Russian pipeline resumes supplying gas to Europe

Russia has resumed pumping gas to Europe through its biggest pipeline after warnings it could curb or halt supplies altogether.

The Nord Stream 1 pipeline restarted following after a 10-day maintenance break but at a reduced level.

It may be recalled that on Wednesday, the European Commission had urged countries to cut gas use by 15% over the next seven months in case Russia switched off Europe's supply.

Russia supplies Europe 40% of its natural gas requirement last year.

Germany was the continent's largest importer in 2020, but has reduced its dependence on Russian gas from 55% to 35%. Eventually, it wants to stop using gas from Russia altogether.

Russia's President Vladimir Putin has sought to play down fears, promising that state gas firm Gazprom would fulfill all its contractual obligations. His spokesman, Dmitry Peskov, denied that Russia was using gas for political blackmail.

The pipeline is only delivering 40% of its capacity, and the head of Germany's network regulator warned that the resumption of gas flows was not a sign that tensions were easing.

"The political uncertainty and the 60% cut from mid-June unfortunately remain," Klaus Müller said.

Gazprom cut the flow of gas through Nord Stream 1 last month, blaming the delayed return - due to sanctions - of a key piece of equipment which had been serviced in Canada.

The turbine is now believed to be on its way back to Russia, but President Putin recently said that if it is not returned, supply would have to be reduced further.

He has also pointed out that another machine is due to be sent for service soon, according to Russia's Tass news agency.

The continued reduction in gas supply through Nord Stream 1 is likely to make it more difficult for countries to replenish their stores before winter, when gas usage is much higher.

European countries have been looking for alternative suppliers of gas, for example LNG from the US, which can be transported by ship.

But building the infrastructure needed to import gas from new suppliers can be expensive and time consuming, which makes it unlikely that Russian gas can be replaced completely before the coming winter.

Instead, it may be necessary to cut gas consumption, and on Wednesday the EU Commission President, Ursula von der Leyen, announced a voluntary target for all EU countries to reduce their gas use by 15%.

In late February, in response to Russia's invasion of Ukraine, Germany abruptly halted plans to open a new pipeline - Nord Stream 2 - which would double the supply of Russian gas to Germany.

Critics of the Nord Stream 2 project had long argued that it would give Russia too much control over Europe's energy supply.

 

Sri Lanka crisis: A warning to Pakistan and Bangladesh

Sri Lanka is in the midst of a deep and unprecedented economic crisis that has sparked huge protests and seen its president quit after fleeing the country - but other countries could be at risk of similar troubles, according to Kristalina Georgieva, Managing Director, International Monetary Fund (IMF).

"Countries with high debt levels and limited policy space will face additional strains. Look no further than Sri Lanka as a warning sign," said Kristalina.

She said developing nations had also been experiencing sustained capital outflows for four months in a row, putting their dreams of catching up with advanced economies at risk.

Sri Lanka is struggling to pay for crucial imports like food, fuel and medicine for its 22 million people as it battles a foreign exchange crisis. Inflation has soared about 50%, with food prices 80% higher than a year ago. The Sri Lankan rupee has slumped in value against the US dollar and other major global currencies this year.

Many blame ex-President Gotabaya Rajapaksa for mishandling the economy with disastrous policies whose impact was only exacerbated by the pandemic.

Over the years, Sri Lanka had built up a huge amount of debt - last month, it became the first country in the Asia Pacific region in 20 years to default on foreign debt.

Officials had been negotiating with the IMF for a US$3 billion bailout package. But those talks are currently stalled amid the political chaos.

The same global headwinds - rising inflation and interest rate hikes, depreciating currencies, high levels of debt and dwindling foreign currency reserves - also affect other economies in the region.

China has been a dominant lender to several of these developing nations and therefore could control their destinies in crucial ways. Buy it's largely unclear what Beijing's lending conditions have been, or how it may restructure the debt.

Where China is at fault, according to Alan Keenan from International Crisis Group, is in encouraging and supporting expensive infrastructure projects that have not produced major economic returns.

"Equally important has been their active political support for the ruling Rajapaksa family and its policies... These political failures are at the heart of Sri Lanka's economic collapse, and until they are remedied through constitutional change and a more democratic political culture, Sri Lanka is unlikely to escape its current nightmare."

Worryingly, other countries appear to be on a similar trajectory.

Pakistan

Fuel prices in Pakistan are up by around 90% since the end of May, after the government ended fuel subsidies. It's trying to rein in spending as it negotiates with the IMF to resume a bailout program.

The economy is struggling with the rising cost of goods. In June, the annual inflation rate hit 21.3%, the highest it has been in 13 years.

Like Sri Lanka, Pakistan also faces low foreign currency reserves, which have almost halved since August last year.

It has imposed a 10% tax on large-scale industry for one year to raise US$1.93 billion as it tries to reduce the gap between government revenue and spending - one of the IMF's key demands.

"If they are able to unlock these funds, other financial lenders like Saudi Arabia and the United Arab Emirates may be willing to extend credit," Andrew Wood, sovereign analyst at S&P Global Ratings said.

Former Prime Minister Imran Khan who vowed to fix some of these problems, was ousted from power although the faltering economy is not the only reason for that.

Again China plays a role here, with Pakistan reportedly owing more than a quarter of its debt to Beijing. "Pakistan appears to have renewed a commercial loan facility vis-a-vis China and this has added to its foreign exchange reserves and there are indications they will reach out to China for the second half of this year," Mr Wood added.

Bangladesh

With reserves dwindling, the government has acted fast to curb non-essential imports, relaxing rules to attract remittances from millions of migrants living overseas and reducing foreign trips for officials.

"For economies running current account deficits - such as Bangladesh, Pakistan and Sri Lanka - governments face serious headwinds in increasing subsidies. Pakistan and Sri Lanka have turned to the IMF and other governments for financial assistance," said Kim Eng Tan, a sovereign analyst at S&P Global Ratings.

"Bangladesh has had to re-prioritize government spending and impose restrictions on consumer activities," he said.

Rising food and energy prices are threatening the pandemic-battered world economy. Now developing nations that have borrowed heavily for years are finding that their weak foundations make them particularly vulnerable to global shock waves.

Are Russia and Iran friends or foes?

A budding courtship between Russia and Iran is an unwelcome development for the West in general and the United States in particular.

Russian President Vladimir Putin used a rare foreign trip on Tuesday to hold talks in Tehran with Supreme Leader Ayatollah Ali Khamenei and President Ebrahim Raisi, as well as Turkish President Tayyip Erdogan.

The fact that Russia and Iran are competing energy producers is likely to place limits on any deeper partnership.

Here's a look at some of the key questions that their developing relationship poses.

CAN IRAN HELP RUSSIA IN THE UKRAINE WAR?

US officials have said Iran is preparing to help supply Russia with several hundred unmanned aerial vehicles (UAVs), or drones, including some that are capable of firing weapons, but neither country has confirmed it. Russian presidential aide Yuri Ushakov was quoted by RIA news agency as saying Putin had not discussed the issue with Iran's leaders.

"Russia deepening an alliance with Iran to kill Ukrainians is something that the whole world should look at and see as a profound threat," US National Security adviser Jake Sullivan said last week.

Ukraine has used Turkish-supplied Bayraktar drones to lethal effect in targeting Russian units and destroying huge quantities of tanks and other armored vehicles. Jack Watling, a war expert at the RUSI think-tank in London, said Iranian drones would be useful to Russia for both reconnaissance and as loitering munitions that can bide their time in locating and engaging suitable targets.

"Beyond supplying UAVs Iran can also help Russia evade sanctions and potentially collaborate on the manufacture of weapons systems that are less dependent upon supply chains through Western countries," he said.

WHAT CAN RUSSIA LEARN FROM IRAN ON SANCTIONS?

Iran has many years of experience of defending itself against Western sanctions over its disputed nuclear program. "The Russians see Iran as being highly experienced at, and a potentially valuable partner, in evading Western sanctions," said Watling.

Russia, meanwhile, has been hit with waves of sanctions against banks, businesses and individuals over the war in Ukraine. Both countries therefore lack access to Western technology and capital, said Janis Kluge of the SWP think-tank in Berlin.

"There might be some lessons that Russia can learn from Iran... In exchange, Russia could offer military goods and possibly raw materials or grain," he said. Russia is already a major supplier of wheat to Tehran.

With some Russian banks cut off from the SWIFT international payments system, Moscow is developing an alternative in which Iranian banks could be included, Kluge said.

More broadly, Iran is part of a wider group of countries - also including China, India, Latin America and Arab and African nations - with which Russia is forging stronger ties in a bid to prove its claim that it can thrive under sanctions and that these will only rebound on the West.

HOW CAN RUSSIA AND IRAN COOPERATE ON ENERGY?

This is potentially a sensitive question, both countries are oil and gas producers, and competition between them has intensified since the start of the Ukraine war as Russia has switched more of its oil exports to China and India at knock-down prices.

"On the economic dimension, the war has significantly worsened their relationship. Moscow is eating Tehran’s lunch in commodity markets and has even fewer resources to throw at projects in Iran," said Henry Rome, deputy head of research at Eurasia Group.

Coinciding with Putin's visit, however, the National Iranian Oil Company and Russia's Gazprom signed a memorandum of understanding worth around US$40 billion under which Gazprom will help NIOC develop two gas fields and six oil fields, as well as taking part in liquefied natural gas (LNG) projects and construction of gas export pipelines.

WILL ANYTHING CHANGE IN THE IRAN NUCLEAR TALKS?

The Ukraine war has changed Moscow’s approach towards talks on reviving the 2015 Iranian nuclear deal, known as the JCPOA.

Eleven months of talks to restore the deal, which lifted sanctions on Iran in return for curbs on its nuclear program, had reached their final stages in March. But they were thrown into disarray over a last-minute Russian demand for written guarantees from Washington that Western sanctions targeting Moscow over its invasion of Ukraine would not affect its trade with Iran.

Although Russia quickly retreated under Iranian pressure, diplomatic momentum for an agreement was lost. The talks have stalled since then over various remaining issues.

Whether the deal can get back on track will be one measure of the impact of the rapprochement between Putin and Iran's leaders.

"Russia’s interference in the JCPOA talks was a significant reversal of the traditional Russian approach and probably further fanned suspicions in Tehran about Moscow’s reliability and trustworthiness," said Rome of Eurasia Group.

Europe inching towards worst energy crisis

The International Energy Agency (IEA) has warned Europe is facing a red alert over its gas consumption and significant additional reductions are needed to prepare the continent for a tough winter ahead.

The warning comes as Russian gas exports to the continent have decreased in capacity and amid maintenance work on the main pipeline to Germany (Nord Stream 1). The IEA fears that further gas cuts cannot be ruled out. 

Experts argue the European Union is struggling to secure alternatives to Russian supplies but has approved another 500 million euros in arms to Ukraine, whereby a push towards a peace settlement may save the bloc a lot of breathing space on its gas stocks, instead of the panic it finds itself in. 

The IEA itself which serves as the west’s energy watchdog says efforts to boost supplies are still falling short and the 27-member bloc needs stricter measures, such as restricting air conditioning demand (during the current heat wave in Europe) and auctioning gas supplies to industry.

Dr. Fatih Birol, the Executive Director of the IEA has said there is a global energy crisis but warned the situation is especially perilous in Europe, which is at the epicenter of the energy market turmoil. He has expressed concern about the months ahead for the continent. 

The IEA has acknowledged there has not been enough progress by the EU to ween itself of Russian gas especially on the demand side, to prevent Europe from finding itself in an incredibly precarious situation.

It says any further cuts of Russian natural gas flows to Europe, combined with other recent supply disruptions, are a red alert for the European Union, adding that as we get closer to next winter, we are getting a clearer sense of what Russia may do next. The next few months will be critical, the organization warned. 

Moscow has strongly rejected any allegations that it has been using its gas supplies for political purposes. Experts have also argued that it is not in the Kremlin’s interest to cut gas supplies as Russia would lose out financially. 

Nevertheless, Brussels the headquarters of the EU is reportedly preparing to tell the bloc members to cut gas consumption immediately, warning that without increased preservation the continent risks running short of the vital commodity this winter. 

Reports have surfaced that the European Commission will provide members with voluntary gas reduction targets by next week, which cautions that targets will be made mandatory in the event of severe disruption to supplies.

Acting jointly now will be less disruptive and costly, facilitating solidarity and avoiding the need for unplanned and uncoordinated actions later in a possible crisis situation with gas reserves running low.

The IEA warns that efforts to diversify away from Russian gas are no longer enough on their own and that Europe faces the real prospect of rationing its energy unless demand is restricted in order for storage facilities to be filled ahead of the long winter season. 

Birol says he has spoken to EU officials urging them to do all they can right now to prepare for a long, hard winter. He said, “Europe is now forced to operate in a constant state of uncertainty over Russian gas supplies, warning that we can’t rule out a complete cut-off.

The irony is that the EU initiated gas crisis by imposing unprecedented economic sanctions on Russia including hundreds of individuals, businesses, companies, entities, flights, and oil by the end of 2022. In March the bloc said it would reduce gas imports by two-thirds within a year, but there have been disagreements among EU members about this. 

The EU is evidently heavily reliant on Russian gas, yet it has threatened Moscow and at the same time, appears to have shot itself in the foot with its sanctions policy.

An EU last week recommended limiting central heating and cooling in buildings as well as the exemption of coal power stations from its target of emissions reductions.

One EU official has said talks are ongoing over what punitive measures can be enforced if mandatory targets set by the EU to cut gas are not met among member states. 

Europe had relied on Russia for about 40% of its gas but since Russia’s military intervention in Ukraine, Western sanctions have disrupted supplies. The continent imported a total of 155 billion cubic meters of gas from Russia in 2021 and consumes close to 400 billion cubic meters of gas in total during a normal year.

A new EU gas plan issues a warning that continued cuts to Russian gas supplies could lead to a drop in the bloc’s GDP by up to 1.5%, depending on the level of disruption.

Birol said, “Flows have been halted through Nord Stream [1], the biggest single gas pipeline between Russia and Europe, for what Russia says is planned maintenance that is due to end on July 21, 2022. Russia had already significantly reduced the flows coming through Nord Stream in June, and it remains unclear whether they will resume and if so, at what level, after the stipulated deadline.”

The maintenance work is routine procedure that is carried out every year and it’s not uncommon that the work would take longer than ten days. Kremlin spokesperson, Dmitry Peskov, has rejected accusations that Russia would use its gas exports to put pressure on European governments.

Nevertheless, the IEA has offered thorough guidelines and steps to the EU on how to fill European gas storage to adequate levels before winter; starting with the reduction of Europe’s current gas consumption, and putting the saved gas into storage. 

Among the advice is to bring down household electricity demand by setting cooling standards and controls. Government and public buildings should take the lead on this to set an example while campaigns should encourage behavioral changes among consumers.

If the measures proposed by the IEA are not implemented now, Europe will be in an extremely vulnerable position and could well face much more drastic cuts and curtailments later on,” the agency warned. 

It goes on to say that in addition to the measures proposed, “European governments also need to prepare the people of Europe for what may be coming. Public awareness campaigns in the context of an energy crisis have been successful previously in reducing short-term energy demand by several percent.”

According to the IEA, since Russia’s military operation in Ukraine, the amount of revenue that Moscow has collected from exporting oil and gas to Europe has doubled compared with the average of recent years – to US$95 billion. 

“The increase in Russia’s oil and gas export revenues in just the last five months is almost three times what it typically makes from exporting gas to Europe over an entire winter.” the IEA says. 

The agency warns that should Russia decide to completely cut off gas supplies before Europe can get its storage levels up to 90%, the situation will be even more grave and challenging.

The warnings and plans for Europe to cope with enough heat in the winter offers an idea on how reliant the EU is on Russian gas and how fragile the situation may become in wintertime. 

Cool heads are required at such a delicate time. Perhaps a peace deal, which the US-led NATO alliance doesn’t appear to care about, is just what’s needed.

 

Khamenei advises Erdogan not to launch military operation in Syria

Leader of the Islamic Revolution Ayatollah Khamenei received Turkish President Recep Tayyip Erdogan and his delegation on Tuesday. During the meeting, the Leader of the Islamic Revolution emphasized the need to increase cooperation between the two countries, especially commercial cooperation.

Discussing the Syrian conflict, the Leader reiterated the need to honor the territorial integrity of Syria. Responding to some statements about a possible Turkish military operation in northern Syria, he said, “Maintaining the territorial integrity of Syria is very important and any military attack in northern Syria will definitely harm Turkey, Syria and the entire region, and it will benefit the terrorists.”

Leader warned, if there is a policy to block the border between Iran and Armenia, the Islamic Republic will oppose it, as this border is a connection route that has been thousands of years old. The Leader added, “This is definitely to the detriment of Syria, Turkey, and the region. It will not achieve the expected political results from the Syrian government.”

Khamenei said the honor and greatness of the Islamic Ummah will be dependent on overcoming differences of opinion, as well as vigilance against divisive policies, mentioning the occupation regime of Israel as one of the causes of discord and enmity in the region.

The Leader considered Palestine as the first issue of the Islamic world and emphasized, “Despite the favor of some governments towards the Zionist regime, the nations are deeply opposed to this usurping regime.”

Emphasizing that the US and the Israeli regime should not be relied upon, he underlined, “Today, neither the Zionist regime, nor the United States, nor others will be able to stop the deep-rooted movement of the Palestinians, and the end result will be in the interest of the Palestinian people.”

Referring to the Turkish president's hatred of terrorist groups, Khamenei said terrorism must be countered, but a military attack in Syria will benefit terrorists, although terrorists are not limited to a specific group.

In response to the Turkish president's request for Iran's cooperation in fighting terrorist groups, the Leader said, “We will certainly cooperate with you in the fight against terrorism.”

Emphasizing that Tehran considers the security of Turkey and its borders as its own, Khamenei told Erdogan, “You also consider the security of Syria to be your security. The Syrian issues should be resolved through negotiations, and Iran, Turkey, Syria and Russia should resolve this issue through dialogue.”

Erdogan said, “In Syria, terrorist groups are supported by heavy weaponry from Western countries such as Germany, England, France, and especially the United States.”The Leader of the Islamic Revolution also called the rising cooperation between Iran and Turkey on all regional issues useful and necessary and said Iran has always defended Erdogan’s government in internal conflicts and against interference.

“As you said, we are friends of each other in difficult times and we pray for the Muslim nation of Turkey,” the Leader highlighted. 

Khamenei called the volume and quality of economic exchanges and cooperation between the two countries much less than the existing capacities, stressing that this issue should be resolved in the negotiations between the presidents.

In the meeting, which was also attended by President Ebrahim Raisi, Erdogan said it is necessary to unite the Islamic Ummah and increase the solidarity between Iran and Turkey. 

“Turkey has never been silent in the face of injustices against Iran, and the brotherhood of Iran and Turkey should expand in all areas,” Erdogan said in reference to illegal sanctions against Iran. 

Emphasizing that he has always been and will be against unilateral sanctions against Iran, Erdogan pointed out that Ankara supports Iran's legitimate demands based on the JCPOA talks and encourages Turkish companies to invest in Iran.

Referring to Iran and Turkey’s campaigns against terrorists for many years, the Turkish president said, “In Syria, terrorist groups are supported by heavy weaponry from Western countries such as Germany, England, France, and especially the United States.”

Erdogan concluded his remarks by stating that Turkey's position regarding the territorial integrity of Syria is clear, saying, “We expect the Syrian government to start political processes. At the Astana process, the Syrian issue is on top of the agenda, and we hope to achieve good results.”

Putin arrives in Iran

On Tuesday, in his first trip since the invasion of Ukraine, Russian President Vladimir Putin arrived in Iran for a summit with his Iranian and Turkish counterparts.

The three countries are working together to try to reduce the violence in Syria despite supporting opposing sides in the war. Russia and Iran are Syrian President Bashar al-Assad’s strongest backers, while Turkey supports anti-Assad insurgents.

Turkish President, Tayyip Erdogan has threatened to launch another operation in Northern Syria, which Tehran and Moscow oppose. In Tehran, Putin and Erdogan will meet to discuss a deal aimed at resuming Ukraine’s Black Sea grain exports.

The emergence of an US-backed Arab-Israeli bloc that could tilt the Middle East balance of power further away from Iran has accelerated its clerical rulers’ efforts to strengthen strategic ties with the Kremlin.

“Considering the evolving geopolitical ties after the Ukraine war, the establishment tries to secure Moscow’s support in Tehran’s confrontation with Washington and its regional allies,” said a senior Iranian official, who asked not to be named.

Sending a clear message to the West that Russia will seek to boost ties with anti-West Iran, Putin will meet the Islamic Republic’s most powerful authority, Supreme Leader Ayatollah Ali Khamenei, just a few days after US President Joe Biden visited Israel and Saudi Arabia.

Putin’s visit to Tehran is watched closely as Russia’s invasion of Ukraine has reconfigured the global oil market and because of Washington’s warning about Tehran’s plan to provide Russia with up to several hundred drones. Tehran has denied selling drones to Moscow to use in Ukraine.

Emboldened by high oil prices after the Ukraine war, Tehran is betting that with Russia’s support it could pressure Washington to offer concessions for revival of a 2015 nuclear deal.

Under the deal, Tehran curbed its sensitive nuclear work in exchange for lifting international sanctions.

But former US President Donald Trump exited the pact in 2018 and reimposed crippling sanctions on Iran. A year later, Tehran started violating nuclear limits of the pact.

Almost a year of indirect talks between Tehran and Washington in Vienna stalled in March, with Iran questioning the United States’ resolve and Washington calling on Tehran to drop extra demands.

But Moscow and Tehran, both subject to US sanctions, have overlapped interests. Iran, whose oil industry has struggled for years under US sanctions, has long relied on Chinese oil purchases to keep the economy afloat. Since the start of Ukraine war, Moscow has taken away Iran’s oil market in Asia.

In May, Reuters reported that Iran’s crude exports to China have fallen sharply as Beijing favoured heavily discounted Russian barrels, leaving almost 40 million barrels of Iranian oil stored on tankers at sea in Asia and seeking buyers.

 

Russia seeking oil payments from India in UAE dirhams

Russia is seeking payment in United Arab Emirates dirhams for oil exports to some Indian customers, three sources said and a document showed, as Moscow moves away from the US dollar to insulate itself from the effects of Western sanctions.

Russia has been hit by a slew of sanctions from the United States and its allies over its invasion of Ukraine in late February, which it terms a "special military operation".

Russian oil major Rosneft is pushing crude through trading firms including Everest Energy and Coral Energy into India, now its second biggest oil buyer after China.

Western sanctions have prompted many oil importers to shun Moscow, pushing spot prices for Russian crude to record discounts against other grades.

That provided Indian refiners, which rarely bought Russian oil due to high freight costs, an opportunity to snap up exports at hefty discounts to Brent and Middle East staples.

Moscow replaced Saudi Arabia as the second biggest oil supplier to India after Iraq for the second month in a row in June.

At least two Indian refiners have already settled some payments in dirhams, the sources said, adding more would make such payments in coming days.

The United Arab Emirates, seeking to maintain what it says is a neutral position, has not imposed sanctions on Moscow, and the payments could add to the frustration of some in the West, who privately say the UAE's position is untenable and siding with Russia.

The trading firms used by Rosneft have started asking for the dollar equivalent payment in dirhams from this month, the sources said.

Russia wants to increase its use of non-Western currencies for trade with countries such as India, its foreign minister Sergi Lavrov said in April.

The country's finance minister last month also said Moscow may start buying currencies of "friendly" countries, using such holdings to influence the exchange rate of the dollar and euro as a means of countering sharp gains in the rouble.

The Moscow currency exchange is preparing to launch trading in the Uzbek sum and the dirham.

Dubai, the Gulf's financial and business centre, has emerged as a refuge for Russian wealth.

India, also maintaining a neutral position, recognizes insurance cover by Russian companies and has offered classification to ships managed by a Dubai-based subsidiary of Moscow's top shipping group to enable trade.

India's central bank last week introduced a new mechanism for international trade settlements in rupees, which many experts see as a way to promote trade with countries that are under Western sanctions, such as Russia and Iran.

 

Can Iraqi mediation bring Saudi Arabia and Iran closer?

According to a report by Saudi Gazette, Iraqi Prime Minister Mustafa Al-Kadhimi paid a visit to the Kingdom of Saudi Arabia, during which he met Crown Prince Mohammed Bin Salman. The visit was followed by another visit to the Iranian capital Tehran, during which he met senior Iranian officials of that country.

What emerged from these two visits was an attempt of mediation to ease the atmosphere and reduce tension in the region, through dialogue between Saudi Arabia and Iran.

There has been no halt for the Iraqi attempts of mediation over the past few years, especially after the assumption of office by Al-Kadhimi as prime minister of the country. Al-Kadhimi is a respectable leader for Saudi Arabia, as the Kingdom sees him as a patriotic figure who works sincerely to resolve the huge crises that are afflicting Iraq.

The Iraqi viewpoint is that crises in inter-regional relations produce negative impact on Iraq internally. The more the region moves towards resolving crises and easing tension, the more this gives a comfortable ground for rulers in Mesopotamia.

It is true that the crises in Iraq are structural and it is very difficult to overcome most of these without understanding all the crises in their entirety. There is a possibility to mitigate the impact of these dilemmas, and perhaps the most important of them is the security dilemma.

It is ironic that Saudi Arabia, in its understanding and approach, is betting on Iran, which is striving to be a national state, and this is a major point of contention with Iran. The latter is betting on pre-state groups, and even supports them through illegal channels far from what is supposed to be from a national state, whether the militias in Iraq, the Houthis in Yemen, Hezbollah in Lebanon and others.

Restoring the national state will not be an easy matter after years of tampering with the social fabric in the countries of the region, which negatively affected the security and stability of the entire region.

It goes without saying that restoration of the state’s presence and roles through internal dialogue and negotiations and by stopping states from interfering in the internal affairs of other states, all of this would contribute to averting these states and the entire region from bloodshed.

Saudi Arabia spares no effort in extending the hand of dialogue to all who want to reach to this end, despite the pile up of discouraging experiences in terms of dialogue.

A point of concern is the arms race that Tehran wants to launch. It will not serve anyone, and it will cause serious consequences for Iran itself. Here we are talking about two aspects: The first is the nuclear program and the anxiety it causes to countries in the region and the lack of confidence in Iranian promises, especially with the increase in the enrichment rate and the secret aspects that Iran seeks to hide.

The second aspect is the program of drones and ballistic missiles that pose a serious threat to the entire region, and in this also there is a threat to the arms race that has already begun.

Serious dialogue to reach a security system can be a window not to resolve crises, as we all wish, but at least to manage them. As for the idea of dialogue for the sake of image, it will not work as the region had tried it during the past decades, a dialogue that results in smiles in front of cameras but fears remain.

What is worst is that Tehran is using this dialogue to continue its troubling policies, all of which will not be useful.

Saudi Arabia, under the leadership of King Salman and Crown Prince Mohammed Bin Salman, continues its efforts in the region to restore stability, avoid tension, and defuse crises whenever it is possible.

Pakistan: Little has changed in 75 years

Thanks to Facebook for reminding me of one of my blogs titled “Ruling Elites of Pakistan” posted on July 24, 2015. I am sure as the readers go through, they may find it very current. The situation hasn’t improved in Pakistan in the last seventy five years. Thanks to the morons adamant at maintaining the status quo.

In the recent past I got a unique opportunity to talk to the students of various business schools. The topic of my presentation was “Pakistan: Opportunities, Challenges and threats”. The consensus arrived at was that the country offers enormous opportunities but people in general and investors in particular suffer from ‘confidence deficit’.

Peeping into the history reveals that the country has been ruled by those having common vested interest and most of the sitting/past members of Senate, National and Provincial Assemblies could be labeled ‘turn coats’. They change loyalty because they wish to remain part of ruling junta, be it democratic or autocratic rule.

 The younger generation continues to suffer from illusion because of mudslinging by the leading political parties i.e. PML-N, PPP, MQM and PTI. Some claim to be opposition parties but have been part of ruling junta for decades. The incumbent prime minister and chief mister of Punjab are the legacy of a ‘Military Dictator, Zia ul- Hq. PTI has formed government in KPK province after 2013 election and is in fact part of ruling junta. MQM has remain in power for considerably long time

Some critics say the country is a victim of geopolitics because super powers install and dislodge rulers in Pakistan to pursue their ‘expansionism’ and politics prove to be ‘loyal than king’. Starting from Liaquat Ali Khan to Nawaz Sharif all the rulers have been towing the US foreign policy for the region.

Ayub Khan’s ten year rule was due to Pakistan’s assigned role in ‘cold war’. For ten years Zia ul Haq fought the US proxy war in Afghanistan to avert USSR attack on the country and frustrate its attempt to get access to ‘warm waters’ that also led to installation of Taliban government  there. When the status of Taliban turned to foe from friend the crusade against them was led by Pervez Musharraf. Asif Zardari did the same and Nawaz Sharif also seems to be following his footsteps.

People believed that PTI would usher a change but forgot that the same old faces control its hierarchy and political agenda. The only inspiration of its chief is to become the next prime minister of Pakistan. Though the decision of Judicial Commission is out, the perception prevails that elections were engineered to create history by making Nawaz Saharif prime minister of Pakistan for the third time.

Many term hanging of Zulfikar Ali Bhutto ‘judicial murder’ and the mystery surrounding assassination of  Benazir Bhutto and earlier dismissal of her government twice pre-maturely raises many question. Many critics find some similarity in killing of Mr. Aquino and his wife becoming president of Philippines and Benazir’s widower becoming president of Pakistan after her assassination, the strings in both the cases were moved from outside.

Decades of participation in the proxy war has proliferated political uncertainty, religious fanaticism, arms and drug trade. On top of all funding of local terrorist, be it in the name of creation of supremacy of Shariah or fighting for the deprived has resulted in assignation and destruction of civilian and military installations.

Some experts say all this is part of a great plan to keep Pakistan dependent on multilateral donors i.e. International Monetary Fund, World Bank, Asian Development Bank and even Islamic Development Bank. Keeping the country dependent on these institutions that are arms of super powers makes it easier to rein Pakistan. It is difficult to bring any change in the country without changing the mindset of masses.

 

West must stop its unconditional support for Zelensky

Amid the Russia-Ukraine war, Nato and the  European Union offer a perfect example of a type of “war communication”. In terms of censorship, disinformation and propaganda, the world is witnessing a replay of the happenings during the Gulf War and the 2003 invasion of Iraq.

The only voices authorized to speak are those giving the official party line, Nato spokespersons, retired officers converted to the lucrative business of security consulting, geopolitical experts (those who stick to the script), Russia’s political opponents, Ukrainian deputies and other allies of President Volodymyr Zelensky.

The mythification of Zelensky has reached absurdist levels, partly by the acting talents of Zelensky, a professional comedian who has shrewdly seized the moment to radically rebrand himself as a symbol of resistance, freedom and democracy.

Zelensky is a populist demagogue and a manipulator; an autocrat at the head of a regime that can best be described as proto-fascist.

With his demagogic cry of “the people against the elites”, his rudimentary electoral program, his false promises to fight corruption that were forgotten as soon as he was elected, and his brutal authoritarian leanings, Zelensky is a perfect example of western populism.

The Kyiv regime also exhibits a growing number of proto-fascistic characteristics: the cult of the personality, which turns the head of state into a venerated and untouchable figure; the militarization of society; the saturation of media and cultural spaces with war propaganda.

Before the war, western media were recognizing the reality of that problem - but as soon as the war started, these groups were magically whitewashed as freedom fighters, and praised as heroic resistors through typical spin. Anyone who now raises the issue is immediately accused of disseminating Putin’s propaganda or being an agent of the Kremlin. 

Even more shocking, yet typical of war propaganda, has been the systematic censorship by dominant western media of any information that would undermine the Zelensky worship and unconditional support for the Kyiv regime. 

In a March presidential decree, Zelensky banned the opposition by suspending the activities of 11 political parties accused of having links with Russia. Thus, the invasion was used in the most cynical manner as a convenient excuse to crack down on political opposition through false rhetoric about collaboration with the enemy. 

Zelensky also invoked the war to eliminate media freedom by merging and nationalizing Ukrainian television channels into a single information platform called “United News” - a platform entirely dedicated to his propaganda.

Zelensky regime is controlled by the most hawkish and extremist escalationists, both Ukrainian and foreign, starting with US President Joe Biden, who has been shunting aside any talk of diplomatic negotiations.

Though at first willing to negotiate and compromise, Zelensky has since fallen in line with the most extremist war hawks, none of whom appear to care about the rest of Europe, which they view merely as something to exploit for more arms and money.

Instead of being emboldened in this reckless military escalation of a war that is devastating his own population and country, Zelensky should instead be pushed towards the negotiating table - for his own sake, that of his suffering people, and the good of the world, which is now itself suffering from a slew of setbacks: inflation, energy and food shortages, and a military-industrial complex ecstatic at the prospect of having trillions of dollars redirected towards it for years to come. A deal to end the war seems feasible, as there a reasonable peace plan on the table. 

In additional to all its other consequences, the Russian invasion has further fractured the US-led post-war global order, which has become a battleground between the ever-more hawkish and imperialistic US, backed by the EU and with the instrumentalization of institutions such as Nato and the G7; and the anti-western bloc led by China and Russia, now officially designated as the West’s two main geopolitical existential threats. 

Given the heavy dependence of Middle East on all involved parties - Russia, Ukraine and the West - for food and energy supplies, as well as national security, they know they have nothing to gain but a lot to lose from direct involvement in this conflict, or from overtly picking sides. They have thus uncomfortably strived to distance themselves from the war without alienating anyone - a tough balancing act that can see them accused of siding with the enemy for shying away from the western sanctions regime.

In fact, many have actively refused to side with Ukraine and the West against Russia for a number of reasons, including perceived western hypocrisy on the professed principle of non-aggression and respect for territorial sovereignty (Iraq, Libya and Afghanistan loom large here); racist double standards on the treatment of refugees; and widespread distrust of the West in general.

Biden leaves Saudi Arabia empty-handed

Joe Biden has left the region empty-handed hoping the OPEC+ group, comprising Saudi Arabia, Russia and other producers, will boost production at a meeting scheduled for August 03, 2022.

Gulf states, which have refused to side with the West against Russia over Ukraine, are seeking a concrete commitment from the United States to strategic ties that have been strained over perceived US disengagement from the region.

President Joe Biden told Arab leaders on Saturday that the United States would remain an active partner in the Middle East, but he failed to secure commitments to a regional security axis that would include Israel or an immediate oil output rise.

Biden, who began his first trip to the Middle East as president with a visit to Israel, presented his vision and strategy for America's engagement in the Middle East at an Arab summit in Jeddah.

The summit communiqué was vague, however, and Saudi Arabia, Washington's most important Arab ally, poured cold water on US hopes the summit could help lay the groundwork for a regional security alliance - including Israel - to combat Iranian threats.

A plan to connect air defence systems could be a hard sell for Arab states that have no ties with Israel and balk at being part of an alliance seen as against Iran, which has a strong regional network of proxies including Iraq, Lebanon and Yemen.

Saudi Arabia's Foreign Minister, Prince Faisal bin Farhan Al Saud, said he was not aware of any discussions on a Gulf-Israeli defence alliance and that the kingdom was not involved in such talks.

He told reporters after the US-Arab summit that Riyadh's decision to open its airspace to all air carriers had nothing to do with establishing diplomatic ties with Israel and was not a precursor to further steps.

Biden focused on the summit with six Gulf states and Egypt, Jordan and Iraq, while downplaying the meeting with MbS which drew criticism in the United States over human rights concerns.

Biden needs the help of OPEC giant Saudi Arabia at a time of high crude prices and other problems related to the Russia-Ukraine conflict. Washington also wants to curb Iran's sway in the region and China's global influence.

Biden came to Saudi Arabia hoping to reach a deal on oil production to help drive down gasoline prices that are driving inflation above 40-year highs and threatening his approval ratings.

He leaves the region empty-handed but hoping the OPEC+ group, comprising Saudi Arabia, Russia and other producers, will boost production at a meeting on Aug. 3.

Gulf states, which have refused to side with the West against Russia over Ukraine, are seeking a concrete commitment from the United States to strategic ties that have been strained over perceived US disengagement from the region.

Riyadh and Abu Dhabi have been frustrated by US conditions on arms sales and at their exclusion from indirect US-Iran talks on reviving a 2015 nuclear pact they see as flawed for not tackling concerns about Iran's missile program and behaviour.

Israel had encouraged Biden's trip to Saudi Arabia, hoping it would lead to warmer ties between it and Riyadh as part of a wider Arab rapprochement.

 

 

United States extends undue favor to India

The US House of Representative has passed a legislative amendment that would protect India from punitive sanctions for buying missiles from Russia.

The India-specific amendment, passed on Thursday afternoon, still has to go through the Senate before it’s signed by President Joe Biden.

Authored and introduced by Indian-American Congressman Ro Khanna, urges the Biden administration to give India a waiver to the Countering America’s Adversaries through Sanctions Act (CAATSA), which can bring immediate sanctions against New Delhi for buying weapons from Moscow.

The amendment argues that such a waiver is needed to deter China’s influence in the region. It was passed by voice vote as part of an en bloc amendment during floor consideration of the US defence bill for 2023.

US law deems waiver ‘necessary’ to counter China’s growing global influence

The United States views India as a key ally in its effort to counter China’s growing global influence and has also included it in the alliance known as ‘Quad’ that aims to counter China in the Pacific region.

Enacted by the US Congress in 2017, CAATSA provides for punitive actions against any country engaged in transactions with Russian defence and intelligence sectors.

CAATSA became a sticking point in India-US ties after New Delhi inked a deal to secure the S-400 missile defence system from Moscow, in the midst of the Russia-Ukraine war. India has also violated US sanctions on buying oil from Russia.

In May, Senator Bob Menendez, who heads the Senate Committee on Foreign Relations, pointed out at a congressional hearing that the Indians “go buy oil from Russia. They buy the S-400 anti-missile system. They abstain at the United Nations on votes criticizing Russia and yet they were never punished for these violations.

Khanna, who is Vice Chair of the India Caucus in the US Congress, however, urged Washington to “stand with India in the face of escalating aggression from China”.

The Reuters news agency reported this week that India’s oil imports from Russia surged to a record of around 950,000 barrels per day (bpd) in June, as Indian refiners snapped up Russian oil sold at hefty discounts.

India shipped in about 4.8 million bpd of oil in June, about 23 per cent higher than a year earlier, the report added.

What is more important for Biden? Saudi oil or Khashoggi

The Washington Post’s publisher blasted President Biden for greeting Saudi Crown Prince Mohammed bin Salman with a fist bump Friday, saying it not only “projected intimacy and comfort” but also gave the Middle East leader “redemption.”

Fred Ryan, the publisher and CEO of The Washington Post, called the exchange between the two leaders at the royal palace in Jeddah, Saudi Arabia, “shameful.”

“The first bump between President Biden and Mohammed bin Salman was worse than a handshake — it was shameful. It projected a level of intimacy and comfort that delivers to MBS the unwarranted redemption he was been desperately seeking,” Ryan said in a statement, using a common media abbreviation for the crown prince’s name.

Biden’s visit to Saudi Arabia has been heavily criticized, including his meeting with Crown Prince Mohammed, who the US intelligence community said approved the 2018 murder of US-based journalist and Washington Post contributor Jamal Khashoggi.  

The Post also reported that Saudi officials had initially excluded two reporters from the newspaper from a planned media briefing that the government was holding on Friday.

They were later allowed to attend the roundtable after bringing up the issue with the White House officials, the Post added.

This is Biden’s first visit to Saudi Arabia after he was elected in 2020 and comes after he promised during his presidential campaign to make the Middle East country a “pariah” state over Khashoggi’s murder in the Saudi Consulate in Istanbul.

Biden highlighted progress in moving relations between Saudi Arabia and Israel toward normalization and said the US and Saudi Arabia agreed to partner on a far-reaching green energy initiative.

Biden also expressed optimism that Saudi Arabia would take steps to boost the global oil supply in the coming weeks, which had been viewed as a major goal of the trip given high domestic gas prices and the disruption of the global energy market caused by Russia’s war in Ukraine.

The trip to the Middle East, Biden said, was about reasserting US leadership in the region at a time when China and Russia are trying to expand their influence and challenge global order.

 

Biden said Friday he raised Khashoggi’s murder during his meeting with the crown prince after the White House wouldn’t comment on whether the president would raise the journalist’s death in the meeting. 

“I raised it at the top of the meeting, making it clear what I thought of it at the time and what I think of it now,” Biden said in a speech.

 “We are not going to leave a vacuum in the Middle East for Russia or China to fill, and we’re getting results,” Biden said.  

Significance of simultaneous visits of Biden and Putin to West Asia

Simultaneous visits of the presidents of the United States and Russia to the West Asia region signifies East-West confrontation.

Mohammad Hossein Soltanifard, Head of the office representing Iran’s interests in Cairo, said his country is the central part of any equation in the region.

Biden started a 4-day visit to Israel and Saudi Arabia from July 13, 2022. Putin is scheduled to visit Iran on July 19. 2022. Putin will attend a trilateral meeting with the leaders of Iran and Turkey, the so-called Astana format of meetings for Syria-related talks.

Putin's visit to Iran immediately after Biden’s trip to Israel and Saudi Arabia “evokes, once again, the East-West confrontation,” Soltanifard said on Twitter.

Soltanifard added, “Iran will still be the bridge of victory, with the difference that the Islamic Republic of Iran is considered the main part of any equation in the region at this point.”

Soltanifard has been appointed as the representative of Iran’s interests in Egypt recently. He replaced Nasser Kanaani, who is now the spokesman for the Iranian foreign ministry. Soltanifard reached Cairo on July 11.

Earlier, he also praised Cairo's position in opposing the American project to establish an alliance against the Islamic Republic of Iran. “Egypt's opposition to the illusory dream of the United States to create an alliance against the Islamic Republic of Iran in light of the silence of other countries participating in the Jeddah Summit is commendable and understandable.,” he said on Twitter.

He added, “And this project, like the project to create the Greater Middle East and the deal of the century, will be born dead, God willing.”

Iran and Egypt have held a high-level meeting in recent weeks and have agreed to boost their relations, according to a Qatari-owned newspaper.

Citing Egyptian diplomatic sources, Al Araby Al Jadeed said new developments have taken place in the relations between Tehran and Cairo ahead of a mid-July visit by US President Joe Biden to the region.

“A high-level meeting, which took place during the recent visit of Egyptian President Abdel Fattah Al-Sisi to the Sultanate of Oman, brought together Egyptian and Iranian officials,” the sources told Al Araby Al Jadeed in early July.

They added that the meeting was attended by a high-ranking figure from the delegation accompanying the Egyptian president with Omani coordination.

The sources indicated that the meeting “was of a security nature in general, and touched upon the situation in the Gaza Strip and Syria,” adding “there were many points of agreement between the two parties, and that the coming period may witness direct coordination between Cairo and Tehran on issues and matters related to the Strip.”

According to the sources, “during the meeting, an agreement was reached on joint coordination in international forums, as long as that was possible, in light of the desire of Cairo and Tehran to reach a good level of relations, provided that they would gradually improve, according to the developments of events in the region.”

In his visit to Oman, the Egyptian President was accompanied by Foreign Minister Sameh Shoukry, Chief of General Intelligence Abbas Kamel, Minister of Planning Hala Saeed, and a number of other officials.