'Youth Bulge' May Undermine Political Stability In The Middle East

Unemployment fuels unrest and anger.

Political instability tends to escalate in regions with lots of economic volatility and limited employment opportunities, particularly for young people.

In a new presentation to clients, Deutsche Bank’s Raj Hindocha and Marcos Arana include this chart of countries with “youth bulges.” These are the countries where young males make up a significant share of the population.

“A weaker US role in [the Middle East and North Africa] exacerbates geopolitical risk in the region, which could lead to higher oil prices and curb global growth,” write Hindocha and Arana.

“Geopolitical risk is ever-present but unpredictable by nature,” they said. “While a large scale geopolitical risk event is not our base case, investors should be mindful of alternative scenarios relative to the benign outcome currently expected by markets.”

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