Will the recent uprisings in the Middle East ultimately sound the death knell for oil-rich Middle East economies?

University of Chicago professor Gary Becker says, of the change occurring across M.E.N.A. (Middle East and North Africa) countries, "The revolutions and protests in Tunisia, Egypt, Libya, Bahrain, and other parts of the M.E.N.A. region are the most important world development in the past 20 years, even though it is still highly uncertain about the types of governments that will emerge, the effects on their economic and political freedoms, and their production of oil. I expect, however, that these economies will become more competitive and less government-controlled, and that world oil prices would tend to be higher in both the short and long runs."

Will the long-term increase in prices expedite the West's efforts to decrease its dependence on Middle East oil?

More at the Becker-Posner blog.

On Monday, Saudi Arabia, Qatar, Kuwait and Bahrain signed an agreement to create a Persian Gulf monetary union bringing back memories of the formation of the European Union in 1993. Central bankers from the six Persian Gulf Arab states (which originally also included the United Arab Emirates and Oman) have been discussing a framework for the organization and a single currency to help boost regional trade for several years.

It has been interesting to watch as it seems that plans for a 2010 regional currency already seem to be in disarray. In May 2007, Kuwait de-pegged its dinar from the dollar opting for a basket of currencies rather than the exchange rate mechanism siting the dollar's slide, increasing inflation, and the rising cost of imports. Then the UAE dropped out of the proposed union last month because of issues with Saudi Arabia over the location of the central bank -- Abu Dhabi or Riyadh. Oman left stating it would not be prepared for a single regional currency by 2010.

The door isn't closed on the UAE, which has the second-richest economy in the region, or Oman; but the union clearly has some issues to work out.