Lifting US sanctions on Iran not an easy job

The most complicated issue in the United States-Iran relationship is the intertwined US sanctions, which were aimed at punishing the Islamic Republic on multiple counts and in the worst possible manner. 

These include from activities related to the nuclear program and support of terrorism to missile proliferation and human rights abuses. Some of Iran’s major institutions, including the Central Bank Iran, were sanctioned, both for their roles supporting the nuclear program and for aiding the alleged terrorist attacks by proxy militias.

The Biden administration wants to lift the sanctions related to Iran’s nuclear program – as promised in the 2015 deal – if Tehran, in turn, rolls back recent breaches of the nuclear deal. The complicating factor in current and future diplomacy is that key Iranian institutions and individuals could remain sanctioned for secondary reasons, thus not providing Iran the economic relief it seeks.

Iran’s oil industry, the country’s main source of export revenue, is a prime example. Biden could lift sanctions on NIOC for its role in funding programs on weapons of mass destruction. But it would remain sanctioned for financially facilitating terrorism orchestrated by the Revolutionary Guards. The same problem of overlapping sanctions could arise in any future talks about Iran’s missile program because institutions involved in proliferation are also sanctioned for supporting regional terrorism.

The Biden administration has the authority to provide temporary exemption from sanctions; it would keep sanctions in place legally but nullify their effects until the Treasury formally revokes sanctions. “Iran is unlikely to be satisfied with such an approach and could demand formal removal of counter terrorism sanctions on these entities, a move that would be hugely unpopular in US domestic circles,” Brian O'Toole wrote for the Atlantic Council.

The issue of sanctions was further complicated when President Donald Trump abandoned the nuclear deal—brokered by the world’s six major powers over two years of intense diplomacy—in 2018. He then re-imposed earlier sanctions from the Bush and Obama administrations that had been lifted when the Joint Comprehensive Plan of Action (JCPOA) was implemented in 2016. He also took the unusual step of sanctioning Iran’s banking and oil sectors for funding the Revolutionary Guards and extremist proxies across the Middle East.

On April 2, Iran has begun indirect talks in Vienna with the United States on returning to compliance with the JCPOA. The Iranian delegation included representatives from the Central Bank of Iran and the Petroleum Ministry, which reflected Tehran’s interest in sanctions relief.

Therefore, there is an urgent need to assess the sanction imposed on Central Bank of Iran, National Iranian Oil Company, National Iranian Tanker Company, National Petrochemical Company, Islamic Republic of Iran Shipping Lines and 18 commercial banks. The filth of more than four decades can’t be cleaned in a few days or months.

Israeli attack on Iranian ship Saviz indicates change in modus operandi

An Iranian vessel was attacked in the Red Sea as Iran and the West resumed nuclear talks in Vienna to revive the 2015 nuclear deal between Tehran and major world powers. Saudi and American media outlets claimed that Israel was behind the attack. The Saudi-owned Al Arabiya reported that an “Israeli commando” attached “a magnetic explosive device” to an Iranian vessel in the Red Sea.

The Tasnim news agency confirmed the attack and identified the vessel as “Iran Saviz.” It reported “The incident happened after the explosion of limpet mines attached to the hull of the ship.”

A day later, Iran officially commented on the issue. The Iranian Foreign Ministry issued a statement confirming the attack.

“The Iranian merchant ship Saviz sustained minor damage in the Red Sea off the coast of Djibouti on April 6, 2021, due to an explosion, the cause of which is being investigated,” Saeed Khatibzadeh, the Ministry’s spokesman said. 

He said the vessel has been deployed to the region in coordination with the International Maritime Organization (IMO) and it has been involved in ensuring maritime security. 

“As already officially announced and based on the arrangements made with the IMO, the non-military Saviz ship had been stationed in the Red Sea region and the Gulf of Aden in order to ensure maritime security along shipping lanes and to counter pirates,” explained the spokesman.

“The ship practically served as Iran’s logistical station (for technical support and logistics) in the Red Sea; so, the specifications and mission of this vessel had already been officially announced to the International Maritime Organization,” he added.

Iran didn’t point the finger at anyone. But, The New York Times suggested that Israel was behind the attack. “The Israelis had notified the United States that its forces had struck the vessel,” the American newspaper quoted a US official as saying.

Although, the official said that the Israelis had termed the attack ‘retaliation’ for alleged earlier Iranian strikes on Israeli vessels, but the timing of the attack strongly indicated a link between the resumption of nuclear talks in Vienna and Israeli efforts to derail those talks.

The Times implicitly pointed to this link, saying the attack came as progress was reported on the first day of the Vienna talks, which are aimed to revive the 2015 Iran nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA) - the very deal that Israel has been working hard to sabotage since 2015.

Therefore, Israel may have intended to send a message to the Biden administration that it will do whatever it can to prevent a revival of the JCPOA. Israel’s modus operandi in the latest attack also suggests a change in Israel’s approach. Israel has reportedly been involved in a shadowy naval war with Iran in recent years.

Several Western news media reported that Israel has been attacking Iranian vessels carrying oil and other commodities since 2019 in a bid to spoil Iran’s economic ties with other countries. These attacks mostly went unnoticed and Israel refused to publicize them until most recently. 

The Israelis would often attack Iranian commercial ships deep into the night using helicopters equipped with machine guns from a distance of many kilometers, a source familiar with the matter told the Tehran Times. 

The Israeli attacks were more of a harassment nature than an operation meant to inflict real damage, according to the source. 

The attack on the Saviz, however, indicates a new modus operandi. First, it was reportedly done with a limpet mine attached to the hull of the Iranian vessel by an Israeli commando. Second, it was carried out early in the morning, a clear indication that the attacker wanted it to be publicized. Leaking the news of the attack to Al Arabiya and The New York Times left little doubt about the intention of the attacker. 

Israel seems to be busy working to prevent the US from returning to its commitments under the JCPOA. If the US is willing to revive the nuclear deal then it needs to pay more attention to Israeli machinations. 

India acquiring strength to monitor movement of Chinese vessels in Malacca Strait

The grant issued by the Japanese government just could not go unnoticed by the stakeholders of Indo-Pacific. The US$36 million in aid to install a battery energy storage system on India's Andaman and Nicobar Islands ‑ Japan's first-ever grant to the strategically located islands ‑ is much more than clean energy. 

Sitting at the mouth of the Malacca Strait, arguably the most important chokepoint in the world, the islands give India and its friends a front-row view of Chinese vessels going into and out of the narrow waterway.

On 26^th March, Japanese Ambassador Satoshi Suzuki and C. S. Mohapatra, an Additional Secretary at India's Ministry of Finance, exchanged notes in New Delhi concerning grant/aid of US$36 million to install a battery energy storage system at the Phoenix Bay Power House on the island of South Andaman to utilize renewable energy and stabilize energy supply.

"It contributes to our shared vision for a free and open Indo-Pacific, and also contributes to Prime Minister Yoshihide Suga's goal of offering climate change assistance," the official said.

"The real advantage the Andamans provide to India is the ability to conduct surveillance over critical waters," said Darshana Baruah, an associate fellow with the South Asia Program at the Carnegie Endowment for International Peace.

"The islands offer unparalleled advantage in surveillance and monitoring the Malacca Strait. It is also close to the Straits of Indonesia, the alternate route into the Indian Ocean, especially for submarines," she said.

"A coherent monitoring and response mechanism will help India detect Chinese vessels upon their entry into the Indian Ocean."

But to maximize their potential, and to host more personnel on the islands, they will need to develop infrastructure, including water, electricity, housing and internet access. "The Japanese grant addresses a key requirement on the ground that will help India better utilize the strategic potential of the Andaman and Nicobar," Baruah said.

Tanvi Madan, a senior fellow and director of The India Project at the Brookings Institution, noted that while the power grid funded by the grant contributes to civilian infrastructure, "it serves a dual purpose."

Madan said that the grant comes at a time when India is stitching in Andaman and Nicobar into its strategic tapestry in a much more significant way and reflects a change in attitude on both the Indian and Japanese sides.

India was the first country Japan extended official development assistance to in 1958. But India has always been reluctant to bring external actors into the Indian Ocean. Japan, for its part, has been hesitant to be too active in India's strategic periphery, to avoid being unnecessarily provocative to China, Madan said.

On India's side, two things are clear, Madan said. One, there is recognition that China, including through its navy, will be increasingly active in the Indian Ocean region. Second, because India cannot tackle that growing presence on its own, "you have now seen a broader switch in Indian strategy that has involved both developing its own capabilities and welcoming other external actors."

China has been boosting its presence in the Indian Ocean, opening its first overseas military base in Djibouti and building a series of commercial ports in Myanmar, Pakistan, Sri Lanka, and the Maldives that could eventually serve a military purpose.

India to begin full scale operations at Iranian port Chabahar in May 2021

India is getting ready to begin full-scale operations of its first foreign sea port venture Chabahar in Iran by May end this year. This facility located on the Gulf of Oman aims at facilitating South Asia, Central Asia and West Asia trade.

Indian US$500 million investment represents a clear and potent commercial challenge to China’s massive port investment in Gwadar port located in Pakistan, a key component of Beijing’s Belt and Road Initiative (BRI).

According to a report by Asia Times, India has nearly completed development of two terminals at Chahabar’s Shahid Beheshti complex that opens onto the Gulf of Oman.

The 10-year lease agreement, a deal first clinched by Prime Minister Narendra Modi in Tehran in 2016, has until now been hobbled by US sanctions imposed under the Donald Trump administration.  

Indian suppliers and engineers, some with interests in the US, were reluctant to deliver essential machinery and services to Iran on fears they could face sanctions, despite clear exemptions on Chabahar in Trump’s sanction order. That led to certain speculation that China may take over the project from India.

Now, New Delhi has accelerated the project with the shift from Trump to Joe Biden, banking like others on a new breakthrough on the Joint Comprehensive Plan of Action (JCPOA) and a broader US-Iran warming trend.

“I will inaugurate the fully operationalized Chabahar port in April or May,” Mansukh Mandaviya, Indian Ports & Shipping Minister, said in a recent virtual discussion on Iran’s Chabahar port.

India has supplied two large cargo-moving cranes and will deliver two more in the coming weeks before the facility’s expected ceremonial opening next month.

New Delhi is already promoting the port’s potential humanitarian role, noting it was used to send emergency shipments of wheat to Afghanistan during the COVID-19 crisis and pesticide to Iran to deal with a recent locust infestation.

Chabahar has seen limited operations since 2019 due to the US restrictions imposed on Iran’s energy exports. The port handled a mere 123 vessels with 1.8 million tons of bulk and general cargo from February 2019 to January 2021, well below its operating capacity, according to reports.

New Delhi ultimately aims to link Chabahar to its International North-South Transport Corridor (INSTC), a project initially proposed by India, Russia, and Iran in 2000 and later joined by 10 other Central Asian nations.

Some see the INSTC as a less talked about rival to China’s BRI, which has invested heavily in Pakistan’s road, power and trade infrastructure, including huge multi-billion-dollar investments at Gwadar port.

INSTC envisions a 7,200 kilometer-long, multimode network comprised of shipping, rail, and road links connecting India’s Mumbai with Europe via Moscow and Central Asia. Initial estimates suggest INSTC could cut current carriage costs by about 30% and travel times by half.

Iran has already started working on a 600-kilometer-long railway line connecting Chabahar port to Zahedan, the provincial capital of Sistan-Baluchestan province close to the Afghan border.

Chabahar port consists of Shahid Kalantari and Shahid Beheshti terminals, each of which has five berth facilities. The port is located in Iran’s Sistan-Balouchestan Province and is about 120 kilometers southwest of Pakistan’s Baluchistan province, where the China-funded Gwadar port is situated.

In May 2016, India, Iran, and Afghanistan signed a trilateral agreement for the strategically-located Chabahar to give New Delhi access to Kabul and Central Asia.

The original plan committed at least US$21 billion for Chabahar–Hajigak corridor, which included US$85 million for Chabahar port development, a US$150 million credit line for Iran, an US$8 billion India-Iran MOU for Indian industrial investment in a Chabahar special economic zone, and US$11 billion for the Hajigak iron and steel mining project awarded to seven Indian companies in central Afghanistan.

Hajigak is the best known and largest iron oxide deposit in Afghanistan. It is located near the Hajigak Pass, with its area divided between Maidan Wardak and Bamyan provinces.

Unlike Chabahar, which is designed more to serve the economic and trade interests of the wider region, Gwadar is more tilted toward Beijing’s ambitions, analysts and traders say.

Riaz Haq, founder and president of PakAlumni Worldwide wrote in a recent blog that “China is looking to build and use Gwadar in Pakistan as Hong Kong West to serve as a superhighway for China’s trade expansion in [the] Middle East (West Asia), Africa and Europe.”

Gwadar port’s planned capacity will accommodate a massive 300 to 400 million tons of cargo annually, comparable to the combined annual capacity of all Indian ports. It also dwarfs the 10-12 million tons of cargo handling capacity now planned for Chabahar.

In another comparison, the largest US port at Long Beach, California, handles 80 million tons of cargo, about a quarter of what Gwadar could handle upon completion of a project that is designed largely to receive and move China’s trade.

Bizarre situation in Israel: Netanyahu being asked to form government 5th time

To begin with, I am obliged to say that the situation in Israel highlights two serious faults of country's dysfunctional system, first, that the vote is split between so many parties that a clear winner does not emerge, and second, whatever is developing is ‘trading and bargaining’ which will end up in making inappropriate choices to run the ministries. 

The idea of 5th election is disgusting, but this faulty system has failed in providing a sustainable solution.

A skeptical Israeli President, Reuven Rivlin invited Prime Minister Benjamin Netanyahu on Tuesday to form a new government, after another inconclusive election deepened political stalemate in the country.

In his speech, Rivlin lamented that he could not have imagined when he was elected seven years ago that he would appoint a candidate to form a government five times during his term.

He said his main consideration is formation of a government that could receive the trust of the Knesset, but no candidate can currently obtain a majority of the Knesset.

The country’s longest-serving leader, in power consecutively since 2009, now faces the toughest challenge of enlisting enough allies for a governing coalition.

Under law, Netanyahu will have 28 days to do so, with the possibility of a two-week extension before President picks another candidate or asks parliament to choose one. Continued deadlock could ultimately result in a new election.

Israel’s election on March 23, its fourth in two years, ended with neither a Netanyahu-led right-wing and religious bloc nor a prospective alliance of his opponents capturing a parliamentary majority.

 “To my great regret, I have the impression that none of the candidates, at this stage, has a real chance of putting together a government, one that would win a confidence vote in parliament,” Rivlin said.

In his televised remarks, Rivlin said that under Israeli law, Netanyahu, as the current prime minister, was not disqualified from being assigned the task despite his indictment on corruption charges.

“The president fulfilled his duty and he had no choice, but granting Netanyahu the mandate is a shameful stain on Israel,” Netanyahu’s strongest rival, centrist politician Yair Lapid, said.

Alternative to Suez Canal: Another canal through Israel

The United States considered a proposal to use 520 nuclear bombs to carve out an alternative to the Suez Canal though Israel in the 1960s, according to a declassified memorandum. The plan never came to fruition, but having an alternative waterway to the Suez Canal could have been looked into once again, after a cargo ship stuck in the narrow path, blocking one of the world's most vital shipping routes.

According to the 1963 memorandum, which was declassified in 1996, the plan would have relied on 520 nuclear bombs to carve out the waterway. The memo called for the "use of nuclear explosives for excavation of Dead Sea canal across the Negev desert."

The memorandum was from the US Department of Energy-backed Lawrence Livermore National Laboratory. It suggested that an "interesting application of nuclear excavation would be a sea-level canal 160 miles long across Israel."

Conventional methods of excavation would be "prohibitively expensive," the memo said. "It appears that nuclear explosives could be profitably applied to this situation."

The memo added that "such a canal would be a strategically valuable alternative to the present Suez Canal and would probably contribute greatly to economic development."

As part of the pricing model, the memorandum estimated that four 2-megaton devices would be needed for every mile, which Wellerstein calculated as meaning "520 nukes" or 1.04 gigatons of explosives.

One possible route the memorandum proposed stretched across the Negev desert in Israel, connecting the Mediterranean to the Gulf of Aqaba, opening access to the Red Sea and the Indian Ocean. 

The laboratory noted that there were 130 miles of "virtually unpopulated desert wasteland, and are thus amenable to nuclear excavation methods." 

The "crude preliminary investigation" suggested that using bombs to create a canal through Israel "appears to be within the range of technological feasibility," the memo said.

But the memo conceived that one problem, which the authors had not taken into consideration, might be "political feasibility, as it is likely that the Arab countries surrounding Israel would strongly object to the construction of such a canal."

The memo came as the US Atomic Energy Commission was investigating using "peaceful nuclear explosions" to dig out useful infrastructure, Forbes reported in 2018. There were also plans to use this method to dig out a canal in Central America, Forbes reported.

But the PNE project remained experimental, after the US found that 27 experiments with PNEs heavily irradiated the landscape. The Atomic Energy Commission was also abolished in 1974. 

The Lawrence Livermore National Laboratory still exists. According to its website, it is dedicated to "ensuring the safety, security and reliability of the nation's nuclear deterrent."

The 1963 memorandum had also come less than a decade after the Suez crisis, a conflict for the control of the strategic waterway which was a defining event in the Cold War.

Arab League declares annexation ‘war crime’

Israeli plan to apply sovereignty to any part of the West Bank will end the two-state solution and eliminate the possibility of establishing an independent, sovereign and geographically viable Palestinian state, said Riyad Malki, Foreign Minister of Palestinian Authority.

In a speech before an emergency videoconference meeting of the Arab League foreign ministers, he said if implemented, the Israeli plan would also place al-Aqsa Mosque in Jerusalem under Israeli control “before it is demolished and replaced by the ostensible Temple.”

The meeting was held at the request of the Palestinians to discuss the “dangers” of the Israeli plan.

The Arab ministers condemned the plan as a “new war crime” and “flagrant violation of United Nations resolutions and international law.” They urged the United States to back away from supporting the plan and said the Arab countries will support by all political, diplomatic, legal and financial means any decisions taken by the Palestinians to confront it.

The foreign ministers also called on the Quartet (United States, Russia, European Union and United Nations) to convene an urgent meeting to save the chances of peace and a two-state solution and to take a position consistent with international decisions to compel Israel to “stop implementing its colonial plans, including annexation and settlement expansion.”

Malki warned that if the Israeli plan is implemented, it would “transform the conflict from a political to a religious conflict that will go on forever because the Palestinians would not accept it and won’t accept anything less than the borders of 1967 to establish their state, with East Jerusalem as its capital.”

The Israeli plan to apply sovereignty to any part of the West Bank “would never guarantee stability, security and peace,” he said.

Malki accused Prime Minister Benjamin Netanyahu of exploiting the coronavirus pandemic “to pass his decisions to annex large parts of the occupied Palestinian territory to Israel.”

 He also urged the Arab states to provide financial aid to the Palestinians as they face difficult financial conditions “due to the restrictions of the occupation.”

Any Israeli decision to annex parts of the West Bank would not change the status of these lands, Arab League Secretary-General Ahmed Aboul Gheit said in a speech during the meeting, adding that they will remain “occupied territories in accordance with international law.”

The purpose of Thursday’s meeting was to warn about the “dangers of the Israeli schemes to annex parts of the West Bank and the possible repercussions on regional stability,” he said. 

Turmoil in Jordan or coup sponsored by Israel

Former Mossad agent Roi Shpushnik was allegedly involved in the attempted coup in Jordan, according to reports in Jordan reported by Maariv, The Jerusalem Post's sister publication. According to the reports, the former Israeli agent offered Prince Hamza a plane to escape from the kingdom.

Earlier on Sunday, Jordan's Deputy Prime Minister Ayman Safadi said that Prince Hamza had liaised with foreign parties over a plot to destabilize the country.   

On Saturday the military said it had issued a warning to the prince over actions targeting "security and stability" in the key US ally. Prince Hamza later said he was under house arrest. Several high-profile figures were also detained.

"The investigations had monitored interferences and communications with foreign parties over the right timing to destabilize Jordan," Safadi said.

These included a Mossad agent contacting Prince Hamza's wife to organize a plane for the couple to leave Jordan, he said.

Many Jordanians were still grappling for answers in the aftermath of reports that Jordanian security forces foiled an attempt by Hamzah and some of his associates to topple the regime of King Abdullah.

People around Hamzah communicated with entities calling themselves “external opposition,” Jordanian Foreign Minister Ayman Safadi said Sunday. He did not provide details about the “external opposition.”

Sixteen Jordanians have been detained in connection with the case, including Bassem Awadallah, a former head of the royal court, and Sharif bin Zaid, a member of the royal family, Safadi said. He accused the detainees of planning to “undermine the security” of Jordan.

Safadi accused Hamzah of sending out a video message on Saturday night as part of an attempt to “distort the facts and gain local and foreign sympathy.”

Abdullah received phone calls on Sunday from the kings of Morocco and Bahrain and the emirs of Qatar and Kuwait, who expressed their countries’ “full solidarity” with Jordan.

The leaders also voiced support for all measures and decisions taken by Abdullah to safeguard Jordan’s security and stability, the Jordanian news agency Petra reported.

Saudi Arabia, Egypt, the United Arab Emirates and the Gulf Cooperation Council also voiced full support for Abdullah in maintaining security and stability in Jordan.

Trade with India: A debacle caused by lack of coordination among government functionaries

The reversal of the Economic Coordination Committee (ECC) decision on imports from India by the cabinet not only proves absence of coordination within the government, but also shows absence of comprehension and prudent thinking of serious matters that require sensible and level-headed approach.

A few days ago, at a press conference, Hammad Azhar, the newly appointed finance minister, had talked about ECC’s decision on trade with India, was based on economic factors. Interestingly, the summary moved in this regard was signed by Prime Minister himself.

The announcement made headlines both at home and in the neighboring country. The decision was viewed as part of recent measures to deescalate hostilities between Pakistan and India. Earlier, there was agreement of ceasefire across the line of control (LoC) as well as speeches were delivered by the Prime Minister and the Army Chief at the Islamabad Security Dialogue.

Ironically, the Federal Cabinet rejected the idea of opening trade between the two countries, leaving both the nations and the world stunned at the incongruence among the key facets of the government.

The debacle raises several questions that cannot be shrugged off by ministers. It has caused embarrassment. It points to a faulty system and also creates the impression that the key job of decision-making is conducted in a juvenile manner.

The explanations from Federal Ministers that ECC decisions can be overturned by the cabinet look novice. In fact Azhar at no point gave the impression that the ‘decision’ to trade with India was just a proposal under review.

It has now transpired that the foreign minister and some key members of government are against the idea of trading with India until New Delhi reviews its Kashmir policy and rescinds its decision to revoke special status of Indian held Kashmir.

While this approach may be in line with Pakistan’s stance on Kashmiris’ right to self-determination, it is also true that historically CBMs have been a part of the Pakistan-India equation.

The ECC decision may have been ostensibly about trade, but it would have needed input from all government departments, including the security establishment. Any decision having long-term consequences just can’t be made in isolation.

The fiasco is casting a cloud of uncertainty over Khan’s leadership skills. As demonstrated by this latest U-turn, communication problems, an inability to make and stick to decisions and poor conflict-resolution skills are becoming the hallmark of this government.

The nation has a right to know who is responsible for this debacle and what action will be taken to avoid such blunders in the future.

Time to reject Israeli manta that Iran is top menace of Middle East

A massive campaign is going on for some time that the recent moves by the US administration are aimed at creating peace in the Middle East. The multiple US-brokered deals between Israel, UAE, Bahrain, Sudan and Morocco, known as the Abraham Accords are creating a new reality in one of the world’s most combustible neighborhoods.

The US leadership promises a more prosperous and securer future for Arabs and Jews alike. The Western plays the trumpet that impetus behind this historic normalization of relations between the Jewish state and its Muslim neighbors is practical. The media portrays Iran as phantom, a common threat labeled by the US State Department as the world’s leading state sponsor of terrorism for nearly four decades. 

Western media portrays that Iran has been metastasizing across the region since its founding in 1979. From funding and arming anti-Israel terrorists, to blowing up Saudi oil facilities, to pirating commercial vessels in the Persian Gulf. They go the extent of saying Iran is the Middle East’s preeminent menace. 

Western media also says that the regime in Tehran does not represent the Iranian people. They quote the example of this chasm was on display after a US drone strike killed Iran’s top terrorist, Qasem Soleimani. Despite the mullahs’ efforts to turn this murderer into a martyr, Iranians ripped down the propaganda posters glorifying him. They also rejected the regime’s attempts to stir up hate against the United States and Israel. Videos from Iran showed average citizens going out of their way to avoid stepping on the US and Israeli flags printed on the ground outside of shopping malls, schools, and mosques – even on the day of Soleimani’s funeral.

The fact of the matter is that the Iranian people have more pressing issues at hand than the regime’s clumsy attempts at propaganda. Tehran’s sponsorship of terrorism, pursuit of nuclear weapons and long-range missiles to deliver them, and unconscionable hostage taking triggered the most crushing economic sanctions in history, crippling Iran’s energy, financial and industrial sectors, among others. Despite the immense resources of Iran, Iranians cannot even find the basics of food and housing, let alone dream of economic opportunities.

The biggest deception behind the Abraham Accords is that the Arabs are more interested in pursuing hi-tech and entrepreneurial opportunities rather than hating the Jews – and that Israel is actually the regional partner of choice in these areas. The biggest prove of this dichotomy is ongoing construction of settlements in the West Bank and other occupied territories.

The Jerusalem Post terms Turkey ‘spoiler’

The Jerusalem Post in one of its editorials has accused Turkey and President Recep Tayyip Erdogan of playing the role of ‘spoiler’ when efforts are being made to normalize relations with various Muslim countries. One may recall that Turkey was the first Muslim country to recognize and establish diplomatic relations with Israel soon after its creation. I have pick up several paragraphs from the editorial to let the readers know how much Israel hates Turkey and Erdogan.

Turkey is again rolling out media narratives about reconciliation with Israel. The latest attempt by Turkey to influence media narratives on this so-called reconciliation were articles that appeared in Turkish and Israeli media suggesting an exchange of ambassadors might be in the air. However, an Israeli Foreign Ministry representative informed that Turkey has not requested that Israel agree to an exchange of ambassadors.

This is not the first time Turkey has done this under the ruling AK Party and its leader President Recep Tayyip Erdogan. In the spring of 2020, Turkey said it wanted reconciliation around the time that France, Greece, Egypt, Cyprus and the UAE were all condemning Turkish threats in the Eastern Mediterranean. Turkey’s attempt to push for a largely mythical reconciliation was underpinned by Ankara’s attempt to block an Israel-Greece-Cyprus deal on a pipeline and to stop Israel from joining the Eastern Mediterranean gas forum.

Turkey again claimed it wanted reconciliation after US President Donald Trump lost his election last year. Turkey’s Erdogan was close to Trump and had gotten the US to allow Turkey to invade and ethnically cleanse Kurds in Syria. Turkey used the Trump administration to threaten NATO allies, harass France, encourage Islamist extremism and send mercenaries to Libya and Syria. Trump’s loss led Turkey to decide that the only way to decrease an emerging Israel-Greece-UAE-Egypt alliance was to try to isolate Israel away from its new friends. Turkey had even threatened to break relations with the UAE if Abu Dhabi normalized relations with Israel. How can a country pretend to want normalization with Israel at the same time that it tries to isolate Israel and ruin Israel’s friendships with Greece, Cyprus and the UAE?

This is why Israel must always be wary of the press reports – usually fed to media from the highest levels in Ankara – about reconciliation. Turkey’s sole goal under Erdogan over the last decade has been to isolate Israel and empower Hamas terrorists and Israel’s enemies. Turkey has done this quietly through funding of Islamic organizations and attempts to take leadership of anti-Israel voices globally. Even as Saudi Arabia and the Gulf have moderated and rapidly improved relations with Israel, Turkey has become a leader – along with Iran – of anti-Israel propaganda. The hosting of Hamas has included terror plots hatched from Turkey. Turkey’s Erdogan has compared Israel to Nazi Germany on numerous occasions, a mix of genocidal antisemitism that has no place in international relations.

Erdogan must make amends for calling Israel a Nazi country if Ankara ever hopes to improve relations. Ankara must also expel Hamas members and stop the flirtation with anti-Israel extremist groups, whether those groups may be in Iran or Gaza. Turkey’s drift towards Iran is worrying for the region. It prefers to work with Iran and Russia to discuss Syria, rather than the US. This is despite Ankara’s media sometimes claiming that Turkey might be willing to work with Israel against Iran.

The real Turkish regime agenda was set out in an article in Turkey’s state-run Turkish Radio and Television Corporation that reflects Turkey’s government thinking. In it, the author denied that Jerusalem is the capital of Israel and claimed that “Israel needs Turkey” and that Israel must “compromise.” Turkey never has to compromise. Turkey never does anything for Israel. This is the real agenda. Turkey wants Israel to beg and come to Ankara on a bended knee and this attitude has always underpinned Ankara’s recent treatment of Israel. It thinks that it can host Hamas terrorists, host plans to murder Israelis, give a red carpet to the Hamas commanders who have blood on their hands, who are welcomed with hugs by Erdogan, and also threaten Gulf countries against normalization with Israel, try to destroy Israel’s links to Greece and Cyprus and then order Israel to “compromise.”

The Next Giants

I am inclined to refer to writing by Shigesaburo Okumura, Editor-in-chief, Nikkei Asia. This, not only hints towards shifting paradigm, but also that world economic growth will be driven by Asia and not by United States or Europe. I quote below:

For the first time in 10 years, yellow sand from the deserts of Mongolia and Kazakhstan has blown into Tokyo. The arrival of the "Asian dust" is a traditional indicator of the coming of spring. It may only be a grain of sand, but seeing that tiny piece of earth makes me feel like I'm a part of Asia. That is not a bad feeling.
 
As the first Big Story of Japan's fiscal New Year, we look at a ranking of Asia's 500 fastest-growing companies, prepared in collaboration with the Financial Times of the UK and Statista of Germany.
 
Of those high performers, our story focuses on seven. That includes the top-ranked company, Carro, a Singapore-based online used-car sales platform. We also highlight its Malaysian competitor, Carsome, which stands at 17th in the ranking.
 
The secret of Carro's success is that it provides detailed reports of any flaws found with its vehicles.
 
In the world of microeconomics, used-car markets are considered a typical "market for lemons," in which buyers cannot judge the real value of the fruit based on its appearance. Removing information asymmetry between sellers and buyers is crucial if the market mechanism is to work effectively. It makes sense, then, that Carro's strategy is so popular among its customers: With the information gap removed, clients are able to buy used cars at a fair price.
 
Other than online car dealers, the story also features Indian mattress seller Wakefit; Singapore-based delivery company Ninja Logistics; South Korean robotics startup Twinny; Japanese software startup AI Inside, whose technology converts handwritten documents into digital data; and New Zealand electricity retailer Electric Kiwi.
 
The ranking is based on the companies' compound annual revenue growth rate between 2016 and 2019. The performances do not reflect the impact of COVID-19, but reading these entrepreneurial success stories, I am convinced that such "animal spirits" will drive the revival of the post-COVID world.
 
Market Spotlight this week is a story on Appier, the first Taiwanese startup to list in Japan since Trend Micro went public in 1998, while our Business Spotlight looks at Bilibili, known as "China's YouTube."
 
Asia Insight is an examination of the Tokyo Olympics. According to the latest Kyodo News poll, only 23.2% of Japanese support holding the games this year.
 
As for the mounting costs amid the diminishing enthusiasm, a professor at College of the Holy Cross in the United States points out in the story that the Tokyo Olympics are "basically the last in the old world where the concept was you spend an unlimited amount, and everyone should be all right with that because it's the Olympics."
 
While we're on the subject, there is talk of a possible boycott within the Western world of the Beijing Olympics in 2022, because of human rights issues related to the Xinjiang Uyghur Autonomous Region.
 
Some apparel brands, including Muji, are facing potential criticism for using Xinjiang cotton, which has become a focus of attention amid claims of forced labor. The Japanese company maintains its cotton is ethically produced. The story describes the difficulties that private companies must navigate in dealing with this highly sensitive issue in China.
 
I also recommend our stories on Myanmar's Generation Z, and the reopening of the Suez Canal.
 
Please do not miss our opinion piece on the #StopAsianHate movement. The author writes that "'Asian hate' has also long encompassed stereotypes and discrimination against ethnic and religious minorities as well as against indigenous peoples, including within Asia" and that "the need to 'Stop Asian Hate' is not just a US or European challenge."
 
I agree that we have to discuss this issue in a broader context, so that more people regard this problem as their own.
 

Bangladesh GDP anticipated to grow by 5.6% in current fiscal year

Bangladesh gross domestic product (GDP) is anticipated to grow by as high as 5.6% in the current fiscal year, subject to three factors, says a World Bank report. These critical factors are: 1) outcome of ongoing vaccination campaign, 2) likely restrictions on mobility, and 3) pace of recovery of world economy.

While there are bright chances of growth during FY21, significant uncertainty surrounds both epidemiology and policy development,” said the “South Asia Economic Focus South Asia Vaccinates” report. “Thus, growth in FY21 could range from 2.6% to 5.6%.

Over the medium term, growth is projected to stabilize within a 5% to 7% range as exports and consumption continues to recover.

The prospects for economic rebound in South Asia are firming up as growth is set to increase by 7.25% in 2021 and 4.4% in 2022, said the report, creating hopes for substantial recovery from historic lows in 2020, putting the region on a path to recovery.

“But the growth is uneven and economic activity remains well below pre-COVID-19 estimates.”

Following a sharp GDP growth deceleration in FY20 due to the pandemic, the economy started recovering in the first half of FY21, as movement restrictions were lifted and international buyers reinstated export orders.

Going forward, a gradual recovery is expected to continue; particularly if the government’s COVID-19 recovery programs are implemented swiftly.

With growth firming up, poverty is projected to decline marginally in FY21.

The pandemic impacted the economy profoundly. A national shutdown from March to May last year resulted in severe supply-side disruptions in all sectors of the economy.

The government’s COVID-19 stimulus provided firms with access to working capital and low-cost loans to sustain operations and maintain employee wages in FY20 and FY21.

From June 2020 onward, movement restrictions have been progressively lifted, and transit and workplace movement patterns returned to pre-pandemic levels by October.

According to the report, the downside risks are likely to persist if new waves of COVID-19 re-emerge in Bangladesh or its trading partner countries.

“This could necessitate additional movement restrictions, dampen demand for readymade garment, and/or limit the outflow of migrant workers.”

Bangladesh is expected to graduate from the UN’s least-developed country status in coming years, which will present opportunities but also challenges, including the eventual loss of preferential access to advanced economy markets, the report said.

Estimated poverty rose sharply in the fiscal year 2019-20 amidst substantial job and income losses.

However, household surveys point to a gradual recovery in employment and earnings and a decline in poverty in the first half of the fiscal year 2020-21.

Food security improved across the country, with the most significant increase in Chattogram.

The report stated that risks to the outlook might persist.

It identified fiscal risks, including weak domestic revenue growth (if tax reforms are delayed) and higher expenditure for COVID-19 vaccination (if external financing is limited) and for supporting the Rohingya refugees (if donor fatigue sets in).

In the financial sector, contingent liabilities from non-performing loans combined with weak capital buffers could necessitate recapitalization (resulting in higher domestic government debt) and depress credit growth.

While external demand for RMG appears to be stabilizing, the recovery is fragile and could be vulnerable to new waves of COVID-19 infections.

Demand for Bangladesh’s overseas workforce in the Gulf region may also be impacted by the ongoing recession in the region, impairing future remittance inflows.

OPEC plus decision to ease production dictated by United States

On Thursday, OPEC plus once again succumbed to pressure from the United States to gradually ease its oil output cuts from May. This should not be a surprise for the world because the Biden administration did exactly what Donald Trump had been doing in the past. 

Just to recall, it was Trump’s practice to call OPEC leaders, particularly Saudi Arabia to keep energy affordable.

The group, which has implemented deep cuts since a pandemic-induced oil price collapse in 2020, agreed to ease production curbs by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June and further 400,000 bpd or so in July.

Under Thursday’s deal, cuts implemented by the Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC plus, would be just above 6.5 million bpd from May, compared with slightly below 7 million bpd in April.

“What we did today is, I think, a very conservative measure,” Saudi Energy Minister Prince Abdulaziz Bin Salman told a news conference after the OPEC plus meeting, adding that output levels could still be adjusted at the next meeting on April 28.

He said Thursday’s decision had not been influenced by any talks with US officials or any other consuming nations.

The Saudi minister also said the kingdom would gradually phase out its additional voluntary cut that have been running at one million bpd, by adding 250,000 bpd to production in May, another 350,000 bpd in June and then 400,000 bpd in July.

“We reaffirmed the importance of international cooperation to ensure affordable and reliable sources of energy for consumers,” Jennifer Granholm, the new energy secretary appointed by US President Joe Biden, said on Twitter after her call with the Saudi energy minister.

News of the call coincided with signs of a changing mood in informal discussions between OPEC plus members. A few days before Thursday’s talks, delegates had said the group would likely keep most existing cuts in place, given uncertainty about the demand outlook amid a new wave of coronavirus lockdowns.

But in the 24 hours before the meeting started, sources said discussions had shifted to the possibility of output increases.

In the past, Trump had used his influence to force Saudi Arabia to adjust policy. When prices spiked, he insisted OPEC raise production. When oil prices collapsed last year, hurting US shale producers, he called on the group to cut output.

Until this week, Biden’s administration had refrained from such an approach, keep a distance from Riyadh and imposing sanctions on some Saudi citizens over the 2018 murder of Jamal Khashoggi.

Even when OPEC plus decided on 4th March to keep output steady, triggering a price rise, the White House had made no direct comment.