In Geopolitics Today - Thursday, June 10th
Indonesia needs a renewable energy transition, President Biden makes first stop in European tour, and the Taliban prepares major offensives as US withdrawal contrinues.
Indonesia’s Necessary Renewable Energy Transition
The Indonesian Energy and Mineral Resources Minister, Arifin Tasrif, has said that the country’s oil reserves contain roughly 4.17 billion barrels of oil left. This means that Indonesia’s oil reserves will likely run out in about 10 years if no new reserves are discovered. Similarly, the country’s natural gas reserves are estimated to be exhausted in roughly 22 years. This may precipitate a policy turn to renewables given the implications of rapidly-dwindling domestic sources of energy.
The issue for Indonesia is that the price of renewable energy electricity can be expensive, which makes it difficult to compete with other sources of electricity. This electricity price gap has made negotiations for the Power Purchase Agreement drag on, and without a drastic turn to renewable energies, Indonesia may find itself forced into importing more and more energy. Furthermore, an energy model focused around sustainable energies is also attractive to Jakarta due to the high levels of pollution in Indonesia, which has moderately unsafe air quality.
Given that time is limited, Jakarta must quickly seek out a path to solutions. All this must be undertaken while Jakarta simultaneously faces other challenges, such as poor technological development, a low-skilled workforce, and the increasingly likely supply chain disruptions caused by intensified US-China competition.
Read more about this story here.
US President Makes First Stop in European Tour
President Joe Biden has arrived in Cornwall for his first G7 summit, which will be starting tomorrow in Carbis Bay and conclude on Sunday.
Air Force One landed in the early hours at Newquay Airport from RAF Mildenhall where Biden gave a speech in which he said that "the United States is back and the democracies of the world are standing together to face the toughest challenges." His stated agenda focuses on leading democracies to confrontation with China, global economic reform, as well as reaching development goals.
The Biden administration will be seeking European support to more effectively shut China out from furthering its growing influence in shaping the rules of the international economy. Biden has particularly emphasised that the US and its allies must offer “a high-standard alternative to China for upgrading physical, digital and health infrastructure that is more resilient and supports global development.”
However, rallying Europe behind the US in a unified voice may yet be an insurmountable task for Biden due to the extent of economic relations between EU member states and China. For instance, in 2020, 8 percent of German exports went to China, which is almost as much as German exports to the United States (8.6 percent). And Germany — the economic bedrock of the EU — is a highly export-dependent economy, which means that concessions to the US vis-à-vis China will have a direct influence on Germany’s bottom-line.
Read more about this story here.
As the US Withdraws, The Taliban Prepare to Strike
When Soviet forces left Afghanistan in the 1980s, the Afghan government and army collapsed within two years. Something similar may soon happen as a result of the rapid US withdrawal currently underway.
As the US Central Command said they have completed over 50 percent of the entire withdrawal process, the Taliban are encircling key Afghan police and army positions. Spotting an opportunity, Taliban forces are said to be positioning themselves for large-scale offensives across the country while they wait for the last American troops to depart.
Meanwhile, officials at the Pentagon are weighing their future options in Afghanistan and are preparing a response in the event that Kabul is in danger of falling to the Taliban. Some US officials indicate the remaining US presence will be gone maybe as early as next month, while the Biden administration has set a withdrawal deadline of September 11th.
Read more about this story here.