India steps up coal use to stop outages

According to a Reuters report, India has stepped up the use of coal to generate electricity in a bid to stop outages caused by lower hydroelectricity output, and as an increase in renewables is struggling to keep pace with record power demand.

It is unusual for India's electricity use to spike in August, when temperatures are lower due to the annual monsoon that runs between June and September. Demand typically peaks in May, when Indians crank up air-conditioners to beat the heat, and industries operate without rain-related disruptions.

However, the driest August in more than a century has resulted in power generation surging to a record 162.7 billion kilowatt hours (units), a Reuters analysis of data from the federal grid operator Grid India showed.

Coal's share in power output rose to 66.7% in August - the highest for the month in six years, according to a Reuters analysis of government data. Lower rainfall lead to the share of hydro power in overall output plunging to 14.8%, compared with 18.1% in the same period last year.

The government has repeatedly defended the use of coal citing lower per capita emissions compared with richer nations, and rising renewable energy output.

Despite higher demand for coal, power plants have slashed imports by 24% to 17.85 million metric tons during the first four months of the fiscal year ending in March 2024, government data showed, due to a 10.7% increase in production by state-run Coal India.

Lower imports by the world's second largest importer of the polluting fuel behind China have kept global thermal coal prices depressed in recent months.

Analysts and industry officials attribute the higher power use to farmers using more electricity to irrigate fields due to insufficient rain, intermittency of renewables, and increased cooling demand with warmer-than-usual temperatures.

"Given the already stressed supply situation, as poor monsoon in August resulted in high agricultural demand, the sudden fall of wind generation ... has further aggravated the situation," power analytics firm EMA Solutions said in a LinkedIn post on Thursday.

India's peak demand - the maximum capacity required during any time of the day - rose to a record 243.9 gigawatts (GW) on August 31, the Grid India data showed, exceeding available capacity by 7.3 GW.

Electricity supply fell short of demand by 780 million units in August, the data showed, marking the highest shortage since April 2022, when India faced its worst power cuts in six and a half years.

Weather officials expect country-wide rainfall in September to be in line with the long-term average, possibly providing some respite to utility operators.

Coal's share in output rose to 74.2% in the eight months that ended in August, the Grid India data showed, compared with 72.9% in the same period last year and on track for a third consecutive annual increase. The share of hydro fell from 10.9% to 9.2%.

Overall power generation has risen by more than 108 billion units this year, dwarfing an increase of about 16 billion units in renewable generation.

India failed to achieve a target to install 175 GW in renewable energy by 2022, and has since stated that it would try to boost non-fossil capacity - solar and wind energy, nuclear and hydro power, and bio-power - to 500 GW by 2030.

Achieving that target would require over 43 GW more of non-fossil capacity every year, nearly three-times the average non-fossil capacity addition over the last two years to July.

 

Developing countries facing debt problem

According to Reuters, the persistent and damaging debt problems gripping a number of developing nations will be a core topic during the G20 summit in Delhi next month. Following is the recap of economies in the countries currently facing problems:

ZAMBIA

Zambia was the first African country to default during the COVID-19 pandemic and after a long-awaited burst of progress in recent months finally looks to be closing in on a repair plan.

In June, it clinched a US$6.3 billion debt rework deal with the Paris Club creditor nations and its other big bilateral lender China. The details are still being worked on, but the government also hopes to reach a deal in the coming months with the international funds that hold its unpaid sovereign bonds.

The progress has also been cheered as a success for the struggling G20 Common Framework initiative, which was set up during the pandemic to try to streamline debt restructurings but has been hard to make work in practice.

SRI LANKA

Sri Lanka announced a debt overhaul plan at the end of June and has continued to make progress since, albeit not everywhere.

Nearly all holders of its domestic, dollar-denominated Sri Lanka Development Bonds (SLDBs) agreed to exchange their bonds into five new Sri Lankan rupee-dominated notes that will mature between 2025 and 2033.

Another part of the domestic debt plan has faced delays, though, with a key deadline on a Treasury bond exchange delayed three times and now set for Septemer 11, 2023.

Central bank chief Nandalal Weerasinghe has said the country's big foreign creditors such as India and China are awaiting the conclusion of the domestic debt operation before continuing discussions.

He said negotiations will be held in parallel with the first review of its US$2.9 billion International Monetary Fund (IMF) bailout program due from 14-27 September. Failure to complete the domestic debt overhaul by then could result in delays both in terms of IMF disbursements and talks with creditors.

GHANA

Ghana defaulted on most of its external debt at the end of last year. It is the fourth country to seek a rework under the Common Framework and is aiming to reduce its international debt payments by US$10.5 billion over the next three years.

Its progress has been relatively swift compared to the likes of Zambia. The government recently agreed to tackle roughly US$4 billion of its domestic debt via a pension fund debt swap operation and a dollar-denominated bonds exchange.

It has sent a restructuring plan to its official sector - wealthier government - creditors and its finance minister has said he also expects to reach a deal with the country's bondholders by the end of the year.

The funds know it will require them to write off money but hope it could also include a recovery instrument that would mean Ghana pays back more of that money over time if its economy recovers quickly.

PAKISTAN

Pakistan needs upwards of $22 billion to service external debt and pay other bills for fiscal year 2024.

A caretaker administration is in charge until an election that must take place by November. Inflation and interest rates are at historic highs, and it is struggling to rebuild from devastating 2022 floods.

In June 2023, Pakistan reached an 11th-hour deal with the IMF for a US$3 billion bailout, and Saudi Arabia and the UAE followed with US$2 billion and US$1 billion cash infusions.

Reserves, which had fallen to US$3.5 billion, had rebounded to US$7.8 billion by late August. Observers say it could have enough to make it to the elections but there are major questions about how long it will be able to avoid default without huge support.

TUNISIA

The North African nation, reeling from multiple hits since a 2011 revolution, is facing a full-blown economic crisis.

Most debt is internal but foreign loan repayments are due later this year and credit ratings agencies have said Tunisia could default.

President Kais Saied has slammed the terms required to unlock US$1.9 billion from the IMF as diktats that he will not meet.

Saudi Arabia pledged a US$400 million soft loan, and a US$100 million grant, but the tourism-dependent economy continues to grapple with shortages in imported food and medicine. The European Union has offered about US$1.1 billion (one billion euros)in support but that appears to be mostly pegged to the IMF deal or reforms.

EGYPT

Egypt remains another of the big countries seen as at risk of falling into trouble. North Africa's largest economy has around US$100 billion of hard currency - mainly dollar-denominated - debt to pay over the next five years, including a meaty US$3.3 billion bond next year and the government spends over 40% of its revenues just on debt interest payments.

Cairo has a US$3 billion IMF program and has devalued the pound by roughly 50% since February 2022. But a privatization plan is still on the go-slow and last month it veered away from its IMF plan by saying it would keep subsidized electricity prices unchanged until January.

Some of its government bonds are changing hands at half their face value and analysts think a key factor in whether it can get back on track is the amount of support wealthy Gulf nations such as Saudi Arabia provide going forward.

EL SALVADOR

El Salvador has shifted from doom and default to bond market darling, propelled by two surprise debt buybacks and the appointment of a former IMF official as adviser to the finance ministry.

In summer 2022, its 2025 eurobond fell to just under 27 cents on the dollar, weighed down by high debt service costs and worries over its financing plans and fiscal policies.

The same bond traded at 91.50 cents on August 31, and its debt-to-GDP ratio stood at 77% in December 2022, the lowest since 2019, and is forecast to drop another percentage point this year, according to Refinitiv data.

It’s now relatively light debt repayment schedule through 2027, and the sky-high popularity of President Nayib Bukele, has assuaged fears the country could default.

KENYA

The East African nation's public debt stands at nearly 70% of GDP, according to the World Bank, putting it at high risk of debt distress.

President William Ruto's government has moderated spending and proposed a raft of tax hikes, assuaging some concerns of an imminent default.

The African Development Bank is in talks with Kenya over US$80.6 million to help it plug its financing gaps this year, and it is also discussing budgetary support from the World Bank.

But concerns remain; Ruto's political opposition has opposed many of his tax hikes, and protests have forced him to pause some reforms, such as fuel subsidy cuts.

UKRAINE

Ukraine froze debt payments in 2022 in the wake of Russia's invasion. It has said it is likely to decide early next year whether to try to extend that agreement or begin looking at potentially more complex alternatives.

Top institutions estimate the post-war rebuild cost will be at least one trillion euros, and the IMF estimates Ukraine needs $3-$4 billion a month to keep the country running.

If the war with Russia is not won or at least eased to a much lower intensity by next year, its debt restructuring dilemma will also have to factor in the November 2024 US Presidential election and the degree of support it would receive should Donald Trump or another Republican candidate win office.

LEBANON

Lebanon has been in default since 2020 with few signs its problems will be resolved any time some.

The IMF has issued stark warnings, but one bit of progress in the last couple of months has been a proposal by the central bank to lift the long-time peg on the country's local currency,

 

Israel not equipped to handle Iranian funded explosives

According to The Jerusalem Post, Israeli military commandos warned on Sunday morning that the IDF's armored vehicles are not equipped to deal with terror attacks carried out using improvised explosive devices (IED), which are thought to be funded and supplied to the West Bank by Iran.

Following recent use of IEDs in attacks, most notably in a blast near Joseph's Tomb where an IDF officer and three soldiers were wounded last week, the commandos warned that it is clear to all of us where this is going. "It will only get worse."

The commandos lamented the lack of armored vehicles available for operations in the West Bank. "Everybody has seen the explosive terror labs uncovered in the Jenin operation.

"On one hand, we're talking about an increased amount of explosives, a situation which urges caution. On the other, there is an issue with the availability of armored jeeps, this is felt on our way to our targets and by the targets."

IDF denies reports

The IDF Spokesperson's Unit rejected the claims on Sunday, stressing that there is no shortage of armored vehicles.

"The vehicles are under continued maintenance in order to ensure their operational capacity remains at a high level."

The IDF also hit back at accusations that Israeli forces secured Joseph's Tomb by foot last week due to this perceived lack of vehicles, writing that the claim is incorrect.

The Israeli forces were wounded when an explosive device struck their armored vehicle.

Israelis seeking Portuguese nationality

According to The Jerusalem Post, more Israelis applied for Portuguese citizenship than any other foreign group over the past two years, even though few choose to actually live in the country.

The number of Israelis seeking a Portuguese passport through a 2015 law passed for the descendants of Jews expelled during the Inquisition reached 20,975 in 2022, according to statistics from the Portuguese Immigration and Border Service (SEF). 

That exceeded the 18,591 applicants from Brazil, whose population is over 20 times larger than Israel’s and has longstanding cultural ties to Portugal, including a shared language. 

Israelis were also the largest group in 2021 when 21,263 people applied.

The surge of Israeli applicants began after Portugal passed its “Law of Return” in 2015, allowing the descendants of Portuguese Sephardic Jews who were affected by the 16th century to apply for nationality. The Portuguese government has announced plans to end this policy in December 2023, declaring its purpose of reparation to be fulfilled.

The policy was plagued by scandal last year amid allegations of fraud and corruption in the Jewish Community of Porto, one of two Jewish authorities — alongside Lisbon’s community — that was certified to vet applications. In particular, the Porto community came under fire for approving the citizenship of Roman Abramovich, a Russian-Jewish billionaire who made his fortune in Russia’s energy sector and has been called a close ally of Vladimir Putin, although he has denied being part of the Russian president’s inner circle. Abramovich’s naturalization came to light shortly after Russia invaded Ukraine when it became apparent that he could live in Europe and challenge the European sanctions being imposed on Russian oligarchs. His case triggered a criminal probe into Porto’s vetting process, leading to the detainment of community rabbi Daniel Litvak and a bitter rift in Portugal’s Jewish communities.

Portuguese citizenship has a wide-ranging appeal for Israelis, including the freedom of movement that comes with a European Union passport. Portugal has lower taxes and a lower cost of living than Israel, although its income levels are also proportionately lower. Some Israelis are attracted to the more relaxed acceptance rates at public universities in Europe and lower attendance costs for EU nationals. 

There are likely also political motivations. Liberal-leaning Israelis — alarmed by Prime Minister Benjamin Netanyahu’s far-right government and its push to undercut the Israeli Supreme Court’s power and independence — have expressed growing interest in moving abroad. Others are galvanized by the fear and stress that come with living in a country continuously locked in deadly conflict with its neighbors.

Despite their spiking interest in nationality, most of the Israelis who applied have not moved to Portugal. While 60,000 Israelis had Portuguese citizenship in 2022, only 569 were residents, according to SEF data. In comparison, 239,744 Brazilians lived in Portugal last year.

Many citizens of Israel, a country full of citizens who have endured past migrations, may be driven by the desire for a “plan B.” Amikam, an Israeli healthcare professional who did not provide his last name, told The Portugal News that he applied for nationality in 2017 even though he has no plans of emigrating. 

“It’s always good to have a plan B in case things in Israel turn for the worst,” he said.

ASEAN losing its composure

Southeast Asia is at a dangerous crossroads. Once regarded as a haven of relative stability and economic progress, today the region is buffeted by escalating geopolitical struggle between the United States and China, state fragmentation in Myanmar and internal political conflicts that are exposing the limits of democratic reform and the dangers of populism.

These issues will be on full display at the annual leaders' summit of the Association of Southeast Asian Nations next week in Jakarta and may well intensify as the group's rotating chairmanship passes afterward from Indonesia to Laos, the bloc's smallest and poorest member.

Civil society and the international community have long looked to ASEAN, which has reliably preserved regional peace for decades, to deal with major challenges.

But the bloc is now deeply divided. On Myanmar, for example, mainland states have put a premium on state integrity and security over political change and reform while more democratic maritime states, led by Indonesia, regard military rule as intolerable.

In an alarming public display of regional dissonance, Thailand recently directly engaged with Myanmar's military junta without informing Indonesia. By playing on such divisions, the junta has avoided complete ostracization.

The region is also divided over the extent to which China poses a threat and whether it should be contained by the United States and its allies.

Laos, Thailand and Cambodia have close ties with Beijing, reflecting proximity or long-standing political alignment. Vietnam views China with deep historical enmity but maintains a dual-track relationship sustained by ties between the two nations' ruling communist parties. Even so, Hanoi has drawn closer to the US.

The Philippines has effectively checked out of ASEAN because officials in Manila believe the group has done nothing to defend the country's maritime claims against Chinese intrusions, noting its failure to support the 2016 arbitral ruling by a court in The Hague affirming Philippine sovereignty over contested areas.

"We might as well be allied with Taiwan, Japan and South Korea," said a former official after the recent confrontation between a Chinese coast guard ship and Philippine vessels attempting to resupply troops on Second Thomas Shoal in the disputed Spratly Islands. Manila has indeed moved closer to the US since Ferdinand Marcos Jr. became president last year.

Compounding such rifts over external issues is a distinct political divide. The rise of democratic reform movements in Indonesia, Malaysia and even Thailand over the last 30 years has led to more frequent changes in national leadership.

As a result, the personal relationships that held ASEAN nations together under more authoritarian regimes have frayed. Some democratic leaders have begun to wonder why they need to spend so much time with tedious ASEAN meetings when their domestic constituents are more interested in social equality and food security than strengthening regional identity.

All this has made Southeast Asia more fragile and isolated than it appears. Great power leaders who once routinely attended regional summits now often skip them. The US and China prefer bilateral engagements during which they can press for alignment. While he will skip this month's ASEAN summit, US President Joe Biden will visit Vietnam right afterward, reportedly to sign a bilateral strategic partnership agreement.

ASEAN has lost its much-touted centrality and is frankly on life support as an autonomous multilateral platform, reflecting to some degree the decline of multilateralism globally.

What can be done to revive effective multilateral cooperation and rescue the region from fracture by competing great powers and division by political dispute?

Civil society has traditionally helped in quiet ways to build and sustain the sinews of connectivity in the region. Networks of academics and think tanks helped promote connections and address sensitivities among governments and offered regional policy ideas.

Many of those veteran scholars are now retired or deceased. The younger generation has not filled the void, in part because the rivalry of the great powers has polarized much of their ranks.

A possible new approach would be to launch a recovery process to help reconnect the 10 ASEAN states. This would involve identifying common challenges rather than relying on outdated institutionalized processes or weak mechanisms to manage conflicts and protect human rights.

There is clearly a need for cross-bloc dialogue about what can be done. A bottom-up approach could offer innovative ideas and help ease the acrimony that has built up over the past few years. Post-pandemic, there is an urgent need for more contact and understanding in a region vastly more challenged than it was even five years ago.

The US and China are locked in an epic, dangerous rivalry that treats Southeast Asia as a battleground, so they will not be of help. But midsized powers and traditional partners such as Australia, the EU and UK could support regional cohesion if they spent less time pushing Western values and seeding animosity toward China, which even if justified, generates further division.

Southeast Asian governments and their leaders could help by speaking with one voice on critical issues and maintaining traditional balancing approaches to great power competition. As things stand today, there is a real chance that the Philippines and China will come to blows over the Second Thomas Shoal.

That would bring the United States and China dangerously close to war. Will ASEAN leaders be able to combine and collaborate to prevent any crisis from escalating? Right now, that looks doubtful.

 

Israeli attempt to normalize Libya ties backfires

Libyan Prime Minister has firmly rejected the prospect of normalizing relations with Israel, days after the news broke out of an apparent secret meeting between the Libyan foreign minister and her Israeli counterpart.

On August 27, Israeli Foreign Minister Eli Cohen publicly said he and Libya’s now sacked foreign minister had held a private meeting in the Italian capital Rome the previous week, the first-ever alleged encounter between a top Libyan diplomat and an Israeli regime official in history.

The next day, Libya’s Prime Minister Abdul Hamid Dbeibah fired Foreign Minister Najla Mangoush, (who claimed it was not an official meeting but a swift coincidental interaction) and launched an investigation into the reported meeting. 

Mangoush’s whereabouts is now unknown following the uproar in Libya after news emerged of the exchange late last week.

Dbeibah also touched on the ongoing probe about the incident, saying, “Regardless of good or bad intentions, together we (the Libyan people) will learn the details of what happened in Rome through the ongoing investigation.”

Under a 1957 law in Libya, it is illegal to normalize ties with the occupation regime of Israel. Libya has long been hostile toward the Israeli regime and a staunch supporter of the Palestinians.

During a televised ministerial meeting of the Libyan Government of National Unity, Prime Minister Dbeibah said his government completely rejects any form of normalization with Israel.

"Before I assumed this mission, (I affirm) our categorical and complete rejection of any form of normalization, and our complete bias towards the Palestinian people and their just cause,” Dbeibah told his ministers.

The Premier has also accepted responsibility for the foreign minister’s illegal interaction, in spite of being unaware of the reported secret gathering, saying, “Despite everything that happened to our people, they still cling to their principles and identity. In fact, from this place, I bear full responsibility for this government, regardless of who made mistakes in it and who was responsible.”

“Long live Libya, long live its people, long live Palestine, and long live the Palestinian cause in our hearts,” he added.

On Tuesday, Libya’s parliament also condemned the meeting, while voicing opposition to any attempt toward any level of normalization with Israel, with the parliament speaker denouncing any contacts with the regime and emphasizing Libya’s support for the Palestinians. 

Aguila Saleh Issa added that no one is allowed to undermine the Palestine struggle for freedom, and everyone should work on establishing a Palestinian state with occupied al-Quds (Jerusalem) as its capital.

In a sign of how just sensitive the news was for the Libyan public, the reported meeting ignited angry street protests in several Libyan cities, including mass rallies in the capital Tripoli, with demonstrations strongly condemning Israel and protesters chanting slogans in support of the Palestinians. 

This, in turn, prompted the suspended foreign minister Mangoush to reportedly flee to Turkey for fear of her safety. Her exact whereabouts remain unknown.

Israeli news reports suggest that the regime’s Prime Minister, Benjamin Netanyahu, was furious with his foreign minister for making the news public before informing him.

Reports also suggest the United States is fuming about the Israeli announcement of the reported meeting amid the wave of angry reactions from Libya.

Both Israel and the US are reportedly said to have hoped the private meeting could have materialized into some type of PR boost for Israel and President Biden, ahead of the 2024 US presidential election with a view to some kind of normalization agenda between Israel and Libya.

The response from the Libyan people and the government officials since the news broke out suggests that no such measure will materialize in the foreseeable future.

Israel is finding itself isolated in West Asia after the so-called Abraham Accords which saw the UAE, Bahrain, and Morocco normalizing ties with Israel when Donald Trump was at the White House.

While Sudan formally joined the so-called Abraham Accords, relations between Sudan and the occupation regime have been frozen because of domestic opposition and political instability.
Three years later, Israel had widely hoped to expand on the so-called Abraham Accords by normalizing ties with many more states in West Asia and Africa, something that has yet to transpire.

Palestinians have said the Abraham Accords have emboldened Israel in its brutal crackdown in the occupied territories, describing the deal as a stab in the back for the Palestinian cause.

According to the United Nations, Israeli forces have killed more than 200 Palestinians so far this year, many of them women and children, the highest annual death toll since the UN began keeping records in 2005.

But 2023 has yet to end and Israeli aggression against the Palestinians continues to expand, particularly the almost daily pre-dawn heavy military invasions in the occupied West Bank cities, towns and villages that have been condemned by human rights groups as “merciless”.

On Friday, the regime's military raided several cities in the occupied West Bank, killing an innocent teacher in the village of Aqaba, while injuring and arresting many others, including family members of residents that Israel claims are wanted. 

Israel is being governed by one of the most fascist regimes in the entity’s short history.  And while former Israeli rulers committed similar war crimes against the Palestinians, observers say the new ministers in Netanyahu’s cabinet are not even trying to hide their brutal and illegal practices, unlike previous ones who tried to cover them up. Netanyahu’s cabinet openly boasts about killing Palestinian civilians.

This has added extra pressure on any regional state's official pondering the idea of some kind of diplomatic normalization and being seen warming up to the new fanatical criminal gang in charge of the occupied Palestinian territories.

 

US backs Chevron in dispute with Cyprus

According to Reuters, Washington has weighed into a dispute between Cyprus and international companies led by Chevron over how to develop a giant offshore gas field, backing the US Company’s plan to link it to neighbouring Egypt.

The Chevron-led consortium proposed connecting the Aphrodite gas field via a subsea pipeline and existing infrastructure to Egypt, where the gas can be sold in the domestic market or liquefied and shipped to Europe, which has largely been cut off from Russian supplies.

Cypriot Energy Minister George Papanastasiou confirmed that the government had rejected the latest plan, which omitted a previous proposal to build a floating gas processing plant at the field which lies 160 kilometers (100 miles) southeast of Cyprus.

"The modification has been rejected. The expectation of the Republic of Cyprus is that the consortium honours what was mutually agreed by the parties in 2019," Papanastasiou told Reuters.

The partners have engaged in a new round of talks with the Cypriot government, Israel's NewMed, which is a partner in the Aphrodite field, said earlier this week.

The United States is backing Chevron's plans, which it believes will help to get gas to the market faster and with a lower carbon footprint as it does not involve building large infrastructure.

"Connecting Aphrodite to Egypt will help them with peak domestic consumption in the summer, add stability and reduce tensions in the region, and allow exports for Europe," the US source said.

The Biden administration is making the distinction between expensive and unnecessary infrastructure projects and less work-intensive interconnections that are necessary as economies transition to cleaner forms of energy, the source said.

Aphrodite, discovered more than a decade ago, holds an estimated 124 billion cubic meters of gas. Chevron is a partner in the field with NewMed and Shell.

Its development would give a vital boost to the Eastern Mediterranean gas basin which has attracted huge investment in recent years, particularly in the wake of Russia's invasion of Ukraine as Europe sought to replace Russian fossil fuel.

According to two industry sources, Nicosia objected to Chevron's plans to drill three production wells rather than five and avoid the construction of a floating production unit above the field.

A Chevron spokesperson said the consortium was working to progress the Aphrodite project.

"We have submitted a modified development plan to the Cypriot Government, which we hope will lead to the development of the Aphrodite field and delivery of gas to Egyptian and global markets via existing LNG (liquefied natural gas) plants on the north coast of Egypt."

"We believe it is important that Aphrodite is expeditiously developed for the benefit of Cyprus, the Eastern Mediterranean region and European and other international markets," Chevron said.