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Ed Webb

The Ouarzazate Solar Plant in Morocco: Triumphal 'Green' Capitalism and the Privatizati... - 0 views

  • a solar mega-project that is supposedly going to end Morocco's dependency on energy imports, provide electricity to more than a million Moroccans, and put the country on a “green path.”
  • This analysis examines the project through the lens of the creation of a new commodity chain, revealing its effects as no different from the destructive mining activities taking place in southern Morocco.
  • What seems to unite all the reports and articles written about the solar plant is a deeply erroneous assumption that any move toward renewable energy is to be welcomed. And that any shift from fossil fuels, regardless of how it is carried out, will help us to avert climate chaos. One needs to say it clearly from the start: the climate crisis we are currently facing is not attributable to fossil fuels per se, but rather to their unsustainable and destructive use in order to fuel the capitalist machine. In other words, capitalism is the culprit, and if we are serious in our endeavors to tackle the climate crisis (only one facet of the multi-dimensional crisis of capitalism), we cannot elude questions of radically changing our ways of producing and distributing things, our consumption patterns and fundamental issues of equity and justice. It follows from this that a mere shift from fossil fuels to renewable energy, while remaining in the capitalist framework of commodifying and privatizing nature for the profits of the few, will not solve the problem. In fact, if we continue down this path we will only end up exacerbating, or creating another set of problems, around issues of ownership of land and natural resources.
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  • the acquisition of 3000 hectares of communally owned land to produce energy
  • "green grabbing"
  • the transfer of ownership, use rights and control over resources that were once publicly or privately owned –or not even the subject of ownership– from the poor (or everyone including the poor) into the hands of the powerful
  • This productivist creation of marginality and degradation has a long history that goes back to French colonial times. It was then that degradation narratives were constructed to justify both outright expropriation of land and the establishment of institutional arrangements based on the premise that extensive pastoralism was unproductive at best, and destructive at worst.
  • the discursive framework rendered it "marginal" and open to new "green" market uses: the production of solar power in this case at the expense of an alternative land use - pastoralism - that is deemed unproductive by the decision-makers. This is evident in the land sale that was carried out at a very low price.
  • various deceptive laws with colonial origins that have functioned to concentrate collective land ownership within the hands of an individual land representative, who tends to be under the influence of powerful regional nobles
  • meetings masquerading as a "consultation with the people" were only designed to inform the local communities about a fait accompli rather than seeking their approval
  • The land, sold at a cheap one Moroccan dirham per square meter was clearly worth a lot more. As if things were not bad enough, the duped local population were surprised to find out that the money from the sale was not going to be handed to them, but that it would be deposited into the tribe's account at the Ministry of Interior. Additionally, the money would be used to finance development projects for the whole area. They discovered that their land sale was not a sale at all: it was simply a transfer of funds from one government agency to another.
  • privatizations in the renewable energy sector are not new as of 2005, when a royal holding company called Nareva was created specifically to monopolize markets in the energy and environment sectors and ended up taking the lion's share in wind energy production in the country
  • he government had effectively privatized and confiscated historical popular sovereignty over land and transformed the people into mere recipients of development; development they are literally paying for, provided it would one day materialize, of course
  • There is no surprise regarding the international financial institutions' (IFIs) strong support for this high-cost and capital-intensive project, as Morocco boasts one of the most neoliberal(ized) economies in the region. It is extremely open to foreign capital at the expense of labor rights, and very advanced in its ambition to be fully integrated into the global marketplace (in a subordinate position, that is).
  • The World Bank’s disbursement levels to Morocco reached record levels in 2011 and 2012, with a major emphasis of these loans placed on promoting the use of Public Private Partnerships (PPPs) within key sectors
  • It seems that production of energy from the sun will not be different and will be controlled by multinationals only interested in making huge profits at the expense of sovereignty and a decent life for Moroccans.
  • The idea that Morocco is taking out billions of dollars in loans to produce energy, some of which will be exported to Europe when the economic viability of the initiative is hardly assured, raises questions about externalizing the risk of Europe's renewable energy strategy to Morocco and other struggling economies around the region. It ignores entirely what has come to be called "climate debt" or "ecological debt" that is owed by the industrialised North to countries of the Global South, given the historical responsibility of the West in causing climate change
  • The biggest issue with this technology is the extensive use of water that comes with the wet cooling stage. Unlike photovoltaic (PV) technology, CSP needs cooling. This is done either by air cooled condensers (dry cooling) or high water-consumption (wet cooling). Phase I of the project will be using the wet cooling option and is estimated to consume from two to three million cubed meters of water annually (Kouz 2011). Water consumption will be much less in the case of a dry cooling (planned for phase II): between 0.73 and 0.88 million cubed meters. PV technologies require water only for cleaning solar panels. They consume about 200 times less water than CSP technology with wet cooling and forty times less water than CSP with dry cooling.
  • Even if the solar plant is only using one percent of the average dam capacity, the water consumption is still significant and can become a thorny problem at times of extreme drought when the dam contains only fifty-four million cubed meter. At such times, the dam waters will not be sufficient to cover the needs of irrigation and drinking water,  making the water usage for the solar plant deeply problematic and contentious.
  • in an arid region like Ouarzazate, this appropriation of water for a supposedly green agenda constitutes another green grab, which will play into and intensify ongoing agrarian dynamics and livelihood struggles in the region.
  • If the Moroccan state was really serious about its green credentials, why is it then building a coal-fired power plant at the same time, which represents an ecocide in-waiting for the already-polluted town of Safi? Why is it also ignoring the devastating environmental and social effects of the mining industry in the country? One notable example is the long-standing community struggle in Imider (140 kilometres east of Ouarzazate) against the royal holding silver mine (Africa's most productive silver mine), which is polluting their environment, grabbing their water, and pillaging their wealth.
Ed Webb

The New Energy geopolitics and the Gulf Arab States - The Geopolitics - 0 views

  • today’s largest volumes of global seaborne crude oil – around 30% – along with a significant volume of LNG, passes through its Straits of Hormuz, making it the most important maritime oil chokepoint which connects the Gulf states with key global markets in the East and the West
  • The International Energy Agency (IEA) sees that the world can reach net-zero emissions by 2060, wherein 75% of reduction comes from energy efficiency and renewable energy, with another 14% from carbon capture and storage, 6% from nuclear and 5% from fuel switching. In this context, the fossil fuels’ share of the global energy mix falls from 82% in 2014 to 35% in 2060 under the 2°C scenario, or to 26% in the below 2°C scenario.
  • Renewable technologies and batteries require certain minerals for their production, such as cobalt, lithium, nickel and rare earth elements. Despite the fact that renewable endowments for wind, solar, geothermal and biomass are scattered geographically, controlling the production of these new commodities will have major geopolitical consequences as they are based only in a selected number of countries such as Chile, Bolivia, Mongolia, and the Democratic Republic of Congo (DRC).
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  • At present, China dominates the world’s investment and innovation in renewable energy technologies.
  • the importance of the Gulf Arab states will be eroded not only because of the decline in global demand for oil but also because Gulf countries are not rich in the minerals required to build renewable energy technologies, and are highly dependent on technology imports rather than in-house technology innovation and research and development
  • all hydrocarbon producer economies will see a fall in total rent of about 40% by 2040 compared with the ‘golden years’ of 2010-14 due to rigorous policies on fuel switching and efficiency to reach net-zero emissions in the second half of this century
  • In 2013, R&D investment in Gulf countries averaged 0.3% of the gross domestic product (GDP), compared with 2%–3% in industrialized countries. The 0.3% figure is far less than the minimum percentage (1%) needed for an effective science and technology base specified by UNESCO.
  • in the new energy era, the Gulf Arab states are still advantaged by their geographical location. These countries are specially positioned for harnessing wind and solar energy
Ed Webb

The Oil for Security Myth and Middle East Insecurity - MERIP - 0 views

  • Guided by the twin logics of energy security and energy independence, American actions and alliances in region became a self-fulfilling prophecy. The very thing the United States sought to eliminate in the Middle East—insecurity—became a major consequence of America’s growing and increasingly militarized entanglement.
  • In effect, the essential relationship of dependency between the United States and the Middle East has never been “oil for security.” It has in fact been oil for insecurity, a dynamic in which war, militarization and autocracy in the region have been entangled with the economic dominance of North Atlantic oil companies, US hegemony and discourses of energy security.
  • Oil’s violent geopolitics is often assumed to result from the immense power its natural scarcity affords to those who can control it. Recent developments in global hydrocarbon markets, which saw negative prices on April 20, 2020 have once again put this scarcity myth to bed
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  • Although the destabilizing contradictions of this dependency have now undercut both American hegemony and the power of the North Atlantic hydrocarbon industries, the oil-for-insecurity entanglement has nonetheless created dangerously strong incentives for more conflict ahead.
  • A 2015 report by the Public Accountability Initiative highlights the extent to which the leading liberal and conservative foreign policy think tanks in Washington—the American Enterprise Institute, Atlantic Council, Brookings, Cato, Center for Strategic and International Studies (CSIS), Council on Foreign Relations and Heritage Foundation—have all received oil industry funding, wrote reports sympathetic to industry interests or usually both
  • When oil prices began to collapse in the mid-1980s, the major oil companies witnessed a 14-year downturn that was only briefly interrupted once, during the 1990-1991 Gulf War.
  • The events of September 11, 2001, the launching of the global war on terror and the 2003 Anglo-American invasion of Iraq reversed the fiscal misfortunes of the North Atlantic oil companies in the previous decade. Collectively, they achieved relative returns on equity several orders of magnitude greater than the heyday of 1979 to 1981. As oil prices soared, new methods of extraction reinvigorated oil production in Texas, North Dakota, Pennsylvania and elsewhere. In effect, war in Iraq made the shale oil revolution possible
  • fracking—not only benefitted from sky-high oil prices, generous US government subsidies and lax regulation, but also the massive amounts of cheap credit on offer to revive the economy after 2008
  • In response to the Soviet invasion of Afghanistan and the Iran hostage crisis, the Carter Doctrine declared America’s intent to use military force to protect its interests in the Gulf. In so doing, Carter not only denounced “the overwhelming dependence of the Western democracies on oil supplies from the Middle East,” but he also proposed new efforts to restrict oil imports, to impose price controls and to incentivize more fossil fuel extraction in the United States, all in conjunction with solidifying key alliances (Egypt, Israel and Pakistan) and reinforcing the US military presence in the region.[5] In effect, America would now extract geopolitical power from the Middle East by seeking to secure it.
  • What helps make energy security discourse real and powerful is the amount of industry money that goes into it. In a normal year, the oil industry devotes some $125 million to lobbying, carried out by an army of over 700 registered lobbyists. This annual commitment is on par with the defense industry. And like US arms makers,[9] the revolving door between government, industry and lobbying is wide open and constantly turning. Over two-thirds of oil lobbyists have spent time in both government and the private sector.[10]
  • In a series of studies that began in late 1980s, economists Jonathan Nitzan and Shimshon Bichler charted the extent to which the world’s leading oil companies enjoyed comparatively handsome rates of returns on equity—well ahead of other dominant sectors within North Atlantic capitalism—when major wars or sustained unrest occurred in the Middle East.
  • For some 50 years, the United States has been able to extract geopolitical power from Middle Eastern oil by posing as the protector of global energy security. The invention of the concept of energy security in the 1970s helped to legitimate the efforts of the Nixon, Ford and Carter administrations to forge new foundations for American hegemony amid the political, economic and social crises of that decade. In the wake of the disastrous US war efforts in Korea and Southeast Asia, Henry Kissinger infamously attempted to re-forge American hegemony by outsourcing US security to proxies like Iran under what is referred to as the Nixon Doctrine. At the same time, regional hegemons would be kept in check by “balancing” competing states against each other.
  • The realization of Middle Eastern insecurity was also made possible by the rapid and intensive arms build-up across the region in the 1970s. As oil prices skyrocketed into the 1980s, billions of so-called petrodollars went to purchase arms, primarily from North Atlantic and Soviet manufacturers. Today, the Middle East remains one of the most militarized regions in the world. Beyond the dominance of the security sector in most Middle Eastern governments, it also boasts the world’s highest rates of military spending. Since 2010, Middle Eastern arms imports have gone from almost a quarter of the world’s share to nearly half in 2016, mainly from North Atlantic armorers.
  • For half a century, American policy toward the Middle East has effectively reinforced these dynamics of insecurity by promoting conflict and authoritarianism, often in the name of energy security. High profile US military interventions—Lebanon in 1983, Libya in 1986 and 2011, the Tanker Wars in the late 1980s, the wars on Iraq in 1991 and 2003, Somalia in 1993, Afghanistan since 2001, the anti-Islamic State campaign since 2014 and the Saudi-Emirati war on Yemen since 2015—have received the most scrutiny in this respect, alongside the post-2001 “low intensity” counterterrorism efforts worldwide
  • cases abound where American policy had the effect of preventing conflicts from being resolved peacefully: Trump’s shredding of the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear agreement with Iran comes to mind; the case of the Israeli-occupied Palestinian territories and the Moroccan-occupied Western Sahara have likewise become quintessential “peace processes” that have largely functioned to prevent peace.
  • the myth of authoritarian stability
  • A year after the unexpected 2011 uprisings, the IMF’s former director Christine Lagarde admitted that the Fund had basically ignored “how the fruits of economic growth were being shared” in the region
  • In denouncing certain governments as “pariahs” or “rogue states,” and in calling for regime change, American policy has allowed those leaders to institute permanent states of emergency that have reinforced their grip on power, in some cases aided by expanded oil rents due to heightened global prices
  • From 2012 to 2018, organized violence in the Middle East accounted for two-thirds of the world’s total conflict related fatalities. Today, three wars in the region—Syria, Iraq and Afghanistan—now rank among the five deadliest since the end of the Cold War. Excluding Pakistan, the Middle East’s share of the worldwide refugee burden as of 2017 was nearly 40 percent at over 27 million, almost double what it was two decades prior.
  • profound political and financial incentives are accumulating to address the existing glut of oil on the market and America’s declining supremacy. A major war in the Middle East would likely fit that bill. The Trump administration’s temptation to wage war with Iran, change Venezuela’s regime and to increase tensions with Russia and China should be interpreted with these incentives in mind.
  • While nationalizing the North Atlantic’s petroleum industries is not only an imperative in the fight against climate change, it would also remove much of the profit motive from making war in the Middle East. Nationalizing the oil industry would also help to defund those institutions most responsible for both disseminating the myths of energy security and promoting insecurity in the Middle East.
Ed Webb

Turkey aims to rid itself of the shackles imposed by energy imports - Middle East Monitor - 0 views

  • Turkish President Recep Tayyip Erdogan announced in Istanbul that the Fatih drilling ship has discovered reserves of 320 billion cubic metres of natural gas in the Black Sea, and that Turkey will start using this in 2023
  • Turkey depends on imports for its oil and gas requirements. Last year, consumption of natural gas in the country was 44.9 billion cubic metres, and 99 per cent of this came from countries such as Russia, Iran and Azerbaijan. The gas discovered by the Fatih will reduce this total dependence on foreign energy supplies and strengthen Ankara’s position in energy deals
  • Turkish research and exploration vessels are confident that new fields will be discovered, helping Turkey to move from being an energy importer to an exporter.
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  • In 2011, Turkey only had the dated Piri Reis seismic survey vessel; today it has five large and advanced ships working in the Black and Mediterranean Seas. Two are seismic survey ships — the Oruc Reis and the RV Barbaros — with three drilling ships: Fatih, Yavuz and Kanuni. While the Fatih is operating in the Black Sea, the others are in the Mediterranean
  • Turkey’s lack of energy resources has been a weak point for the economy
Ed Webb

Top Africa Stories in 2022 - 0 views

  • On Feb. 24, Russia invaded Ukraine, and sanctions imposed on Russia by Western states led to surging food, fuel, and fertilizer prices. Burkina Faso saw two successful coups and a third foiled putsch. There were failed power grabs in São Tomé and Príncipe, the Democratic Republic of the Congo, and against Mali’s military junta, sparked by armed groups’ escalating attacks and creeping inflation on food and services. It was a continuation of a trajectory set in 2021, a year that saw four successful coups in Africa (in Chad, Guinea, Mali, and Sudan).
  • Tunisia is just one of many countries experiencing a rollback of democratic gains. Amid an economic crisis worsened by the pandemic and made even more acute by the war in Ukraine, democratic backsliding is increasing. As reported in Africa Brief this year, Sudan’s democratic future still hangs in the balance, and Mali’s putsch leaders agreed to a two-year democratic transition that would allow coup leader Col. Assimi Goïta and other military members to run in general elections in 2024. Ibrahim Traoré, an army captain in Burkina Faso, proclaimed himself the new president of the country’s military junta in the country’s second coup in eight months while Guinea’s military rulers issued a three-year ban on public demonstrations to combat growing calls for democracy. And around 50 people were killed by security forces as Chadians took to the streets to demand a quicker transition to democratic rule.
  • Recent elections in Kenya and Angola showed democratic gains as Kenyans defied their outgoing president’s chosen successor and young Angolans increasingly challenged their one-party state. Africans want more democracy even if their leaders want less of it.
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  • In the midst of this global energy crisis, African leaders have argued that their nations should also be allowed to ramp up fossil fuel use to improve domestic energy access—given they had contributed so little to historic carbon emissions. Indeed, 43 percent of Africa’s 1.4 billion people still lack access to electricity. As a result of soaring energy prices, the number of people without access to energy across Africa rose for the first time in decades, threatening to erode all gains made. According to the International Energy Agency, around 1 billion Africans will still rely on dirty fuels, such as firewood, for cooking in 2030. However, Western governments demanded that multilateral lenders, such as the World Bank, stop funding fossil fuel projects to reduce global carbon emissions.
  • Africa is seeking more than just climate reparations as it looks to transform the global system. African leaders want a permanent seat for the African Union at the G-20, two seats on the U.N. Security Council, and a reordering of global tax rules under the United Nations.
  • Inflation in Ghana rose to 15.7 percent in March as the Ghanaian currency lost 16 percent of its value against the dollar, prompting protests in June over the soaring cost of living.
  • Egypt, Africa’s second-largest economy, agreed on Oct. 27 to a $3 billion bailout from the International Monetary Fund (IMF). It was the country’s fourth since Abdel Fattah al-Sisi took power in a coup in 2013, making Egypt the IMF’s second-largest debtor after Argentina. Long a top choice for emerging market investors, Egypt had become heavily dependent on hot money, but investors panicking over the war in Ukraine pulled around $20 billion out of Egypt between February and March.
  • 2022 was a year for the restitution of Africa’s historical artifacts stolen by colonial powers. The Smithsonian Institution agreed to return its collection of Benin Bronzes and placed legal ownership with Nigerian authorities. In July, Germany handed back two bronzes and put more than 1,000 other items into Nigeria’s ownership while a digital database—known as Digital Benin, which documents Western museums’ existing collection of Benin’s artifacts—was unveiled in November. Despite this progress, there are still unanswered calls for the British Museum, the largest holder of Benin Bronzes, to return its loot. In September, the world marked the 200th anniversary of the deciphering of the Rosetta Stone, a fragment of written decrees issued by Egyptian priests during the reign of Ptolemy V (204 to 180 B.C.). Egyptian scholars and archaeologists renewed their demand for the stone’s return, which has been housed at the British Museum in London since 1802. Their call has garnered more than 135,000 signatures on an online petition.
  • An online archive to showcase Mali’s cultural history was launched in March, digitizing more than 40,000 of Timbuktu’s ancient manuscripts, some dating to the 12th century and originally written in medieval Arabic but translated to several languages in an online platform. Malian librarians and their assistants secretly transported hundreds of thousands of documents into family homes in a bid to save them from destruction by jihadis. Through those efforts, some 350,000 manuscripts from 45 libraries across the city were kept safe.
Ed Webb

Saudi Arabia, China Sign Deals Worth Up to $65 Billion | Foreign Policy - 0 views

  • Saudi Arabian King Salman traveled to China Thursday to deepen economic ties between the world’s biggest oil exporter and the world’s second-largest oil consumer. It’s a key stop in the king’s six-week trip to Asia that comes as Riyadh struggles with a slumping oil market and a desperate need to diversify its economy.
  • up to $65 billion worth of economic and trade deals, spanning sectors from energy to space
  • more than 20 agreements on oil investments and in renewable energy
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  • China even discussed taking a stake in Saudi Aramco, the state-owned oil firm, which is preparing for a public listing
  • King Salman, and especially crown prince Mohammed bin Salman, have launched an ambitious campaign to shock the country out of oil-dependency and diversify the economy under the auspices of its Saudi Vision 2030 plan. It’s culminated in the unusual six-week trip to Asia that includes stops in Japan, Malaysia, Indonesia, Brunei, and the Maldives as Salman courts foreign investors
  • Xi couched China’s future role in the Middle East in purely economic terms, citing his country’s ambitious One Belt One Road initiative, China’s state-run Xinhua News reported. He stressed China would continue its longstanding policy of non-interference in the Middle East, in contrast to the United States and European counterparts
  • But China has steadily ramped up involvement in the region as its dependence on Middle Eastern oil grows. Beijing began building its first overseas military outpost, a naval base in Djibouti on the Horn of Africa, in 2016. And it funneled thousands of peacekeepers to U.N. missions, including in oil-rich countries like South Sudan.
Ed Webb

Saudi Crown Prince Asks: What if a City, But It's a 105-Mile Line - 0 views

  • Vicious Saudi autocrat Mohamed bin Salman has a new vision for Neom, his plan for a massive, $500 billion, AI-powered, nominally legally independent city-state of the future on the border with Egypt and Jordan. When we last left the crown prince, he had reportedly commissioned 2,300-pages’ worth of proposals from Boston Consulting Group, McKinsey & Co. and Oliver Wyman boasting of possible amenities like holographic schoolteachers, cloud seeding to create rain, flying taxis, glow-in-the-dark beaches, a giant NASA-built artificial moon, and lots of robots: maids, cage fighters, and dinosaurs.
  • Now Salman has a bold new idea: One of the cities in Neom is a line. A line roughly 105-miles (170-kilometers) long and a five-minute walk wide, to be exact. No, really, it’s a line. The proposed city is a line that stretches across all of Saudi Arabia. That’s the plan.
  • “With zero cars, zero streets, and zero carbon emissions, you can fulfill all your daily requirements within a five minute walk,” the crown prince continued. “And you can travel from end to end within 20 minutes.”AdvertisementThe end-to-end in 20 minutes boast likely refers to some form of mass transit that doesn’t yet exist. That works out to a transit system running at about 317 mph (510 kph). That would be much faster than Japan’s famous Shinkansen train network, which is capped at 200 mph (321 kph). Some Japanese rail companies have tested maglev trains that have gone up to 373 mph (600 kph), though it’s nowhere near ready for primetime.
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  • According to Bloomberg, Saudi officials project the Line will cost around $100-$200 billion of the $500 billion planned to be spent on Neom and will have a population of 1 million with 380,000 jobs by the year 2030. It will have one of the biggest airports in the world for some reason, which seems like a strange addition to a supposedly climate-friendly city.
  • The site also makes numerous hand wavy and vaguely menacing claims, including that “all businesses and communities” will have “over 90%” of their data processed by AI and robots:
  • Don’t pay attention to Saudi war crimes in Yemen, the prince’s brutal crackdowns on dissent, the hit squad that tortured journalist Jamal Khashoggi to death, and the other habitual human rights abuses that allow the Saudi monarchy to remain in power. Also, ignore that obstacles facing Neom include budgetary constraints, the forced eviction of tens of thousands of existing residents such as the Huwaitat tribe, coronavirus and oil shock, investor flight over human rights concerns, and the lingering questions of whether the whole project is a distraction from pressing domestic issues and/or a mirage conjured up by consulting firms pandering to the crown prince’s ego and hungry for lucrative fees. Nevermind you that there are numerous ways we could ensure the cities people already live in are prepared for climate change rather than blowing billions of dollars on a vanity project.
Ed Webb

"Carbon Democracy" Timothy Mitchell, Columbia University on Vimeo - 0 views

  •  
    The very smart Tim Mitchell presents the argument of his most recent book about the relationship between patterns of energy exploitation and democracy. Not the well-known rentierism argument, but a more sweeping political analysis of fossil fuels and 20th century democracy.
Ed Webb

Egypt currency has further to fall: business leader | Reuters - 0 views

  • Egypt has begun devaluing its currency to help revive the economy and meet the conditions of an expected IMF loan and the depreciation has further to go, a business leader in the ruling Muslim Brotherhood said
  • "We have started already some increase in taxation, and there is the devaluation of the pound and we raised some prices of petrol and gas," Malek said in an interview."Normal people in the street now understand that there is a price that we will have to pay for the IMF agreement."Asked whether he expected a further depreciation of the Egyptian currency to help exports and tourism, he said: "I'm not of course a technical (expert) but people expect a little bit of devaluation in the future."
  • Malek, who was imprisoned under Mubarak with top Muslim Brotherhood leader Khairat el-Shater, his friend and business partner, said he was actively trying to persuade wealthy Egyptians to return and invest in the country.Asked if he was personally involved in trying to persuade billionaires who have left Egypt and had their assets frozen or been convicted of economic crimes to come home, he said "Yes. I am inviting everyone to come to Egypt. It is very important to prioritize legislation and court cases should be solved first... before these people come back."
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  • Malek said his organization was also trying to broker a solution to Cairo's debt to foreign energy companies producing oil and gas in Egypt such as BP, Gas Natural, Petronas, Shell and Dana, that has accumulated since the 2011 uprising.He disputed the figure of $9 billion cited by consultancy Executive Analysis and European diplomats for the total energy debt, saying it was far less, but declined to give a number."Some of their contracts needed to be reviewed because they were not balanced to cover both the national interest and the company interest. So some licenses were suspended when they expired, which made a bit of a problem," Malek said."We tried to encourage them by giving them more concessions and rescheduling these payments (owed by Egypt). We opened other opportunities in the same field such as refineries and other projects they can take. Up to this moment, none of these companies has decided to leave," Malek said.He acknowledged that most foreign energy companies were still holding back on new investments in Egypt. "They want to see these problems tackled first. They want to see a clear road map, which is normal in such an environment."
Ed Webb

Desert Cucumbers: The Sahara Forest Project Comes to Tunisia - Tunisialive - 0 views

  • A $30 million, high-tech agricultural facility covering 10 hectares in the desert in Tunisia’s south is scheduled to open in 2018. The facility, which is a highly sophisticated green house, will use solar energy to power its operations and seawater to irrigate crops and maintain humidity. The extracted salt from the seawater will also be sold commercially.
  • hoped to be a new environmental solution to create green jobs through profitable production of food, water, clean electricity and biomass in desert areas. The first pilot project opened in Qatar in December 2012, and another facility will be launched in Jordan later this year
  • Although there are no numbers or estimates available for Tunisia yet, the Qatar facility directly employs 6,000 people, with a further support staff of 30,000. Tunisian unemployment is estimated around 15 percent countrywide and even higher among young college graduates
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  • It has also become increasingly difficult to maintain a stable agricultural output as the country faces droughts and floods due to climate change
  • 1 percent of Tunisia’s energy supply is based on renewable energy sources, but the Tunisian government has pledged to increase that number to 30 percent by 2030
Ed Webb

Late Populism: State Distributional Regimes and Economic Conflict after the Arab Uprisi... - 0 views

  • This note will briefly outline the notion of an Arab “variety of capitalism” characterized by the central role of a distributive state whose interventions lead to a deep, and at least in parts unintended, segmentation of business and labour markets into insiders and outsiders. It will explain how this model has led to economic stagnation and contributed to the uprisings of 2011 as well as how it has hobbled economic adjustment after the uprisings, both under anciens and new regimes. Its pessimistic conclusion is that distributional institutions in most Arab countries remain very sticky, having created powerful vested interests not only in business but also in society at large that undermine the negotiation of a new “social contract” – a concept that many are talking about but no one seems to be able to map out in any detail.
  • Authoritarian-populist republics like Algeria, Egypt, (pre-war) Syria and Tunisia have achieved particularly good human development scores considering their modest levels of wealth (figure 3).
  • While Arab governments’ ambition to provide might have led to solid coverage of basic services, most Arab states have pledged much wider material guarantees to their citizens – typically beyond their fiscal and administrative capacity, especially once economic growth started stalling in the 1970s. The result has been a rigid insider-outsider division in which some benefit from Arab governments’ relative generosity while others remain excluded.
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  • The shares of public in total employment across core Arab countries in Maghreb and Mashreq mostly lie between 20 and 40 percent, far above those in richer Latin America, where they range from 4 to 15 percent (OECD 2014, 61), sub-Saharan Africa, where they range from 2 to 9 percent (Monga and Lin 2015, 138), or East Asia and Pacific, where they mostly lie below 5 percent (Packard and Van Nguyen 2014, 16).
  • A majority of citizens, however, remains excluded from state employment, which is often seen to be allocated in intransparent ways. As formal employment in the private sector remains miniscule, the default option for most remains the badly paid, precarious informal sector.
  • A large informal sector also exists in other developing countries. But different from most other developing economies, the “insider” group on the labor market mostly consists of public employees (figure 5). This setup makes for a relatively large and protected insider group, but also crowds out state resources for more inclusive and growth-oriented policies.
  • Insider-outsider dynamics are also at play in Arab business, the top tiers of which are typically state-dependent cronies, protected through layers of heavy regulation as well as discretionary subsidies and credit allocation – themselves often distorted legacies of earlier periods of statist development
  • On labor markets, informality typically lasts longer, labor turnover is lower, and exits from public employment are almost unheard of
  • deep formal and informal state intervention and protection result in low mobility between segments
  • The only universal benefit on which most Arab states spend large amounts are energy subsidies, which are regressive as they disproportionately benefit richer households.
  • While Arab states have gone to great lengths to provide, popular expectations of provision in the region have also been particularly high (figure 6) – arguably a legacy of populist policies that have promised universal public services and employment to the masses since the age of Nasser.
  • Given these high expectations, material exclusion and inequality and the highly visible “winner takes all” business cronyism in the 2000s has been grating for many ordinary citizens – even if average levels of inequality in the region remain on a middling level in global comparison
  • While the elites leading the revolutions cared deeply about questions of political freedom, it is clear that material issues played an important role in the mass mobilization that tipped the balance in cases like Egypt or Tunisia.
  • Since 2011, some energy subsidies have been cut in a piecemeal fashion, but only under enormous fiscal pressure and without building a comprehensive social safety system to compensate. In the absence of such systems, public resistance to subsidy reforms has been strong. No ruler has yet dared to substantially change public employment policies.
  • This anti-development equilibrium of low capacity and vested interests has led Arab states even further down the route of unequal and exclusive distribution after 2011. In Tunisia, the most powerful interest group is the national union UGTT, which represents mostly middle aged, middle class government employees – not the informal sector whose rage fuelled the revolution. The UGGT has contributed to elite-level political pacts that have prevented Tunisia from backsliding into autocracy. In the economic field, however, it has mostly focused on defending insider privileges, investing much of its energy in fighting successfully for fiscally unsustainable civil service salary raises. In the meantime, little has been done for improving the lot of informal workers. They themselves remain fixated on the public sector: protesters from marginalized communities have been asking for the provision of one government job per family, and unrest has been triggered by the removal of individuals from an official list promising government employment.
  • Even “fierce” states embroiled in civil wars have deepened their old-style distributional commitments: Post-Saddam patronage policies under rival prime ministers have resulted in a state that now reportedly employs 7 million individuals, about half the total adult population (More than 55 percent of the population of about 36 million is under 20). Including in ISIS-occupied areas, 8 million individuals rely on a government salary or pension. Iraq competes with much richer GCC countries for the highest share of government employees anywhere in the world
  • Tunisian and Egyptian attempts to prosecute old regime cronies have been half-hearted at best and many cronies remain well connected to the new ruling elites. In the absence of an independent business class, both governments have made attempts to lure temporarily marginalized old-school business tycoons back into their countries to invest.
Ed Webb

The Coronavirus Oil Shock Is Just Getting Started - 0 views

  • People in the West tend to think about oil shocks from the perspective of the consumer. They notice when prices go up. The price spikes in 1973 and 1979 triggered by boycotts by oil producers are etched in their collective consciousness, as price controls left Americans lining up for gas and European governments imposed weekend driving bans. This was more than an economic shock. The balance of power in the world economy seemed to be shifting from the developed to the developing world.
  • If a surge in fossil fuel prices rearranges the world economy, the effect also operates in reverse. For the vast majority of countries in the world, the decline in oil prices is a boon. Among emerging markets, Indonesia, Philippines, India, Argentina, Turkey, and South Africa all benefit, as imported fuel is a big part of their import bill. Cheaper energy will cushion the pain of the COVID-19 recession. But at the same time, and by the same token, plunging oil prices deliver a concentrated and devastating shock to the producers. By comparison with the diffuse benefit enjoyed by consumers, the producers suffer immediate immiseration.
  • In inflation-adjusted terms, oil prices are similar to those last seen in the 1950s, when the Persian Gulf states were little more than clients of the oil majors, the United States and the British Empire
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  • In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category
  • The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment
  • Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices
  • Ecuador is the second Latin American country after Argentina to enter technical default this year.
  • Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.
  • Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue
  • The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.
  • Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.
  • Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages
  • The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply
  • The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.
  • Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.
  • In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?
  • The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.
Ed Webb

'Apocalypse soon': reluctant Middle East forced to open eyes to climate crisis | Climat... - 0 views

  • In Qatar, the country with the highest per capita carbon emissions in the world and the biggest producer of liquid gas, the outdoors is already being air conditioned.
  • The Gulf States are still highly reliant on oil and gas exports, which remain more than 70% of total goods exports in Kuwait, Qatar, Saudi Arabia and Oman, and on oil revenues, which exceed 70% of total government revenues in Kuwait, Qatar, Oman, and Bahrain. In Vision 2030, published in 2016, the Saudi crown prince, Mohammed bin Salman, promised to turn the country into a diversified industrial power house. The reality is very different. The World Bank shows Saudi Arabia is still 75% dependent on oil exports for its budget.
  • The Middle East is warming at twice the rate of the rest of the world. By the end of the century, if the more dire predictions prove true, Mecca may not be habitable, making the summer Haj a pilgrimage of peril, even catastrophe
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  • The ruling elites are all dependent on oil rents for the survival of their regimes. They need the oil business to stay alive for them to stay in power. Their system is based on continued oil rent, but ultimately, the citizens’ long-term interests are with a liveable climate
  • The precise point oil demand will peak has been contested, and depends on a myriad of assumptions about regulation, technology and consumer behaviour. But many people say demand will peak in about 2040, and then decline.
  • the International Energy Association’s report Net Zero by 2050, by contrast, proposed oil demand fall from 88m barrels a day (mb/d) in 2020, to 72 mb/d in 2030 and to 24 mb/d in 2050, a fall of almost 75% between 2020 and 2050. It argued that the Gulf has all three elements needed to switch to renewables: capital, sun and large tracts of vacant land.
  • Opec’s own projections suggest oil demand will rise in absolute terms through to 2045, and oil’s share of world wide energy demand will fall only from 30% to 28%. Hardly a green revolution.
  • In the United Arab Emirates it is estimated that the climate crisis costs £6bn a year in higher health costs. The salinity of the Gulf, caused by proliferating desalination plants, has increased by 20%, with all the likely impact on marine life and biodiversity.
  • Aramco, the Saudi company with the largest carbon footprint in the world, is not trying to diversify at the rate of Shell or BP. Indeed, it has just announced an investment to increase crude capacity from 12m barrels a day to 13m barrels by 2027
  • If you see the lifestyle in the UAE, Saudi Arabia and Qatar, it is based on endless consumption
  • The region is responsible for only 4.7 % of worldwide carbon emissions, dwarfed by the pollution from Europe, America and China. The oil that the Middle East exports is logged against the carbon emissions of the users, not the producers.
  • The Gulf’s self-proclaimed first mover, the UAE, was the first country in the region to ratify the Paris agreement and is now the least dependent on oil for government revenues. Last week it announced a “net zero initiative by 2050” to be begun with $163bn (£118bn) of investments and a new minister for climate change and the environment, Mariam Almheiri. The announcement came after the UAE ordered an 80-day brainstorming session in every government department from June. It was the first petro-state to embrace net zero in domestic consumption.
  • Gulf states are deeply competitive, so a flurry of news is emerging. Qatar has appointed a climate minister; Bahrain is targeting net zero by 2050; Kuwait has a new emissions plan.
  • Fossil fuels shipped abroad are not on the Saudi’s carbon ledger, owing to UN accounting rules, and the promised internal reduction in emissions is dependent on a heavy bet that unproven blue hydrogen and carbon capture technology will work.
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