in India.

Even before the pandemic triggered one of the world’s most extensive lockdowns and slammed economic growth, companies were struggling to raise money as banks cut back lending. The atmosphere may make it hard for Ambani to come through on his plans, said Arun Kejriwal, director at KRIS, an investment advisory firm in Mumbai.

“The rights issuance is not attractive,” said Kejriwal. “Hence, the math is not adding up for Reliance in cutting its net debt to zero ahead of the promised deadline. The road map needs to be clearer as the earnings were below expectations.”

In April, Reliance said it would raise as much as 250 billion rupees through non-convertible debentures.

Adjusted debt peaked at 2.7 trillion rupees in fiscal 2020, according to S&P Global Ratings. The ratings company expects that to decline to about 2.2 trillion rupees in the following year and 1.7 trillion rupees by fiscal 2023.

Earnings growth at the company’s digital and retail segments will be about 50% in fiscal 2020, S&P estimates. The businesses will account for about 40% of the company’s earnings before interest, taxes, depreciation and amortization, from just 3% in 2017, S&P said.

“The company’s strategy of transforming its upstream energy focus to domestic consumption-driven businesses has been successful,” S&P said in an April 28 report affirming Reliance’s BBB+ credit rating. “We expect digital and retail growth to continue in fiscals 2021 and 2022.”

COVID-19 – The financial crisis of 2008 was a piece of cake

COVID-19 – The financial crisis of 2008 was a piece of cake

With, the omnipresent COVID-19 – The financial crisis of 2008 was a piece of cake as proposed by ELECTRIFYING on 9 April 2020 we are given a comparative view of the different crises that currently shake not only the world of finance but the world at large.

The world has seen difficult financial times before, like the ‘Black Tuesday’ in 1929, which we all know as the ‘Great Crash of Wall Street’. Only 13 years ago, we were able to observe another crash originating in the USA but spreading all over the world to end in a global financial crisis. Yet we see ourselves heading towards the next crisis at a frightening pace, but surely, we should be prepared and have learned our lesson from mastered crisis’. 

Unfortunately, the unpleasant truth is that the world has not seen this kind of crisis before, as it is constituted genuinely different from the ones we already went through. This time the financial insecurity hasn’t been caused by banks or real estate market; it has been triggered by a global virus which led to the shutdown of economies backbone – SME businesses. The mentioned shutdown has resulted in a short-term demand and supply shock of real-economy to first affect the stock exchange due to its pro-active market responsiveness. 

Further effects are the inflation of bonds and company shares as it takes some time for rating agencies screening forecasts and month-end reports until updating the credit rating of companies and governmental entities. The United Kingdom, Mexico, Brasil, Argentina, Iran, Irak and many others have already been cut.

The world has seen difficult financial times before, like the ‘Black Tuesday’ in 1929, which we all know as the ‘Great Crash of Wall Street’. Only 13 years ago, we were able to observe another crash originating in the USA but spreading all over the world to end in a global financial crisis. Yet we see ourselves heading towards the next crisis at a frightening pace, but surely, we should be prepared and have learned our lesson from mastered crisis’. 

Unfortunately, the unpleasant truth is that the world has not seen this kind of crisis before, as it is constituted genuinely different from the ones we already went through. This time the financial insecurity hasn’t been caused by banks or real estate market; it has been triggered by a global virus which led to the shutdown of economies backbone – SME businesses. The mentioned shutdown has resulted in a short-term demand and supply shock of real-economy to first affect the stock exchange due to its pro-active market responsiveness. 

Further effects are the inflation of bonds and company shares as it takes some time for rating agencies screening forecasts and month-end reports until updating the credit rating of companies and governmental entities. The United Kingdom, Mexico, Brasil, Argentina, Iran, Irak and many others have already been cut.

COVID-19 – The financial crisis of 2008 was a piece of cake

Eventually, the real estate market will as well see a correction of the booming prices due to a rising supply but limited buyers in the market, partially as an effect of travel boundaries and decreasing cash pools of investors and individuals. If there are only ten local prospective buyers compared to hundreds of international interested parties, the current peek prices will no longer be achieved. 

As an upside, we don’t expect hyperinflation to kick-in caused by billions of Pounds, Dollars and Euros simultaneously flooding the markets for the sake of securing liquidity. Indeed, central banks had no other choice but to keep the printer on full throttle to steer against the sharp drop in the stock market. In contrast to an earlier crisis, globalisation and digitalisation have driven the supply of equivalent products to a majority of goods and services, e.g. Cinema vs Netflix, Restaurants vs Delivery Services, Physical Meetings vs Video Conferences. Besides, shelves in most supermarkets around the world are still filled with necessities despite numerous media promotions regarding panic buying.

As it happens, the real threat this time is the shutdown of SMEs, the resulting mass unemployment and the dropping purchasing power. Millions of people all around the world are losing their jobs, struggling to pay their rent and mortgages while facing severe existential issues. In the aftermath, tax deficiency, reduced economic growth, and ongoing down grades of institutions and countries as a whole will also impact the stock market in the long run. Hence, we expect further global economic struggles to highly depend on the realisation of global decision makers’ strategies 

A lesson taught from past experience illustrates that a financial crisis always shows unexpected long-term collateral. The Imperial College of London has released a study in 2016, stating an additional 260,000 deaths linked to the financial crisis of 2007/08. This frightening result has been assigned solely to unaffordable or late cancer diagnosis/therapies of countries without universal healthcare in the OECD like the US or UK. 

COVID-19 – The financial crisis of 2008 was a piece of cake

Within the energy sector, business is still running as usual with some effects of dropping prices due to the reduced demand. On the other hand, postponement of new installations is inevitable. Power utilities and O&M companies are classified as being essential infrastructure, which enables their staff to hit the road and keep the energy flowing. Although the restrictions and enhanced H&S measures (PPE, scheduling of lone working, unavailability and avoidance of hotels, increases of travel time, etc.) also bear additional costs to the energy sector, it has been vastly unaffected so far. 

Ending this blog post with some good news, Forbes has published an astonishing figure of 72% of all energy project in 2019 were renewable, which would be an eager target for the FY2020 as well. 

What direction do you see our economy heading towards?  

Turkey tries to keep wheels of economy turning

Turkey tries to keep wheels of economy turning

Bulent Gökay, Keele University elaborates on how Turkey tries to keep wheels of economy turning despite worsening coronavirus crisis. It, contrary to its neighbours, would not go down the same way. Read on to find out why.


Turkey confirmed its first case of the new coronavirus on March 11, but since then the speed of its infection rate has surpassed that of many other countries with cases doubling every two days. On April 2, Turkey had more than 15,000 confirmed cases and 277 deaths from complications related to the coronavirus, according to data collated by John Hopkins University.

The Turkish government has called for people to stay at home and self-isolate. Mass disinfection has been carried out in all public spaces in cities. To encourage residents to stay at home, all parks, picnic areas and shorelines are closed to pedestrians.

Some airports are closed and all international flights to and from Turkey were banned on March 27. All schools, universities, cafes, restaurants, and mass praying in mosques and other praying spaces has been suspended, and all sporting activities postponed indefinitely.

Manufacturing remains open

Many small businesses in the service sector are closed, and many companies in banking, insurance and R&D have switched to working from home. But in many industrial sectors, such as metal, textile, mining and construction, millions of workers are still forced to go to work or face losing their jobs. In Istanbul, where more than a quarter of Turkey’s GDP is produced, the public transport system still carries over a million people daily.

Recep Tayyip Erdoğan, Turkey’s president, has openly opposed a total lockdown, arguing a stay-at-home order would halt all economic activity. On March 30, he said continuing production and exports was the country’s top priority and that Turkey must keep its “wheels turning”.

But in the short term, many of Turkey’s export markets for minerals, textiles and food, such as Germany, China, Italy, Spain, Iran and Iraq, are already closed due to the virus. This has led to enormous surpluses piling up in warehouses. Even where there are overseas customers, getting the goods delivered has proven difficult. The process of sanitising and disinfecting the trucks and testing the drivers before they travel takes many extra hours, sometime days, after waiting in long lines.

Still, Erdogan’s statements give the impression that he sees this pandemic not only as a serious crisis, but also as an opportunity for Turkish manufacturers. The hope is that, after the Chinese shutdown, European producers which depend on Chinese companies for a range of semi-finished products may consider Turkey as an alternative supplier in the longer term. That’s why the government is still allowing millions of workers to go to factories, mines and construction sites despite the huge health risk.

A bruised economy

The Turkish government announced a 100 billion lira (£12 billion) stimulus package on March 18. It included tax postponement and subsidies directed at domestic consumption, such as reducing VAT on certain items and suspension of national insurance payments in many sectors for six months. But this is an insignificant sum for an economy as big as Turkey’s.

Most of the support will go to medium and large companies that were forced to close, and only a very tiny amount to individual workers. In order to benefit from the scheme, a person must have worked at least 600 days in the past three years (450 days for those in Ankara). Those with most need get the lowest level of help or no help from the state.

The tourism sector, which accounts for about 12% of the economy, has already been decimated. Some 2.5 million workers will not be able to work as they had been expecting to in the peak tourist months between April and September.

Limited room for manoeuvre

Even before the virus hit Turkey the economy was already weak, still trying to recover from the impacts of a 2016 coup attempt and a 2018 currency crisis, both of which caused severe stress to Turkey’s economic and financial systems.

In March, Turkey’s Central Bank reduced its benchmark interest rate by 1%, and several of the country’s largest private banks announced measures to support the economy, such as suspending loan repayments. As a result, the Turkish lira initially held up reasonably well, compared with other emerging market economies, but it fell to an 18-month low on April 1 as the coronavirus death rates accelerated. Official interest rates have fallen below 10%, providing some protection to those holding Turkish lira versus some foreign currencies.

Turkey’s financial options to limit the impact of the crisis are limited. Credit rating agency Moody’s revised its prediction for the country GDP from 3% growth in 2020 to a 1.4% contraction. Still, it may get a reprieve from the low oil price. Turkey imports almost all its energy needs, and with the recent fall in the price of oil and gas, this means Turkey could save about US$12 billion (£9.6 billion) in energy imports.

It is hard to see very far ahead. During the next few months, it’s expected that Turkey, alongside South Africa and Argentina, could be sliding toward insolvency and debt default. After that, everything depends on how this crisis progresses and how long it will take to end.

Bulent Gökay, Professor of International Relations, Keele University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Construction Activity Can Signal When Credit Booms Go Wrong

Construction Activity Can Signal When Credit Booms Go Wrong

An IMF blog article by Deniz Igan dated February 12, 2020, holds that Construction Activity Can Signal When Credit Booms Go Wrong. This state of affairs seems to apply almost universally.  Indeed, as per the French saying “when the building goes, everything goes,” it appears that it took time for the international financial institution to reach this conclusion, especially with regards to the countries of the  MENA region.


In Spain, private sector credit as a share of GDP almost doubled between 2000 and 2007. This increase was accompanied by a boom in housing prices—which doubled in real terms over the same period. The economy as a whole also grew at a record pace.

But then in 2008, Spain’s credit bubble burst, and with it came loan defaults, bank failures, and a prolonged economic slowdown.

A less-noticed development in Spain was in the construction sector, where employment grew by an astounding 47 percent, compared to the economy-wide increase of 27 percent.

New IMF staff research, based on a large sample of advanced and emerging market economies since the 1970s, shows that long-lasting credit booms that featured rapid construction growth never ended well.

New evidence on credit booms

Rapid credit growth—known as “credit booms”—presents a trade-off between immediate, buoyant economic performance and the danger of a future crisis. The risk of a “bad boom”—where a rapid credit growth episode is followed by a financial crisis or subpar economic growth—increases when there is also a boom in house prices.

Long-lasting credit booms that featured rapid construction growth never ended well.

Our research shows that the experience with the dangerous combination of credit booms and rapid expansion in the construction sector goes beyond the Spanish borders and extends to time periods not related to the global financial crisis.

We find that signals from construction activity may help to tell apart the dangerous booms, which need to be controlled, from the episodes of buoyant but healthy credit growth (“good booms”).

Credit booms do not lift all boats alike

During booms, output and employment expand faster. But not all sectors behave the same. Most of the extra growth is concentrated in a few industries—specifically, construction and, at a distant second, finance.

However, the same industries that benefit the most during booms experience the most severe downturns during busts. This implies that credit booms tend to leave few long-term footprints on a country’s industrial composition.

Construction Activity Can Signal When Credit Booms Go Wrong

Construction is special

Construction is the only sector that consistently behaves differently between good and bad credit booms. On average, output and employment in the construction sector grow between 2 and 3 percentage points more in bad booms than in good ones. In all other sectors, the difference is smaller and not significant (except trade, but only when it comes to output growth).

Construction Activity Can Signal When Credit Booms Go Wrong

What makes construction special? Construction does not have the growth potential of many other industries. In other words, too much investment in construction may divert resources away from more productive activities and result in lower output.

Also, the temporary boost in construction employment and the relatively low level of skills needed may discourage some workers from investing in their education and skills. This may have long-lasting effects on output after the boom ends.

Finally, construction projects have large up-front financing needs, and final consumers of the product (for example, houses or hotels) also tend to borrow to finance their purchases. As a result, debt may increase significantly more during booms led by construction.

The predictive power of construction activity

An unusually rapid expansion of the construction sector helps flag bad credit booms. A 1 percentage point increase in output and employment growth in the construction sector during a boom raises the probability of the boom being bad by 2 and 5 percentage points, respectively.

Construction growth is also a strong predictor of the economic costs of bad booms than other variables. A 1 percentage point increase in output growth in the construction sector during a bad boom corresponds to nearly a 0.1 percentage point drop in aggregate output growth during the bust.

Policy takeaways

If policymakers observe a rapid expansion in the construction sector during a credit boom, they should consider tightening macroeconomic policies and using macroprudential tools (such as higher down payments for mortgages).

In some cases, policy action will be triggered by other indicators, such as house prices or household mortgages. Sometimes, however, these other indicators may not sound the alarm (for example, because the construction boom is financed by the corporate sector or by foreigners), yet risks accumulate. Then, unusually rapid growth of construction could give a signal, for instance, to impose limits on banks’ exposure to real estate developers and other construction firms.

Finally, given that data on output and employment in the construction sector are often available with a few months’ lag, higher-frequency indicators such as construction permit applications could act as valuable signals. Construction indicators should also be included in models that assess risks to future economic activity.

Corruption costs developing countries $1.26 trillion

Corruption costs developing countries $1.26 trillion


The World Economic Forum ( WEF) in this article by Sean Fleming finds that Corruption costs developing countries $1.26 trillion every year – yet half of EMEA think it’s acceptable.

Costs of Corruption running deep in the MENA (refer to the above chart) are not clearly indicated whereas these seem to be fairly high.


Corruption leaves many people far worse off and feeling marginalized.
Corruption leaves many people far worse off and feeling marginalized. Image: Unsplash/Vitaly Taranov
  • Corruption is a global problem.
  • It costs both money and lives.
  • International collaboration is the only way to defeat it.

Corruption takes many forms. It is often thought of as a problem that mostly affects developing countries. But while the harm it does is magnified in poorer nations, corruption does not concern itself with national boundaries – it can be unearthed anywhere.

Have you read?

At the 50th World Economic Forum Annual Meeting in Davos next month, Founder and Executive Chairman Klaus Schwab will launch the Forum’s Davos Manifesto. It will state the need to adopt a new economic model, “stakeholder capitalism”. And at its heart is a call to fight corruption. That fight has been central to the World Economic Forum’s work for many years, and in 2004 it established the Partnering Against Corruption Initiative (PACI).

Corruption costs developing countries $1.26 trillion
Corruption takes a toll all over the world

To mark International Anti-Corruption Day 2019, here are seven shocking and damaging recent examples of corruption around the world, as identified by Transparency International.

1. Across the EMEA region (that’s Europe, the Middle East, and Africa) and India almost half of all workers think bribery and corruption are acceptable if there is an economic downturn.

2. Corruption, bribery, theft and tax evasion, and other illicit financial flows cost developing countries $1.26 trillion per year. That’s roughly the combined size of the economies of Switzerland, South Africa and Belgium, and enough money to lift the 1.4 billion people who get by on less than $1.25 a day above the poverty threshold and keep them there for at least six years.

3. The Transparency International Corruption Perceptions Index scores 178 countries on their degree of corruption – 10 is the cleanest possible, and 0 indicates endemic corruption. In 2010, around three-quarters of all 178 scored lower than five.

4. As much as $132 billion is lost to corruption every year throughout the European Union’s member states, according to the EU Commissioner for Home Affairs.

What’s the World Economic Forum doing about corruption?

It hosts the Partnering Against Corruption Initiative (PACI), the largest global CEO-led anti-corruption initiative.

Realizing that corruption hampers growth and innovation, and increases social inequality, PACI aims to shape the global anti-corruption agenda.

Founded in 2004, it brings together top CEOs, governments and international organizations who develop collective action on corruption, transparency and emerging-marking risks.

PACI uses technology to boost transparency and accountability through its platform, Tech for Integrity. Show

5. Bangladesh is one of the world’s poorer countries. Around one-third of the population say they have been the victims of corruption, and an astonishing 84% of those households who had interacted with different public and private service institutions have been victims of corruption.

6. In war-torn Afghanistan, of the $8 billion donated in recent years, as much as $1 billion has been lost to corruption. Integrity Watch Afghanistan estimates bribe payments — for everything from enrolling in elementary school to getting a permit — exceed $1 billion a year.

7. In one Russian province, if you want to become a police officer you will probably have to pay around $3,000. To get a place in medical school, you will need to part with around $10,000. One consequence of this, according to the International Crisis Group, has been that some people have grown so disaffected that they have become drawn to Islamic extremism.