Newly elected Japanese Prime Minister mesmerized by US mantra

Newly elected Japanese Prime Minister Fumio Kishida expressed skepticism about China's qualification to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) at his first press conference on Monday, noting the bloc's tough free trade requirements.

As regards China's application to join the CPTPP, he said, "we need to look at whether China can meet the high standards required by the trade pact." "It's still unclear if it can," he added.

Kishida noted that China was using force to shift the status quo in the region. "It is important to say what we need to say to China in coordination with allies and partners with whom we share fundamental values," he said.

US President Joe Biden on Monday congratulated Kishida on his election. "The US-Japan Alliance is the cornerstone of peace, security, and prosperity in the Indo-Pacific and the world, and I look forward to working closely with Prime Minister Kishida to strengthen our cooperation in the months and years ahead," he said.

Kishida will speak with Biden over the phone as early as Tuesday, in what is expected to be his first conversation with a global leader since taking office. They will affirm the importance of the Japan-US alliance and exchange ideas on ensuring a free and open Indo-Pacific. The leaders are also expected to discuss national security concerns in light of recent developments, including China.

On foreign policy, Kishida laid out three principles: 1) protecting universal values such as freedom, democracy, human rights and the rule of law; 2) strengthening Japan's defense; and 3) taking the lead in tackling global issues such as climate change and the free flow of data.

On strengthening Japan's security, the Prime Minister specifically mentioned missile defense. "To defend our territory, seas, airspace, as well as the lives and assets of our people, I am determined to strengthen the defense of Japan, including missile defense, and bolster maritime security capabilities," he said.

The reference to missile deterrence is seen as a nod to the upcoming two-plus-two security negotiations with the US Secretaries of State and Defense, during which the US is expected to propose basing intermediate-range missiles in Japan to deter Chinese actions in the Taiwan Strait.

"I will engage in foreign policy and national security challenges with resolve, drawing on the Japan-US alliance and the world's trust in Japan," Kishida said.

Kishida also said he is prepared to meet North Korean leader without preconditions. He called the resolution of the abduction issue ‑ the North's kidnapping of Japanese in the 1970s and '80s ‑ a top priority of the government.

On economic policy, Kishida promised that his cabinet will work together to distribute wealth widely among the people.

"I aim to create a new form of capitalism, and present a new socioeconomic vision to pave the way for Japan's future," he said.

The leader said he will set up a new team to lay out a post-pandemic social and economic vision for Japan. "We will create a positive cycle of growth and distribution to create an economy where people can prosper," he pledged.

Kishida said the government should consider tax reform, in particular changing the current rules that grant lower effective tax rates to those earning 100 million yen (US$900,000) or more.

He also listed a slew of other policies to foster economic growth, including promoting technological advancements, narrowing income gaps between urban and nonurban areas through digitization, protecting Japan's economic security and creating social welfare and tax systems that are fair to all work styles.

Kishida said he will dissolve the lower house on October 14 for an election on October 31, seeking a fresh popular mandate as he takes the country's reins.

"I want the Japanese people to decide before anything else whether they believe in me, and, if possible, to tap that confidence to advance a politics of trust and compassion," he said.

"I set the timeline in hopes of tackling daring coronavirus and economic measures with the public's support," Kishida said. Slowing case numbers in Japan contributed to his decision.

Regarding the Group of 20 Summit and the United Nations COP26 Climate Change Summit, which are scheduled around the time of the election, Kishida said he will be able to take part in discussions through remote and other technologies. "I hope to make Japan's presence felt," he said.

Need to find out reasons for downing of Facebook, Instagram, WhatsApp

Users have begun reporting Facebook, Instagram and WhatsApp returned to function after going offline for users across the globe on Monday and remaining down for nearly six hours. Some users are still experiencing difficulties writing or uploading new posts or stories, but their feed has reloaded.

Downdetector that tracks outages by collating status reports from a series of sources, said that they saw almost 14 million total reports for Facebook, Whatsapp, Instagram and Facebook Messenger said, "We are starting to see reports begin to decline now that Facebook is back up."

Facebook apologized but did not immediately explain what caused the failure. The firm owns Instagram and WhatsApp.

As the world flocked to competing apps such as Twitter and TikTok, shares of Facebook fell 4.9%, their biggest daily drop since last November, amid a broader selloff in technology stocks on Monday. Shares rose about half a percent in after-hours trade following resumption of service.

"To every small and large business, family, and individual who depends on us, I'm sorry," Facebook Chief Technology Officer Mike Schroepfer tweeted, adding that it "may take some time to get to 100%."

Several Facebook employees who declined to be named said that they believed that the outage was caused by an internal mistake in how internet traffic is routed to its systems. The failures of internal communication tools and other resources that depend on that same network in order to work compounded the error, the employees said.

Security experts said an inadvertent mistake or sabotage by an insider were both plausible.

"Facebook basically locked its keys in its car," tweeted Jonathan Zittrain, Director of Harvard's Berkman Klein Center for Internet & Society.

As the company was struggling to resume connection, Schroepfer said in a tweet, "We are experiencing networking issues and teams are working as fast as possible to debug and restore." He also apologized sincerely to everyone "impacted by outages."

During the crisis, Facebook workers also reported issues with using their company phones and equipment, and some have even been locked out of the building when their digital cards failed to function, the New York Times reported on Monday.

Other platforms such as Amazon and Telegram have been experiencing difficulties ever since the Facebook shutdown as well, possibly as many users turned to these alternative platforms instead of Facebook, and overloaded their systems.

The severe outage comes immediately after a whistleblower accused Facebook of repeatedly prioritizing profit over clamping down on hate speech and misinformation on Sunday. 

"Strange that hours after a whistleblower calls out Facebook saying they engaged in a 'betrayal of democracy' that Facebook and other companies it owns are totally down." Donald Trump Jr. tweeted on Monday. "I'm sure it's a coincidence."

#Facebookdown and Whatsapp have become trending on Twitter as the world experienced several hours with only one large active social media platform out of the top four used in Israel, Whatsapp, Twitter, Facebook and Instagram.

Twitter became the hottest arena for the hours when Facebook was off the grid, and started a thread reading, "hello literally everyone." Many industrial giants responded to the tweet, including McDonalds, Microsoft Teams, Alexa, and the culprits themselves, Whatsapp, Instagram and Real Mark Zuckerberg, who tweeted, "Am also here literally. Lol," and assured the fanbase that he was working on the app issues.

Security experts tracking the situation said the outage could have been triggered by a configuration error, which could be the result of an internal mistake, though sabotage by an insider would be theoretically possible.

An outside hack was viewed as less likely. A massive denial-of-service attack that could overwhelm one of the world's most popular sites, on the other hand, would require either coordination among powerful criminal groups or a very innovative technique.

Facebook acknowledged users were having trouble accessing its apps but did not provide any specifics about the nature of the problem or how many were affected by the outage.

"We're working to get things back to normal as quickly as possible, and we apologize for any inconvenience," Facebook said.

Facebook has experienced similar widespread outages with its suite of apps this year in March and July.

Several users using their Facebook credentials to log in to third-party apps such as Pokemon Go and Match Masters also faced issues.

"If your game isn't running as usual please note that there's been an issue with Facebook login servers and the moment this gets fixed all will be back to normal," puzzle game app Match Masters said on its Twitter account.

Commencement of commercial flights between Egypt and Israel

An Egyptair aircraft landed at Ben-Gurion Airport on Sunday in the airline’s first-ever commercial flight to Israel. The Egyptian national carrier will now run four weekly round-trip commercial flights between Tel Aviv and Cairo. 

Sunday’s flight was greeted with the traditional water sprays shot in the air in celebration of the historic event.

Since Israel and Egypt signed a peace deal in 1979, flights between the two countries have been offered by a subsidiary of Egyptair, called Air Sinai, created exclusively for that purpose. Those flights ran with varying frequencies between the two countries, depending on diplomatic conditions, and never showed the company’s logo on the plane.

Israeli Prime Minister Naftali Bennett had met with Egyptian President Abdel-Fattah el-Sisi in Sharm el-Sheikh three weeks ago in the first visit of an Israeli prime minister to Egypt in a decade. Sisi felt comfortable at the time announcing the meeting publicly, whereas in the past, only Israel would publicize such high-level diplomatic events.

The flight followed another “historic first” flight last week, a direct commercial flight to Israel from Bahrain, kicking off Gulf Air’s new biweekly route between Ben-Gurion and Manama, Bahrain’s capital city.

Flights between Israel and Dubai began last November, and a direct route to Abu Dhabi launched in April. In July, El Al and Israir both launched their first flights to Marrakesh, Morocco, following the normalization of ties in December.

Israel has had peace with Egypt since 1979, but while Cairo has remained an important strategic partner throughout, the relationship has had hot and cold periods.

Last month the Taba border crossing between Israel and Egypt’s Sinai Peninsula returned to full activity after Israel’s National Security Council lowered the travel alert level of beaches there. Travel to Sinai, a popular tourist destination for Israelis, was severely restricted during the past year due to the corona pandemic.

Wendy Sherman could prove tough bargainer for Pakistan

Wendy Ruth Sherman (born June 7, 1949) is an American professor and diplomat serving as the United States Deputy Secretary of State since April 2021. She is a professor of public leadership and Director of the Center for Public Leadership at the Harvard Kennedy School a senior counselor at Albright Stonebridge Group and a senior fellow at Harvard Kennedy School's Belfer Center for Science and International Affairs.

Sherman, a social worker, served as the director of EMILY's list, the director of Maryland's office of child welfare, and the founding president of the Fannie Mae Foundation. During the Clinton administration, she served as Counselor of the United States Department of State from 1997 to 2001. She was also a Special Advisor to President Bill Clinton and Secretary of State Madeleine Albright and North Korea Policy Coordinator. In the latter role, she was instrumental in negotiations related to North Korea's nuclear weapon and ballistic missile programs.

She served under Hillary Clinton and John Kerry as Under Secretary of State for Political Affairs from 2011 to 2015. She was the fourth-ranking official in the US Department of State. In that role, Sherman was the lead negotiator for the Iran nuclear deal. On January 16, 2021, President-elect Joe Biden formally announced Sherman to serve as United States Deputy Secretary of State under Antony Blinken. On March 11, 2021, her nomination was reported out of the Senate Foreign Relations Committee. Her nomination was approved by the full Senate on April 13, 2021, by a vote of 56 to 42. She is the first woman to hold the position. She was sworn into office on April 14, 2021.

On September 21, 2011, she was appointed to the position of Under Secretary of State for Political Affairs by Secretary Hillary Clinton. In this capacity, Sherman has led the US team during six negotiating rounds between Iran and six world powers about Tehran's nuclear program.

In this position, she was the fourth-highest ranking member of the Department.

She was named part of a special task force by Secretary of State Hillary Clinton to implement recommendations to improve protections for Foreign Service personnel, as a result of the 2012 Benghazi attack.

Sherman was critical of Benjamin Netanyahu's commitment towards a two-state solution, suggesting it could impact the United State's veto policy surrounding related resolutions at the United Nations.

 She was criticized by human rights organizations, including Amnesty International for praising Ethiopia for "strengthening its democracy" in wake of the 2015 elections - citing democratic backsliding and suppression of human rights.

She played a role in negotiating the details behind the Syria peace talks of 2016.

Under Secretary Sherman met with Yossi Cohen, National Security Advisor to the Prime Minister of Israel, at the US Department of State in Washington DC on February 18, 2015.

In October 2013, before negotiations began in Geneva between Iran and the so-called "P5+1," she made a comment about the Iranian negotiating strategy in a Senate committee hearing. She said, "We know that deception is part of the DNA." This caused her some trouble when a number of Iranian officials, including some members of the country's parliament, asked her to apologize. She served as the lead negotiator for the United States in the agreement reached with Iran on July 14, 2015 in Vienna.

On February 27, 2015, Sherman told a conference at Carnegie Endowment for International Peace, "The Koreans and Chinese have quarreled with Tokyo over so-called comfort women from World War II. There are disagreements about the content of history books and even the names given to various bodies of water. All this is understandable, but it can also be frustrating."

She continued, "Of course, nationalist feelings can still be exploited, and it's not hard for a political leader anywhere to earn cheap applause by vilifying a former enemy. But such provocations produce paralysis, not progress." Her comments were condemned by South Korea, but an analyst at the Asan Institute for Policy Studies said the reaction to Ms Sherman's remarks seemed excessive, and that her comments were in line with US policy.

US asking Pakistan ‘to do more’ once again

The United States has asked Pakistan to take action against all extremist groups ahead of a visit of US Deputy Secretary of State, Wendy Sherman to Islamabad. Sherman will be in Pakistan on 7 and 8 October and meet with Pakistani officials.

Sherman is the highest-ranking career diplomat in the State Department as the Secretary of State, who is equivalent to a foreign minister in other countries, is always a political appointee. She is the highest-ranking US visitor to Pakistan under President Joe Biden and since Taliban’s victory in Kabul.

Sherman will be in India on 6 and 7 October where she will meet officials and civil society leaders and address US-India Business Council annual “ideas summit”.

“We seek a strong partnership with Pakistan on counter terrorism and we expect sustained action against all militant and terrorist groups without distinction,” Sherman told reporters.

“Both of our countries have suffered terribly from the scourge of terrorism and we look forward to cooperative efforts to eliminate all regional and global terrorist threats,” she said from Switzerland, her first stop on a trip that will also take her to India and Uzbekistan.

Pakistani Minister Imran Khan, a longtime critic of US military campaigns, has asked the world to engage Taliban and provide economic support.

Sherman praised Pakistan's calls for an inclusive government in Afghanistan. “We look to Pakistan to play a critical role in enabling that outcome,” she said.

Pakistani Foreign Minister Shah Mahmood Qureshi met his US counterpart Antony Blinken in New York on the sidelines of the 76th session of the UN General Assembly. Their talks focused on the current situation in Afghanistan where the Taliban ousted the pro-US Ghani government in mid-August. The takeover followed the withdrawal of US troops from the war-torn country.

The US wants Pakistan to persuade Taliban to include other factions in government, respect human rights, allow women to work and girls to attend school.

Pakistan has assured the international community that it too wants an inclusive government in Kabul and will continue urging Taliban to fulfill the promises they have made to the international community.

Rising suicide trend among US troops

Suicides among US troops rose 15% during 2020 as compared to the earlier year, according to an annual report from the Pentagon released on Thursday. The figures show that 580 US service members died by suicide last year, a nearly 80-person increase from the 504 who committed suicide in 2019.

The figure for 2020 was lower than the 543 suicides in 2018.

Defense Secretary Lloyd Austin called the new numbers "troubling," and said suicide prevention is "a paramount challenge" for the military.

"Suicide rates among our service members and military families are still too high, and the trends are not going in the right direction," Austin said in a statement Thursday. 

"We must redouble our efforts to provide all of our people with the care and the resources they need, to reduce stigmas and barriers to care, and to ensure that our community uses simple safety measures and precautions to reduce the risk of future tragedies."

He added that the Pentagon will "continue to work swiftly and urgently," in collaboration with the Department of Veterans Affairs.

USA Today was the first to report the new statistics before these were made public.

Alaska has been the site of several suicides, according to USA Today, with six suicides in the first five months of the year. The newspaper reported that the Army has spent more than US$200 million in an attempt to improve the quality of life at its bases in the state.

A study released in June this year uncovered that more than 30,000 active-duty personnel and veterans of wars that followed the September 11, 2001, terrorist attacks had committed suicide.

That number, the study noted, was almost three times as many service members who were killed in post-9/11 war operations.

Earlier in September 2021 the Department of Veteran Affairs released a report that said veteran suicides in 2019 dropped to its lowest levels observed over the previous 12 years.

Has the game begun to promote Kamala Harris as next President of United States?

Reportedly poll numbers of Vice President Kamala Harris are rising, while numbers of President Joe Biden are falling. Kamala has rebounded in recent weeks, regaining her footing with approval ratings that now stand higher than Biden.

Harris got off to a rocky start at the beginning of the administration, including a botched response on why she hadn’t traveled to the Mexican border, when she said she hadn’t been to Europe either.

But her allies say Harris, whose difficult start provoked questions about her ability to be a future presidential candidate for the party, “has found her place” in the White House. 

“I think there’s definitely a feeling that things have been smoother,” said one ally. “It seems like they have ironed out some of the initial wrinkles.” 

Julian Zelizer, a professor of history and public affairs at Princeton University, said Harris has “started to solidify her position and strengthen the office, gaining a sense — always difficult for a VP — of what her role should be in the administration.”

“The key will be how those numbers hold as policy controversies continue and politics heats up,” he added.

A Gallup poll last week showed 49% approved of Harris’s job as vice president, 6 points higher than Biden’s 43% approval rating. It’s a significant change for both Biden and Harris. The president fell 6 points since August and 13 points since June. Harris’s current approval rating is the same as Biden’s in 2009, when he served as Barack Obama’s vice president.

The September 22, 2021 Gallup poll — conducted earlier in the month — also revealed that the vice president performed better than Biden with independents, a stunning revelation for a man who was catapulted to the White House because of support from that demographic.

It’s unclear why Harris’s numbers have risen higher than Biden’s in some surveys, though Biden in the last two months has gone through the most difficult phase of his presidency so far. Biden has received bipartisan criticism related to the US withdrawal from Afghanistan and has also taken some hits over the prolonged coronavirus pandemic.

The president has also been criticized over his handling of the border and immigration, taking hits from the left and the right over an influx of migrants from Haiti for the last few weeks.

Harris, in contrast, has been more in the background than the foreground on those controversies, though she did win headlines for criticizing the way some Haitian migrants were being treated by border agents.

Most Democratic strategists and observers say Harris hasn’t had a singular moment or two that has boosted her in the public realm. 

“Nothing specific,” said Basil Smikle, the Democratic strategist and former Executive Director of the New York State Democratic Party, when asked if there has been a standout moment for the vice president.

He suggested the White House could actually benefit by doing more with Harris.

Smikle said that while Harris has been accessible, for example by appearing at Howard University’s homecoming, “the White House could bring her in more closely — as other administrations have — but they seem to keep her at a little distance, which may have been helpful to her in the long run.”

Other strategists say Harris has benefitted from Republicans setting their sights on Biden in recent weeks. They have portrayed him as weak on the border and Afghanistan.

“My instinct is to say that so much fire has been aimed at Biden, Harris’s numbers have gone up by sheer virtue of being out of the spotlight,” Democratic strategist Christy Setzer added. “She’s not giving anyone fresh reason to dislike her, so her polling numbers revert to the mean, with the country about evenly divided on the Black woman in the No. 2 spot.”

But Harris has appeared to settle into more of a role in her vice presidency. Last week, she hosted the leaders of Zambia, Ghana and India separately. On Wednesday, she hosted a meeting with five Latino small-business leaders.

Harris has been increasingly active politically too, giving a forceful speech for Calif. Gov. Gavin Newsom (D), fundraising for Virginia Democratic gubernatorial candidate Terry McAuliffe and attending an event at George Mason University for National Voter Registration Day. 

To be sure, Harris’s polling numbers are not spectacular. The same Gallup poll that showed her with a 49% approval rating showed she had a 49% disapproval rating. Other polls in the last month also show her with support in the low or mid-40s, though some polls in August had her hovering in the mid- to high 30s. 

Not everything has gone to plan for Harris either. Aides and allies grew frustrated last week after she was scheduled for an in-studio interview on “The View,” but two of the hosts were pulled from the set after they tested positive for COVID-19. 

Harris conducted the interview virtually as a precaution, even though she had flown from Washington to New York for the program. The hosts subsequently tested negative, and the tests were ruled a false positive. 

The Harris ally called the incident “unfortunate” while saying Harris needs to continue to up her national stature for her own political prospects. 

“I think we’re all happy to see her settle into her role and find her bearings, but I think even she knows she has a long way to go,” the ally said

Countering drug trade in Afghanistan

According to reports, Jim Jordan (R-Ohio) urged President Joe Biden administration on Wednesday to provide a plan on how it will counter the illicit narcotics trade in Afghanistan. 

Jordan asked the Office of National Drug Control Policy (ONDCP) if the administration has a strategy in place to address Afghanistan's opium and heroin trade in light of the Taliban’s takeover of the country.

“The Taliban takeover of Afghanistan due to President Biden’s reckless and chaotic withdrawal has created a power vacuum that has emboldened terrorist groups and threatened our vital national security interests. It has also led to the Taliban seizing control of the illicit drug trade in Afghanistan that will help to finance its terror activities,” Jordan said.

The Republican congressman cited a July report from the ONDCP that said more than 80 percent of the global heroin supply originates in Afghanistan and that poppy cultivation increased in 2020, following a two-year decline. 

The Taliban said in August it would ban the production of opium poppies after years of profiting from it.

“To date, President Biden has not yet established a comprehensive counternarcotics strategy to tackle our country’s drug crisis. This failure is particularly concerning in light of the Biden border crisis and the surge of illegal alien encounters at the southwest border,” Jordan said.

He also asked if ONDCP meets with the State Department’s Bureau of International Narcotics and Law Enforcement Affairs, the Defense Department, and the Drug Enforcement Administration about drug eradication efforts, seizing illicit narcotics in transit, or deterring access to drug trafficking routes.

He questioned if ONDCP also works with those entities to enhance the capacity to stop the flow of illicit narcotics leaving Afghanistan and if programs the US had with Afghanistan to counter the drug trade have been terminated with the Taliban’s takeover.

Jordan requested answers from Regina LaBelle, acting director of ONDCP, by October 13, 2021. 

The July report from the ONDCP found that 90 percent of heroin seized and tested in the US originates from Mexico, despite the majority of the global supply originating in Afghanistan. The White House released the ONDCP report in July, prior to the fall of Afghanistan, and touted that President Biden’s budget request calls for US$10.7 billion in investments for populations at greatest risk or overdose and substance abuse.

Pakistan facing repercussions of “Absolutely Not”

On Wednesday the benchmark index of Pakistan Stock Exchange lost about 2% (908 points). The fall has been attributed to a bill being moved in the US senate. Foreign Office spokesperson Asim Iftikhar Ahmad said that "unwarranted" references to Pakistan in a bill that was recently introduced in the United States Senate was "inconsistent" with the spirit of cooperation that had existed between the two countries on Afghanistan since 2001.

"We see that a debate is under way in Washington both in the media and on Capitol Hill to reflect on and examine the circumstances leading to the US withdrawal from Afghanistan. The draft legislation introduced in the US Senate by a group of Senate Republicans seems to be a reaction to this debate," he said in a statement.

However, the references to Pakistan in the bill were "completely unwarranted", he said. Terming those references as "inconsistent in spirit" with Pak-US cooperation on Afghanistan since the American invasion in 2001, he recalled that Pakistan had facilitated the Afghan peace process and helped evacuate citizens of the US and other countries from Afghanistan in August.

Ahmad reiterated that Pakistan had always maintained that there was no military solution to the conflict in Afghanistan. It had also stressed that a coercive approach would not work and the only way to achieve sustainable peace in the war-torn country was through engagement and dialogue, he added.

He noted that sustained security cooperation between Pakistan and the US would "remain critical in dealing with any future terrorist threat in the region".

"Such proposed legislative measures are, therefore, uncalled for and counterproductive," the spokesperson said.

Twenty-two US senators moved a bill in the Senate on Monday that seeks to assess Pakistan's alleged role in Afghanistan before and after the fall of Kabul and in the Taliban offensive in Panjshir Valley.

Senator Jim Risch, ranking member of the Senate Foreign Relations Committee, and other Republicans introduced the Afghanistan Counterterrorism, Oversight, and Accountability Act to address outstanding issues related to the Biden administration's "rushed and disastrous withdrawal from Afghanistan".

The proposed legislation calls for a comprehensive report on who supported the Taliban during America's 20 years in Afghanistan, helped the group in capturing Kabul in mid-August and supported their offensive on Panjshir Valley.

The first report shall include "an assessment of support by state and non-state actors, including the government of Pakistan, for the Taliban between 2001 and 2020", including the provision of sanctuary space, financial support, intelligence support, logistics and medical support, training, equipping, and tactical, operation or strategic direction, according to the bill.

The legislation also requires "an assessment of support by state and non-state actors, including the government of Pakistan, for the September 2021 offensive of the Taliban against the Panjshir Valley and the Afghan resistance".

The proposed bill also seeks to impose sanctions on the Taliban and others in Afghanistan for terrorism, drug-trafficking, and human rights abuses, as well as on those providing support to the Taliban, including foreign governments.

It states that the US should not recognize any member of the Taliban as the ambassador of Afghanistan to the United States or as the ambassador of Afghanistan to the United Nations, and places restrictions on non-humanitarian foreign assistance to the war-torn country.

It also calls for a comprehensive review of foreign assistance to entities that support the Taliban.

Top US generals contradict President Joe Biden

Top US military officials told lawmakers on Tuesday that they had recommended 2,500 US troops remain in Afghanistan, contradicting comments made by President Joe Biden earlier this year.

Gen. Frank McKenzie, head of US Central Command, and Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, each acknowledged during public congressional testimony that they agreed with the recommendation of Army Gen. Austin Miller that 2,500 troops be left in the country, though they denied to detail what they advised Biden directly.

Biden announced his decision to end US military involvement in Afghanistan back in April.

“I won’t share my personal recommendation to the president, but I will give you my honest opinion, and my honest opinion and view shaped my recommendation. I recommended that we maintain 2,500 troops in Afghanistan. And I also recommended earlier in the fall of 2020 that we maintain 4,500 at that time. Those are my personal views,” McKenzie told the Senate Armed Services Committee on Tuesday under questioning from Sen. James Inhofe (Okla.), the panel’s top Republican.

McKenzie said it had been his view that the full US withdrawal would lead to the collapse of Afghan forces and government.

Milley said he agreed with that assessment and that it was his personal view dating back to last fall that the US should maintain at least 2,500 troops in Afghanistan to move toward a peace agreement between the Taliban and Afghan government. Milley declined to comment directly on his specific discussions with Biden when questioned by Sen. Tom Cotton (R-Ark.).

Asked whether Miller discussed his recommendation with Biden, McKenzie told lawmakers he believed his opinion “was well-heard.”

Republican lawmakers repeatedly raised the matter in the context of an interview Biden gave to ABC News in August during which he denied that his top military commanders recommended he leave 2,500 troops in Afghanistan.

“Your top military advisers warned against withdrawing on this timeline. They wanted you to keep about 2,500 troops,” ABC’s George Stephanopoulos said to Biden in the interview.

“No, they didn't,” Biden replied. “It was split. That wasn't true.”

“Your military advisers did not tell you, ‘No, we should just keep 2,500 troops. It's been a stable situation for the last several years. We can do that. We can continue to do that’?” Stephanopoulos later pressed.

“No one said that to me that I can recall,” Biden replied.

White House press secretary Jen Psaki tweeted Tuesday afternoon that leaving 2,500 troops in Afghanistan would have escalated the conflict due to the Trump administration’s deal with the Taliban to withdraw.

“As @POTUS told ABC, ending the war in Afghanistan was in our national interest. He said advice was split, but consensus of top military advisors was 2500 troops staying meant escalation due to deal by the previous admin. @SecDef, the Chairman, and GEN McKenzie all reiterated,” Psaki tweeted.

Psaki further defended Biden's past comments during an afternoon press briefing, saying he was given a range of advice and that remaining in Afghanistan would have necessitated a further troop increase while risking lives of US service members. 

“The president is always going to welcome a range of advice. He asks for candor. He asks for directness. And in any scenario he’s not looking for a bunch of 'yes' men and women,” Psaki told reporters, adding that it is up to Biden to ultimately decide “what's in the best interest of the United States.”

Milley said during the hearing that the US would have been back at war with the Taliban if forces had stayed beyond August 31, 2021.

Military generals unanimously recommended that Biden stick to the August 31 withdrawal date on August 25, Milley said, when Biden was considering extending the deadline to accommodate the evacuation mission.

Asked about the ABC News exchange on Tuesday, Defense Secretary Lloyd Austin called Biden an “honest and forthright man.”

“Their input was received by the president and considered by the president, for sure,” Austin told Cotton when asked if Biden’s statement to ABC was true. “In terms of what they specifically recommended, senator, as they just said, they’re not going to provide what they recommended in confidence.”

Later during the hearing, Sen. Dan Sullivan (R-Alaska) grilled the witnesses on whether Biden made a false statement in the interview.

“That was a false statement, by the president of the United States, was it not?” Sullivan asked.

“I didn’t even see the statement, to tell you the truth,” Milley replied, adding, “I’m not going to characterize a statement of the president of the United States.”

In April, Biden ordered the full US military withdrawal from Afghanistan by September 11, 2021. US forces completed the withdrawal by August 31, capping a chaotic exit and evacuation mission from the war-torn country after the Taliban gained control of Kabul earlier the same month.

Miller appeared before lawmakers for classified testimony earlier this month. Tuesday's hearing was the first time that top military officials have testified publicly since the August withdrawal.

Investors getting jittery

USD traded sharply higher against all of the major currencies on Tuesday as Treasury yields surged and stocks plummeted. With several factors driving investors out of risk assets, FX traders need to beware of the possibility of risk aversion intensifying over the next few days. From surging commodity prices, the prospect of tighter monetary policies, risk of the US government shutdown and even a credit default, there are plenty of reasons to be worried.  

The cost of natural gas is skyrocketing and the increase is spilling over to oil. In the last 2 days, natural gas prices rose more than 10% and in the past year, it is up 180%. Heading into the cooler fall and winter months, households will be hit by significantly more expensive heating bills. The energy crisis is so severe that in countries like the UK and China, there have been forced blackouts and factory shutdowns.  In some Chinese provinces, traffic lights have been turned off. 

Aside from having a direct impact on pocketbooks, higher natural gas and oil prices is also a problem for inflation. In comments made today, Federal Reserve Chairman Jerome Powell admitted that “it’s fair to say that” inflation is broader, more structural and more concerning than earlier this year. More specifically he said supply chain constraints like shortages of chips “have not only not gotten better – they’ve actually gotten worse.” Stickier inflation increases the need for less accommodation, which is positive for rates, negative for stocks and risk currencies. Considering that no one expects the energy crisis or supply chain bottlenecks to be resolved quickly, risk aversion could intensify, leading to demand for USD, JPY and Swiss Franc.

Treasury Secretary Janet Yellen warned that the government would not be able to make all of their payments if the debt ceiling is not raised by October 18th.  Companies like JPMorgan said they have begun preparing for a potential US credit default. Although it is very unlikely, if that happens the consequences for the markets would be brief but significant. Equities and currencies would fall sharply.

The government’s current funding expires on October 1st and lawmakers are rushing to pass legislation that would avoid a partial shutdown. There’s a lot going on in Washington this week and the battle on Capitol Hill is hurting and not helping risk appetite.  Consumer confidence weakened in September and given recent developments, we expect further deterioration this month.

With no major economic reports on the calendar on Wednesday, equities and Treasuries will drive currency flows. The Bank of England and Reserve Bank of New Zealand may be two of the least dovish central banks but their currencies have been hit the hardest by risk aversion.

The UK is dealing with its own petrol crisis worsened by driver shortage. EUR remains the most resilient, experiencing only modest losses due to euro’s low yield. Risk aversion is normally negative for USD/JPY but 10 year Treasury yields which rose to its highest level since June is having greater influence on USD flows.

Israel trying to buy out loyalty of Jordan

Israeli Channel 12 reported that Foreign Minister Yair Lapid has secretly met with King Abdullah of Jordan as Prime Minister Naftali Bennett embarked for New York where he was expected to meet with Bahraini and UAE ministers and speak at the United Nations General Assembly (UNGA). 

Bennett and President Isaac Herzog have also met with King Abdullah, in what is seen as a series of overtures to repair Israel's relationship with the Hashemite Kingdom that had become strained under former Prime Minister Benjamin Netanyahu's tenure.

Lapid and King Abdullah discussed the tensions in Jerusalem, including around the Temple Mount, known to Muslims as al-Haram al-Sharif. The two men also spoke of ways to improve ties between Israel and Jordan, acceding to Channel 12.

It added that the Biden administration received a report of the visit.

Bennett's government has also signed a major water deal with the Hashemite Kingdom that almost doubled the amount of water Israel sends to Jordan. It also agreed to allow Jordan to increase its exports to Palestinian areas of the West Bank.

Israel's longest border is with Jordan and the stability of it is vital for Israel's security. 

Anti Iran stance of Bennett can’t make him true successor of Netanyahu

Prime Minister Naftali Bennett addressed the UN General Assembly for the first time, barely 100 days after he was sworn in, ending Benjamin Netanyahu's more than decade-long premiership. 

"For way too long, Israel was defined by wars with our neighbors," Bennett said in his address. "But this is not what Israel is about. This is not what the people of Israel are about. Israelis don’t wake up in the morning thinking about the conflict. Israelis want to lead a good life, take care of our families, and build a better world for our children."

Bennett warned the assembly that two problems – the coronavirus and political polarization – were "challenging the very fabric of society at this moment" and has the ability to "paralyze nations." 

“Israel had rejected polarization by forming the government he leads, what started as a political accident can now turn into a purpose," Bennett said. "And that purpose is unity. Today we sit together, around one table. We speak to each other with respect, we act with decency, and we carry a message: Things can be different."

As for the pandemic, Bennett said Israel had successfully developed a model for managing it by rejecting lockdowns and embracing booster shots. "Lockdowns, restrictions, quarantines – cannot work in the long run," he said. The government's decision to begin providing booster shots was a tough one, given the fact that the US Food and Drug Administration hadn't approved them, but it ultimately paid off, Bennett stated, saying that Israel "pioneered the booster shot."

Turning to the issue of Iran, Bennett blamed Tehran for funding, training and arming groups that "seek to dominate the Middle East and spread radical Islam across the world," as well as to destroy Israel. Furthermore, he said, Iran is trying to dominate the region by stretching its presence into Lebanon, Iraq, Syria, Yemen, and Gaza, and "every place Iran touches – fails."

Bennett also warned that Iran's nuclear weapons program had "hit a watershed moment, and so has our patience," saying that Tehran has crossed all red lines and ignored international inspections. "Words do not stop centrifuges from spinning," he said.

Bennett took the opportunity to criticize countries that took part in a commemoration marking the 20th anniversary of the adoption of the Durban Declaration and Program of Action.

"And to those countries who chose to participate in this farce, I say', Attacking Israel doesn’t make you morally superior, fighting the only democracy in the Middle East doesn’t make you "woke", adopting clichés about Israel without bothering to learn the basic facts, well, that's just plain lazy," he said.

The prime minister did not address the Palestinian issue after last week’s UN speech by Palestinian President Mahmoud Abbas, who delivered a one-year ultimatum to Israel to withdraw to pre-1967 borders.

Netanyahu’s Likud party quickly issued a statement criticizing Bennett’s speech and extolling his predecessor. “Netanyahu's speeches at the UN made waves all around the world and brought Israel's political interests to the forefront of international attention,” read the statement. “Unlike him, Bennett gave an empty speech in front of an empty hall and wasted empty words, instead of taking advantage of an important international platform.” 

The Palestinian ambassador to the UN, Riyad Mansour, told Palestinian radio station Ashams that Bennett had ignored not just the Palestinians, but also the international community, in his speech. "We will act on all fronts, especially the Security Council and the International Criminal Court and all the countries of the world, but the anchor will be the Palestinian people's unity and its hold on its land," he said. "The world remembers well what happened in May in the lands of Palestine," including within Israel's pre-1967 borders, Mansour added, referring to Jewish-Arab violence and rioting earlier this year during a military confrontation between Israel and Hamas.

Any attack by Israel on Lebanon will be met with a response, says Qassem

Any attack by Israel on Lebanon will be met with a response from Hezbollah, said Deputy Secretary General Sheikh Naim Qassem on Friday evening, according to Palestinian media.

"Any Israeli attack on Lebanon will be met with a response from Hezbollah. Even if [Lebanon] is dragged into a war, we will face the war. Our weapons are locked and loaded. If we need more, we have our ways to rearm ourselves," he said, according to reports on Twitter.

“We are waiting for the Lebanese government’s position on the indirect negotiations with [the Israeli enemy] regarding the border issue, and when our turn arrives, we will do our duty,” he said. 

"We will continue to bring oil as long as Lebanon’s central bank and Lebanese fuel companies do not supply Lebanon’s oil/fuel needs," he added.

Qassem's statement came in the backdrop of Lebanese President Michelle Aoun's speech at the United Nations General Assembly earlier on Friday.

In his speech, Aoun called for a resumption of the indirect talks on Lebanon's maritime dispute with Israel. 

"We remain gravely concerned at Israel's repeated threats against Lebanon and, more recently, Israel's plans to carry out oil and gas exploration activities along the contested maritime border," he said.

"We condemn any and all attempts to violate the limits of our exclusive economic zone and we maintain our right to the oil and gas found within that zone," he said. 

"Lebanon demands the resumption of indirect negotiations on the demarcation of the southern maritime borders in line with international law," Aoun said. "We will not relinquish or compromise on our border claims and it is the role of the international community to stand with us."

Israel and Lebanon began US-mediated negotiations regarding their maritime border in October 2020, which were the first talks between the countries in 30 years. The two Middle East neighbors hoped that settling the border dispute would encourage further gas exploration in the area.

Israel already pumps significant amounts of gas from the Mediterranean, but Lebanon has yet to do so.

The Lebanese delegation at the time faced significant pressure from Hezbollah to abandon the negotiations.

After four rounds of talks, negotiations stopped in November. Israeli Energy Minister Yuval Steinitz accused Lebanon of changing its position seven times, presenting “positions that add up to a provocation.”

Aoun's remarks came two weeks after a new Lebanese government was sworn in, ending a 13-month long political crisis that began after a devastating blast destroying the Beirut port on August 4, 2020.

Qassem's statement may be an attempt to signal to the Lebanese people that despite Aoun's condemnation of Israel's actions, Hezbollah still sees itself as the true defender of Lebanon.

Germany gets ready for most unpredictable elections

For the first time in well over a decade, German voters will enter polling booths for federal elections on Sunday with no clear idea which party will win, who will be the next chancellor, or what governing coalition will be formed.

Only a razor’s edge separates the centre-left Social Democratic Party (SPD) from the conservative Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), according to the latest poll by the Allensbach Institute, which puts the archrivals at 26 percent and 25 percent, respectively.

Other polls released in recent days put the SPD’s lead at two to four points, with a margin of error of about 3 percent.

Experts have urged caution when interpreting polling data due to the uncertain influence of a historically high number of undecided voters, as well as an expected surge in postal voting.

Exit polls will be released when voting ends at 6pm local time (16:00 GMT) on Sunday, and results will emerge throughout the night.

Angela Merkel’s decision to depart as chancellor after 16 years has upended German politics and led to the most unpredictable race in years. At various points in the campaign, the SPD, CDU/CSU and the Greens have each been leading the polls.

Climate change has dominated party programs and televised debates more than any other issue. On Friday, more than 100,000 protesters joined outside the German parliament building in Berlin, where activist Greta Thunberg told crowds that “no political party is doing even close to enough” to avoid climate disaster.

Other points of debate included social welfare spending and raising the minimum wage, overhauling Germany’s rickety digital infrastructure, and the country’s role in the NATO alliance.

Success and failure in the campaign have largely been determined by party leaders’ ability to frame themselves as a natural heir to Merkel, who remains Germany’s most popular politician.

Gaffes by CDU leader Armin Laschet saw his approval rates tank, while allegations of CV-padding and plagiarism knocked Green candidate Annalena Baerbock’s race off course.

Finance Minister and SPD candidate Olaf Scholz has played up his reputation as a boring, pragmatic centrist to great effect.

A recent poll found that 47 percent of voters favoured him for chancellor, compared with 20 percent for Laschet and 16 percent for Baerbock.

“The issue of succession became perhaps the most important campaign issue,” Kai Arzheimer, a professor of politics at the University of Mainz, told Al Jazeera.

“Voters are more worried or more interested in who would be most competent, and who would be best able to manage Germany and Germany’s future. So personalities have become a major focus in this campaign.”

A total of 60.4 million voters aged above 18 are eligible to cast a ballot on Sunday. Voting booths will open at 8am (06:00 GMT) on Sunday and close at 6pm (16:00 GMT).

Under Germany’s electoral system, voters cast two ballots for the Bundestag, the federal parliament, which has a base number of 598 seats.

The first is for a candidate to represent one of Germany’s 299 districts, which is determined in a United Kingdom-style first-past-the-post system.

The second is for a party. These votes are distributed according to proportional representation to each party that passes a 5 percent threshold, who chose 299 more candidates from internal lists to represent them.

A number of “overhang” seats are created if there is an imbalance between a party’s directly elected seats and its share of voters, a feature that has caused the Bundestag to balloon in size.

In 2017, the total number of seats rose to 709, and the number is expected to rise again this year.

The states of Berlin and Mecklenburg-Vorpommern will also hold simultaneous state elections. Berliners will receive a further ballot for a referendum to expropriate the capital’s largest landlords and take nearly a quarter-million homes into state ownership.

Germany’s federal returning officer told local media that the number of votes submitted by post would be at least 40 percent, potentially even doubling the 28.6 percent in 2017.

The COVID-19 pandemic is not expected to reduce turnout, he added, noting that regional elections earlier this year did not see any significant decline.

In the coming weeks and months, German parties will negotiate with each other to form a coalition capable of governing with a majority in the new Bundestag.

There is little appetite to renew Merkel’s favoured “grand coalition” of SPD and CDU/CSU, so polling suggests three parties will be required.

There are no formal rules that govern coalition talks, which will last until MPs vote in a new government and elect a new chancellor.

The CDU and the SPD have indicated that they will seek to lead a coalition even if they do not come out in the first place.

The most likely options, taking their names from the party colours, are a so-called “traffic light” combination of SPD, Green and Free Democratic Party (FDP); or a “Jamaica” coalition of CDU/CSU, Green and FDP.

The pro-business FDP wants tight fiscal control over finances, which complicates a marriage with the SPD and the Greens, who have staked their campaigns on increasing spending for social welfare and climate protection.

“This might be a very big issue, whether we will have more taxes or higher taxes, or not,” said Ursula Munch, director of the Academy for Political Education in Tutzing.

“The Free Democrats, they promised their voters to have a tax reduction.”

A left-wing coalition of SPD, the Green and the Left Party may be mathematically possible if the latter clears the 5 percent hurdle to enter parliament. The Left’s program has more in common than the FDP, but its opposition to NATO is a major barrier to the larger parties.

“It will take quite a long time,” said Munch. “It’s impossible to form a coalition before November and we’ll be happy if we have one in February.”

If Merkel does stay on as interim chancellor until December 17, she will make history by overtaking her mentor, former CDU leader Helmut Kohl, as Germany’s longest-serving post-war leader.

Israel aims at repairing relationship with ruling junta in United States

Israel is deeply concerned with what is happening in the Democratic Party and how even something like Iron Dome - a purely defensive system - is no longer a matter of consensus.

On Thursday evening, the House of Representatives approved a bill to provide Israel with US$ one billion in aid to replenish stockpiles of Iron Dome interceptors, used up during the IDF’s last clash with Hamas in the Gaza Strip in May.

The decision to provide the funding was made earlier this year by US President Joe Biden during his meeting at the White House in August with Prime Minister Naftali Bennett.

Initially, the Democratic Party leadership tried to insert the provision into a stopgap spending bill aimed at averting a government shutdown at the end of the month. But then they came up against opposition from the far-left flank of the party, including members of the so-called “Squad” like representatives Alexandria Ocasio-Cortez of New York and Rashida Tlaib of Michigan.

Leadership of the party pulled the provision from the bill and decided to bring it back to the House as a stand-alone piece of legislation, which was done on Thursday, passing with an overwhelming majority of 420 to 9.

Interestingly, Ocasio-Cortez voted “present” – a form of abstaining – after initially planning to vote against the bill. She was later seen crying on the House floor.

In a letter to her constituents in New York that she posted to Twitter Friday, Ocasio-Cortez said she was inclined to vote “no” at first because she opposes giving “unconditional” aid to Israel while “doing nothing to address or raise the persistent human rights abuses against the Palestinian people.” She did not explain what caused her to switch her vote to “present.”

On the one hand, Israel can breathe a sigh of relief. The bill passed and it received overwhelming support. On the other hand, Israel needs to be deeply concerned with what is happening in the Democratic Party and how even something like Iron Dome – a purely defensive system that saves lives – is no longer a matter of consensus. Instead, even Iron Dome stirs controversy.

It is important that we recognize the truth, Israel has a problem. Part of it is the fault of Israel and part of it has nothing to do with Israel.

The part that is on Israel is the active role the previous prime minister played in undermining support for Israel in the Democratic Party. He did this by intentionally clashing with then-President Barack Obama, the way he spoke against the Iran deal in 2015 in Congress and the way he cozied up to former President Donald Trump, while knowing that it could push away Democratic friends.

On the other hand, some of the trends seen today in the Democratic Party have nothing to do with Israel. The Squad wasn’t created around Israel but rather to advance progressive, far-left issues in which Israel gets entangled.

It is into this situation that Mike Herzog, Israel’s newly-confirmed ambassador will enter when he arrives in a few weeks in Washington. He will have to maneuver between an administration and Congress that is seemingly supportive of Israel on the one hand, but also needs to balance that support within a party that appears to be moving farther and farther to the Left.

The Iron Dome fiasco shows what Herzog’s number one mission needs to be, trying to repair ties within the Democratic Party while building new alliances and relationships with minority groups throughout the US.

Policy on Iran is important but that will anyhow be determined by the political echelon. Policy on the Palestinians is also important but everyone knows that not too much can happen now anyhow due to the unique makeup of the current government.

Where the needle can potentially move is in the relationship between Israel and the current ruling party in the US. Herzog should come to this with a strategic plan, focused on identifying friends and untapped potential allies, and communicating about Israel and its policies in a way that can appeal to a progressive and liberal demographic.

Waiting out an administration or a Congress is not a strategy even though that is what former Prime Minister Benjamin Netanyahu did when Obama was president.

Israel needs to initiate, to communicate and to build relationships. What happened with Iron Dome shows how important all of this is?

Angry Americans Hysterical Reactions

After Iranian President Ebrahim Raisi virtually addressed the 76th United Nations General Assembly, many political analysts commented on the contents of his speech. However, what is interesting is that the authors of the JCPOA are crying over an empty coffin. 

To examine this issue, let’s review what the president told the UN General Assembly.

“Sanctions are the US new way of war with the nations of the world,” Raisi said at his speech. 

Is this a remark that anyone can object it? No. The fact is the United States has imposed crippling sanctions against Iran cannot be denied. Even the American or hardliner Israeli analysts admit this. As the Iranian president rightfully said, sanctions against the Iran started “not with my country’s nuclear program; they even predate the Islamic Revolution and go back to the year 1951 when oil nationalization went underway in Iran…”

The United States went too far in its illegal sanctions on Iran to the extent that strict financial sanctions even impeded the import of medicine and medical equipment to Iran at the time of the global Coronavirus pandemic. There is little doubt that the Americans committed medical terrorism against the Iranian people. Raisi also pointed to this fact in his speech.

“Sanctions, especially on medicine at the time of the COVID-19 pandemic, are crimes against humanity,” he said.

He also emphasized, “I, on behalf of the Iranian nation and millions of refugees hosted by my country, would like to condemn the continued illegal US sanctions especially in the area of humanitarian items, and demand that this organized crime against humanity be recorded as a symbol and reality of the so-called American human rights.”

Soon after the speech, a network of analysts and commentators started bashing Raisi, as well as screaming over a revival of the JCPOA. Since Raisi administration took the power in early August, Iran started to patiently evaluate the situation to return to the negotiations table. In a phone call on 14th September 201 with former British Foreign Secretary Dominic Raab, Iranian Foreign Minister Hossein Amir Abdollahian said that Iran is in the process of “consultations on how to continue the Vienna talks,. He reiterated to welcome negotiations that have tangible results and secure the rights and interests of the Iranian people.”   

This is what the Iranian president had previously touched on during first TV interview on 5th September.

“Negotiation is an option as a tool for diplomacy, but negotiation under pressure and threats is not acceptable at all,” Raisi insisted.

After Raisi’s speech, Ali Vaez, Director of Iran Project and Senior Advisor to the Crisis Group tweeted, “.@raisi_com’s speech at #UNGA was one of the most anti-American speeches I’ve heard from an Iranian president in years.” 

Barbara Slavin, Director of the Future of Iran Initiative at the Atlantic Council, replied to Vaez’s tweet, saying, “As harsh as @Ahmadinejad1956 but more coldly rational. Did you notice at the end, #Raisi said #Iran wanted 'large scale economic and political cooperation with all countries of the world? We need to remember, as well, that he is only the front man, not the decider.” 

Yet, the most predictable strategy was outlined by the CEO of The Foundation for Defense of Democracies (FDD), Mark Dubowitz.

He tweeted, “Raisi’s new negotiating team will ask for total sanctions relief and give less than the JCPOA. @USEnvoyIran @Rob_Malley will give them 97% and then pretend that they held the line and that there’s a “longer and stronger” deal to be had.”

It seems that the thinkers, who helped draft the JCPOA, don’t agree with the text anymore, as it ostensibly contradicts their desires. The plan is now clear. Bashing Raisi and his foreign policy team with every tool in order to write a “longer and stronger” deal to satisfy desires is not helpful at all. But what is really a longer and stronger deal? 

The United States has always been interested in dragging the Iranian missile program into the negotiations. For eight years, since the intensive negotiations started, Iran has made it crystal clear that its defensive capabilities are not up for negotiations. Yet, the United States is using various pressure tools to impose a deal on Iran. Iran has always reiterated that it will only go back to the original 2015 JCPOA text, if and only if the US verifiably lifts all sanctions. 

As for Raisi’s speech, he condemned US terrorism and extremism in Afghanistan, Iraq, Syria, and Yemen, asked for the lifting of all sanctions, and restated that Iran will return to the Vienna talks were intended to revitalize the nuclear deal.

If this is too harsh for the Crisis Group, then it shows that the JCPOA revival is not their concern. Had it been so, they would not have objected to a rational speech in which Raisi insisted on the need to lift sanctions. It is advised that the thinkers would not shed crocodile tears over the JCPOA revival. 

Pakistan Stock Exchange Benchmark Index Declines 3.4%WoW

Moving along the trend set in motion in previous week, Pakistan Stock Exchange posted negative performance throughout the week. On last trading day of the week ended on 24th September 2021, bench mark index closed at 45,073 points, touching a low of 44,788 points. 

During the outgoing week, the index cumulatively lost 1,562 points or 3.4%. A 25bps hike in interest rates by the central bank suggests further hikes in future.

Other major news flows during the week included: 1) the central bank tightening regulations on consumer financing and mandating banks to share 5-day import payments schedule, 2) the GoP considering re-imposing higher regulatory duties to curb auto imports, 3) Petroleum division proposing to increase gas prices by up to 35 percent, 4) Pakistan planning to issue international Sukuk in October 2021 to raise US$1.5 billion and 5) EU extending GSP+ status for Pakistan with six new conventions.

Volumes relatively dried up with average daily turnover sliding to 383.5 million shares as against 400.1 million shares a week ago. Major activity tilted towards main board items. Pressure was witnessed across sectors, with Engineering hit the most, registering a decline of 6.3%WoW followed by Auto Assemblers, down 5.9%WoW. Refineries emerged the worst performer (down 17.2%) over uncertainty on refinery policy. The resignation of SAPM Tabish Gauhar, the architect of the Policy, hints towards possible delays in finalization of the Policy.

Flow-wise, Foreigners and Others played a major role in absorbing selling pressure by other participants, with cumulative net inflow at US$12.6 million, while Individuals and Companies cumulatively squared US$11.0 million positions. The major gainers were: HMM, PSEL, SCBPL, ARPL and SNGPL, while laggards were, ANL, ATRL (down 17.9%WoW), BYCO, PAEL and BNWM.

Market is likely to remain volatile in the near term, direction to be determined by IMF review. Reversing certain incentives such as in the case of Autos should be viewed as material positive particularly from a macro perspective, easing pressure on external account. Moreover, investors should adopt a top-down approach to investing where possibility of further interest rate hikes could bring Banking Sector into limelight, while Techs and Textiles (on currency depreciation where stronger earnings are yet to be priced in) are other sectors of interest. Techs may remain under pressure owing to structural impediments faced by one of the companies. The weakness should be taken as an opportunity to accumulate.