China’s Evolving Energy Policies in Africa

John Feffer

Photograph Source: NINTENPUG – CC BY-SA 3.0

China has been issuing a number of new policies on its approach to climate and energy. In 2021, the Chinese government announced that it would end the financing of coal-fired power plants overseas. In early 2022, it issued new environmental guidelines on its overseas investments.

Toward Africa in particular, Beijing has signaled equally significant shifts. At the December 2021 Forum on China-Africa Cooperation ministerial, China substantially reduced its infrastructure investments in Africa for the next three years. It also cut its assistance in agriculture, climate, health, peace and security, and trade promotion by 80 percent and in capacity-building by 90 percent. At the same time, the Vision 2035 document released in conjunction with the ministerial promised “a new green growth model for common eco-development of China and Africa.”

At an off-the-record meeting with representatives of African NGOs, three experts on Chinese law, investment strategies, and energy transition connected to Africa shared their insights on this evolving relationship. They offered different ways of interpreting the new Chinese policies and provided recommendations for how African civil society could advance their agendas with respect to various Chinese entities: the state, multilateral financing institutions, and enterprises.

The Pattern of Chinese Overseas Investments

It’s no longer boom time for Chinese investments overseas. Chinese overseas lending has dropped considerably since a peak in 2016. Lending to Africa in general, as well as specific investments in energy projects in Africa, follow the same downward trend line.

The rise and fall of Chinese overseas investments follows developments within China itself. Beginning in 2008, five years before the official launch of the Belt-and-Road Initiative, there was a huge outflow of investment as Chinese firms and contractors were looking everywhere for opportunities to build infrastructure projects. African governments in particular had large construction wish lists, and Chinese banks entered the picture to provide the financing.

But then came the slowing down of the Chinese economy—from double digit increases in the early 2000s to around 6 percent growth just before the pandemic hit—as well as a tumble in global commodity prices after 2015. The outbreak of COVID-19 precipitated a period of negative growth. Coming out of COVID, the era of “hot money” going into railroad investments, ports, and roads is not likely to return. “Chinese banks are a lot more cautious and more strategic,” noted Gao Qi (pseudonym), an energy expert. “There’s been a bit of a shift away within the Belt-and-Road Initiative away from hard infrastructure and more toward digital connectivity through e-commerce and newer technologies.”

The composition of those investments has also changed dramatically over the years. In the early 2000s, much of the investment went into natural gas. In any given year, coal might also represent a significant portion of the overall investments, but that reflects the fact that a single coal project might involve a disproportionate amount of Chinese funds. At the same time, hydropower has increasingly attracted much of the Chinese energy investments, with solar and wind investments also rising in recent years. “In official discourse, the Chinese government has been quite positive about low-carbon cooperation,” Qi concluded.

The type of energy investments depends a great deal on local conditions. Chinese energy funding in Africa tends to follow local resources: coal in the south, hydropower in the east, and gas in the west.

The Coal Announcement

Against the backdrop of these investments, Chinese President Xi Jinping surprised the world by announcing at the UN General Assembly in November 2021 the end of financing for overseas coal-powered plants. On the one hand, Xi wanted to promote China as a responsible player in the climate sphere.

On the other hand, the announcement was “conveniently vague,” noted Yunnan Chen, a senior research officer in the Development and Public Finance program at the Overseas Development Institute in London. The announcement seems to over any new state financing from August 2021 on. However, projects that were already under construction before this date will likely continue. Also, “whether this applies to Chinese state-owned enterprises involved in the construction of coal plants is less clear and whether it applies to financing from Chinese commercial banks yet to be seen.”

On this last point, she continued, “commercial lenders will probably incorporate this policy signal into their own strategic decisions going forward, but whether it will be legally binding on them remains to be seen.” Because the public perception of coal-fired plants has turned quite negative, Xi’s announcement, however vague, might be sufficient in persuading commercial lenders to reconsider their investments in this field. The same applies to Chinese contractors, who are not covered by the new directive, as they consider involvement in overseas coal-fired plants going forward.

China’s domestic use of coal increased significantly last year, as part of an overall rise in energy demand. It remains unclear, however, whether the policy push to secure access to coal will have any impact on coal policies abroad beyond possible increases in coal imports.

New Environmental Guidelines

In January 2022, the Chinese Ministry of Ecology and Environment along with the Ministry of Commerce released new “Guidelines for Ecological Environmental Protection of Foreign Investment Cooperation and Construction Projects.”

These are guidelines, however, not laws. “So, it’s still perfectly legal under Chinese law to build a coal-fired plant,” pointed out Jingjing Zhang, a Chinese environmental lawyer, a lecturer in law at University of Maryland Law School, and director of the Center for Transnational Environmental Accountability. “There are no legal consequences.” There is still some conflict within the Chinese government over which authority can regulate overseas investments. “The Ministry of Ecology and Environment does not have the mandate to regulate overseas projects.”

So, the wording of the new guidelines is very important. The document uses verbs like “promoting,” “urging,” and “improving.” It talks of “should” and “shall.” But none of these words has legal consequences.

In fact, China’s environmental laws only apply within China. “When you see a very positive signal, like this new set of guidelines covering overseas projects, you can be cautiously optimistic about them,” Zhang continued. “These are not the first set of guidelines. Some guidelines appeared in 2013, almost 10 years ago, and there have been various guidelines from various government bodies since. But we are still seeing a lot of projects approved by China causing environmental problems and having a human rights impact. We can just hope that Chinese companies voluntarily comply. If they don’t comply, maybe there can be internal political pressure, but there are no legal consequences.”

On the other hand, the environmental impact system outlined in the new guidelines has been designed by very professional experts. This makes the new document stronger than previous guidelines. “This is a promising signal,” she added. “This could lead to stronger regulations. But it will take time. Another good signal is that in our most recent Five Year Plan, the Chinese government indicated that it will design legislation to manage overseas investments.” Such legislation could give the Ministry of Environment and Ecology power to regulate and manage Chinese overseas investment as to their climate impact.

“Until that happens, we cannot use Chinese environmental law to request Chinese companies to conform to environmental standards,” she concluded.

China’s energy law has also been under revision for two years. A chapter of the law will cover overseas cooperation. It may also enumerate different requirements around coal than those specified in Xi Jinping’s pledge.

The Chinese System

The Chinese political system is not a monolith. For any energy project to move forward, it needs the approval of all three key actors: guardian ministries, the Export-Import Bank and the China Development Bank (plus the insurance company Sino Sure), and state-owned enterprises (SOEs) in the energy sector. Nearly all of these actors have veto power. So, for instance, the Ministry of Finance can nix a project all by itself. Tellingly, the Ministry of Ecology and Environment is not one of the guardian ministries, so it can’t stop a project even if it has serious reservations about it.

The four big SOEs—Power China, Energy China, China Three Gorges Corporation, China Industrial Machinery Corporation—are just contractors not project developers. As contractors, they do what the owner says. So, it is not easy to assess accountability in the case of a violation such as land appropriation. Responsibility for violations depend on the legal relationship between owner, contractor, and funder. These four SOEs are also involved in both conventional energy and renewable energy projects.

As “state-owned” enterprises, SOEs have state shareholders. The state also makes appointments to the leadership of the SOE. High-level appointees to management positions are tied to politics and thus more susceptible to political pressure than private entrepreneurs. They can thus be made more accountable through pressure on the Chinese government, particularly by host countries.

Nevertheless, China’s state-owned enterprises are, to a significant extent, independent actors rather than “barnacles on the huge ship” of China. They undertake overseas projects at their own initiative, not at the behest of the government, and they can operate autonomously overseas. If they get involved in energy and hard infrastructure projects, that’s “primarily where the commercial opportunities are for contractors,” Gao Qi noted. These are profit-seeking projects financed by Chinese credit, which comes from the Export-Import Bank or the China Development Bank. “The involvement of the state raises the political profile of the project,” and makes it easier to get the green light for the project both in China and in the host country.

“The state-owned enterprise needs policy entrepreneurs from both sides to facilitate the deal,” Qi continued. “The DFIs are so important. They are the gatekeepers that determine whether these projects are bankable. The ministries don’t have the information or the financial sector expertise. So, project screening rests on the policy banks.” Also, there is evidence that the Chinese government is “shifting away from the mercantilist, profit-driven ideology that has dominated overseas loans.”

When Chinese firms get involved in social projects, and it’s not that often, it’s usually under the umbrella of corporate social responsibility. “These firms want to improve their reputation,” Yunnan Chen explained. “They adopt more international practices and norms to demonstrate that they are benevolent social actors. Sometimes we’ll see a construction company build a school near a project or make a donation or consult with the community. In some cases, this is corporate greenwashing.

The Chinese government created an international development agency (China International Development Cooperation Agency) in 2018. It remains small and separate from other overseas activities. “But it does have potential, and it has co-promoted some new environmental regulations,” Qi concluded.

International Human Rights and Transparency Standards

China has a provision of its criminal law that makes it a crime to bribe the officials of foreign governments and international organizations. “This article has never been used to prosecute a Chinese corporation or a person,” Jingjing Zhang pointed out. “Potentially, it could be used. But there’s no opportunity for individuals or civil society to initiate such a procedure. The Chinese prosecutor office has to initiate the procedure.”

There’s a diversity in behavior even in a single company across different countries. “There are definitely bad actors from certain enterprises,” Yunnan Chen noted. “They go to Africa to make money. They don’t have a strong stake or incentive to care about the impact on the local economy or local people. But other companies care about their public image in African countries and care about long-term investments. They want to be seen as responsible stakeholders and can more easily be held accountable in their activities.”

China has signed and ratified international human rights and environment treaties. “Under those treaties, the state has a legal obligation to comply with those international treaties,” Zhang pointed out. “These treaty obligations include the International Covenant on Economic, Social, and Cultural Rights, which requires the Chinese state to protect human rights beyond its borders. “This is a legal instrument that civil society could use.”

Chinese contractors have engaged in human rights violations, illegal mining, and bribery. “But not all the conflicts originate from China,” Chen added. “You have to look at your own legal and governance issues. Different subsidiaries act very differently in different countries, depending on the governance of that country. Applying your country’s regulations: that is the first and foremost line for a community group or NGO to use. The bar needs to be raised from both sides.”

Debt

China has provided a lot of loans to Africa, approximately $150 billion. As the largest bilateral creditor, China holds about 21 percent of the continent’s debt, while 30 percent of all debt service goes to Beijing. China has also engaged in considerable debt restructuring, including debt service suspensions for 16 African countries during the pandemic period.

The loans do not follow a single template. Deals are tailored to the country, to the kind of project, to the different partners involved. Some are linked to access to particular commodities. With Guinea-Bissau, for instance, China extended $20 billion of loans over a nearly 20-year period for bauxite concessions.

There is a widespread fear that China will take over assets in the case of a default on loans. “But there is no evidence of a Chinese company taking over an asset if the government can’t pay,” Yunnan Chen argued. “If there are problems with repayment, banks allow for delayed repayment, a moratorium on the principle as long as the interest is paid. Seizing an asset is a more complicated and politically destructive move, which is not in the interest of the Chinese government or Chinese contractors. The asset might not be profitable. And the potential public relations fallout makes it an unattractive option, even if the countries could work out a debt-equity swap.”

“That doesn’t mean that indebtedness to China is harmless,” she continued. “Debt is still a huge issue for fiscally strained governments. And renegotiating debt with China is not easy. What we’ve seen through the G20 framework is that China can be an assertive and bureaucratically stubborn actor to deal with. But China is not going to seize ports or airports.”

Supporting Renewables

Between 2007 and 2020, the lion’s share of China’s public sector development funding for infrastructure projects in Africa went to renewable energy: $23.5 billion versus $19 billion for transport, $13.5 billion for fossil fuel projects, and $4.6 billion for telecommunications. .

But even these figures don’t cover all of China’s involvement in renewable energy on the continent. For instance, 80 percent of the solar panels used in projects in Africa are provided by Chinese companies. “So, it might not be a Chinese project, it could be a World Bank or USAID project, but there’s still some Chinese involvement,” Gao Qi noted. “This could be scaled up if China’s development agency becomes more powerful.”

Another development that could spur more investments in renewable energy is the Green Panda bond, an instrument introduced in 2016 by the BRICS bank. It remains unclear, however, whether natural gas projects, ordinarily not considered “green” under China’s definitions, will be eligible for such bonds.

Blinken moves to bring Middle East allies behind US/NATO war on Russia

Jean Shaoul

US Secretary of State Antony Blinken flew to the Middle East at the weekend to hold an extraordinary meeting with Middle East leaders.

His ostensible purpose was to discuss the region’s relations with Iran, but his overarching mission was to secure full backing for the US/NATO war drive against Russia.

Blinken (third right) at the Negev Summit (Source: Secretary Antony Blinken Twitter)

The hastily arranged meeting, attended by leaders from the United Arab Emirates (UAE), Bahrain, Morocco, all of whom signed the Abraham Accords with Israel in 2020, and Egypt, was hosted by Israel’s Prime Minister Naftali Bennett. It was held in Sde Boker, a town in Israel’s Negev desert. Jerusalem would have been too contentious a location for Israel’s newfound allies, still supposedly committed to a “two-state solution” to the decades-long Israel/Palestine conflict.

The Negev summit comes amid US concern that its longstanding Middle East allies are not firmly on board the Biden administration’s war drive against Russia in a bid to assert US hegemony.

On Tuesday, Blinken met Morocco’s King Mohammed VI and the UAE’s Crown Prince Mohammed bin Zayed in Rabat. The UAE hosts numerous Russian oligarchs, has bought weapons from Russia, initially refused to denounce Russia’s invasion of Ukraine, abstaining from a resolution at the United Nations Security Council, and declined calls from US President Joe Biden. Its welcoming of Syria’s President Bashar al-Assad, who survived US imperialism’s covert war for regime change with Russian help, for a state visit to Abu Dhabi has infuriated Washington.

Tel Aviv has desperately sought to balance between the US and Russia, despite having acted for years as the custodian of US imperialism’s interests.

Israel is home to many immigrants from both Russia and Ukraine on whom it is reliant as a source of cheap labour for its high-tech industries. It has formally supported the US/NATO war drive in Ukraine, but has been very reticent in public, with Bennett ordering his cabinet to remain silent on the issue and refusing to publicly mention “Russia” or “Putin” or criticize Russia’s invasion of Ukraine. Senior US politicians and officials have criticised Israel for “sitting on the fence.”

Victoria Nuland, Under Secretary of State for Political Affairs, called on Bennett to come out of his “comfort zone” and provide Ukraine with military aid while joining the sanctions against Putin, adding that the US did not want Israel “to become the last haven for dirty money that’s fueling Putin's wars.”

While Israel has sent humanitarian aid to Ukraine, it has refused Kiev’s requests to send arms, including US-made anti-aircraft Stinger missiles or drones, or supply it with Israeli arms company NSO’s Pegasus spyware. Bennett has sought to avoid antagonising Russia, even paying a flying visit to Moscow as the first Western leader to meet Putin after the invasion of Ukraine. He has refused to impose sanctions on Russia or Russian oligarchs, despite Nuland’s insistence that joining the financial sanctions was more important than Israel providing military aid to Ukraine.

A Ukrainian official accused Bennett of using his role as mediator “to justify the fact that Israel is avoiding transferring military aid to Ukraine or joining the sanction slapped on Russia,” while also pressuring Ukraine’s President Volodymyr Zelenskyy to accept Russian President Vladimir Putin’s conditions for ending the war—a claim Bennett denied.

Some 30 to 40 Russian oligarchs reside in Israel, where many hold Israeli citizenship. As new immigrants, they do not have to report on their source of income for a 10-year period, while charitable donations to academic, cultural, and other public institutions serve to protect their interests in the public arena. Indeed, Yad VaShem, Israel’s Holocaust Museum, was forced to turn down tens of millions of dollars from the Israeli-Russian billionaire Roman Abramovich, after its appeal to the US not to include him in sanctions failed.

At least five cabinet ministers in the present coalition government, including Minister of Defence Benny Gantz, the Speaker of Israel’s parliament and a former political prisoner in the Soviet Union Yuli Edelstein, Finance Minister Avigdor Lieberman, Housing Minister Ze’ev Elkin and Justice Minister Gideon Sa’ar, have links to Israel’s Russian oligarchs.

Israel relies heavily on its trade and investment links with Russia, importing about $1 billion of Russian coal, wheat, diamonds and other goods annually, and exporting about $718 million in agricultural products to Russia in 2020.

Crucially, Israel coordinates its hundreds of airstrikes on Syria with Russia, attacking government positions and fighters and facilities belonging to Lebanon’s Hezbollah and Iranian forces, which have played a key role in defending the Assad regime against the oppositionists armed and trained by the Sunni Gulf states, Turkey and the CIA.

Tel Aviv’s too open public opposition to Russia’s invasion and occupation of Ukraine would contradict its own diplomatic campaigns against the Palestinian-led Boycott, Divestment, and Sanctions Movement that opposes Israel’s occupation of Palestinian territories and the International Criminal Court that is investigating suspected crimes committed during Israel’s brutal assault on Gaza in 2014, its 15-year blockade of the enclave and military occupation of the West Bank. It was for this very reason that former Prime Minister Benjamin Netanyahu turned for support and trade with far right and authoritarian governments including Brazil, Hungary, Ukraine, India, China, the Philippines and Russia.

The petro-monarchs in the Gulf have also been less than enthusiastic about the Biden administration’s war drive. They have been angered by:

• Washington’s lack of support for Egyptian President Hosni Mubarak during the Egyptian revolution in 2011.
• Its failure to openly prosecute the proxy war for regime change in Syria.
• Its lack of overt support for the Saudi-led war against the Houthis who toppled Riyadh’s hated puppet in Yemen, President Abdrabbuh Mansur Hadi, that has turned the country into the world’s greatest humanitarian disaster.
• Its distancing from the Gulf nations’ public split in 2017 with Qatar, which they accused of supporting Iran and extremism.
• Its treatment of Saudi de facto ruler Crown Prince Mohammed bin Salman as a pariah for ordering the murder of insider turned dissident Jamal Khashoggi in its Istanbul consulate in 2018.

And above all:

• President Joe Biden’s apparent political withdrawal from the Middle East, where Saudi Arabia and Iran have backed opposing sides in regional wars and political conflicts in Lebanon, Iraq and Syria for years, in favour of its “great power rivalry” policy with China and Russia; and
• His efforts to revive the 2015 nuclear deal with Iran, which is accused of supporting their own restive Shia populations.

The Gulf rulers have sought to end their overwhelming reliance on the US and turned to Russia and China for trade and investment. They have refused US demands to increase oil production to lower prices on the world market.

The US has sought to reassure them that Washington will not agree to Iran’s demand for the US to lift its designation of the Islamic Revolutionary Guards Corps (IRGC) as a foreign terrorist organisation. Neither would the US allow Tehran to acquire nuclear weapons.

The growing distance between the US and its allies takes place amid the disastrous economic impact of the war in Ukraine, threatening shortages of wheat and other products from Ukraine and Russia in a region already seething with discontent, poverty and inequality.

Blinken, who also met Palestinian Authority President Mahmoud Abbas in the West Bank, later flew on to Rabat where he discussed the contentious issue of the Western Sahara. There, in his meeting on Tuesday with the UAE’s de facto ruler, he sought to reassure the Gulf monarchs of Washington’s determination to help them fend off attacks from the Iran-aligned Houthi group in Yemen.

Speaking in advance of his trip to neighbouring Algiers, the Algerian capital, the following day, he said he would discuss how “to alleviate some of the burden that this [the war] is placing on people, including throughout the Middle East.” This was code for trying to persuade Algeria to become an alternative gas supplier to Russia, thereby reducing his allies’ dependency on Moscow for its energy needs and reducing gas prices.

German government plans missile defence system for war against Russia

Johannes Stern

Four weeks ago, Chancellor Olaf Scholz announced tripling of the military budget, Germany's biggest rearmament offensive since the end of the Second World War. Since then, things have proceeded rapidly. The decision to procure dozens of nuclear-capable F-35 stealth bombers is now being followed by a plan to establish a national missile defence system.

Launch of an “Arrow 3” missile (United States Missile Defense Agency, Public domain, via Wikimedia Commons)

On Tuesday, a parliamentary delegation from the Bundestag's defence committee travelled to Israel to explore the purchase of the US-Israeli “Arrow 3” system, which has been in operation in Israel since 2017. It is designed to destroy enemy long-range missiles in the upper atmosphere or even in space. The range of the approximately seven-metre-long missiles is put at about 2,400 kilometres.

Plans for the installation of the multi-billion-dollar system are already well advanced, apparently. The missile radar systems would be “set up at three locations in Germany” and “report their surveillance data to the National Command Post in Uedem (Lower Rhine),” Bild am Sonntag reported on 27 March. The radars are “so powerful that the protective screen could also cover Poland, Romania or the Baltic states.”

The procurement of the system is part of the NATO war offensive against Russia and the assertion of German imperialism aiming to organise Europe under its leadership. Bild am Sonntag quotes the main spokesman on the defence budget committee, Andreas Schwarz (Social Democratic Party, SPD), saying, “We must protect ourselves better against the threat from Russia. To do this, we need a Germany-wide missile defence shield quickly. The Israeli Arrow 3 system is a good solution. We can also stretch the Iron Dome over our neighbouring countries. This would give us a key role in Europe's security.”

On Sunday evening, Scholz also confirmed the plans. He had “resolved not to divulge the details of a plan that has not yet been finalised,” but he explained on the ARD television channel that the missile defence system was “certainly one of the things we are discussing.” It was “urgently necessary that we provide the Bundeswehr [Armed Forces] with more resources, with more tanks, more air defence capabilities, and enable it in many other ways so that it can perform the task it has to perform.”

As in his war speech to the Bundestag on February 27, the chancellor justified the planned arms build-up by the supposed threat from Russia. “We must all prepare ourselves for the fact that we currently have a neighbour who is prepared to use force to assert its interests,” he stressed. “And that’s why we have to join forces to make sure that doesn’t happen.”

This is the familiar propaganda. In fact, the imperialist powers use “force” all the time to advance their economic and geostrategic interests. The wars of aggression and regime change operations in Serbia, Afghanistan, Iraq, Libya, and Syria in the last 30 years alone, which violated international law, have destroyed entire countries and cost millions of lives.

The “turning point” in foreign policy proclaimed by Scholz was prepared for a long time. The systematic military encirclement of Russia by NATO and the imperialist powers—above all Germany and the USA—has deliberately provoked Putin’s reactionary attack on Ukraine. Now, the German ruling class is using the situation to reassert itself as the dominant power in Europe and organise the continent under German leadership.

Germany was “the country with the largest military expenditure in the European Union,” Scholz said. He went on to cite the NATO target of each member state’s spending two percent of its GDP on the military. “If we now meet the two percent, we will be the country in the European NATO alliance with the highest military expenditure and with the strongest defence infrastructure,” Scholz boasted on television. The Bundeswehr would play “a central role for alliance and national defence, especially with our capabilities on the ground.” Along with the USA, only Germany would have “the force that is necessary for the entire alliance. And we will have to organise it accordingly.”

Scholz repeatedly threatened Russia. Germany would “make itself so strong that no one will dare to attack us. And that is the message we are also sending to the Russian president: Don’t you dare!” He said he had repeatedly emphasised what President Joe Biden “has now also said in Poland: NATO's mutual assistance commitment applies to us.” We will “defend every inch of NATO territory. An attack on the Baltic states, on Poland, on Slovakia or other countries would be like an attack on ourselves.”

Neither his interviewer nor Scholz explained to the television audience what these statements meant. The so-called “mutual assistance obligation,” governed by Article 5 of the NATO Treaty, states “that an armed attack against one or more” parties “shall be considered as an attack against them all” and “that in the event of such an armed attack each of them ... shall render assistance to the party or parties under attack ... including the use of armed force.”

In other words, if the Ukraine war, which is being systematically fueled by the imperialist powers through arms deliveries and the massive build-up of NATO troops in Eastern Europe, spreads to an Eastern European NATO country, Scholz and the German government are committing themselves to going to war against Russia. The consequence would be a devastating third world war.

Unlike during the German invasion of the Soviet Union in World War II, which cost between 30 and 40 million lives, Russia today has nuclear weapons. These could be used in the event of a “threat to Russia’s existence,” Kremlin spokesman Dmitry Peskov and former Russian President and Prime Minister Dmitry Medvedev, currently deputy head of the Russian Security Council, warned a few days ago. Influential circles in the NATO powers openly regard the use of nuclear weapons as a legitimate option.

Pakistan’s right-wing populist Imran Khan-led government facing likely defeat in no-confidence vote

Sampath Perera & Keith Jones

Pakistan’s National Assembly is to begin debate Thursday on a no-confidence motion brought against the country’s Islamist populist prime minister, Imran Khan, and his Pakistan Tehreek-e-Insaf (PTI—Pakistan Movement for Social Justice)-led coalition government.

Pakistan's Prime Minister Imran Khan, center, arrives to attend a military parade to mark Pakistan National Day, in Islamabad, Pakistan, Wednesday, March 23, 2022. (AP Photo/Anjum Naveed)

Popular support for the government has plunged due to its imposition of International Monetary Fund (IMF)-dictated austerity and its ruinous response to the COVID-19 pandemic. Within the ruling elite, meanwhile, there are sharp divisions and major misgivings over Khan’s foreign policy, in particular Pakistan’s ever-widening estrangement from Washington.

Everything suggests the government will lose the confidence vote, scheduled for Sunday, April 3, and fall from office. Following weeks of political infighting and skullduggery, the opposition parties appear to have succeeded in peeling off more than enough MPs from the government to bring it down. This has involved both defections from the PTI and the coaxing of coalition partners to cross over to the opposition.

In the 75 years since Pakistan was created, no prime minister of an elected government has ever completed a full five-year term.

The military, the country’s real power broker, has apparently given tacit support to the opposition’s attempt to unseat the government. The victory of Khan and his PTI, hitherto an also-ran in Pakistan politics, in the 2018 elections was widely attributed to the machinations of the military, but the latter has reportedly soured on the government. Last October, there was a public spat between the army top brass and Khan over the appointment of the head of the ISI, the military’s menacing intelligence arm. Ultimately Khan was forced to back down.

There are also widespread reports that the military is angered by Khan’s refusal to heed demands from Washington and its allies that Pakistan label Russia the “aggressor” in the war over Ukraine—a war the NATO powers themselves deliberately provoked through their military-strategic encirclement of Russia and arming of Ukraine.

The Pakistani elite’s two traditional parties of government, the Pakistan People’s Party (PPP) and Pakistan Muslim League (PML-N), together with the Islamic fundamentalist Jamiat Ulema-i-Islam-Fazl (JUI-F) have spearheaded the campaign to remove Khan. The opposition parties have no fundamental disagreement with Khan’s pro-investor economic policies. When in office, they themselves have imposed one anti-worker IMF “restructuring program” after another, and in January they ensured the government got the approval of parliament’s upper house, where it did not have a majority, for the latest IMF austerity measures.

Yet the opposition parties are cynically exploiting the seething anger among Pakistan’s workers and toilers to dislodge the government.

Food and fuel price increases have pushed the official inflation rate above 12 percent. Living standards have been further squeezed by the government’s recent imposition of a standard 17 percent tax on previously subsidized goods, including medicine, as part of a package of measures to secure the latest tranche of an IMF loan. Other measures included recommitting to a sweeping privatization program, and rolling back subsidies for foodstuffs and energy products, including gasoline and electricity.

Throughout the pandemic, Khan has prioritized profits over lives, opposing any health measures that would impede profit-making, while providing no more than famine relief to the tens of millions who lost all income as a result of the pandemic’s economic fallout.

Recent research into excess COVID-19 deaths has exposed Khan’s lie that his government managed the pandemic relatively well compared to other countries in the region, especially India. Officially, Pakistan acknowledges 30,350 pandemic deaths, but a study published in the medical journal The Lancet this month estimated the true total to be more than twenty times that, 664,000.

Popular support for Khan and his PTI has fallen sharply, especially over the past two years. In December, the PTI suffered a rout in elections for local government bodies in its traditional Khyber Pakhtunkhwa stronghold. The mass rally Khan held last Sunday to mobilize support for his government was dwarfed by the protest the opposition mounted the following day.

While the opposition demagogically attacks Khan over the price rises and mass joblessness, they are utterly indifferent to the plight of the Pakistan’s workers and toilers. They are moving against the PTI to gain access to state patronage and working in collusion with the military, as Pakistan’s ruling elite gropes to deal with intersecting economic, political and geopolitical crises and forestall swelling opposition from below.

In response to the ever-expanding military-strategic alliance between the US and India, Pakistan’s historic rival, Islamabad under successive governments has deepened its “all-weather partnership” with Beijing. An important element in this partnership is the $60 billion-plus China-Pakistan Economic Corridor, which has provided a much-needed economic shot-in-the-arm for Pakistan, while allowing China access to the Arabian seaport of Gwadar.

However, sections of Pakistan’s elite have become increasingly concerned that Islamabad has become too estranged from the western imperialist powers and above all Washington, whom it loyally served as a Cold War and Bush “war on terror” ally. They were taken aback when the US and European powers backed Modi’s patently illegal “surgical strikes” inside Pakistan and gave Islamabad no support in its protests over Modi’s 2019 constitutional coup in Indian-held Kashmir.

Khan and the Pakistani military had hoped to mend ties with Washington by proving useful in helping put together a “political settlement” to end the Afghan war. But that stratagem fell apart when Biden decided to unilaterally withdraw US forces from Afghanistan so that the Pentagon could concentrate on “strategic conflict” with Russia and China, and the Taliban swept to power.

The Biden administration continues to insist that Washington views Islamabad as a valued “strategic” partner. However, Biden has refused to so much as take a phone call from Khan since assuming the presidency 15 months ago.

It is within this context that Khan has come under sustained attack publicly in the Pakistani press and behind the scenes from the military for his stance on the Russia-Ukraine war.

Khan—who was in Moscow on Feb. 24 when the war broke out as part of a Beijing-encouraged attempt to expand military and economic ties with Russia—has declared Pakistan “neutral.” To the consternation of much of the elite, he accused the western powers of bullying and a double-standard in their treatment of Pakistan and India, when 23 heads of foreign missions in Pakistan, including Britain, France, Germany and Canada, issued a letter that demanded Islamabad condemn Russia.

Even before the flap over the letter, Deutsche Welle reported that Pakistan’s military was concerned about Khan’s attempt to build closer relations with Moscow at the cost of relations with the West. Army Chief General Qamar Javed Bajwa, it noted, “was meeting with EU officials in Brussels,” when Khan was in Moscow. It quoted a Brussels-based Pakistani analyst, Khalid Hameed Farooqi, saying that “Pakistan’s military leadership wants to keep distance from Russia, unlike Imran Khan.” The military “doesn’t want to provoke the West, as Pakistan's security infrastructure relies on the West’s support,” said Farooqi. “The generals,” he added, “are pro-West.”

Within Pakistan’s military and political establishments there is clearly a powerful faction that believes Islamabad could use the Russia-Ukraine war to mend fences with Washington and exploit India’s strategic predicament. To Washington’s chagrin, New Delhi has tried to navigate the geopolitical storm by abstaining on UN Security Council and General Assembly motions denouncing Russia, and otherwise made clear that it is not prepared to jeopardize or even downgrade its decades-long close military-security ties with Moscow.

However much the US, Britain and the European Union powers would welcome Pakistan’s condemnation of Russia, their principal concern is Islamabad’s ties with China, which are exponentially more important.

Pakistani press reports suggest up to 20 PTI legislators and most of the coalition parties will desert Khan in the no-confidence vote. The Balochistan Awami Party joined the opposition on Monday, and the Muttahida Qaumi Movement-Pakistan (MQM-P), after prolonged bargaining with both sides, deserted Khan on Tuesday. On Wednesday, the Muslim League-Q (PMLQ) announced it had reached an agreement with the opposition, spurning a PTI offer it take the chief minister post in Punjab, Pakistan’s largest state.

In recent days, Khan has resorted to all manner of anti-democratic maneuvers in a desperate attempt to alter the course of the developments. These included unconstitutional delays in convening parliament and mobilizing his supporters to intimidate PTI defectors. This culminated in their breaking into a building housing parliamentarians in Islamabad’s high security “red zone.” Subsequently, Khan justified the violent attack as legitimate anger against “illegal” defections.

Khan is also attempting to intimidate the defectors with the aid of the Supreme Court. He has asked it to impose a lifetime ban on PTI legislators who defect “from the party line” ever sitting in parliament again. With far reaching consequences, Khan is also demanding the Supreme Court interpret the constitution in such a way that votes by parliamentarians that are in contradiction with the “party line” are declared invalid and not counted.

In response, the court has asked the higher courts in each of the four provinces to submit written statements giving their opinion.

Previous no-confidence motions have failed. The elected governments were ousted either by politically-driven Supreme Court rulings or, as has more often happened, by the direct intervention of the US-backed military.

Australia: Renewed flooding again imperils thousands of people

Michael Newman

Only four weeks after record-breaking floods in Australia devastated cities and towns in New South Wales and Queensland, areas of northern NSW are again being severely impacted by torrential rains and flash flooding.

Flood damaged furniture and household goods in Phyllis Street, Lismore [Credit: WSWS Media]

Just as quickly, the renewed emergency has exposed the lack of government assistance, resources and basic infrastructure—even rain gauges, pumps and warning signals—that has now twice thrown thousands of residents into danger in low-lying areas.

People who were just starting to recover, and partly restore homes where possible, have again been inundated, causing further hardship and distress, as well as anger over the inadequate and indifferent official response.

Communities throughout northern NSW have experienced as much as 200-300mm of rainfall in just a few hours, leading to destructive and sometimes unprecedented rapid flooding. Alstonville, a town between Ballina and Lismore, received 431mm in 24 hours.

Ballina experienced just short of a metre of rain in one week, with around half that amount falling in 24 hours. Similarly heavy rain was recorded in Byron Bay, Coffs Harbour, Dorrigo and Bellingen.

So far, about 20 evacuation orders are in place across the Northern Rivers region of NSW, affecting around 28,000 people. The largely-volunteer State Emergency Service (SES) carried out 55 flood rescues in 24 hours. Searches are continuing for a missing aged care worker, feared drowned in her car.

In the regional city of Lismore, one of the worst-hit areas of the previous floods, there was again widespread fury over the response of governments and authorities as the town’s levee was overtopped by floodwaters from the Wilsons River for the second time within a month. The river’s level peaked at over 11 metres last night, engulfing the central lower parts of the city.

Nearby towns, including Casino, Coraki, Evans Head, Yamba and Bungawalbin, were also inundated. The central business district of Byron Bay was submerged in what long-time residents described as some of the worst flooding they had experienced in half a century. At least three metres of water have been recorded in the area during the past 24 hours, overloading the town’s drainage system and damaging dozens of shops.

The flooding also occurred in parts of southern Queensland, with 170 road closures reported to date. In the Gold Coast, 300mm of rain fell on the city in 24 hours to early Tuesday morning, while in Dalby, west of Brisbane, 2,000 homes were damaged by floodwaters after the Myall Creek peaked just under the record level from the 2011 floods.

Despite continuous severe storm warnings from the Australian Bureau of Meteorology, evacuation orders issued on Monday by the NSW SES for thousands of residents in northern parts of the state were rescinded on Tuesday afternoon, only to be reimposed in the early hours of Wednesday morning due to an overnight spike in rainfall, much to the anger and bewilderment of residents.

Furthermore, because of faulty communications systems, the SES had to use Facebook to alert people to evacuate, and some were not told directly to leave their homes until 9 a.m. on Wednesday, giving them only a couple of hours to collect their possessions and flee.

The chaotic emergency response was also hampered in Lismore by the failure of the town’s flood evacuation sirens, pumps and rain gauges, which had not been repaired or replaced since being put out of action by the February 28 flood disaster.

Ballina residents also said they were never notified in advance as to when flooding would occur and many were then cut off from evacuation centres. Even by early Wednesday, neither Ballina nor Byron Bay had received evacuation orders or warnings from the SES.

Yet the acting NSW premier Paul Toole defiantly defended the state government’s performance when it was criticised at a press conference on Wednesday. “When you have a look at the rainfall, no one could have predicted some of the amounts we have seen,” he insisted. “Four weeks ago, these communities were impacted… no one could have predicted that we would be back here again.”

In Lismore, the trauma was intensified by the piles of debris still sitting outside homes and businesses from the February 28 catastrophe, not yet collected. People who had camped inside their ruined houses were forced to hurriedly evacuate again.

This time, the flood levels were somewhat lower, so mass rescues by volunteers were not needed, but bitter memories remain about the way in which thousands of people had to be saved by fellow residents on February 28, unable to even contact emergency services.

Campervan accommodation in Alstonville near Lismore for homeless flood victims [Credit: WSWS Media]

An evacuated Lismore resident spoke to the WSWS yesterday from nearby Alstonville. Some people who lost their homes on February 28, and who were eventually allocated small government-supplied camper vans, were shifted there as the floodwaters rose again.

“The rain was so bad last night,” she said. “It was so relentless. It went on for hours and hours with a double lightning strike and triple thunderclap at one point uprooting a tree and people were starting to get anxious.

“We were taken to a site on the [Alstonville] Showground where we each had to stay in a van, with the government paying $375 a night for us to stay in those vans. There were about 40–60 vans on the site for one person each, although some allowed for two. You had to walk for a mile in the rain to access toilets and showers, which some people had to drive in their cars to get to. We also get food donations, but it’s pretty much all we have.”

Even before this week’s floods, the previous ones had devastated the lives of thousands of households in northern NSW, with the SES estimating that 3,600 homes in Lismore, Murwillumbah, Ballina and Coraki were uninhabitable, with some being condemned to demolition because of extensive flood damage.

Conflict over Russian demand for payments in roubles

Nick Beams

Natural gas supplies from Russia to Western Europe could be cut off unless a deal is reached following Russian demands that payments for its exports be made in roubles rather than euros or dollars. This demand was flatly turned down by a meeting of G7 energy ministers earlier this week.

A woman walks at an exchange office sign showing the currency exchange rates of the Russian ruble, U.S. dollar, and euro in Moscow, Russia, Tuesday, Dec. 29, 2015. The Russian ruble continued its decline on Tuesday, dropping by 0.6 percent to 72.6 rubles to the dollar. (AP Photo/Alexander Zemlianichenko)

Germany and Austria have both taken the first steps towards instituting gas rationing because of the potential halt in supplies. However, in a call late on Wednesday between German Chancellor Olaf Scholz and Russian President Vladimir Putin, there was an indication of a possible pullback.

According to German sources, Putin said payments could still be made in euros as long as they were made to the Gazprombank, which has been excluded from sanctions imposed by the US and the European Union.

On Monday, Putin had declared that henceforth payments for oil and gas should not be made in euro and dollars but in the Russian currency in an attempt to boost its value.

Under the sanctions imposed by the imperialist powers, the rouble has fallen sharply in value. But the Russian central bank is not able to use its reserves, estimated to be around $630 billion, to prop up the currency.

Money is still flowing into Russian bank accounts as a result of the payments for oil and gas, which have been excluded from the sanctions regime, but the increased euro and dollar holdings are effectively frozen once they have been made.

The Putin directive was aimed at pressuring foreign companies to buy the Russian currency and thereby step into the breach, at least partially, left by the ban on the activities of the Russian central bank.

The demand for rouble payments was flatly rejected by the G7 group of major capitalist powers as soon as it was issued. The aim is to press ahead with the drive to crash the Russian economy, in order to promote a social, economic and potentially a political crisis for the Putin regime.

Germany’s economics and finance minister Robert Habeck said the Putin demand had been unanimously rejected and the group was “prepared” for “all scenarios,” including a possible halt to Russian energy supplies.

With the major powers having imposed sweeping sanctions on Russia, the world 12th largest economy, the G7 pronouncement reeked of hypocrisy as it invoked the sanctity of contracts as the basis for its decision.

Speaking after the meeting, which included representatives from the US, UK, France Canada, Italy, Germany and Japan, Habeck said: “All G7 ministers totally agreed that [requiring payment in roubles] would be a clear and unilateral violation of existing contracts.”

He then went on to reveal the motivation for the decision saying Putin’s move showed he “has his back to the wall” as sanctions were harming the Russian economy.

Russia hit back against the G7 decision with government officials declaring that it would not “supply gas for free.”

Kremlin spokesman Dmitry Peskov said: “Payments will be accepted in roubles only. Companies need to understand the changed market situation, the absolutely new reality that has emerged amid the economic war waged on Russia.”

The major European importers of natural gas have all invoked contract stipulations that payments be made in euros and dollars as the reason not to accede to the Russian demand.

The chief executive of Poland’s state-controlled gas company PGNiG, Pawel Majewski has said there is “not much possibility” of switching payments to the Russian energy company Gazprom to roubles. “It is not the case that our counterparty can just freely change the means of making payments as it wishes,” he said.

Even if companies did decide to try and comply with the Russian directive it is likely they would be hit with sanctions aimed at preventing the conversion of euros into roubles.

According to a French government official, President Macron told Putin in a call on Tuesday that it would not be possible for gas companies to make their payments in roubles. France was against such a move.

If Russia sticks to its demand, then gas supplies will start to be cut off. The Russian news agency Interfax has reported that officials from Gazprom, the government and the central bank will report to Putin today on how to organise payments in roubles.

The Russian government has implemented several measures to try to halt the fall of its currency, including ordering Russian brokerages not to allow foreign clients to sell securities, making it more difficult to sell the rouble. Exporters have also been told to sell 80 percent of their foreign currency revenues and buy roubles. But such measures can only make a marginal difference. Hence the move on gas payments.

The issue goes far beyond the conflict with Russia. The ability of the major imperialist powers to unilaterally null and void the foreign currency holdings of major countries overnight has cast a shadow over the entire global financial system. Its very foundations are being threatened.

This issue was the subject of a comment published yesterday by Financial Times columnist Martin Wolf entitled “A new world of currency disorder looms.”

Wolf noted that after the Russian default of 1998, Putin had hoped that by building up foreign currency reserves he would be able to guarantee financial independence. The current action against Russia is significant not only for Russia because a “targeted demonetisation of the world’s most globalised currencies has big implications.”

The weaponization of currencies had major consequences for those who fear being targeted, he wrote. “Sanctions on Russia’s central bank are a shock. Who, governments ask, is next? What does it mean for our sovereignty?”

Wolf warned that Western policymakers may find that by using these weapons they might damage themselves as the rest of the world tried to “find ways of transacting and storing value that circumvent the currencies and financial markets of the US and its allies.”

He noted that China was already attempting to do this. But he ruled out the prospect of China developing a new international monetary system based on its currency. Its financial system was underdeveloped and relatively closed and was “very far from providing what sterling and the dollar provided in their heyday.”

The future, Wolf concluded, was not a new global order but “more disorder” and “future historians may view today’s sanctions as another step on that journey.”