Monday, 21 February 2022

United States-China ties as fraught as ever

At the height of the Cold War, US President Richard Nixon flew into communist China’s center of power for a visit that transformed US-China relations and China’s position in the world in ways that was unimaginable at the time.

The relationship between China and the United States was always a challenge, and after half a century of ups and downs, is more fraught than ever. The Cold War is long over, but on both sides there are fears a new one could be beginning. Despite repeated Chinese disavowals, the US worries that the democratic-led world that triumphed over the Soviet Union could be challenged by the authoritarian model of a powerful and still-rising China.

 “The U.-China relationship has always been contentious but one of necessity,” said Oriana Skylar Mastro, a China expert at Stanford University. “Perhaps 50 years ago the reasons were mainly economic. Now they are mainly in the security realm. But the relationship has never — and will never — be easy.”

Nixon landed in Beijing on a gray winter morning 50 years ago. Billboards carried slogans such as “Down with American Imperialism,” part of the upheaval under the Cultural Revolution that banished intellectuals and others to the countryside and subjected many to public humiliation and brutal and even deadly attacks in the name of class struggle.

Nixon’s 1972 trip, which included meetings with Chairman Mao Zedong and a visit to the Great Wall, led to the establishment of diplomatic relations in 1979 and the parallel severing of formal ties with Taiwan, which the US had recognized as the government of China after the communists took power in Beijing in 1949.

Premier Zhou Enlai’s translator wrote in a memoir that, to the best of his recollection, Nixon said, “This hand stretches out across the Pacific Ocean in friendship” as he shook hands with Zhou at the airport.

For both sides, it was a friendship born of circumstances, rather than natural allegiances.

China and the Soviet Union, formerly communist allies, had split and even clashed along their border in 1969, and Mao saw the United States as a potential counterbalance to any threat of a Soviet invasion.

Nixon, embroiled in the Watergate scandal at home, was seeking to isolate the Soviet Union and exit a prolonged and bloody Vietnam War that had divided the US society. He hoped that China, an ally of communist North Vietnam in its battle with the US-backed South, could play a role in resolving the conflict.

The US president put himself in the position of supplicant to Beijing, said June Teufel Dreyer, a Chinese politics specialist at the University of Miami. Chinese state media promoted the idea that a prosperous China would be a peaceful China and that the country was a huge market for the US exports, she said.

It would be decades before that happened. First, the US became a huge market for China, propelling the latter’s meteoric rise from an impoverished nation to the world’s second largest economy.

Nixon’s visit was a pivotal event that ushered in China’s turn outward and subsequent rise globally, said the University of Chicago’s Dali Yang, the author of numerous books on Chinese politics and economics.

 

Pakistan should get ready to trade with Iran

According to a Dawn report the revival of the Joint Comprehensive Plan of Action (JCPOA) signed between Iran and leading super powers in 2015 is likely to present Pakistan some of the rarest opportunities. It will not only open up new avenues for closer economic engagement between the two neighbors, but access to oil, gas oil and minerals.

According to credible media reports, JCPOA is expected early next month. To earn Iran’s trust and to convince the world of the US intent, President Joe Biden has restored some sanction waivers early this month. These breaks would allow firms around the world to trade with Iran.

The private sector, aware of the US hostility towards Iran and its dominant position in the global market, particularly over capital flows through the banking system.

Razzak Dawood, advisor to Prime Minister on commerce, did not divulge much on the possibility of visiting Tehran to explore possibilities. Responding to Dawn, he did not hide his lack of interest. “I am looking into it.”

The reports from Vienna are calming in a global environment of growing geopolitical rivalries threatening whatever is left of Covid-battered economies. If the growing energy insecurity amidst rising oil prices and vanishing fears of Western backlash kick-start the Pakistan-Iran oil pipeline project, it will be a real boon for the people and the private sector groaning under the burden of rising fuel prices, hoped an incorrigible optimist.

Journalist-turned-politician Senator Mushahid Hussain Syed was hopeful of a positive outcome if the sanctions are lifted on Iran and the financial flows are eased. The partial sanction waiver by the United States is good news for Pakistan. as it will open up opportunities for boosting commercial cooperation between the two neighbours. Coupled with US humanitarian sanctions waiver for Afghanistan after January 23-25 Oslo meeting, this augurs well for lowering tensions in the region.

“While Iranian minister’s visit was linked more with cross-border security issues, especially terrorism in Balochistan, last year’s opening of a third border crossing point between Pakistan and Iran can provide an impetus for bilateral trade and travel.

“The biggest issue was that, fearing Western retaliation; Pakistani banks were not willing to open a letter of credit (LC) for legitimate overland trade. Perhaps, eventually, the Pakistan-Iran pipeline deal can also be revived. Iran can provide energy security to Pakistan which would strengthen the economy.

“An additional force multiplier for Pakistan-Iran economic ties is the China-Iran strategic economic agreement,” he responded in writing when reached for his input.

Dr. Manzoor Ahmed, former Ambassador of Pakistan to the World Trade Organization (WTO), lament limited trade and implicitly blamed a weak foreign policy.

“Pakistan has a very low trade volume; its exports to Iran can be multiplied manifold. Despite sanctions, India’s exports crossed US$3 billion as it allowed Iran to buy in Indian currency,” he said.

In the past, it was not US sanctions alone, but also the Saudi pressure that prevented Pakistan from deepening trade ties.

Pakistan should start preparing for the post-sanction period. It enjoys potential to diversify its energy import sources. Both the countries enjoy a long common border. There is also a probability of opening more border posts.

Pakistan has already signed a preferential trade agreement with Iran. The time has come to reciprocate the good will gesture of Iran.

Razak and hawks poles apart on trade with India

According to a Dawn newspaper report, Abdul Razak Dawood, Adviser to the Prime Minister on Commerce, Textile, Industry and Production, and Investment has said that trade with India is the need of the hour and beneficial to both countries. 

“The trade with India is very beneficial to all, especially Pakistan. And I support it,” he added.

“As far as the Ministry of Commerce is concerned, its position is to do trade with India and my stance is that we should do trade with India and it should be opened now,” Dawood said.

Dawood said something which is logical and need of the hour. Many others believe once Pakistan and India start with Trade it would be only a matter of time to open other doors.

Many analysts believe that if Pakistan continue to beat the drum that there will be no trade with India unless article 370 is re-instated, then in the next 100 years Pakistan will not be able to do trade with India.

They also say that many hawks, who play a key role in Pakistan’s policy insist on banning trade, travel, sports and people to people contact with India. Therefore, whatever Razzak and likeminded people are saying does not matter.

It may be recalled that in the recent past EEC made a decision to allow import of cotton from India, but the decision was taken back on the insistence of Prime Minister Khan. It may be said the Khan is also under the pressure of hawks.

The people privy to the decision making process say that at times open and backdoor diplomacy sound hoax call, because hawks know exactly how to discourage trade with India.    

Sunday, 20 February 2022

South Korea and Iran to resume oil trade

South Korea and Iran are working closely on resuming oil trade and unfreezing Iranian funds, said South Korean Foreign Ministry. The country was previously one of Iran's leading Asian oil customers. The move coincides with negotiations resuming in Vienna to revive Tehran's 2015 nuclear agreement with world powers.

Tehran has repeatedly demanded the release of about US$7 billion of its funds frozen in South Korean banks under US sanctions, saying Seoul was holding the money hostage.

"Our side expressed hope for the resolution of issues related to sanctions such as the transfer of frozen funds upon the agreement on the restoration of the Joint Comprehensive Plan of Action (JCPOA) now underway in Vienna," a South Korean statement said, using the full name of the nuclear accord.

The Iranian side stressed the importance of an early resolution of the matter of the frozen funds, it added.

Iran and South Korea are also discussing the trading of crude oil and oil products, on the condition sanctions are lifted as progress is made in nuclear negotiations, the statement said.

Previously South Korean oil buyers chiefly imported condensate, or an ultra-light form of crude oil, from Iran.

In Tehran, the Iranian Foreign Ministry spokesman Saeed Khatibzadeh said Iran saw the talks as a possible indicator of attempts to re-establish trade ties with South Korea.

"This expert meeting's results can be seen as a test of South Korea's seriousness to solve existing problems between the two countries and normalizing ties, including through oil and condensate sales to Korea and Korean firms' investments in Iranian projects," Khatibzadeh told state media.

"Therefore, Iran will carefully follow up on the results of these negotiations in considering how to regulate relations between the two countries," Khatibzadeh added.

The United States reimposed sanctions on Iran in 2018 after then President Donald Trump withdrew from the nuclear deal under which Tehran agreed to curb its nuclear program in exchange for US sanctions relief.

South Korea, the world's fifth-largest crude buyer, imported a total of 12.6 million tons of crude in January against 10.3 million tons a year ago, preliminary data from the Korea Customs Service showed. 

Saturday, 19 February 2022

The biggest challenge for Biden

The biggest challenge for US President Biden leadership is brewing crisis caused by Russian aggression against Ukraine. The stakes are high for Biden, after the chaotic withdrawal from Afghanistan that prompted widespread criticism and left allies questioning US leadership. 

Political observers say that the unfolding situation represents an opportunity for Biden to demonstrate American leadership and draw a contrast with former President Trump’s handling of Russian President Vladimir Putin.  

“More than anything, he has to show all these people that he is not the weak and frail leader Republicans say he is,” said one Democratic strategist. “In this case, it’s about perception more than anything else.”

There are also some political risks, especially if the crisis spirals into war and impacts the domestic economy. 

With an eye toward the upcoming midterm elections, Republicans have tried to paint Biden as weak on issues of domestic and foreign policy.

But Democrats like the contrast between Biden’s approach to Russia and how Trump, who spoke warmly of Putin and exhibited deference to the Russian leader, dealt with the Kremlin. They think this will be an effective response to any GOP attacks on Biden’s approach to the crisis. 

“Foreign policy is one of those areas where presidents can look or seem presidential,” said Basil Smikle, a Democratic strategist and director of Hunter College’s public policy program. 

“Particularly in the post-Trump environment where we all have been witness to the Trump-Putin bromance, if you will, I think voters will be able to see, number one, Biden on the world stage looking presidential, and two, can he look presidential against Putin where Donald Trump did not,” Smikle said.  

In a recent speech from the White House, Biden pledged to give diplomacy “every chance” to resolve the crisis while issuing a stern warning to Russia against invading Ukraine.   

“The world will not forget that Russia chose needless death and destruction,” Biden said.

“Invading Ukraine will prove to be a self-inflicted wound.”  

Biden administration officials have warned a Russian invasion of Ukraine could happen at any time, but Russia sent some signals that it may be willing to de-escalate. Biden is likely to receive credit if conflict is avoided, while he may incur some blame if the situation spirals out of control.  

Biden’s approach to the crisis has been focused on uniting allies behind a common approach to pushing back against Putin’s provocations and preparing a sanctions package that would cause pain to the Russian economy if it were to launch a renewed military invasion of Ukraine.   

Biden has been firm in his engagements with Putin, proposing “swift and severe costs” in the event of an invasion in a phone call over the weekend. He has sent thousands of troops to defend NATO allies in Eastern Europe while being clear that US troops will not be sent into Ukraine to fight Russia. The troop movements have even won some praise from Republican lawmakers.  

Much of the economic impact of a full-scale Russian invasion of Ukraine is expected to be centered in Europe, but it could drive up energy costs in the US, compounding the price pressures Americans are already facing.  

Biden acknowledged this possibility during his address on Tuesday and said his administration is “taking active steps to alleviate the pressure on our own energy markets.” 

“I will not pretend this will be painless,” he said. 

The Biden administration has been trying to fend off a potential energy crisis by engaging with countries and major energy companies to find a way to offset any energy shortage, given Europe’s reliance on Russian gas. 

Republicans have hammered Biden over inflation for months, seeking to convince voters that his policies are to blame and that he’s doing little to address high prices.  

“International crises could change the maps at home,” said Alex Conant, a GOP strategist.  

The economy and the pandemic will always matter a lot to people, Conant said, but if an international conflict escalates to the point that it affects the domestic economy or troops have to be deployed, it could definitely influence people’s views when voting.

Observers say this particular foreign policy scenario is different from the Afghanistan withdrawal that many see as a pivotal, negative point in Biden’s approval ratings as president. 

“I think the situation in Russia/Ukraine is quite different politically than Afghanistan,” said Richard Fontaine, the CEO of the Center for a New American Security who served as a foreign policy adviser to the late Sen. John McCain.  “The worst-case scenario is a full-scale invasion of Ukraine and if it happens, it will be despite the administration's efforts to avert it. If Putin is determined to go forward, no one is going to stop him.   

“That, I think, is different than Afghanistan, where at issue was a US policy of withdrawal implemented by the United States — and over objections from some of our allies.”  

The Afghanistan withdrawal struck at the heart of the competency message that Biden relied on during his successful presidential campaign. It was followed by a drop in the president’s domestic poll numbers that have not recovered as the nation grapples with the enduring coronavirus pandemic and inflation.  

There is limited data thus far on views of the Russia-Ukraine crisis and Biden’s handling of it. 

A CBS News poll released last week found that 70% of Democrats believe Biden’s approach to Russia is “about right,” while 44% of independents said the same. Only 16% of Republicans said his approach is “about right,” while 59% said it is too friendly and 25% said it is “too hostile.” 

Democratic strategist Rodell Mollineau said the White House has handled the crisis well to date.  

“This administration, the amount of communicating they’re doing on this is important. It shows Russia and the Ukraine that the US is invested, and it shows the American people this is something the US takes seriously,” Mollineau said.  

At the same time, Fontaine observed that the current crisis could have adverse political ramifications for Biden if it consumes his time and takes his attention away from other priorities of the Biden administration. 

“If that goes on indefinitely, it could produce opportunity costs for other administration priorities, in both foreign and domestic policy,” he said.  

Democrats say whatever happens, it’s unlikely to be a defining issue in this year’s midterms or the presidential race in 2024. 

As Democratic strategist Eddie Vale put it, “The 2022 and 2024 elections are going to hinge on what happens in Kenosha, not Kyiv.” 

 

Iran-Uzbekistan Joint Economic Committee Meeting Scheduled

Iranian Industry, Mining and Trade Ministry will hold 14th Iran-Uzbekistan Joint Economic Committee meeting on February 20-21, said an official of Trade Promotion Organization (TPO).

Director General of TPO’s United States and Europe Office, Mohammad-Reza Karimzadeh said on Friday that the 14th Iran-Uzbekistan Joint Committee meeting has been convened in Tehran for the promotion of trade among the two countries.

Expert committees have held talks in recent days to coordinate the preparation of the draft for a memorandum of understanding (MOU) between the two countries on economic, investment, customs, transportation, energy, health, scientific, technological, tourism, cultural and agricultural arenas, Karimzadeh said.

The official further noted that given the importance of enhancing relations between the private sectors of the two countries, the organizers also plan to hold a seminar on trade opportunities of the two nations on the sidelines of the mentioned meeting at the venue of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) on February 21, 2022.

Talking about the significance of the Joint Economic Committee meeting in developing the trade and economic relations between Iran and Uzbekistan, the Iranian official said, Uzbekistan is one of the important markets for Iranian commodities. Iran’s exports to Uzbekistan have witnessed significant growth in recent months, Karimzadeh said.

Iranian Deputy Foreign Minister for Economic Diplomacy Mehdi Safari said on February 17, 2022 that the Islamic Republic is going to hold two joint economic committee meetings with Uzbekistan and Kazakhstan in Tehran in the coming days separately.

It is expected that holding such meetings will help sign promising agreements for future cooperation in different fields, Safari noted.

According to the Deputy Foreign Minister, a delegation comprising of experts from Pakistan will also visit Tehran in the near future to discuss collaborations with officials in Iran’s agriculture sector.

Pakistan and Iran have so far shown determination to enhance economic and trade ties between private and administrative sectors of both countries, Safari added.

OPEC plus wants Iran to join supply deal

Reportedly, Iran has risen above Russia on the oil market radar due to reports from multiple sources that a new nuclear deal is very close to being agreed upon. There are also rumors that Russia is about to invade Ukraine, which has sent oil prices soaring earlier in the week, but tensions eased slightly by the weekend.

Iran is already gearing up for a return of its crude to international markets. The country last year announced production ramp-up plans. This week, media reported that officials from the state-owned National Iranian Oil Company had visited South Korea to discuss supply deals with local refiners.

If a deal is reached on Iran’s nuclear program, the country could add 500,000 bpd to global oil supply between April and May. According to Rystad Energy analyst Louise Dickson, Iran can ramp up production very quickly, in a matter of four to six months, and it also has substantial amounts of oil in storage to offer on international markets if sanctions are lifted

A potential agreement about the United States and Iran returning to the so-called nuclear deal looks close, according to an OPEC+ source.

“It is very likely OPEC will adjust Iran into the deal, as there is no other option,” the source told Reuters.

Over the past few days, there have been hints from diplomats that a deal on reviving the nuclear agreement is indeed close, which pushed oil prices lower.

Iran’s main negotiator, Ali Bagheri Kani, tweeted late on Wednesday. “After weeks of intensive talks, we are closer than ever to an agreement; nothing is agreed until everything is agreed, though. Our negotiating partners need to be realistic, avoid intransigence and heed lessons of past four years. Time for their serious decisions.”

In case a deal is reached, the United States has said that the window of reaching an agreement is closing fast—Iran could return some 1.3 million barrels per day (bpd) to the market within several months after the US lifts sanctions on its oil exports.

According to diplomats who spoke to Reuters, a draft of an agreement being discussed would put the main sanction-lifting stage, including oil exports, at a later stage, while releasing Western prisoners held in Iran and unfreezing Iranian funds would come first.

In the event of an agreement, OPEC+ would look to include Iran—currently exempted from all OPEC+ pact quotas—in the deal, Reuters’ source says.

Iran, for its part, will likely seek first to restore its oil production and exports, but it will also likely agree to a quota after talks with OPEC+, a source with knowledge of Iran’s thinking told Reuters.

It is looking increasingly likely that a new nuclear deal with Iran will be reached and sanctions on its oil industry will be lifted.

Iran would likely want to restore production to near pre-sanctions levels before joining any such agreement

 

Friday, 18 February 2022

Biden convinced Putin ready to invade Ukraine

Prior to the attack on Iraq and Afghanistan, the United States and its allies created hype about presence of Osama bin Laden in Afghanistan and Iraq building weapons of mass destruction. Both the countries were attacked, but both the mantras proved merely ‘hoax call’. This time the target is Russia and the mantra is the same, “Russia is getting ready to attack Ukraine”.

President of United States, Joe Biden on Friday said he believes Russian President Vladimir Putin has made up his mind to move forward with an invasion of Ukraine.

"As of this moment I’m convinced he’s made the decision. We have reason to believe that," Biden told reporters at the White House after delivering an update on the threat of a Russian invasion.

"You are convinced President Putin is going to invade Ukraine. Is that what you just said a few moments ago?" a reporter asked moments later.

"Yes, I did," Biden said, adding that diplomacy was still on the table if Moscow chose to deescalate.

Biden and White House officials have for weeks said they did not believe Putin had made a final decision about whether to carry out an invasion into Ukraine even as Russia amassed troops and military equipment along the Ukrainian border. But Biden indicated Friday that had changed and that the US and it allies were preparing for a Russian attack in the coming days. 

"We have reason to believe the Russian forces are planning to and intend to attack Ukraine in the coming week, in the coming days. We believe that they will target Ukraine’s capital of Kyiv, a city of 2.8 million innocent people," Biden said in prepared remarks.

"We’re calling out Russia’s plans loudly and repeatedly not because we want a conflict, but because we’re doing everything in our power to remove any reason that Russia may give to justify invading Ukraine and prevent them from moving," he added.

Biden held a call earlier Friday with leaders from Europe and Canada to discuss the ongoing threat of a Russian invasion. Vice President Harris is scheduled to meet Saturday with Ukrainian President Volodymyr Zelensky at the Munich Security Conference in Germany.

Biden and other White House officials have said it is up to Zelensky whether he wants to leave the country amid the threat of a potential Russian attack.

Despite Russian claims in recent days that it was moving forces away from Ukraine’s border, the US and NATO said that Moscow has added troops. Russia is also engaging in military exercises in Belarus, compounding the threat.   

Biden on Friday called out Russian claims he said were being used to create a pretext for an invasion. He cited the shelling of a Ukrainian kindergarten classroom by Russian-backed separatists and "fabricated claims" of an impending Ukrainian attack on Russia. 

"All of these are consistent with the playbook the Russians have used before to set up a false justification to act against Ukraine," Biden said. "This is also in line with the pretext scenarios that the United States and our allies and partners have been warning about for weeks."

Biden reiterated that he would not send US troops into Ukraine should fighting break out, but he pledged support for the Ukrainian people.

"The entire free world is united," Biden said. "Russia has a choice between war and all the suffering it will bring, or diplomacy."

 

Thursday, 17 February 2022

United States robs Afghanistan of US3.5 billion

Afghans have staged protests against a decision of the US administration to use $3.5 billion dollars of their country’s frozen assets to help settle lawsuits by the families of 9/11 victims. 

The US continues to maintain a strong economic blockade of Afghanistan and its central bank by not easing the mounting humanitarian crisis in the country. 

The protesters say the money belongs to the Afghan people stressing they are the ones who should be compensated by the US for 20 years of occupation that brought about terror, destruction, poverty, and killing of a countless number of civilians. 

Demonstrators have also gathered outside Kabul's Eid Gah mosque making similar demands of reparations from the US.

Civil society activist Abdul Rahman had this message for the US administration, “What about our Afghan people, who gave many sacrifices and thousands and thousands of losses of lives?''

Afghan activists have also pointed out that none of the hijackers that staged the 9/11 attacks were Afghan nationals and say they will never forget the destruction left behind by America. 

Aid groups have condemned the move saying the money legally belongs to the Afghan people and nobody else is entitled to it. 

Addressing a press conference in Kabul, former Afghan President Hamid Karzai slammed Biden’s decision. He called on Washington to immediately return the US$7 billion in frozen assets which he says “belong to no government, but to the people of Afghanistan”.

The Taliban’s senior spokesperson, Mohammad Naeem Wardak, wrote on social media, "The theft and seizure of money owed by the United States to the Afghan people represent the lowest level of human and moral decay of a country and a nation”. 

Pakistan’s permanent representative to the United Nations, Munir Akram, says the money was critically needed to revive the economy of the war-battered country. Akram says, “We have consistently joined the calls of the international community as well as the senior UN officials and the international humanitarian actors to unfreeze Afghanistan’s reserves”

Critics have also denounced the White House for doing so little to address underlying factors driving Afghanistan’s massive humanitarian crisis after 20 years of American occupation.

A financial advisor to the former Afghan government, Torek Farhadi, questioned the White House’s decision saying "these reserves belong to the people of Afghanistan, not the Taliban... Biden's decision is one-sided and does not match with international law”

Farhadi also says that “no other country on Earth makes such confiscation decisions about another country's reserves”. 

Policy Analyst and Afghan Researcher, Mohsin Amin, strongly denounced the move; writing on social media that "the U.S. dropped 85,000 bombs on Afghanistan. Even if one bomb killed 3 people, it's 255K. The last U.S. airstrike killed 10 (7 children), "97 percent of [Afghanistan] is starving, 3.2m children are malnourished, yet the US wants to throttle the economy and steal the hard-earned savings of Afghans”. 

The Policy Advisor to the UK Minister of Afghan Resettlement, Shabnam Nasimi, wrote on social media "as more than 23 million people are on the brink of starvation, it is unjust & immoral for @POTUS to want to use billions of Afghanistan’s frozen assets to pay 9/11 victims. The horrific 9/11 attacks had nothing to do with the people of Afghanistan, & they should not be punished”. 

Adam Weinstein, a researcher at the Quincy Institute, also added to the chorus of condemnation online saying the move will "go down in history as a travesty. Punishing an entire people for a crime they did not commit & kneecapping them into forever dependence should offend every American”. 

On Sunday, the Afghan central bank called on the U.S. administration to reverse the decision. 

In a statement, the Da Afghanistan Bank (DAB) said "blocking Foreign Exchange (FX) Reserves and allocating them to irrelevant purposes, is an injustice to the people of Afghanistan and [the DAB] will never accept if the FX reserves of Afghanistan is paid under the name of compensation or humanitarian assistance to others and [the DAB]  wants the reversal of the decision and release of all FX reserves of Afghanistan”.

"As per the law and relevant regulations, FX reserves of Afghanistan are used to implement monetary policy, facilitate international trade and stabilize financial sector”.

The statement added that “the real owners of these reserves are the people of Afghanistan. These reserves were not the property of governments, parties, and groups and have never been used as per their demand and decisions”. 

When Kabul fell to the Taliban in August 2021, Afghanistan had over $9 billion in reserves held on behalf of the country’s central bank abroad.

This included $7 billion in foreign currency reserves held in the U.S., and the rest mostly in Germany, the UAE, Switzerland, and a few other countries.

The Biden administration has decided to release $3.5 billion of Afghanistan’s money held in America towards families of victims of the September 11, 2001 attacks and it has also agreed to allocate the other $3.5 billion towards a trust fund that will be used to send humanitarian assistance to Afghanistan. 

However, a senior U.S. administration official told reporters that it will take a long time before the money is even released for humanitarian relief in Afghanistan claiming “we have to go through a judicial process here, it is going to be at least a number of months before we can move any of this money, right? So this money isn’t going to be available over the next couple of months regardless“. 

The remarks come as acute malnutrition is spiking and over 90 percent of the country is facing serious food insecurity, problems that disproportionally affect women and girls; while Afghan children are starving to death nearly every day.

Advocacy group Human Rights Watch says “even if implemented, the decision would create a problematic precedent.. directing $3.5 billion to humanitarian assistance for Afghans may sound generous, but it should be remembered that the entire $7 billion already legally belonged to the Afghan people”.

The rights group highlights that even if the U.S. gives the remaining money to “a humanitarian trust fund, current restrictions on Afghanistan’s banking sector make it virtually impossible to send or spend the money inside the country”. 

It added that more important to addressing Afghanistan’s current crisis “are ongoing efforts by the United Nations and humanitarian organizations to convince the U.S. and World Bank to ease economic restrictions to allow Afghanistan’s economy, which is near complete collapse, to stabilize. Current restrictions on Afghanistan’s banking system are driving the population toward famine” 

On multiple occasions, humanitarian organizations have warned that keeping an economic blockade on the country will only make things worse. 

Organizations and groups that are trying to offer assistance need access to banks. 

Human Rights Watch says “without them, the UN’s own humanitarian activities have become exceedingly difficult; some have had to cease operations altogether”.

Aid group Refugees International has also issued a statement saying they are concerned Biden’s administration’s decision will exacerbate the suffering of the Afghan people.

The organization said "millions are already facing a dire and life-threatening humanitarian crisis this winter. Using part of Afghanistan’s reserves to help provide badly needed relief aid and essential services will no doubt help save lives”

It added, "We are concerned that this action could further cripple the country’s financial system and thereby perpetuate the suffering of the Afghan people."

Analysts say the mounting condemnation of the US administration will add to America’s disastrous policies and mistakes Washington committed and is continuing to commit again the people of Afghanistan.

Pakistan textile exports rise to US$11 billion

According to the data released by Pakistan Bureau of Statistics, Pakistan textile exports has witnessed a record exports of US$11 billion in first seven months of the current financial year (FY22), up by 25%YoY. In PKR terms, the exports yielded Rs1.861 trillion, up 30%YoY due to 4% depreciation of the local currency.

For 7MFY22, the key export driver was increase in value-added exports where knitwear segment contributed the most as it increased by 33%YoY to US$2.9 billion, followed by Readymade garments, up 22%YoY to US$2.2 billion and Bedwear up 19%YoY to US$1.9 billion exports.

However, on MoM basis, Pakistan textile exports were down 4% to US$1.5 billion in January 2022, due to lower value-added exports segments mainly in Knitwear, down 12%MoM and Ready-made garments, down 4% MoM.

As compared to last year, Pakistan’s textile exports were up by 17%YoY in January 2022 led by significant recovery witnessed in value-added segments, largely in knitwear, up 19%YoY, Ready-made up 17%YoY and Bedwear, up 21%YoY.

The volumetric growth and improved pricing were the key drivers resulting in higher exports.   

Going forward, analysts expect textile exports to remain robust in the remaining months of FY22 fiscal and may touch US$19 billion.

Ease of lockdown in European economies is likely to drive increased orders and help overall textile exports.

The Federal Cabinet on February 15 approved the Textile and Apparel Policy 2020-25, after Ministry of Commerce (MoC) submitted the revised draft of textile policy to Economic Coordination Committee (ECC) incorporating few amendments.

The key reason behind the late approval was the dispute between MoC and Energy Ministry on the issue of Energy Tariffs, specifically RLNG and Electricity.

As to the sources, the updated draft stated that Energy Tariffs (RLNG and Electricity) will be provided to textiles and apparel industry at regionally competitive rates during the policy years. For this, tariff will be reviewed and announced in federal budget by Finance Division.

§  As per Pakistan Institute of Development Economics (PIDE), the average regional electricity tariff rate stood at 7.4 cents/kWh in Mar-21, which we believe has likely increased since than. Pakistan’s current electricity tariff is around 9 cents/Kwh. 

§  In case of RLNG, the average regional RLNG rate stood at ~US$4/MMBTU as per PIDE vs. Pakistan’s tariff rate at US$6.5/MMBTU. We believe the above stated textile policy will have a neutral impact on the sector. Given, Pakistan is already offering subsidized energy & RLNG tariffs to textile players and Pakistan being part of an IMF program, a further reduction from the current levels is highly unlikely. 

§  RLNG tariff is expected to remain intact at US$6.5/MMBTU level although regional average is comparatively low. To note, RLNG is currently being provided at US$9/MMBTU to textile sector till March-22 due to supply issues.

§  Subsidized energy rates, increasing export numbers, and currency weakness bodes well for the sector. We have an ‘Overweight’ stance on Textile Sector with Interloop Limited (ILP) and Nishat Mills Limited (NML) as our top picks.

 

 

Wednesday, 16 February 2022

CNN plunging deeper into crisis

According to media reports, the crisis marring CNN deepened Tuesday with the departure of key executive Allison Gollust and a New York Times report shedding new light on internal turmoil at the network. 

Gollust served as Chief Marketing Officer of CNN. She is in a relationship with Jeff Zucker, who was ousted as the President of the network on February 02, 2022.  

Zucker’s failure to disclose the relationship was the official reason given for his departure, though there has been plenty of speculation about other factors that might have been at play. 

Gollust’s departure, like Zucker’s, looks like an involuntary resignation. In a statement, she described it as “deeply disappointing” that she “would be treated this way” as she leaves. 

Meanwhile, the New York Times story provided more detail on an allegation of sexual assault against former CNN anchor Chris Cuomo. The allegation — which Cuomo vehemently denies — dates back to his pre-CNN days at ABC News.  

But the Times report included a claim from his accuser's lawyer that Cuomo, while at CNN, may have sought to dissuade the woman from coming forward by airing a segment on the company where she worked as the "Me Too" movement gathered steam. If true, that would be a clear and grave breach of journalistic ethics. 

The new twists ensure that the saga roiling the network founded in 1980 by Ted Turner will keep on running. 

Two weeks ago, when Zucker resigned, both he and Gollust issued statements acknowledging they should have disclosed their relationship and did not. 

At that time, Gollust appeared set to stay with the network. Zucker and Gollust have worked together for decades, having first met when Zucker was the young executive producer of NBC’s “Today” and Gollust was an NBC publicist.  

The status of their relationship has been a subject of gossip in New York media circles for years. Former “Today” anchor Katie Couric described the dynamics between the two in eyebrow-arching terms in the memoir she published last fall. 

Zucker and Gollust have asserted that they were close friends and colleagues until the pandemic, when their relationship became a romantic one. Both are divorced and there is no suggestion of coercion or abuse of power. 

In a memo announcing Gollust’s departure on Tuesday, WarnerMedia CEO Jason Kilar said that an investigation “performed by a third-party law firm and led by a former federal judge” had begun last September and concluded this past weekend. 

Kilar added that the probe had “found violations of Company policies, including CNN’s News Standards and Practices, by Jeff Zucker, Allison Gollust, and Chris Cuomo.” 

But the careful phrasing says nothing about whether the job-ending violation for Gollust was her failure to disclose her relationship with Zucker. If it was, why did she seem in the clear to stay in her position just two weeks ago? If it wasn’t, what new infraction has come to light? 

Gollust, for her part, says that the claims from WarnerMedia are “an attempt to retaliate against me and change the media narrative in the wake of their disastrous handling of the last two weeks.” 

The thread that has caused the higher reaches of CNN to unravel begins with the relationship between Chris Cuomo and his elder brother, former New York Governor Andrew Cuomo. 

During the early stages of the COVID-19 pandemic, Chris Cuomo conducted several interviews on his CNN prime-time show with the then-governor. The interviews were ethically questionable but strongly backed by Zucker.  

Familial banter between the brothers about topics including which one was favored by their mother made for compelling television even while critics voiced queasiness. 

The situation became more serious when the New York governor was accused by multiple women of inappropriate behavior. In time, it emerged that Chris Cuomo had played a role in helping his brother push back against those allegations. 

Zucker defended the CNN anchor when the first details emerged of those efforts. But the problem deepened in November 2021, when new documentation released by New York Attorney General Letitia James showed that Chris Cuomo had sought to get advance warning of damaging stories about his brother and appeared to be seeking ways to cast doubt on at least one of his accusers. 

Zucker ultimately fired Cuomo, with whom he had been personally close as well as professionally allied. 

For a start, Gollust had worked for Andrew Cuomo, albeit for a brief period almost a decade ago. Perhaps more pertinently, there are now suggestions that Zucker crossed journalistic lines in his dealings with Andrew Cuomo. 

Tuesday’s Times report noted that, after Chris Cuomo was fired, people on his team “soon began whispering to reporters that Zucker had coached Governor Cuomo on how to use his televised briefings [on the pandemic] to go after” then-President Trump. 

The Times included a denial from a Zucker spokeswoman that the ousted CNN president had ever given Andrew Cuomo “advice.” 

If that denial were to be disproved, it would cause serious outrage — and would buttress the argument of those who believe the media in general, and CNN in particular, are too cozy with Democratic politicians. 

Beyond the specifics of what exactly happened with Cuomo, Zucker and Gollust, there are bigger questions facing CNN.  Zucker is widely credited — or blamed, depending on your point of view — for driving CNN in a more opinionated direction, especially during the Trump presidency. 

To his supporters, Zucker understood that the 45th president — whose career he had previously revitalized while at NBC by making him the star of “The Apprentice” — required a paradigm shift in journalistic coverage. The network’s ratings soared as anchors, including Chris Cuomo and others, aimed daily barbs at Trump. 

To his detractors, Zucker pushed a view of politics-as-reality-show to unhealthy extremes. Zucker’s influence undercut CNN’s credibility and accelerated a general coarsening of journalistic and political culture, according to this critique. 

CNN and the rest of WarnerMedia is in the process of being spun off by its corporate owner, AT&T. Assuming that deal goes through, those properties will then merge with Discovery Inc. 

But longtime media mogul and Discovery board member John Malone caused a stir back in November last year when he told CNBC, “I would like to see CNN evolve back to the kind of journalism that it started with — and actually have journalists, which would be unique and refreshing.” 

CNN is also readying a streaming service, CNN plus, for launch. Zucker was central to that project, but he had also recruited some broadcasters who represent a break with the opinionated anti-Trump approach — notably Chris Wallace, formerly of Fox News, and Kasie Hunt, formerly of NBC News. 

With Zucker gone, and so much else in flux, any shift in the network’s tone will be closely parsed. The old maxim holds that it is never good for journalists — or media organizations — to become the news. But whether it matters to the audience is another matter. 

Other networks and big-name shows have endured scandal in recent years — and endured just fine. 

The late Roger Ailes, the driving force behind the rise of Fox News, faced multiple accusations of sexual harassment, leading to his ouster from the network in 2016. Despite this, Fox News remains the ratings leader among all cable networks. 

Matt Lauer, the longtime co-anchor of “Today,” was fired in 2017, with NBC citing a report of “inappropriate sexual behavior.” Other allegations against Lauer followed.  

Lauer has acknowledged causing other people “pain” for which he feels “sorrow and regret” but has denied ever coercing anyone into sex. There has been no long-standing damage to “Today,” which remains in a close battle with ABC’s “Good Morning America” for primacy among morning shows. 

There is no real reason to think CNN will suffer any worse fate.  That said, the network’s ratings were way off the highs of the Trump years even before the current furor kicked off. 

Multiple media reports have indicated that some of CNN’s biggest names are dismayed by Zucker’s departure. There have also been insinuations from the journalistic ranks that Zucker was really pushed out not for a terminal ethical lapse, but because of a battle for corporate power between him and Kilar. There are no signs yet of any big names actually departing the organization. But the prolonged controversy is surely bad for morale, among rank-and-file staff and on-screen stars alike. 

Iran January 2022 oil output rises 21%MoM

Iran’s crude oil production in January 2022 reached 2.503 million barrels per day (bpd), registering a 21% increase as compared to the figure for December 2021, according to OPEC’s latest monthly report. Iran had produced 2.482 million bpd of crude oil in December 2021.

The Iran’s average crude output for the fourth quarter of 2021 stood at 2.480 million bpd indicating a 40,000-bpd increase as compared to the figure for the first quarter of the year, the report indicated.

OPEC put the average Iranian crude output for 2021 at 2.405 million bpd, while the average output in 2020 was 1.988 million bpd.

These statistics show that although with the re-imposition of the US sanctions, Iran's oil production decreased; gradually the country has been able to compensate for part of the output decline.

The country’s heavy crude oil price also increased US$10.91 in January, to register a 14.6% rise as compared to the earlier month.

Iran sold its heavy crude oil at US$85.59 per barrel during the month, under review as compared to December price of US$74.68 per barrel. Based on the OPEC data, the country’s average heavy crude price was US$54.38 in 2021.

In addition to the devastating impacts of the coronavirus pandemic on the global oil industry which resulted in the drastic fall in oil production and prices, the Iranian oil industry was under pressure from the US efforts to isolate the country by re-imposing sanctions in 2021.

Iran has been ramping up its oil production over the past few months following the recovery of the global markets from the negative impacts of the coronavirus pandemic and the developments in Vienna talks.

Back in February 2021, Fitch Solutions Incorporation, a subsidiary of Fitch Ratings, which is one of the three biggest credit rating agencies of United States, saw the Islamic Republic’s crude oil exports double in 2022 compared to 2020.

“The prospects for the Iranian oil sector have brightened significantly following Joe Biden's victory in the US presidential election on November 3, 2020. President Biden has indicated that he will seek to re-enter the US into the Iranian nuclear deal, paving the way for a roll-back of secondary sanctions and recovery of around 2.0 million bpd in oil production,” the report said.

 

Tuesday, 15 February 2022

Japan to supply LNG to Europe amid Ukraine crisis

US asks Japan to offer emergency assistance amid tense faceoff with Russia 

Japan will provide part of its liquefied natural gas imports to Europe from March as simmering tensions between Russia and the West over Ukraine undermine energy security in the region, said Industry Minister Koichi Hagiuda.

Hagiuda told reporters after separately meeting European Union (EU) Ambassador to Japan Patricia Flor and US Ambassador to Japan Rahm Emanuel that the Japanese government took account of requests from the United States and the European Union in making the decision, as well as a gas shortage in Europe.

LNG supply in Japan is currently tight, but we decided to meet the requests as long as a stable supply to Japan is ensured, said Hagiuda.

Industry Ministry officials suggested total shipment to the region in March will likely be several hundred thousand tons.

The government is asking Japanese companies involved in the LNG business for their cooperation even beyond March, Hagiuda said.

Japan, a major LNG importer, will secure enough supply for domestic needs before assisting European countries facing the threat of disruptions to their gas supply from Russia in the event of an incursion by Moscow into Ukraine, according to government sources.

With about 40% of Europe's imports of LNG coming from Russia, the United States has asked Japan to extend energy assistance to ensure stable energy supplies in the region during the winter.

The United States has warned of sanctions if Russia, which has massed troops near the Ukrainian border, invades. There is growing concern that Moscow could significantly restrict LNG exports to Europe in retaliation for Western sanctions.

To reassure allies of the North Atlantic Treaty Organization (NATO), the United States is sending additional troops to Europe, while Russia has accused the United States and NATO of ignoring security concerns related to Ukraine, a former Soviet republic.

At an energy council meeting in Washington earlier this week, the United States and the EU affirmed their commitment to address risks related to the bloc's energy supply.

EU Foreign Policy Chief Josep Borrell told the meeting that Russia does not hesitate to use its energy supplies to Europe as a weapon for geopolitical gain as energy prices surge worldwide.

US Secretary of State Antony Blinken, noting Russia's state-owned companies are holding back natural gas exports, said Washington is in discussions with governments and major producers around the world to shore up energy supply throughout Europe, including Ukraine.

US President Joe Biden also warned, after holding talks with German Chancellor Olaf Scholz, that the yet-to-be-activated Nord Stream 2, a gas pipeline project connecting Germany and Russia via the Baltic Sea, will be halted if Russian troops cross into Ukraine.

Japan's LNG move forms part of such international efforts.

But in Japan, the growth in LNG demand for heating tends to outpace that of supply in the month of February, according to an energy industry official.

While Japan has a greater stockpile of LNG this winter than last, some in the energy sector believe it would be challenging to provide surplus LNG during February due to the possibility of a surge in demand.

The United States has urged Japan to consider imposing economic sanctions on Moscow if Russian troops invade Ukraine, according to diplomatic sources.

 

 


Monday, 14 February 2022

What if Israel strikes Iran?

As negotiations between the world powers and Iran in Vienna enter their “final stage,” many in the Middle East and also in Washington and European capitals – hold their breath to question, is return to a nuclear deal with Iran possible?

The arch rival of Iran, Israel is closely following developments in Vienna. Accepting the fact that some agreement with Iran is almost certainly on the way, Prime Minister Naftali Bennett recently said, “The agreement and what appears to be its conditions will damage the ability to take on Iran’s nuclear program.”

It appears that Israel is getting ready to attack Iran, in case the talks in Vienna fail to produce an agreement and Iran is free to pursue its nuclear program, in addition to its regional activities.

Many Israelis believe that a deal with Iran won’t be able to stop the country from developing a nuclear weapon. Therefore. Israel must get ready to strike Iran. Bennett stated, “Israel will continue to ensure its full freedom of operation in any place and at any time, with no limitations.” The incoming IAF commander Maj.-Gen. Tomer Bar said that the Israel Air Force is ready to attack Iran tomorrow.”

If Israel does indeed attack Iran, as Israeli officials have increasingly implied might happen, what impact would it have on the Middle East? How would the region be any different after such a development?

These questions may be hypothetical now, but they could very well turn out to be reality tomorrow.

To find answers to these question, Wikistrat, a crowdsourced consultancy, ran a weeklong simulation from January 24 to 31, 2022, while the talks in Vienna were still taking place.

To explore how an Israeli strike would impact the region’s stability, the simulation focused on the five actors that were considered the most significant in the Gulf region, Iran, Saudi Arabia, the United States, China and Russia. The simulation included 31 experts from 13 countries and focused on three scenarios: 1) a successful Israeli strike on Iran, 2) a failed strike, and 3) a partially successful strike.

Discussions in the simulation produced a few key insights, which observers of developments in the region may want to keep in mind as they try to make sense of the Middle East in the next few years.

First, the experts argued that in the years after an Israeli military strike ‑ regardless of its results ‑ the Middle East will enter the nuclear proliferation phase, which will include not only Israel but also Iran and possibly Saudi Arabia. An Israeli strike will embolden the Iran regime’s desire to have a nuclear weapon, viewing it – much like North Korea – as a guarantee against future attacks.

For its part, fearing an Iranian nuclear retaliation against it, Saudi Arabia will also seek to develop its own nuclear program. This is based on the participants’ assessment that a failed Israeli strike would drive the Saudi leadership to move forward as quickly as possible with its own nuclear program. A successful strike could serve as a catalyst to the Saudi nuclear program, encouraging Saudi decision-makers to leverage the attack and to catch up with the Iranian nuclear program.

A successful strike could lead to a Saudi-Israeli normalization. Some of the experts argued that a successful Israeli strike might cause Mohammed bin Salman, as king, to normalize relations with Israel, in the expectation that the entrenched anti-Iranian sentiment in Saudi Arabia would outweigh any backlash against normalization.

However, a failed strike could have a negative effect on Israel’s regional position, as Israel was perceived until then as a strong partner to the Gulf states on security affairs and a critical partner for confronting Iran. The experts assessed that if Israel failed to deliver on confronting Iran by failing to destroy its nuclear facilities, Saudi Arabia would be less inclined to engage with it.

While a nuclear deal between the US, other world powers and Iran seems almost certain at this point, the stakes for an unchecked nuclear Iran are higher than ever.

If Israel feels compelled to act alone to stop a nuclear Iran, a completely different geopolitical reality could emerge in the Middle East.