Friday, 30 June 2023

US didn't anticipate Afghanistan exit chaos

Key failures by both the Trump and Biden administrations contributed to a chaotic and deadly end to the two-decade US presence in Afghanistan, according to a State Department review that was published Friday. 

Among these included that senior officials did not prepare for worst case scenarios and appreciate how quickly the situation could devolve, key leadership roles were not empowered with authority and firmly held policy positions failed to take into account dissenting opinions.

The review focused on the State Department’s responsibilities during the period where the US was ending its military presence in Afghanistan, offering recommendations on how the agency could better prepare for and respond to extraordinary crises in unstable security environments.

The report, called the After Action Review, was commissioned by Secretary of State Antony Blinken in the aftermath of the US pullout of Afghanistan, which formally ended on August 31, 2021.

It was released with little notice and fanfare in the afternoon of a holiday weekend, when Congress is out of session and the administration is unlikely to face public questioning from journalists at press briefings. 

It also comes nearly two years after US officials first committed to critically reviewing the pullout from Afghanistan, which marked one of the lowest moments for President Biden’s term and has contributed to criticism, and raised concern over how the US government prepares for evacuating Americans in times of crisis.

While the US managed to evacuate more than 120,000 people from Afghanistan over the course of two weeks, including more than 85,000 Afghans, the disorganized effort led to a swell of people rushing to the gates of Hamid Karzai International Airport over several days, and a subsequent suicide bomb blast killing 13 US service members and more than 150 Afghans.

The administration drew intense criticism for the chaos and the State Department in particular is the target of Republican criticisms that the agency failed to prepare for a worst-case scenario and that resulted in more than 100,000 Afghan allies left behind.

The report notes that diplomats serving in Kabul that were forced to shutter their operations at the embassy and establish an ad-hoc evacuation plan at the airport confronted a task of unprecedented scale and complexity.

IMF standby arrangement for Pakistan: Too little too late

Pakistan has finally entered into a new US$3 billion short term Standby Arrangement (SBA) spread over 9 months. The country has entered into such SBA in the past in 2000 and 2008.

The deal — subject to approval by the IMF Board in July — comes after an eight-month delay and offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.

The positive point is that the US$3 billion funding, spread over nine months, is higher than expected for Pakistan. The country was awaiting the release of the remaining US$2.5 billion from a US$6.5 billion bailout package agreed in 2019, which expires on June 30, 2023.

The new stand-by arrangement is built on the 2019 program, IMF official Nathan Porter said in a statement on Thursday, adding that Pakistan’s economy had faced several challenges in recent times, including devastating floods last year and commodity price hikes following the war in Ukraine.

“As a result of these shocks as well as some policy missteps — including shortages from constraints on the functioning of the FX market — economic growth has stalled. Inflation, including for essential items, is very high,” he added.

“Despite the authorities’ efforts to reduce imports and the trade deficit, reserves have declined to very low levels. Liquidity conditions in the power sector also remain acute,” Porter said in a statement.

“Given these challenges, the new arrangement would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead,” he said.

The IMF’s press release states, “The IMF staff and the Pakistani authorities have reached a staff-level agreement on policies to be supported by a Stand-By Arrangement (SBA).”

It added that the new SBA will “support the authorities’ immediate efforts to stabilize the economy from recent external shocks, preserve macroeconomic stability and provide a framework for financing from multilateral and bilateral partners”.

“The new SBA will also create space for social and development spending through improved domestic revenue mobilization and careful spending execution to help address the needs of the Pakistani people,” the IMF said.

It further said, “Steadfast policy implementation is key for Pakistan to overcome its current challenges, including through greater fiscal discipline, a market-determined exchange rate to absorb external pressures, and further progress on reforms, particularly in the energy sector, to promote climate resilience, and to help improve the business climate.”

It added that the budget advances a primary surplus of around 0.4% of GDP by taking some steps to broaden the tax base and increase tax collection from under taxed sectors, as well as improving progressivity, while ensuring space to strengthen support for the vulnerable through the BISP (Benazir Income Support Program)”.

“It will be important that the budget is executed as planned, and the authorities resist pressures for unbudgeted spending or tax exemptions in the period ahead,” the lender emphasized.

It went on to note that the State Bank of Pakistan (SBP) has “withdrawn the guidance on import prioritization and is committed to ensuring the full market determination of the exchange rate”.

“Going forward, the SBP should remain proactive to reduce inflation, which particularly affects the most vulnerable, and maintain a foreign exchange framework free of restrictions on payments and transfers for current international transactions and multiple currency practices,” the IMF highlighted.

 

Thursday, 29 June 2023

Biden Iran envoy under investigation

Rob Malley, a US special envoy for Iran, has been placed on leave due to a security clearance suspension earlier this year which resulted in an investigation.

A US official told CNN Thursday that his clearance was suspended after the State Department conducted an investigation into the possible mishandling of classified documents. While Malley remained at his post amid the investigation, he was barred from accessing classified information, the official added.

State Department spokesperson Matt Miller confirmed that Malley was benched, adding that Abram Paley will serve as the acting special envoy to Iran for the US, according to CNN. 

“Rob Malley is on leave and Abram Paley is serving as acting Special Envoy for Iran and leading the Department’s work in this area,” Miller told the news outlet. 

Malley, who was appointed to his position two years ago, confirmed that his security clearance is under review, noting in a statement that he expects the investigation to be resolved favorably and soon.

“I have been informed that my security clearance is under review. I have not been provided any further information, but I expect the investigation to be resolved favorably and soon. In the meantime, I am on leave,” Malley told CNN.

The move comes as Malley, who was a prominent player in working to secure the release of detained Americans in Iran, has remained excluded from the ongoing Iran nuclear deal talks. 

The Hill has reached out to the State Department for additional comment. Department officials last year said that reviving the nuclear deal with Iran, which was nixed under former President Trump in 2018, was not their main focus.

This came as protests between Iranian authorities and residents intensified following the death of 22-year-old Mahsa Amini in the custody of the country’s Morality Police, CNN reported. 

Republican lawmakers recently warned the Biden administration about pursuing an agreement with Iran that would provide sanctions relief without approval from Congress.

 

Mohammed Bin Salman holds annual reception for foreign dignitaries performing Hajj

On behalf of King Salman, Crown Prince and Prime Minister Mohammed Bin Salman held his annual reception on Thursday for heads of state, Islamic dignitaries, guests of Custodian of the Two Holy Mosques, government bodies, and heads of delegations and pilgrim affairs offices performing Hajj this year.

At the Royal Court of Mina Palace in Makkah, the guests were led Malaysia’s King Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah, Senegalese President Macky Sall, Pakistan’s President Arif Alvi, Bangladesh’s President Mohammed Shahabuddin, Vice President of Maldives Faisal Naseem, Prime Minister of Egypt, Dr. Mustafa Madbouly, Prime Minister of Lebanon Najib Mikati, Prime Minister of Somalia Hamza Abdi Barre, Prime Minister of Niger Ouhoumoudou Mahamadou, Prime Minister of Palestine Mohammad Ibrahim Shtayyeh, and the Speakers of the House of Representatives of several Islamic countries.

In his speech, Crown Prince Mohammed Bin Salman said, “The Kingdom of Saudi Arabia, since its founding, is honored to serve the Two Holy Mosques and take care of them, and has made this at the forefront of its interests.”

“The Kingdom has taken all efforts and harnessed all capabilities to provide comfort and reassurance to pilgrims.”

He added: “We ask Allah to perpetuate safety and security for us and the Islamic Ummah.”

Crown Prince Mohammed wished pilgrims success to complete their rituals in these blessed days and to return them to their homes safely.

Current status of Iran-China Trade

Trade became increasingly difficult to track as China underreported its purchases of Iranian oil to avoid US sanctions. Its companies reportedly continued to buy Iranian oil through intermediaries, many in Malaysia and the United Arab Emirates.

The biggest obstacle to Iran’s trade with China in the 21st century has been the United States—for its economic might and wealth, massive consumer base, and diplomatic clout.

Lately, Iran’s oil exports to China notably trended upward.  But Tehran was forced to sell its petroleum exports at discounted prices to lure businesses that feared US financial penalties on third parties.  

In March 2021, during the final months of Rouhani’s presidency, Iran signed a 25-year strategic agreement focused largely on strengthening economic and security cooperation – with China. “China is a friend for hard times,” said Foreign Minister Mohammad Javad Zarif.  

Chinese Foreign Minister Wang Yi said that China firmly supports Iran in safeguarding its state sovereignty and national dignity. During the announcement in Tehran, he called on the United States to abandon the Iran sanctions and remove its long arm of jurisdictional measures that have been aimed at China, among others.

Iran’s turn to the East accelerated after the election of hardliner President Ebrahim Raisi. Raisi and his team think that the 21st century belongs to Asia and rising powers there, Nasser Hadian, a University of Tehran political scientist, told The Iran Primer. 

Amid the shifting world order, they see China as the leader of an emerging Eastern bloc that includes Russia, Pakistan, and Iran. 

In 2021, Iranian oil exports to China reportedly averaged 818,000 barrels per day, although Beijing did not issue official numbers. For the first five months of 2023, it averaged about 1 million barrels per day.  

By 2023, Tehran sought a strategic relationship with Beijing because of its status as a rising global power and a potential partner in offsetting the impact of Western sanctions. But China primarily viewed Iran as an energy source. Beijing also viewed Tehran as a way to balance its ties—and diversify energy sources—in the volatile Middle East. 

Deepening ties with the Islamic Republic was also a means of ensuring stability in the Middle East, which China relied on for more than half its oil. Beijing worried that extraordinary economic pain in Iran may translate into more aggressive behavior on the international stage, which was a part of the reason for trade with Tehran, Murphy told The Iran Primer. 

Economically, the United States became China’s largest trade partner in the 2000s. By 2022, trade between the world’s two largest economies totaled US$759 billion—or 12% of China’s global trade. In contrast, China’s trade with Iran was slightly less than US$16 billion—or 0.25% of China’s global trade.  

Diplomatically, more than 1,000 US sanctions on Iran—for its nuclear program, missile proliferation, support for terrorism, and human rights abuses—also deterred China from deeper economic integration. Chinese companies face third-party sanctions if they are caught buying goods from Iran.  

Due to both factors, China has increasingly turned to trade with other Middle East countries. Its trade in 2022 with Saudi Arabia, Iran’s biggest rival in the Muslim world, was US$67 billion—or four times larger than the almost US$16 billion trade with Iran.

China’s trade with Israel, Iran’s nemesis in the Middle East, was US$25 billion—or 60% higher than trade with Iran.

“The Iran-China relationship was still quite transactional,” Murphy said. “It is a decreasingly important economic relationship in comparison to other powers in the region. China wants Iran to feel included and not engage in destabilizing behavior.”  

 

UECC, GoodFuels and NYK complete biofuel bunkering

According to Seatrade Maritime News, UECC has successfully completed the first biofuel bunkering of one of its chartered vessels in partnership with NYK and GoodFuels.

Emerald Leader received 470 tons of the B30 blend of biofuel and VLSFO at the port of Vlissingen, Netherlands, on 27 May, 2023. The fuel was delivered by Dutch biofuel company GoodFuels.

UECC joint-owner NYK offered technical support for the operation and will continue to monitor performance of the fuel with UECC. The vessel connects the Easter Mediterranean and Northern Europe on UECCs North South trade.

"This momentous delivery of next-generation biofuel represents another significant step forward in our sustainability journey," said Daniel Gent, Energy and Sustainability Manager for UECC.

GoodFuels claims its biofuels can reduce CO₂ emissions by up to 90% as compared to fossil fuels, and that it sources sustainable feedstocks that do not compete with food production, do no cause deforestation and are 100% waste or residue.

"We are proud to partner with GoodFuels and NYK to bring this innovative and environmentally friendly solution to our customers.”

Bernard van Haeringen, Commercial Manager at GoodFuels said, "We are thrilled to partner with UECC and NYK to deliver our advanced sustainable biofuel for the first time to m/v Emerald Leader. This collaboration showcases the commitment of all parties involved to combating climate change and accelerating the energy transition in the shipping industry. We are confident that biofuels will play a crucial role in decarburizing the maritime sector."

 

Wednesday, 28 June 2023

Quick end to Wagner insurrection upsets West

A short-lived armed mutiny in Russia was a well thought out and planned operation aiming to take over power in the country, says Russian deputy head of the Security Council Dmitry Medvedev.

When a country backed by the US-led NATO, with upwards of US$100 billion in sophisticated weapon shipments cannot counter Russian forces, it is quite impossible to imagine a single unit succeeding in a coup attempt. 

Life has returned to normal in Russia to the disappointment of NATO and its allies. 

Western media had always referred to Wagner PMC, whose members have been fighting in Ukraine as part of Russia's special military operation as mercenaries.

During the quick mutiny attempt, they were no longer referred to as mercenaries anymore in the Western news narrative, as Yevgeny Prigozhin and some of his forces had switched from battling NATO-backed Ukrainian forces to fighting against the Russian Federation. 

The US news outlets have cited sources as saying US intelligence agencies had known in advance that Prigozhin was planning a major move against the Russian government. 

The US is said to have deliberately avoided informing Russian authorities about the plan in an attempt to see how far Wagner PMC can go to inflict internal strife in Russia. 

Throughout the day of unrest in Russia, not a single drop of blood was shed. 

Many observers are of the belief that Prigozhin had been in touch with foreign intelligence agencies that have been trying to carry out the same mission as Prigozhin, but through other measures, in what Russian Foreign Minister Sergey Lavrov has called all-out hybrid warfare against his country. 

Western leaders have also been left frustrated as during the attempted coup, Russian military leaders, politicians, senior officials and the public came out in support of Putin and rallied around him in a strong sign of support for the Russian leader. 

Senior Russian officials had warned the West against using the mutiny attempt to advance their Russophobic goals, saying this would prove futile.

Prigozhin, head of the Russian private military company Wagner group, and his aides began the insurrection early on Saturday and ended by night. It was ended in a deal brokered by Belarus. 

The Wagner leader's adventure came to a swift halt following an agreement with the Kremlin, and Prigozhin called off his mutiny plans in return for security guarantees. 

As part of the agreement, it has been reported that Prigozhin has left Russia for Belarus while his Wagner fighters will be absorbed into the Russian military.
The Russian Federal Security Service has also dropped a criminal case over charges of a call for an armed rebellion.

Prigozhin ended the mutiny with the knowledge that his Wagner unit was heavily outmatched by the Russian military. His mission against Russia was similar to that of the US-led NATO military alliance, which has so far sent about US$100 billion worth of weapons to Ukraine to fight Russia. 

The armed contractors, who take their military orders from the commander of chief of the Russian armed forces, managed to seize several army headquarters in the southern Russian border city of Rostov-on-Don, while others forces tried to make their way to Moscow.

Sergey Surovikin, the deputy commander of the Russian joint forces in Moscow's special military operation, called on Wagner PMC to comply with President Putin’s order and to resolve all issues peacefully.

Wagner PMC has been leading the fight for the Ukrainian city of Bakhmut, in what has been the longest and deadliest battle between Russian and Ukrainian forces since the conflict erupted in February 2021.

Some analysts believe it showed the combat expertise that the Wagner armed forces lacked by stretching out the battle for too long and allowing Ukraine the time to carefully plan for its counter-offensive. 

Prigozhin began the attempted mutiny by claiming that his forces had been hit with an airstrike, accusing the Russian military leadership of killing members of his unit in Ukraine with the air attack. He failed to present any evidence to back up his allegation. Medvedev described the accusation as nonsense. 

The former Russian President pointed out that given the high degree of the attempted mutiny's preparedness, the professional coordination of action and the quality management of troop movements, it is possible to speak of a thought-out military plan and the participation in the mutiny of the individuals who earlier served in the elite units of the Russian Armed Forces or, quite possibly, of foreign specialists as well. 

Russian presidential spokesman Dmitry Peskov told journalists that an agreement was reached that PMC Wagner troops would return to their camps and places of deployment. Some of them, if they wish to do so, can later ink contracts with the Defense Ministry," Peskov said. "It also applies to fighters, who decided against taking part in this armed mutiny”.

"They have even requested the assistance of the traffic police as well as other help to return to their permanent places of deployment," Peskov added in remarks published by TASS.

Over the past six months, Prigozhin had been building a feud with Russia's Defense Minister Sergey Shoigu and Russia's chief of the general staff Valery Gerasimov. 

Putin had called on the businessman behind Wagner to settle any of his differences in a peaceful manner. Prigozhin chose the opposite, and that has raised eyebrows about what his true intentions had been and who was acting behind him.

A convoy of his forces crossed the border from the battlefield in Ukraine to a Russian border city, at one point taking full control of it, before the Russian military swiftly regained authority. 

His units have no aircrafts so there was no chance of success by his armed mutiny. The Russian military could have wiped out all his forces when they crossed the border, with Moscow enjoying powerful air superiority. 

Since the conflict in Ukraine, officials in Kyiv have repeatedly complained about a lack of advanced warplanes to match Russia's Air Force. 

 

Israel needs to do more against settlers committing violence, says Blinken

Israel needs to do more to counter violence by settlers against Palestinians, US Secretary of State Antony Blinken told Foreign Minister Eli Cohen in a phone call on Tuesday.

Blinken said the US appreciates messages from Cohen, Prime Minister Benjamin Netanyahu, and Defense Minister Yoav Gallant against the violent incidents that took place over the weekend, but that more action must be taken.

Blinken's call came after repeated arson and other attacks by Jewish extremists on Palestinian villages last weekend, in apparent revenge for recent deadly Palestinian terror attacks on Israelis. The heads of the IDF, police and Shin Bet (Israel Security Agency) called the incidents nationalist terror.

Cohen said that the government of Israel fully condemns events in which citizens take the law into their own hands.

The escalation of violence in the West Bank comes from “proxies of the Iranian Ayatollahs regime,” Cohen stated. “Iran is directing terrorism across the Middle East, from Lebanon to Syria, via Iraq and Yemen, to Hamas and Islamic Jihad.

Cohen also called on the international community to act aggressively and unequivocally to prevent Iran from obtaining a nuclear weapon, which would be a danger to the world and mark the start of a regional nuclear arms race.

Cohen and Blinken also discussed the possibility of Israel establishing diplomatic relations with more Arab and Muslim countries, and a new date for the foreign ministers’ meeting of the Negev Forum.

The Negev Forum gathers the US, Israel and the Arab states with which Israel has peace, except for Jordan, to discuss multilateral matters, including security. A foreign ministers’ meeting set to take place in Morocco this year has been postponed multiple times, in part because of the Israeli government’s policies in Judea and Samaria.

“Expanding the circle of normalization and peace in the Middle East, led by the US, will advance the entire region and bring security, growth and stability,” Cohen said. “We will continue to act to build and strengthen our relations with additional countries in the Middle East and beyond.”

Cohen also expressed his appreciation for departing US Ambassador Tom Nides, who ends his tenure in Israel at the end of June.

The State Department did not release a readout of the call by press time.



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World leading currencies out of sync

Leading global currencies are rarely on different paths. Yet Japan's yen and China's yuan are slumping against the US dollar, while in Europe the euro is outperforming and sterling is on a tear, says a Reuters report.

"We've got a one in a 100 years pandemic and once in 75 years war and a once in 25 years energy crisis all thrown into the mix together," said SocGen's Juckes. "You’ve got to be 120 years old to have any understanding of this."

With economic and monetary policy outlooks varying, currency moves are increasingly out of sync with each other. This is making the US$7.5 trillion a day global FX market - operating in the aftermath of COVID-19 and the face of war in Ukraine and an energy crisis - more volatile and more unpredictable.

"It used to be the case that if you got the direction of euro/dollar right, you had a good chance of getting everything else right, but now it's a bit harder," said Nomura's G10 FX strategist Jordan Rochester.

The differences between currencies are widening.

Last year alone, the euro fell to a 20-year low versus the US dollar, sterling hit its lowest on record and the yen its weakest in 32 years, as the greenback soared broadly on sharp increases in US interest rates to curb inflation that other major central banks lagged.

The Bank of Japan has dashed expectations that a change to its ultra-dovish monetary policy would come early in 2023, sending the Japanese yen down 9% so far this year, on top of a 12% decline in 2022. That has raised the chance of intervention to stem weakness.

More pain is also anticipated for the yuan, trading near seven-month lows, as well as smaller Asian currencies.

Meanwhile the euro is up 2.5% this month against the US dollar and expected to rise further given a hawkish European Central Bank - and sterling has meanwhile risen over 5% so far in 2023, leaving it set for its biggest annual gain since 2017.

Rochester said Nomura forecast the euro moving to US$1.12 over coming months, implying a further 2% gain from US$1.095 now, and expected the yuan to weaken to 7.30 per dollar versus 7.2 now.

The yuan has slid almost 5% so far this year, hurt by a weak economy and a wide interest-rate gap with the United States.

This week Chinese authorities set a stronger than expected trading band for the currency, a sign that Beijing is increasingly uncomfortable with its quickening slide.

Lee Hardman, senior FX strategist at MUFG, said the dollar's rebound against Asian currencies reflected a reversal of the trades put in place late last year with the post lockdown reopening of China's economy, as pessimism about the growth outlook there grew.

Elsewhere the dollar is not performing as well. It's continuing to weaken against some European currencies and also Latin American currencies.

Hardman said that, as market volatility slows compared to recent years, investors were focusing more on carry trades, exploiting the variances in interest rates and monetary cycles between different central banks.

Kit Juckes, head of FX strategy at Societe Generale, said the focus on monetary policy differences was also a result of uncertainties elsewhere.

"What strikes me at the moment about FX markets is they are more short-term interest rate sensitive than I can remember them being.

"Because we are so uncertain about so many things in this most unusual of economic cycles, we're just going to focus on what the next central bank policy move is."

This is not good news for the yen, near seven-month lows against the US dollar and 15-year lows versus the euro, as the Bank of Japan holds fast to its ultra-loose monetary policy.

Of course given what the world has endured in the past few years, it is maybe not surprising that currency markets have gone a little strange.

 

Tuesday, 27 June 2023

West Bank rockets from lone wolf, not Hamas

The rockets fired by a Palestinian in the Jenin area of the West Bank on Monday and which failed to fly beyond the launch area were launched by a lone wolf and not by Hamas, The Jerusalem Post has reported.

This confirmed finding comes despite Hamas' claims that it was linked to the incident and despite the fact that the IDF has not yet revealed who launched the rocket.

Further, the Post understands that the IDF does not regard the launching of the two rockets (both which lacked any explosive materials and flew less than 100 meters from the launch site) as a major new threat of its own. 

Rather, the IDF believes its past and ongoing actions to eliminate Palestinian Islamic Jihad officials who were trying to build more sustained and systematic rocket firing capabilities on Israel have been and will continue to be successful.

West Bank rocket launches were a TikTok incident, not a serious threat

In addition, the IDF views the incident as being primarily a TikTok incident, or an exercise in public relations not all that different from the dummy rocket that the IDF recently found.

The IDF is even disappointed in the media depiction of the rocket launches as a serious threat, as this depiction may have achieved other terror groups' broad goals of creating fear and instability among the general population.

In contrast, the IDF is extremely concerned by the recent succession of Hamas and other terror organizations shooting attacks in places like Eli, Hermesh and against the Dee family.

The IDF absolutely views these incidents as a dangerous escalation which could get out of hand.

After all of these IDF perspectives, the fact is that in 2005 terror groups succeeded in firing multiple rockets from the West Bank and Shin Bet (Israel Security Agency) director Ronen Bar warned of the threat as a serious one in recent months.

 

Muslims urged to hold fast to unity

Eminent Saudi Scholar and Member of the Council of Senior Scholars Sheikh Youssef Bin Muhammad Bin Saeed urged the faithful not to be carried away by malicious campaigns and rumors.

Delivering the Arafat sermon at the Namirah Mosque here on Tuesday, Sheikh Bin Saeed said that the Islamic Shariah forbade Muslims from following rumors and disinformation that aim to divide their ranks.

“The believers are warned against malicious campaigns in all their forms and manifestations, aimed at dividing their ranks and inciting one group against another,” he said in the sermon.

Sheikh Bin Saeed called on the pilgrims to hold fast to unity and eschew discord.

He emphasized that the difference in languages, colors and ethnicities does not justify falling into discords and divisions. Rather, it is a sign from the signs of God in this universe.

Sheikh Bin Saeed noted that the Islamic texts reaffirm the command for unity, love, harmony, and prohibit disputes, divisions, and differences.

“The Prophet (peace be upon him) has commanded his followers to be united and cooperative, and prohibited them from discords and conflicts. Thus, through him, Allah has united his followers' hearts,” he said.

Sheikh Bin Saeed warned, “When unity is broken, personal whims and animosities prevail, and intentions become conflicting, resulting in the shedding of forbidden blood.”

Underscoring the significance of holding fast to unity and closing ranks, the preacher said that the Hand of Allah is with the collective body of Muslims (Jamaa’h) while Satan is with those who separate themselves from the Jamaa’h.

The significance of unity becomes apparent through the negative consequences of division and differences, affecting individuals, families, and societies, he emphasized.

“From this standpoint, Islam has implemented appropriate preventative measures and robust defensive strategies to halt the influence of destructive intentions and acts of sabotage that aim to tear apart communities.

“It does that by erecting a resilient barrier that inhibits the disintegration of its structure and the destabilization of its pillars, at the individual, familial, societal, national, and even global levels,” he said while reminding that God has commanded the Muslims, in times of dispute, to return back to the Holy Qur'an and the Sunnah (Tradition of the Prophet).

God has commanded them to maintain good conduct, interact with one another in an exemplary manner, and demonstrate compassion and mercy towards one another.

“In order to achieve the objective of unifying our word, Islam has emphasized the importance of strengthening social, familial, and spiritual bonds.

“It commanded us to uphold ties of kinship, and clarified the rights of spouses, parents, children, and daughters. Likewise, it commanded us to show kindness and goodness to relatives, neighbors, and the needy,” he said.

He also pointed out that Islam came to remind those who are in conflict with their brothers to reconcile and encourage them towards rectification in times of disputes.

Underscoring the need to stand united, Sheikh Bin Saeed made the pilgrims aware of the fact that God has prescribed several collective acts of obedience, such as the pilgrims’ gathering today on the plains of Arafat and their congregational prayers on Fridays.

“One of the means to foster unity is the social solidarity mandated by Islam, which includes the payment of Zakat and other charitable contributions, establishment of trusts, and giving of voluntary alms,” he said.

Sheikh Bin Saeed’s sermon focused on the universal message of Islam, underlined by the Prophet in his farewell Hajj.

He quoted the following Tradition of the Prophet in this regard, “O people! Indeed, your Lord is One. Your father (Adam) is one. No Arab has superiority over a non-Arab, nor does a non-Arab have superiority over an Arab. Similarly, no white person is superior to a black person, nor is a black person superior to a white person, except by piety. I have certainly conveyed the message. Indeed, God has made inviolable between yourselves your blood, your wealth, your honor just as He has made this day of yours inviolable, in this inviolable land of yours and in this inviolable month of yours.”

OPEC Plus oil quota reform increases dominance of gulf producers

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman earlier this month outlined one of the biggest reforms at OPEC in recent years and presented it as a reward for countries that invest in their oil industry.

The change clears the way for giving larger production quotas to OPEC Gulf members such as Saudi Arabia, the United Arab Emirates and Kuwait at the expense of African nations such as Nigeria and Angola.

Production quotas and baselines, from which production cuts are calculated, have been a sensitive subject within OPEC for decades as most producers want a higher quota so they can earn more from oil exports.

The shake-up is likely to become more extreme in the next few years as Middle Eastern state oil majors ramp up investments while production falls in African nations that have struggled to attract foreign investment.

Gulf producers, the holders of the little spare capacity in the global oil market, have long dominated OPEC.

Their power and influence has already increased in the last 15 years with their rising capacity, while African production has fallen as foreign investments have shrunk.

Unlike Gulf producers, African producers rely heavily on investment from international oil companies. Those companies have shunned Africa in recent years in favour of investment in the US shale patch and in prolific giant oilfields elsewhere such as offshore Brazil and Guyana.

In May, Saudi Arabia, the UAE and Kuwait's share of total OPEC production was over 10% higher than it was 15 years ago at 55%, according to OPEC production figures. Nigeria and Angola's total share over the same period has shrunk by over 3% to below 9%.

For Nigeria, capacity continues to be restricted by operational and security issues, combined with low investment levels, leading to decline, analysts at consultancy Wood Mackenzie said.

New field developments and recent discoveries in Angola will not be enough to stem long term capacity declines, they added.

In contrast, Saudi Arabia and the United Arab Emirates have plans in place to significantly boost their production capacity to 13 million bpd and 5 million bpd, respectively, by 2027 from current levels of about 12 and 4 million.

Fellow Gulf producer Kuwait on June 18 said it would boost its production capacity by 200,000 bpd by 2025 to reach 3 million bpd.

Capacity additions from the three Gulf countries over the 2020-25 period total a combined 1.2 million bpd, double the capacity that Nigeria and Angola are projected to lose over the same period, Reuters calculations find.

The two West African countries have lost nearly a quarter of their production capacity since 2019 as a result of underinvestment and security issues.

At its June 04 meeting, the Organization of the Petroleum Exporting Countries and allies, led by Russia, (OPEC+) overhauled production quotas for the majority of its members.

"In the final analysis what this agreement will achieve for all of us is that those who invest, not this year, but the years to come, 2024 and 2025 and moving forward, there will be a recognition for their investment," Prince Abdulaziz said.

While the majority of members of OPEC Plus got a lower production target, the UAE's was higher.

Richard Bronze, Head of Geopolitics at Energy Aspects, said one of the reasons behind the change was to address OPEC's previous credibility issues when policy changes were not necessarily reflected on oil markets.

"It meant that the actual supply increase or decrease resulting for a quota change would be far smaller than the announced figure, fuelling doubts in the market about the ability of the group to manage market fundamentals," he said.

 

 


Monday, 26 June 2023

Three scenarios surrounding Wagner mutiny

While the western analysts are offering all sorts of rationales, our readers are suggested to also consider three likely scenarios about the rebellion of Wagner's forces against the Russian army.

1- A possible deception plan by the Russian intelligence apparatus with the aim of diverting and draining the power and energy of enemy intelligence organizations as well as rival countries. In this case, the difference in the media narrative will deepen, some local operational tension will intensify, but from a functional point of view, the tension will not elevate to a strategic level.

2- Loyalty is what separates the Wagner unit and the Minister of Defense and the Chief of General Staff of the Russian Army. The former may be fake, the latter close to realty. In this case, based on the Russian approach and security-defense strategy, Prigozhin and his loyalists will be dealt with gradually but decisively.

3- A NATO-backed intelligence operation with the aim of disintegrating and weakening Russian forces. Prigozhin has coordinated with a foreign party. In this context, Wagner’s declared dispute is about greater loyalty to Russia, the effectiveness and efficiency of existing Russian defense and security approaches.

Any relationship with a Russian adversary will not flourish because it will highlight betrayal to Russia in alliance with an enemy.

This will lead to the collapse among the ranks of Wagner's forces. Part of NATO's goal will be achieved, but at the end of the day, it will consolidate Russia's defense and security superiority.

The important point is that Wagner, which is strongly dependent on the Russian defense sector, at least in the field of ammunition and logistics in the battlefield, will not be able to resist the Russia's powerful military.

 

Xi Jinping to fully support Vladimir Putin

China has voiced support for Russia after a short-lived insurrection posed the gravest challenge to the 23-year rule of Vladimir Putin, a close partner of Chinese leader Xi Jinping in his push for a new world order and strategic alignment against the United States.

A day after Wagner mercenary fighters turned back from their march toward Moscow, ending a brief and chaotic uprising by warlord Yevgeny Prigozhin, Beijing released its first comment on what Putin had called an armed rebellion.

“This is Russia’s internal affair,” a Chinese Foreign Ministry spokesperson said in a terse statement posted online late on Sunday night.

“As Russia’s friendly neighbor and comprehensive strategic partner of coordination for the new era, China supports Russia in maintaining national stability and achieving development and prosperity,” it said.

Beijing’s carefully crafted public comment came well after the brief mutiny had dissipated, with Prigozhin agreeing on Saturday to pull back his fighters in a deal with the Kremlin that would reportedly see him enter into exile in Belarus.

It also came after Russian Deputy Foreign Minister Andrey Rudenko flew to Beijing to meet with Chinese officials on Sunday, where the two sides reaffirmed their close partnership and political trust.

China’s Foreign Minister Qin Gang and Rudenko exchanged views on “Sino-Russian relations and international and regional issues of common concern,” the Chinese Foreign Ministry said in a one-line statement posted on its website, with a photo showing the pair walking side by side while smiling.

“The Chinese side expressed support for the efforts of the leadership of the Russian Federation to stabilize the situation in the country in connection with the events of June 24, and reaffirmed its interest in strengthening the unity and further prosperity of Russia,” the Russian ministry said in a statement.

According to the Chinese readout, Ma told Rudenko that under the leadership of Xi and Putin, the mutual political trust and cooperation between China and Russia had grown continuously.

“Under the complex and grim international situation, it is necessary to follow the important consensus reached by the two leaders, communicate in a timely manner, ensure the stable and long-term relationship between the two countries, and safeguard the common interests of both sides,” Ma was quoted as saying.

Xi, China’s most powerful leader in decades, has developed a close personal rapport with Putin over their shared ambition to challenge the US-led global order. The two autocratic leaders declared a friendship with “no limits” in February 2022, shortly before Putin launched his war on Ukraine.

Despite its claims of neutrality, China has refused to condemn the invasion and instead provided much-needed diplomatic and economic support for Russia, a position that has alarmed Western nations, especially in Europe.

In March, Xi and Putin made a sweeping affirmation of their alignment across a host of issues – and shared mistrust of the United States – during the Chinese leader’s first visit to Russia since the invasion.

“Right now there are changes – the likes of which we haven’t seen for 100 years – and we are the ones driving these changes together,” Xi told Putin as they bid farewell at the door of the Kremlin.

Three months on, the co-driving force for Xi’s vision has seen his grip on power severely challenged by an extraordinary show of defiance, shattering the veneer of total control the Russian leader has struggled to maintain.

“Although Russia’s nightmare came to an end temporarily yesterday, this incident will definitely hurt Russia and Putin’s image,” Jin Canrong, an international relations professor at Renmin University in Beijing, wrote Sunday on Weibo, where the Wagner insurrection was a top trending topic over the weekend.

Commenting on Twitter Saturday before Prigozhin aborted his insurrection, Hu Xijin, the former editor of the nationalist Global Times, said the “armed rebellion has made the Russian political situation cross the tipping point.”

“Regardless of his outcome, Russia cannot return to the country it was before the rebellion anymore,” he said in the Tweet, which was later deleted. 

 

Sunday, 25 June 2023

Modi visit fuels concerns Biden putting human rights on back burner

Indian Prime Minister Narendra Modi’ state visit is fueling concerns from activist groups in the United States that the Biden administration has put human rights on the back burner.

During the visit, President Biden held back from public criticism of Modi’s handling of human rights and democratic values — issues that led a handful of progressive lawmakers to boycott his speech to a joint address to Congress.

The president, instead, rolled out the red carpet for Modi with a celebratory welcome and hug, a 21-gun salute and a state dinner with notable White House guests, a charm offensive underscoring India’s economic and foreign policy importance to the United States.

Biden had previously come under criticism last July for a fist bump with Saudi Crown Prince Mohammed bin Salman during a visit to Jeddah that advocates argue effectively ignored the Saudi government’s human rights abuses.

White House officials contend that tough conversations with allies behind closed doors — including Modi — are more productive than grandstanding and scolding in public. 

“The prime minister and I had a good discussion about democratic values. … We’re straightforward with each other, and — and we respect each other,” Biden said during a press conference alongside Modi at the White House on Thursday. 

But critics say that puts little pressure on governments and leaders like Modi to actually deliver on reforms.

The Indian leader in particular is criticized for failing to counter anti-Muslim hate and is cracking down on civil liberties and press freedoms — issues that strike at the core of respect for democratic governments. 

“I would argue that the administration needs to be more explicit about backsliding allies, practically recommitting themselves to fundamental freedoms and the respect for human rights as the basis for an evolving global order,” said Tess McEnery, who previously served as Biden’s director for democracy and human rights at the National Security Council.

During his campaign, Biden put human rights at the center of his foreign policy messaging and identified strengthening democracy — at home and abroad — as key to pushing back against autocratic governments such as Russia and China.

Yet in pushing back on Russia and China, the US also needs allies. And that has complicated efforts with human rights.

The White House sees India as an indispensable partner in its strategy with China; its population of 1.4 billion people is the only market that can compete with Beijing’s.

India represents a needed partner in the administration’s efforts to diversify supply chains away from China for critical materials such as semiconductors and rare earth minerals that are the building blocks of those technologies.  

Modi recognized the power that India holds during his address to Congress on Thursday.

“When defense and aerospace in India grow, industries in the states of Washington, Arizona, Georgia, Alabama, South Carolina, and Pennsylvania thrive. … When Indians fly more, a single order for aircrafts creates more than a million jobs in 44 states in America,” he said. “When an American phone maker invests in India, it creates an entire ecosystem of jobs and opportunities in both countries.”

The most robust applause from Congress came when Modi said the US was one of India’s most important defense partners — an important statement given American efforts to turn New Delhi away from its reliance on Russia’s defense industry and have it serve a bulwark against China’s growing military.

The US is home to a more than an Indian-American community of more than 4.5 million people — a key voting bloc that the president hopes to hold onto ahead of what is likely to be a fraught 2024 presidential election. 

“I think that President Biden is eager not to cede any of the, kind of, Indian-American community vote to the Republican Party,” said Daniel Markey, senior adviser on South Asia at the United States Institute of Peace (USIP).

Republicans and Democrats in Congress are largely united in supporting a robust US and Indian partnership. A bipartisan and bicameral grouping introduced legislation Thursday to fast-track weapons sales to India in recognition of Modi’s visit.

And while more than 70 House and Senate lawmakers raised concerns over Modi’s human rights record in a letter to Biden ahead of the visit, only a little more than a handful of progressive Democratic lawmakers boycotted the prime minister’s speech. 

“We are told that we must now turn a blind eye to the repression because of foreign policy concerns, even though human rights are supposed to be at the center of our foreign policy,”Ilhan Omar said during a policy briefing she hosted with human rights advocates after Modi’s address, which she boycotted. 

Among the most pressing criticisms against Modi’s rule is the criminal conviction against Indian opposition leader Rahul Gandhi, who was sentenced to two years in prison for negatively using Modi’s surname during a political rally in 2019.

 

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Advocates have also warned about freedom of speech and press freedoms in India in the wake of a tax raid on the offices of the BBC in India in March, and cases of journalists being jailed.

Freedom House, a nongovernmental organization that tracks democratic freedoms globally, rated India as partly free in its Freedom in the World report for 2023. The group claimed Modi’s government and his Hindu nationalist Bharatiya Janata Party has presided over discriminatory policies and a rise in persecution affecting the Muslim population.

“The constitution guarantees civil liberties including freedom of expression and freedom of religion, but harassment of journalists, nongovernmental organizations, and other government critics has increased significantly under Modi,” the group wrote. 

Jim McGovern, co-chairman of the Tom Lantos Human Rights Commission, argued that a balance can be met between calling out human rights concerns while also supporting the US-Indian relationship. 

“It’s because we value our friendship with the Indian people that we also have to speak the truth about human rights abuses in India that are ongoing, well-documented by credible observers and deeply troubling,” he said at the policy briefing hosted by Omar.  

“We don’t raise these issues to discredit India,” he continued. “We raise them because we know from our own experience that if human rights problems are not confronted and resolved, they will fester and deepen and undermine a country’s promise.” 

Markey, of the USIP, said the Biden administration prepared for blowback over the decision to keep criticisms against Modi in private, but added that its excessive references to sharing appreciation for democratic governance did itself no favors.

“I think they went even farther than maybe they needed to do, for Indian consumption,” he said. 

“They leaned into the shared-democracy issue, rather than pulling back from it,” Markey added. “They gave a lot of ammunition to those who would suggest that this is just pure hypocrisy at this point, rather than kind of edging around it.”

McEnery, who is now the executive director of the Project on Middle East Democracy, said the Biden administration needs to elevate defending democracy and human rights to an “interest” more than a value.

That would mean doing trade and economic deals centered on good governance principles, she said, or reforming arms and security relationships based on human rights. 

“I saw this firsthand a lot, where many good, hard-working people inside every arm of the US government, including the National Security Council, tried to make the case for democracy and human rights as a vital national security interest,” she said. “And I would see that shot down time and again by others throughout the government.” 

 

 

 

 

Israel reboots fiercely opposed judicial campaign

Israeli lawmakers on Sunday began debating a bill that would limit the Supreme Court's powers, rebooting a fiercely opposed judicial overhaul instigated by Prime Minister Benjamin Netanyahu's religious-nationalist coalition.

Anti-government demonstrations had prompted Netanyahu to suspend his judicial drive in March to allow compromise talks with opposition parties. He declared those talks fruitless last week and ordered some of the legislation to be revived.

The proposed changes, which include curbing on the court's ability to rule against the government, had sparked frequent street protests before the March suspension. On Saturday night anti-overhaul activists blocked a major Tel Aviv highway.

Coalition lawmakers have indicated that the new bill would be a far softer version of previous proposals that had sought to almost totally roll back the Supreme Court's power to rule against the executive.

The opposition, however, says the new bill would still open the door to corruption.

"You are renewing a legislation blitz meant to destroy the justice system's independence and badly hurt Israeli democracy's delicate checks and balances," Labour lawmaker Gilad Kariv said as the debate began.

Opposition leader Yair Lapid on Twitter urged Netanyahu to stop the legislation and revive negotiations "until we reach agreements that will safeguard democracy and prevent a national disaster".

The proposed judicial overhaul has also stirred Western concern over Israel's democratic health and spooked investors. Critics see it as an attempt to curb court independence by Netanyahu, who is on trial on graft charges that he denies.

The coalition says its goal is to balance the powers of the government, legislature and judiciary by reining in a Supreme Court they see as too interventionist.

 

Saturday, 24 June 2023

Iranian oil output increases by 350,000 bpd

According to a report by the International Energy Agency (IEA) Iran’s crude oil output has increased by about 350,000 barrels per day (bpd) since the beginning of 2023, despite the US sanctions targeting the country’s oil sector.

“Despite tough financial restrictions, Iran managed to increase crude oil output by about 130,000 bpd in 2022 to an average 2.55 million bpd, and by 350,000 bpd since the beginning of this year,” the IEA said in its latest report dubbed Oil 2023.

The report argued that Iran remains a wildcard for world oil markets, and if it is released from sanctions, production could ramp up gradually by roughly 900,000 bpd to reach the capacity of 3.8 million bpd.

Higher exports and domestic throughput have pushed Iranian crude production up to around 2.9 million bpd in May 2023, it added.

Earlier, Bloomberg reported that Iran has been shipping the highest amount of crude in almost five years despite US sanctions.

Bloomberg cited energy analysts as saying that Iran’s oil exports have surged to the highest level since the US unilaterally re-imposed sanctions on the country in 2018.

The crude shipments have doubled since last autumn to reach 1.6 million barrels a day in May 2023, according to the report.

A Reuters report said on July 16, 2022 that Iranian crude shipments continued to rise in 2023 with higher shipments to China, Syria, and Venezuela. The report quoted consultants, shipping data, and a source familiar with the matter.

A large chunk of Iran’s crude oil goes to China which is the world’s major importer of energy. Several European customers including Germany, Spain, and Bulgaria also imported oil from Iran.

The United States, under former president Donald Trump, abandoned the nuclear deal with the Islamic Republic, formally known as the Joint Comprehensive Plan of Action (JCPOA), in May 2018 and reinstated unilateral sanctions that the agreement had lifted.

Tehran's oil exports have been limited since May 2018. However, the exports have risen steadily during the term of current US President, Joe Biden.

The crude exports exceeded 1.5 million bpd in May 2023, the highest monthly rate since 2018, Reuters reported quoting Kpler, a major international tanker-tracking service.

The exports were roughly 2.5 million bpd in 2018, before the US withdrawal from the 2015 nuclear agreement.

Iran said in May it has boosted its crude output to above three million bpd. That's about three percent of global supply and would be the highest since 2018, according to figures from the Organization of the Petroleum Exporting Countries (OPEC).

SVB International, a consultant, estimates crude production hit 3.04 million bpd in May, up from 2.66 million bpd in January. Exports of crude and condensate were 1.93 million bpd in May, according to the report.

"Sanctions are in place but perhaps they are not fully implemented or monitored," said Sara Vakhshouri of SVB.

The recently published figures are the latest sign that US sanctions on Iran have failed to cut the country’s oil revenues to zero, an objective frequently stated by former and current US administration officials.

They also vindicate efforts by Iran in recent years to rely more on diplomatic and economic resources to circumvent US sanctions rather than to submit to Washington’s pressure to scale back its nuclear, defense, and foreign policy programs in return for an easing of the sanctions.

In May, senior US Republican Senator Lindsey Graham confessed to the ineffectiveness of the sanctions that have been unilaterally imposed on Iran.

Graham slammed the Biden administration for failing to stop Iran’s oil exports.

“Iranians are making more money under sanctions not less and China is the biggest reason we're not doing a damn thing about it,” he reportedly said.


Why is US Media Blind to American War Atrocities?

Today I am obliged to share this text excerpted from Norman Solomon’s new book, War Made Invisible: How America Hides the Human Toll of Its Military Machine. On the first day of March 2022, visitors to the New York Times homepage saw a headline across the top of their screens in huge capital letters: ROCKET BARRAGE KILLS CIVILIANS.

It was the kind of breaking news banner headline that could have referred to countless US missile attacks and other military assaults during the previous two decades, telling of civilian deaths in Afghanistan, Pakistan, Iraq, Syria, and elsewhere.

But those wars on terror, killings did not qualify for huge banner headlines. What stirred the Times to quickly publish one about civilian deaths was—as reported on the front page of its print edition, “A deadly Russian rocket assault on Kharkiv, Ukraine’s second-largest city that raised new alarms about how far the Kremlin was willing to go to subjugate its smaller neighbor.”

During the months that followed, the New York Times was among thousands of American outlets devoting the kind of news coverage to Russia’s war in Ukraine that would have been unthinkable while reporting on US warfare.

Early in April, 40 days after the Russian invasion began a jarring headline in all capitals—“HORROR GROWS OVER SLAUGHTER IN UKRAINE”—spanned the top of the front page of the Times print edition.

During April, 14 stories on the newspaper’s front page were primarily about civilian deaths as a result of the Russian invasion, all of which appeared at the top of the page, researchers found Fairness and Accuracy in reporting.

During a comparable period—after the US invaded Iraq—the Times published only one story about civilian deaths at the hands of the US military on the front page.

By any consistent standard, the horrors that the US military had brought to so many civilians since the autumn of 2001 were no less terrible for the victims than what Russia is doing in Ukraine.

But the US media coverage has been vastly more immediate, graphic, extensive, and outraged about Russia’s slaughter than America’s slaughter.

On the rare occasions when a major US news outlet provided in-depth reporting of civilian deaths caused by American forces, the pieces were usually retrospective, appearing long after the fact—postmortems with little political impact and scant follow-up, hardly making a peep in media echo chambers.

No matter how sophisticated its high-tech weaponry, the large-scale Russian warfare in Ukraine is barbaric. That the same could also be said about American warfare in Afghanistan and Iraq was a truth nearly taboo to utter in US mass media.

Both the United States and Russia had brazenly flouted international law, crossing borders and persisting with massive lethal force.

Coherent principles would condemn and illuminate each instance. But, despite press freedoms in the United States, very few big-name journalists and their imitators in the profession have been willing to break ranks with the gist of Washington’s official war narratives, which are, at bottom, not much more nuanced than assuming that America’s exemplary national character has been mobilized to defeat the unmitigated evil of the foe.

Nationalism masquerading as journalism covers war in darkness and light, telling us for whom the bell tolls. And so, when Russia invaded Ukraine and proceeded to terrorize, kill, and maim, the US media were all hands on deck with empathetic, poignant reporting via TV, radio, print, and online outlets.

But when American missiles and gravity bombs hit population centers over the previous two decades, the human tragedies rarely got anything more than short shrift in the US media.

The extreme differences in the quantity and tone of coverage reflected—and reinforced—the agendas of war makers based in Washington.

Norman Solomon is the national director of RootsAction.org and executive director of the Institute for Public Accuracy. His latest book, War Made Invisible: How America Hides the Human Toll of Its Military Machine, is published by The New Press

 

Tehran and Kabul reach major trade agreements

During the visit of the head of the Iranian Trade Promotion Organization (TPO)’s Afghan desk to Afghanistan, important agreements were made for the development of trade relations between the two countries, the TPO portal reported.

Hamidreza Karbalaie Esmaili’s visit to Afghanistan was aimed at improving trade relations between the two neighbors in the fields of technical and engineering services, pharmaceuticals and medical equipment, petrochemical products, food industry, etc.

During the visit, Esmaili met and held talks with the economic, commercial, and medical officials of the country, including the acting minister of public health, first deputy of the chamber of commerce and investment, director general of Afghanistan customs, deputy and senior advisor to the acting minister of trade, consul general of Iran in Herat, border guard commissioner, and director general of Dogharoun customs.

Following the talks, the two sides reached initial agreements for completing several infrastructure projects and decided to begin negotiations on a preferential trade agreement and expanding customs cooperation.

During the talks, the parties prepared a list of 10 commodity items for the implementation of the first phase of the preferential trade agreement. The number of items will be increased in the near future.

Also, agreements were made regarding the formation of a joint industrial zone at the two countries' border, with energy infrastructure being supplied by Iran and the investment for establishing the zone being provided by Afghan businessmen in collaboration with the Iranian private sector.

The Afghan side also announced its readiness to open a transit route from Pakistan to Iran’s Khorasan Razavi Province via the Taftan-Chaman-Islam Qala-Mashhad route, which will reduce the route between the two countries from 1,500 to less than 1,000 kilometers.

Acceptance of elite Afghan students in various medical and non-medical fields in Iranian universities and bilateral cooperation regarding the specialized training of Afghan medical staff by sending Iranian professors to Afghanistan were among other subjects that the parties agreed upon.

 

Pakistan Stock Exchange benchmark index posts 3.0%WoW decline

The week ended on June 23, 2023 witnessed gloomy sentiments overwhelming Pakistan Stock Exchange. The benchmark KSE-100 index has experienced bearish sentiments since the announcement of the Federal Budget on June 09, 2023. The Index opened the week at 41,301 points and closed at 40,065, losing 1,236 points or 3.0%WoW.

Daily average traded volume was reported at 131 million shares as compared to 161.7 million shares a week ago, down 19.0%WoW. The market performance has been characterized by the IMF’s disagreement over the federal budget, aggravated by Pakistan’s non-inclusion in the Fund’s board meetings up till June 29, 2023.

Although there are assurances from the Prime minister and other senior officials regarding a positive conclusion to the program, investor sentiments remain bearish.

Foreign exchange reserves held by State Bank of Pakistan (SBP) plunged to US$3.5 billion, excluding the refinanced US$300 million from China and absence of any bilateral flows owing to the stalled IMF program, exacerbating the already precarious situation. Pakistan faces US$10.35 billion debt obligation by the end of December 31, 2023. The exchange parity registered mild gains to close at PKR286.7 to US$.

Other major news for the week were: 1) FBR income tax collection was up 41.0%YoY surpassing the annual target of PkR3,026 billion ahead of FY23 close; 2) SBP mobilized PKR2.43 billion through T-Bills auction, at a flattish yield of 22.0%; 3) current account surplus was recorded at US$225 million for May 2023, as compared to a surplus of US$78 million in April 2023. The deficit for 11MFY23 narrowed by 81% due to curbed imports; 4) FDI declined by 21%YoY during 11MFY23 to US$1.32 billion. Total foreign investment nosedived 82.0%YoY to stand at US$294 million. However, US$149 million inflows were recorded in May 2023, depicting a 6.0%MoM increase in FDI; 5) external government borrowing of US$8.6 billion during 11MFY23 declined by 36.0%YoY.

Leasing Companies, Transport, and Glass & Ceramics have been the worst performers, whilst Tobacco remained the exception.

Major net selling was recorded by Brokers at US$7.7 million. Companies absorbed most of the selling with a net buy of US$10.5 million.

Top performers during the week were: SML, SHEL, PAKT, UPFL, and AGP, while top laggards included MTL, PGLC, YOUW, GATM, and PSMC.

Market is expected to remain range-bound owing to a lack of clarity on the IMF program, stalled bilateral flows amidst a burgeoning debt burden fueling the default risk. Analysts expect the market to react once NA finalizes the Finance Act for FY24, keeping in view proposals put forward by the Senate and other business bodies.

They reiterate their stance of following a cautious approach to stock picking and we continue to advocate dollar-denominated revenue stream scrips (Technology and E&P sector) to hedge against currency risk and high dividend yielding scrips. 

Friday, 23 June 2023

Pakistan hits out at US and India after Biden-Modi meeting

According to Reuters, Pakistan on Friday criticized the United States and India after President Joe Biden met Prime Minister Narendra Modi at the White House and both leaders called on Pakistan to ensure its territory was not used as a base for militant attacks.

Pakistan's foreign ministry said a joint US-Indian statement was unwarranted, one-sided, and misleading. The reference to Islamabad in it was contrary to diplomatic norms, it said.

The ministry added that it was surprised by the joint s

tatement and said it had close counterterrorism cooperation with the United States.

Relations between India and Pakistan have been fraught for years. Since independence from Britain in 1947, India and Pakistan have fought three wars, two of them over the Muslim-majority Himalayan region of Kashmir, which they both claim in full but rule in part.

The joint US-Indian statement said, "They (Biden and Modi) strongly condemned cross-border terrorism, the use of terrorist proxies and called on Pakistan to take immediate action to ensure that no territory under its control is used for launching terrorist attacks."

Pakistan's foreign ministry said India was using the allegations of extremism against Islamabad to deflect from the situation in Kashmir and the treatment of minorities in India.

New Delhi has for years accused Pakistan of launching militant attacks in India, including the one in 2008 in Mumbai that killed over 165 people.

India also says Pakistan has helped Islamist militants who have battled Indian security forces in its part of Kashmir since the late 1980s. Pakistan denies the accusation and says it only provides diplomatic and moral support for Kashmiris seeking self-determination.

The special status given to the Indian state of Jammu and Kashmir was revoked in 2019 when New Delhi split it into two federally controlled territories. Pakistan calls the moves illegal and wants them rolled back.

Biden rolled out the red carpet for Modi on Thursday, with both leaders touting deals their countries reached on defense and commerce aimed at countering China's global influence.

Pakistan also said it was deeply concerned over the planned transfer of advanced military technologies to India, saying such steps would not prove helpful in achieving peace in South Asia.