NEPAL ON VERGE OF CRISIS
Five years after Nepal abolished the monarchy and become a democratic republic, the Himalayan country remains paralyzed with political crisis, with new elections postponed to November. The country has been without a parliament for more than a year, and the major political parties in contention for power have missed another crucial deadline for drafting a constitution and settling an agreement on the general structure of the government. Nepali Times editor Kunda Dixit claims that many of the key political figures in Nepal have squandered opportunities for political reconfiguration. What’s worse, the political instability that has plagued the country ever since the Maoist insurgency fell from power over a decade ago has wreaked havoc on Nepal’s already fragile economy. Nearly a quarter of the country’s Gross Domestic Product is dependent on remittances from abroad, and the country has also not had a full budget in over three years. Both India and China have voiced their concern on the risk of instability spilling over into their shared borders. (Voice of America, July 1, 2013)
INDIA,CHINA COMPETE OVER AFRICAN ENERGY
India and China are fishing for energy in the deep waters of Mozambique - home to the world's biggest gas discovery in a decade. India’s two biggest oil companies, Oil and Natural Gas Corp (ONGC), and Oil India Ltd. (OIL), have clinched a deal providing them access to an offshore gas basin with 42 trillion cubic feet (tfc) of natural gas - which is currently about 20 times that of India’s annual gas consumption. Incidentally, China’s largest oil producer, China National Petroleum Corporation (CNPC), acquired a 20 per cent stake in an adjoining zone for $4.2 billion in the same week. With this acquisition, CNPC will get access to 75 tfc of natural gas. "If things go well in Mozambique, it may well end up being the second largest natural gas exporter in the world after Qatar and overtaking Australia...Shell, the largest LNG player globally is keen to step in,” said Niraj Mansingka, an oil and gas analyst at Edelweiss. (Yahoo! News, July 1, 2013)
PAKISTAN/AFGHANISTAN STALEMATE IN QATAR
Afghan officials have rejected a Pakistani proposal to cede parts of southeastern Afghanistan to the Taliban during “end game” peace talks in Doha. Afghanistan has long accused Pakistan of playing a double game in the 12-year-old war, noting that Islamabad’s public pronouncements about peace and stability contrast with its material support to the Taliban. Afghan President Hamid Karzai has voiced his disapproval of the plan in a news conference with British PM David Cameron, saying that "delivering a province or two to the Taliban" would be perceived as an invasion by the Afghan people. (Reuters, July 1, 2013)
INDIA/BHUTAN HYDRO AGREEMENT STYMIES
Energy collaboration between India and Bhutan power is frozen in limbo after India proposed to switch from an Inter-government model to a Joint Venture model in which Bhutan would assume more responsibility for financing power plants. Bhutan has balked at the proposal, citing a lack of funding. “Bhutan has refused to adopt the shift, arguing they do not have the money to fund even the 15 per cent equity portion,” a senior official told India’s Business Standard. India has already financed three energy projects through soft loans and grants - Tala, Chukha and Kurichu – totaling nearly 1,500 Megawatts. In return, India imports 90 percent of the power generated. Planned but yet to be commissioned are nearly a dozen new power projects totaling nearly 10,000 Megawatts capacity. (Business Standard, June 28, 2013)
IMF TO LOAN PAKISTAN $5B
A fresh loan by the International Monetary Fund was signed in Islamabad this month after two days of talks with Pakistani officials. Pakistan has lobbied for the loan to ameliorate an impending energy crisis that is threatening the country’s economy. Many urban and rural areas are allotted electricity for only a few hours throughout the day - and daytime temperatures regularly reach well over 100 degrees Fahrenheit. During talks, Pakistani officials addressed the IMF’s longstanding reservations over Pakistan’s energy and fiscal policies, which have been badly mismanaged. Less than 2% of Pakistanis pay income taxes and officials in Islamabad assured the fund that that a tax collection target has been set at Rs. 2475 billion during the new fiscal year while government subsidies would be gradually reduced. (The Nation, July 1, 2013)