Trouble in Egypt

By now, many people have probably heard about the political unrest in Egypt as President Mubarak attempts to keep himself in power. While I have my opinions about Mubarak and what the U.S. should or should not do about him, this post is not about that. Rather, I was interested in the connection between the political instability in Egypt and its effect on businesses and markets.

Many developed countries have invested a lot in Egypt, mainly because they are technically a democracy and because of their proven oil reserves. If politics starts getting in the way, investors will start pulling out of Egypt, leaving it much more difficult to tap them for oil exports.

What's the strategic move here, then? During the State of the Union address, President Obama stated that one of his goals is to have a certain percentage of electric vehicles on the roads by a certain date, and to have a certain percentage of Americans living within access of high-speed rail. By reducing our dependence on oil, investors can pull out of countries like Egypt and push into research and development of alternative forms of energy and transportation.

http://www.reuters.com/article/email/idUSTRE70S31L20110129

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