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US Energy Diplomacy In A Changing World

By
Dr. Raziq Hussian
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Energy Diplomacy

Thirty years after the conclusion of the Cold War and the start of globalization, the globe has both become more linked and still suffers continuous volatility. From border disputes to resource misallocations to inadequate government performance and conflicts stemming from long-standing societal concerns have necessitated involvement from the main international powers.

Energy diplomacy is crucial for managing international relations and ensuring global energy security.

Current crises, like those in Ukraine and the Middle East, give one the sense that unsolved security issues from the late 20th century have influenced and will continue to affect international relations far into the 21st. Nonetheless, some of the biggest obstacles to world peace and security originate from transnational concerns like global pandemics, migration and refugees, resource depletion, and maybe most importantly, climate change.

These global issues create new problems because of their local consequences. Not only these issues do not end at one national boundary, but none of any states in the globe has the capacity or power to handle the climate change-like challenge on their own. Although international agencies such as the United Nations might provide a path to answers, it depends on the combined will of its members to implement. Unquestionably, climate change calls for a coordinated response beyond political lines.

Regardless of political background, it is imperative to give energy security and safety first priority as nations and areas struggle with the pressing need to switch to sustainable energy sources. The search for a better future call for a cooperative strategy wherein both energy diplomacy and energy security become essential instruments in bringing governments under a shared climate agenda.

The US energy industry is leading the charge in transitioning to sustainable energy sources.

Leading this change is the American energy industry, which has seen many major advances quickening this shift. This covers initiatives of the Federal Energy Regulatory Commission (FERC) to simplify the connections between new energy projects and the grid, therefore, removing obstacles to national renewable energy expansion. Propelled by a dynamic legislation like the Inflation Reduction Act (IRA), which has resulted in unprecedented expansion in the renewables industry. Given a very appealing investment market, energy storage is also seeing development.

Still, energy diplomacy may set in motion this expansion beyond American boundaries. Energy diplomacy is described as a strategic strategy to manage international relations by means of coordinated and harmonic supply and demand chains of energy resources and markets. The war in Ukraine is a prime example where United States has used its Liquefied Natural Gas (LNG) shipments to Europe as tool, therefore, minimizing reliance on Russian fossil fuels.

Hence, Europe’s dependence on US markets has grown as it lessens its need for Russian energy. But this change may have just swapped one reliance with another, leaving Europe exposed to its suppliers. Furthermore, this US strategy has not done much to promote alternative energy sources which are fundamental components of the green transition. Therefore, even if energy diplomacy helps in this situation to solve current geopolitical concerns, it also must assist long-term climate protection objectives by employing improved energy security.

Gastech presents a unique opportunity to advance global energy cooperation and climate protection.

Although energy security mostly concentrates on immediate objectives, a major long-term goal is to lower the consumption of some kinds of energy in favor of transition fuels, such LNG as well as wind, solar, geothermal, and other sources of renewable or green energy that are indispensable to the efforts aimed at countering climate change.

Dealing with the fundamental problems resulting from resource competitiveness and climate change depends on energy security. It shapes energy diplomacy in building international frameworks of cooperation by varying energy profiles and between developed and developing states. This approach involves engaging with countries presently in early, or undeveloped stages in their energy route to allow a plan of transition to greener energy solutions that fits within reasonable infrastructural capability.

It also presupposes the understanding of the fact that geopolitical struggles always assign the second rank to global issues common to everyone. Having tremendous stakes in both conventional and non-conventional energy resources, the United States is in a good position to influence global projects while at the same time taking care of its requirements.

Europe’s dependence on US LNG highlights the complex dynamics of global energy security.

A great deal of opportunity to advance these goals can be found at one of the world’s premier events, Gastech, which will be held in Houston in September. The demonstrated goal of reaching a consensus at trade conferences or climate summits would mean that the states and the corporate sector negotiate and communicate pathways for an energy policy and formulate institutions for collective advancement.

Such cooperation also serves and/or contributes to mitigating the impacts of climate change and enhance energy equity security anywhere it is fostered. Knowing traditional, transitional, and renewable energy sources, the US energy industry might be rather significant in these international projects, and, therefore, advancing the global energy security and simultaneously serving its national interests.

The Chinese Yuan vs The US Dollar

By
Dr. Zukun Lyu
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US dollar vs Yuan

The Saudi government is negotiating to sell its oil at a price tied to the Chinese yuan. Although some nations would want the yuan to be replaced by the US dollar as the world’s reserve currency, the status of the economy makes this impossible.

The US dollar has maintained its status as the world’s reserve currency since the 1944 Bretton Woods Conference.

Since the 1944 Bretton Woods Conference, the US dollar has been the world’s reserve currency. The US Treasury’s gold reserves helped establish the dollar to reach the status. As World War II ended, the United States had the world’s largest gold holdings. Other nations’ citizens choose US Treasury securities over US cash to bolster their currencies.

As Washington’s engagement in Vietnam persisted and US deficits rose, nations who owned US assets backed by US gold reserves were concerned. When nations started to trade US commodities for gold, US gold stockpiles fell. This fact eventually led to the US dollar being removed from the gold standard and converted by then-President Richard Nixon into a fiat currency. Since then other countries followed the United States’ approach and switched to fiat money, every country now uses it.

Even though the United States has switched to a fiat currency, the US dollar remains the most valuable in the world. The value of a country’s fiat currency is determined by its people’s perceived wealth and power; the United States stands head and shoulders above all others.

One of the reasons the United States seems to be so robust in preserving its dominant power position is its geographical location. With friendly countries to the north and south, an ocean on both sides and a climate conducive to world-class agricultural land, the United States has various natural advantages. It includes readily navigable rivers transporting goods and services from the country’s center. The development of oil fracturing will also help the United States become more energy-independent. In addition, there are 4.2 trillion untapped Green River Formation oil reserves.

China’s debt-to-GDP ratio is estimated at 342 percent, posing significant risks to its economic stability.

This enduring strength may also be credited to the heritage of the US Constitution, which has made the continual transfer of political power between various political adversaries possible even after the riot and probable insurrection on January 6, 2021. So far, the United States has served as a beacon of stability in a world where economic situations may be harsh, and courts can be unpredictable.

Aside from the physical and non-physical advantages, the United States’ population provides the country with a competitive advantage in the industrial and domestic consumer sectors. Although the US population’s yearly growth rate is reaching stagnation, one might claim that the previous Trump administration’s strict immigration policies slowed demographic growth.

The COVID-19 outbreak exacerbates the slow rate of population growth in the United States. Currently, the projected global population increase by 2060 is between 376 million and 404 million. Nonetheless, the United States would remain a leading producer and consumer market. No other country has a comparable demographic advantage.

The widespread notion is that the United States is a declining nation, while China is a growing superpower. Although it is a widespread proverb, a cold and serious examination of the facts about China, the economic challenges it faces, like of natural resources and an aging population portrays a bleak image of the People’s Republic of China.

Geopolitician Peter Zeihan highlights that money is viewed as a political tool in China, unlike in the US, where it has intrinsic value.

Although many people cheer on China’s economic success and firms prostitute themselves to get access to China’s domestic market, few pay attention to the massive debt that is threatening the Chinese economy and the risks that such a collapse may entail. Chinese debt is estimated to be over $28 trillion. China’s debt-to-GDP ratio is 342% of GDP. Shadow finance is thought to be the reason the debt ratio is much higher.

Geopolitician Peter Zeihan compares and examines the concepts of money in China and the United States. In the United States, money is seen as an economic gain. Money is seen as a political good in China. Money has intrinsic value in the United States. Money is a political good in China; it is valuable only if it can be utilized to achieve a political goal.

China lacks the concepts of rate of return and profit margins, therefore, there is a danger; eventually, the law of supply and demand will triumph, and the Chinese economy will be forced to adapt. The damage that the inescapable correction will impose on the Chinese economy grows with the amount of time it takes to complete this economic adjustment.

The US Constitution’s legacy of peaceful power transitions contributes to the country’s enduring stability in a volatile world.

Although the United States has an open economy in which money may be transported in and out at will, the Chinese government regulates cash movement outside of the nation. Investors risk losing their whole wealth if a political crisis occurs that creates an economic disaster or escalates into a military conflict by restricting the flow of money in and out of China. Examining the bare bones data demonstrates the significant advantage of the US dollar over the Yuan. Any sensible economic operator would prefer to keep their money in the United States than in China.

The Growing Economic Footprint of Gulf States in Africa

By
Corinna Perini
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Gulf

Historically, the Arabian Peninsula was a major marine center linking East African trade routes to the Middle East. With greater economic ties throughout Africa key to their aspirations, three Gulf Cooperation Council (GCC) members — Qatar, Saudi Arabia, and the United Arab Emirates (UAE) — are now establishing themselves as powerful middle powers.

Expanding their presence in the resource sectors of oil, gas, mining, and agriculture, the Gulf businesses and institutions are also heavily engaged in transportation infrastructure, logistics, and renewable energy. Still, Africa-Gulf relations show the difficulty of juggling possibilities and hazards in the developing multipolar age.

The UAE has emerged as one of the largest investors in Africa, with $100 billion in commitments.

Traditionally, the most solid ties between the GCC and Africa have been with North Africa, with a clear focus on Egypt. The Gulf States have long seen North Africa and the Horn of Africa as “extended neighborhoods”. Nevertheless, until recently the linkages between the GCC nations and these two regions were not especially strong despite the geographical closeness, common history, migration and commercial connections.

But the Gulf Arab participation in North Africa as well as the Horn of Africa and the Red Sea Rim has grown during the last 20 years. Nowadays, Saudi Arabia, the UAE and Qatar are aggressively looking for economic possibilities and trying to establish their impact across the whole continent. To serve their business interests, they have expanded the number of their embassies across Sub-Saharan Africa (SSA).

Trade between Africa and the Gulf nations has shown a consistent increase recently. Reaching a record $154 billion in 2022, the Economist Intelligence Unit noted a notable rise in bilateral trade, thereby reducing the gap with China and Western Europe and positioning the GCC well ahead of the US and India. Although mining goods are a major import, commerce in other areas is growing, while oil and gas dominate GCC exports to Africa. Offering access to a bigger united African market, the Africa Continental Free Trade Area (AfCFTA) is projected to strengthen these links even further.

Except for Saudi Arabia, all the GCC governments have signed bilateral investment treaties (BIT) with African counterparts. Driven by ambitious promises to generate renewable energy like green hydrogen and build infrastructure like ports, warehouses, and data centers, the Gulf investors in Africa have lately made announcements of greenfield foreign direct investment (FDI). Last year, GCC firms revealed 73 FDI projects in Africa valued over $53 billion, claims fDi Markets. With $60 billion spread over 83 projects, 2022 was the only year with more FDI capital expenditure from the GCC investors.

About 85% of the more than $100 billion the GCC nations have poured into the continent comes from the UAE and Saudi Arabia. With promises significantly higher than those of China whose infrastructure financing has dropped, as well as France, the UK, and the US, the UAE has indeed become one of the biggest investors in Africa. Having 26,500 Africa-registered businesses, Dubai has also developed as a commercial center for Africa.

Gulf states are heavily funding copper, nickel, and other vital minerals critical for renewable energy technologies.

Investments from the Gulf States in Africa are mostly focused on three areas — natural resources (hydrocarbons, mining, and agriculture), port infrastructure and transport hubs, and renewable energy and technologies.

Using their project funding and experience, oil and gas giants Saudi Arabia, the UAE, and Qatar are increasing their presence throughout the whole energy value chain. Targeting oil sustainability with Chad, Ethiopia, Nigeria, Rwanda, and Senegal, Saudi Minister of Energy Prince Abdulaziz bin Salman inked agreements last November at the Saudi Arabia-African Economic Conference. Meanwhile, Saudi Aramco intends to make investments in the revival of four state refineries in Nigeria, which have been non-operable for years, therefore necessitating reliance on imports for gasoline.

Last December, the UAE committed to provide both technical and financial support for building an offshore gas pipeline that would carry Nigerian gas to Morocco, which has become a significant target for Emirati investments drawing a combined $30 billion.

April saw reports of “intensified” discussions with Alpha MBM Investments, located in Dubai, positioned as the main developer and investor in the planned $4 billion refinery in Uganda. Complementing the company’s efforts to increase its lower-carbon LNG portfolio, Abu Dhabi National Oil Company (ADNOC) said the following month that it had bought Galp’s 10% equity share in Mozambique’s Rovuma LNG project.

Targeting high-potential areas for increased refined product sales, the UAE’s state-owned oil and gas giants such ADNOC and the Emirates National Oil Company Group (ENOC) are also expanding their storage and distribution networks throughout Africa.

GCC nations are increasingly focused on food security by investing in African agriculture and controlling the entire food supply chain.

ENOC and Tanzania’s Ministry of Energy signed a Memorandum of Understanding (MoU) in January 2023, aiming at building a receiving and storage facility for gas and oil products. Two months later, ADNOC, Aramco, and ENOC inked contracts, agreeing to provide Kenya with petroleum products. Among many businesses reportedly assessing offers for Shell’s downstream assets in South Africa are ADNOC and Aramco.

Focusing on gas resource acquisition, Qatar Gas has partnered with Jeniks Energy Group to manage investment in the gas industry across Africa. As part of their joint venture ambitions to develop the Orange basin region in surrounding Namibia, QatarEnergy and TotalEnergies said in May they would purchase participation interests in offshore oil and gas blocks in South Africa. More recently, Qatar Energy signed a contract with Exxon Mobil to acquire a forty percent participation in two ultra-deep water exploration zones off the coast of Egypt.

Particularly in the mining sector — including its vital minerals sector — the Gulf nations are digging into Africa. They are heavily funding copper, nickel, and other minerals required for power transmission lines, electric vehicles (EVs), and renewable energy among the worldwide push for sustainable energy solutions and China’s supremacy in mineral processing.

Though the specifics are unknown, the UAE and the Democratic Republic of Congo’s (DRC) state-owned Sakima mining firm inked a $1.9 billion agreement in July 2023 to develop four vital mineral mines. With a $1.1 billion acquisition of a 51% share in Zambia’s Mopani Copper Mines in December 2023, International Resources Holding (IRH), the mining investment arm of Abu Dhabi’s International Holding Company (IHC), In Zambia, IRH teamed with Jubilee Metals Group in a copper recovery and processing project.

Rising as a major participant in the African mining sector is Saudi Arabia which wants to become a processing center for battery materials and boost economic contribution from $17 billion to $75 billion by 2035. Four African nations have agreements with the Kingdom for investigating mining prospects. With a network of activities in Malawi, Mozambique, Zimbabwe, and Zambia, Saudi Arabia’s Ma’aden — mostly controlled by the Public Investment Fund (PIF) and the biggest multi-committee mining and metals corporation in the Middle East — has grown into prominence in Africa.

Saudi Arabia and UAE are leading the charge in building port infrastructure and transportation hubs across Africa.

For the GCC nations who have focused on agro-investments in Africa, food security is an absolute top concern. They have always handled their food supply concerns very well. But the 2007–2008 food crisis — characterized by food export restrictions in more than thirty nations — inspired initiatives to guarantee a consistent supply. The Gulf States’ concerns about food security have been reignited by the COVID-19 epidemic and the disturbance in global supply systems related to the Ukraine war.

Following their food security policies, Saudi Arabia and UAE have led the way in investing in African agriculture for more than 10 years via contract farming, acquisition of agricultural businesses, and lease or purchase of substantial areas of land. Land purchases have sped up in the last several years. Agricultural land in Sudan, Zimbabwe, and Angola has been acquired by Emirati corporations such Dubai Investments and the Abu Dhabi-based E20 Investments.

Most of the 14 pending land purchase agreements the UAE has are in Africa. From crop cultivation to processing and export of the finished good and sales, the UAE and Saudi Arabia are now developing nations with complete control of the food supply chain.

With an eye on creating significant financial returns and supporting food resilience, the Gulf firms are creating food and agricultural portfolios. Al Dahra Agricultural Company runs four large agricultural projects in Egypt, mostly supplying the local market with wheat and other food crops. And 50% of its shares are owned by Abu Dhabi’s sovereign wealth fund ADQ.

The UAE’s Elite Agro Projects revealed last October its intentions to open a tea plant in Uganda and a wheat farm in Ethiopia. Targeting a number of important areas, including food production, ADQ established a financing and investment structure with Kenya last April.

Just like the UAE, the respective approaches adopted by Saudi Arabia and Qatar for food security center on raising local production while making investments in worldwide supply networks to get preferential access to key commodities. Recently, many Saudi teams visited South Africa and Nigeria as well as other East African nations to look into agricultural business prospects. Hence, agribusiness transactions have been explored by companies such Gulf Saudi Star Agricultural Development and Qatar’s Hassad Food in Ethiopia, Uganda, and elsewhere.

Gulf nations are expanding their involvement in Africa’s renewable energy sector, including green hydrogen and sustainable fuels.

UAE’s ambitions go beyond just growing its own food to include becoming a food trading center. Therefore, thanks to a network of ports and logistical hubs, the many Emirati businesses in the food and agricultural sectors in Africa are progressively linked to the UAE.

A pillar approach for GCC governments has been investing in port infrastructure, controlling important transport hubs, and either supporting or investing in African transport and logistics enterprises. The UAE has several African ports and is leading in establishing deeper links with the African transportation industry. Over $1.8 billion has been invested by DP World, a logistics business located in Dubai, to Africa over the previous 10 years. Going forward, it intends to contribute another $3 billion.

Currently, DP World ranks among the biggest port operators in Africa. Its ports on the sea and inland transport terminals as well as other activities are spread throughout the continent. And for $890 million, it bought Imperial Logistics, the largest distributor in South Africa in March 2022. To run the diverse Dar es Salaam Port, DP World signed a 30-year concession contract with the Tanzanian government in October.

It has also launched a $80 million logistics park, which would relate to its current cargo terminal in Ain Sokhna Port in Egypt. The business revealed in June intentions to spend $3 billion to build new port and logistical hubs throughout Africa.

Abu Dhabi has increased its own expenditure in African port development during the previous several years. An example of this are the concession agreements and collaboration accords with Sudan and Tanzania (2022), Angola, Republic of Congo-Brzzaville, Egypt (2023), which Abu Dhabi Ports Group has inked.

Targeting to improve the Kingdom’s product and export flow via Africa’s gateway, the Federation of Saudi Chambers inked a 92-year deal with Djibouti Ports and Free Zones Authority in June to construct a logistics free zone at the Port of Djibouti. Focusing on many industries in more than a dozen African nations, investment financing from the Saudi Fund for Development (SFD) has gone up. Recently, it teamed with Africa Finance Corporation (AFC) to find and jointly execute infrastructure projects all throughout the continent.

With an eye on renewable energy, hydrogen, and sustainable fuels, the Gulf States are expanding the range of their involvement in Africa’s energy industry. For cooperation in producing green hydrogen and its derivatives, Riyadh-based ACWA Power inked a MoU with Industrial production Corporation (IDC) of South Africa in late 2022.

Masdar, a state-owned renewable energy business from Abu Dhabi, bought a share in South Africa’s Lekela Power that year and is now working with Germany’s Conjuncta and Egypt’s Infinity on the west coast of Mauritania. With its headquarters in Dubai, URB, a development company, is spending $20 billion on building the most sustainable metropolis on the continent — called “The Parks” — in South Africa.

While Gulf investments in Africa present opportunities, they also raise concerns about political unrest and exploitation.

The UAE promised $4.5 billion at the Africa Climate Summit last year to hasten initiatives including sustainable energy. With backing from AMEA Power, Abu Dhabi Fund for Development, and Etihad Credit to close the financing gap, Masdar in association with Africa50 seeks to scale up renewable energy projects. Operating in more than a dozen African nations, Dubai-based AMEA Power LLC intends to commit $1 billion on renewable projects, including building a green hydrogen factory in Kenya. Concurrently, TAQA Morocco, under ownership of Abu Dhabi National Energy Company, intends to invest $1.6 billion in renewable energy projects.

Meanwhile, Saudi Arabia’s ACWA Power is the biggest GCC-based investor in the renewable energy industry of South Africa and the leading stakeholder in the Redstone concentrated solar power (CSP) facility.  Entering a joint venture with Enel Green Power SA, Qatar Investment Authority (QIA) also engaged in clean energy production in South Africa.

Driven by common goals of economic diversification, investment, and sustainable development, economic links between the Gulf States and Africa are blossoming. That stated, the Africa-Gulf relations mirror the conflict between the possibilities and hazards present in the contemporary multipolar period.

Investing in Africa gives the GCC countries access to geopolitical power, fresh markets, and natural resources. These investments also boost their attempts at economic diversification and food security. The disadvantages, however, include possible local community reaction and political unrest.

Gulf investments and alliances are timely and highly needed for African nations.

Among the drawbacks, it is difficult to overlook the Gulf States’ support to the authoritarian governments and militias; extensive smuggling networks allowing illegal financial flows; Dubai providing refuge to many African oligarchs; and possible exploitation of local communities and surroundings by means of investments in mineral and food resources.

Still, the African leaders can shape results, while the GCC countries and businesses have names to maintain. Both sides may guarantee mutually beneficial economic relations by supporting open trade practices, investing in sustainable initiatives, enhancing regulatory frameworks to stop exploitation, and thus forging alliances that make local economic development a top priority.

The New BRICS Currency and Payment Systems?

By
Dr. Nhien Tran
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BRICS

Amid great debates and high expectations for developing an economic clout, the BRICS (Brazil, Russia, India, China, and South Africa) and their allies are excitedly awaiting the introduction of a new currency and the creation of a new payment system at the forthcoming October 2024 summit in Kazan, Russia.

Following accepted procedures, Russia took over the one-year presidency of the BRICS on January 1, 2024. Over 250 activities scheduled under Russia’s presidency will lead to the BRICS conference in Kazan in October 2024. From its inception in 2006, BRICS have had two eras of expansion. In 2011 South Africa joined the original group in addition to China, Russia, India, and Brazil. On January 1, 2024, Ethiopia, Egypt, Iran, Saudi Arabia, and the United Arab Emirates became the five new official members of BRICS.

The BRICS have spent the previous several months delving deeply into the importance of their reformed procedures and a balanced approach for reestablishing the world’s dollar-based monetary system to clear their common determination to attain these economic policy goals.

The BRICS have spent the previous several months delving deeply into the importance of their reformed procedures and a balanced approach for reestablishing the world’s dollar-based monetary system to clear their common determination to attain these economic policy goals.

Acknowledging the close working links among members, BRICS has been constantly communicating and collaborating with a like-minded coalition of allies and global corporate players to show its readiness for a historic collective decision on this, which is expected in couple of months. Several initiatives under Russia’s BRICS leadership have made great progress toward their objectives in line with the values and resolutions adopted during the XV BRICS conference in South Africa.

Over the last several months, there has been a lot of back-and-forth on these economic projects; yet the strategic ideas for their future expansion with the inclusion of emerging countries from the Global South remain unchangeable. There is a massive information campaign in progress meant to distribute the reputations of the US and Europe. This implies that the 2006-formed “informal alliance” BRICS has attracted interest from some strong countries becoming increasingly unhappy with western supremacy.

Data recorded by reliable international media shows that more than thirty countries have indicated they want to be BRICS members. Acknowledging the increased desire, Russian Foreign Minister Sergey Lavrov noted that “the modalities of ascension have to be collectively discussed” at further summits, even if during Russia’s leadership the integration of additional new members into BRICS has been stopped.

Chairman of an expert council tasked with running Russia’s presidency; Viktoria Panova claimed that the upcoming summit—the final one under Russia’s BRICS leadership—would mostly concentrate on establishing a unified payment system. There are present projects to create a financial payment system to help the BRICS countries cooperate while maintaining their freedom in trade and economic ties. The expert, who was cited by the local Russian media, said that this is top priority as everyone in the group finds it important.

There is a massive information campaign in progress meant to distribute the reputations of the US and Europe.

Reports late in July revealed that the BRICS nations had developed a system like SWIFT, the worldwide financial messaging network blocked as part of the sanctions imposed on Russia after its invasion of Ukraine. The cornerstone of the method will be the BRICS Bridge international payment system. Transactions will take place using the currencies of the BRICS members, the New Development Bank acts as a clearinghouse and integration tool. As Panova pointed out, however, it is as important to consider how the recently joined BRICS countries will interact with the New Development Bank.

As the BRICS group aims to challenge the US dollar’s dominance as the world’s main currency, the creation of a payment system has taken front stage on their priorities. The financial project is supposed to present itself at the pinnacle of 2024. What is informally known as the BRICS Bridge has received support for a variety of reasons and suggestions to evade the West-dependent SWIFT system. Once the US dollar is in use, developing countries—especially those in the Global South—may be able to wean themselves off it and maybe even promote the use of their own national currency in trade dealings.

Four countries — Bangladesh, the UAE, Uruguay, and Egypt — have joined the New Development Bank (NDB), which its members established in 2015 to rival the current international financial institutions. Originally, the members of the BRICS alliance are South Africa, Brazil, Russia, India, and China. Ever since the NDB was established, policymakers have been wondering about its operations since, unlike more obvious multilateral financial institutions like the World Bank and the International Monetary Fund, little is known about it and its skeletal organizational structure and limited investment profile.

From its founding to the present, as the NDB enters its second decade, scholarly debates and research on the BRICS Bank have been underdeveloped. Released in July by Boston University’s Global Development Policy Center scholar Gregory T. Chin, “The ‘New’ New Development Bank: A Decade Plus in the Making” generated many questions. Among the very legitimate questions are those about the uniqueness of the NDB’s leadership and program as well as its achievements over the last ten years, especially in connection to its present concentration on de-dollarization and multipolarity.

Once the US dollar is in use, developing countries—especially those in the Global South—may be able to wean themselves off it and maybe even promote the use of their own national currency in trade dealings.

The prospect of adding members to the NDB raises the issue of why. Though South Africa was not initially included in O’Neill’s first formulation—which focused on Brazil, Russia, India, and China—he revisits the notion of the “BRICs,” a label he devised, for this collection. Like the issue of the BRICS expansion, O’Neill argues, the NDB membership expansion process and criteria must be worked out.

They also must agree on the admission standards, which must be related to a redefining of particular aims and communal objectives. They also require a well-defined scope of activity and value-added as they will be working together eventually. O’Neill argues that if the main petro-states in the Middle East and Gulf joined the NDB in 2023, it would support the bank’s efforts to encourage the use of local currencies.

Considering the original intent of the BRICS countries in establishing the NDB—to increase its worldwide visibility and presence, to seek out new approaches that advance a developmental agenda in the South—in terms of membership growth, regional offices, outreach, and partnerships, or in terms of the more concrete objectives of encouraging the use of local currencies, combating climate change and environmental protection, and promoting sustainable infrastructure and renewable energy—it is reasonable to question whether the members and upper management have been courageous enough in their efforts to build up the bank.

Professionals attending a separate webinar meeting in Geneva, Switzerland, agreed that digitizing the economy involves several moving components. Among these were the requirement of early establishment of rules and simplification of procedures. Using common market definition techniques to digital markets may be challenging as they are typically more creative and dynamic than traditional ones. One of the issues in handling digital marketplaces is this.

They also require a well-defined scope of activity and value-added as they will be working together eventually.

Although the BRICS alliance is currently very unofficial, as the membership count rises it is beginning to operate more actively. The more it evolves, the more real-world problems and conflicts surface. Although the BRICS nations have united on the need of consumer welfare standards and other basic rules, analysts have noted clear disparities even in this regard.

The governments of several countries, like Brazil, Russia, China, and South Africa, admit other objectives such ensuring economic freedom or a level playing field for small and medium-sized businesses. Some kind of development in more complex legal standards for assessing abuse of power might help to reach these goals. This covers the issue of antitrust control, which both national governments and many interstate organizations may have.

As the BRICS economies grow, several analysts—including Victor Oliveira Fernandes of the Brazilian Administrative Council for Economic Defense (CADE), Alexey Ivanov of the BRICS Competition Law and Policy Center, Deni Mantzari of the University College of London, and others—have observed that their strategies toward competition policy should reflect that.

Still, there are other important issues like a new antitrust-based approach for internet economy regulation. It is important to underline, nonetheless, that combating the violations of fair competition rules by global monopolists in local markets calls for cooperation exactly within the framework of supranational institutions.

Still, the group’s first concern is developing fresh assessment criteria and standards. CADE Commissioner Victor Oliveira Fernandes mentioned in his presentation that their company has already created many new metrics to characterize the platform industry. These include lack of openness, control of significant information, influence over choice via online platform design, and the ability to unilaterally impose conditions—as an indication of negotiating power.

The BRICS Bridge would have an expected impact because most BRICS members have openly expressed their support for a de-dollarization plan or process—a sad destiny for the Western currency—as well as for unilateral trade.

Several academics and policy analysts and some BRICS members confirmed to the author of this article in separate interviews carried out in early August that the evolution of the BRICS payment platform has reached a major stage and, if continuing as planned, would lead to a worldwide explosion. The BRICS Bridge would have an expected impact because most BRICS members have openly expressed their support for a de-dollarization plan or process—a sad destiny for the Western currency — as well as for unilateral trade. Over time, however, it might increase overall trade and — more importantly — solidify fresh bonds between the members of associations.

Preserve democracy, no room for political violence: Biden

By
Info Desk
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Democratic Convention

CHICAGO – US President Joe Biden called for preserving democracy, saying there was no room for political violence, as he addressed the Democratic National Convention in Chicago.

“There is no place in America for political violence, none. You cannot say you love your country only when you win,” he told the gathering.

“Democracy has prevailed. Democracy has delivered. And now democracy must be preserved,” Biden stressed.

His speech concluded the first day of the four-day event which will end with the formal nomination of Kamala Harris as a Democratic candidate for the upcoming US presidential election. Her running mate is Tim Walz, currently serving as Minnesota governor.

VOTE FOR FREEDOM

In a clear reference to the far-right which is supporting Republican nominee Donald Trump again, Biden “Let me ask you. Are you ready to vote for freedom?”

Read more: Harris And Trump Are Now Tied In Seven US Swing States

He urged the people to go out to vote on November 5, as democracy would be on the ballot.

“We saved democracy in 2020 and now we must save it again in 2024,” he said.

TRUMP AND PUTIN

Biden blasted Trump and his foreign policy, which the former president presents as “America First”.

Trump bows down to [Russian President Vladimir] Putin, the US president remarked.

Unlike the Trump administration, Biden said, the United States had re-engaged with its global allies, including NATO, since he took the office.

“We united Europe like it hadn’t been united for years, adding Finland and Sweden to NATO,” Biden said.

“Putin thought he’d take Kyiv in three days. Three years later, Ukraine is still free.”

PROTECTING CIVIL RIGHTS

In his speech, Biden also promised to protect civil liberties.

“Kamala [Harris] and Tim [Walz] will protect your freedom, protect your right to vote, to protect your civil rights.”

On the other hand, Biden added that Trump will do everything to ban abortion nationwide, as he talked about the one of most divisive topics in the US.

In this respect, he remarked that “Trump is going to find out the power of women in 2024”. He also called for giving the Democrats a clear majority in the US Senate and House of Representatives.

“That’s why you have to elect a Senate and House to restore Roe v Wade.”

PROSECUTOR VS CONVICTED FELON

Biden said selecting Kamala was the best decision he made in his whole career. “Like many of our best presidents, she was also vice president.”

He described Kamala as an “experienced” person with “enormous integrity”.

Biden drew a contrast between Harris as a prosecutor and Trump, a convicted felon. “Kamala and Tim will continue to take on corporate greed and bring down cost of food,” he added.

It’s a developing story. Details to follow   

The Philippine Vs China: Beijing Promises ‘Forceful Measures’

By
Info Desk
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0
South China Sea

BEIJING/MANILA – China on Monday vowed to maintain “forceful measures” in the South China Sea after a collision between the Philippine and Chinese vessels near a disputed reef.

The Philippine vessels’ actions had “seriously violated China’s sovereignty”, foreign ministry spokesperson Mao Ning said in Beijing.

She added that China “will continue to take resolute and forceful measures in accordance with the law to safeguard its territorial sovereignty and maritime rights and interests”.

The statement comes as the Philippines and China accused each other of ramming vessels and performing dangerous maneuvers in the South China Sea.

It is the latest flareup after the two nations had agreed to try to ease tensions and manage disagreements at sea.

Earlier, China Coast Guard spokesperson Geng Yu said a Philippine vessel had “deliberately collided” with a Chinese ship early on Monday.

“Philippine Coast Guard vessels … illegally entered the waters near the Xianbin Reef in the Nansha Islands without permission from the Chinese government,” Geng said, using the Chinese names for the Sabina Shoal and the Spratly Islands.

“The China Coast Guard took control measures against the Philippine vessels in accordance with the law,” Geng added.

THE DISPUTE

Sabina Shoal is in the Spratly Islands, which are claimed by China, the Philippines, Taiwan and Vietnam.

Beijing claims almost all of the South China Sea, including both shoals. It has rejected a 2016 ruling by the Permanent Court of Arbitration in The Hague that the Chinese claims had no basis under international law.

Meanwhile, the Western nations have been sharply criticizing China for aggressive measures designed to in block the Philippine efforts to resupply troops aboard a navy ship it intentionally grounded 25 years ago.

ACCUSED OF IMPOSING FACTS

The Philippines disputed Beijing’s account and accused it of “imposing its version of facts.”

It said two of its coast guard vessels “encountered unlawful and aggressive maneuvers” from Chinese vessels near Sabina Shoal while on their way to supply Filipino personnel stationed in two occupied islands.

“These dangerous maneuvers resulted in collisions, causing structural damage to both PCG (Philippine Coast Guard) vessels,” said Jonathan Malaya, a spokesperson for the national security council and Manila’s South China Sea task force.

ARGUMENTS AND COUNTERARGUMENTS

Manila said coast guard vessels Cape Engano and Bagacay were on their way to resupply personnel stationed in Flat Island which Manila calls Patag, and Lawak Island which China calls Nanshan, when the confrontation happened near Sabina Shoal.

A collision occurred between Cape Engano and a China Coast Guard ship at around 3:24am on Monday (1924 GMT on Sunday), Manila said.

Around 16 minutes later, a Chinese coast guard ship rammed Manila’s guard vessel Bagacay twice, damaging its auxiliary room, where a three-foot wide hole was inflicted, according to Philippine officials and images shared by the PCG.

The China Coast Guard posted a short video of the incident which showed what it said was a Philippine coast guard ship “deliberately ramming” with what it said was one of their vessels.

China’s maritime security said the same Philippine vessel involved in the collision then entered waters near Second Thomas Shoal after being prevented from entering Sabina Shoal waters.

WASHINGTON STANDS WITH MANILA

The United States condemned China’s actions. Its ambassador to Manila MaryKay Carlson said in post shared on X that the US “stands with the Philippines in condemning the China Coast Guard’s dangerous maneuvers” which endangered lives and caused damage to coast guard vessels.

Pakistan’s Strategic Edge in South Asia

By
Dr. Zafar Khan
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0
South Asia

Many presume, including some from the rival state, that Pakistan has not yet carried out Multiple Independently Targetable Reentry Vehicle (MIRV) test and it is India that has tested for the first time this capability in South Asia. More recently, India tested MIRV technology over Agni-V ranging from 3000km to 5000km.

Pakistan’s MIRV test in 2017 with the Ababeel missile challenged India’s ballistic missile defense system.

However, it is equally important to note that Pakistan has already successfully tested MIRV technology in January 2017 when it tested a Medium Range Ballistic Missile (MRBM) Ababeel ranging from 2,200km. Ababeel which has become a credible surface-to-surface ballistic missile can carry multiple warheads to hit multiple targets in multiple locations.

According to the Inter-Services Public Relations (ISPR), “The test flight was aimed at validating various design and technical parameters of the weapon system…Ababeel is capable of carrying nuclear warheads and can engage multiple targets with high precision, defeating the enemy’s hostile radars.”

Furthermore, the statement reads, “Development of Ababeel Weapon System is aimed at ensuring survivability of Pakistan’s ballistic missiles in the growing regional Ballistic Missile Defense (BMD) environment. This will further reinforce deterrence.”

India’s development of BMD systems and hypersonic capabilities raises the stakes in South Asia.

In the arms race for MIRVing, the United States was the first country to develop MIRV technology in the early 1970s followed by the Soviet Union and other nuclear weapon states. It is reported that Russia may MIRV up to 16 warheads of both the ICBMs and the SLBMs.

MIRVs are much more sophisticated and can hit multiple targets in multiple locations compared to multiple reentry vehicles (MRVs) where multiple warheads hit one target. The rationale for MIRVing was primarily to defeat the deployed defensive systems. That being noted, Pakistan’s rationale for developing and testing MIRV technology is to defeat India’s BMD.

India has been working to develop two types of BMD systems: the first tier is the Prithvi Air Defense (PAD) capable of intercepting high-altitude incoming missiles and the second tier is the Advanced Air Defense (AAD) capable of intercepting the low altitude missiles. The Indian security leadership might be pondering expanding its BMD system and make the perceived defensive system more sophisticated and embracing advanced technologies.

To counter India’s BMD, Pakistan may need to enhance its hypersonic missile technology.

India has been the first mover to develop a ballistic missile defense system to protect its major cities, if not the entire India, from the decisive incoming missiles in the broader Southern Asian region. A single factor may not help us understand the rationale for India’s acquisition of the BMD system.

However, the deployed defensive system may provide India the shield and sword incentives. Many perceive that India will have the incentive to strike first with the false incentives to shield itself since the defensive systems can be defeated by offensive speed in the form of a high hypersonic system.

As a part of effective countermeasures like the rivals do against each other, Pakistan has tested MIRV technology to undermine the defensive capability of India’s BMD and its other sophisticated air defense systems. To retain deterrence balance in South Asia, Pakistan may also need to speed up its other countermeasures such as hypersonic missile capability, which can penetrate the adversary territory and hit the targets quite efficiently without bothering much about the rival sophisticated defensive systems.

Strategic stability in South Asia hinges on effective countermeasures and maintaining deterrence.

It is reported that the Pakistan Air Force has developed hypersonic missile capability after it acquired stealth fighter jets. Many may argue that there is no substantial defensive mechanism to intercept hypersonic weapons. Presumably and quite ambitiously, the defensive systems could be converted into some type of hypervelocity to intercept the incoming hypersonic missile.

However, many may argue that it is not the hypervelocity, but the maneuverability that matters. In any case, speed matters too, which makes the potential adversary vulnerable to preemptive strikes. India has already developed a BrahMos supersonic cruise missile. It has now been trying to turn this into hypersonic missile capability.

In doing so, India is being tempted to escalate dominance and counterforce preemptive strikes in South Asia, which potentially increases crisis instability, arms race, and unintended consequences. Pakistan will need to produce effective countermeasures to offset India’s offensive capabilities. This is to retain deterrence balance and ensure broader strategic stability in South Asia.

Harris And Trump Are Now Tied In Seven US Swing States

By
Info Desk
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0
Kamala Harris

CHICAGO – US Vice President Kamala Harris and her rival Donald Trump are now tied in seven battleground states, latest opinion polls show.

These polls were conducted by ABC News/Washington Post/Ipsos poll and CBS News on the eve of four-day Democratic National Convention in Chicago, starting Monday (today).

It is a big improvement for Democrats as Trump, former and a Republican nominee, was earlier leading in some of these states.

But the development came only after President Joe Biden dropped out of the race and Harris replaced me, as the Democrats panicked with the prospects of Trump returning to the White House. As a result, they made Biden to leave the contest.

At the same time, Harris currently enjoys three to six percentage points countrywide lead over Trump.

SWING STATES

Given the electoral college system is the basis of the of US presidential election, the battleground states, also called the swing states, decide the outcome.

Swing states are those in US presidential elections that could potentially be won by either candidate. Therefore, the candidates focus on these states.

Their opposites are known as safe states, which opinion polls leading up to the election identify as being highly likely won by a particular party’s candidate.

In 2024, the seven battleground states are: Pennsylvania, Michigan, Wisconsin, Arizona, Georgia, Nevada and North Carolina. And Harris and Trump are tied 50-50.

IS HARRIS A GAME CHANGER?

Things have changed for Democrats since the US vice president became the party nominee.

According to an ABC News/Washington Post/Ipsos poll, Harris is ahead of Trump by 49-45% among registered voters and 51-45%.

In a five-way race that includes Robert F Kennedy, Cornel West and Jill Stein, Harris leads Trump 47-44% among registered voters and 49-45% among likely voters.

On the other hand, the CBS News poll shows that Harris is three points ahead nationally, leading Trump 51-48%.

SUN BELT STATES

On Saturday, a New York Times/Siena College poll showed Harris in contention in the “Sun Belt” states of Arizona, Georgia, Nevada and North Carolina, which had been leaning heavily towards Trump when Biden was the Democratic nominee.

Harris on Sunday held several campaign events in Pennsylvania, whose 20 electoral votes flipped from Trump to Biden in 2020.

“We have a lot of work to do to earn the vote of the American people. That’s why we’re on this bus tour today and we’re going to be travelling this country as we’ve been and talking with folks, listening to folks and hopefully earning their votes over the next 79 days.”

However, Trump criticized Harris on inflation and her previous opposition to fracking, which is popular in the state, while also launching a series of personal attacks.

“People say, ‘Be nice’. Have you heard her laugh? That is the laugh of a crazy person… It’s the laugh of a lunatic,” Trump said.

THE GAZA CHALLENGE

Although Democrats have quickly coalesced around Harris, the Democratic nominee is expected to face demonstrations over the Biden administration’s support for the war in Gaza on the sidelines of the convention.

It means Harris still needs to impress the Muslim and millennial voters who are against the traditional policies of US establishment when it comes to Palestinians and Israel.

Dozens of Democratic delegates calling themselves “Delegates Against Genocide” have said that they will use the convention to press for an embargo on US arms sales to Israel.

The Democrats’ draft platform released last month calls for an immediate ceasefire in the war, without mentioning the Palestinian death toll or calling for a halt to US arms shipments to Israel.

Iran’s Potential Countermeasures Against Israel

By
Chiara Cacco
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0
Iran and Israel

The confrontation between Iran and Israel has a tangled past and deep roots. Geographic locations of the parties, ideological differences, and regional strategic goals all complicate the elements causing this conflict. This conflict has resurfaced; the fight has become hotter; Israel’s deliberate and targeted attacks have essentially closed all avenues of peace.

Israel’s attack on the Iranian consulate in Damascus as well as the assassination of Hamas leader Ismail Haniyeh right in Tehran damaged Iran’s prestige, territorial integrity, and national sovereignty. The most crucial question among all this upheaval is: how likely Iran will respond? Is Iran about to start a world war? Regarding Israel’s conduct, how will Iran react?

Iran is likely to balance prudence with retribution through proxy conflicts and strategic military moves.

One conceivable reprisal from Iran for Israel’s activities is the murder of a well-known official from Israel. This approach serves as a direct sort of reaction and helps Iran to target at the core of Israel’s leadership. Showing to the world, its allies, and its people that Iran can target at the center of Israel’s leadership and delivering a strong deterrent message about its might and influence would be the key goals for Tehran.

Stated differently, Iran is striving to both extract punishment and show its power. Still, the probability of this decision is meager. Given Iran’s limited operational capacity inside Israel, a targeted death would logistically be challenging. On the other hand, Israel is prepared to manage such threats because of its strong security system and support from vital friends. These problems taken together reduce the likelihood that this alternative will be used effectively.

Iran may also potentially turn to diplomatic and non-punitive responses to the breach of its sovereignty. It may present Israel in a bad light, implying that the Israeli leadership is aggressive, violates international law, and seeks to raise local hostilities. Iran may make this more than simply a bilateral dispute by publicly criticizing Israel’s activities as against international law.

The assassination of Ismail Haniyeh in Tehran marked a significant escalation in the Iran-Israel conflict.

Iran can attempt to criticize Israel’s activities and exert pressure by employing diplomatic channels and international venues such as the United Nations. It may also seek remedy via international courts. These actions might help Iran improve its image in the world and simultaneously question Israel’s reputation both internationally and in popular opinion around the globe.

Another rather likely scenario is the start of large-scale and bloody proxy conflicts against Israel.  Iran would begin here by giving Hamas far greater resources — including money, weapons, intelligence, and political support — along with other elements. The fact that Yahya Sinwar replaced Haniyeh shows unequivocally the plan. Sinwar is close to Iran and well-known for advocating a military solution to the crisis. This decision amply reveals Iran’s involvement in it, in keeping with its objective of intensifying conflict with Israel.

Iran’s network of proxy groups spans the Middle East including Hezbollah in Lebanon and other militias in Syria and Iraq. Usually, these groups agree with Iran’s stance. Iran is anticipated to increase its support for these proxy groups and start additional operations against Israel’s interests as payback for previous actions. This may show up as more hacking, more missile strikes, or border instability directed toward Israel.

Iran may seek diplomatic channels to criticize Israel, portraying it as a violator of international law.

Iran wants to use this approach to divert Israel’s military resources, worsen its security posture, and indirectly pressure the Jewish state at little cost. This strategy targets Israel’s conventional military might by means of regional alliances, therefore complementing Iran’s wider theory of asymmetric warfare.

Another option Iran has for revenge against Israel is large military attacks with less effect. For these high-profile operations—which would more likely be a show of power than a declaration of war—missile strikes, naval maneuvers in vital waterways, general military maneuvers in disputed areas, or even a limited direct attack are all options. Iran would be demonstrating to the world that it can defend its interests without resorting to war by this type of attack. By doing this, it intends to raise national morale at home and show Iran’s strategic depth and agility to regional and worldwide audiences.

From the offered options, Iran looks to respond to Israel; yet, it is rather unlikely that it would go to war with Israel.  Iran is fully aware of the fact that a full-scale battle would not serve its current geopolitical situation. It will, therefore, strike a compromise between the requirement of moderation in its strategic calculations and the demand of retribution.

Proxy conflicts remain Iran’s primary means of exerting pressure without direct war.

Iranian authorities claim this is an attempt to retain Iran’s deterrent weapons and make the battle localized rather than worldwide. Given Israel’s latest actions, Iran will most certainly use a multipronged approach. In such case, the most practical plan would probably combine low-intensity, few-death huge missile attacks with proxy battles. Iran may restore its dignity and national pride using extensive low-intensity missile strikes, even if it is displaying its strength without significantly raising the conflict.

Through proxy conflicts to apply indirect pressure on Israel, Iran may avoid the risks and costs of direct armed engagement with Israel. Proxy battles are considered to be the main means by which Iran exacts its revenge as they let Iran impose pressure without really going to war. Using strategic military moves and proxy battles, Iran aims to balance prudence with retribution.

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