Search This Blog

Thursday, July 06, 2006

Energy: Geopolitical shifts

The Frontline has a piece on the Shanghai Cooperation Organization which has been described by a western academic as "OPEC with the bomb". The imporance of India's low key presence as an observer country can be interpreted as either making up for the current shift towards the US with its Asian partners or as a fifth column for US interests. Given the fact that the Petroleum minister Deora attended instead of Head of state Dr.Singh, the latter sounds plausible. Especially as Deora is seen to be close to US interests. However it could be a bit of both as India has stated its intent in joining this grouping. Being part of the SCO with Russia and China is very important for India's energy security and the importance of this cannot be overstated. It must be remembered that Deora is a new hand at the ministry who was brought in to appease (my opinion) the US as Mani shankar iyer did the unthinkable by actually cutting a strategic deal with the chinese to cooperate instead of compete on equity oil. It is my concidered opinion that Dr.Singh had to lose Mani to show that India is serious about the Nuclear deal. The joint agreement is now a dead letter. While the US can scare India or for that matter anyone else away from equity oil, china is a different kettle of fish when it comes to intimidation.

The prize at stake here is the central asian oil reserve that is being eyed by both the SCO (including observers :) and the US as the strategic reserve of the 21st century. Iran and Pakistan (also observer nations) are lobbying hard to get into this grouping. With Iran in the fold this could be the biggest emerging cartel and have major ramifications on how central asian oil will be exploited and for whose benefit.

If Iran, Pakistan and India join this grouping (as they should) the SCO will provide the foundation for an Asian Energy Framework, that will compete head on with the west for oil reserves. With Venezuela and the South American block already showing interest in selling equity oil to India and China, a Mercosur-SCO + IPI block will change the energy map of the world. Watch this space for lots of action.

Some more voices on the same issue.

Very Strange issues
Informed Dissent


  1. There are some in the current government who worked for IMF and/or WB.That and the current Indo-US agreement in which Monsanto is in the advisory committee for agricultural affairs is worrying. But liberalization has been on the whole benficial and with left having such strong representation in the central govt. one hopes that these will work out. One of the bigshots in IMF is an Indian by name Raghram Rajan and his views seem refreshingly different from those in IMF in old days. He coauthored a book (which I have not read) called "Saving capitalism from Capitalists". Reviews are encouraging. One keeps hoping.

  2. Start with the prime minister :) The bretton woods gang has hijacked virtually every credible leader we have so its a bit like closing the barn door after the horse has bolted. The agriculture issues are even worse given the fact that we face subsistance issues. The blue box green box system has confused the developing countries and allowed the developed countries to heavily subsidize their farmers. India is headed for a lot of trouble as our netas are takign a very short sighted view of trade, agriculture and more important energy security. The doha round is still not settled as the developing countries have too much to lose. the way i see it this is a game of attrition, if the developing countries hold off long enough the g-7 will become more resonable..

  3. I agree with most of what you say but keep hoping. I just finished browsing through"The Sorrows of Empire" by Chalmers Johnson which confirms what you said. Perhaps this is where educated and well-informed people can help through blogs and group blogs to inform people and pressurize governments to take the right decisions. Meanwhile lot of poor will suffer.

  4. Shiv yr thoughts are right on the money. To me this whole arguement of getting oil and nuclear power is disturbing, i think we should be looking towards renewbale energy and fundamentally we should try to reduce demand, which also means use energy more efficiently. I hope (its a big word in India's conetxt) someone in PMO also thinks on those lines.