If the Petrodollar dies, So dose America as a superpower
Mian Majid Ali Afzal
Petrodollar is actually a device invented by “Henry Kissinger and Richard Nixon”, the standard of living of all Americans can be traced back to, the vast oil rich deserts of Saudi Arabia. In early seventies after the Arab crisis which gave rise to concept of oil embargo. OPEC basically tripled the price of oil to the western world. And at that time, America realized that they were vulnerable because they were importing about 70% of the total oil they consumed. To secure a reliable foreign source of oil US President Richard Nixon sent his secretary of state and national security advisor “Hennery Kissinger” to Saudi Arabia for a secret meeting. The result was a pact that still stands to the day that if Saudi Arabia which has the primer to the world’s largest producer of oil will sell the oil in US dollar, America would defend Saudi Arabia and make sure the house of Saud remains in power as a direct result of this US Saudi agreement. All other oil producing nations also adopted the dollar as the sole medium of exchange. Demand for petrol increased exponentially all over the world and soon they had a new name, the petrodollar. Your currency is as strong as its demand just like anything else. Why the petrodollar is important? It causes a demand for US dollar. A lot of Americans don’t realize that over 70% of all the $100 bills in the world are actually outside of the US, there is more $100 bill is Russia then there are in America. This stock pilot US dollar in countries around the world, is because oil is bought and sold using the greenbacks, if oil starts trading in non-petrodollar such as gold or a biscuit of currency or if China and Russia start trading in Yuan and Roble rather than US dollar then demand won’t be there, and the way of life of the average American will be down, it will be worst in great depression. Today anyone who has potentially threaten the status of the petrodollar hasn’t been fared well. Libyan strong man “Muammar Gaddafi” publically pushed for the pan African gold backed currency for a few to trade Libya’s oil. He was killed during the US pact revolution in 2011, in just a few short years before Iraqi dictator “Saddam Husain” abrogated oil for Euros, US invaded under the guise of looking for WMD’s which Iraq never had and interestingly enough after the Americans invaded, took over, put in their own government. The whole concept of selling oil in Euros, never surfaced again. Today, many countries present the current petrodollar system, and their leading spoke person is none other than Russian President “Vladimir Putin”. Americans should be very worried about what Putin can do? There is a new cold war going on.it is the colder war that is exactly what’s going on? In holding centre of this push Vladimir Putin, and the petro dollar is so crucial to the colder war. The only thing holding America right now at the top is the petrodollar, and let me make very clear if the petrodollar dies, so dies America as a superpower.
Now let’s talk about Pakistan, how Pakistan has been fallen in fiscal debts in last 75 years, there were many other reasons (such as corruption, lack of accountability/transparency, lack of visionary leadership, civil military oligarchy etc.) but in my perspective the major cause was Petrodollar. Petrodollar lead our country towards darkness/fiscal debts. I find some statistical evidence regarding petrodollar, whenever civilian governments came in Pakistan the use of thermal power (oil based power generation) increased which directly supported petrodollar/American dominancy in our country and in the other hand whenever dictators came in Pakistan the use of hydro-power(water based power generation) increased and thermal power decreased. If you want to govern Pakistan talk to America and settle a secret agreement with US establishment that you will purchase maximum oil products in US dollar and you will be the next prime minister of Pakistan.
In context of the above said factors, Pakistan was forced by the America (with the connivance of the then Government of Pakistan) to import a combination of fuels from Iran, Qatar and other Middle Eastern countries. The beneficiaries of such imports include the exporting country, the US, and Pakistani government (on account of taxes). All the entities make nearly one-third each from these energy sales. The profits earned by the USA and Government of Pakistan are/were used to control/manoeuvre politics in the country. The second and more important dimension of energy policy (petro-dollar policy) relates to the IPPs (Independent Power Producers) as they are assured of minimal profits by the state of Pakistan. The owners of the IPPs, the crony Government of Pakistan, and the USA have sort of common interests in the political economy of our country. They jointly manoeuvred socio-political environment in the country to promote their interests through control on economy, economic policies, and monetary corruption.
To generate funds for political manoeuvring, PTAs+ (Preferential Trade Agreements Plus) were signed between power generating companies and textile manufacturing companies in Pakistan with their counterparts in the USA (PTA+ is not signed between countries or states; rather between companies). Such Pakistani companies pay part of their PTA+ related profits to politicians and other entities to manoeuvre/control politics in Pakistan. This complex web of funds is difficult to catch legally and the country keeps on suffering from such intrigues. In 2015 senate election in Pakistan, allegations of horse trading during Senate elections remain a good example of political manoeuvring through such a web of financial corruption. The reported high price deal of LNG imports from Qatar also alludes towards the organized system of international corruption. These international manoeuvrings include financial ratings of the country by Moody and other such agencies. Mr Dominique Strauss-Kahn (DSK) the former president of the IMF, has said in an interview that Pakistan’s financial rating was changed for political manoeuvring in the country.
To conclude, it is difficult to understand and address Pakistan’s governance and socio-economic-political issues by merely focusing on local conditions/politics. We must duly understand the role of regional and global forces to deal with Pakistan’s socio-political and economic issues. Our foreign policy has a great relevance to national growth and development. We are in dire need to understand the role of our current government and dynamics how they play with socio-economic health of Pakistan.