Felixstowe: Eight day strike comes to end

An eight-day strike at the Britain’s main container port has come to an end, but the impact will continue to be felt in the coming months and further action could be on its way.

Supply chain risk company Everstream Analytics said carriers have avoided Felixstowe during the strike, with ship calls dropping by 82% from 29 in the week of August 15 to just five in the following strike week.

“The large-scale vessel diversions have led to higher congestion levels, especially at German ports that have battled labor actions on their own in the last few weeks,” said Everstream.

Waiting times at Hamburg hit a peak for the year of 42 hours last week and at Bremerhaven, 18 vessels per day waited at anchor to berth, another 2022 high and around 63% above the annual average.

The strike at Felixstowe has ended, but the underlying issue of pay is yet to be resolved. “The ball is now firmly back in Felixstowe’s court. The employer has the opportunity to make a greatly improved offer which will end this dispute. If the employer declines this opportunity, then further strike action is expected to be announced in the coming weeks,” said a spokesperson for Unite the union.

Unions have proposed September 19 as a potential date for more strike action, potentially with fellow dockworkers at the Port of Liverpool striking alongside workers at Felixstowe.

“Knock-on congestion and delays on other European ports are therefore likely to occur in the coming weeks as well as we head into the beginning of Q4 and the holiday season,” said Everstream.

Port owner Hutchison said it offered a “very fair” 7% pay rise to workers along with a one-off £500 bonus.

The threat of further industrial action comes at a time of widespread strikes in the Britain, including by rail workers, barristers, council workers, and postal workers. The most prominent reason for strikes is insufficient pay increases in the face of high inflation.

Unite, the union behind the Felixstowe strike, has had recent success in the Britain maritime sector. Workers at ferry operator Red Funnel voted to accept a two-year pay deal of between 13.4% and 18.3% covering members including ratings, shunters and customer service staff.

The strikes are the latest in a series of disruptions to the Britain’s supply chain, adding to complications from Brexit regulatory changes, pandemic impacts, and the loss of ferry capacity during the P&O Ferries debacle.

 

Afghanistan: One year of Taliban rule, but no recognition by international community

Taliban marked the first anniversary of their rule in Afghanistan on Wednesday. This reminds humiliating defeat of US-led forces who invaded Afghanistan following September 11, 2001, attacks on the United States. 

Two of the most regrettable points are: 1) United States has not allowed the world to recognize Taliban government and 2) to continue its tyranny United States has not released foreign reserves of Afghan central bank as yet.

"The experience of the past 20 years can be a good guide... Any kind of pressure and threats on Afghans in the last 20 years has failed and just increased the crisis," Taliban said in a statement.

The Islamic Emirate of Afghanistan - the name the Taliban give their government - is the "legitimate government of the country and the representative of the brave Afghan nation", the statement said.

No country has recognized Taliban, who took over Afghanistan with a speed and ease that took the world by surprise, following which President Ashraf Ghani fled the country and his government collapsed. The US led forces left two weeks later in chaos.

Taliban statement called on the international community to allow Afghans to have an independent Islamic government that has a positive interaction with the world.

The international community has pressed Taliban on human rights, particularly those of girls and women whose access to school and work has been limited. It has also urged Taliban to stopping harassing critics, activists and journalists.

The Taliban say they are discussing the matter of girls' education and deny cracking down on dissent.

Fireworks lit up Kabul sky on Tuesday night on the first anniversary of the withdrawal of foreign troops which Taliban are marking as "Freedom Day". 

Wednesday was also a public holiday, with small celebrations across Kabul including parades by Taliban forces.

Gorbachev winning Nobel Prize for ending Cold War dies

Mikhail Gorbachev, who ended the Cold War without bloodshed and also earned Nobel Prize but failed in preventing the collapse of the Soviet Union, died at the age of 91 in Moscow.

Gorbachev, the last Soviet president, forged arms reduction deals with the United States and partnerships with Western powers to remove the Iron Curtain that had divided Europe since World War II and bring about the reunification of Germany.

His internal reforms helped weaken the Soviet Union to the point where it fell apart, a moment that President Vladimir Putin has called the ‘greatest geopolitical catastrophe’ of the twentieth century.

Putin expressed his deepest condolences, Kremlin spokesman Dmitry Peskov told Interfax. "Tomorrow he will send a telegram of condolences to his family and friends," he said.

Putin said in 2018 he would reverse the Soviet Union's disintegration if he could, news agencies reported.

World leaders were quick to pay tribute. European Commission Chief Ursula von der Leyen said Gorbachev, who was awarded the Nobel Peace Prize in 1990, had opened the way for a free Europe.

British Prime Minister Boris Johnson, citing Putin's invasion of Ukraine, said Gorbachev's "tireless commitment to opening up Soviet society remains an example to us all".

There was no immediate reaction from the White House or the US State Department. Former US Secretary of State James Baker described Gorbachev as "a giant who steered his great nation towards democracy".

After decades of Cold War tension and confrontation, Gorbachev brought the Soviet Union closer to the West than at any point since World War Two.

"He gave freedom to hundreds of millions of people in Russia and around it, and also half of Europe," said former Russian liberal opposition leader Grigory Yavlinsky. "Few leaders in history have had such a decisive influence on their time."

But Gorbachev saw his legacy wrecked late in life, as the invasion of Ukraine brought Western sanctions crashing down on Moscow, and politicians in both Russia and the West began to speak of a new Cold War.

"Gorbachev died in a symbolic way when his life's work, freedom, was effectively destroyed by Putin," said Andrei Kolesnikov, senior fellow at the Carnegie Endowment for International Peace.

He will be buried in Moscow's Novodevichy Cemetery next to his wife Raisa, who died in 1999, said Tass, citing the foundation that the ex-Soviet leader set up once he left office.

"We are all orphans now. But not everyone realizes it," said Alexei Venediktov, head of a liberal media radio outlet that closed down after coming under pressure over its coverage of the Ukraine war.

When pro-democracy protests rocked Soviet bloc nations in communist Eastern Europe in 1989, Gorbachev refrained from using force - unlike previous Kremlin leaders who had sent tanks to crush uprisings in Hungary in 1956 and Czechoslovakia in 1968.

But the protests fuelled aspirations for autonomy in the 15 republics of the Soviet Union, which disintegrated over the next two years in chaotic fashion.

Gorbachev - who was briefly deposed in an August 1991 coup by party hardliners - struggled vainly to prevent that collapse.

"The era of Gorbachev is the era of perestroika, the era of hope, the era of our entry into a missile-free world ... but there was one miscalculation: we did not know our country well," said Vladimir Shevchenko, who headed Gorbachev's protocol office when he was Soviet leader.

"Our union fell apart, that was a tragedy and his tragedy," RIA news agency cited him as saying.

On becoming general secretary of the Soviet Communist Party in 1985, aged just 54, he had set out to revitalize the system by introducing limited political and economic freedoms, but his reforms spun out of control.

"He was a good man - he was a decent man. I think his tragedy is in a sense that he was too decent for the country he was leading," said Gorbachev biographer William Taubman, a professor emeritus at Amherst College in Massachusetts.

Gorbachev's policy of glasnost - free speech - allowed previously unthinkable criticism of the party and the state, but also emboldened nationalists who began to press for independence in the Baltic republics of Latvia, Lithuania, Estonia and elsewhere.

Many Russians never forgave Gorbachev for the turbulence that his reforms unleashed, considering the subsequent plunge in their living standards too high a price to pay for democracy.

Vladimir Rogov, a Russian-appointed official in a part of Ukraine now occupied by pro-Moscow forces, said Gorbachev had "deliberately led the (Soviet) Union to its demise" and called him a traitor.

"He gave us all freedom - but we don't know what to do with it," liberal economist Ruslan Grinberg told the armed forces news outlet Zvezda after visiting Gorbachev in hospital in June.

 

Canada invokes pipeline treaty with United States

Canada has invoked a 1977 pipeline treaty with the United States for the second time in less than a year. This is to prevent a shutdown of Enbridge-Line 5 pipeline in Wisconsin, said Canadian Foreign Minister Melanie Joly on Monday.

The Bad River Band, a Native American tribe in northern Wisconsin, wants the 1953 pipeline shut down and removed from its reservation because of the risk of a leak and expired easements, which are land use agreements between Enbridge and the tribe.

In May, Enbridge filed a motion in a US district court saying federal law prohibits attempts to stop the pipeline's operations. The motion sought to dismiss some of Bad River Band's claims.

The company said in a statement on Monday that it remains open to resolving this matter amicably and was pursuing permits to re-route Line 5 around the Bad River Reservation.

Joly said Canada has raised serious concerns that a possible shut down of the Line 5 pipeline will cause a widespread and significant economic and energy disruption.

"This would impact energy prices, such as propane for heating homes and the price of gas at the pump. At a time when global inflation is making it hard on families to make ends meet, these are unacceptable outcomes," Joly said in a statement.

The pipeline is a critical part of Enbridge's Mainline network, which delivers the bulk of Canadian oil exports to the United States. Line 5 carries 540,000 barrels per day from Superior, Wisconsin, to Sarnia, Ontario.

Joly said Canada was worried about the domino effects the shutdown would have on jobs.

"The shutdown could have a major impact on a number of communities on both sides of the border that depend on the wellbeing of businesses along the supply chain," she said.

The 1977 pipeline treaty governs the free flow of oil between Canada and the United States, and last year Canada invoked it for the first time ever to start negotiations with the United States to resolve a dispute with Michigan State, which wants to shut down Line 5 on environmental grounds.

This month, a US judge sided with Enbridge in ruling that a federal court should hear a suit by the State of Michigan seeking to force shutdown of the pipeline underneath the Straits of Mackinac in the Great Lakes. 

 

Japan pledges US$30 billion for Africa to counter Chinese influence

Japan plans to infuse US$30 billion in aid and investment from its public and private sectors into Africa over the next three years as it seeks to counter China’s growing influence.

Speaking via video link at the eighth Tokyo International Conference on African Development (TICAD), Prime Minister Fumio Kishida stressed Japan will grow together with Africa.

This is an increase from the US$20 billion that Japan promised African countries in 2019 and we essentially achieved it over the last three years, Kishida said.

The pledge is seen as an effort by Tokyo to differentiate itself from China, which has been criticized by the US and some Western nations for burdening African countries with loans.

Japan launched the TICAD in 1993, to revive interest in the continent and find raw materials for its industries and markets for its products. About a decade later, China began holding a rival event, the Forum on China-Africa Cooperation, at a time when Japan was turning inward as it sought to rebuild its struggling economy.

Japan has over time shifted the focus of its engagement with Africa from aid to private-sector-led investment.

Japan’s total trade with the continent is just a small fraction of Africa’s trade with China, according to the Japan External Trade Organization. In 2020, Africa’s exports to Japan were US$8.6 billion, while African imports from Japan were about US$7.9 billion.

As against this, China’s total two-way trade with the continent reached US$254 billion last year.

President Xi Jinping last year pledged US$40 billion in loans and investment for Africa and promised to grow imports from the continent to US$300 billion in three years.

Except during the triennial TICAD meetings, Japan is almost invisible in Africa, Seifudein Adem, a global affairs professor at Doshisha University in Kyoto, Japan, said while Africa, too, is invisible in Japan.

Adem added, “China is also ahead in disseminating its ideas and values in Africa. While the global pandemic has widened the gap between Africa and Japan, the trend started earlier.”

He said Japan’s relative power has declined over the last three decades, as has its diplomatic and economic interest in Africa. However, the re-emergence of China as a global hegemon seems to be marginally stimulating Japan’s engagement with Africa and will continue to do so”, Adem noted.

At TICAD-8 in Tunis, which was attended by hundreds of heads of state and diplomats, Kishida, who spoke via video link, announced that Tokyo will help African countries with debt restructuring and extend loans worth around US$5 billion in coordination with the African Development Bank to promote sustainable African development.

This includes a special, newly created loan of up to US$1 billion for the purpose of advancing reforms that result in sound debt management and helping a resilient and sustainable Africa, the prime minister said.

Kishida also announced a further US$4 billion to promote Japan’s Green Growth Initiative. He also promised to contribute over US$1 billion to the Global Fund to help fight the spread of Covid-19 and other infectious diseases in Africa.

Kishida said Tokyo would work to ensure grain shipments to Africa amid a global shortage at a time when the international order is under threat after Russia invaded Ukraine.

Japan has aligned itself with the other Group of Seven countries in sanctioning Russia. However, the continent is divided over Moscow’s war in Ukraine, with many countries taking a neutral stance while others oppose sanctions, which Russia has blamed for food shortages in Africa.

Adem of Doshisha University said Japan’s approach to African development is distinct with its emphasis on transparency and the high quality of its projects.

 “But, from Japan’s point of view, the growing influence of China in Africa in the last two decades has made them all the more important to try to offset China’s unassailable competitive advantage,” Adem, the author of a forthcoming book on lessons for Africa from Japan and China, said.

However, he said Kishida has been more cautious in his diplomacy so far compared with previous leaders. Perhaps gone are the days of bold initiatives of the late Shinzo Abe, a friend of Africa, he said.

But Jonathan Berkshire Miller, a senior fellow at the Japan Institute of International Affairs, said: “Tokyo’s advantage will be to provide high-quality infrastructure, in line with the G20 priorities, and also enable African SMEs (small and medium-sized enterprises) through public-private partnerships.”

He said Japan has been making strides for decades on this through its TICAD process and evolving its assistance to the continent.

Miller said Japan views Africa in dynamic terms. However, Africa is changing and Japan is also realizing that its relations with the continent also need to balance the growing economic and geopolitical dimensions. Eventually, Japan would be advised to look more closely at building pre-existing partnerships with India and others in the region.

He said TICAD this year is of even more critical importance for African states to take ownership of partnerships and infrastructure cooperation. As the inflationary pressures and economic headwinds continue in recent months, the focus should be on partnership-based ventures that don’t saddle African states with unwieldy debt, Miller said.

Iran gas revenues increase 64% in a year

The Managing Director of National Iranian Gas Company (NIGC) has said the country’s gas revenues have increased by 64% since the current government took office last August, IRNA reported.

“An 11% increase in gas exports to Turkey and the continuation of negotiations to increase exports, the collection of about US$1.6 billion of Iran's gas dues from Iraq, and a 138% increase in gas swaps are among other measures taken to promote energy diplomacy in the 13th government,” Majid Chegeni said on Sunday.

Speaking at a ceremony for inaugurating several gas projects on the occasion of Government Week, Chegeni noted that over the past year Iran has reached a new record in gas condensate exports and the country has been established as a major player in the region’s gas market.

According to the official, the Islamic Republic’s natural gas refining capacity has also reached 1.030 billion cubic meters in the past 12 months and 530 kilometers of new gas pipelines have also been constructed to transfer fuel to seven power plants.

Operating the largest natural gas network in West Asia, NIGC continues to expand this network into the country’s most remote areas so that currently over 95 percent of the Iranian population enjoys natural gas through this huge network.

With a total length of over 36,000 kilometers, Iran’s gas network is also among the world’s most modern networks and it enjoys the most modern and updated measuring, transmission, and pressure boosting instruments and equipment.

This vast network of pipelines is growing bigger and bigger every year as NIGC tries to increase the coverage of the national network to nearly 100 percent.

According to NIGC data, Iran is currently producing over 810 mcm of natural gas daily which is mostly used within the country by the domestic sectors as well as fuel for the power plants. A small portion is also exported to neighboring countries like Iraq and Turkey.

Pakistan: Crucial IMF Board Meeting Today

Reportedly, Executive Board of the International Monetary Fund (IMF) is scheduled to meet Today (Monday) to consider a bailout package for Pakistan.

If the Board approves the deal, the IMF will immediately disburse about US$1.2 billion to Pakistan and may provide up to $4 billion over the remainder of the current fiscal year, which began on July 01, 2022.

“The board is likely to approve the disbursement of the 8th and 9th tranche (over US$1.2 billion) on Monday.” “Not doing so will send a negative signal, particularly during the floods.”

Pakistan, could also request emergency help from the IMF’s Rapid Financing Instrument (RFI), which may bring additional funds of up to US$500 million.

In April 2020, the Board approved the disbursement of US$1.386 billion to Pakistan under the RFI to address the economic impact of the Covid-19 shock.

Also, The Wall Street Journal (WSJ) reported on Sunday that in recent weeks Pakistan has tied up at least US$37 billion in international loans and investments, pulling the country away from the kind of financial collapse seen in Sri Lanka”.

Both WSJ and Voice of America (VOA), a semi-official broadcasting service, confirmed that the Board is meeting on Monday to consider Pakistan’s request.

The VOA reported that in the last six weeks Pakistan has secured loans, financing, deferred oil payments and investment commitments close to US$12 billion from China, Saudi Arabia, Qatar and UAE to avoid a default. But such commitments will become available only after the IMF Board approves the package.

The VOA quoted experts as telling, “Pakistan’s economy is broad and deep and its geostrategic position strong enough for it to avoid default.”

Tamanna Salikuddin, Director of South Asia programs at the United States Institute of Peace, told VOA that despite differences Washington still supports the loans through the IMF because a crisis on Afghanistan’s border is not something that the US wants to see.

She identified “Counterterrorism, nuclear security and stability” as being the main factors for continued US interest in Pakistan.

Salikuddin noted that “Geostrategic importance (often) leads Pakistan to make irresponsible economic policies as the leadership perhaps believes the country is too big to fail.”

The WSJ noted that the IMF had asked the country to first arrange additional funds to cover the rest of its external funding shortfall for the fiscal year, pointing out that Islamabad appears to have met that target.

Among allies, “China led the way, providing more than $10 billion, mostly by rolling over existing loans,” the report added.

In an interview to WSJ, Finance Minister Miftah Ismail said Saudi Arabia was rolling over a US$3 billion loan and was providing at least US$1.2 billion worth of oil on a deferred payment basis. Riyadh would also invest US$1 billion in Pakistan.

The UAE will invest a similar amount in Pakistan’s commercial sector, and it is rolling over a $2.5 billion loan. Last week, Qatar announced it would invest US$3 billion in the country.

But the WSJ report warned that the scale of the flooding from heavier-than-usual monsoon rains means that the country will need more financing than it had planned for.

It goes without saying that the opposition and government forces in Pakistan also need to end fighting each other over everything if they want to stabilize the economy.

 

Iran, Russia and China targets of US disinformation campaign

Recent studies have uncovered material that appears to be the part of the ongoing disinformation campaigns of the United States. These are aimed at maligning Iran, Russia, and China by using bogus accounts to spread pro-Western narratives.

In a study conducted by researchers from the Stanford Internet Observatory and research company Graphika, it was found that pro-US covert influence operations utilized deceptive techniques to sway public opinion in West Asia and Central Asia for over five years.

The accounts running the activities posted articles in at least seven languages, including Farsi, Russian, Arabic, and Urdu, and frequently pretended to be news organizations or to be persons who weren't real.

Some of the accounts posted links to websites maintained by the US military as well as news pieces from media organizations financed by Washington, such as Voice of America and Radio Free Europe.

The country of origin of the accounts, according to Meta, which owns Facebook, Instagram, and WhatsApp, was the United States, while according to Twitter; the presumptive countries of origin for the accounts were the United States and Britain.

The study also stated that in July and August, when the fraudulent pro-US influence campaign was being promoted, Twitter and Meta erased hundreds of phony accounts.

The Russian social media networks VKontakte and Odnoklassniki, Google's YouTube, and Telegram were all utilized in the activities.

According to YouTube, multiple channels that were promoting US foreign policy in Arabic, Farsi, and Russian, as well as channels connected to a US consulting business, were removed. Based on the researchers, the accounts used regionally specific language and message.

Between November 2020 and June 2022, a total of 21 Twitter accounts, six Instagram accounts, five Facebook profiles, and two Facebook pages allegedly targeted Iranian audiences.

It was revealed that several of the aliases had possibly artificial intelligence-generated profile images.

Many made an effort to appear authentic by sprinkling poems and images of Persian cuisine with political messaging.

Numerous posts on Facebook and Instagram also unfairly contrasted chances for Iranian women with those available to women abroad.

In addition, 12 Twitter accounts, 10 Facebook pages, 15 Facebook profiles, and 10 Instagram accounts were made with a Central Asian concentration between June 2020 and March 2022.

These accounts subsequently posted articles that sharply denounced Russia's military campaign in Ukraine and supported anti-Russian demonstrations taking place in Central Asian nations.

Another set of reports honed down on West Asia, praising US efforts in Iraq and using encounters between US troops and Syrian children to support Washington's occupation of Syrian territory and theft of the natural riches of the Arab nation.

The research shows that none of the propaganda tactics were successful in reaching a sizable audience.

Only 19% of the discovered covert accounts had more than 1,000 followers, and the majority of posts and tweets only garnered a handful of likes or retweets.

The study is one of the most thorough evaluations to date of a covert, pro-US influence campaign, according to Shelby Grossman, a member of the research team that published the report.

Is China following debt trap policy?

A recent announcement by China that it is forgiving 23 loans for 17 African countries may be motivated by accusations of debt-trap diplomacy, say some analysts.

Critics have long accused Beijing of practicing debt-trap diplomacy, suggesting it deliberately lends to countries that it knows cannot repay the money, thereby increasing its political leverage. 

China vehemently rejects this, alleging it’s a way for the United States to discredit Beijing, Washington’s main challenger in the quest for influence in Africa.

China’s decision to forgive the zero-interest loans is, in part, aimed at countering the debt-trap narrative, said Harry Verhoeven, senior research scholar at Columbia University in New York.

“It is not uncommon for China to do something like this, forgive interest-free loans, now obviously it is connected to the overall debt-trap diplomacy narrative in the sense that clearly there’s a felt need on the part of China to push back,” Verhoeven said.

China’s announcement did not specify the countries or the amount of loan forgiveness, but analysts say that since 2000, China has regularly forgiven loans that are nearing their end but have a small balance.

“This is not a loan cancellation, but the cancellation of the remaining unpaid portion of interest-free loans that have reached maturity, that is if a loan was supposed to be fully paid off over 20 years, but it still has an outstanding balance, they cancel that outstanding balance,” Deborah Brautigam, Director of the China Africa Research Initiative at Johns Hopkins University’s School of Advanced International Studies. Brautigam’s research shows that between 2000 and 2019, China canceled at least US$3.4 billion of such debt in Africa.

While this applies to the Chinese government’s interest-free loans, it is not the case with the country’s interest-bearing commercial loans, which can be restructured but are never considered for cancellation, analysts explained.

Verhoeven said the sums of money involved in the 23 loans forgiven would likely be modest, but the politics of such gestures are noteworthy because for many years the Chinese would kind of shrug at various aspects, various lines of criticism, pertaining to their engagement in different African countries. But with the debt-trap allegations, China has belatedly woken up to the fact that this is a bit of public relations nightmare, said Verhoeven.

China has also been playing a role in restructuring the external debt of some African countries such as Zambia, which became the first African country to default on its debt during the pandemic. China, along with France, is chairing a committee to deal with debt relief efforts. The move, welcomed by the International Monetary Fund, is ongoing.

China is Zambia’s biggest creditor. Lusaka owes some US$6 billion to Chinese entities. In July, Zambia’s Finance Ministry announced it was canceling US$2 billion of undisbursed loans from its external creditors, US$1.6 billion of which are from Chinese banks. The move stopped construction of infrastructure projects largely funded by a Chinese bank, the South China Morning Post reported.

Shahar Hameiri, a political economist from the University of Queensland in Australia, agreed that the latest move by Beijing in forgiving African nations’ interest-free loans was probably just a goodwill gesture.

“The bigger loans are likelier to be restructured, if repayment problems loom, as we saw in Zambia,” said Hameiri

Senior officials in the United States have regularly warned developing countries, particularly in Africa, about the dangers of Chinese loans, and a 2020 State Department document, titled “The Elements of the China Challenge,” referred to China’s “predatory development program and debt-trap diplomacy.”

On a visit to the continent this month, the US Ambassador to the United Nations, Linda Thomas-Greenfield, touched on the idea that the wealthy and powerful have extracted Africa’s natural resources for their own gain. And it continues today through bad deals and debt traps. She did not mention China by name.

African politicians themselves have had mixed reactions to the debt-trap theory, with some, such as Ethiopia’s Ambassador to China, Teshome Toga Chanaka, refuting the idea, saying, “A partnership that does not benefit both will not sustain long.”

Others, including Kenya’s new President-elect, William Ruto, and Angolan opposition presidential candidate Adalberto Costa Jr., have expressed concern over taking Chinese loans.

The debt trap allegations have infuriated Beijing, which says Western private lenders are responsible for the bulk of poor countries’ debt and charge much higher interest rates.

The US allegation against China is simply untenable, Chinese Foreign Minister Wang Yi said this month.
Chinese state media constantly run articles aiming to debunk the narrative.

A number of economists and researchers are also saying the debt-trap narrative against China is unfounded.

“The debt-trap idea is that Chinese banks had ulterior motives, deliberately lending to countries when they knew those countries couldn’t repay,” Brautigam said.

“The reality is that like bondholders, which hold the majority of Africa’s debt, Chinese banks lent to countries that looked quite promising. All of these creditors have belatedly realized that risk profiles can shift dramatically in a short period of time.”

China restructured or refinanced about US$15 billion in African debt between 2000 and 2019, Brautigam’s research has found. She did not find that China had been involved in any asset seizures.

Echoing Brautigam, Hameiri said, “There is scant evidence that China has pursued ‘debt-trap diplomacy’ the idea that it would on purpose issue loans to ensnare recipients in unsustainable debt, in order to seize strategic assets or exercise control over their governments.”

Chinese lending has at times been problematic, Hameiri wrote, because in a frenzy to issue loans, Chinese lenders often spent little time considering debt sustainability. Chinese lending has contributed to debt problems in a number of countries, although it is not necessarily the only or even the primary cause as in Sri Lanka.”Some critics blamed China for the crisis in Sri Lanka earlier this year, when the cash-strapped government – which had defaulted on its debt – was deposed by mass protests. Beijing also is Colombo’s biggest bilateral creditor; however, Sri Lanka’s largest foreign lending source is in sovereign bonds.

Verhoeven said the growth in sovereign bonds has been an important factor in African nations’ debt too and rejected the Chinese debt-trap narrative.

“When it comes to China, the debt-trap narrative suggests … this is being done on purpose,” to get countries to vote with China in the UN General Assembly and to reduce Western influence, he said.

There “is little actual evidence that China’s been doing this for political gain,” Verhoeven said, “which is not to in any way say that Chinese lending is all fine, or that it’s always responsible or the best thing for countries to do, far from it.”

Since China has now been burned several times regarding its lending, with several countries defaulting on the loans, plus its own economic difficulties at home, there is certainly a sense that the good old days of 10 or 15 years ago where it could sort of give out loans left and right … are over,” said Verhoeven.

Where does Germany stand?

In the emerging new Cold War between the United States and China, it’s easy enough to slot some key global players onto one of the two sides. Russia stands with China and Japan stands with the United States.

Where does Europe stand is a key question mark. Long on the sidelines — much where President Xi Jinping has wanted — there are signs emerging that Germany, Europe’s economic engine, is undergoing a rethink about its trade and investment ties with China. German industry is fully cognizant of the danger of any fundamental shift, given its enormous reliance on China.

Outgoing Volkswagen AG China boss Stephan Wollenstein underscored last month that Asia’s biggest economy remains key to the fortunes of the German auto giant, which counted on China for 40% of its sales in the first quarter.

But the political tilt in Berlin is conspicuous. German Foreign Minister Annalena Baerbock said last month she is very serious about reducing the German economy’s reliance on China. 

Back in April, when Chancellor Olaf Scholz made his debut trip to Asia, he decided to stop first in Japan — a contrast with predecessor Angela Merkel, who put China first. Scholz highlighted that political symbolism was a priority in setting up the trip, saying in Tokyo that it was no coincidence his first trip as leader led him to that city.

Meantime, German lawmakers have pressed for greater scrutiny over their nation’s business ties with China. Despite industry lobbying, in 2021 they pushed through a supply-chain law that now requires companies to do due diligence on their suppliers, ensuring they don’t use slave labor — a move clearly targeted at China, amid concerns over practices in Xinjiang.

The Economy Ministry, led by Berbock’s Green Party colleague Robert Habeck, in May declined to renew investment guarantees for Volkswagen in China, over human-rights concerns, Der Spiegel and other media reported.

The increasing importance of geopolitics in Germany’s economic ties with China also hit home with the diplomatic spat between China and Lithuania. German firms that sourced products from Lithuania, including Continental AG, found their items held up in Chinese customs.

If a Baltic nation allowing Taiwan set up a representative office can end up disrupting German business operations in China, then it opens up a whole set of risks previously given little thought. One solution is to localize operations in China — effectively cordoning them off from overseas supply chains.

Germany Inc. is also facing a sea-change in terms of popular sentiment on the home front. Even before the Russian invasion of Ukraine — which did China little favor in terms of public opinion in most democratic nations, given Beijing’s support for Moscow — a majority of Germany’s population had turned negative on the country. A survey by Forsa, a research institute, last year showed 58% wanted Berlin to take a tougher stance against China even if it affected economic relations with the nation.

Germany is expected to release a fresh strategic game plan with regard to China later this year, and it will likely see the formal ditching Merkel’s approach of “wandel durch handel, or “change through trade,” says Yanmei Xie, a China policy analyst at Gavekal.

“How quickly the relationship changes will depend on how the argument resolves between Germans who favor values and strategic autonomy versus those who emphasize growth and profits,” she wrote in a note this month.

 Courtesy: Bloomberg

Even talk about hike in interest rate causes major decline at US stock exchanges

Over the years, I have been saying that Pakistan suffers from cost pushed inflation and any hike in interest rate erodes competitiveness of Pakistani businesses.

However, the policy planners in Pakistan, living in utopia have been persistently increasing interest rate having the least realization. I am sure this news will help the policy makers in understanding my point of view.

In the United States, stocks closed sharply down on Friday following comments from Federal Reserve Chairman Jerome Powell that the Fed will press forward with raising interest rates amid lingering inflation.

Higher interest rates can restrain economic growth by making borrowing money more expensive and slowing consumer spending. 

The Dow Jones Industrial Average dropped more than 1,000 points, while the Nasdaq composite dropped almost 500 points. The S&P 500 dropped by more than 140 points.

All three declines meant a more than 3% drop. All are still slightly above their levels a month ago, but much of their gains in that time were erased on Friday.

Powell gave a keynote address at the Fed’s annual policy summit in Jackson Hole, Wyo., saying that the central bank would be willing to take forceful and rapid steps to address inflation, even if it means potentially higher unemployment rates and a recession. 

The Bureau of Economic Analysis revealed on Friday that inflation slowed to 6.3% in July from exactly a year ago. This figure is down from the 6.8% annual inflation rate that was reported in June. 

But the Fed’s goal is to get inflation down to 2%, and Powell said the drop from last month is far short of what the Fed needs to see before it can be confident that inflation is dropping. 

The Fed has already raised interest rates from a range of 0 to 0.25% in March to 2.25% to 2.5% in July. This included two consecutive increases of 0.75 percentage points, the largest monthly increases in almost 30 years.

Powell said the Fed’s decision on how much to raise interest rates next month will be based on the data it receives.

 

Pakistan: Unlocking Economic Potential

This year Pakistan celebrated Independence Day (August 14), when the clouds of imminent default were getting thicker. Despite having complete faith in the economic resilience of Pakistan, people are worried about the ballooning ‘confidence deficit. They believe that breaching current account deficit as well as budget deficit is possible but overcoming confidence deficit may take years.

The brighter side of the story is that International Monetary Fund (IMF) is likely to release promised branch of about US$1.2 billion. This will pave the way for the inflow of foreign exchange from friendly countries and other multilateral lenders. At present the biggest support is coming from overseas Pakistanis who are sending around US$2.5 billion every month.

In last financial year, exports of textiles and clothing touched record high level. Now it is the responsibility of the policy planners to ensure there is no dip in export of textiles and clothing. The chances are bright because Pakistan is likely to get certain concessions under GSP Plus system.

It is my estimate that Pakistan is capable of earning more than US$50 billion per annum from export of textiles and clothing. However, to achieve this, Pakistani farmers have to double indigenous production of cotton to take textiles and clothing exports to the next level.

Since Pakistan’s exports of textiles and clothing are concentrated in United States and European countries, improvement in quality standards can boost ‘Unit Price Realization’ significantly. However, the target can only be achieved by ensuring uninterrupted supply of electricity and gas to the manufacturers at affordable cost.

A cursory look at the reasons of burgeoning current account deficit shows that import bill on energy products and edible oil are the two culprits. While boosting of oil and gas may take some time, shortfall of edible oil can be overcome by focusing cultivation oil seeds that include cotton, sunflower and canola. Nearly 50% reduction in the prices of palm oil is likely to reduce import bill of edible oil significantly. Similarly, crude oil prices are on the downwards trajectory.

This year Pakistan has been forced to import wheat due to its production below the target. Some analysts are of the view that if 20% wheat that goes stale before reaching the market can be saved, the country may not need to import the staple food, but extra foreign exchange would be earned by exporting the saved quantity.

Analysts fear that a significant quantity of wheat is smuggled to the neighboring countries. Pakistan can earn substantial foreign exchange if wheat and other food items are exported through the official channel.

Having reached at the consensus that Pakistan has to produce exportable surplus, supporting policies have to be evolved and implemented. These include operating fertilizer plants at or above name plate capacity. It is necessary to bring it at record that as against an installed capacity capable of 7 million tons urea annually, the country produced around 6 million tons. An additional one million tons of urea can be produced by supply ‘full required’ quantity of gas to urea plants.

At the prevailing global prices of urea, Pakistan can earn significantly foreign exchange by exporting urea, part of this may be used to import LNG or meeting the difference in cost of generation when furnace oil is used.

At stated earlier saving the wheat from going stale or containing smuggling its smuggling is possible. Government has to ensure construction of modern storage silos capable of storing up to 50 million tons to store wheat, rice and maize.

The central bank has already announced an incentive ladden plan for the construction of silos. It is necessary to share the news that warehouses have issued warehouse house receipts worth PKR100 billion electronically. However, this is only tip of the iceberg. Now it is the responsibility of the Government of Pakistan, central bank and commercial banks to convince the farmers to store their produce at the modern silos.

It is often said that indigenous production of oil and gas is constantly doing down. This process can be decelerated by drilling more exploratory and production wells. Along with this refineries operating in the country have to be up gradated to produce higher distillates.

This year Pakistan has once again faced floods, which has once again highlighted the need for the construction of dams. It is known to all and sundry that Pakistan is capable of producing more than 40,000MW electricity from hydel plants.

A lot of time has been wasted in finding justifications for some disputed dams. Analysts are of the view that Pakistan should establish ‘run of the river, type hydel power generation units. These are not only low cost but can be constructed within shorter span of time.

The added advantage is that cost of electricity produced from hydel facilities is one tenth of the cost of electricity produced at thermal plants. These hydel power plants can be constructed closer to the point of consumption. There will be no need to construct long transmission lines and transmission. The additional advantage is reduction in the transmission and distribution (T&D) losses.   

 

 

 

China lifting oil to offset Venezuelan debt

According to a Reuters report, a Chinese company has been entrusted to ship millions of barrels of Venezuelan oil despite the US sanctions. This is part of a deal to offset Caracas' billions of dollars of debt to Beijing.

China National Petroleum Corp (CNPC) stopped carrying Venezuelan oil in August 2019 after Washington tightened sanctions on the South American exporter. But it continued to find its way to China via traders who rebranded it.

Since November 2020 China Aerospace Science and Industry Corp (CASIC) has been carrying Venezuelan crude on three tankers it acquired from PetroChina. The oil is stored on a tank farm it also took over from PetroChina.

The firm has taken 13 cargoes carrying a total of about 25 million barrels of oil, including two vessels due to arrive in China in September, according to the loading schedules of Venezuelan state oil firm PDVSA, and tanker tracking data from Refinitiv and Vortexa Analytics.

The 13 shipments, worth about US$1.5 billion at formula prices for Venezuela’s flagship-grade Merey crude, were declared "crude oil" at Chinese customs, without specifying origin.

" shipments are strictly under a government mandate, where CASIC was designated to move the oil as payment to offset Venezuelan debt to China.

Without commenting on debt offset, China's Foreign Ministry said on Friday the two nations are engaged in cooperation over oil for humanitarian goods.

“The cooperation meets Venezuela's current needs and is also in line with humanitarian principles," a Ministry spokesperson said, adding that China opposes US unilateral sanctions and long-arm jurisdiction.

Another source said that although part of each cargo pays down debt, other goods, such as COVID-19 vaccines, are also being subtracted from the crude sales.

All money from proceeds stays in China. Venezuela’s Foreign Affairs Ministry is in charge of conciliation and accountability.

At roughly 42,000 barrels a day, these shipments have increased total Venezuelan oil to China to about 420,000 bpd between January and July this year, equivalent to about 3% of China's consumption, according to Emma Li, analyst with Vortexa, which tracks such flows.

Venezuela's debt dates to 2007, the era of then-President Hugo Chavez, when the country borrowed more than US$50 billion from Beijing under loan-for-oil deals.

China, the world's top oil buyer, has over the past few years benefited from cheaper oil supplies from Iran and Venezuela, and has in recent months ramped up imports from Russia amid soured relations with Washington.

CASIC, which started in 1956 as a defence research arm that developed China's first missile has over the decades expanded into a defence conglomerate specializing in space technology.

It was picked for the oil job because it is politically powerful and has limited global financial exposure, making it less vulnerable to sanctions.

The company has since 2015 worked with state oil giants, including CNPC and Sinopec, in petroleum equipment manufacturing, digital technology and overseas projects.

The CASIC Venezuelan oil shipments are transported by three Very Large Crude Carriers - Xingye, Yongle and Thousand Sunny, according PDVSA's loading schedules and ship tracking by Vortexa and Refinitiv.

All Venezuelan oil cargoes received by CASIC were originally picked up at the Jose port by Cirrostrati Technology Co, a firm with no track record in oil trading, acting as intermediary for only these cargoes.

The oil shipped by CASIC is mostly consumed by China's independent refiners, which have increasingly relied on cheaper crude from Iran and Venezuela and more recently Russia to maintain operations.

One independent refiner said they were offered the oil at US$8 per barrel below benchmark Brent crude ex-storage basis, versus a discount of more than US$30 for similar-quality crude marketed as a Malaysian export.

"It is more costly, but it's good that the government is now taking charge of these Venezuelan supplies, which saves us lots of logistics headaches and sanction-related risks," said an executive with the refiner.

Japan seeks to organize meeting of creditors to Sri Lanka

Japan is seeking to organize a Sri Lanka creditors' conference, hoping it could help solve the South Asia nation's debt crisis, but uncertainties cloud the outlook for any talks.

Tokyo is open to hosting talks among all the creditor nations aimed at lifting Colombo from its worst debt crisis since independence, but it is not clear whether top creditor China would join and a lack of clarity remains about Sri Lanka's finances.

Japan would be willing to chair such a meeting with China if that would speed up the process for addressing Sri Lanka's debt, estimated at US$6.2 billion on a bilateral basis at the end of 2020.

President Ranil Wickremesinghe told Reuters last week that Sri Lanka would ask Japan to invite the main creditor nations to talks on restructuring bilateral debts. He said he would discuss the issue with Prime Minister Fumio Kishida in Tokyo next month, when he is expected to attend the funeral of the assassinated former premier Shinzo Abe.

Tokyo, the number two creditor, has a stake in rescuing Sri Lanka, not just to recoup its US$3 billion in loans but also its diplomatic interest in checking China's growing presence in the region.

S&P Global this month downgraded Sri Lanka's government bonds to default after it missed interest and principal payments. The island nation of 22 million people off India's southern tip, with debt at 114% of annual economic output, is in social and financial upheaval from the impact of COVID-19 pandemic on top of years of economic mismanagement.

An International Monetary Fund (IMF) team met Wickremesinghe on Wednesday to discuss a bailout, including restructuring US$29 billion in debt, as Colombo seeks a US$3 billion IMF aid program. 

The president met the same day with Japan's ambassador.

Tokyo believes a new platform is needed to pull creditors together.

Sri Lanka is running out of time since it defaulted on its debt. The priority is for creditor nations to agree on an effective scheme.

Japan is keen to move this forward. But it's not something Japan alone can raise its hand and push through, the cooperation of other nations was crucial.

Japan's Foreign Ministry declined to comment. Sri Lanka's central bank and Finance Ministry did not immediately respond to requests for comment. An IMF spokesperson declined to comment.

Concerns include rivalry and territorial tensions between big creditors China and India, while Sri Lanka would have to commit to reforming its finances and disclose more information about its debt, the sources said.

Last month, shortly after Wickremesinghe took office when his predecessor fled the country, Chinese President Xi Jinping wrote to him that he was ready to provide support and assistance to the best of my ability to President Wickremesinghe and the people of Sri Lanka in their efforts.

Getting Beijing's cooperation on a debt restructuring was complicated by factors such as a large number of lenders.

A Chinese foreign ministry spokesman told Reuters that Beijing was willing to stand with relevant countries and international financial institutions and continue to play a positive role in helping Sri Lanka respond to its present difficulties, relieve its debt burden and realize sustainable development.

Japan hopes to see a new debt restructuring framework resembling one set up by the Group of 20 big economies targeting low-income countries. Sri Lanka does not fall under this "common framework" because it is classified as a middle-income emerging country.

It must be a platform where all creditor nations participate to ensure they all shoulder a fair share in waiving deb. Until these conditions are met, it would be difficult for any talks to succeed.

The common framework, launched by the G20 and the Paris Club of rich creditor nations in 2020, provides debt relief mainly through extension in debt-payment deadlines and reduction in interest payments.

Some people involved think an initial creditors' meeting could be held in September, but one source said it would "take a little while, possibly several months".

Restructuring talks are only possible after the IMF scrutinizes Sri Lanka's debt, the sources said.

 

 

Poppy Cultivation in Afghanistan

According to an article by Ambassador, Mark Green, President, Director and CEO, Wilson Center, at a time when the majority of Afghan population struggles to afford food under the collapsed economy and severe drought, the “poppy pledge” threatens to devastate the livelihoods of entire communities. 

According to Green, Afghanistan is the world's largest producer of poppy. Its production grew during the years when United States and coalition forces were present, despite the US spending more than US$8 billion to eradicate the crop.

Production grew during Taliban’s years of insurgency, despite its public opposition to poppy  production because narcotics are contrary to Islam, and perhaps because the militant group reportedly imposed “taxes” on poppy farmers and others involved in the trade as a way of funding its operations.

As Taliban representatives negotiated over the drawdown of Western forces with, first, the Trump Administration and then, later, Biden representatives, they promised to end poppy production in Afghanistan once they regained power.

Even though observers say Taliban have broken many of its other pledges—on matters like the role of women in society and tolerance for diversity of opinion— the “poppy pledge” may be one they’re serious about trying to keep.

In April, Taliban issued a decree that banned poppy cultivation in Afghanistan, and government spokespersons said that offenders would be tried according to Shariah laws and courts.

A representative of the interior ministry told the Associated Press, “We are committed to bringing poppy cultivation to zero.” 

Farmers in Helmand, the center of poppy cultivation in Afghanistan, recently reported that armed Taliban officials have begun seizing farms and tearing up fields of poppies with tractors.

Taliban campaign to eradicate poppy cultivation poses significant challenges for millions of impoverished farmers and day laborers that rely on their earnings from the profitable crop.

In 2021, the value of Afghanistan's poppy production was 14% of the country’s GDP at US$1.8 billion to US$2.7 billion, and day laborers can make more than US$300 a month harvesting poppy.

 

Pakistan: Remittances continue to be the biggest source of foreign exchange

Remittances have remained high in June 2022. Eid festivity impact was restricted to the month, the inflow of US$2.5 billion depict a higher rate of remittance. Even though remittances were down 9%MoM, analysts expect growth during the year to remain tepid backed by increase in Pakistani worker registration in GCC countries.

As per Board of Emigration and Overseas Employment (BEOE), around 458,000 Pakistanis have expatriated during 7MFY22TD as against 288,000 and 225,000 during FY21 and FY20, respectively. Most of the expatriations have occurred towards Middle East countries which continue to enjoy better macros in a high oil price environment. 

Notwithstanding a better current account deficit (CAD) in July 2022, the overall Balance of Payment (BoP) position was reported at a negative US$1.8 billion. This is largely owing to the absence of financial flows from any country during the month. 

During June 2022, Pakistan received US$2.3 billion deposit from China while in July 2022 external debt repayments of US$748 million eroded foreign exchange reserves.

Pakistan’s monthly CAD nearly halved during the month under review to US$1.2 billion (3.7% of GDP), despite hefty oil payments as the free-fall in Pak Rupee (fall of 17%) continued to act as a key shock absorber, supported by administrative measures that reduced trade deficit to US$3 billion (21%MoM decline). 

Notwithstanding the fizzling out of Eid festivity impact, rate of remittance flows remained steady at US$2.5 billion for July 2022. 

Trend reversal in PBS-SBP import differential was witnessed owing to oil payments where most shipments, at high crack spreads and as under PBS data, were made during July 2022. Adherence to the renewed IMF program is imperative besides administrative measures to conserve energy in order to keep CAD within the targeted level of US$10 billion (3.0% of GDP).

Pakistan is poised to receive US$4 billion under friendly assistance from GCC countries, which will effectively put its external account at an over-financed status.

SBP has already indicated a pause in tightening with a few downside risks from exogenous factors and deviation from the path of fiscal consolidation. While the end of overheating of economy is in sight (June 2023), Pakistan needs stay adequately congruent to the Fund’s stipulations and implement energy conservation drives to reduce oil import bill.

Trade deficit has come off from its fresh peak of US$3.9 billion to US$3.1 billion, largely owing to demand moderation as well as administrative measures on restricting non-essential items, more specifically the CKD imports.

The biggest decline was seen in machinery and transport group. Infrequent trend reversal in the PBS-SBP import difference was also witnessed during the month, which was primarily on account of higher crack spreads booked in prior month and cash transactions being settled in July 2022. This also kept Pakistan’s average cost of oil import higher than oil prices.

 

United States takes help of poll to continue war in Ukraine

It is not new by a regular practice of the US administration to take help of pool to justify its acts. This time it has taken help of world’s leading news agency, Reuters, to continue arms supply to Ukraine. 

Before the readers go further I request them to first read one of my blogs titled Dying Ukrainians Thriving US Military Complexes dated August 20, 2022.

After half a year of war in Ukraine, a slim majority of Americans agree that the United States should continue to support Kyiv until Russia withdraws all its forces, according to a Reuters/Ipsos opinion poll released on Wednesday.

The polling suggests continued support for President Joe Biden's policy of backing Ukraine, despite economic worries and domestic political developments grabbing Americans' attention in recent months.

The Biden administration has provided weapons and ammunition for Ukraine's bid to repel Russian forces and is expected to announce a new security assistance package of about US$3 billion, a US official said, as Ukraine's marks its Independence Day on Wednesday.

Ukrainian President Volodymyr Zelenskiy has vowed to recapture territory seized after the February 24 invasion and in earlier incursions beginning in 2014, when Russia annexed Crimea.

Out of 1,005 people in the United States who took part in an online poll last week, 53% expressed support for backing Ukraine "until all Russian forces are withdrawn from territory claimed by Ukraine." Only 18% said they opposed.

That support came from both sides of the political divide, although Democratic voters were more likely to back the position, with 66% of Democrats in support compared to 51% of Republicans.

A slim majority, 51%, also supported providing arms such as guns and anti-tank weapons to Ukraine's military, compared with 22% who opposed.

In previous polls, higher numbers of Americans have backed providing arms to Ukraine but directly comparable polling was not available.

In line with past polling, there was little support among Americans from across the political spectrum for sending US troops to Ukraine.

Only 26% said they supported such an intervention, but 43% agreed with sending US troops to NATO allies neighboring Ukraine who are not at war with Russia.

 

Why fuss against Mahmoud Abbas?

At a press conference with German Chancellor Olaf Scholz in Berlin, Mahmoud Abbas, President, Palestinian Authority (PA) said Israel has caused 50 Holocausts against Palestinians. His remarks triggered outrage among certain world leaders, including Scholz.

"From 1947 to the present day, Israel has committed 50 massacres in Palestinian villages and cities," Abbas said in Arabic, according to CNN. Until today and every day there are killings by the Israeli military.

Abbas made the comments when asked if he would apologize for the 1972 Olympics incident in Munich, when members of the Israeli team were taken hostage by Palestinians linked to the Palestinian Liberation Organization (PLO).

Chancellor Scholz tweeted, "I am disgusted by the outrageous remarks made by Palestinian President Mahmoud #Abbas. For Germans in particular, any relativization of the singularity of the Holocaust is intolerable and unacceptable. I condemn any attempt to deny the crimes of the Holocaust."

It is true that the Holocaust has singular dimensions but the German leader and others who were outraged by the Palestinian Authority president’s remarks cannot deny nearly eight decades of occupation, land robbery, destruction of homes, burning of olive trees, imprisonment, injustice, genocide, displacement of families, etc.  Just in 1948, 700,000 Palestinians were forced to leave their homes.

Moreover, Abbas did not deny Holocaust that Scholz says condemns denial of it.

Also, deep down, Scholz and other current and former Western leaders are well aware that Israel’s behaviors are by no means excusable, otherwise they are bigoted.

Why the term Holocaust used by Abbas was taken literally. He was just trying to express incessant cruelty against Palestinians.

The interim Israeli Prime Minister Yair Lapid tried to abuse the situation and talked about morality of the remarks by the Palestinian Authority leader, something which is quite alien to Israeli officials.

"Six million Jews were murdered in the Holocaust, including one and a half million Jewish children. History will never forgive him (Abbas)," Lapid tweeted.

Lapid is better to be reminded that history will never forgive or forget the stealing of another nation’s land. Between August 5 and 7, Lapid killed 16 children in Gaza. 

Holocaust happened during World War II, from 1939 to 1945. But the Palestinians have been suffering since 1947 and there is no prospect for an end to their agonies.

Israelis are stealing the remaining Palestinian lands in the West Bank and don’t allow them to establish their own country. They have also imprisoned about two million people in Gaza.

Even Palestinians who were protesting inside the besieged Gaza were murdered in cold blood as they were holding symbolic “Great March of Return” demonstrations. 

Also, UN Security Council resolutions 242 and 338, which oblige Israel to return to the 1967 borders, carry no weight for the West.

In the Tuesday press conference Scholz also unexpectedly refuted the statement by Abbas that Palestinians are living under the apartheid practiced by the Israeli regime, saying he did "not think that is correct, to use the term to describe the situation. 

Manay groups, including Amnesty International and Human Rights Watch, have concluded that Israel's treatment of Palestinians amounts to apartheid.

In a commentary on August 18, Marwan Bishara, a senior political analyst at Al Jazeera, said, “Aggrieved and angry, the Palestinians have long believed that it was they who paid the price for the horrors inflicted upon Jews in Europe since it is they who were robbed of their homeland by the newly established Jewish state in 1948.”

Bishara adds “… the early Zionists chose to settle and build a homeland for Jews in Palestine nearly half a century before the Holocaust, knowing all too well that it is the homeland of another people. They wished it cleansed of its non-Jewish inhabitants. Israel’s founding father, David Ben-Gurion believed Zionism was not driven by victimhood but rather by the necessary emancipation of the Jewish people as a new nation in Palestine.”

The analyst goes on to say, “The Gaza Strip may not be the Buchenwald concentration camp, but for decades, this tortured and tormented open-air prison of two million Palestinians has had more than its share of sadistic Israeli aggression under the pretext of security.”

In a show of hypocrisy, over the past decades Western statesmen have not reacted to comparing certain Arab leaders to Adolf Hitler by Israeli leaders.

“Israeli leaders have called any Palestinian or Arab leader they disliked a ‘new Hitler’, to justify aggression and war against Palestine, Egypt, Lebanon and others. Before their trilateral attack on Egypt in 1956, Israel and its two co-conspirators, France and Britain, portrayed its pan-Arab leader, Gamal Abdel Nasser, as ‘Hitler on the Nile’,” Bishara says.

Moreover, Zionists have used the term “anti-Semitism” to attack the opponents of Tel Aviv’s behaviors toward Palestinians. They are using this term to justify their illegal acts.

“…, any journalist, scholar or peace activist who dares criticize Israeli policy is routinely denounced as an anti-Semite, Holocaust denier and neo-Nazi,” the Al Jazeera analyst writes.

He also says, “Such Zionist and Israeli abuse of the Holocaust’s memory and even its survivors was exposed by Israeli historian Tom Segev in his revelatory book The Seventh Million, The Israelis and The Holocaust, as well as by American Jewish scholar, Norman Finkelstein, in his daring book, The Holocaust Industry, Reflections on the Exploitation of Jewish Suffering.

“The latter is highly critical of the cynical calculus behind the persistent invocation of the Holocaust by American Zionist organizations, in order to portray Israel as a victim, despite its 1967 war and occupation of Palestine in its entirety.”

Courtesy: The Tehran Times

Colossal impact of Ukraine war on Germany

The adverse impact of Russia-Ukraine conflict leading to war is anticipated to last for years. One of the leading economists, Marcel Fratzscher of the German Institute for Economic Research told Reuters. He expressed fears that the turmoil could cost 3 percentage points of growth this year.

Fratzscher, whose institute advises the government of Europe's largest economy on macroeconomic policy, said the impact could last until 2025 when Germany expects to have freed itself from all exposure to Russian gas.

Germany, which for decades prospered from reliable flows of cheap Russian gas, is rushing to reorient itself after the outbreak of war in February.

"The war in Ukraine has done massive damage to the German economy," Fratzscher said, adding that perhaps only 1.5% would remain of the 4.5% economic growth he had expected at the start of the year.

The impact on inflation, through high energy prices, would also be sustained for a similar period, though he rejected suggestions that there was cause for wage restraint.

"Unions aren't as strong as they were in the 1970s," he said, noting that this year's forecast wage growth of 4.5% was well short of inflation at some 8%. "Even in coming years I see no sign of us falling into a wage spiral."

  

Crude oil prices slip on receding fears of output cut by OPEC Plus

Crude oil prices fell on Wednesday, taking a breather from a near 4% surge the previous day, on receding fears of an imminent output cut by the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC Plus.

Global benchmark Brent crude futures fell to US$99.82 a barrel by 0337 GMT, after rising 3.9% and WTI futures declined to US$93.47 a barrel, having jumped 3.7% on Tuesday.

Both contracts soared on Tuesday after Energy Minister of Saudi Arabia flagged the possibility of supply cuts to balance a market it described as "schizophrenic", with the paper and physical markets becoming increasingly disconnected.

"While Abdulaziz bin Salman's comment may have achieved more than putting a floor under crude prices, we expect it to follow the law of diminishing returns, unless it is followed up by more signals or action from OPEC Plus to restrain output," said Vandana Hari, founder of oil market analysis provider Vanda Insights.

With OPEC Plus already delivering about 2.8 million barrels per day less than its monthly target, cutting production is going to be more complicated than usual, Hari added.

Potential OPEC Plus production cuts may not be imminent and are likely to coincide with the return of Iran to oil markets should it clinch a nuclear deal with the West, nine OPEC sources told Reuters on Tuesday.

A senior US official told Reuters on Monday that Iran had dropped some of its main demands on resurrecting a deal. 

"Tuesday's rally was overdone as many investors knew it would take several months for Iranian oil to flow into the international market even if an agreement to revive Tehran's 2015 nuclear deal was made, meaning OPEC Plus would not trim output so quickly," said Kazuhiko Saito, Chief Analyst at Fujitomi Securities.

"Still, there is not much room for the market's downside due to robust heating fuel demand for the winter," he said, citing that the recent rally in the US heating oil market and surging natural gas prices boosted expectations for stronger heating oil demand and tighter crude supply.

US gas prices shot above US$10 for the first time in about 14 years due to a surge in prices in Europe, where tight supplies persist.

Underlining tight supply, US crude stockpiles fell by about 5.6 million barrels for the week ended August 19, according to market sources citing American Petroleum Institute figures on Tuesday, against analysts' estimate of a drop by 900,000 barrels.

But gasoline inventories rose by about 268,000 barrels, while distillate stocks increased by about 1.1 million barrels.

Jerusalem belongs to all, not Jews alone

Jerusalem is the united capital of Israel, Defense Minister Benny Gantz said Monday morning as he pushed back at former Prime Minister Benjamin Netanyahu, who attacked him on social media over his previously announced stance.

“Jerusalem is the united capital of the State of Israel – so it has been, and so it will be,” Gantz told Radio 103 FM.

Netanyahu on Sunday tweeted the headline of an interview Gantz gave to a Saudi paper in 2020 in which he said there was room for a Palestinian capital in a united Jerusalem.

 “The answer is no,” Netanyahu tweeted. The issue of a united Jerusalem is one he often campaigns on and has in the past warned that his opposition would give it away to the Palestinians. He famously did so when he campaigned against former Labor Party leader Shimon Peres.

Gantz clarified in his radio interview that he had made those comments around the time former US President Donald Trump had unveiled his peace plan, which called for a Palestinian capital in Palestinian neighborhoods of Jerusalem that were on the opposite side of the security barrier. Netanyahu also supported that plan.

Trump’s plan also called for a two-state resolution to the conflict. Gantz in his public comments since then has spoken of a resolution that involves two entities.

Gantz told the radio station he did not believe it was possible “to get to a permanent agreement with the Palestinians in the coming years.”

What needs to happen instead is to reduce the points of conflict and strengthen Palestinian self-governance over their own affairs, particularly their internal security, Gantz said.

It’s important to prevent the creation of a bi-national state, “which no one wants,” he said.

With respect to a Palestinian foothold in Jerusalem, Gantz said there are people who say there are “civilian villages that Palestinians call Jerusalem, which is not in the metropolitan envelope of Jerusalem, and they can be defined as their capital.”

Gantz also clarified that he would not sit in a government in which Netanyahu was a Prime Minister or a Minister.

 

Benjamin Gantz was born in Kfar Ahim, Israel, in 1959. His mother Malka was a Holocaust survivor, originally from Hungary. His father Nahum came from Romania, and was arrested by the British authorities for trying to enter Palestine illegally, before reaching Israel. His parents were among the founders of Moshav Kfar Ahim, a cooperative agricultural community in south-central Israel. In his youth, he attended the Shafir High School in Merkaz Shapira and boarding school at the HaKfar HaYarok youth village in Ramat HaSharon.

Gantz is a graduate of the IDF Command and Staff College and the National Security College. He holds a bachelor's degree in history from Tel Aviv University, a master's degree in political science from the University of Haifa, and an additional master's degree in National Resources Management from the National Defense University in the United States. Gantz is married to Revital, with whom he has four children. He lives in Rosh HaAyin

In February 2011, following the government decision to promote Gantz to Chief of the General Staff, Attorney Avi'ad Vissuli of the Forum for the Land of Israel unsuccessfully petitioned to revoke the appointment.

In February 2019, an Israeli-American woman accused Gantz of exposing himself to her 40 years earlier, causing her traumatic disorders. Gantz denied all allegations, claiming that such an incident never took place, and that the allegations were politically motivated. Gantz has since sued the woman for defamation.