Does it matter for the oil market that three of Opec’s 13 member states can now be classed as failed or failing? The general definition of a failed state refers to a nation in which the government has lost political authority and control. On this definition Libya already qualifies, with large areas of the country beyond government authority and under the control of competing local militia. Venezuela is clearly failing and close to defaulting on its debts. Algeria is struggling under the weight of President Abdelaziz Bouteflika’s weak administration and mounting economic problems.
Failure clearly matters for the 75m citizens within these countries. Venezuela has inflation of something like 700 per cent, if you believe the International Monetary Fund’s analysis — around a mere 170 per cent if you believe the government. Caracas is the murder capital of the world. Algeria has not yet seen open violence but the prospect of civil unrest is high and the fear that this could lead to another migrant crisis with boat people fleeing across the Mediterranean is already a source of concern in Paris. Read more