Central banks around the world raising interest rates to tame inflation

During the pandemic, central banks in both advanced and emerging market economies took unprecedented measures to ease financial conditions and support the economic recovery, including interest-rate cuts and asset purchases.

With inflation at multi-decade highs in many countries and pressures broadening beyond food and energy prices, policymakers have pivoted toward tighter policy. Central banks in many emerging markets proactively started to hike rates earlier last year, followed by their counterparts in advanced economies in the final months of 2021.

The monetary policy cycle is now increasingly synchronized around the world. Importantly, the pace of tightening is accelerating in several countries, particularly in advanced economies, in terms of both frequency and magnitude of rate hikes. Some central banks have begun to reduce the size of their balance sheets, moving further toward normalization of policy.

Stable prices are a crucial prerequisite for sustained economic growth. With risks to the inflation outlook tilted to the upside, central banks must continue normalizing to prevent inflationary pressures from becoming entrenched. They need to act resolutely to bring inflation back to their target, avoiding a de-anchoring of inflation expectations that would damage credibility built over the past decades.

Monetary policy can’t resolve remaining pandemic-related bottlenecks in global supply chains and disruptions in commodities markets due to the war in Ukraine. It can however slow overall demand to address demand-related inflationary pressures, so a tightening of financial conditions is the goal.

The high uncertainty clouding the economic and inflation outlook hampers the ability of central banks to provide simple guidance about the future path of policy. But clear communication by central banks about the need to further tighten policy and steps required to control inflation is crucial to preserve credibility.

Clear communication is also critical to avoid a sharp, disorderly tightening of financial conditions that could interact with, and amplify, existing financial vulnerabilities, putting economic growth and financial stability at risk down the road.

 

 

German aluminium foundry struggling for survival

Gerd Roeders is reluctantly preparing for the temporary shutdown of his German aluminium foundry to survive Europe's growing gas crunch. He hopes by moving the 200-year-old plant to three weeks of 24-hour shifts followed by a one-week shutdown, he can maintain output while cutting his gas consumption.

His bill has already more than doubled this year from last, he said, fearing it will triple or even quadruple in 2023.

The plan will save the cost of gas needed to fire up the ovens every morning, Roeders calculates, even if it means paying staff at family-owned G.A. Roeders more to work night shifts.

Survival for G.A. Roeders GmbH and Germany's 600 other foundries, most of which are small-to-medium enterprises with less than 250 staff, will mean cost cuts and tough talks with customers.

"We're laying out our prices to customers and telling them they have to pay more," 59-year-old Roeders told Reuters as workers prepared the plant for the first week of rest. "We can't deliver parts if we invest and don't earn anything back."

G.A. Roeders, with plants in Germany and the Czech Republic employing around 500 people, produces more than1,000 parts. It serves auto makers like Volkswagen and Continental, airline manufacturers and medical technology firms, yielding annual revenues of 60 million euros.

While contracts for foundries generally include a clause that allows them to charge more when the cost of metal increases no such clause exists for energy.

Roeders said he has always sought to be frugal on energy - the business' second-largest expenditure after staff - a habit he learnt from his father who would turn off office computers at night and switch off the lights during lunch breaks. But the firm is now facing unprecedented rises.

The price of the front-month Dutch TTF gas contract, the benchmark for Europe, has almost tripled since the start of the year due to the slowdown of Russian gas deliveries through Nord Stream 1 and a tight global market.

And while the firm still has a 30,000-litre oil tank on site, which has not been used for years, to use it again would feel like a backward step, Roeders said.

Germany's energy regulator is pleading for businesses, government and consumers to reduce their gas intake and has asked the biggest firms to submit emergency plans to cut usage further in the winter.

Yet chief executives of German carmakers including Mercedes-Benz and Volkswagen have warned in recent weeks that maintaining output levels under emergency plans will only work if their suppliers can continue to deliver parts.

Producers of the aluminium, steel and glass essential to making cars rely even more heavily on natural gas than the automakers themselves, prompting fears of a ripple effect across their global client base if they are forced to halt production.

German manufacturers of car components sell to more than 3,000 direct customers in the United States, Europe and Japan with their products reaching over 100,000 second-tier customers, supply chain analytics firm Interos estimates.

The energy crisis is the latest in a string of upheavals, from carbon emissions curbs and supply chain bottlenecks to stricter due diligence laws, which small businesses say they will struggle to overcome without more support.

"Converting to electricity-driven units requires massive renovation and is at best conceivable in the medium term," a spokesperson for the German Association of Foundries said.

"No technology other than firing up machines with gas is currently available," the spokesperson added.

Together with an alliance of other aluminium makers and a university, G.A. Roeders has received government funding to design a prototype smelting oven which could operate on a mix of 30%-40% hydrogen and 60%-70% gas. The aim is to eventually run exclusively on hydrogen.

Interest in the project has multiplied since Russia's invasion of Ukraine, Roeders said, but there are still many hurdles before it can become operational - from scaling up the technology to setting up a hydrogen charging network.

"To industrialize something like this usually takes at least five years," he said. "We'll have to dress up warm; we won't have a hydrogen oven yet."

 

US adamant at keeping Iran out of oil market

Having imposed economic sanctions on Iran for more than four decades, especially after signing of nuclear deal with Iran in 2015, United States remains adamant at keeping Iran out of oil market. It may be recalled that when the things were taking some shape, President, Donald Trump withdrew his country from the deal in 2018.

Nuclear negotiators who have gathered in Vienna after a five month-hiatus have indicated that they are optimistic about reviving the 2015 nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA).

“We stand five minutes or five seconds from the finish line,” Russian Ambassador Mikhail Ulyanov told reporters outside Vienna’s Palais Coburg on Sunday, four days into the talks. He said there are “three or four issues” left to be resolved.

“They are sensitive, especially for Iranians and Americans,” Ulyanov said. “I cannot guarantee, but the impression is that we are moving in the right direction.”

Enrique Mora, the European Union’s top negotiator who acts as mediator between Iran and the US, also said he is “absolutely” optimistic about the talks’ progress so far.

“We are advancing and I expect we will close the negotiations soon,” he told Iranian media.

The Wall Street Journal also said negotiations between Iran and the US on reviving the JCPOA are close to completion, Mora said on Sunday evening.

The text of an agreement could be closed in coming hours, said Mora.

According to the Iranian diplomats, experts are focusing on technical issues about Iran’s nuclear program.

Behrouz Kamalvandi, the spokesman for the Atomic Energy Organization of Iran (AEOI), had confirmed on Saturday that the talks were mainly focused on Safeguards issues.

One of Iran’s demands is that the IAEA should stop unsubstantiated allegations regarding PMD that had already been resolved in July 2015, when the nuclear deal was struck.

In a telephone call with UN Secretary General Antonio Guterres on Sunday afternoon, Iran’s Foreign Minister Hossein Amir-Abdollahian said, “We believe that the Agency should completely resolve the remaining issues related to the Safeguards Agreement by distancing itself from irrelevant and non-constructive political issues and through the technical channel.”

He added, “Nuclear weapons have no place in the defense doctrine of the Islamic Republic of Iran and are in contradiction to our policies and beliefs,” referring to a fatwa (religious decree) by Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei declaring that the production, stockpile and use of nuclear weapons as forbidden.

"The Leader's fatwa that prohibits the use of nuclear weapons is clear-cut and is the final say for everybody," Iran's Foreign Minister said.

 

Oil prices being manipulated by western media

This morning I picked up this news item from Reuters. It covers some of the usual mantras i.e. deal with Iran, inventory data, supply disruptions. I am forced to infer that ‘media drives oil prices’ and the sponsors are famous seven sisters, who have now reduced to ‘big four’ after the successive mergers. 

They love to keep prices high to maximize their profits. Since many of them are of ‘US Origin’, I have reasons to believe that they enjoy the support of the US administration.

Crude oil prices pulled back slightly on Tuesday on the latest progress in last-ditch talks to revive the 2015 Iran nuclear accord, which would clear the way to boost its crude exports in a tight market.

Brent futures fell 14 cents to US$96.51 a barrel at 0404 GMT, paring a 1.8% gain from the previous session. US West Texas Intermediate (WTI) futures declined 16 cents to US$90.60 a barrel, after climbing 2% in the earlier session.

"The specter of a US-Iran nuclear deal continues to hover over the market," ANZ Research analysts said in a note.

The European Union late on Monday put forward a "final" text to revive the 2015 Iran nuclear deal, awaiting approvals from Washington and Tehran. A senior EU official said a final decision on the proposal was expected within "very, very few weeks".

"While the details around the timing of the resumption of Iran's oil exports remain uncertain even if the accord is revived, there is certainly scope for Iran to increase oil exports relatively quickly," Commonwealth Bank analyst Vivek Dhar said in a note.

He said Iran could boost its oil exports by 1 million to 1.5 million barrels per day, or up to 1.5% of global supply, in six months.

"A revival of the 2015 nuclear accord will likely see oil prices fall sharply given that markets probably don't believe a deal will be reached," Dhar said.

However, signs that demand may not be dented as much as feared are keeping a floor under the market for now, following stronger-than-expected trade data from China on the weekend and the surprising acceleration in US jobs growth in July.

The oil market has remained under pressure recently over global recession fears, with Brent prices suffering their biggest weekly drop last week.

China, the world's largest crude oil importer, brought in 8.79 million barrels per day of crude in July, 9.5% lower from a year earlier but up from June's import volumes, according to China's customs data.

Traders will also be watching out for weekly US oil inventory data, first from the American Petroleum Institute on Tuesday and then the Energy Information Administration on Wednesday.

Five analysts polled by Reuters expect crude stockpiles fell by around 400,000 barrels and gasoline stockpiles declined also by about 400,000 barrels in the week to August 5, while distillate inventories, which include diesel and jet fuel, were unchanged.

Western components found in Russian weapons

A British defense think tank identified 450 unique microelectronic components in Russian military equipment left in Ukraine that appeared to be manufactured by United States, European and East Asian companies.

In partnership with Reuters, the Royal United Services Institute (RUSI) released a report on Monday detailing inspections of 27 Russian weapons systems and pieces of military equipment expended or lost since Russia invaded Ukraine and the group said the majority of the apparent Western components were manufactured by US companies.

“The preponderance of foreign-made components inside these systems reveals that Russia’s war machine is heavily reliant on imports of sophisticated microelectronics to operate effectively,” the group said in its report.

“This is despite persistent efforts by the Russian government to replace imports – in all aspects of its economy, including the military sector – with domestically produced materials in order to withstand international sanctions,” it continued.

Russia has been fighting Ukrainian forces for more than five months after invading the country on February 24. After failing to quickly take the capital city of Kyiv, Moscow refocused its efforts on the country’s industrial heartland in the east, known as the Donbas region, with no end to the conflict in sight.

RUSI said 317 of the 450 identified Western components appear to be from US companies, while components from Japan, Taiwan, Switzerland, the Netherlands, Germany, China, South Korea, the U.K. and Austria were also present.

The think tank cautioned it is possible the components are counterfeits of Western brands but indicated that wasn’t likely.

“Russia’s well-documented historical dependence on Western technology, and the critical role that some of the components play in the effective operation of the systems in which they were found, has led the research team to assume that the components are likely genuine,” the group said.

RUSI’s report states 56 US companies manufactured the “vast majority” of the components, and more than 200 of them appear to have been manufactured by just 10 companies. Texas Instruments was the most frequent US brand, accounting for 51 of the components. 

Of the 450 identified components, RUSI indicated 18% were assigned an Export Control Classification Number (ECCN), which would have required a government license for export to Russia even before Moscow invaded Crimea in 2014.

Others would have fallen under an EAR99 classification, RUSI said, which would not have required a license prior to Russia’s invasion in February.

“The presence of a large number of EAR99 and some ECCN classified items in Russian military equipment suggests that these components were either purchased by military equipment manufacturers from distributors in Russia, that they were procured under fake end-user certificates or that they were diverted for military applications at a later point,” the think tank said in its report.

Bill approved by the US Senate to jeopardize electric vehicle adoption targets

A group representing General Motors, Toyota Motor, Volkswagen and other major automakers said a US$430 billion bill approved by the US Senate will put achieving US electric-vehicle (EV) adoption targets for 2030 in jeopardy.

"Unfortunately, the EV tax credit requirements will make most vehicles immediately ineligible for the incentive;" said the Alliance for Automotive Innovation's Chief Executive, John Bozzella, adding the bill "will also jeopardize our collective target of 40% to 50% electric vehicle sales by 2030."

The group had warned Friday that most EV models would not qualify for a US$7,500 tax credit for US buyers under the bill.

To be eligible for the credit, vehicles must be assembled in North America, which would make some current EVs ineligible as soon as the bill takes effect.

The Senate bill imposes other restrictions to deter automakers from using Chinese-made materials by phasing in required percentages of North American-sourced battery components.

After 2023, vehicles with batteries that have Chinese components could not receive the credit, while critical minerals also face limitations on sourcing.

Senator Joe Manchin, who pushed for the restrictions, said EVs should not depend on foreign supply chains while Senator Debbie Stabenow of Michigan said the credit is "unworkable”.

The bill creates a US$4,000 tax credit for used EVs. The package provides billions in new funding for EV production as well as US$3 billion for the US Postal Service to buy EVs and battery-charging equipment.

The new EV tax credits, which would expire in 2032, would be limited to trucks, vans and SUVs priced no more than US$80,000 and cars up to US$55,000. Families with adjusted gross incomes of up to US$300,000 would be eligible.

President Joe Biden in 2021 set a target for electric and plug-in electric vehicles to comprise half of new vehicle sales in 2030.

 

Sri Lanka stuck between India and China

Chinese Embassy in Sri Lanka has sought an urgent meeting with senior Sri Lankan authorities after Colombo sought a deferment of the planned docking of a high-tech Chinese research vessel at the strategic Hambantota port over which India had raised concerns.

The Chinese space and satellite tracking research vessel 'Yuan Wang 5' was scheduled to dock at the Hambantota Port from August 11 to 17, weeks after Sri Lanka witnessed a major political turmoil following massive mass protests over the country's worst economic crisis in decades.

A note from Sri Lanka's Foreign Ministry to the Chinese embassy in Colombo dated August 5 says, "The Ministry wishes to request that the arrival of the vessel Yuan Wang 5 in Hambantota to be deferred until further consultations are made on the matter."

Some media reports said that India was worried the vessel would be used to spy on its activities and that it had lodged a complaint with Sri Lanka.

Some Sri Lankan news portals also reported that Sri Lankan President Ranil Wickremesinghe held a closed-door meeting with China's Ambassador Qi Zhenhong after Colombo sought a deferment of the planned docking. But the President's Office denied the media reports over the meeting.

On July 12, amidst the political turmoil in Sri Lanka, the then government approved the Chinese vessel's docking at the Hambantota port.

The Chinese vessel was expected to dock at the Sri Lankan port for "refuelling and 'replenishment' and will conduct satellite control and research tracking in the northwestern part of the Indian Ocean region through August and September.

The southern deep-sea port of Hambantota is considered strategically important for its location. The port, located in the hometown of the Rajapaksa family, has been developed largely with Chinese loans.

According to media reports here, India has informed Sri Lanka that the docking of the high-tech Chinese research vessel could pose a threat to its national security.

Sri Lanka received strong messages of protests from India as the ship was said to have the capability to track satellites and intercontinental ballistic missiles, the report said.

India has said it carefully monitors any development having a bearing on its security and economic interests.

"We are aware of reports of a proposed visit by this vessel to Hambantota in August," External Affairs Ministry Spokesperson Arindam Bagchi said in New Delhi when asked about the reports of a proposed visit by a Chinese vessel.

"The government carefully monitors any development having a bearing on India's security and economic interests and takes all necessary measures to safeguard them," he said last month.

New Delhi is concerned about the possibility of the ship's tracking systems attempting to snoop on Indian installations while being on its way to the Sri Lankan port.

India has traditionally taken a stern view of Chinese military vessels in the Indian Ocean and has protested such visits with Sri Lanka in the past.

The ties between India and Sri Lanka had come under strain after Colombo gave permission to a Chinese nuclear-powered submarine to dock in one of its ports in 2014.

China is the main creditor of Sri Lanka with investment in infrastructure. Debt restructuring of Chinese loans would be key to the island's success in the ongoing talks with the International Monetary Fund for a bailout.

India on the other hand has been Sri Lanka's lifeline in the ongoing economic crisis.

India has been at the forefront of extending economic assistance of nearly US$4 billion to Sri Lanka during the year as the island nation is grappling with the worst economic crisis since independence in 1948.

As the new Sri Lankan president looks at pulling the country out of its economic crisis, India has said that it will continue to assist the island nation and support its people in their quest for stability and prosperity.

Prime Minister Dinesh Gunawardena last week said Sri Lanka was looking forward to settle the issue of the vessel's visit with an "approach of friendship".

India's concerns have been focused on Hambantota port in particular. In 2017, Colombo leased the southern port to China Merchant Port Holdings for 99 years, after Sri Lanka was unable to keep its loan repayment commitments, fanning fears over the potential use of the port for military purposes.

One year Rule of Ebrahim Raisi: A comparison between present and past foreign policies

Ebrahim Raisi, President of Iran has been in power for one year. Today, a comparison is done between the foreign policies followed by him and his predecessor Hassan Rouhani. The general perception is that Raisi has been towing the same policy, still let us explore his priorities and key achievements.

Raisi has been relatively cautious and has not changed the overall direction of foreign policy. In Iran’s system, the president can guide foreign policy, but he is only one of several players at the Supreme National Security Council, the most powerful body for setting national security policy.

Raisi has little reason to rock the boat or take major risks because Iran’s position in the region is relatively strong. The west accuse Iran of sponsoring armed proxies and political allies in Iraq, Lebanon, Syria, and Yemen that help project power and influence across the region.

Raisi’s priorities have been easing tensions with Iran’s neighbors and boosting ties with Asian powers, especially China and Russia. Raisi has also focused on expanding Iran’s trade with Central Asian countries. He has been active on the diplomatic front. As of July 2022, he had traveled to Oman, Qatar, Russia, Tajikistan, and Turkmenistan.

Raisi’s first trip was to Tajikistan, where he participated in the Shanghai Cooperation Organization summit in September 2021. The regional economic and security bloc, led by China and Russia, accepted Iran’s bid for membership 15 years after it applied.

Afghanistan

Raisi took office in August 2021 as the Taliban took over wide swaths of Afghanistan, which shares a 572-mile border with Iran. He welcomed the departure of US forces but cautiously engaged with the Taliban. Iran had supported opposition forces against the Taliban when it last ruled the country from 1996 to 2001. He has repeatedly called for an inclusive government that includes all political factions and reflects Afghanistan’s religious and ethnic diversity. Tensions have flared over sporadic altercations at border crossings. 

China

Under Raisi, Iran managed to increase oil exports to China. In January 2022, Iran reportedly exported more than 700,000 barrels per day – more than Iran exported before the reimposition of US sanctions in 2018. China has also continued to invest in a broad range of Iranian industries, including oil and gas, lumber, and light manufacturing. But this pattern had begun years ago.

Iraq

In August 2021, Foreign Minister Amir-Abdollahian participated in a regional conference in Baghdad along with presidents, kings or foreign ministers from Egypt, Jordan, Kuwait, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates. French President Emmanuel Macron also participated. The goal was to ease regional tensions. Iran continues to support an array of Shiite militias and political parties, which may be in a position to form a government more to their liking. 

Israel

Since Raisi took office, Israel has allegedly carried out several operations, including two drone strikes and an assassination, in Iran. But Iran’s responses have been surprisingly muted. In March 2022, Iran fired a dozen ballistic missiles into Iraqi Kurdistan. The IRGC claimed that it targeted Israeli strategic centers in Erbil. The other notable allegation was a plot to assassinate Israeli tourists in Istanbul. But those moves were relatively small compared to the alleged Iranian strike on Saudi Arabian oil facilities in 2019 or sabotage of Gulf shipping that occurred during Rouhani’s presidency.

Lebanon

Iran is often alleged for providing weapons, including missiles and drones, and funding to Hezbollah. The outfit has evolved into the strongest armed group in Lebanon and one of the most influential political players.

Oman

In May 2022, Raisi visited Muscat to sign deals for expanded cooperation on energy, transportation, education, and trade. 

Qatar

Raisi signed agreements on transportation, trade, tourism, energy, and education during a visit to Doha in February 2022. Emir Tamim bin Hamad al Thani visited Tehran to discuss ways to boost bilateral ties in May 2022. They also discussed diplomatic efforts to restore the 2015 nuclear deal. 

Russia

In perhaps the most significant change, Iran has accelerated the expansion of ties to Russia despite the invasion of Ukraine, which has led to extensive Western sanctions on Russia. Raisi met Putin three times in the first seven months of 2022 alone. Russia has also shown interest in purchasing Iranian drones. On energy, the two countries have cooperated as part of OPEC Plus to try to keep oil prices high. But Russia has also started to heavily discount its oil to sell to China, putting it in competition with Iran.

Saudi Arabia 

Iran has continued a series of talks that began in April 2021 to restore diplomatic relations, which were severed in 2016. In July 2022, Iran announced its readiness to move talks to the political level. Iraq mediated the talks.

Syria

Iran continued to bolster the Assad regime, which has regained much territory from rebel and jihadi groups since the civil war broke out in 2011.

United Arab Emirates (UAE)

Foreign Minister Amir-Abdollahian made a rare visit to Abu Dhabi to pay respects following the death of President Sheikh Khalifa in May 2022. He said that the two countries were turning a new page after years of tensions. As of July, the UAE was considering sending an ambassador back to Tehran. The UAE had downgraded its ties with Iran in 2016. 

Yemen

Allegedly, Iran continued to provide weapons to the Houthi rebels. But it also welcomed the UN-brokered ceasefire between the Houthis and Yemeni government that began in April 2022.

 

Can Saudi Arabia-China-Russia-Iran alliance end the US hegemony in the region?

Saudi Arabia-China, Russia and Iran are getting closer to resist the US hegemony and Washington is definitely not happy with this coalition. Over the years Beijing has inked various strategic partnerships with the Arab states to push United States out of the region.

Lately the Biden administration tried to redefine the relationships with Saudi Arabia, having deteriorated in 2018 over the murder of Washington Post columnist Jamal Khashoggi. It may be recalled that Biden, after assuming the charge as the president of the country, had vowed to make Saudi Arabia a "pariah" state over Khashoggi's murder.

Biden is under tremendous pressure after having initiated proxy war in Ukraine. Not only the world but United States is bearing the brunt of higher energy prices, supply disruptions and historic high inflation.

Analysts believe Biden having failed in punishing Saudi Crown Prince Mohammad bin Salman (MBS) changed his policy to mend relationships, but failed in securing more oil from Saudi Arabia and made little headway on Israeli-Palestinian relationship. 

Biden in his recent visit tried to reassure his allies in the Middle East that the U.S. will stay actively engaged amid fears that China and Russia could swiftly fill a leadership vacuum.

Countering China's growing influence in international politics, Russia's war in Ukraine and Iranian influence in the Middle East remain to be seen as the top priority of the Biden administration.

According to some analysts, the New Cold War has already been triggered and the world will see further intensification due to China’s growing economy, military modernization, superiority in Artificial Intelligence, and soft power domain.

China's bilateral trade with Arab world in 2021 crossed the figure of US$330 billion. The China-led Belt and Road Initiative (BRI) has 20 partners in the Middle East and North Africa while Beijing has inked 15 strategic partnerships with the Arab states in the last decade alone, causing enough trouble for Washington.

The region has rapidly been witnessing bloc politics. The US and China are on quest of promoting their ideologies and political clouts. Washington seeks to promote democratic values to reinforce the QUAD and New Quad in the Middle East.

China–Iran 25-year economic cooperation deal of US$400 billion enhances Beijing's influence in the Middle East and the Indian Ocean.

Biden, unlike his predecessor Trump, is trying to unite the US allies in the Middle East, cementing NATO, the New Asia-Pacific Economic Bloc, and reviving the Joint Comprehensive Plan of Action (JCPOA) to obtain relative political gains.

When Trump became the president of the country, he instead of visiting Canada (Ottawa is the first capital to be visited by the US presidents due to economic diplomacy) visited Saudi Arabia and inked an agreement, worth US$350 billion including a US$110 billion weapons deal. Many US analysts believe that Saudi Arabia is a lucrative market as far as the US military-industrial complex and foreign direct investments are concerned. Saudi Arabia can also be instrumental in eroding Iranian sway in the region.

The Middle East (West Asia) is unlikely to remain immune to the great powers’ competition. Legitimation of MBS remains to be seen as the tip of the iceberg. The only game in the town for Washington is China and Iran in the region.

People can still recall that Modi was the only person ever denied a US visa because of deliberately allowed anti-Muslim riots in Gujarat state in 2002 when he was the Chief Minister of the state resulted in the killing of more than 1,000. However, Modi turned out to be an apple's eye of the US as soon as he became prime minister of India. It appears the US is more concerned about its national interest and is least bothered with morality. According to Machiavelli school of thought “politics have no relation to morals”.  

China, Russia, and Iran are clearly in one bloc opposing the US hegemony. The Ukraine crisis has further been bolstering ties between Beijing, Moscow, and Iran. Biden’s statement clearly illustrates that aforementioned countries are predicated to be described as the new evil axis to the US in a bid to unite the allies to protect the democratic values and the prevailing international world order. 

One year Rule of Ebrahim Raisi: Comparing present and past Foreign Ministers

Ebrahim Raisi, President of Iran, often termed a hardliner by the west has now been in power for one year. Let us explore what are the major differences from his predecessor Hassan Rouhani. Today, a comparison is done between the two foreign ministers. 

Raisi has long expressed hardline views on both domestic and foreign policy. The United States sanctioned him in 2019, citing his role in domestic repression. Raisi is best known for serving on the so-called “death commission” that ordered the extrajudicial executions of thousands of political prisoners in 1988. Raisi was critical of Rouhani in both his failed 2017 presidential campaign and his successful 2021 campaign.

Raisi, like all presidents, replaced the ministers of his predecessor. Rouhani’s cabinet included several ministers who were educated in the West or were open to engagement with the West. In contrast, Raisi team was largely educated in Iran and has favored boosting ties with Asian powers. Five of his ministers were designated under US sanctions.

The change in foreign ministers was a microcosm for the transition. Rouhani’s Foreign Minister, Mohammad Javad Zarif, spoke fluent English after receiving a BA and an MA from San Francisco State University, and an MA and PhD in international relations from the University of Denver. Zarif also served in New York as Iran’s ambassador to the United Nations from 2002 to 2007. As foreign minister (2013-2021), he played a key role in negotiating the 2015 nuclear deal and developed a working relationship with Secretary of State John Kerry.

By contrast, Raisi’s Foreign Minister, Hossein Amir-Abdollahian, speaks fluent Arabic and stilted English. He received a PhD in international relations from the University of Tehran. During his career at the Foreign Ministry, he was posted to Iraq and Bahrain and had portfolios largely focused on the region. As Foreign Minister, his priorities are to improve relations with Iran’s neighbors as well as Asian countries. Amir-Abdollahian reportedly has close ties to the Islamic Revolutionary Guard Corps (IRGC). 

In my next blog I will compare the foreign policies followed by the two ministers. Please allow me to say that the change in president and ministers has not translated into much of a shift. Raisi has generally continued down the same path as Rouhani on domestic and foreign policy.

Iran to continue constructive cooperation with OPEC

Iranian Oil Minister, Javad Oji said his country will continue constructive interactions with Organization of Petroleum Exporting Countries (OPEC) and will support the organization’s new Director General, Shana reported.

“As a founding member of OPEC, Iran will definitely continue its constructive interaction with OPEC and would effectively support the new Secretary General as well as the OPEC secretariat,” Oji said at the 31st OPEC and Non-OPEC Ministerial Meeting held via video conference.

Honoring the memory of former OPEC Secretary General Mohammad Sanusi Barkindo and welcoming his replacement Haitham Al Ghais, the minister said, “I received the very sad news of the passing away of His Excellency Mohammad Sanusi Barkindo, Distinguished Secretary General OPEC. On behalf of the Government and people of the Islamic Republic of Iran, I would like to express my heartfelt condolences to Your Excellencies, particularly His Excellency Timipre Sylva, Minister of State for Petroleum Resources, Distinguished Government and Great People of Nigeria and the esteemed Staff of the OPEC Secretariat.”

“Undoubtedly, His Excellency’s round-the-clock efforts as the OPEC Secretary General to promote solidarity and unity among Member Countries, along with his trust in collective wisdom and efforts for creating understanding have always helped the Organization and its Members,” he added.

He also congratulated Haitham Al Ghais for assuming the position of the OPEC Secretary General, saying, “I am confident that your appointment will be a critical step in advancing the Organization, achieving the collective goals of the OPEC and its Members and the fair and forward-looking leadership of the OPEC Secretariat.”

“I am confident that the OPEC’s successes in recent years will continue in the future under the leadership of Al Ghais. I wish him every success in his new position during this challenging time for fossil fuels,” he added.

Chinese Foreign Minister scheduled to arrive in Dhaka today

Chinese Foreign Minister, Wang Yi is scheduled to arrive in Dhaka today (Saturday) afternoon to discuss bilateral, regional and global issues with Bangladesh leadership. Agriculture Minister Muhammad Abdur Razzaque will receive the Chinese Foreign Minister.

According to reports, neither the Ministry of Foreign Affairs nor the Chinese Embassy in Dhaka shared his program schedule in detail till the time till late evening.

Minister Wang is scheduled to meet Prime Minister Sheikh Hasina on Sunday morning apart from holding a bilateral meeting with his Bangladesh counterpart AK Abdul Momen the same day.

“This is going to be different from other bilateral visits. I can’t tell you in details at this moment as many things are still under last minute discussion,” another official familiar with the development told, speaking on condition of anonymity.

Awami League General Secretary and Road Transport and Bridges Minister Obaidul Quader will host a dinner in honour of the Chinese Foreign Minister on Satuarday, said State Minister for Foreign Affairs Md Shahriar Alam.

Foreign Minister Momen is expected to return home Saturday night from Cambodia after attending the ASEAN Regional Forum meeting.

Talking to reporters at the Ministry of Foreign Affairs, Shahriar Alam said Bangladesh and China are likely to sign multiple MoUs and agreements during Wang’s visit.

He said the list is not finalized yet and it can be five-seven – new and renewal including cooperation on the disaster management and cultural exchange fronts.

Shahriar assured that the planned MoUs and agreements will be aligned with Bangladesh’s cultural, social and economic policy though the list is not finalized yet.

The state minister said the relationship between Bangladesh and China is “deep and wide” and the two countries will discuss areas of future cooperation.

Responding to a question, the state minister said Bangladesh will seek a stronger role from the Chinese government for early repatriation of the Rohingyas.

In January 2017, Wang had an hour-long stopover in Dhaka. This time, he is coming for a longer period.

The visit is taking place amid growing geopolitical tensions with impact on developing countries in the region while experts suggest Bangladesh to ensure a strategic balance amid these tensions.

Earlier, Foreign Secretary Masud Bin Momen said taking a new loan from China will not be a part of their agenda during the Chinese foreign minister’s Bangladesh visit.

“This time, the issue of taking loan afresh isn’t there at least,” he said on Wednesday when a reporter wanted to know whether Bangladesh is going to take a loan from China again.

Asked what message this visit carries amid the crisis in various parts of the world, the foreign secretary said it will be known once the Chinese foreign minister comes. “We are working on the visit. Things are yet to be finalized.”

He reiterated that the visit is part of the Chinese side’s routine visit to the region and also it is an opportunity to review the existing engagements between the two countries.

               

Biden celebrates one of the best weeks of his presidency

President Biden, who has been struggling with his approval polling for months amid a declining economy and international crises, started this weekend with one of the best weeks of his presidency. Let’s run through the week:

Al-Qaeda leader Ayman al-Zawahiri was killed in a drone strike. President Joe Biden said Monday in a speech from the White House. "I authorized a precision strike that would remove him from the battlefield, once and for all," Biden said.

Zawahiri, who just turned 71 years old, had remained a visible international symbol of the group, 11 years after the US killed Osama bin Laden. At one point, he acted as bin Laden's personal physician.

Zawahiri was killed in "a precise tailored airstrike" using two Hellfire missiles. The drone strike conducted on last Saturday was authorized by Biden following weeks of meetings with his Cabinet and key advisers, the official said on Monday, adding that no American personnel were on the ground in Kabul at the time of the strike.

Kansas voters turned out in droves to protect abortion access by a nearly 20-point margin. Keep in mind: The red state was the first to vote on abortion since the Supreme Court overturned Roe v. Wade.

Voters in Kansas rejected a proposed state constitutional amendment Tuesday that would have said there was no right to an abortion in the state, according to The Associated Press.

Kansas was the first state to vote on abortion rights since the US Supreme Court handed down its ruling in Dobbs v. Jackson's Women's Health Organization.

President Joe Biden hailed Tuesday's vote and called on Congress to pass a law to restore nationwide abortion rights that were provided by Roe.

"This vote makes clear what we know the majority of Americans agree that women should have access to abortion and should have the right to make their own health care decisions," Biden said in a statement.

Sen. Kyrsten Sinema agreed to support the reconciliation bill, giving Democrats enough votes to pass a major component of Biden’s agenda. There had been significant doubt for the entirety of Biden’s presidency that this deal would be made.

Sinema announced Thursday evening that she had reached a deal with Senate Majority Leader Charles Schumer that could pave the way for Democrats to pass their budget reconciliation package.

The announcement paves the way for Sinema to vote Saturday for a motion to proceed to a budget reconciliation package that would reform the tax code, tackle climate change, reduce the cost of prescription drugs and shrink the federal deficit.    

A robust July jobs report calmed fears that the US was headed into a recession. An aggregate 528,000 jobs were added and the unemployment rate fell to 3.5 percent in July, according to data released Friday by the Labor Department, a stunning gain that defied predictions of a slowdown.

Economists expected the US to have added roughly 250,000 jobs in July and keep the jobless rate at 3.6 percent, according to consensus estimates released before the report.

The stunning July jobs gain will raise questions about how close the US economy actually is to a recession after months of growing concern over a sharp slowdown. The resilience of the labor market also means the Federal Reserve may have more room — or at least feel more pressure — to rapidly raise interest rates and fight inflation without fears of triggering steep job losses.

Last but not the least, gasoline prices have continued to decline for more than 50 consecutive days.