Arab Spring, Arab Fall

The US State Department confirmed this morning that the US Ambassador to Libya, ​Christopher Stevens, was killed along with three of his staff in an attack yesterday on the American Consulate in Benghazi. It's a cruel irony that Ambassador Stevens had strongly supported the Libyan rebels as they fought to overthrow Colonel Muammar Qaddafi in the Arab Spring uprisings. At the same time, demonstrators in Egypt stormed the American Embassy in Cairo, again. Both these attacks stemmed from Egyptian media reports about a YouTube trailer for the gratuitous, American-made video, "Innocence of Muslims", which insults the Prophet Muhammad.

Whatever one's particular belief, it is, at the very least, discouraging that violence fueled by religious differences ​once again dominates headlines from the Middle East. This is a region where the Arab Spring turmoil, which swept away long-time dictators in Tunisia, Libya, Egypt and Yemen, has nonetheless left these economies with still daunting economic challenges. Unemployment among young adults, for example, is estimated at over 25%, the highest of any rate anywhere in the world. The new government in Egypt - headed by its first-ever democratically elected President, Mohamed Morsi, the leader of the Muslim Brotherhood's Freedom and Justice Party  -  is financially stressed to the point that it has been forced to enter into negotiations with the International Monetary Fund (IMF) for a bailout loan, reportedly in the range of $5 billion.

Here's the point. The $5 billion, if granted, on however generous terms, is a fraction of the current financial needs of the Egyptian government.​ But an IMF Agreement is also designed to boost the confidence of other government and private investors, leading, presumably,  to a resumption of capital inflows. Yesterday's religious violence is anything but a catalyst for such essential inflows.