China Springs a BRI Surprise on US

M K Bhadrakumar | 11 Jun 2024

The China-Kyrgyzstan-Uzbekistan railway project has become a lodestar in the phenomenal transformation of regional connectivity in Central Asia.

China, Kyrgyzstan and Uzbekistan signed an intergovernmental agreement to begin construction of a railway link connecting Xinjiang with Fergana Valley, Beijing, on June 6, 2024

The report of the death of China’s Belt and Road Initiative [BRI] was an exaggeration, after all. Within days of the US President Joe Biden’s acerbic remark during an interview last week with the Time magazine that the BRI has “become a nuisance graveyard initiative,” a trilateral intergovernmental agreement to commence construction work on the China-Kyrgyzstan-Uzbekistan [CKU] railway project was signed in Beijing last Thursday. 

Chinese President Xi Jinping offered congratulations on the trilateral intergovernmental agreement with Kyrgyzstan and Uzbekistan and described the CKU as “a strategic project for China’s connectivity with Central Asia, symbolising the three nations’ collaborative efforts under the Belt and Road Initiative.” Xi hailed the agreement as “a show of determination”.

The idea of such a railway project was first proposed by Uzbekistan in 1996 but it languished for over a quarter century thereafter due to the geopolitical and alliance changes in Central Asia, including reservations reportedly on the part of Moscow and Astana. China, which could unilaterally finance CKU, also lost interest and prioritised its ties with Russia and Kazakhstan. 

Principally, the failure of the three countries to reach a consensus on the railway’s route became a vexed issue with China and Uzbekistan favouring a southern route, which would represent the shorter transit route to Europe and West Asia, while Bishkek insisted on the northern route—a longer passage that would connect Kyrgyzstan’s northern and southern regions and boost its economy. 

However, the moribund project took new life following the changing geopolitics of Central Asia, as intra-regional integration processes began gaining traction, the rethink in Moscow in favour of strengthening regional connectivity in the conditions under western sanctions, etc. 

Indeed, with improved railway connectivity, it is not only the connection between China and the two Central Asian countries along the route that will be strengthened, but the interconnectivity in Central Asian region as well. 

However, in a curious reversal of roles, as Central Asia turned into a turf of the great game lately between the US on one side and Russia and China on the other, Washington began taking a dim view of the prospect of such a project to connect the railway systems of China potentially to the European railway network through Turkmenistan, Iran, and Türkiye.  

Suffice to say, in the past two years, with renewed interest, China began viewing the 523 km long railway line — 213 kms in China, 260 kms in Kyrgyzstan, and 50 kms in Uzbekistan — optimistically as a shorter route from China to Europe and West Asia than the existing 900 km corridor that passes through the Trans-Siberian Railway in Russia, which lacks modern infrastructure with only a single non-electrified track that makes it incapable of transiting Chinese goods to Europe, and also mitigate the economic costs associated with Western sanctions on Russia.

Above all, the growing geopolitical tensions over the Taiwan Strait and South China Sea have begun posing serious concern and top priority for Beijing to establish alternate land routes to the European market.         

Without doubt, CKU has huge potential in geopolitical, geo-strategic and geo-economic terms. Succinctly put, it will complete the southern passage of the New Eurasian Land Bridge, shaping a convenient transport path from East and Southeast Asia to Central and Western Asia, Northern Africa and Europe. 

Specifically, apart from integrating Central Asian region with the wider transportation network, and connect it better to the global market, Beijing envisages that CKU could be further extended to other countries in future, such as Afghanistan. 

In fact, speaking at the signing ceremony on Thursday alongside Xi and Kyrgyz President Sadyr Japarov, President of Uzbekistan Shavkat Mirziyoyev underscored that “This road will allow our countries to enter the wide markets of South Asia and the Middle East through the promising Trans-Afghan Corridor.” 

Of course, the construction of CKU, which is expected to start later this year at a cost of $8 billion, poses formidable challenges, being a trans-national project to be executed by a joint venture of between three countries in the BOT  format. No doubt, CKU involves daunting engineering skills with its path traversing the challenging terrain of western China and Kyrgyzstan at altitudes ranging from 2,000-3500 meters and involving the construction of more than fifty tunnels and ninety bridges through Kyrgyzstan’s highest mountains.

But China has vast experience and expertise in pulling it off. Xi said the agreement signed in Beijing provided a “solid legal foundation” for the railway’s construction and it transformed the project “from a vision to a reality”.

The project feasibility study is currently being updated, following the completion of field surveys by Chinese engineers in December. Zhu Yongbiao, a professor at the Research Centre for the Belt and Road of Lanzhou University, told Global Times that construction techniques and financing pose no problems. 

The Chinese foreign ministry spokesperson stated at the daily press briefing in Beijing on Friday, “This important milestone was achieved thanks to the tremendous efforts of different departments and experts, as well as the personal attention and support from the leaders of the three countries.” 

The spokesperson flagged that CKU is “another testament to the importance of the Belt and Road Initiative and demonstrates the popularity of the vision for a community with a shared future for mankind in Central Asia.”

The CKU originates from the western Chinese hub of Kashgar to the Uzbek city of Andijan in Ferghana Valley, passing through Torugart, Makmal and Jalalabad. It connects the Soviet-era railway grid in Uzbekistan leading to Termez on the Amu Darya bordering Mazar-i-Sharif city in Afghanistan. 

Uzbekistan announced last month that the Trans-Afghan railway project is anticipated to be completed by the end of 2027, connecting Uzbekistan, Afghanistan, and Pakistan, “facilitating crucial trade routes and bolstering regional connectivity.” Interestingly, the Trans-Afghan Railway project has also figured in the Chinese-Pakistani documents in the past.

The joint statement issued after Pakistani Prime Minister Shehbaz Sharif’s visit to China last week vowed to make the China-Pakistan Economic Corridor “an exemplary project of high-quality building of Belt and Road cooperation… (and) recognised the significance of Gwadar Port as an important node in cross-regional connectivity” while also agreeing to play a constructive role “in helping Afghanistan to achieve stable development and integrate into the international community.”

Notably, in the first official recognition of the interim Taliban government by a major nation, Xi Jinping welcomed Asadullah Bilal Karimi, the Taliban-appointed Afghan ambassador, in a formal ceremony at the Great Hall of the People in January, along with envoys from Cuba, Iran, Pakistan and 38 other countries, who also presented their credentials. 

It is entirely conceivable that the time has come for the realisation of the century-old dream of a Trans-Afghan railway. Qatar reportedly has shows interest in funding the project. At a meeting in Kazan in February with Russian President Vladimir Putin, Mirziyoyev had disclosed that the Russian side had expressed interest in participating in the development of the technical justification for the project and its promotion. The Russian Deputy Prime Minister for Transport Vitaly Savelyev who had earlier visited Tashkent, attended the meeting in Kazan.

Certainly, the restoration of full relationship between Moscow and Kabul, which is imminent, will help speed up matters. 

The CKU becomes the lodestar in a phenomenal transformation of regional connectivity in Central Asia and far-flung regions surrounding it. In the current international climate, this has profound geopolitical implications for the Russian-Chinese joint/coordinated efforts to push back the US’ dual containment strategy. 

MK Bhadrakumar is a former diplomat. He was India’s ambassador to Uzbekistan and Turkey. The views are personal.

 

Courtesy: Indian Punchline

Engineer Rashid’s Victory in Baramulla is a Silent Message for Kashmiri Dynasts

KASHMIR IS INDIA'S GAZA

Nasir Khuehami, Ummar Jamal |

 13 Jun 2024

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The burgeoning voter engagement signals a seismic shift, where the electorate refuses to be pawns in the game orchestrated by the political elite represented by NC and PDP.

Engineer Rashid (Image Credit: X handle of @ErRashidKashmir)

When Omar Abdullah and Sajad Gani Lone filed nominations to contest from the Baramulla constituency, it was widely anticipated that the political battle would be decisively bipolar between these two prominent figures. Many dismissed Engineer Rashid as a minor contender, much like in 2019. However, as the saying goes, "A week is a long time in politics."

The week-long campaign by Abrar Rashid, on behalf of his incarcerated father, yielded an unexpected victory. Engineer Rashid secured the Lok Sabha seat from Baramulla, defeating two heavyweights -- National Conference (NC) Vice President and former Jammu & Kashmir Chief Minister Omar Abdullah, and the President of J&K Peoples Conference, Sajad Lone, who had the backing of J&K Apni Party and several other political factions.

With a lead in 14 Assembly seats, the margin of Rashid's victory over Abdullah sent shockwaves through the NC. Initially, Abdullah conceded defeat and extended his congratulations to Rashid. However, a few days later, Abdullah tweeted excerpts from articles in The Print and The Indian Express, which suggested that Rashid's victory would embolden secessionists and reinvigorate Kashmir’s Islamist movement. Through a series of tweets, he implied that Rashid won due to a sympathy vote and that his victory would be problematic, potentially reviving separatism in Kashmir.

Rashid, who has taken an oath on the Indian Constitution and served as an MLA twice, was unfairly maligned Abdullah’s endorsement of these articles. Rashid’s decisive public mandate should be respected, not tarnished. Abdullah’s tweets recall the 1987 elections, which were marred by allegations of rigging to undermine the political challenge from the Muslim United Front, suggesting that their victory would lead to secession. The subversion of the people's mandate in 1987 had far-reaching consequences, the effects of which are still felt today.

By repeatedly tweeting these articles, Abdullah has implicitly endorsed views that undermine the democratic choice of the people. Accusing political rivals of being secessionists has been an NC tactic since 1987 against those who challenge their dominance. During the 2019 parliamentary elections, NC candidate Akbar Lone accused Rashid of being an RSS (Rashtriya Swayamsevak Sangh) agent. It is paradoxical that, five years later, the party’s vice-president is implying that Rashid’s victory would revive separatism.

From these contradictory stances, one can logically conclude that Abdullah considers only the Abdullah family and their supporters are entitled to rule Kashmir. His portrayal of Rashid as an anti-national figure, whose presence in Parliament would purportedly harm national interests, appears to be a strategic move to mislead Delhi and prevent the people of Kashmir from getting an alternative in politics.

Implying that the 4,72,481 people who voted for Rashid are secessionists and radical Islamists is a profound disrespect of the public mandate. Such actions exemplify how some political figures deflect blame for their defeats onto others. Abdullah’s inability to offer something substantive to the electorate is starkly evidenced by his loss. His endorsement of these articles serves as a convenient distraction from his failure to connect with the voters. The electorate’s choice signals a demand for fresh approaches and genuine solutions. Rashid’s victory embodies this desire for change, highlighting the shortcomings of Abdullah’s campaign.

The pertinent question now is how Rashid managed to deliver such a resounding defeat to two political heavyweights in Kashmiri politics. There are several reasons for this outcome. The voters decisively turned away from the NC and the People’s Democratic Party (PDP), viewing them as dynastic elites more interested in their own power and privilege than the welfare of the people.

Similarly, the J&K Apni Party was rejected as a perceived proxy of the Bharatiya Janata Party. This reflected a desire for independence from parties seen as controlled by Delhi, either at present or historically, and not genuinely advocating for local interests.

Rashid’s accessibility and grassroots connection during his two terms as MLA, symbolised by his traditional attire and constant presence among the people, made him more relatable and trustworthy. There was significant voter turnout, with Rashid securing leads in traditionally strong NC and PC areas like Kupwara, Trehgam, Lolab, and Karnah. The shift in political dynamics, with people who previously viewed participation in elections as taboo now supporting the electoral process, marked a significant transition in Kashmiri politics.

Rashid’s campaign was organic and grassroots-driven, contrasting with the staged and heavily secured campaigns of other parties. His adept use of social media platforms, like Facebook and Instagram, to engage with voters was both relatable and effective. There was a strong anti-BJP sentiment in Kashmir, particularly in North Kashmir, where people felt that Rashid was the best candidate to represent their opposition to BJP policies. Rashid’s unique position as the only mainstream leader who remained incarcerated while others were released over the past five years, heightened his image as a victim of BJP’s actions.

This situation generated significant sympathy for Rashid, especially among women, who played a crucial role in mobilising their families and communities to support him. The widespread sympathy and perception of Rashid as a steadfast and resilient leader against BJP galvanised voters to rally behind him, significantly contributing to his victory.

The political vacuum and the August 5 decision (abrogation of Article 370, revoking state status, and its bifurcation), which impacted Kashmir’s rights and identity, fueled widespread frustration. Rashid’s win sent a strong message to the Centre. The electorate responded to the extreme pressure, suffocation, and curbs on freedom of speech and dissent by voting to have these issues represented in Parliament. This was a form of protest against the lack of space for expression and dissent, reflecting the electorate's desire for a leader who truly represents their concerns and aspirations.

The outcome of the 2024 parliamentary elections delivers a resounding message to the two Kashmiri political dynasties. With the defeat of both Abdullah and Mehbooba Mufti, it is glaringly apparent that amidst surging voter participation, the political fortunes of these two formidable lineages have been cast into uncertainty. The failure of these two political parties to resonate with the aspirations of the ordinary Kashmiri leader has become glaringly evident. The past electoral victories of these dynasties were significantly buoyed by low voter turnouts.

However, the surge in voter participation is poised to fundamentally alter the political landscape, rendering the fate of the people no longer dictated solely by the cadres of these entrenched political factions.

The burgeoning voter engagement signals a seismic shift, where the electorate refuses to be mere pawns in the game orchestrated by the political elite. The electorate has awakened to the realisation that these dynastic rulers have merely promised them bridges where no rivers flow. As they seek a more promising alternative, only time will unveil whether Engineer Rashid emerges as the harbinger of change.

 

Nasir Khuehami is National Convenor, J&K Students Association, studying Masters in Conflict Analysis and Peacebuilding from Jamia Millia Islamia, New Delhi. khuehamiayaan@gmail.com.

Ummar Jamal is National General Secretary of J&K Students Association, studying law from the University of Kashmir. ummarjamal968@gmail.com. The views are personal.

 

The G7 Loses Ground to BRICS

M.K. Bhadrakumar | 14 Jun 2024

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With the failure of the Western project to isolate Russia, the G7 is meandering and has lost its sense of direction.

One hidden transformation of the international system in the most recent years has been the hijacking of the G7 by Washington as its ‘kitchen cabinet’ in the transatlantic system. The G8’s ‘shrinkage’ to G7 in March 2014 following the coup in Ukraine was a defining moment that signalled that there wasn’t going to be any post-Cold War peace dividend. The G7 that was conceived as a group of countries charioting the world economy ended up as the vehicle of big-power rivalry to preserve the US’ global hegemony. Isolating Russia — and lately, China, too — became its leitmotif. 

With the failure of the Western project to isolate Russia, the G7 is meandering and lost its sense of direction. Italy, the G7 summit’s rotating host this year, has made AI (artificial intelligence) a key issue in the summit. And Prime Minister Giorgia Meloni invited by an unlikely guest, the pontiff, to make an unprecedented appearance at the G7 event at the fashionable Italian hotel Borgo Enyatia to advocate for the regulation of AI, a technology he’s called potentially harmful.

Pope Francis was a chemist prior to entering seminary and will apparently draw on his scientific training to inform his stances. Italy under Meloni’s leadership has increasingly scrutinised AI technology, and temporarily banned ChatGPT in March 2023, becoming the first Western country to do so. 

Equally, G7 is desperate to go beyond a closed elite club of Western democracies by piloting an ambitious outreach and issued an unusually long list of invited leaders of the non-Western world to the summit. Aside Ukraine, Meloni has invited the leaders of India, Brazil, South Africa, Turkey, Saudi Arabia, Argentina, Algeria, Kenya and Mauritania to attend the meeting. What was the logic applied is impossible to tell. 

But this is realpolitik and G7 is hoping to bridge the ‘West vs. the Rest’ hiatus in the line-up over the Ukraine crisis. In fact, the ‘outreach guests’ will witness tomorrow (June 14) the nail-biting finale of a geopolitical drama, which forms the core of the G7 summit — the months-long attempt by the group’s leaders to make a decision on using dividends from frozen Russian assets for Ukraine’s military needs.

To recap, as part of the West’s ‘sanctions from hell’ against Russia in 2022, the European Union, Canada, the US and Japan froze Moscow’s assets in the western banks to the tune of $ 300 billion. (Some say, the actual figure is closer to $400 billion.) Only about $5-6 billion is located in the US, while $210 billion is stored in Europe, but the decision to use the proceeds from Russian assets was initiated by Washington with a hidden agenda to make Europe pay for the war’s consequences. 

Unsurprisingly, the European members and Japan opposed the US pressure to include a provision on the use of income from frozen Russian assets in the joint G7 statement to be adopted. The CNN reported on Monday that American officials are still trying to agree on the “most sensitive financial details” of the plan for Russian assets, since the G7 countries are yet come to a consensus and discussions are continuing as regards “the exact form of providing assistance, as well as guarantees for the return of these funds.” 

That said, don’t be surprised if the recalcitrant Europeans ultimately fall in line. There is no question that the G7 move to appropriate Russian money in western banks was bad enough but to use the profits out of them to fund the needs of Ukraine is, to put it mildly, an act of brigandage. 

The US gains if the current freeze in Russia-Europe ties reaches a point of no return, as Europe is sure to bear the brunt of Moscow’s retaliation. If the G7 adopts such a move, it will weaken the global financial system. By brazenly violating international law, the G7 will be setting a precedent that undermines confidence in European institutions. 

It will be interesting to see how the G7 leaders explain to the ‘outreach’ countries, drawn largely out of BRICS, that Russia is an exception and such a practice will not one day be used against India, Turkey, Saudi Arabia or some other state. 

To be sure, the spectre of the 16th summit meeting of BRICS at Kazan (October 16-18) under the chairmanship of Russian President Vladimir Putin haunts the G7. Moscow has let it be known that if the past three years ended with the expansion of the BRICS, the new phase going forward will ensure that the participants in an expanded format create a viable structure in which the member countries work purposively to develop a viable structure. 

An important topic at the BRICS summit meeting in Kazan will be the creation of a single currency within the grouping, which will significantly simplify and expand the economic relations of the member countries against the backdrop of mounting pressure from the West. 

Speaking at the SPIEF conference in St. Petersburg last week, Putin announced that such an independent payment system would be created. Foreign Minister Sergey Lavrov later confirmed that a platform for payments in national currencies is being developed. 

The BRICS countries have realised that the creation of a single currency has become a necessity today due to the ongoing sanctions from the US and the European Union. Lavrov noted that “recent international events have thrown off the masks” of the West, which has tried to impose its own values on other countries under the guise of universal ones and replace equal dialogue with “narrow coalitions” that assign the right to speak on behalf of the whole world. 

BRICS, Lavrov underscored, implies a completely opposite type of partnership — that is, anything but a bloc structure, and on the contrary, a fundamentally open format, which involves working only in those areas that are of mutual interest to all participants, big and small. Reports suggest that around 30 countries have sought BRICS membership.

Meanwhile, in ‘systemic’ terms, G7 is entering uncharted waters. Far-Right parties are storming the power centres of Europe. With an eye on the G7 summit, Politico wrote: “Dream on. The G7 summit in the southern Italian coastal resort of Borgo Egnazia features arguably the weakest gathering of leaders the group has mustered for years. Most of the attendees are distracted by elections or domestic crises, disillusioned by years in office, or clinging desperately to power. 

“France’s Emmanuel Macron and Britain’s Rishi Sunak are both fighting snap election campaigns they called in last-ditch efforts to reverse their flagging fortunes.

“Germany’s Olaf Scholz was humiliated by far-right nationalists in last weekend’s EU Parliament election and could soon be toppled himself.

“Justin Trudeau, prime minister for nine years in Canada, has spoken openly about quitting his “crazy” job.

“Japan’s Fumio Kishida is enduring his lowest personal ratings ahead of a leadership contest later this year. 

“And then there’s Joe Biden.

“The 81-year-old U.S. president’s son, Hunter, was found guilty of gun charges on Tuesday, barely two weeks before his father’s first crucial debate with a resurgent Donald Trump in a presidential campaign the Democrat is in serious danger of losing.” 

Above all, the angst in the European mind is palpable that if Trump wins in a democracy-altering climax in the November election, he may not even have time or patience to tolerate an archaic forum like G7. Surveying the bleak landscape, it comes as no surprise that Meloni took matters in her hands and decided to use the summit to her purposes by designing an agenda that cleaved to Italy’s strategic interests — Africa, migration and the Mediterranean.

MK Bhadrakumar is a former diplomat. He was India’s Ambassador to Uzbekistan and Turkey. The views are personal.

Courtesy: Indian Punchline

 

Brazil: Feminists Mobilise Against Bill That Equates Abortion With Murder

Peoples Dispatch | 15 Jun 2024

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The Chamber of Deputies surprised many by pushing forward the discussion on a bill that equates abortion with murder and prohibits abortion even in cases of rape.

Abortion rights demonstrators mobilize in Brasília (Photo: Matheus Alves / Mídia NINJA)

On Wednesday, June 12, Brazil’s Chamber of Deputies approved the urgent discussion of a bill that equates abortion with murder. Officially named Bill 1904/2024, it will now be voted on by the plenary of the Chamber of Deputies, without first going through the relevant committees.

The bill could result in prison sentences as long as 20 years for those who administer abortions after 22 weeks of pregnancy.

The Speaker of the Chamber of Deputies, Arthur Lira, of the Progressive Party, put the matter on the agenda without informing the federal deputies and without announcing the bill’s number. He asked Pastor Henrique Vieira of the left-wing Socialism and Freedom Party about the position of party members on the matter under consideration, but he did not respond. Lira considered the urgency of the matter approved in symbolic voting, in which each deputy’s vote on the electronic panel isn’t recorded, which lasted just 23 seconds. In general, symbolic voting occurs when there is already agreement among parliamentarians on the matter on the agenda.

The bill adds articles to the Penal Code to make the penalties for simple homicide the same as those for abortions carried out after 22 weeks of gestation, even in cases where the practice is legally allowed. The text also prohibits abortion even in cases of pregnancy resulting from rape, if there is fetal viability.  

At the time of the vote, there was no reaction in the plenary. On social media, however, members of the progressive spectrum attacked what they called Lira’s “maneuver”.

“Lira has just struck a blow against women’s rights. He approved an emergency request without even announcing the vote. The request allows voting on the bill that forces girls and women who suffer sexual violence to have the child of a rapist,” wrote Natália Bonavides of the Workers’ Party.

Congresswoman Sâmia Bomfim of the Socialism and Freedom Party also spoke out on social media. “Using a maneuver, Lira approved the urgency of the Child Pregnancy Bill, so the bill can go to a voting at any time in the plenary,” she posted.

The Nem Presa Nem Morta (Either Jailed nor Killed, in a rough translation) Campaign, which defends the decriminalization of abortion in the country, called Lira’s stance “cowardly.”

The National Front for the Legalization of Abortion described the urgent approval as “dishonest and undemocratic.”

Protesters across Brazil denounce “Child Pregnancy Bill”

On Thursday night, many Brazilian cities saw feminist protests against Bill 1904/2024, dubbed the Child Pregnancy Bill for the impact it could have on young girls who are victims of sexual violence.

The Front Against the Criminalization of Women and For the Legalization of Abortion led protests in 17 Brazilian cities and engaged in mobilizations in many other places.

Hundreds gathered at the Republic’s National Museum in Brasília for the protest. According to Thaísa Magalhães, Women’s Secretary of Brazil’s Central Workers’ Union of the Federal District (CUT-DF, in Portuguese), the protests show that women listened to the call of many feminist and social organizations. “Women expressed their solidarity with the urgency of going to the streets to say no to the Child Pregnancy Bill,” said Thaíssa.

According to Brazilian pedagogue Leila Rebouças, the discussion of this agenda in the Chamber of Deputies represents a negotiation over women’s bodies. She also points out that in election years, such as 2024, when municipal elections will be held, conservative agendas are, once again, debated in Congress. “This is yet another strategy to put these agendas forward to negotiate votes,” she said.

In São Paulo, the demonstration took place at the São Paulo Museum of Art (MASP, in Portuguese) on Paulista Avenue, and brought together hundreds of demonstrators. According to Ana Paula, an activist with the National Front Against the Criminalization of Women and For the Legalization of Abortion, the demonstrations are women’s response to the attack on a right already legally guaranteed.

“It was a moment of revolt for women and all pregnant women about the urgency for the Bill 1904/2024, which was done without any decent consultation with parliament, because it wasn’t even announced. In 23 seconds, Lira has ruined the lives of thousands of girls and women who have access to a legal right guaranteed by the Penal Code, which dates back to 1940: abortion in cases of sexual violence and risk to life. This is truly revolting and led to this movement,” she says.

At Cinelândia, downtown Rio de Janeiro, people gathered to defend the right to legal abortion.

This article was based on two reports originally published in Brasil de Fato.

Courtesy: Peoples Dispatch

 

Death of Petrodollar is a Biden Legacy

M.K. Bhadrakumar | 15 Jun 2024

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The end is nearing for the unfettered freedom US enjoyed to print dollar currency at will and living it up far beyond its means and imposing its global hegemony.

The Deep State should have been alert five years ago when Candidate Joe Biden announced that he, if elected as president, was determined to make the Saudi rulers “pay the price, and make them in fact the pariah that they are.”

Biden was blunt to the point of being brutal about the Saudi royal family, saying there was “very little social redeeming value in the present government in Saudi Arabia” under King Salman’s rule.  

But, instead, the Deep State felt delighted that Biden was just the man to succeed Donald Trump and reverse the Trump-era practice of forgiving Saudi human rights violations in order to preserve jobs in the American arms industry.

Biden probably knew by then that the American intelligence had concluded about the role of Mohammed bin Salman, the Saudi crown prince and the de facto leader of the country, in the killing of the dissident-journalist Jamal Khashoggi, who was a ‘strategic asset’ of the CIA for navigating the next Saudi succession and the ensuing regime change to a happy ending. Khashoggi’s decapitation crippled Washington’s game plan to instal a pliable ruler in Riyadh. 

Today, all that is history. But unlike the Bourbons, the Saudi royals never forget or forgive. They also have infinite patience and their own concept of time and space. And last Sunday, June 9, they struck. 

In great royal style, last Sunday, Riyadh simply let the 50-year-old petrodollar agreement between the US and Saudi Arabia to expire. 

To recap, the term “petrodollar” refers to the US dollar’s pivotal role as the currency used for crude oil transactions on the world market per the US-Saudi deal dating back to 1974 shortly after the US went off the gold standard. 

In the history of global finance, few agreements have wielded as many benefits as the petrodollar pact did for the US economy. At its core, the agreement stipulated that Saudi Arabia would price its oil exports exclusively in US dollars and invest its surplus oil revenues in US Treasury bonds — and, in a quid pro quo, the US would provide military support and protection to the kingdom.  

The ‘win-win’ deal ensured that the US gained a stable source of oil and a captive market for its debt, while Saudi Arabia secured its economic and overall security. In turn, the denomination of oil in dollar elevated the dollar’s status as the world’s ‘reserve currency’. 

Since then, the global demand for dollars to purchase oil has helped to keep the currency strong, not only made imports relatively cheap for American consumers but in systemic terms, the influx of foreign capital into US Treasury bonds supported low interest rates and a robust bond market.

Suffice to say, the expiration of the 1974 US-Saudi ‘oil-for-security’ deal has far-reaching implications. At the most obvious level, it highlights the shifting power dynamics in the oil market with the emergence of alternative energy sources (e.g., renewables and natural gas) and new oil-producing countries (e.g., Brazil and Canada) challenging the traditional dominance of West Asia. But this is more the optics of it. 

Crucially, the petrodollar’s expiration could weaken the US dollar and, by extension, the US financial markets. If oil were to be priced in a currency other than the dollar, it could lead to a decline in global demand for the greenback, which, in turn, could result in higher inflation, higher interest rates, and a weaker bond market in the US.

Suffice to say, going forward we may expect a significant shift in global power dynamics with the growing influence of emerging economies, the changing energy landscape and a tectonic shift in the global financial order as it enters a “post-American” era. The bottom line is that the US dollar’s dominance is no longer guaranteed. 

There is no question that Saudi Arabia has a roadmap worked out. Four days before the expiration of the oil-for-security deal, Reuters reported that Saudi Arabia has joined a China-dominated central bank digital currency cross-border trial, “in what could be another step towards less of the world’s oil trade being done in U.S. dollars.” 

The announcement on June 4 came from the Switzerland-based Bank for International Settlements [BIS], an international financial institution owned by member central banks. It means that Saudi central bank has become a “full participant” of Project mBridge, a collaboration launched in 2021 between the central banks of China, Hong Kong, Thailand and the United Arab Emirates. 

The BIS announcement took note that mBridge had reached “minimum viable product” stage — that is, it is ready to move beyond the prototype phase. By the way, 135 countries and currency unions, representing 98% of global GDP, are currently exploring central bank digital currencies, or CBDCs.  

The entry of Saudi Arabia, a major G20 economy and the largest oil exporter in the world, signals a scaling up of commodity settlement on a platform outside of dollars in a near term scenario, with a new technology behind it. Interestingly, the mBridge transactions can use the code China’s e-yuan is built on! 

The intention is to modernise payments with new functionality and provide an alternative to physical cash, which seems in terminal decline anyway. China dominates the mBridge project and is carrying out the world’s largest domestic CBDC pilot which now reaches 260 million people and covers 200 scenarios from e-commerce to government stimulus payments. 

Indeed, other big emerging economies, including India, Brazil and Russia, also plan to launch digital currencies in the next 1-2 years while the European Central Bank has begun work on a digital euro pilot ahead of a possible launch in 2028.

Now, add to this Russia’s master plan to create a new BRICS payments system bypassing the dollar altogether. Moscow stock exchange announced on Wednesday that it will stop trading dollars and euros from Thursday, June 13.  

Thus, the expiration of the US-Saudi deal last weekend is emblematic of a cascading challenge from various quarters to the dollar’s pre-eminence as ‘reserve currency.’ In particular, the end is nearing for the unfettered freedom America enjoyed to print dollar currency at will and living it up far beyond its means and imposing the US’ global hegemony. 

There is growing unease among US elites that good life may be ending as the crushing debt burden sinks the American economy. In a CNBC interview yesterday, Treasury Secretary Janet Yellen warned that high interest rates are also adding to the burden as the US manages its massive $34.7 trillion debt load.  

Of course, there are no clear alternatives yet to the US dollar as the world’s leading reserve currency but the writing on the wall is that global trade strains and increased use of tariffs or sanctions could undermine its role sooner than later, as foreign investors’ concerns are rising about America’s public debt sustainability. 

The Fitch Ratings noted yesterday (June 13) that “Large primary deficits and higher interest service costs will keep the U.S. sovereign debt burden increasing after November’s elections, regardless of who wins.” 

In sum, what seemed hitherto a geopolitical rivalry over NATO expansion and Taiwan — or setting trade/technology standards in the Fourth Industrial Revolution — is taking on an existential dimension for Washington as the future of dollar is at stake. There are enough hints testifying to coordinated moves by Moscow and Beijing to accelerate the “de-dollarisation” process.

On the one hand, Russia is pulling all stops to present to the world at the forthcoming BRICS summit in October a non-dollar payment system to settle trade, while, on the other hand, China is systematically dumping its holdings of US treasury bonds that will give it a freer hand when the crunch time comes.  

MK Bhadrakumar is a former diplomat. He was India’s Ambassador to Uzbekistan and Turkey. The views are personal.

Courtesy: Indian Punchline

Extreme Weather Events: Why Outdoor Workers' Rights Are a Matter of Climate Justice

Sheeva Dubey, Prasad Pathak | 

17 Jun 2024

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Ensuring health and livelihood safeguards for outdoor workers against climate change impacts, such as heat, rain, cold, should be seen as a matter of their rights.

Multiple research and journalistic reports confirm the double whammy of excessive heat on outdoor workers -- on health as well as on livelihood. The impact on health ranges from minor ones, such as dehydration, body ache, weakness, exhaustion, fever, to major impacts, such as fainting, and death.

Livelihoods are impacted due to reasons like diminished productivity of workers, inability to work in excessive heat, loss of business, and income. There have been similar findings in a study on heat stress impact on the street vendors in Pune, Maharashtra.

While the heatwave predictions are at district levels, it exacerbates within urban areas and outdoor workers, such as street vendors, face the brunt as they can’t control their working environment unlike office-based workers who may have fans and air-conditioning.

This summer, unprecedented duration, intensity, and frequency of heatwaves were witnessed across India. According to India Meteorological Department, heatwaves are a period of unusually high temperatures as compared to what is normally expected over a region. While the criteria slightly differ for plane, hilly areas and coastal areas, temperatures should remain higher for more than 2 days to become a heatwave.

In India, heatwaves occur mostly during March to June. Records indicate that since 1956 till now, 11 summers had heat waves (temperatures more than 45 Degree Celsius). However, the frequency has increased in the 21st Century. Consecutively, 2022, 2023 and 2024 have experienced heat waves, while 2024 has experienced the highest temperatures of 52.9 Degrees. The death toll so far has been more than 200 this year.

As per predictions, this trend (heat wave) is likely to increase every year, primarily because of climate change. Concerns are, therefore, being raised about lack of policy and action to protect outdoor workers, such as agricultural workers, construction workers, transport workers, street vendors, and brick kiln workers.

However, safeguards from climate change impacts are still far from being seen as rights that outdoor workers deserve and must claim, although protection from climate change has been recently acknowledged by the Supreme Court as a part of the fundamental rights to life and equality. Yet, an understanding of climate justice is starkly missing in the entire discourse.

A fight for justice and rights

Why is there a question of justice when we speak of climate change? Because climate change is caused by human activities. Also, different communities have contributed differently to global warming that causes climate change. Western nations have amassed tremendous wealth by colonising and industrial activities that have caused far more carbon emissions than the rest of the nations, many of which have also been colonised and exploited by the West.

Similarly, the capitalist class owning industries has contributed far more to global warming than the working class that is engaged in mostly in manual labour, gets underpaid in return, and survives on the least resources causing minimal carbon emissions.

However, when it comes to bearing the impact of climate change, it is the poor, the marginalised, the working class, and the underdeveloped nations that find themselves more disadvantaged because of their inability to protect themselves and cover their losses. Climate change “vulnerability” is commonly understood to increase with one’s “exposure” to climate conditions and her “sensitivity” to it, and decrease with improvements in “adaptive capacity.”

Outdoor workers are far more exposed than others to climate conditions, such as heat, rain or cold. They are also more sensitive to adverse impacts of climate change than those with access to better locations, infrastructure, resources, livelihood security, nutrition, and healthcare.

Even the spatial composition of the outdoors affects the heat experienced for workers, such as street vendors. For example, crowded market places where vendors work, usually lack vegetation, water bodies, and have densely packed buildings that retain heat and increase minimum temperature (night) and maximum temperatures.

Next, most outdoor workers struggling to make ends meet in India’s vast informal economy, also have poor “adaptive capacity,” that is, one’s ability to minimise loss and damage or maximise profit with changing climate conditions. Socio-economically marginalising factors, such as gender, caste, race, ethnicity, age, or disability, render individuals and communities further vulnerable to climate change impacts.

Outdoor workers having made the least contribution to global warming but are in the forefront of bearing the impact of climate change. This is a matter of injustice. Not being given the needed policy framework and funds to cope with their climate vulnerabilities further adds to this climate injustice.

The Intergovernmental Panel on Climate Change (IPCC) defines climate justice as “justice that links development and human rights to achieve a human-centred approach to addressing climate change, safeguarding the rights of the most vulnerable people and sharing the burdens and benefits of climate change and its impacts equitably and fairly.” Securing the “rights” of climate vulnerable communities is very much at the core of IPCC’s idea of climate justice. Ensuring safeguards for outdoor workers against climate change impacts should thus be seen as a matter of their rights.

A lacking policy

India’s National Action Plan on Climate Change, released in 2008, has no component that addresses the vulnerabilities of outdoor and informal workers. These workers have thereby been excluded from many state-level climate change action plans as well. Not surprisingly, none of the projects funded under the National Adaptation Fund for Climate Change, as listed on the NABARD website, address the vulnerabilities of outdoor workers.

In disaster management policy, such as the National Disaster Management Plan, 2019, outdoor workers are acknowledged to be vulnerable to disasters, such as heat waves, chemical (industrial) disasters, and biological and public health emergencies. However, no measures have been included in the plan that are specific to outdoor workers besides assessing their vulnerability and improving their awareness. Outdoor workers’ particular vulnerabilities to disasters are not addressed. Also, there is no attention paid to outdoor workers in the plan for urban flooding, which specifically affects outdoor workers in urban areas.

In India, Heat Action Plans (HAPs) are prepared to deal with heat waves by increasing preparedness to reduce the impacts of heat. These HAPs are being prepared at state, district and city levels. It is observed that there is no consistency of scale – i.e., not every state or district or city would prepare HAPs.

The most prominent lacuna in the HAPs is that it does not consider local conditions but follow national guidelines. These HAPs focus on individuals but ignore their socio-economic differences and thus, ignore the vulnerable populations having collective vulnerabilities. It is also not clear how much budget gets allocated to prepare HAPs and then subsequently for mitigation measures. Thus, it is difficult to for the transition from preparing HAPs to effective implementation.

Further, while outdoor workers have received some attention in the country’s HAPs, this attention has been mostly limited to construction workers. Other outdoor workers, such as street vendors, gig workers, transport workers, sanitation workers, waste pickers, and hamaal workers get no mention. The focus being highly urban, agricultural workers, mining workers, fish workers, saltpan workers, cattle-rearers and the likes have also received no attention. Similar lapses are there in the 2018 draft of the National Action Plan for Climate Change and Human Health and the National Action Plan on Heat Related Illnesses, 2021.

On the other side, the laws and policies on workplace safety in India do not acknowledge and address climate change vulnerabilities of workers. These include the new Occupational Safety, Health and Working Conditions Code, 2020 and the National Policy on Safety, Health and Environment at Workplace, 2009. The various schemes and missions on skill development and livelihood support such as Deendayal Antyodaya Yojana - National Urban Livelihoods Mission and Pradhan Mantri Kaushal Vikas Yojana are equally myopic and lacking in acknowledging and addressing climate change risks that workers face.

Workers’ challenges

The International Labour Organisation has recommended that workers and workplaces should be at the centre of conceptualising climate change action. It has clearly directed that heat action plans should address workers’ safety and health. However, India’s outdoor workers remain excluded from the nation’s climate change policies. This keeps them in a marginalised position, incapable of accessing resources to protect themselves or even participating in the climate change discourse and decision-making.

Moreover, when the law of the land does not secure workers’ right to protect themselves from climate change, the discourse is unable to move past the language of aid, assistance and charity to that of rights and justice. As a result, we are not finding outdoor workers in India demanding resources to cope with climate extremes as their rights. They themselves are yet to realise that it is their right and a matter of justice. 

At the global level, the discussions on climate change have started paying serious attention to loss and damage due to climate change. An understanding of climate justice is at the heart of these discussions so as to make sure that those with least contribution to global warming should not have to pay undue cost of it. These international conversations should be brought to regional and local levels to question how the losses of outdoor workers should be compensated.

Meanwhile, as we also found in our study with street vendors in Pune on heat stress impact, they continue to bear economic losses without any social security, insurance or compensation from anywhere to cover them. Such losses include but are not limited to loss of customers due to severe weather conditions, goods spoiled, and loss in productivity. A loss of income that is already at the subsistence level, further renders them incapable of coping with worsening climate. Diminished income can further push them to work in severe weather conditions, risking their health and safety.

There is no escape from acknowledging outdoor workers to be at the frontline of bearing the climate change impacts, and unfairly so. Also, there is no better recourse than safeguarding their right to protect themselves from climate change impacts through appropriate law, policy, and funding. Any delay in this is further adding to the climate injustice they are experiencing. 

The writers are faculty at FLAME University, Pune, Maharashtra. The views are personal.