Farmers protest in India on December 26, 2020 / credit: Ravan Khosa
Editor’s Note: The following is the writer’s analysis.
November is a month of pleasant weather and festivities in India. But during the final week of this month last year, several hundred thousand farmers gathered on the borders of the National Capital Territory of Delhi—which contains the capital of New Delhi—to confront a huge police force.
They settled down at several points on the border, creating new townships and organizing huge langars, a Sikh concept that involves free meals cooked and eaten together as a community.
This protest sparked a general strike of 250 million Indian farmers as well as workers from other sectors, making it the largest known strike in the world.
Over 11 months have passed since then and farmers have maintained their protest sites, although at a smaller level, using this to inspire protests in other areas of India. The movement is the strongest in parts of northern India (states such as Punjab and Haryana, and the western portion of the state of Uttar Pradesh). But it has spread to other areas as well, thereby strengthening the overall opposition to India’s right-wing, sectarian ruling regime. While this movement has raised several demands, the most persistent one has been for the repeal of three highly controversial farm laws, which were passed in 2020, bypassing normal parliamentary procedures.
Women have made up a significant portion of the farmers’ protests in India over the past 11 months / credit: JK Photography
The farmers say—and several experts back these claims—that these new farm laws greatly increase the possibility of corporate control over the Indian farming and food system. One law strengthens the contract farming system in favor of corporate interests and against farmers. The second law increases possibilities for big corporations to hoard huge quantities of important crops and hence manipulate and dominate their market. The third law weakens the existing procurement farming system while facilitating a new, unregulated tax-free purchase system, which big business can easily dominate. Both local crony capitalists and big multinational agribusiness companies are likely to use these new opportunities to increase their domination, while also entering into collaboration to corner small farmers.
Allowing big business to dominate India’s food and farm system would be a culmination of trends witnessed in recent decades. The advent of Green Revolution seeds promoted by Western—particularly U.S.—pressure opened up Indian farming to big business, but led to an increase in pollution and soil degradation caused by chemical fertilizers and pesticides, escalated costs to farmers, lowered food quality, and the loss of biodiversity as local seeds and mixed farming systems were uprooted. Objections voiced by the most senior farm scientist, Dr. R.H. Richharia, director of the Central Rice Research Institute, were brushed aside with a heavy hand and he was rudely removed from his job.
The next stage of corporate domination came with the ushering in of the World Trade Organization regime, with its rules for international trade and patents. This could not be stopped, but resistance efforts helped save some safeguards for farmers.
The third stage came with the advent of genetically modified (GMO) crops, including the Bt Cotton crop. Next, efforts were taken to introduce GMO technology to grow several food crops, starting with brinjal (eggplant or aubergine) and mustard. A Monsanto partner mounted an aggressive campaign for spreading GMO brinjal, which would have paved the way for GMO technology to produce other food crops. However, a strong resistance movement opposed this and, so far, GMO food crops have been resisted more or less successfully. Professor Pushpa Bhargava, an acclaimed scientist to whom the Indian Supreme Court offered a special advisory role on this issue, warned, “The ultimate aim of this attempt of which the leader is Monsanto, is to obtain control over Indian agriculture and thus food production.”
Women harvesting rice in Palacode in the Indian state of Tamil Nadu / credit: Deepak kumar on Unsplash
The longer term trend has been for big agribusiness to try to dominate the Indian farming scene, although this has been resisted with varying success by farmers and activists at different stages. Building on this previous strength, many farmer organizations have shown greater unity and resilience this time for a more determined resistance.
This growing resistance may be one reason why the open announcement of the India-United States free trade agreement (FTA) has been postponed. Earlier prolonged negotiations for India’s proposed FTA with the European Union had to be called off due to strong objections raised by farmers, particularly dairy farmers.
Such fears are even more pronounced in the context of negotiations for FTA with the United States, which have been even less transparent than the European negotiations.
Sections of Indian bourgeois media have been speculating the FTA with the United States will be introduced in stages. Meanwhile, farmers’ concerns have been confirmed by other recent government decisions as well. Recent moves for mandatory protection of staple foods have been opposed in favor of facilitating the growing big-business domination of food processing and a setback to existing systems, which protect farmers and small processors from the pressures of a less regulated market. The Indian government also recently advocated for palm fruit trees to increase edible oil production, which has been criticized for harming the interests of millions of traditional oilseed farmers and disrupting the biodiversity and ecology of areas where palm-oil plantations are planning to be introduced on a mass scale.
Nearly two-thirds of India’s 1.38 billion people remain linked to rural livelihoods. Approximately 115 million farmer households can be counted in India, most of them small family farms. The growing big-business intrusion has led to an ever-escalating rise in farming costs and debt, in turn leading to ordinary farmers losing their land. According to census data, farmers have been turning into landless households at the rate of 100 per hour. From a global perspective, this is part of the worldwide struggle to save small farmer communities. The movement can gain traction if protesting farmers include the concerns of landless rural households, who now comprise almost half of households in the Indian countryside. Another widely felt need is for this movement to move toward ecologically protective farming, the importance of which has increased as the global climate changes.
Bharat Dogra is Honorary Convener of the Campaign to Save Earth Now. He has been involved with several social movements in India. Dogra’s most recent books include Man Over Machine and Planet in Peril.
Sukumar Shinde, 52, who sells food items and snacks in rural fairs, said, “Because of the lockdown, I had to throw away several food items as they have a shorter shelf life.” / credit: Sanket Jain
Balu Jadhav usually journeys through 60 villages 300 days a year, selling toys and artificial jewelry in India’s “jatras,” or rural village fairs.
So if Jadhav travels less than 1,000 miles a year, that’s a sign of distress.
“In the past two years, I covered only 150 miles,” he said.
His two-decade-long routine was broken in March 2020 when far-right Indian Prime Minister Narendra Modi announced a 21-day nationwide lockdown to curb a pandemic caused by COVID-19, the novel coronavirus. The lockdown was extended to 67 days, causing 121 million people to lose their jobs within the first month. Yet, with this lockdown, India couldn’t contain the coronavirus. Meanwhile, because case numbers ebbed and flowed for two years, district administrators banned fairs.
With a history of over 150 years, these fairs remain an important source of income for marginalized people. In Jadhav’s home state of Maharashtra, located on India’s Arabian Sea coast, almost every village hosts an annual fair for a couple of days. Jatras are held in reverence of local deities. Rural vendors sell a variety of items, including toys, posters of regional deities, local books, footwear, artificial jewelry, balloons and household items. “A fair is like a festival and a holiday season for rural people,” said Gangabai, Jadhav’s wife. “Everyone prepares good food, dresses up and relatives from different villages attend the fair.”
With no option for selling goods, the Jadhavs were forced to work in 10 other occupations. They labored as farmworkers and masons, and in factories, but nothing helped them earn enough to survive. “There was no regular work because COVID devastated the rural economy,” she said.
The 2022 World Inequality Report states India is one of the most unequal countries in the world. Oxfam’s Inequality Kills report mentions, “The wealth of the 10 richest men has doubled, while the incomes of 99 percent of humanity are worse off, because of COVID-19.” Further, it found that a new billionaire was created every 26 hours since the pandemic began. Meanwhile, millions like Jadhav could barely find 26 hours of work per month during the peak of the pandemic.
After two years, local administrators in the village of Jambhali in Maharashtra’s Kolhapur district were permitted to arrange a fair that would be held January 1-2. Unfortunately, while the Jadhavs assumed it would help them sail, it was far from reality.
With rising coronavirus cases in January, reporting as high as 347,254 cases one day, several COVID restrictions were implemented again.
“We earned about 3,000 rupees ($40) from every fair before the pandemic. Now we are finding it difficult even to recover the transportation cost,” Balu Jadhav said. “Ever since COVID, people have stopped spending money because of dwindling wages.”
Hundreds of vendors in the Kolhapur district protested several times outside the local administrator’s office, demanding revocation of the ban on fairs. “Despite writing hundreds of letters, nothing concretized,” Jadhav said.
Anusuya Chavan, who lives in the same village as the Jadhav family, is in her mid-40s and sells toys. “This occupation forced us to never send the children to school, and with COVID, there’s no possibility that four of my children will ever see the school.” Her children, all below 18, are busy looking for work. “Earlier, we took loans to support our business, but now we are forced to take loans for eating food twice a day. It’s that bad.” Chavan has 13 members in her joint family and is in $670 debt. Her husband, Yuvraj, 50, has spent four decades traveling to sell at fairs. “My entire life has gone sleeping on roads,” he said. “But with lockdowns and curfews, we don’t even have roads on which to sleep.”
Vendors rely on informal loans to buy items to sell and pay them off immediately after fairs. “The moneylenders send their goons for collection, and we always pay on time,” Yuvraj said. However, with no sales, several vendors have been caught in debts of at least $3,350 each. High interest-rate fees have caused those debts to amass.
Meanwhile, fear, anger and frustration pile up, with another generation missing out on obtaining an education. That leaves Jadhav to vent.
“Even our children will have to live the same cursed life now.”
A view of the Jambhali fair at night. Vendors said they had never before seen such a low turnout / credit: Sanket JainVendors sell a variety of items, including toys, posters of regional deities, local books, footwear, artificial jewelry, balloons, household items, and much more in India’s rural fairs / credit: Sanket Jain“I’ve taken both the doses of the vaccine and even follow COVID norms, yet the government hasn’t given permission for fairs,” said toyseller Yuvraj Chavan / credit: Sanket JainKanthinath Ghotane traveled from the neighboring Indian state of Karnataka state to sell keychains in the Jambhali fair of Maharashtra’s Kolhapur district / credit: Sanket JainFairs are more like festivals, and are special occasions for rural people. During these fairs, every household creates in front of their homes rangolis, a traditional Indian art form, in which patterns are created on the floor using powder, flower petals, colors, colored sand and limestone / credit: Sanket JainEveryone (irrespective of religion) first offers coconut and incense sticks in Jambhali’s Khwajaso dargah, a Muslim shrine, before entering the jatra. “These fairs are a sign of communal harmony,” said Sikandar Attar, a coconut and incense stick vendor / credit: Sanket JainSikandar Attar, 69, who travels to more than 100 villages every year, sells incense sticks and coconuts offered to regional deities. He began working at farms during the COVID-19 lockdown. Even today, he hasn’t been able to find his way through to make ends meet / credit: Sanket JainCredit: Sanket JainColorful LED-based toys are selling at a higher rate than other items / credit: Sanket JainRiyaz Latkar, 32, has been selling artificial jewelry for over a decade and said he has never seen a crisis like this / credit: Sanket JainDuring these two- to three-day fairs, vendors sleep and cook on the roadside. Kamalaxmi Bahurupi said, “I’ve spent my entire life cooking food on roadsides. I don’t know how long we will live like this.” / credit: Sanket JainArtificial jewelry is usually in high demand in the village fairs of Maharashtra. However, with people losing their livelihoods because of the pandemic lockdown, vendors have reported a steep decline in sales / credit: Sanket JainIn this stall, every item is sold for a fixed rate of Rs 10 (13 U.S. cents) / credit: Sanket JainBalu and Gangabai Jadhav were forced to work 10 different occupations as the fairs remained banned. “If there’s another lockdown, we’ll all die of starvation,” Balu said / credit: Sanket JainAs much as 70 percent of rural India lacks an internet connection. With schools shut because of the coronavirus pandemic, several children have been forced to pick this line of work to make ends meet and support their families / credit: Sanket JainHorse and bullock cart races remain a major attraction during these fairs. Here, a horse is getting ready for a race / credit: Sanket JainCredit: Sanket Jain
Sanket Jain is an independent journalist based in the Kolhapur district of the western Indian state of Maharashtra. He was a 2019 People’s Archive of Rural India fellow, for which he documented vanishing art forms in the Indian countryside. He has written for Baffler, Progressive Magazine, Counterpunch, Byline Times, The National, Popula, Media Co-op, Indian Express and several other publications.
More than 15,000 people participated in a November 22, 2021, protest at the White House to express their disappointment with the Biden administration’s coercive diplomatic policy toward the democratically elected government of Ethiopia / credit: Twitter/Gennet Negussie
Editor’s Note: The following is the writer’s opinion and was first published in Black Agenda Report.
Correction: A previous version of this article erroneously connected Lausan Collective to the National Endowment for Democracy (NED). A member of Lausan Collective had served as a fellow at the Taiwan Foundation for Democracy, an organization that has collaborated with the NED.
In the last few months, the left media outlets from various camps, in their sincere attempts to demonstrate solidarity and spotlight conflict in the Horn of Africa and internal developments in Ethiopia, got it wrong. They have been uncritically centering active ideological players on two opposing camps. The significant focus on the Tigray People’s Liberation Front (TPLF) attacks on Eritrea, its invasion of Afar and the Amhara region, and its existence as a willing proxy actor of Washington was correct. They got it wrong, however, in their uncritical framing of neoliberal Ethiopian President Abiy Ahmed. They have chosen to over-amplify the Abiy camp’s reactionary narrative on the long ideological internal struggle concerning the path forward for Ethiopia and the Horn.
In 1915, Lenin gracefully asserted:
“We demand freedom of self-determination, i.e., independence, i.e., freedom of secession for the oppressed nations, not because we have dreamt of splitting up the country economically, or of the ideal of small states, but, on the contrary, because we want large states and the closer unity and even fusion of nations, only on a truly democratic, truly internationalist basis, which is inconceivable without the freedom to secede.”
It is in the same framework that the principled Ethiopian and Eritrean revolutionaries during the 1960 and 70s warmly embraced this materialist line on the National Question. One of the most noted and often quoted Ethiopian Marxist is Wallelign Mekonnen. Mekonnen, who is of Amhara background, is famous for this 1969 article, “On the Question of Nationalities in Ethiopia.” This article is very relevant for today, and offers an effective ideological compass to navigate around the war of narratives taking shape, particularly on social media. Mekonnen specifies the basis of the Ethiopian settler state and its class foundation, which operated to benefit the Abyssinian ruling class in both Amhara and Tigray regions. The oppressed nations were not Amhara or those in the Tigray region, but the other non-Abyssinian nations in the south, who were conquered, colonized, and their names erased for the creation of Ethiopia. Mekonnen writes:
“To anybody who has got a nodding acquaintance with Marxism, culture is nothing more than the superstructure of an economic basis. So cultural domination always presupposes economic subjugation. A clear example of economic subjugation would be the Amhara and to a certain extent Tigray Neftegna system in the South and the Amhara Tigray Coalition in the urban areas. The usual pseudo-refutation of this analysis is the reference to the large Amhara and Tigray masses wallowing in poverty in the countryside.”
Following Mekonnen, I argue that the left must cautiously navigate around the two opposing ideological battlegrounds that have co-opted the language and performativity of “anti-imperialism” or “decolonization.” This language works to impede wider radical investigation of the Horn of Africa and its various contradictions.
As Lenin and the elder Eritrean and Ethiopian revolutionaries from the 1960 and 1970s advocated a dialectical understanding of the National Question, so must the left as they seek to understand Ethiopia and the Horn. What is the national question of Ethiopia? Voices from the revolutionary Ethiopian student movement of the 1960s and 1970s echoed much of V. I. Lenin’s point on the National Question that nation-states should be based on “voluntary ties, never compulsory ties.” Lenin insisted upon the “right of every nation to political self-determination,” which includes the right to secession. Following Lenin, Tilahun Takele (pseudonym name for a member of the Ethiopian People’s Revolutionary Party (EPRP)), argued:
“How could Marx, Engels, Lenin and Stalin, of all people support the right of nations to secession when they were, on the other hand, the most committed advocates of the unity and integration of the world proletariat? The answer is simple. Briefly, it is precisely because they wanted to promote the genuine, equality and fraternal unity of the proletariat of all nations, the general unity of the oppressed toiling masses of all nations.”
What are examples of the two opposing voices on The National Question that are attempting to get leftist legitimacy and credibility online? The first example uses the facade of decolonial positioning to cover for the attempted imperialist intervention against Ethiopia and also absolve TPLF of its violent aims to continue the settler-colonial legacy of Abyssinian king Yohaness of Tigray. The second one gives cover to neoliberal Abiy’s vision, a vision that aims to continue the settler-colonial legacy of Abyssinian king Menelik of Amhara without addressing the grievances of the oppressed nationalities.
We can see an example of the first camp in a popular event that occurred on December 8, 2021. Haymarket hosted a webinar called, “What’s Happening in Ethiopia,” with panelists Ayantu Tibeso and J. Khadijah Abdurahman, and facilitated by an anti-China Hong Kong “leftist,” Promise Li, who is a member of Lausan Collective.
Haymarket attracts pro-TPLF academics, such as Andom Ghebreghiorgis, with similar pro-Amnesty International politics and NED connections. One of the panelists referenced Wallelign Mekonnen by aiming to manipulate the “Nations and Nationalities” discussion toward vilifying the Amharas and the Eritrean state, while simultaneously giving cover to the Washington-backed TPLF as the vanguard of the oppressed nationalities. In other words, the discussion was intellectually dishonest, both in its inability to acknowledge Ethiopia as a settler state that has primarily benefited the Amhara and Tigray ruling classes, and in its echoing the U.S. State Department propaganda that is running interference for the TPLF while demonizing the Eritrean state.
An example of the second ideological camp can be seen at an event that occurred on September 11, 2021. The People’s Forum NYC hosted a webinar on “Imperialism, Ethiopia & Conflict in the Horn of Africa,” with panelists Simon Tesfamariam and Elias Amare, who are part of the People’s Front for Democracy and Justice (PFDJ) camp and co-leading the #NoMore social media campaign. Simon and Elias echoed the usual Abyssinian pejorative slur of “Ethnic Federalism” and discredited the Nations and Nationalities argument by attributing it to “tribalism,” and saying that “tribalism is a problem throughout Africa.” The term “ethnic federalism” is not one of facts to the current Ethiopian constitution as there is no ethnic federalism but mult-national federalism in name, which has not been implemented during the last 28 years under the TPLF regime and now under Abiy as well. They also ridiculed the radical assertion around Nations and Nationalities, equating anyone that supports that line with being a “tribalist.” In the same vein, Tesfamariam attempted to discredit the voices who put critical anti-colonial framing on the formation of Ethiopia, which challenges the mythological narrative of a 3,000-year-old independent Christian African state. Further, on his Twitter account, Tesfamariam deployed Abyssinian slurs “ethnofascist” and “tribalists” to de-legitimize the historical grievances of the oppressed nationalities.
Why are Eritreans like Simon Tesfamariam and Elias Amare, who support the People’s Front for Democracy and Justice (PFDJ), so keen on dismissing the real struggles of oppressed nationalities in Ethiopia, a position that is in contradiction to the spirit of the Eritrean revolution? Under the direction of Isaias Afwerki, the PFDJ has taken a line of concentrating on the primary contradictions, which is imperialism and the management of the region via proxy actors like TPLF. In fact, for the past 18 years, the Eritrean state had been the home of oppressed nationalities’ liberation fronts (OLF, ONLF, etc) struggling against the Washington-backed TPLF regime. However, after the 2018 peace deal, and after the re-igniting of war in the region in 2020 by the TPLF, the rhetoric in support of the oppressed nationalities has been abandoned.
The Good, the Bad and the Ugly with #NoMore
“We have the Marxist-Leninist weapon of criticism and self-criticism. We can get rid of a bad style and keep the good.” -Mao Zedong
How did the #NoMore form online and what is the social, political and class structure behind it? The #NoMore campaign is an online diaspora projection or formalization involving the PFDJ in Eritrea and the Amhara region, plus Abiy Ahmed in Addis Ababa, in political alliance against the TPLF. The sporadic social media campaign came at a time during the violent occupation of the Amhara region as TPLF was making gains militarily and attempting to advance to Addis Ababa. The Twitter accounts that support the campaign are led by the three dominant ethnic and political bases in both Eritrea and Ethiopia, represented by Hermela Aregawi (Tigraya), Simon Tesfamariam (Tigrinya) and Nebiyu Asfaw (Amhara). The #NoMore campaigns and protests have attracted very large crowds in the United States. But the large crowd is primarily Amhara because this is the main group that forms the Ethiopian diaspora in North America. The Amhara population also numbers 20 million in Ethiopia, and are the second largest group after the Oromos, who number over 40 million people.
Despite the claim to represent all of Ethiopia, the Oromos and other historically marginalized groups are hardly part of the social media campaign. The same can be said with all of the Eritreans and Somalis. Both the Amhara and Tigrayans, due to their dominant grip of Ethiopia over the century, enjoy the settler-colonial privilege with scholarships, visas and aid to live in the diaspora. This is the reason why they are the dominant voices of what we call “Ethiopia”—online and offline.
The good aspect of the #NoMore campaign is that it is significant to witness Eritreans and Ethiopians engaging each other and sharing a common struggle. That itself is historic. That the campaign focused on the crimes of the TPLF on Eritrea, Amhara and Afar region is the best thing about it. What is problematic is the shifty co-option of “anti-imperialist” rhetoric. While the leaders of the #NoMore campaign are vehemently critical of Washington’s foreign policy, if at least temporarily, their opposition seem to only demand that the leaders Isaias Afwerki and Abiy Ahmed have a seat at the table—presumably with the imperialists. They should be calling, instead, for the destruction of the table.
The bad aspect of the #NoMore campaign is its deployment of reactionary rhetoric and symbolism: The foregrounding of the imperial Abyssinia flag, the exaltation of feudal Abyssinian monarchs, the romanticization of the “Battle of Adwa” and the pushing of the propaganda that “Ethiopia is 3,000-year-old independent state.” This social media campaign has alienated the Oromos and other marginalized communities.
The ugly is that the National Question—the goal of decolonizing the settler-state of Ethiopia, and the overall need for a wider class struggle of the masses in the Horn of Africa—has taken a back seat in the #NoMore campaign. In fact, the articulated electoral strategy of “Vote Republican” should demonstrate that this is not a sincere anti-imperialist campaign.
How Can the Left Get It Right?
It is important for Western leftists to focus on imperialism and not take a hardline position on the internal politics of Ethiopia by not being sensitive to all the contradictions. The PFDJ is able to recognize the primary contradiction being the imperialist lackey, TPLF, in Ethiopia, but fails to recognize the other internal contradictions (the National Question). This is where the TPLF has a lifeline. For the PFDJ to not acknowledge the secondary contradiction is also to not have the correct analysis on the ways that the Abyssinian ruling class exploits these contradictions to further their settler-colonial agenda. These secondary contradictions are weaponized to exacerbate the primary contradiction. We see, for example, how the TPLF is using the plight of the oppressed nationalities to mask their settler-colonial ambitions. PFDJ representatives dismiss the oppressed nationalities as just “tribalists” and “ethnofascists,” a move that alienates the historically oppressed nationalities.
Failure to actively engage the contradictions of the National Question also gives legitimacy to Abiy, who, in addition to espousing more neoliberal policies than TPLF, has denied the historical grievances of Oromos and others in Ethiopia.
The left should oppose imperialism, but without ignoring the Ethiopian National Question. Tigray was never a part of the oppressed nationalities, but benefited from the fruits of settler colonialism. Tigray region’s political struggle with the Amhara region dates back to the period of Ethiopia’s creation in the late 1800s. The ideological struggle in the present is over who is to be the face of the Ethiopian settler-colonial state.
The left or anti-colonial forces in the past also got it wrong when they gave solidarity to slave-owning Menelik with the “Battle of Adwa,” legitimizing the conquest of the oppressed nationalities; to Selassie during the fascist Italian invasion of Ethiopia by helping to restore his feudal rule; to the pseudo-Marxist Derg regime, which hijacked the revolutionary momentum in Ethiopia; and to Meles Zenawi under the banner of state developmentalism.
The modern left must not make the same historical mistake in not being sensitive to the decolonial question of Ethiopia.
The left must heed to words of the Eritrean and Ethiopian revolutionaries of the 1960s and ’70s. One noted Ethiopian voice from that time is Tilahun Takele, who stated: “We believe that the recognition and support of the right of secession by revolutionary Ethiopians, especially those from the dominant nations, will foster trust and fraternity among the various nationalities.”
Filmon Zerai is an independent blogger who provides leftist commentary on the Horn of Africa. His views have appeared on CapeTalk, Sputnik International, BBC and other outlets. Zerai also is the founder and producer of the Horn of Africa Leftists podcast.
On September 10, sections of the second Nord Stream 2 pipeline laid from the German shore and Danish waters were connected in a so-called “above water tie-in.” The opposing pipe strings were lifted from the seabed by the lay barge, Fortuna. Then the pipe ends were cut and fitted together. The welding to connect the two lines took place on a platform located above the water on the side of the vessel. Then the connected pipeline was lowered to the seabed as one continuous string / credit: Nord Stream 2 / Axel Schmidt
Editor’s Note: The following represents the writer’s analysis and was produced in partnership by Newsclick and Globetrotter.
The current crisis of spiraling gas prices in Europe, coupled with a cold snap in the region, highlights the fact that the transition to green energy in any part of the world is not going to be easy. The high gas prices in Europe also bring to the forefront the complexity involved in transitioning to clean energy sources: that energy is not simply about choosing the right technology, and that transitioning to green energy has economic and geopolitical dimensions that need to be taken into consideration as well.
Gas wars in Europe are very much a part of the larger geostrategic battle being waged by the United States using the North Atlantic Treaty Organization (NATO) and Ukraine. The problem the United States and the EU have is that shifting the EU’s energy dependence on Russia will have huge costs for the EU, which is being missed in the current standoff between Russia and NATO. A break with Russia at this point over Ukraine will have huge consequences for the EU’s attempt to transition to cleaner energy sources.
The European Union has made its problem of a green transition worse by choosing a completely market-based approach toward gas pricing. The blackouts witnessed by people in Texas in February 2021 as a result of freezing temperatures made it apparent that such market-driven policies fail during vagaries of weather, pushing gas prices to levels where the poor may have to simply turn off their heating. In winter, gas prices tend to skyrocket in the European Union, as they did in 2020 and again in 2021.
For India and its electricity grid, one lesson from this European experience is clear. Markets do not solve the problem of energy pricing, as they require planning, long-term investments and stability in pricing. The electricity sector will face disastrous consequences if it is handed over to private electricity companies, as is being proposed in India. This is what the move to separate wires from the electricity they carry aims to achieve through Indian Prime Minister Narendra Modi’s government’s proposed amendment to the existing Electricity Act of 2003.
In order to understand the issues related to transitioning toward green energy, it is important to take a closer look at the current gas supply-related issues being faced by the European Union. The EU has chosen gas as its choice of fuel for electricity production, as it goes off coal and nuclear while also investing heavily in wind and solar. The argument advanced in favor of this choice is that gas would provide the EU with a transitional fuel for its low carbon emission path, as gas tends to produce less emissions than coal. It is another matter that gas is at best a short-term solution, as it still emits half as much greenhouse gas as coal.
As I have written earlier, the problem with green energy is that it requires a much larger capacity addition to handle seasonal and daily fluctuations that planners have not accounted for while advocating for switching over to clean energy sources. During winter, days are shorter in higher latitudes, and the world therefore gets fewer hours of sunlight. This seasonal problem with solar energy has been compounded in Europe with low winds in 2021 reducing the electricity output of windmills.
The European Union has banked heavily on gas to meet its short- and medium-term goals of cutting down greenhouse emissions. Gas can be stored to meet short-term and seasonal needs, and gas production can even be increased easily from gas fields with requisite pumping capacity. All this, however, requires advance planning and investment in surplus capacity building to meet the requirements of daily or seasonal fluctuations.
Unfortunately, the EU is a strong believer that markets magically solve all problems. It has moved away from long-term price contracts for gas and toward spot and short-term contracts—unlike China, India and Japan, which all have long-term contracts indexed to their oil prices.
Why does the gas price affect the price of electricity in the EU? After all, natural gas accounts only for about 20 percent of the EU’s electricity generation. Unfortunately for the people in the EU region, not only the gas market but also the electricity market has been “liberalized” under the market reforms in the EU. The energy mix in the grid is determined by energy market auctions, in which private electricity producers bid their prices and the quantity they will supply to the electricity grid. These bids are accepted, in order from lowest to highest, until the next day’s predicted demand is fully met. The last bidder’s price then becomes the price for all producers. In the language of Milton Friedman’s followers—who were known as the Chicago Boys—this price offered by the last bidder is its “marginal price” discovered through the market auction of electricity and, therefore, is the “natural” price of electricity. For readers who might have followed the recently concluded elections in Chile, Augusto Pinochet—who was a military dictator in Chile from 1973 to 1990—introduced the Constitution of 1980 in Chile and had incorporated the above principle in a constitutional guarantee to the neoliberal reforms in the electricity sector in the country. Hopefully, the victory of the left in the presidential elections in Chile and the earlier referendum on rewriting the Chilean constitution will also address this issue. Interestingly, it was not the former UK Prime Minister Margaret Thatcher—as is commonly thought—who started the electricity “reforms” but Pinochet’s bloody regime in Chile.
At present in the EU, natural gas is the marginal producer, and that is why the price of gas also determines the price of electricity in Europe. This explains the almost 200 percent rise in electricity price in Europe in 2020. In 2021, according to an October 2021 report by the European Commission, “Gas prices are increasing globally, but more significantly in net importer regional markets like Asia and the EU. So far in 2021, prices tripled in [the] EU and more than doubled in Asia while only doubling in the U.S.” [emphasis added].
The coupling of the gas and the electricity markets by using the marginal price as the price of all producers means that if gas spot prices triple as has been seen recently, so will the electricity prices. No prizes for guessing who gets hit the hardest with such increases. Though there has been criticism from various quarters regarding the use of marginal price as the price of electricity for all suppliers irrespective of their respective costs, the neoliberal belief in the gods of the market has ruled supreme in Europe.
Russia has long-term contracts as well as short-term contracts to supply gas to EU countries. Putin has mocked the EU’s fascination with spot prices and gas prices and said that Russia is willing to supply more gas via long-term contracts to the region. Meanwhile, in October 2021, European Commission President Ursula von der Leyen said that Russia was not doing its part in helping Europe tide over the gas crisis, according to an article in the Economist. The article stated, however, that according to analysts, Russia’s “big continental customers have recently confirmed that it is meeting its contractual obligations,” adding that “[t]here is little hard evidence that Russia is a big factor in Europe’s current gas crisis.”
The question here is that the EU either believes in the efficiency of the markets or it doesn’t. The EU cannot argue markets are best when spot prices are low in summer, and lose that belief in winter, asking Russia to supply more in order to “control” the market price. And if markets indeed are best, why not help the market by expediting the regulatory clearances for the Nord Stream 2 pipeline, which will ship Russian gas to Germany?
This brings us to the knotty question of the EU and Russia. The current Ukraine crisis that is roiling the relationship between the EU and Russia is closely linked to gas as well. Pipelines from Russia through Ukraine and Poland, along with the undersea Nord Stream 1, currently supply the bulk of Russian gas to the EU. Russia also has additional capacity via the newly commissioned Nord Stream 2 to supply more gas to Europe if it receives the financial regulatory clearance.
There is little doubt that Nord Stream 2 is caught not simply in regulatory issues but also in the geopolitics of gas in Europe. The United States pressured Germany not to allow Nord Stream 2 to be commissioned, and also threatened to impose sanctions on companies involved with the pipeline project. Before stepping down as the chancellor of Germany in September 2021, Angela Merkel, however, resisted pressure from Washington to halt the work on the pipeline and forced the United States to concede to a “compromise deal.” The Ukraine crisis has created further pressure on Germany to postpone Nord Stream 2 even if it means worsening its twin crises of gas and electricity prices.
The net gainer in all of this is the United States, which will get the EU as a buyer for its more expensive fracking gas. Russia currently supplies about 40 percent of the EU’s gas. If this stalls, the United States, which supplies about 5 percent of the EU’s gas demand (according to 2020 figures), could be a big gainer. The United States’ interest in sanctioning Russian gas supply and not allowing the commissioning of Nord Stream 2 has as much to do with its support to Ukraine as seeing that Russia does not become too important to the EU.
Nord Stream 2 could help form a common pan-European market and a larger Eurasian consolidation. Just as it did in East and Southeast Asia, the United States has a vested interest in stopping trade following geography instead of politics. Interestingly, gas pipelines from the Soviet Union to Western Europe were built during the Cold War as geography and trade got priority over Cold War politics.
The United States wants to focus on NATO and the Indo-Pacific region, as its focus is on the oceans. In geographical terms, the oceans are not separate but a continuous body covering more than 70 percent of the world’s surface with three major islands: Eurasia, Africa and the Americas. (Although in the formulation of British geographer Halford Mackinder, the originator of the world island idea, Africa was seen as a part of Eurasia.) Eurasia alone is by far the bigger island, with 70 percent of the world’s population. That is why the United States does not want such a consolidation.
The world is passing through perhaps the greatest transition that human civilization has known in meeting the current challenges posed by climate change. To address these challenges, an energy transition is required that cannot be achieved through markets that prioritize immediate profits over long-term societal gains. If gas is indeed the transitional fuel, at least for Europe, it needs long-term policies of integrating its gas grid with gas fields, which have adequate storage. And Europe needs to stop playing games with its energy and the world’s climate future for the benefit of the United States.
For India, the lessons are clear. Markets do not work for infrastructure. Long-term planning with state leadership is what India needs to ensure supply of electricity to all Indians and ensure the country’s green transition—instead of dependence on electricity markets created artificially by a few regulators framing rules to favor the private monopoly of electricity companies.
Prabir Purkayastha is the founding editor of Newsclick.in, a digital media platform. He is an activist for science and the free software movement.