A Monetary History of Poverty in the Southern Red Sea Region
Funded by the Deutscher Akademischer Austauschdienst (DAAD PRIME)
|Project leader:||Dr. Steven Serels|
This project examines the link between the spread of the modern international monetary system and the development of structural poverty in the Southern Red Sea Region (SRSR). The SRSR, which is comprised of modern day Sudan, Eritrea, Ethiopia, Djibouti, Somalia, Saudi Arabia and Yemen, is one of the poorest regions of the world. However, this was not always the case. Historically, the SRSR was the site of a closely linked, robust socio-economic system that produced wealth and stability. Except for petrol-rich Saudi Arabia, the countries that comprise the SRSR experienced the twentieth century as a period of economic decline. This project hypothesizes that one of the previously unaccounted for major causes of this decline was the adoption of modern currencies, i.e. government issued fiat currencies whose value is determined by international currency exchange markets and whose circulation is supported by central banks with sweeping powers. This project further hypothesizes that the dismantling of the traditional regional currency system and the integration of the SRSR into the modern international monetary system increased economic instability and decreased the ability of local communities to cope with economic downturns.