Pelosi visits Taiwan in utter disregard to Chinese warnings

More than 30 years ago, Nancy Pelosi angered China's government by showing up in Tiananmen Square and unfurling a banner honoring dissidents killed in the 1989 protests.

On Tuesday, August 02, 2022, as speaker of the House of Representatives, Pelosi disregarded China's fiery warnings and landed in Taiwan to support its government and meet with human rights activists.

Pelosi's trip to Taiwan capped her decades as a leading US critic of the Beijing government, especially on rights issues, and underscores the long history of the US Congress taking a harder line than the White House in dealings with Beijing.

Second in line for the presidency after Vice President Kamala Harris, Pelosi became the most senior US politician to travel to Taiwan since then-Speaker Newt Gingrich in 1997. She led a delegation of six other House members.

In 1991, two years after China's bloody crackdown on pro-democracy demonstrations, Pelosi and two other US lawmakers unfurled a banner in Tiananmen reading, "To those who died for democracy in China."

In 2015, she took a group of House Democrats to Tibet, the first such visit since widespread unrest in 2008. Pelosi has regularly spoken out about human rights issues in Tibet and has met the Dalai Lama, whom Beijing reviles as a violent separatist.

China views visits by US officials to Taiwan as sending an encouraging signal to the island's pro-independence camp. Washington does not have official diplomatic ties with Taiwan but is legally bound to provide it with the means to defend itself.

Kharis Templeman, a Taiwan expert at Stanford University's Hoover Institution, said Pelosi, who is 82, would be looking to cement her legacy, while signaling support for Taiwan against pressure from Beijing.

"And what better person to send that signal than the speaker of the House herself? So she's in a very powerful symbolic position to take a stand against the CCP," Templeman said, referring to the Chinese Communist Party.

Beijing considers Taiwan part of its territory and has never renounced using force to bring the island under its control. Taiwan rejects China's sovereignty claims and says only its people can decide its future.

Chinese foreign ministry spokesman Zhao Lijian said a trip would lead to "very serious developments and consequences."

Analysts said Beijing's response was likely to be symbolic. "I think China has tried to signal that their reaction would make the US and Taiwan uncomfortable, but would not cause a war," said Scott Kennedy, a China analyst at Washington's Center for Strategic and International Studies.

Congress has long taken a harder line on Taiwan than the White House, no matter whether Democrats, such as President Joe Biden and Pelosi, or Republicans are in charge.

Republicans supported Pelosi's trip. "Any member that wants to go, should. It shows political deterrence to President Xi," Representative Michael McCaul, the top Republican on the House Foreign Affairs Committee, told NBC News. McCaul said he was invited to join Pelosi's Asia trip but was unable to do so.

The executive branch takes ultimate responsibility for foreign policy but relations with Taiwan are one area where Congress wants influence. The Taiwan Relations Act, which has guided relations since 1979, passed Congress with an overwhelming majority after lawmakers rejected a proposal from then-President Jimmy Carter as too weak.

Democrats and Republicans in the US Senate are working on a bill that would overhaul that policy, including by increasing military support for Taiwan and expanding Taipei's role in international organizations.

Pelosi's trip and Beijing’s reaction have pushed the White House to once again express - including in a call between Biden and Chinese President Xi Jinping last week - that it has no desire to change the status quo.

Biden cast doubt publicly on the wisdom of the trip last month in a rare break with Pelosi, a close ally.

"I think that the military thinks it's not a good idea right now, but I don't know what the status of it is," Biden told reporters.

Pelosi's office refused ahead of the visit to rule out or confirm a possible stop by the speaker, citing security concerns typical for top US officials.

Pelosi announced on Sunday that she was leading a congressional delegation to Singapore, Malaysia, South Korea and Japan "to reaffirm America's strong and unshakeable commitment to our allies and friends in the region."

US defense officials played down the risk of China's military interfering with Pelosi's visit, but they were worried that an accident could spiral into a larger conflict.

 

Finding reasons behind the US support for war in Ukraine

Biden Administration could have avoided pushing Ukraine into war in the first place by not inviting Russian immediate neighbor to join NATO, but it chose the war. Many are of the view that it was not for any love for the people of Ukraine.

Is it because it is a country populated by white people? In 1994, President Clinton did nothing while genocide of Tutsi ethnic Rwandans was going on in Rwanda resulting in the deaths of some 500,000 to 662,000. Was that utter neglect because those were black people?

Or is it because there is a considerable number of Ukrainians living in the United States who would vote for Biden’s reelection in 2024?

Or is it because usually a war president gets reelected?

Or was it that Biden wanted to look “macho”, a president who cowed down Russia?

Or are Biden administration and the Pentagon pursuing the policy suggested by recent Rand Corporation thesis to break up Russia by weakening it by this brutal war?

Or are he and the democrats paying back the ‘defense’ contractors—for their donations to the Democrats during elections-- with billions of dollars in profit by this war?

The Rand Corporation’s April 2019 article on Russia recommends that we should overextend and weaken Russia by directly addressing its vulnerabilities, anxieties, and strengths, exploiting areas of its weakness while undermining Russia’s current advantages.

Further it states that “Russia’s greatest vulnerability, in any competition with the United States is its economy.” It seems the reason; United States has embarked upon provoking Russia to invade Ukraine.

United States is using double edged sword: 1) weakening Russia militarily by this proxy war and 2) weakening Russia economically by brutal sanctions ever imposed on a country.

The US administration government has doled out more than US$54 billion in arms and other categories. It is anticipated that more will come as the war drags on.

These billions in donation to Ukraine, a country that is 9,181 kilometers away from the United States and has no strategic value to the United States.

These billions are not coming from president or politicians; this is taxpayers’ money. The taxpayers must ask the government, why to donate such huge amounts to a country which has done nothing for America?

President Biden’s son, Hunter Biden supposedly made US$11 million from 2013 to 2018, being made member of Board of Directors of Ukraine gas company, Burisma, though he had no knowledge of gas production, refining or transportation.

Biden, Nancy Pelosi, Michell McConnel, Jill Biden and others went and paid visit to Zelensky and his wife. Why so much love and respect for Ukraine and its president?

The US provocation of Russia resulting in this brutal but avoidable war will go down in history as one the most irresponsible and reckless act committed by the United States, a foreign policy blunder that could trigger a nuclear war between Russia and the United States.

 

United States targets Chinese and UAE firms

According to a Reuters report, the United States on Monday imposed sanctions on Chinese and other firms it said helped to sell tens of millions of dollars' in Iranian oil and petrochemical products to East Asia as it seeks to raise pressure on Tehran to curb its nuclear program.

The US Treasury and the US State Departments have imposed sanctions on a total of six companies, four based in Hong Kong, one in Singapore, and one in the United Arab Emirates (UAE) in actions that were announced in separate statements.

The Treasury accused Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), one of Iran's largest petrochemical brokers, of using the firms to facilitate the sale of Iranian petroleum and petrochemical products to East Asia.

The Treasury targeted UAE-based Blue Cactus Heavy Equipment and Machinery Spare Parts Trading, which it said helped sell millions of dollars of Iranian-origin petroleum products to Hong Kong-based Triliance Petrochemical Company, which has previously been sanctioned by the United States.

It also targeted Hong Kong-based Farwell Canyon HK and Shekufei International Trading Company for facilitating such sales for onward shipment to buyers in East Asia.

The Treasury accused PGPICC of using the firms' bank accounts, along with those of Hong Kong and Malaysia-based PZNFR Trading, to collect millions of dollars in proceeds.

Separately, the State Department sanctioned Singapore-based Pioneer Ship Management for allegedly managing a vessel that carried Iranian petroleum products and Hong Kong-based Golden Warrior Shipping Company, for alleged transactions related to Iranian oil and petroleum products.

The actions freeze US-based assets and generally bar Americans from dealing with them. Others that engage in certain transactions with the targeted firms also risk being sanctioned.

The steps represent the third round of US-Iran related sanctions against Chinese firms in the last two months.

Since taking office in 2021, US President Joe Biden has been loath to sanction Chinese entities engaged in oil trade with Iran due to hopes of securing an agreement to revive the 2015 Iran nuclear deal.

Efforts to resurrect the deal - under which Iran had curbed its nuclear program in exchange for relief from US and other sanctions - have so far failed, leading Washington to look for other ways to increase pressure on Tehran.

"The United States continues to pursue the path of diplomacy to achieve a mutual return to full implementation of the Joint Comprehensive Plan of Action," the Treasury's Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, said in the statement, referring to the 2015 deal by its formal name.

"Until such time as Iran is ready to return to full implementation of its commitments, we will continue to enforce sanctions on the illicit sale of Iranian petroleum and petrochemicals."

Reacting to the new sanctions, Iran's Foreign Ministry spokesperson Nasser Kanaani said in a statement that Iran will respond decisively and firmly to the White House's continuation of sanctions.

Ship carrying 26,000 tons corn leaves Ukraine

According to The Joint Co-ordination Centre (JCC) of the Black Sea Grain Initiative, Razoni sailed from the port of Odesa today in the early hours, carrying 26,000 tons of corn destined for Lebanon.

Ukraine Minister for Infrastructure, Alexander Kubrakov, said 16 ships have been blockaded in Odesa since the start of the war and are awaiting their turn to sail.

 “In parallel, we will receive applications for the arrival of new vessels to load agricultural products,” said Kubrakov.

JCC was set up to co-ordinate the agreement between Russia, Ukraine and the UN to facilitate the safe export of Ukraine’s large grain stocks to the world market—the Black Sea Grain Initiative. JCC comprises representatives from Ukraine, Russia, Turkey and the UN.

The shipment aboard Razoni is expected to arrive in Turkish waters for inspection on August 02, 2022, before sailing to its final destination, Tripoli.

Under the terms of Black Sea Grain Initiative, co-ordinates have been established to create a Humanitarian Maritime Corridor. The details of the corridor have been distributed and the JCC requested participants to ensure their militaries are aware of the vessel’s passage and its right to safety.

“Today Ukraine, together with partners, takes another step to prevent world hunger,” said Ukraine Minister for Infrastructure Alexander Kubrakov.

“Unlocking ports will provide at least US$1 billion in foreign exchange revenue to the economy and an opportunity for the agricultural sector to plan for next year.”

Signed on July 22, 2022, the 120-day deal allows for the export of grain from western Ukraine ports Yuzhne, Chornomorsk, and Odesa, ports which accounted for 65% of Ukraine’s total grain exports over the past five years, according to Bimco.

While the ports historically account for almost two-thirds of grain exports, volume will undoubtedly be limited by various impacts of Russia's invasion of Ukraine.

 “With this deal, the UN hopes to increase monthly grain exports from Ukraine by five million tons. However, since over the past five years, these three ports have not ever handled such a high amount of grain, meeting this target could prove to be a challenge,” said Niels Rasmussen, Chief Shipping Analyst at Bimco.

“Even if port logistics accelerate to expedite exports, the need to escort ships in and out of the ports is likely to cause some congestion.” 

There are also questions over whether seafarers, operators, ship owners, and insurers will be willing and able to work in the region.

Ukraine is a significant producer of grains and oilseeds, with arable land accounting for around 55% of its land area according to the US Department for Agriculture (USDA) and agriculture accounting for 41% of Ukraine’s total exports by value in 2021.

Some 22 million tons of grain are stranded in Ukraine ready for export, and a further export surplus of 25 million tons is expected from the 2022 harvest. There is an urgent need to move grain; with the wheat harvest underway and corn harvest to follow in September, stored grain needs to be exported swiftly to make room for the new crop.

“A significant obstacle to Ukrainian grain exports will be the voyage risk and corresponding insurance premiums. For the shipping of Ukrainian grain to be attractive, high rates will be necessary to mitigate risk-related expenses,” said Rasmussen. “Russia’s recent missile strikes in ports such as Odesa will add to the insecurity and uncertainty of operating in the Black Sea.” 

The impact of the war in Ukraine has hit production for key agricultural exports. Usually the world’s largest producer and exporter of sunflower meal and oil, Ukraine’s sunflower meal exports are forecast to fall from almost 66% of global exports to 40%, and sunflower oil exports are forecast down from almost half of global exports to 35%.

 “Due to limited global supply of wheat and maize, a return of Ukrainian grain to the global market would positively impact the Panamax, Supramax and Handysize segments. Additionally, the boost in Ukrainian exports would help combat inflation and food insecurity, particularly in emerging economies, and help bring needed stability to the global economy,” said Bimco.

 

Pakistan: Strategy for Navigating FY23

Through a joint statement issued by Ministry of Finance and State Bank of Pakistan, all the stakeholders and public in general has been assured that the present trauma will ease. While one may not agree with some of the points, this is an official strategy and only wait and see stance could be adopted.

Pakistan’s problems are temporary and are being forcefully addressed

Pakistan’s foreign exchange reserves have fallen since February as foreign exchange inflows have been outpaced by outflows. The inflows mainly comprise of multilateral loans from the IMF, World Bank and ADB; bilateral assistance in the form of deposits and loans from friendly countries like China, Saudi Arabia, and the UAE; and commercial borrowing from foreign banks and through the issuance of Eurobonds and Sukuks. The paucity of inflows has happened in large part due to the delay in completing the next review of the IMF program, which has lingered since February due to policy slippages. Meanwhile, on the outflows side, debt servicing on foreign borrowing has continued as repayments on these debts have been coming due over this period.

At the same time, the exchange rate has come under significant pressure, especially since mid-June. It has been driven by general US dollar tightening, a rise in the current account deficit (exacerbated by a heavy energy import bill in June), the decline in foreign exchange reserves, and worsening sentiment due to uncertainty about the IMF program and domestic politics.

However, important developments have happened recently that will address both of these temporary issues. On July 13, the critical milestone of a staff-level agreement on completing the next IMF review was reached. As of today, all prior actions for completing the review have been met and the formal Board meeting to disburse the next tranche of US$1.2 billion is expected in a couple of weeks. At the same time, macroeconomic policies—both fiscal policy and monetary policy—have been appropriately tightened to reduce demand-led pressures and rein in the current account deficit. Finally, the government has clearly announced that it intends to serve out the rest of its term until October 2023 and is ready to implement all the conditions agreed with the Fund over the remaining 12 months of the IMF program.

In FY23, Pakistan’s gross financing needs will be more than fully met under the ongoing IMF program

The financing needs stem from a current account deficit of around US$10 billion and principal repayments on external debt of around US$24 billion.

In order to bolster Pakistan’s foreign exchange reserves position, it is important for Pakistan to be slightly over-financed relative to these needs.

As a result, an extra cushion of US$4 billion is planned over the next 12 months. This funding commitment is being arranged through a number of different channels, including from friendly countries that helped Pakistan in a similar way at the beginning of the IMF program in June 2019.

Important measures have been taken to contain the current account deficit

In addition to high global commodity prices, the large current account deficit in FY22 was driven by rapid domestic demand (growth reached almost 6 percent for two consecutive years leading to overheating of the economy), artificially low domestic energy prices due to the February subsidy package, an unbudgeted and procyclical fiscal expansion, and heavy energy imports in June to minimize load-shedding and build inventories.

To contain this deficit going forward, the policy rate was raised by 800 basis points, the energy subsidy package has been reversed, and the FY23 budget targets a consolidation of nearly 2.5 percent of GDP, centered on tax increases while protecting the most vulnerable. This will help cool domestic demand, including for fuel and electricity.

In addition, temporary administrative measures have been taken to contain the import bill, including requiring prior approval before importing automobiles, mobile phones and machinery. These measures will be eased as the current account deficit shrinks in the coming months.

These measures are working, the import bill fell significantly in July, as energy imports have declined and non-energy imports continue to moderate

Foreign exchange payments in July were significantly lower than in June. This is true for both oil and non-oil payments. Altogether, payments were a sustainable US$6.1 billion in July compared to US$7.9 billion in June.

The latest trade data indicate that non-oil imports continue to fall. Specifically, non-oil imports fell by 5.7%QoQ during Q4 FY22. They are expected to reduce further going forward.

Looking ahead, a considerable slowdown has been witnessed in LC opening in recent weeks, again for both oil as well as non-oil commodities. Based on market reports, there was an 11%MoM decline in Oil Marketing Companies sales volume in June.

After the surge in energy imports in June, a stock of diesel and furnace oil sufficient for 5 and 8 weeks, respectively, is now available in the country, much higher than the normal range of 2 to 4 weeks in the past. This implies a lower need for petroleum imports going forward.

With the recent rains and storage of water in the dams, hydroelectricity is also likely to increase and need to generate electricity on imported fuel is expected to decline going forward.

As a result of these trends, the import bill is likely to shrink going forward and should begin to manifest itself more forcefully in lower FX payments over the next 1-2 months.

Overall, imports are expected to decline in coming months due to a decline in global commodity prices, the higher oil stock, the unfolding impact of higher domestic prices of petroleum products, adjustments in electricity and gas tariffs, the removal of tax exemptions under the FY23 budget, administrative measures taken to curtail imports, and the lagged impact of the monetary and fiscal tightening that has been undertaken.

The Rupee has overshot temporarily but it is expected to appreciate in line with fundamentals over the next few months

Around half of the Rupee depreciation since December 2021 can be attributed to the global surge in the US dollar, following historic tightening by the Federal Reserve and heightened risk aversion.

Of the remaining half, some is driven by domestic fundamentals, in particular, the widening of the current account deficit, especially in the last few months. As noted above, the deficit is expected to narrow going forward as the temporary surge in the import bill is brought under control. As this happens, the Rupee is expected to gradually strengthen.

The remaining depreciation has been overdone and driven by sentiment. The Rupee has overshot due to concerns about domestic politics and the IMF program. This uncertainty is being resolved, such that the sentiment-driven part of the Rupee depreciation will also unwind over the coming period.

Where the market has become disorderly, the State Bank has continued to step in through sales of US dollars to calm the markets and will continue to do so, as needed in the future. Strong steps to counter any speculation have also been taken, including close monitoring and inspections of banks and exchange companies. Further additional measures will be taken as situation warrants.

Rumors that a particular level of the exchange rate has been agreed with the IMF are completely unfounded. The exchange rate is flexible and market-determined, and will remain so, but any disorderly movements are being countered.

Going forward, as the current account deficit is curtailed and sentiment improves, we fully expect the Rupee to appreciate. Indeed, this was the experience during the beginning of the IMF program in 2019, when the Rupee strengthened considerably after a period of weakness in the lead-up to the program.

Clearly, the Rupee can overshoot temporarily as it has done recently. However, it moves both ways over time. We expect this pattern to re-assert itself in the coming period. As a result, the Rupee should strengthen in line with improved fundamentals in the form of a smaller current account deficit as well as stronger sentiment.

Beirut silo collapses ahead of blast anniversary

Part of the grain silos at Beirut Port collapsed on Sunday just days before the second anniversary of the massive explosion that damaged them, sending a cloud of dust over the capital and reviving traumatic memories of the blast that killed more than 215 people. There were no immediate reports of injuries.

Lebanese officials warned last week that part of the silos - a towering reminder of the catastrophic August 04, 2020 explosion - could collapse after the northern portion began tilting at an accelerated rate.

"It was the same feeling as when the blast happened, we remembered the explosion," said Tarek Hussein, a resident of nearby Karantina area, who was out buying groceries with his son when the collapse happened. "A few big pieces fell and my son got scared when he saw it," he said.

A fire had been smoldering in the silos for several weeks which officials said was the result of summer heat igniting fermenting grains that have been left rotting inside since the explosion.

The 2020 blast was caused by ammonium nitrate unsafely stored at the port since 2013. It is widely seen by Lebanese as a symbol of corruption and bad governance by a ruling elite that has also steered the country into a devastating financial collapse.

One of the most powerful non-nuclear blasts on record, the explosion wounded some 6,000 people and shattered swathes of Beirut, leaving tens of thousands of people homeless.

Ali Hamie, the minister of transport and public works in the caretaker government, told Reuters he feared more parts of the silos could collapse imminently.

Environment Minister Nasser Yassin said that while the authorities did not know if other parts of the silos would fall, the southern part was more stable.

The fire at the silos, glowing orange at night inside a port that still resembles a disaster zone, had put many Beirut residents on edge for weeks.

The government took a decision in April to destroy silos, angering victims' families who wanted them left to preserve the memory of the blast. Parliament last week failed to adopt a law that would have protected them from demolition.

Citizens' hopes that there will be accountability for the 2020 blast have dimmed as the investigating judge has faced high-level political resistance, including legal complaints lodged by senior officials he has sought to interrogate.

Prime Minister-designate Najib Mikati has said he rejects any interference in the probe and wants it to run its course.

However, reflecting mistrust of authorities, many people have said they believed the fire was started intentionally or deliberately not been contained.

Divina Abojaoude, an engineer and member of a committee representing the families of victims, residents and experts, said the silos did not have to fall.

"They were tilting gradually and needed support, and our whole goal was to get them supported," she told Reuters.

"The fire was natural and sped things up. If the government wanted to, they could have contained the fire and reduced it, but we have suspicions they wanted the silos to collapse."

Earlier this month, the economy minister cited difficulties in extinguishing the fire, including the risk of the silos being knocked over or the blaze spreading as a result of air pressure generated by army helicopters.

Fadi Hussein, a Karantina resident, said he believed the collapse was intentional to remove "any trace of August 04, 2020".

"We are not worried for ourselves, but for our children, from the pollution," resulting from the silos' collapse, he said, noting that power cuts in the country meant he was unable to even turn on a fan at home to reduce the impact of the dust.

Nancy Pelosi sets off on Asia tour

According to South China Morning Post, US House Speaker Nancy Pelosi has begun her anticipated trip to Asia, with her office naming four destinations but making no mention of Taiwan. 

This comes amid more stormy warnings from Beijing amid heightened tensions over her planned visit to the island.

Pelosi, No 3 in the line of US presidential succession, is leading a six-member congressional delegation to Singapore, Malaysia, South Korea and Japan, according to a statement released by her office on Sunday.

The statement skipped any mention of Taiwan, after days of intense speculation about a likely stop there fuelled tensions, with Beijing calling it a provocation and warning Washington against playing with fire.

“In Singapore, Malaysia, South Korea and Japan, our delegation will hold high-level meetings to discuss how we can further advance our shared interests and values, including peace and security, economic growth and trade, the Covid-19 pandemic, the climate crisis, human rights and democratic governance,” the statement quoted Pelosi as saying.

“America is firmly committed to smart, strategic engagement in the region, understanding that a free and flourishing Indo-Pacific is crucial to prosperity in our nation and around the globe,” the 82-year-old Democratic lawmaker said.

Beijing regards Taiwan to be a breakaway province, to be reunited by force if necessary, and warns against any official exchange with the self-governed island.

It earlier said Pelosi’s planned trip to Taiwan was a move to support Taiwan independence, in violation of one-China policy, followed by the United States.

On Thursday, Biden and China’s Xi Jinping spoke on the phone for over two hours. During the call, Biden tried to reassure Xi that US policy towards Taiwan has not changed.

“On Taiwan, President Biden emphasized that US policy has not changed and that the US strongly opposes unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait,” an official readout on the White House website said.

After the leaders’ phone call, China’s Foreign Ministry quoted Xi as telling Biden that those who play with fire will perish by it and that they hoped the United States will be clear-eyed about this.

However, Pelosi indicated on Friday that she will be on a trip to Asia, but did not mention Taiwan. “I am very excited if we were to go to the countries that you will hear about along the way,” she said, Reuters reported.

White House spokesman John Kirby said, “Where she (Pelosi) is going to go and what she is going to do is up to the speaker to speak to.”

However, he added that the United States has not observed any signs of a specific military threat from China. “(We have) seen no physical, tangible indications of anything untoward with regard to Taiwan,” Kirby said.

  

United States remains adamant at not releasing frozen Afghan assets

Please allow me to begin my today’s blog with the Iranian indictment, “United States is the biggest terrorist in this world”. The United States is often accused of killing of hundreds and thousands of people every year in proxy wars or through direct assaults. 

It played ‘the game of death’ in Afghanistan for four decades. After facing the defeat in August last year, it may have pulled its troops from Afghanistan but it is still making lives of Afghans miserable on one or the other pretext.

It is a fact that the United States has neither recognized the Taliban government nor allows other countries to recognize their government is Afghanistan. On top of all it has frozen Afghan foreign exchange reserves. The acts of United States tantamount to worst kind of aggression against Afghans, as the country find it almost impossible to import even basic necessities due to non-availability of foreign exchange.

To maintain the US hegemony in Afghanistan, Secretary of State Antony Blinken has launched the US-Afghan Consultative Mechanism (USACM), which would enable Afghan citizens to communicate directly with American policymakers.

Addressing the launching ceremony, the top US diplomat said that besides Pakistan, the Organization of Islamic Cooperation, Qatar and Turkey, and others were also backing US efforts to convince the Taliban to reverse their decision to keep Afghan girls out of school.

The new platform — USACM — is aimed at bringing together Afghan women, journalists, and at-risk ethnic and religious communities with the representatives of the US State Department. It will facilitate regular engagement with the US government on issues ranging from human rights documentation to women in Islam.

With USACM’s launch, “We are taking these relationships to the next level. That’s why I’m so pleased about today,” Secretary Blinken said. He identified the group’s priorities as supporting income-generating activities for Afghan women; strategizing ways to help Afghan human rights monitors safely document abuses, and devising new methods to promote religious freedom.

The United States has discussed with Taliban officials the possible release of Afghan central bank’s assets frozen after the fall of Kabul in August last year. The two sides discussed ongoing efforts to enable the US$3.5 billion Afghan central bank reserves to be used for the benefit of the Afghan people.

However, in nearly one year, the US administration has failed in addressing the urgent humanitarian situation in Afghanistan.

To further complicate the situation a meeting, involving Special Representative for Afghanistan Thomas West and Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson, took place on Wednesday in Tashkent. The meetings took place after the conclusion of the Tashkent Conference on Afghanistan that Uzbekistan hosted on July 26.

Media reports on the meeting claimed that the talks had made some progress and the US and Taliban officials had exchanged proposals for unfreezing the assets. But some differences remained unresolved.

One of the key differences was over the Taliban’s refusal to replace the bank’s top political appointees, “one of whom is under US sanctions as are several of the movement’s leaders,” one of the reports added.

Iran aspires to become a gas hub with Russian support

Iran is currently under sanctions and involved in nuclear deal discussions with the United States and the West. It is also positioning itself to work with China and Russia.

The investment by Gazprom in Iran’s National Iranian Oil Company was announced during a recent visit by Russian President Vladimir Putin to Iran. This creates hope that Russian investment could help Iran become a regional gas hub.

Analyst and energy expert Habibollah Zafarian was quoted in an article at Iran’s Fars News arguing that the country could become a gas hub based on gas trade with neighboring countries. “Iran's gas reserves and privileged geographical location allow the country to play an influential role in the gas trade of the region.” 

Zafarian said “Iran's strategy should be defined in such a way that it buys the surplus gas of the countries of the region as much as possible and exports gas to the requesting countries at a higher price.”

Those like Zafarian, quoted in Iran pro-government media, are part of a push for the Islamic Republic to get out from under the West’s shadow and increase energy independence. 

Iran is well positioned to trade with Qatar, Azerbaijan and Turkmenistan, which have a surplus of gas, the article said, adding that gas is currently being exported by various countries to Armenia, Turkey, Iraq, Kuwait and the Persian Gulf countries – especially the UAE – and Oman, Pakistan and Afghanistan. 

“Everyone wants to import gas,” Zafarian said. “As a result, there is a great opportunity for Iran to become a regional gas hub with gas trade between exporting and importing countries.” 

Iran wants to take advantage of the war in Ukraine and the global economic crisis to work closely with Qatar and also improve its gas fields and its liquefied natural gas (LNG) infrastructure

“Also, in the recent developments of the gas market, Russia has minimized gas exports to Europe, and America is trying to increase its LNG exports in order to replace a part of Russian gas in the European market,” an expert told Fars News.

Iran can now purchase Russian gas and then export it. There could even be an export pipeline. Gas could be exported to Turkey, Armenia, Georgia and Syria.

"In return, we can also help Russia and buy Qatar gas, which is one of the most serious options to replace Russian gas in the European market, and sell it to our destination markets."  

Clearly Iran is plotting to take advantage of the global crises, openly saying what it wants to do. The regime has been trying to develop north-south rail and transport lines for years so that it can hook up Turkey with southern Iran and also develop links to Central Asia and Pakistan or even India.  

Supporters of Iraqi cleric Sadr storm Baghdad Green Zone

Storming Baghdad twice in a week by supporters of Moqtada al-Sadr and chanting anti-Iran slogans can fuel turmoil in the country. Iraqis linked neither to Sadr nor to his opponents say are they caught in the middle of the political gridlock.

Analysts have reasons to suspect the riots are being sponsored and supported by the elements who don't want any reduction in animosity between Iran and Saudi Arabia. Lately, Iraq has played a key role in bringing Iran and Saudi Arabia closer.  

Thousands of supporters of populist cleric Moqtada al-Sadr stormed Baghdad’s fortified government zone on Saturday for the second time in a week, escalating a political stand-off that is hitting ordinary Iraqis hardest.

Protesters rallied by Sadr and his social-political Sadrist Movement tore down concrete barriers and entered the Green Zone, which houses government buildings and foreign missions, heading for Iraq’s parliament, a Reuters witness said.

The scenes followed similar protests on Wednesday, although this time several protesters and police officers were hurt as Sadr’s supporters threw stones and police fired teargas and stun grenades, according to security officials and medics.

Sadr’s party came first in a general election in October but he withdrew his lawmakers from parliament when he failed to form a government which excluded his rivals, mostly groups backed by Iran.

Sadr has since made good on threats to stir up popular unrest if parliament tries to approve a government he does not like, saying it must be free of foreign influence and the corruption that has plagued Iraq for decades.

The Sadrists chanted against Sadr’s political rivals who are now trying to form a government. Iraq has been without a president and prime minister for a record period because of the deadlock.

Sadr maintains large state power himself because his movement remains involved in running the country — his loyalists sit in powerful positions throughout Iraqi ministries and state bodies.

Iraqis linked neither to Sadr nor to his opponents say are they caught in the middle of the political gridlock.

While Baghdad earns record income from its vast oil wealth, the country has no budget, regular power and water cuts, poor education and healthcare, and insufficient job opportunities for the young.

Indian Army Chief visits Bangladesh

The chief of army staff of India, General Manoj Pande completed his Bangladesh visit recently (from July 18 to July 20) as part of the outstanding bilateral defense relations between Bangladesh and India.

General Manoj Pande was on his first trip abroad since taking over the post. First day of his visit, the army chief laid a wreath at Shikha Anirban to honor the valiant souls who made the ultimate sacrifices during the Liberation War of 1971.

Indian Army chief General Manoj Pande received a Guard of Honour at a convention centre of Bangladesh Armed Forces.

Indian Army Chief General Manoj Pande paid a courtesy call on his Bangladesh counterpart General SM Shafiuddin Ahmed at the Army Headquarters in Dhaka.  The two discussed ways to enhance and strengthen bilateral defense cooperation.

Manoj Pande met with senior members of the security establishment several times throughout the day to discuss defense-related topics. In Dhanmondi, at the Bangladesh’s Father of the Nation Bangabandhu Sheikh Mujibur Rahman Memorial Museum, he also paid respects. He met with Bangladesh PM Sheikh Hasina on Tuesday and focused on strengthening bilateral ties.

The army chief spoke the Defense Services Command and Staff College, Mirpur, professors and students on the second day of his visit.

He met with staff at the Bangladesh Institute of Peace Support and Operation Training, a prestigious institution in Bangladesh that prepares peacekeepers for work in a variety of UN peace operations, and engaged in conversation with them. After that, he visited the Bangabandhu Military Museum in Mirpur.

Manoj Pande’s visit has strengthened relations between the two armies on a bilateral level and served as a catalyst for improved coordination and collaboration between the two nations on a variety of strategic problems.

In South Asia, Bangladesh is an important ally of the India. The two nations work closely together on problems like climate change, counterterrorism, and regional security. This visit may serve to cement bilateral defense ties. Defense cooperation between nations could strengthen bilateral ties.

Both India and Bangladesh are essential to the region. Despite some bilateral issues, both countries are greatly interested in further solidifying their bilateral ties, which was made clear by this visit.

This could assist in bolstering bilateral ties and reflecting better bilateral understanding. This visit is highly important for Bangladesh and India in the region. Bangladesh and the India must work together as reliable partners to address some shared issues. Through this visit, India and Bangladesh have further reinforced their defense ties.

India played a significant role in the Bangladesh War of Liberation in 1971, helping the then-East Pakistan transform into the new country of Bangladesh, which permanently altered the dynamics of South Asia. India and Bangladesh agreed to a “Treaty of Friendship and Cooperation” that would last for 25 years.

Given the numerous cultural, diplomatic, economic, and security linkages that exist between India and Bangladesh today, the two nations’ bilateral ties are now stronger than ever. Bangladesh occupies a special place in India’s heart as a close neighbor and an essential part of the country’s “Neighborhood First Policy.”

In March this year, two Indian naval ships—INS Kulish and INS Sumedha—visited Bangladesh’s Mongla Port, making it the first naval visit India had made in the previous 50 years.

Bangladesh is still India’s “closest neighbor,” and relations with it are at a “golden age.” India wants to strengthen its relationship with Bangladesh just as the US wants to engage with it more strategically. Of sure, both nations would benefit from the situation.

In recent years, India and Bangladesh’s defense and security relations have improved. The 50th anniversary of Bangladesh’s Liberation was in 2021. Both India and Bangladesh have highly trained, experienced military, and they work together to keep the Eastern region peaceful.

The Bangladeshi and Indian militaries are increasingly collaborating on defense. Through a variety of initiatives, such as joint training and drills and defense discussions, the two countries’ armed forces have been working together more and more.

In order to achieve self-sufficiency in defense manufacturing in Bangladesh, India will assist Bangladesh in setting up manufacturing and service facilities for the defense platforms that both nations currently possess. Additionally, India will offer the Bangladesh military specialized training as well as technical and logistical support. India also gave a neighboring nation, Bangladesh, its first ever line of credit for defense-related purchases, in the amount of US$500 million.

India’s determination to combat terrorism in all its manifestations was echoed by Bangladesh’s resolute stance against terrorism. India is aware of Bangladesh’s efforts to prevent terrorist organizations from using space to conduct activities against India. In response, India should keep up its efforts to stop any terrorist group from using its territory to harm Bangladeshi interests.

India had encountered challenging circumstances in some of the States bordering Bangladesh, but since Prime Minister Shiekh Hasina’s government came to office in 2009, it has provided all assistance.

 

US oil companies the biggest beneficiaries of sanctions on Russian energy companies

The US super-majors ExxonMobil and Chevron both reported their highest-ever quarterly profits on Friday. Higher oil and gas prices, the highest refining margins, increased production, and aggressive cost control all contributed to the record-breaking profits at Exxon. Chevron also reported record-breaking profits, announcing an increase in share buybacks.

ExxonMobil results were far above analyst expectations and posted second-quarter earnings of US$17.9 billion, or US$4.21 per share assuming dilution. This is nearly quadruple the US$4.69 billion earnings for the second quarter last year, and more than triple the earnings from the first quarter of this year. Exxon’s per share earnings easily beat the analyst consensus of US$3.84.

Higher oil and gas prices, the highest refining margins in years, increased production, and aggressive cost control all contributed to the record-breaking profits at Exxon, were higher than its previous quarterly earnings record in 2012 and the quarterly profits in 2008, when Brent prices hit a record US$147 per barrel.

“Second-quarter earnings were driven by a tight supply/demand balance for oil, natural gas, and refined products, which have increased both natural gas realizations and refining margins well above the 10-year range,” Exxon said.

Another US super-major, Chevron, also posted record earnings beating analyst forecasts, thanks to high oil and gas prices and tight fuel markets driving multi-year high refining margins.

Chevron recorded adjusted earnings of US$11.4 billion, or US$5.82 per share, for the second quarter, up from US$3.3 billion earnings, or US$1.71 per share, for the same period of 2021. The analyst consensus was for US$5.08 EPS for this past quarter.

Chevron increased the top end of its annual share repurchase guidance range to US$15 billion, up from the US$10 billion guidance from March.

Following the results release, Chevron stock was up by more than 3.5% pre-market on Friday, while Exxon was advancing by 2.5%.

The record earnings from the US super-majors add to similarly strong earnings from the European majors, each of which reported much higher profits as commodity prices rallied.

 

 

 

United States GDP falls for second straight quarter

Economy of the United States appeared to shrink for the second consecutive quarter, according to federal data released Thursday, amid growing concern the country could be slipping into a recession.

US gross domestic product (GDP) shrunk between April and June, the Commerce Department reported, marking the second-straight quarter of economic contraction.

GDP fell at a yearly pace of 0.9% in the second quarter, according to the Commerce Department’s first estimate of economic growth over the previous three months.

“The US economy is struggling,” Scott Hoyt, senior director at Moody’s Analytics, wrote in a Thursday analysis.

“We now expect growth to struggle to reach potential both this year and next. However, we don’t believe the economy is in a recession,” he continued.

Many economists expected GDP to fall for a second consecutive quarter as the economy faced more pressure from high inflation, rising interest rates, slowing job growth, falling home sales and other headwinds. 

While the economy was almost certain to slow after growing 5.7% in 2021, experts have become more fearful of the US slowing into a recession after GDP fell at an annualized rate of 1.6% in the first quarter.

Two straight quarters of negative economic growth have long been used as a rule of thumb to determine when the US is in recession and is the formal threshold for a recession in other countries. But economists in the US consider a broader range of data when determining if the US is in recession.

“The headline of a second straight decline in real GDP highlights the abrupt change in the path of the US economy, but the ongoing strength in the job market and other signs of growth make it unlikely that this will be categorized as a recession at this point,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association, in a Thursday analysis.

A steep decline in business investment and a 3.1% surge in imports, which detract from GDP in calculations, were the two major forces behind the second quarter decline.

 “The data fits with our view that the rate of US economic growth will slow noticeably this year, as households and businesses grapple with record high inflation and a steep rise in interest rates,” Cailin Birch, a global economist at the Economist Intelligence Unit, said in a Thursday analysis.

President Biden and White House officials have tried to convince Americans that the US economy is not yet in a recession thanks to a strong job market. They’ve focused heavily on the NBER’s definition of a recession to show Americans that the economy is not as weak as it may seem.

“It’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation. But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure,” Biden said in a Thursday statement.

Republican lawmakers were quick to release their own declarations of recession. They blamed Biden for driving the economy into ruin and accusing the White House of trying to dupe the American people.

“As Biden and his Democrat allies in Congress busy themselves with changing the definition of a recession, Americans continue to shoulder the burden of troublesome economic conditions,” Rep. Blaine Luetkemeyer, the ranking member on the House Small Business Committee, said in a Thursday statement.

The Federal Reserve is likely to keep boosting interest rates as inflation rises, which will continue to slow the economy, as the war in Ukraine and pandemic-related supply chain challenges threaten to make inflation worse.

 “Whether the economy meets the conventional or formal definition of recession is in many respects immaterial. Either way, households and firms are reeling from combined energy, inflation, and rate shocks that have damped individuals’ purchasing power and are in the process of reducing household living standards,” wrote Joe Brusuelas, chief economist at audit and tax firm RSM.

“That is the toll levied by the inflation tax and is why it is critical to restore price stability to the economy as soon as is reasonably possible,” he continued.

 

Pakistan Mild Respite Ahead

Pakistan ended FY22 with a 4-year high current account deficit (CAD) of US$17.4 billion (4.6% of GDP) as against US$2.82 billion (0.8% of GDP) a year ago.

CAD for June 2022 swelled 59%MoM to US$2.3 billion as imports hit a record high of US$7.04 billion on the back of energy imports. This was despite the second highest monthly exports and seasonal rise in remittances.

In the absence of adequate foreign exchange liquidity, the disruption in goods imports along with administrative ban on non-essential items is likely to trim CAD to a sizeable extent in the coming months.

However, Pakistan’s leading brokerage house Inter Market Securities sticks to its base case estimate of US$12.6 billion (3.0% of GDP) for FY23. The most contraction in import bill will be led by absence of TERF-related machinery and COVID-19 vaccinations in addition to the respite from palm oil imports.

Trade deficit hit an all-time high of US$3.9 billion in June 2022 owing to record imports of US$7.04 billion, despite second highest monthly exports of US$3.1 billion, up 26%MoM.

Pakistan’s energy requirements surged tremendously during June 2022, as country’s monthly oil import bill hit the highest mark of US$2.9 billion.

Going forward, imports are likely to stay lower than FY22 monthly average of US$6.0 billion owing to low machinery and vaccination imports, coupled with relatively lower international oil prices and crack spreads.

Some savings will also likely emerge from Foods imports as international palm oil prices have come off by 50% recently. All this is in addition to bottlenecks created by inadequacy of foreign exchange liquidity and administrative measures to curb non-essential imports.

A against this , export of textiles and clothing remained high in FY22 owing to summer demand and adequate energy availability, but home textile demand growth may unlikely stay put in FY23.

Remittances during June 2022 increased 18% to US$2.8 billion on account of seasonal rise from Eid-festivity-flows, managing to remain above FY22 monthly average of US$2.6 billion.

Cumulatively, remittances have risen 6%YoY to US$31.2 billion in FY22. The brokerage house believes, remittance growth is likely to remain tepid as the normalized travel, opening up avenues of non-banking channels.

Despite the US$2.3 billion rollover from China in June 2022, Reserves held by State bank of Pakistan (SBP) increased by a meager US$420 million June 2022 amid elevated imports keeping import cover around 1.5 months.

The IMF staff level agreement is through and the US$1.17 billion tranche is subject to Board approval, and likely to be released by end August 22.

The brokerage house believes, Pakistan’s attempts towards overcoming the foreign exchange liquidity constraints will be difficult, more specifically in terms of bond issuances in the current scheme of things.

This will garner an approval for executing an express transaction to sell government stake in State-Owned Entities (SOEs).