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2015 – End of the Petrodollar system?

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Neoconservatives arrayed in their Washington offices are congratulating themselves on their success in using the Charlie Hebdo affair to reunite Europe with Washington’s foreign policy. No more French votes with the Palestinians against the Washington-Israeli position.

No more growing European sympathy with the Palestinians. No more growing European opposition to launching new wars in the Middle East. No more calls from the French president to end the sanctions against Russia.

Do the neoconservatives also understand that they have united Europeans with the right-wing anti-immigration political parties? The wave of support for the Charlie Hebdo cartoonists is the wave of Marine Le Pen’s National Front, Nigel Farage’s UK Independence Party, and Germany’s PEGIDA sweeping over Europe. These parties are empowered by the anti-immigration fervor that was orchestrated in order to reunite Europeans with Washington and Israel.

Once again the arrogant and insolent neoconservatives have blundered. Charlie Hebdo’s empowerment of the anti-immigration parties has the potential to revolutionize European politics and destroy Washington’s empire. See my weekend interview with King World News for my thoughts on this potential game-changer. http://kingworldnews.com/paul-craig-roberts-new-crisis-worse-russia-unleashing-black-swans-west/

The reports from the UK Daily Mail and from Zero Hedge that Russia has cut off natural gas deliveries to six European countries must be incorrect.

These sources are credible and well-informed, but such a cut-off would have instantly produced political and financial turmoil of which there is no sign. Therefore, unless there is a news blackout, Russia’s action has been misunderstood.

We know something real has happened. Otherwise, EU energy official Maros Sefcovic would not be expressing such consternation.

Although I am without any definite information, I believe I know what the real story is. Russia, tired of Ukraine’s theft of the natural gas that passes through the country on its way to delivery to Europe, has made a decision to route the gas to Turkey, thus bypassing Ukraine.

The Russian energy minister has confirmed this decision and added that if European countries wish to avail themselves of this gas supply, they must put in place the infrastructure or pipeline to bring the gas into their countries.

In other words, there is a potential for a cutoff in the future, but no cutoff at the present.

These two events–Charlie Hebdo and the Russian decision to cease delivering gas to Europe via Ukraine–should remind us that the potential for black swans, and unintended consequences of official decisions that can produce black swans, always exist. Not even the American “superpower” is immune from black swans.

There is as much circumstantial evidence that the CIA and French Intelligence are responsible for the Charlie Hebdo shootings as there is that the shootings were carried out by the two brothers whose ID was conveniently found in the alleged get-away car. As the French made certain that the brothers were killed before they could talk, we will never know what they had to say about the plot.

The only evidence we have that the brothers are guilty is the claim by the security forces. Every time I hear government claims without real evidence, I remember Saddam Hussein’s “weapons of mass destruction,” Assad’s “use of chemical weapons,” and Iran’s “nuclear weapons program.”

If a US National Security Advisor can conjure up out of thin air “mushroom clouds over an American city,” Cherif and Said Kouachi can be turned into killers. After all, they are dead and cannot protest.

If this was, and we will never know for certain, a false flag attack, it achieved Washington’s goal of reuniting Europe under Washington and Israeli auspices. But this success has an unintended consequence. The unintended consequence is to unify Europe under the anti-immigration policy of the right-wing parties, thus empowering the leaders of those parties.

If this surmise is correct, Marie Le Pen and Nigel Farage will find their lives and/or reputations in danger as Washington will resist the rise of European governments that do not adhere to Washington’s line.

The consternation caused by Russia’s decision to relocate its gas delivery to Europe is proof that Russia holds many cards that Russia could play that would bring down the political and financial structures of the Western World.

China holds similar cards.

The two countries are not playing their cards, because they do not think that they need them. Instead, the two powers are withdrawing from the Western financial system that serves Western hegemony over the world. They are creating all of the economic institutions that they need in order to be completely independent of the West.

Therefore, the Russian and Chinese governments reason, “Why be provocative and slap down the Western fools. They might resort to their nuclear weapons, and the entire world would be lost. Let’s just walk away while they encourage us to depart with their provocations.”

We can be thankful that Vladimir Putin and the leaders of the Chinese government are both intelligent and humane, unlike Western leaders.

Imagine, for example, the dire consequences for the West if Putin were to become personally involved as a result of the numerous affronts to both Russia and Putin himself. Putin can destroy NATO and the entire Western financial system whenever he wants. All he has to do is to announce that as NATO has declared economic war against Russia, Russia no longer sells energy to NATO members.

The NATO alliance would dissolve as Europe cannot survive without Russian energy supplies. Washington’s empire would end.

Putin realizes that the insolent neoconservatives would have to push the nuclear button in order to save face. Unlike Putin, their egos are on the line. Thus, Putin saves the world from nuclear war by not being provocative.

Now, imagine if the Chinese government were to lose its patience with Washington. To confront the “exceptional, indispensable, unipower” with the reality of its impotence, all China needs to do is to dump its massive dollar-denominated financial assets on the market, all at once, just as the Federal Reserve’s bullion bank agents dump massive uncovered gold contracts on the future’s market.

In order to avoid US financial collapse, the Federal Reserve would have to print massive amounts of new dollars with which to purchase the dumped Chinese holdings. As the Federal Reserve would protect US financial markets by purchasing the dumped Chinese holdings, the Chinese would lose nothing from the sale. It is the next step that is decisive. The Chinese government then dumps the massive holdings of dollars it has received from its selloff of dollar-dominated financial instruments.

Now what happens? The Fed can print dollars with which to purchase the dumped Chinese holdings, but the Fed cannot print foreign currencies with which to buy up the dumped dollars.

The massive supply of dollars dumped in the exchange market by China would have no takers. The dollar’s value would collapse. Washington could no longer pay its bills by printing money. Americans living in an import-dependent country, thanks to jobs offshoring, would be faced with high prices that would seriously erode their living standard. The United States would experience economic, social, and political instability.

Putting aside their brainwashing, their defensiveness and patriotic support of the regime in Washington, Americans need to ask themselves: How is it possible that the government of the United States, an alleged Superpower, is so unaware of its true vulnerabilities that Washington is capable of pushing two real powers until they have had enough and play the cards that they hold?

Americans need to understand that the only thing exceptional about the US is the ignorance of the population and the stupidity of the government.

What other country would let a handful of Wall Street crooks control its economic and foreign policy, run its central bank and Treasury, and subordinate citizens’ interests to the interests of the one percent’s pocketbook?

A population this insouciant is at the total mercy of Russia and China.

Yesterday there was a black swan event, an event that could yet unleash other black swan events. The Swiss central bank announced an end to its pegging of the Swiss franc to the euro and US –

Three years ago flight from euros and dollars into Swiss francs pushed the exchange value of the franc so high that it threatened the existence of the Swiss export industries. Switzerland announced that any further inflows of foreign currencies into francs would be met by creating new francs to absorb the inflows so as not to drive up the exchange rate further. In other words, the Swiss pegged the franc.

Yesterday the Swiss central bank announced that the peg was off. The franc instantly rose in value. Stocks of Swiss export companies fell, and hedge funds wrongly positioned incurred major hits to their solvency.

Why did the Swiss remove the peg? It was not a costless action. It cost the central bank and Swiss export industries substantially.

The answer is that the EU attorney general ruled that it was permissible for the EU central bank to initiate Quantitative Easing–that is, the printing of new euros–in order to bail out the mistakes of the private bankers.

This decision means that Switzerland expects to be confronted with massive flight from the euro and that the Swiss central bank is unwilling to print enough new Swiss francs to maintain the peg. The Swiss central bank believes that it would have to run the printing press so hard that the basis of the Swiss money supply would explode, far exceeding the GDP of Switzerland.

The money printing policy of the US, Japan, and apparently now the EU has forced other countries to inflate their own currencies in order to prevent the rise in the exchange value of their currencies that would curtail their ability to export and earn foreign currencies with which to pay for their imports. Thus Washington has forced the world into printing money.

The Swiss have backed out of this system. Will others follow, or will the rest of the world follow the Russians and Chinese governments into new monetary arrangements and simply turn their backs on the corrupt and irredeemable West?

The level of corruption and manipulation that characterizes US economic and foreign policy today was impossible in earlier times when Washington’s ambition was constrained by the Soviet Union. The greed for hegemonic power has made Washington the most corrupt government on earth.

The consequence of this corruption is ruin.

“Leadership passes into empire. Empire begets insolence. Insolence brings ruin.”

Ruin is America’s future.

 

Post Scriptum:

And, what about Russia’s Future:

Russia Just Pulled Itself Out Of Petrodollar

Back in November, before most grasped just how serious the collapse in crude was (and would become, as well as its massive implications), independent analytics wrote “How The Petrodollar Quietly Died, And Nobody Noticed“, because for the first time in almost two decades, energy-exporting countries would pull their “petrodollars” out of world markets in 2015.

This empirical death of Petrodollar followed years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.

They added that in 2014 “the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations.”

pd1

The problem was compounded by its own positive feedback loop: as the last few weeks vividly demonstrated, plunging oil would lead to a further liquidation in foreign  reserves for the oil exporters who rushed to preserve their currencies, leading to even greater drops in oil as the viable producers rushed to pump out as much crude out of the ground as possible in a scramble to put the weakest producers out of business, and to crush marginal production. Call it Game Theory gone mad and on steroids.

Ironically, when the price of crude started its self-reinforcing plunge, such a death would happen whether the petrodollar participants wanted it, or, as the case may be, were dragged into the abattoir kicking and screaming.

It is the latter that seems to have taken place with the one country that many though initially would do everything in its power to have an amicable departure from the Petrodollar and yet whose divorce from the USD has quickly become a very messy affair, with lots of screaming and the occasional artillery shell.

As Bloomberg reports, Russia may ‘unseal its $88 billion Reserve Fund and convert some of its foreign-currency holdings into rubles, the latest government effort to prop up an economy veering into its worst slump since 2009.’

These are dollars which Russia would have otherwise recycled into US denominated assets. Instead, Russia will purchase even more Rubles and use the proceeds for FX and economic stabilization purposes.

“Together with the central bank, we are selling a part of our foreign-currency reserves,” Finance Minister Anton Siluanov said in Moscow today. “We’ll get rubles and place them in deposits for banks, giving liquidity to the economy.

Call it less than amicable divorce, call it what you will: what it is, is Russia violently leaving the ranks of countries that exchange crude for US paper.

More:

Russia may convert as much as 500 billion rubles from one of the government’s two sovereign wealth funds to support the national currency, Siluanov said, calling the ruble “undervalued.” The Finance Ministry last month started selling foreign currency remaining on the Treasury’s accounts.

The entire 500 billion rubles or part of the amount will be converted in January-February through the central bank, according to Deputy Finance Minister Alexey Moiseev. The Bank of Russia will determine the timing and method of the operation.

The ruble, the world’s second-worst performing currency last year, weakened for a fourth day, losing 1.3 percent to 66.0775 against the dollar by 3:21 p.m. in Moscow. It trimmed a drop of as much as 2 percent after Siluanov’s comments. The ruble’s continued slump this year underscores the fragility of coordinated measures by Russia’s government and central bank that steered the ruble’s rebound from a record-low intraday level of 80.10 on Dec. 16. OAO Gazprom and four other state-controlled exporters were ordered last month to cut foreign-currency holdings by March 1 to levels no higher than they were on Oct. 1. The central bank sought to make it easier for banks to access dollars and euros while raising its key rate to 17 percent, the emergency level it introduced last month to arrest the ruble collapse.

Today’s announcement “looks ruble-supportive, as together with state-driven selling from exporters it would support FX supply on the market,” Dmitry Polevoy, chief economist for Russia and the Commonwealth of Independent States at ING Groep NV in Moscow, said by e-mail. “Also, it will be helpful for banks, while there might be some negative effects related to extra money supply and risks of using some of the money on the FX market for short-term speculations.

Bloomberg’s dready summary of the US economy is generally spot on, and is to be expected when any nation finally leaves, voluntarily or otherwise, the stranglehold of a global reserve currency. What Bloomberg failed to account for is what happens to the remainder of the Petrodollar world. Here is what researches said last time:

Outside from the domestic economic impact within EMs due to the downward oil price shock, we believe that the implications for financial market liquidity via the reduced recycling of petrodollars should not be underestimated. Because energy exporters do not fully invest their export receipts and effectively ‘save’ a considerable portion of their income, these surplus funds find their way back into bank deposits (fuelling the loan market) as well as into financial markets and other assets. This capital has helped fund debt among importers, helping to boost overall growth as well as other financial markets liquidity conditions.

[T]his year, it is to expect that incremental liquidity typically provided by such recycled flows will be markedly reduced, estimating that direct and other capital outflows from energy exporters will have declined by USD253bn YoY. Of course, these economies also receive inward capital, so on a net basis, the additional capital provided externally is much lower. This year, it is to expect that net capital flows will be negative for EM, representing the first net inflow of capital (USD8bn) for the first time in eighteen years. This compares with USD60bn last year, which itself was down from USD248bn in 2012. At its peak, recycled EM petro dollars amounted to USD511bn back in 2006. The declines seen since 2006 not only reflect the changed global environment, but also the propensity of underlying exporters to begin investing the money domestically rather than save. The implications for financial markets liquidity – not to mention related downward pressure on US Treasury yields – is negative.

Considering the wildly violent moves we have seen so far in the market confirming just how little liquidity is left in the market, and of course, the absolutely collapse in Treasury yields, with the 30 Year just hitting a record low, this prediction has been borne out precisely as expected.

And now, one should await to see which other country will follow Russia out of the Petrodollar next, and what impact that will have not only on the world’s reserve currency, on US Treasury rates, and on the most financialized commodity as this chart demonstrates:

pd2

… but on what is most important to developed world central planners everywhere: asset prices levels, and specifically what happens when the sellers emerge into what is rapidly shaping up as the most illiquid market in history.

 

First published by 4th Media, under title: “Ruin is America’s Future: Swiss Central Bank Announced End to Its Pegging of the Swiss Franc to Euro and US Dollar”

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Kurdistan – Britain Ties in New Momentum Driven by Energy Supply

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One hundred year before, despite world promise for Independent Kurdistan after post world war’s Ottoman division, Britain government’s decision to divide Kurdistan and merge it in new forming Iraq and Turkey, as well as bloodily suppressing the Kurdish rebel movement by using intense bombardment deprived the Kurds of their right to self-determination, built a historical aloofness between the Kurds and Britain, which has been deepened over time, and brought profound bilaterally distrust, it’s still lasting.

While, majority of people in Middle East (M.E) strongly still believe that Britain’s interests or intentions are in behind of most of the sufferings in this region, but Kurds found their fate directly changed by Britain policies in the M.E. Britain’s role in Iraq’s political and economical process of Iraq  by 1972 were main obstacle in Kurdish movements for independence. This policy continued then, with no proper reactance by Britain for Iraqi Baathi government’s violences against Kurds, such as chemical attacks and Infal (Massacre of more than 180,000 people) deepened these mutual reluctances, but Britain’s cooperation along with France and the United States in passing UN Security Council’s Resolution 688 to prevent a mass extermination of the Kurds by the Iraqi government in 1991, is unforgettable turning point in Britain’s approach toward Kurdish people.

Twelve years later, when international coalition, led by U.S, Overthrew Baath’s Saddaam Hussein in 2003, British forces focused on south of Iraqi province of Basra, where later in 2009, British giant oil, bp, signed its first oil contract in modern Iraqi era to develop the big field of Rumaila in cooperation with Chines CNPC. Four years later, British bp entered new cooperation with Iraqi federal for redeveloping oil fields in Kurdish city of Kirkuk, where first oil well in Iraq’s history were drilled by British led Iraq Petroleum Company (IPC) in 1927. Kirkuk, where known as heart of Kurdistan, is one of disputed regions between Kurdish government and federal government of Iraq, stipulated in Iraqi constitution (article 140) to be determined by a referendum, so far it has been postponed.

Meanwhile, despite British bp’s interest to Kirkuk, less than 100 km far from Erbil, KRG’s capital, lack of any British giant oil and gas companies’ desire to enter the projects in Kurdish administrated region, raise a doubt over Britain’s support for 2017’s October attacked by Iraqi federal forces on the Kurdish peshmerga’s bases in Kirkuk, in contrast to the close mutual cooperation in the fight against ISIS terrorism in Iraq.

When the distance between the Kurds and Britain was predicted to widen, bike-tour of Erbil streets by Kurdistan President and British ambassador to Iraq, in April 2021, dispatched positive pulses. The improvements in mutual relationship continued, when British foreign minister visited Erbil, June of 2021. Then, Kurdistan President’s visit of No.10 of Downing Street strengthened the ties, brought hopes for more developments.

Russian invasions on Ukraine, which highlighted Europe’s need for reform in Energy policies and diversifying energy sources, mainly for Natural gas supplies, made historical opportunity for Kurdistan, world biggest undeveloped oil and gas reserves. Kurdistan Region of Iraq own about 45 billion barrels of oil reserves and about 5.7 trillion cubic meters of natural gas, while the KRG’s oil production is still below 500,000 bpd and about 15 million cubic meters of natural gas. While Baath government of Iraq left Kurdistan oil and gas reserves undeveloped until end of its rule in 2003, Kurdish semi-autonomous government began development plan of its oil and gas, soon after 2007, when its oil and gas law was passed in region’s parliament. The semi-autonomous region’s oil production is over three OPEC members including Gabon, Congo and Equatorial Guinea, according to OPC Monthly Oil Market Report – April 2022.

Kurdistan government targeted fast raise in natural gas production to 725 million cubic feet by 2023 and more than one billion cubic feet by 2025, which enabled region to start export natural gas in next two years. Kurdish government president and prime minister recently visited regional countries, incising Qatar, UAE and Turkey to receive their support. In next step, Kurdish PM, Mr. Masrour Barzani, showed Kurdistan’s plan to develop the region’s natural gas production and infrastructures to export to Europe, through Turkey, during his Dubai Energy Forum. He also during his meeting at mid of April 2022, with Britain’s PM, Mr. Brouris Johnson, discussed Kurdistan’s interest  to connect region’s natural gas to international transmitting pipeline in Turkey, seems supported by British PM, a great chance for more development in mutual economical relationship.

Kurdistan’s ambitiously plan for fast development of its natural gas production to be supported by west, mainly US and UK in several categories. While KRG should internally conduct radical reforms in directing the sector, the international supports to be achieved against threatening of Kurdistan by Baghdad’s view on Kurdistan’s oil and gas sector, seeking to centralize its administration, which is needed to be resolved with federal government swiftly. International racing, is also vital for facing the regional and global competitor’s challenges, seems to be next step facing Kurdish natural gas project.

New era in Kurdistan and Britain ties sparked hopes to bring Britain’s support for Kurdistan’s oil and gas industry, not only technically, but also, politically. British companies would be welcomed in Kurdistan to participate in developing Kurdistan’s oil and gas plan, financially and technically supports. Also, Britain’s political support for Kurdistan’s natural gas, mainly, would be softening Iraq’s position against Kurdistan’s natural gas, which could back Britain’s strategy for diversifying UK and Europe natural gas sources.

The new turning point in Kurdistan and Britain is recently kicked off, would strengthen ties and raise hopes for strategical achievement, if Britain is ready to warmly shake the hands with Kurdish government, mainly for gas policy.

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The Development and Geopolitics of New Energy Vehicles in Anglo-American Axis Countries

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While the global development of green energy and industries has been an ongoing matter, the war launched by Russia in Ukraine adds a deeper geopolitical dimension to it. In this shift, the “Anglo-American Axis”, comprising the United Kingdom and the United States, may once again lead the way.

Take the UK as an example. In promoting green energy and green industry, and reducing its carbon emissions, a series of seemingly radical policies have been introduced in the past two years. The UK government released the “Ten-Point Plan for a Green Industrial Revolution” in November 2020, proposing the development of offshore wind power, in addition to promoting the development of low-carbon hydrogen, and providing advanced nuclear energy, accelerating the transition to zero-emission vehicles, among others. It also includes action plans for the reduction of 230 million tons of carbon emissions in the transport and construction industries in the next decade.

In the policy paper Energy White Paper: Powering Our Net Zero Future published in December 2020, the UK has planned for the transformation of the energy system, and strive to achieve the goal of ne-zero carbon emissions in the energy system by 2050. On the conventional energy front, it announced a phase-out of existing coal power plants by October 2024. Focusing on the fields of energy, industry, transportation, construction and others, it aims at reducing greenhouse gas emissions by at least 68% by 2030. Additionally, the UK has also launched the Emissions Trading Scheme (ETS) on January 1, 2021, setting a cap on total greenhouse gas emissions for industrial and manufacturing companies, with the objective of achieving a net-zero emissions target by 2050. In March 2021, it took the lead among the G7 countries to launch the Industrial Decarbonization Strategy, supporting the development of low-carbon technologies and improving industrial competitiveness. The plan is to significantly reduce carbon dioxide emissions from manufacturing companies by 2030 and build the world’s first net-zero emissions industrial zone by 2040.

In terms of public transport, there is the March 2021 National Bus Strategy, and a green transformation plan for the bus industry is proposed. In July of the same year, the Transport Decarbonization Plan is announced, further integrating low-carbon transformation in transportation such as railways, buses, and aviation, and promoting the electrification of public and private transportation. At present, there are more than 600,000 plug-in electric vehicles in the UK, and the production of new energy vehicles exceeds one-fifth of the total car production. In the nation’s new car sales for February 2022, electric vehicle sales accounted for 17.7% of the market, the market share of plug-in hybrid vehicle sales is 7.9%. Adding traditional hybrid vehicles, electric vehicles account for more than one-third of the sales.

On April 8, 2022, the UK government announced the annual development goals for new energy vehicles. It is stipulated that by 2024, all-electric vehicles must occupy 22% of the market. This proportion rises to 52% in 2028 and 80% in 2030. The country’s authority hopes that these mandatory policies will force carmakers to, by 2035, increase the share of electric vehicles in sales every year, when all models must achieve zero emissions. It will then ban the sale of new petrol and diesel cars from 2030 and hybrid cars from 2035, under plans unveiled two years ago.

As the world’s largest automobile consumer, the United States has also put forward the development plan for new energy vehicles. It should be pointed out that the marketization forces represented by Tesla have played a strong and spontaneous role in the U.S.’ development of new energy vehicles. On this basis, the supporting policies introduced by the U.S. government will have greater policy flexibility. After the Biden administration came to power, there are changes in the negative attitude of the Trump administration towards the new energy industry, and an agreement returning to the Paris Agreement has been signed. To achieve the goals of the Paris Agreement, the U.S. government plans to increase the sales of new energy vehicles (including plug-in hybrid, pure electric, and fuel cell vehicles) to 40-50% by 2030. The government and industry will provide subsidies for the purchase of these vehicles, improve the charging network, invest in research and development, and provide subsidies for the production of the vehicles and their spare parts. On March 31, 2021, the Biden administration proposed to invest USD 174 billion in supporting the development of the U.S. electric vehicle market, which involves improving the U.S. domestic industrial chain. It targets to construct 500,000 charging stations, electrify school buses, public transport, and federal fleets by 2030. In President Biden’s USD 1.75 trillion stimulus bill passed by the House of Representatives that year, there was a subsidy mechanism for new energy vehicles and additional subsidies for traditional American car companies.

Major U.S. domestic and international automakers, United Auto Workers, Alliance for Automotive Innovation, the California government, the U.S. Climate Alliance, as well as other industrial and governmental agencies have issued a joint statement and support the Biden administration to accelerate the development of the new energy vehicle industry, so as to strengthen the leadership of the U.S. in this field. On the basis of marketization, the strong support of the U.S. to the new energy vehicle industry will greatly promote the development of this particular market in the country.

Researchers at ANBOUND believe that the UK and the American strategies and series of policies for the development of new energy vehicles are not merely concerning industry and green development. Instead, they carry profound influence and significance. Chan Kung, founder of ANBOUND, pointed out that the policy signals given by the Anglo-American axis represent the shape of the things to come. The development of new energy vehicles is not a purely industrial or technological issue. It is conspicuous that such a development means alternative ways of energy utilization have emerged, and this energy revolution has its geopolitical implication, where both the UK and the U.S. will further ditch their dependence on Russian energy. If the future industrial system and consumer market are no longer dependent on oil, then Russia, which is highly dependent on oil resources economically, will be hit greatly in economic sense.

It should be pointed out that due to the complexity and extension of the transportation system, this revolutionary policy of energy substitution will also drive the rapid development of other industries, as well as related technological buildout and the manufacturing of new products. It will not take long for a new manufacturing system to emerge in the countries and societies of the Anglo-American axis.

Chan Kung emphasized that it is also worth noting that from a geopolitical perspective, this large-scale new energy policy is also a measure to share geopolitical risks and pressures. In the past, countries and governments had to address issues caused by geopolitical risks, such as rising oil prices and inflation. These in turn, could lead to political instability if the ruling government failed to address them well. However, the rapid development of industries such as new energy vehicles has made a great change in the situation. The pressure on the government was quickly directed to the private sector, industry, and society. To improve the quality of life, people are spending money to buy new energy vehicles. This is tantamount to common people spending money to solve the geopolitical risks of the Anglo-American axis countries and governments. Once this pattern and market system are formed, the Anglo-American axis countries will not only eliminate the pressure of Russia’s weaponization of energy, they can also generate profits from it, even form a new manufacturing system that can scrap their dependence on the manufacturing industry of third world countries and China. From this ideal logic, the development of new energy vehicles can serve multiple purposes for countries such as the United Kingdom and the United States.

Noticeably, unlike in China, the “electric vehicles” or “new energy vehicles” mentioned in the supporting policies of the Anglo-American axis countries do not have any specific type (such as plug-in hybrid, pure electric, fuel cell vehicle, etc.). This is actually a wise decision in the design of public policy. The technology part is a technical issue, not a public policy issue. Separating public policy from technical issues not only distinguishes the functions of policy and market, but also effectively reduces the influence of interest groups.

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China’s Contribution to Bangladesh’s Achievement of 100 Percent Electricity Coverage

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With the opening of a China-funded eco-friendly 1320mw’s mega power plant at Payra in Patuakhali district, Bangladesh became the first country in South Asia to achieve 100 percent electricity coverage. That megaproject is a centrepiece of Bangladesh and China’s Belt and Road collaboration. Bangladesh saved $100 million by completing the Payra Thermal Power Plant project ahead of schedule.

Prime Minister Sheikh Hasina also expressed gratitude to the Chinese president and prime minister for their assistance in the construction of the Payra power plant. She claimed that with the inauguration of the project, every residence in the country was now getting electricity and announced 100 percent electricity coverage with the inauguration of the 1,320 MW Payra Thermal Power Plant, the country’s largest of its kind.

She also remarked March – a month of Bengalese Victory, noting that her government was able to open the power plant during this month, which coincides with the “Mujib Borsho,” which commemorates the birth centenary of Bangabandhu Sheikh Mujibur Rahman and the country’s Golden Jubilee.

Chinese Ambassador to Bangladesh Li Jiming quoted on the inauguration ceremony that, “This project serves another major breakthrough in China-Bangladesh cooperation in the Belt and Road Initiative, another splendid symbol of China’s strong commitment to Bangladesh in its development.”

According to the State Minister for Power, Energy and Mineral Resources, Bangladesh has not undertaken such a large-scale, cutting-edge project in the last 50 years, and the Payra plant is Asia’s third and the world’s twelfth to use ultra-supercritical technology.

Bangladesh China Power Company Limited (BCPCL), a 50:50 joint venture between China National Machinery Import and Export Corporation (CMC) and Bangladesh’s state-owned North-West Power Generation Company Ltd (NWPGCL), developed the Payra Thermal Power Plant with $2.48 billion financing from China Exim Bank.

The power generation capacity has rocketed to 25,514 MW in February 2022 from 4,942 MW in January, 2009. Bangladesh is now ahead of India and Pakistan, among the South Asian countries that have brought 98 per cent and 74 per cent of their population under the electricity network, according to data from the World Bank.

Patuakhali district of Bangladesh is set to take the lead in the country’s economic growth following the opening of the country’s first coal-fired Ultra Supercritical Technology power plant in coastal Payra. Within the next 5-10 years, the area will become an energy hub.

The government is also planning to establish a special economic zone and an airport to realize its dream of developing the country, attracting investments to Payra, and establishing besides Kuakata as a world-class eco-tourism centre within the next two decades, according to State Minister for Power Nasrul Hamid, while this powerplant will ensure power coverage of this flagship dreams.

The plant will energize Payra port, which has the potential to become an important sea-based transit point on the Silk Route as well as a global trade hub, as the government plans to develop the region as one of the country’s major economic corridors by establishing direct road and rail connections between Dhaka and the rest of the country, as well as connectivity to Bhutan, china, India, and Sri Lanka. According to the port authorities, a full-scale functioning of the port will result in a 2% boost in the country’s gross domestic product (GDP).

Another active power project, The Barapukuria Coal Fired Power Plant Extension is a 275MW coal-fired power plant in Rangpur, Bangladesh is also developed by CCC Engineering and Harbin Electric. Bangladesh received a US$224 million loan from the Chinese private bank Industrial and Commercial Bank of China (ICBC) in January 2014 to expand the capacity of the 250 MW Barapukuria coal-fired thermal power station by 275 MW.

China’s SEPCOIII Electric Power Construction Corporation has also committed to collaborate with Bangladesh’s S.Alam Group to build coal-fired power facilities in Chittagong with a capacity of 1,320 megawatts, which are targeted to begin operations this year.

Bangladesh joined the flagship BRI in 2016, and its ties with Beijing have grown significantly in recent years as Bangladesh’s largest trading partner is now China. During Chinese President Xi Jinping’s visit to Dhaka in October 2016 different development projects worth around $20 billion were agreed.  Among which The Padma Bridge Rail Link, the Karnaphuli Tunnel, the Single Point Mooring project and the Dasherkandhi Sewage Water Treatment Plant are all slated to be finished this year. All of these china funded projects are expected to make a significant contribution to Bangladesh’s economic growth in order to meet the country’s goal of becoming a developed country by 2041.

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