Sunday, 11 October 2020

United States the biggest war machine

It may not be wrong to say that military bases of the United States are the key pieces of the global war machine, but people don’t hear about these very often. It is estimated 800 US military bases are located around the globe that play an essential role in turning the whole world into a bloody battlefield. These bases are located in more than seventy countries around the world and represent a mighty military presence, yet rarely acknowledged in US political discourse.

The Marine Corps Air Station Futenma in Okinawa might occasionally grab a headline thanks to sustained and vigorous anti-base protests, and US military bases in Guam might briefly make news due to public opposition to “Valiant Shield” war exercises that have taken place on the US colony during the pandemic. But, overwhelmingly, foreign bases simply are not discussed.

They are immutable, unremarkable facts, rarely considered even during elections that repeatedly invokes concepts like “democracy” and “endless war” and, thanks to a raging pandemic and climate crisis, raises existential questions about what United States is and should be.

The people living in the countries and US colonies impacted by these bases — the workers who build their plumbing systems, latrines, and labor in the sex trades that often spring up around them, the residents subjected to environmental toxins and war exercises — simply do not exist.

These military bases hold the key to understanding why the United States has consistently been in some state of war or military invasion for nearly every year of its existence as a country.

US military bases around the world, from Diego Garcia to Djibouti, are nuts and bolts in the war machine itself. Military bases provide the logistical, supply, and combat support that has allowed the United States to turn the whole world into its battlefield. They make conflict more likely, and then more wars lead to more military bases, in a vicious cycle of expansion and empire. Put another way, “bases frequently beget wars, which can beget more bases, which can beget more wars, and so on.”

While the idea that the global expansion of military bases corresponds with the rise of US empire may seem obvious, it is both consequence and cause. The way global military positions spread — which are always sold to the public as defensive — are by their very nature, offensive and become their own, self-fulfilling ecosystems of conquest.

Just as the induced demand principle shows, building more lanes on highways actually increases traffic, United States of War makes the argument that military bases themselves incentivize and perpetuate military aggression, coups, and meddling.

The trajectory toward empire started with white settler expansion within the United States. In 1785, the US Army initiated what “would become a century-long continent-wide fort-construction program. These forts were used to launch violent invasions of Native American lands, to protect white settler towns and cities, and to force Native Americans further and further away from the East Coast.

They were also used to expand the fur trade, which, in turn, encouraged other settlers to keep moving west, with some forts functioning in part as trading posts. The famed expedition of Lewis and Clark was a military mission to collect geographic data that would be used for more “fort construction, natural resource exploitation and westward colonization by settlers.”

While the United States was expanding its frontier, its Navy was also pursuing fort construction overseas, from North Africa’s Barbary Coast to Chile, often for the purpose of securing trade advantages. In the thirty years following the war of 1812 — primarily a war of US expansion — settlers pushed westward within the United States, building infrastructure as they went: roads, trails, and more than sixty major forts west of the Mississippi River by the 1850s. After the United States went to war with Mexico, army bases were constructed in the annexed territory. Forts in Wyoming protected wagon trails, allowing settlers to expand through the western United States.

The violent conquest and massacre of Native Americans did not stop during the Civil War, and it escalated from 1865 to 1898, when the US Army fought no fewer than 943 distinct engagements against Native peoples, ranging from skirmishes to full-scale battles in twelve separate campaigns. White supremacist policies were particularly pronounced in California, but took place across the West. After 1876, when President Ulysses S. Grant turned over Native Americans to the War Department, Fort Leavenworth was transformed into a prisoner of war camp for the Nimi’ipuu tribe.

Over almost 115 consecutive years of US wars against indigenous nations, US military forts played a consistent role in protecting white settler pillaging and conquest.

The War of 1898 was the start of a new form of overseas empire which saw the country expanded across the continent with the help of US Army forts and near-continuous war. In some cases, it’s possible to draw a direct line between expansion within the United States and conquest abroad.

US Army waged brutal battles against the Kiowa, Comanche, Sioux, Nez Perce, and Apache tribes, then ordered cavalry to massacre as many as three hundred Lakota Sioux in 1890, and then violently put down the Pullman, Illinois railroad workers strike in 1894.

A bloody counterinsurgency war in the Philippines was aimed at defeating its independence movement. Similar continuity between domestic and global repression can be found today as counterinsurgency tactics and military weapons and equipment are used by US police departments.

Organized labor, immigrants, recently freed slaves and indigenous peoples at home and abroad were all subdued by the same military and police forces making way for white settlement and capital expansion.

After seizing Spanish colonies during the 1898 war, the US began to pursue a new form of imperialism that was less dependent on the creation of new formal colonies and more dependent on informal, less overtly violent — but violent nonetheless — political and economic tools backed by military might, including bases abroad. The US built up the military presence in the Philippines to seventy thousand troops, using these forces to help put down China’s Boxer rebellion, and used its military might to intervene ruthlessly in Panama.

World War II saw the dramatic expansion of military bases, an era commencing in 1940, when President Franklin D. Roosevelt signed a deal with Prime Minister Winston Churchill to trade naval destroyers for ninety-nine-year leases in eight British colonies, all located in the Western Hemisphere. In the immediate aftermath of the war, the US temporarily shrank military personnel spending, and returned roughly half its foreign bases.

Yet the basic global infrastructure of bases remained entrenched and a permanent war system was established. During the post–World War II era of decolonization, the US used its military base network and economic influence, buttressed by new institutions like the World Bank and International Monetary Fund, to protect its preeminence.

During the Cold War, overseas base expansion became central to the goals of containment and forward positioning, premised on the idea that global bases allow quick response to threats and rapid interventions and deployments in crises. While giving the illusion of increased safety, these bases actually made foreign wars more likely because they made it easier to wage such wars. In turn, conflict increased construction of US bases.

The Korean War, which killed between three and four million people, prompted a 40 percent increase in the number of US bases abroad, and increasing concern about maintaining bases in the Pacific Ocean. Bases also spread across Latin America, Europe, and the Middle East.

CIA stations expanded alongside military bases, and clandestine meddling and supporting coups became a preferred tool of US Empire. When the US waged brutal war in Vietnam, Laos, and Cambodia, it was assisted by hundreds of bases in Japan, Okinawa, the Philippines, and Guam.

The fate of the roughly one thousand Chagossians (descendants of Indian indentured workers and enslaved Africans) from Diego Garcia, an island in the Indian Ocean, spotlights the remarkable cruelty the US during this period of strategic island approach, whereby the US established control over small, colonial islands.

After making a secret agreement with Britain in 1966 to purchase basing rights, the US and UK governments expelled its residents between 1967 to 1973, leaving them trapped on Mauritius and Seychelles, without jobs or homes, many of their possessions lost to them forever.

During some phases of the expulsion, residents were forced onto cargo ships, their dogs killed. By 1973, the US was using this base to support Israel in its 1973 war with Arab nations. To this day,” Vine notes, Chagossians and many others among the displaced are struggling to return home, to win some justice and recompense for what they have suffered.”

The United States used bases from Diego Garcia to Oman to invade Afghanistan in 2001 and, once there, established more bases, and took over former Soviet ones. Likewise, bases from Kuwait to Jordan to Bahrain to Diego Garcia were critical for the 2003 invasion of Iraq, where the US immediately began building bases and installations post-invasion.

While the Bush-Cheney administration closed some bases in Europe, overall spending on bases reached record highs during their time in office. The war with ISIS has seen troops return to Iraq, and the acquisition of bases, even after the Iraqi parliament in 2011 rejected a deal to keep fifty-eight bases in the country.

Since September 11, 2001, the US has also expanded its presence in Africa, building “lily pads” across the continent — smaller profile, somewhat secretive installations, suggesting a frog jumping from lily pad to lily pad toward its prey. US bases have been central to waging the 2011 NATO war in Libya, drone strikes in Yemen, military intervention in Somalia and Cameroon. The military has been conducting a variety of operations regularly in at least 49 African countries.

Meanwhile, base spending has played a key role in the steady uptick of overall military spending. In addition to the direct harm they do through enabling war, bases are associated with incredible fraud and waste, and base contractors renowned for their significant political contributions. This political force, and self-contained logic of sustenance and expansion, is the key to understanding how the Military Industrial Complex can be like Frankenstein’s monster, taking on a life of its own thanks to the spending it commands.

The War on Terror ethos, in which the whole world is considered a US battlefield and the US grants itself broad latitude to wage preemptive war, has come to define US foreign policy. George W. Bush talked about the importance of having a military ready to strike at a moment’s notice in any dark corner of the world to the Middle East, Africa, and Muslim areas of Asia.

Today, the war on ISIS — responsible for significant civilian deaths — continues, so does brinkmanship with Iran, hedging against China, brutal war in Afghanistan, and US support for the war on Yemen, which has unleashed a profound humanitarian crisis.

Saturday, 10 October 2020

Iran Afghanistan discuss completion of Khaf-Herat railway

Reportedly, Iranian Transport and Urban Development Minister, Mohammad Eslami and his Afghan counterpart Mohammad Yama Shams discussed the details of Khaf-Herat railway project.

In the meeting, held through video conference, the officials discussed several issues including the inauguration of the project, the financial issues, insurance services, manpower training, freight and passenger transportation, customs, technical and security issues, etc.

Speaking in the meeting, Eslami stressed the need to pay attention to the details and various aspects of the contracts for the operation of the Khaf-Herat railway, and said: "High goals can be established for this railway line."

“The work is not done with the construction and operation of this railway line…. it is the starting point and the cornerstone for the development of strategic relations between the two friendly and neighboring nations,” Eslami said.

Khaf-Herat railway which is part of the Iran-Afghanistan rail corridor connects Iran’s eastern city of Khaf to Afghanistan’s western city of Ghoryan.

The construction of the 193-kilomeres-long railway, which is underway in four parts taht began in 2007.  

In a meeting with Afghanistan’s Acting Foreign Affairs Minister Mohammad Haneef Atmar in Tehran on June 22, Iranian Energy Minister Reza Ardakanian said that the third section of Khaf-Herat railway project which connects the rail networks of Iran and Afghanistan will come on stream in the third quarter of the current Iranian calendar year.

In early July, Iranian and Afghan officials held a committee meeting to investigate the ways to complete Khaf-Herat railway.

Afghan official with Herat Governor's Office Jilani Farhad informed that the joint committee was set up following the emphasis of the Afghan president to accelerate construction and completion of the project considering its significance to improve transit between Iran and Afghanistan.

Two parts of the railway (77 km), which is located in Iran, has been completed a long time ago but the two other parts (116 km), on the Afghan soil, are yet to be worked out.

Wednesday, 7 October 2020

Biden and Trump are two sides of the same coin

While Donald Trump and Joe Biden bitterly criticize each other’s Iran policy, it may not be wrong to say there are no differences in their policies. They pursue the same goal, but their tactics are different. Regardless of who wins election, the US may change its policy towards Iran after the November election.

Trump has said repeatedly that if he loses the November presidential election, Iran and China would “own America.” Trump reiterated that Iran, along with countries, prefers Biden victory over him.

However, Iran has made it clear many times that it does not attach importance to the victory of a certain candidate in the US election. In fact, Iranian officials have stated that it does not matter for them who will win the November election.

Some analysts and commentators have claimed that Iran prefers the election of Biden because he would reenter the 2015 nuclear deal between Iran and other world powers if he is elected. These analysts argue that Biden’s election means, Trump’s maximum pressure campaign against Iran would come to an end.

The US intelligence community also strengthened the narrative of Iran preferring a Biden victory. In a statement, William Evanina, the chief of the National Counter-Intelligence and Security Center, alleged that Iran seeks to undermine President Trump. 

“We assess that Iran seeks to undermine US democratic institutions and to divide the country in advance of the 2020 elections by spreading disinformation,” Evanina said.

Tehran’s motivation to conduct such activities is driven by a perception that President Trump’s reelection would result in a continuation of US pressure on Iran in an effort to foment regime change.

“Democrats are not better than the Republicans. The only difference is that President Obama worked quietly, while Trump works vociferously. These sanctions have been imposed by the Democrats especially under Obama, said Ali Akbar Velayati, a senior advisor to the Leader of the Islamic Revolution on international affairs.
 
The regime change policy is nothing new in the US foreign policy. The US has pursued this policy against many countries. It launched military campaigns to overthrow the regimes of Iraq, Afghanistan and Libya. In addition to overt military campaigns, the US has also launched covert operations to topple political systems in Iran, Venezuela, and Syria. The government of Mohammad Mosaddeq, the first democratically-elected prime minister of Iran was toppled in 1953 in a CIA and MI6 orchestrated coup.
 
During and after the revolution, the US sought to topple the newly established Islamic Republic. The policy of regime change in Iran once again gained steam in Washington’s foreign policy circles after it became clear that the US has forever lost its grip on Iran.

The US imposed sanctions, which still remain in place. Trump has increased the sanctions pressure on Iran to an unprecedented level, a move widely seen as a way to overthrow the government of Iran through fomenting social unrest across the country.

Monday, 5 October 2020

Trump or Biden: Who will be the next US President?

There are growing feelings that Donald Trump, regardless of how much he is hated even by some segments of the American society, may win the November election. Ignoring the survey results, it will not a bad idea to explore, can Joe Biden be the next president. 

The same happened in 2016. Many surveys showed Hilary Clinton would be the next president, but she did not. Many ask how it happened and why surveys made a mistake in their conclusions. 

Many analysts around the world are saying Biden is not the best candidate for the presidency. He is not as charismatic as Barak Obama. He has a problem in social connection that gives Trump an edge. 

Biden is also termed too old, but many analysts are sure he could be the next president. This belief comes of Trump’s actions. The biggest Trump’s ability is how he could use Machiavelli's advice in his work. He is a big liar. He is a populist and has the ability to gather vulnerable people around himself. 

Trump uses the conspiracy theory in his speeches to show that every miserable thing that happens in the world is because of the small groups who rule the world. He hates China because many workers in America hate China, a good card to play with it. He blames all those who are against him. He knew everything about the coronavirus at the beginning but he intentionally did nothing. 

He coined a new name for coronavirus and called it China virus. He uses this term to blame China. He says China made it. Scientists disagree, but he insists on it. He is a showman. He exaggerates in his speeches and uses words, like tremendous, great job or biggest. 

Trump always use these words without comparing things to each other. He said except the Lincoln government, his government was the best in history that worked for the black people. Nobody asks him how he says such junk words. 

He lies without any shame. He does not know the difference between bacteria and virus but he shows himself as a great scientist that knows what is good for people in the coronavirus pandemic. Such behavior is good for millions of Americans. It wrongly shows that he is a determined and reliable leader in crises. 

Abraham Lincoln has a very famous quote that says, “You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.” From the first day he took over as president, he started to divide people into different groups. He tried to scare one group from another. He is popular between the poor and religious people. 

Trump is not a good candidate for the people who are logical. All know he is a billionaire and not a religious person but he is a good actor. He had run casinos during his life and had relations with prostitutes. But he could play his role as a superman for these groups very well. 

The Oscar academy should nominate him as the best leading role actor. He could fool people very easily but from the first day he made a very big mistake. He did not care about the difference between politics and business.

From the first day, he ignored women, black people, and minority groups. In the beginning days, all women understood he wanted to keep his seat for the next term. He could do everything to make white and religious people happy. Abortion rights and many other rights that women have gained over the past 100 years are now under threat.

Since he became president, black people faced an increased rate of racism in the US. Hate and discrimination have again resurfaced in many neighborhoods. Hispanic groups and Asian have been insulted for nearly four years of his presidency. 

Hispanic people are mentioned in Trump’s speeches as a big problem for the U.S. economy, calling them rapist, burglar and smuggler. Asians and now Chinese are blamed for the coronavirus pandemic. 

It is absolutely clear most of these groups will participate in the election and will give vote to Biden. One point is important and no analyst should ignore that the US election is different from other countries.

Tiny and small groups could change the result of the election. The electoral vote has the ability by only one vote in bailout to give all of the votes in one state to one candidate. For example in the 2000 election only a hundred votes in Florida made Gorge W. Bush the president.

In this situation the role of the Supreme Court is important. It is evident that most of the Republicans in the Senate want to choose a new judge for the Supreme Court as soon as possible. 

However, nobody can manipulate the election if people participate in the election. Now many analysts believe that one can count on the votes of the blacks, Asians, and Hispanics for Biden and he could be elected the next president.


Saturday, 3 October 2020

What could be the outcome of US presidential election if a candidate dies or becomes incapacitated?

After the breaking news that US President, Donald Trump and First Lady Melania have tested positive for coronavirus, stocks in Europe, United States and Asia nosedived on Friday. The news heaps even more uncertainty onto a growing pile of unknowns facing investors, including how the diagnosis might affect the 3rd November 3 election and policies on trade, tariffs and many other issues beyond then.

According to White House Chief of Staff, Mark Meadows, Trump has mild symptoms, but the diagnosis less than five weeks ahead of 3rd November election. However, the news has raised questions, what happens if a presidential candidate or the president-elect dies or becomes incapacitated.

The most important question being asked is, will election be postponed? It is very unlikely to happen because the US Constitution gives Congress the power to determine the election date. Under US law, the election takes place on the first Tuesday after the first Monday in November, every four years.

The Democratic-controlled House of Representatives would almost certainly object to delaying the election, even if the Republican-controlled Senate voted to do so. The presidential election has never been postponed.

Another question is what happens if a candidate dies ahead of the election?

Both the Democratic National Committee and the Republican National Committee have rules that call for their members to vote on a replacement nominee. However, it is likely too late to replace a candidate in time for the election.

Early voting is underway, with more than 2.2 million votes cast. The deadline to change ballots in many states has also passed; mail ballots, which are expected to be widely used due to the coronavirus pandemic, have been sent to voters in two dozen states.

Unless Congress delays the election, voters would still choose between the Republican Trump and Democrat Joe Biden even if one died before 3rd November. If the winner is deceased, however, a new set of questions emerges.

What happens if a candidate dies before the Electoral College votes?

Under the Electoral College system, the winner of the election is determined by securing a majority of “electoral votes” allotted to the 50 states and the District of Columbia in proportion to their population. The Electoral College’s electors are scheduled to meet on 14th December to vote for president. The winner must receive at least 270 of the 538 total Electoral College votes.

Each state’s electoral votes typically go to the winner of the state’s popular vote. Some states allow electors to vote for anyone they choose, but more than half of the states bind electors to cast their votes for the winner.

Most state laws that bind electors do not contemplate what to do if a candidate dies. Michigan’s law requires electors to vote for the winning candidates who appeared on the ballot. Indiana law, by contrast, states that electors should switch to a party’s replacement if the candidate has died.

In the event of a candidate’s death, the opposing party might challenge in court whether bound electors should be allowed to vote for a replacement. How will the Supreme Court handle a controversy like this? It is unlikely that a party would try to defy the will of voters if it was clear a particular candidate won the election.

What if a winner dies after the Electoral College has voted, but before Congress has certified the vote?

No winning candidate has ever died after the election but before inauguration. The closest instance came in 1872, when Horace Greeley died on 29th November, weeks after losing the election to Ulysses Grant. The 66 electoral votes that Greeley earned ended up largely split among his running mate and other minor candidates.

Friday, 2 October 2020

Rising fears of war in Iraq

Reportedly, the United States has started making preparations to withdraw diplomats from Iraq after warning Baghdad it could shut its embassy. Any move by the US to scale down its diplomatic presence is being seen as an escalation of its confrontation with Iran.

“The American threat to close their embassy is merely a pressure tactic, but is a double-edged sword,” said Gati Rikabi, a member of Iraq’s parliamentary security committee. He said US moves were designed to scare Iraqi leaders into supporting Prime Minister Mustafa al-Kadhimi.

However, there are growing concern among Iraqis is that pulling out diplomats could be followed by military action against forces Washington blamed for attacks and turn their country into a battle zone.

Many fear the possibility of military action, with just weeks to go before an election in which US President Donald Trump has campaigned on a hard line towards Tehran and its proxies.

US Secretary of State Mike Pompeo has threatened to close the embassy in a phone call a week ago to President Barham Salih.

Populist Iraqi leader Muqtada al-Sadr, who commands a following of millions of Iraqis, issued a statement last week pleading for groups to avoid an escalation that could turn Iraq into a battleground.

One of the Western diplomats said the US administration did not “want to be limited in their options” to weaken Iran or pro-Iranian militias in Iraq, Washington is expected to respond militarily.

Earlier it was said the US would reduce its presence in Iraq to 3,000 troops from 5,200. Pentagon reinforced its committed to support Iraq’s long-term “security, stability, and prosperity”.

In a region polarized between allies of Iran and the US, Iraq is the rare exception, a country that has close ties with both. But that has left it open to a perennial risk of becoming a battleground in a proxy war.

That risk became more evident after Washington killed Iran’s most important military commander, Qassem Soleimani, with a drone strike at Baghdad airport. Iran responded with missiles fired at US bases in Iraq.

Since a new prime minister has taken power in Iraq, supported by the US, Tehran is still maintaining close links with powerful Shia factions.

Rockets regularly fly across the Tigris towards the heavily fortified US diplomatic compound, constructed to be the biggest US embassy in the world in central Baghdad’s so-called “Green Zone” during the US occupation after a 2003 invasion.

Tuesday, 29 September 2020

“Preemptive strike against Iran still an option”, says Israeli Prime Minister

Reportedly, Israeli Prime Minister Benjamin Netanyahu has warned that his country has not ruled out a preemptive strike against Iran. He was addressing a memorial service for those who fell in the 1973 Yom Kippur War.

“A preemptive strike is a difficult thing to do,” said Netanyahu. “I know that if Iran wants to base itself in the North, we are ready to fight them. This is a direct lesson of the Yom Kippur War. We will do everything in order to protect the State of Israel; we are not ruling out a preliminary strike.”

He reiterated, “This is the power on our side,” added the prime minister. It is the power that has brought peace with Jordan, Egypt, agreements with the UAE and Bahrain. This power will bring peace with additional states.”

While families across the country were prevented – due to the coronavirus lockdown – from visiting the graves of loved ones who fell in war, Netanyahu was joined at the state ceremony by President Reuven Rivlin, Defense Minister and Alternative Prime Minister Benny Gantz and Chief of Staff Lt. Gen. Aviv Kochavi at Mount Herzl in Jerusalem

“We embrace you from afar,” Rivlin told bereaved families. Harking back to events of 47 years ago, Rivlin reflected on how swiftly synagogues had emptied as people spontaneously went to war.

In the families of those who fought and fell in the Yom Kippur War, he said, there are already grandchildren and even great-grandchildren.

Rivlin called the war a decisive victory “for which we paid a terrible price. The Yom Kippur War will remain with us forever.”

Alluding to Israel’s lack of preparedness at the time, Rivlin cautioned that “we must always be alert to danger” and do something about threats before they become a reality.

 “The surprise that was our lot in that war must not be forgotten and must not be repeated: not in security, but also not in health or in the economy,” he said.

“I fought in the killing fields of that terrible war, and here I am today,” Rivlin said.

 “Almost a jubilee later, and I well remember how we won that war. In the trenches, we fought shoulder to shoulder. No one checked to see if you had peyote folded under your helmet or if you were wearing your red pad, a symbol of the Histadrut. We stormed together, knowing that if we did not rush forward, there might not be anywhere to return to.

“Our national security requires a rebuilding of the contract between the public and its elected representatives, respect for the law and obedience to guidelines, and the reconciliation of the deep rifts among the people,” the president said.

“We will wake up the day after the plague,” Rivlin said. “I do not know when this day will arrive, but it will arrive. And when it arrives we must make sure we wake up to it as brothers to each other, responsible for one another.”

Saturday, 26 September 2020

Will China and Russia be the next targets if United States succeeds in imposing sanctions on Iran?

Reportedly on 14th August 2020, the 15-member UN Security Council (UNSC) unanimously rejected a resolution moved by United States to extend an arms embargo on Iran. All other JCPOA participants and most of the UNSC members argued that since the US was no longer a JCPOA participant it cannot use these provisions.

The majority of the UNSC members said they would not support the US move to snapback sanctions. One can still recall that US President, Donald Trump had signed a document reinstating sanctions against Iran after announcing its withdrawal from JCPOA on 8th May 2018. It is also on record that the US after ending its participation in the JCPOA had spared no effort to destroy the agreement.

One has to explore the validity of the US claim. It is believed that there is no legitimacy of the US claim. The imposition of sanctions and the defacto blockade of Iran is a long-standing act of the US to usher regime change, similar to those it had carried out in Iraq, Afghanistan and Libya. 

The next question to be explored is; will other members of the UNSC back the US move? It is doubtful that Russia or China would back anything the US aims at hitting Iran. The repeated failures of the US in UNSC have prompted it to move unilaterally to pursue its agenda against Iran.

Yet another question arises, can the US force other JCPOA members to back its actions? Historically, the US has used a variety of tools to threaten and coerce nations around the globe to support its demands. Its current trade war with China is in many ways designed to pressurize Beijing to make concessions. It is becoming evident that both China and Russia know that if the US is successful in imposing sanction on Iran, it will also become easier to take similar actions against them.  

The last question to be answered is, why has Trump focused on the Iran issue months before the 2020 presidential election? Trump had started talking about "ending the Iran deal" even before becoming president. If one looks at US foreign policy agenda, all US presidents eventually end up adopting the US policy papers like the Brookings Institution's "Which Path to Persia?" Declaring a desire to first create, then withdraw from a deal with Iran in order to make the US look like it tried to be reasonable before moving on to more extreme tactics. 

Barack Obama and Donald Trump merely played their role in this game - Obama created the deal and Trump withdrew from it. There are reasons to believe that the US had no intention of honoring its commitments even before its representatives sat down with their Iranian counterparts. Trump may win or lose the upcoming election, maximum US pressure will continue on Iran. Other JCPOA participants will have to deal with the US aggression pragmatically.

Saturday, 19 September 2020

US aircraft carrier enters Persian Gulf


Reportedly a US aircraft carrier has entered the Persian Gulf for the first time in ten months, as tensions soar between Tehran and Washington over a number of issues.

US 5th Fleet announced on Friday that USS Nimitz passed through the Strait of Hormuz with the guided-missile cruisers USS Princeton and USS Philippine Sea and guided-missile destroyer USS Sterett.

“The [Carrier Strike Group] will operate and train alongside regional and coalition partners, and provide naval aviation support to Operation Inherent Resolve,” the statement said.

Nimitz is the first carrier to operate in the Persian Gulf since USS Abraham Lincoln made the Strait of Hormuz transit last November. The last capital ship to sail in the Persian Gulf was USS Bataan in April.

“The Nimitz Strike Group has been operating in the 5th Fleet area of operations since July, and is at the peak of readiness,” strike group commander Rear Admiral Jim Kirk said.

“We will continue our support to the joint force while we operate from the (Persian) Gulf alongside our regional and coalition partners,” he added.

Tehran and Washington have been at loggerheads since Donald Trump became president. The Trump administration is set to re-impose UN sanctions against Iran under the Iran nuclear deal, despite the fact that other parties to the deal have resoundingly rejected the US measure as illegal.

It is the latest move in the “maximum pressure” campaign against Tehran, which the US pursued after it withdrew from the nuclear deal, officially called the Joint Comprehensive Plan of Action (JCPOA), in May 2018.

It came after Washington failed to extend the conventional weapons embargo set to expire next month under the JCPOA.

“We expect every nation to comply with UN Security Council resolutions -- period, full stop,” US Secretary of State Mike Pompeo said Thursday. 

“And the United States is intent on enforcing all the UN Security Council resolutions. And come Monday, there will be a new series of UN Security Council resolutions that we enforce, and we intend to ask every country to stand behind them,” he added.

Meanwhile, Britain, France and Germany told the UN Security Council on Friday that UN sanctions relief for Iran would continue beyond September 20, when the US asserts that the sanctions should be re-imposed.

In a letter to the 15-member body, the three European parties to the JCPOA said any decision or action taken to re-impose UN sanctions “would be incapable of legal effect.”

Iran has also dismissed the US bid, with President Hassan Rouhani congratulating the Iranian people on the imminent defeat of the US to trigger the so-called snapback sanctions against Tehran.

“In advance, I congratulate the Iranian nation on the upcoming Saturday and Sunday victory [of Iran] and the US humiliating defeat,” Rouhani said during a cabinet session on Wednesday morning.

Foreign Minister Mohammad Javad Zarif said Pompeo was wrong to think that the UN sanctions on Iran would be re-imposed on September 20.

“Wrong again, Pompeo. Nothing new happens on 9/20. Just read Resolution 2231. Bolton—who convinced the boss to order you to ‘CEASE US participation’—did. In his words: Process is not ‘simple’, automatic or snappy, but intentionally ‘complex and lengthy’. US is not a participant,” Zarif tweeted on Thursday.

On Tuesday, Zarif wrote in a tweet that Trump is being pushed toward a war with Iran by “the habitual liar”, referring to Pompeo.

“The habitual liar bamboozled @realdonaldtrump into assassinating ISIS' enemy #1 by raising a false alarm,” Zarif said, adding, “Now he's trying to sucker him into mother of all quagmires by leaking a new false alarm, time to wake up.”

It came hours after Trump threatened Iran with a “1,000 times greater” attack in response to a fake story, which claimed Iran is planning to assassinate the US ambassador to South Africa.

Wednesday, 2 September 2020

US Dollar Gaining Strength


The record breaking moves in the S&P 500 have drawn investors into US assets and in turn the USD. The greenback extended its gains against all of the major currencies on Wednesday with EUR and AUD experiencing the steepest declines. 

Non-farm payrolls will be released on Friday and ADP is an important barometer of labor market health. According to the private payroll provider, US companies added 428,000 workers last month, about half the forecasted amount. When the number was initially released investors reacted by selling USD, but the rally resumed quickly as buyers returned.

Even if non-manufacturing ISM report shows service sector activity slowing and employment gains weakening, the general sentiment in the market is that the rally in stocks signal a more durable recovery that should lead to lower unemployment.  While there are a lot of problems with this theory including the possibility of a second wave as schools re-open, sheer optimism is the main reason why investors are buying US stocks and the greenback. According to Beige Book released by the Fed, economic gains were modest. Business contacts had mixed expectations for staffing in the months ahead with manufacturers expecting staff increases and the service sector anticipating the need for reductions.

The reversal in EUR gained traction with the single currency headed for a test of 1.18 versus the USD. Eurozone retail sales are scheduled for release, it could miss expectations. Signs of the Eurozone recovery losing momentum are worrying investors and with the single currency rising to heady levels, there’s a strong sense of profit taking especially after ECB Chief Economist Lane said EUR/USD rate would matters. 

Last but certainly not least, GBP followed EUR lower. As it was said at the start of the week, there’s very little on the UK calendar but the data that one has seen so far has been better with house prices following mortgage approvals higher. Still GBP is taking its cue from the market’s appetite for USD. 

Monday, 24 August 2020

Dollar bomb can burst any time

The scale of money being printed in the United States has become unprecedented; the government is spending more money than ever before. It is being said that more than 60 cents out of every dollar the government spends is printed. The US Federal Reserve is printing more money than the government is collecting in taxes.

Critics are challenging the myth that the US economy was strong before Covid-19. They say it wasn’t strong at all; it was the weakest it has ever been. It was the biggest bubble that has ever existed, that’s the reason economy imploded after Covid-19 pandemic. The air has started leaking in the fourth quarter of 2018 and the dollar is being wiped out now.

It is being said openly that everything the US government did in the aftermath of the 2008 financial crisis was imprudent. Its monetary as well as fiscal policies were faulty. As a consequence, the US economy never recovered from the crisis, which was caused by the Fed and the government.

The US is about to experience inflation on an unprecedented scale. The cost of living is going to skyrocket and it’s going to happen very quickly, but people are not going to see this.

More people will be blindsided by the dollar crisis than by the financial crisis. The dollar crisis will be much worse than the financial crisis. When the dollar crisis happens, printing dollars will not help because nobody wants them.

Analysts warn that there will be a sovereign debt crisis. The dollar will fall through the floor and inflation is going to ravish the US. If this happens the world will go off the dollar standard and go back to the gold standard, it has already started happening.

The entire US economy is built on the perception that the dollar is the world’s reserve currency. Once the dollar become just like any another currency, it will be the end of the game for US. The fear is growing that the dollar may collapse any day. That is the reason individuals, corporate and governments are buying gold to hedge the financial risk.

Saturday, 15 August 2020

The world response to UAE - Israel agreement

The United Arab Emirates (UAE) has become the first Persian Gulf Arab country to reach a deal on normalizing relations with Israel. It is also the third Arab nation to reach such a deal with Israel, after Jordan and Egypt. The "Abraham Agreement", was made public by United States President Donald Trump on Thursday, securing an Israeli commitment to halt further annexation of Palestinian lands in the occupied West Bank.

However, addressing reporters later in Tel Aviv, Israeli Prime Minister Benjamin Netanyahu said he agreed to "delay" the annexation as part of the deal with the UAE, but the plans remain "on the table". It is necessary to see how other nations and the various stakeholders in the Israeli-Palestinian conflict reacted to the Israel-UAE deal. The UAE's minister of state for foreign affairs, Anwar Gargash, defended the deal. Abu Dhabi Crown Prince's Mohammed bin Zayed decision to normalize ties with Israel reflected badly needed realism.

"While the peace decision remains basically a Palestinian-Israeli one, the bold initiative of Sheikh Mohammed bin Zayed has allowed, by banishing the specter of annexing Palestinian lands, more time for peace opportunities through the two-state solution," Gargash said in a series of tweets. "Developing normal ties in return for this is a realistic approach forwarded by the Emirates," he said. "The successful decision is to take and give. This has been achieved."

In a statement, Democratic United States presidential candidate Joe Biden said, "The UAE's offer to publicly recognize the State of Israel is a welcome, brave, and badly-needed act of statesmanship ...  A Biden-Harris Administration will seek to build on this progress, and will challenge all the nations of the region to keep pace." Biden also said, "Annexation would be a body blow to the cause of peace, which is why I oppose it now and would oppose it as president," he said.

United Kingdom Prime Minister Boris Johnson praised the agreement between Israel and the UAE. He said, "The UAE and Israel's decision to normalize relations is hugely good news."  "It was my profound hope that annexation did not go ahead in the West Bank and today's agreement to suspend those plans is a welcome step on the road to a more peaceful West of Asia."

The Persian Gulf state of Bahrain welcomed the accord between the UAE and Israel. The small island state of Bahrain is a close ally of Saudi Arabia, which has not yet commented on the agreement.

Egyptian President Abdel Fattah el-Sisi, a close ally of the UAE, welcomed the agreement. "I followed with interest and appreciation the joint statement between the United States, United Arab Emirates, and Israel to halt the Israeli annexation of Palestinian lands and taking steps to bring peace in the West of Asia," said Sisi.

Jordan said that the UAE-Israel deal could push forward stalled peace negotiations if it succeeds in prodding Israel to accept a Palestinian state on land that Israel had occupied in the 1967 Arab-Israeli War.

"If Israel dealt with it as an incentive to end occupation ... it will move the region towards a just peace," said Jordan's Foreign Minister Ayman Safadi. Israel's failure to do this would only deepen the decades-long Arab-Israeli conflict and threaten the security of the region as a whole. The agreement must be followed by Israel ending any unilateral moves to annex territory in the occupied West Bank that that obstruct peace prospects and violate Palestinian rights.

In a statement issued by his spokesman, Palestinian President Mahmoud Abbas denounced the accord, saying the Palestinian leadership rejects and denounces the UAE, Israeli and US trilateral, surprising announcement. He also termed the deal a "betrayal of Jerusalem, Al-Aqsa, and the Palestinian cause."

Hamas rejected the US-brokered deal establishing formal ties between Israel and the UAE saying it did not serve the cause of the Palestinians. This agreement encourages the occupation by Israel to continue its denial of the rights of Palestinian people, and even to continue its crimes against our people.

Oman said it backed the normalization of ties between the neighboring United Arab Emirates and Israel and hoped the move would help achieve a lasting West of Asia peace.  A foreign ministry spokesman expressed the sultanate's "support for the UAE's decision regarding relations with Israel", according to a statement on Oman's official news agency.

Monday, 22 June 2020

US Naval Ship getting too close to China


Reportedly, for the first time since 2017, the US Navy has positioned three of its aircraft carriers on the doorstep of the disputed South China Sea, as tensions between Washington and Beijing continue to soar. The dispatch to the Western Pacific of the three vessels was likely intended to send a message to China that, despite the ongoing coronavirus pandemic, the United States military would continue to maintain a strong presence in the region.
According to reports, two of US Navy’s ships, USS Theodore Roosevelt and USS Nimitz carrier strike groups had begun dual carrier flight operations in the Philippine Sea.
The two strike groups were scheduled to conduct air defense drills, sea surveillance, replenishments at sea, defensive air combat training, long-range strike drills, coordinated maneuvers and other exercises.
“This is a great opportunity for us to train together in a complex scenario,” said Rear Adm. Doug Verissimo, commander of Carrier Strike Group 9. “By working together in this environment, we’re improving our tactical skills and readiness in the face of an increasingly pressurized region and COVID-19.”
While it was not clear where in the Philippine Sea the US carriers were operating or where they would head to next — the Luzon Strait between Taiwan and the Philippines is the entryway into the flash point South China Sea.
Beijing claims much of the South China Sea, though the Philippines, Vietnam, Malaysia, Taiwan and Brunei have overlapping claims in the waters where the Chinese, US, Japanese and some Southeast Asian navies routinely operate.
The US Navy has angered Beijing by regularly conducting training and so-called freedom of navigation operations close to some of the islands China occupies in the waterway, including its man-made islets, asserting that freedom of access is crucial to international waterways.
Washington has lambasted Beijing for its moves in the waterway, including the construction of the man-made islands, some of which are home to military-grade airfields and advanced weaponry.
The US fears the outposts could be used to restrict free movement in the waterway, which includes vital sea lanes through which about $3 trillion in global trade passes each year.
Chinese state-run media lashed out last week as news emerged that the three carriers were simultaneously operating in the Pacific. In a report, the hawkish Global Times said that the deployment could put Chinese troops at risk.
“By massing these aircraft carriers, the US is attempting to demonstrate to the whole region and even the world that it remains the most powerful naval force, as they could enter the South China Sea and threaten Chinese troops on the Xisha and Nansha islands as well as vessels passing through nearby waters, so the US could carry out its hegemonic politics,” the report quoted Beijing-based naval expert Li Jie as saying.
The Xisha and Nansha Islands are the Chinese names for the Paracel and Spratly chains in the South China Sea. But the report also said that China could counter the US by holding its own naval drills in the waters at the same time, Li said.
It also highlighted the weapons at Beijing’s disposal, notably mentioning its “wide range of weapons designed to sink aircraft carriers,” including the DF-21D “carrier killer” and DF-26 “Guam killer” ballistic missiles.
The US military has in recent months grappled with the coronavirus as it battled to maintain its formidable presence in the Western Pacific, while both reassuring allies and preventing China from capitalizing on any perceived opening.
The Navy has rebounded after cases of COVID-19 were detected on some of its ships, including infections aboard all three carriers currently in the Philippine Sea, with many of the hard-hit vessels returning to action.
“Our operations demonstrate the resilience and readiness of our naval force and are a powerful message of our commitment to regional security and stability as we protect the critically important rights, freedoms, and lawful uses of the sea for the benefit all nations,” said Rear Adm. James Kirk, commander of Carrier Strike Group 11.
US carriers have conducted dual carrier strike group operations in the Western Pacific, including in the South and East China seas and Philippine Sea for several years, according to the navy. These operations typically occur when strike groups deployed to the 7th Fleet area of operations from the US West Coast link up with the forward-deployed carrier strike group from Yokosuka.
This month’s deployment to the Pacific is the largest since 2017, when the US sent three carriers to the region amid tensions with nuclear-armed North Korea.

Saturday, 13 June 2020

Have Trump and Adelson cut a deal on annexation of West Bank?


As back as May 2019, I had written a blog and its title was “Sheldon Adelson: Jackpot for Israel”. Its opening paragraph was, “A bet on Donald Trump for president may have seemed risky two years ago, but for billionaire casino magnate Sheldon Adelson the payout has been spectacular. Adelson (85-year old) and his wife Miriam gave around US$82 million to Republicans and candidate Trump in 2016 and within two years his two major asks were met: moving the US embassy in Israel to Jerusalem, and withdrawing of US from Iran nuclear deal”. Today I have managed to gather some details, which are worth reading.
Sheldon Adelson, the Israel-loving, Iran-war-craving casino baron, talks to Donald Trump all the time, and for good reason, he and wife Miriam are the biggest Republican donors, poised to give as much as US$200 million this year. Now that the White House appears to be lying down for the Israeli government as it moves to annex portions of the West Bank despite a growing chorus of international condemnation, the focus should be on Adelson. He has always been a strong supporter of Israeli expansion, a man who says, “There’s no such thing as a Palestinian.”
Adelsons have gotten everything they wanted from US President: tearing up the Iran deal, moving the embassy to Jerusalem, defunding Palestinians, recognizing the Golan annexation, treating settlement expansion as legitimate, even a presidential medal of freedom for Miriam, etc. Right up to yesterday — a Trump attack on the ICC in the name of Israel. As Trump once said when a Republican rival was getting Adelson’s money, Adelson wanted a “perfect little puppet.”
Most important, the Adelsons got the Trump “peace plan,” which paves the way for annexation of the West Bank. When Trump announced his “vision,” there they were in the front row. Especially if Trump loses in November, as appears more and more likely — this is the Adelsons’ last chance to get annexation. They speak to Trump all the time.
Look at it from Trump’s point of view. He doesn’t care about peace in the Middle East or Palestinian human rights. He wants one thing, to win in November, and he needs money. Why would the Adelsons risk US$200 million on a loser? Well, because it’s not a losing cause; they get their payback now. They figure that Israeli annexation is permanent no matter what happens to Trump. “Facts on the ground” is the Israeli way of expansion. The embassy move will never be reversed by a Joe Biden. So let’s annex.
Sheldon’s Israeli newspaper Israel Hayom is promoting annexation. He believes, annexation is Israel’s right, and it poses no threat to the interests of either the United States or the Jewish state. The paper is an important rightwing voice in Israel, and the Adelsons have been big supporters of Benjamin Netanyahu. So they may also play a role in Netanyahu’s zeal to annex, when he had a lot of opportunities to dismiss that policy.
The Guardian said in February that insiders expect the Adelsons to donate between US$100 and US$200 million to Trump’s reelection hopes this year. If that seems like a big lift, look at their track record: The Adelsons gave more than US$100 million to Republican causes in 2016 and another US$123 million during the 2018 election.
McClatchy reported last year that the Adelsons were putting off their big donations in 2020 until as late as possible, so as not to excite negative publicity. Adelson is a funder and board member of the Republican Jewish Coalition that calls Trump the most pro-Israel president ever and, big coincidence, the RJC “is launching a lobbying effort on Capitol Hill to rally support for Israeli annexation.
The RJC is chaired by the ex-senator Norm Coleman. . . who is said to have strong ties to Adelson that benefit the RJC and other Super Pacs and dark money outfits where Coleman is a big player.
Coleman helps lead fundraising for a Super Pac, the Congressional Leadership Fund, and a dark money outfit, the American Action Network, that respectively back Republican House members and their policies and have received seven-figure checks from the Adelsons in recent elections.
The Adelsons have seemed to have their way on annexation so far. Annexation of large parts of the West Bank is green lighted in Trump’s deal of the century. Adelsons wanted the plan out well ahead of the election, Dan Raviv of i24 said, so that Israel would be freed to set its own border this year before November comes and possibly limits its autonomy. Adelsons may be the most important actors in this entire foreign policy discussion. Maybe the media should be telling us more about them now. . .



Sunday, 10 May 2020

United States and China entangling in a new type of cold war


Over the last more than two months many countries were told by World Health Organization (WHO) to opt for lockdown to fight wide spreading coronavirus pandemic. In the mean time one of the equally fast developing narratives is that it is an ongoing biological war between United States and China.
If one can recall Saddam Hussein of Iraq was accused for the production of weapons of mass destruction. A few sites were identified and destroyed, but soon it became evident that the entire propaganda was very well concocted. However, some observers went to the extent of saying that these sites produced material which was used against Iran in a war spread over more than a decade.
Coming back to my topic, it may be suspected that United States was not happy, rather afraid of growing economic might of China. Initially to keep a close watch the US companies were allowed to make huge investment in China and Chinese were allowed to invest in United States. Growing deficit in balance of trade prompted United States to impose restrictions on the entry of Chinese good, but all in vain.
One of the conspiracy theories is that United States leaked a virus in Wuhan, to ultimately reach the industrial hub of Shanghai. The move backfired as China saved its industrial hub, but virus spread to almost all the countries on the plant, except a few.
Scanning the content printed one is inclined to arrive at a conclusion that this is not a pandemic but a biological war. After more than four decades of engagement, the two superpowers have been unable to bridge the ideological gulf that separates them. A global pandemic might have served as an occasion for more cooperation; instead it has only made the divide more obvious. The two countries now stand on the brink of a new type of cold war.
The level of trust between China and the United States is at its lowest point since diplomatic ties were established in 1979. The deterioration in US-China ties began long before the pandemic and even before the Trump presidency. A fundamental shift in the relationship has taken place. American interests now diverge more than they converge.
China’s return towards communist orthodoxies since Xi Jinping became president in 2013 has had a crucial impact. Tthe fundamental difference in ideology between the US and China can be summed as, “Between 1978 and 2012, the Communist party put aside its communist roots and focused on developing economic strength. Once China succeeded economically, the CCP went back to refocus on its original intentions of building socialism. For decades, this bargain delivered impressive commercial gains; making China the prime engine for global growth.
Tens of thousands of US companies set up business in China and bilateral trade last year amounted to US$541 billion.  China is often accused of showing less willingness to accept US global leadership and began carving out its geographical spheres of influence. One critical breach of trust was termed deployed huge military infrastructure on the islands by China.
 The insecurities of United States started mounting on rising military might of China. Images of sailors standing on the deck of a Chinese guided-missile destroyer were clear signs of defiance by China. As China’s economy grew, it showed progressively less willingness to accept US hegemony.
In US-China commercial relationship accusations of violation of intellectual property rights became a big hurdle. This prompted Washington to impose tariffs on a range of Chinese goods, triggering a 20-month trade war that was put on hold in January this year with a truce deal that remains extremely fragile.
Reportedly, total Chinese investment in the US fell to US$5 billion last year, from a recent peak of US$45 billion in 2016, when Chinese companies were much more free to acquire US businesses. On top of that Trump administration and lawmakers on Capitol Hill have been considering other moves against China, including more stringent export controls, curbs on investment flows and limits on integrated supply chains between the two countries — all in the midst of a deep global recession.
Trump also threatened to terminate the January trade deal with China, which could lead to a new flare-up in tariffs, because of skepticism over China’s willingness to honour its pledge to buy billions of dollars of American goods. 
Apparently, both sides claim that good progress is being made and fully express willingness to meet their obligations under the agreement in a timely manner, but ongoing blame game becomes the biggest dampener. Some observers predict continued tension, with nationalist sentiment and recession supporting hardliners in both countries. It appears extremely difficult to contain deteriorating relationship. Strategic competition will remain the dominant factor.


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Wednesday, 6 May 2020

United States “an uninvited guest” in Persian Gulf


An International affairs expert, Sabah Zanganeh has termed the United States “an uninvited guest” in the Persian Gulf region. “The United States’ security and military forces have understood that Iran is serious about defending its interests. Iran is the owner, but the United States is an uninvited guest. If any incident occurs, it is this guest who will be harmed,” he told IRNA in an interview published on Tuesday.
Zanganeh added that the United States knows that it should not make a mistake and endanger regional security. “It was a time when Portugal and Britain were in the Persian Gulf region, but they left. The United States must learn a lesson and leave the region,” he noted.
President Hassan Rouhani said on 29th April 29 that the US must know that the waterway in the West Asia region is the Persian Gulf and not the New York or Washington Gulf.
“They must understand the situation by the name of the place and the people who have protected it for thousands of years and stop hatching plots against the Iranian people,” Rouhani said in a cabinet meeting.
He said, “The United States has witnessed the Iranian people’s success in all areas and also in protecting the Persian Gulf waterway. Our soldiers in armed forces, the Guards [the Islamic Revolutionary Guard Corps], Basij, Army and police forces have always protected and will protect the Persian Gulf.”
Rouhani also described the Persian Gulf as very “important” and “sensitive” region.
“The Persian Gulf belongs to the Iranian nation and has always been and will be the Persian Gulf,” the president noted.
IRGC Navy chief Alireza Tangsiri also said on 27th April that the United States is an “uninvited guest” in the Persian Gulf region.
The chief of the Iranian Army Command and General Staff College (DAFOOS) has said that the United States is an “uninvited guest” in the Persian Gulf region.
“The Persian Gulf is like a big old house which has eight doors and independent rooms and also a yard which is shared by these eight neighbors. If a guest comes, he has to leave after a while, because a guest should not stay permanently,” General Hossein Valivand told reporters on the sidelines of a ceremony held to mark the national day of the Persian Gulf.
Valivand noted that Iran wants the US and all other foreign forces to leave the Persian Gulf region.
“We guarantee security of the Persian Gulf by the Army’s Navy and the Guards [the IRGC] and also by cooperation with other neighbors and the countries we have formed a military coalition with,” he said.
Foreign Ministry spokesman Abbas Mousavi said on 20th April that foreign forces’ presence in the region is the source of insecurity, instability, and tension.
“We consider presence of the foreign forces, especially forces of the United States, in the region a source of tension, instability, and insecurity. Their presence is illegal and illegitimate. This is our region and our armed forces must be able to patrol without hurdle,” Mousavi said in a press conference held through video conference.
He said, “This issue led to our forces’ response. It has been for thousands of years that Iran is in this region and the regional security must be provided by the regional countries, especially Oman which is in the Strait of Hormuz region.”
The spokesman urged foreign forces to leave the region and not make Iran give them warning.
Foreign Minister Mohammad Javad Zarif wrote on his Twitter page on April 23 that “US forces have no business 7,000 miles away from home, provoking our sailors off our OWN Persian Gulf shores.” 
It came after US President Donald Trump said he had ordered the US Navy to destroy Iranian boats “if they harass” US ships in the Persian Gulf.
“I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea,” Trump said in a tweet on 22nd April 22.
The IRGC has rejected US description of the Iranian boats’ behavior in the Persian Gulf, saying such a depiction is like “Hollywood scenarios”.


Monday, 4 May 2020

Chevron books larger profit but opts for fresh capex cuts


Oil major Chevron booked a larger profit in the first quarter of 2020 compared to the same period last year on the back of asset sales, favorable tax items, and forex gains, but decided to further cut its apex guidance for the year. Chevron also set a new quarterly production record.
Chevron has reported earnings of US$3.6 billion for the first quarter of 2020 as compared to earnings of US$2.6 billion for the first quarter of 2019.
Included in the current quarter was a gain of US$240 million associated with the sale of upstream assets in the Philippines and favorable tax items aggregating to US$440 million.
Foreign currency effects increased earnings in the first quarter of 2020 by US$514 million.
Sales and other operating revenues in the first quarter of 2020 were reported at US$30 billion, as compared to US$34 billion for the same period a year ago.
“First-quarter earnings were up from a year ago,” said Michael K. Wirth, Chevron’s chairman of the board and chief executive officer, “driven by downstream margins and increased Permian production. However, commodity prices fell significantly in March and the weakness continued into the second quarter, primarily due to reduced demand resulting from the COVID-19 pandemic.”
Wirth also added that the company’s financial results in future periods are expected to be depressed as long as current market conditions persist.
Chevron decided to further reduce its 2020 capital expenditure by up to US$14 billion.
The company has already reduced its 2020 capital spending plan by $4 billion.
In addition, the Company estimates that 2020 operating costs will decrease by US$1 billion. This follows the previously announced suspension of share repurchases and the completion of additional asset sales.
“Together these actions are consistent with our longstanding financial priorities: to protect the dividend; to prioritize capital that drives long-term value, and to maintain a strong balance sheet,“, said Wirth.
Chevron’s worldwide net oil-equivalent production was 3.24 million barrels per day in the first quarter of 2020, an increase of over 6 per cent from a year ago, and a new quarterly record.

Sunday, 3 May 2020

An agreement signed with United States in 1945 will continue to haunt House of Saud for ever

I wrote a blog titled “And finally Saudi Arabia bows down before US mantra” on April 10, 2020, where the bottom-line was that Saudi Arabia has bent to knees before United States. Since then I wanted to explore what turned Saudi Arabia too feeble. 
Now I share with you the crux of my finding very briefly.
In my opinion, Saudi Arabia was put to its knees after United States put showed it the details of an agreement in 1945 between Franklin D. Roosevelt, President of United States and the Saudi King at the time, Abdulaziz, which defined the relationship between the two countries for the years to come. 
The deal that was struck between the two men at that time was that the US would receive all of the oil supplies it needed for as long as Saudi Arabia had oil in place, in return for which the U.S. would guarantee the security of the ruling House of Saud.
The deal was altered slightly since the rise of the US shale oil industry. The US also expects the House of Saud to not only supply the US with whatever oil it needs for as long as it can but also that it will also facilitate the US shale industry to continue to function and to grow.
President Donald Trump has used this agreement to the US benefit. He has sensed a lack of understanding on the part of Saudi Arabia for the huge benefit that the US is doing the ruling family. He went to the extent of saying that [Saudi King Salman] would not last in power for two weeks without the backing of the US military. He also made it clear that without the US protection, either Israel or Iran and its proxy operatives and supporters could very soon end the rule of the House of Saud.
Trump has also said, “I will do whatever I have to do... to protect... tens of thousands of energy workers and our great companies,” and added that plans to impose tariffs on Saudi Arabia’s oil exports into the US were “certainly a tool in the toolbox.”
 Putting tariffs on Saudi oil rather than Russian oil made a lot of sense from two key perspectives. First, the US imports around 95% more oil from Saudi than it does from Russia, so sanctioning Russian oil would have little effect on supply glut prevailing in the US. Second, it was also a understanding in the US that Russia was in much better economic shape than Saudi to handle any shocks to its oil-related streams of revenue.
It is also the fact that Saudi currently provides one of the few large-scale sources of sour crude to the US, which is essential to its production of diesel, and to which purpose WTI is less suited. Gulf Coast refinery system of the US has invested heavily in coking systems and other infrastructure to better handle heavier crudes from the Middle East in recent decades.
The other major historical sources are not in a position to fill the gap, with US sanctions still imposed on oil imports from Venezuela, Mexican flows unreliable, and Canada’s pipeline capacity to the US not able to handle anymore exports south until the long-delayed Keystone pipeline is up and running till 2023.
It was strongly believed that Trump would use the threat of such tariffs to convince the Saudis that he is unpredictable enough to impose such taxes, regardless of the short-term economic consequences. As president, he was required to do something as around 44 million barrels of Saudi crude was expected to reach the US over the next four weeks. This was around four times the most recent four-week average, according to EIA records, and it was mostly due to be delivered to the already overwhelmed Cushing delivery point.
Reportedly, Republican Senator Kevin Cramer of North Dakota, who advises Trump on energy issues, has been calling on the White House to take action to stop the very large crude carriers from unloading and several senators and congressmen have threatened to vote to withhold military aid to Saudi Arabia.
Keeping in view the burgeoning ill-feeling towards the Saudis, sources in theUS Administration were desperate to exploit ‘No Oil Producing and Exporting Cartels Act’ (NOPEC). Pressure was building on Trump to finally sign off the NOPEC Bill ever since the Saudis announced to increase output.
The NOPEC Bill would make it illegal to artificially cap oil (and gas) production or to set prices, as OPEC, OPEC+, and Saudi Arabia do. The Bill would also immediately remove the sovereign immunity that presently exists in US courts for OPEC as a group and for each and every one of its individual member states. This would leave Saudi Arabia open to being sued under existing US anti-trust legislation, with its total liability being its estimated US$ one trillion of investments in the US alone.
The would have also entitled the US administration to freeze all Saudi bank accounts in United States, seize its assets in the country, and halt all use of US currency by the Saudis anywhere in the world. It would have also allowed the US to go after Saudi Aramco and its assets and funds, as it is still a majority state-owned production and trading vehicle, and ment that Aramco could be ordered to break itself up into smaller, constituent companies that are not deemed to break competition rules in the oil, gas, and petrochemicals sectors or to influence the oil price.
The Bill came very close indeed to being passed into a law in February of last year, when the House Judiciary Committee passed the NOPEC Act, which cleared the way for a vote on the Bill before the full House of Representatives. On the same day, Democrats Patrick Leahy and Amy Klobuchar and – most remarkably – two Republicans, Chuck Grassley and Mike Lee, introduced the NOPEC Bill to the Senate. Its progress was only halted after President Trump stepped in and vetoed it when the Saudis did what he told them to do, but the option is still available for a relatively quick turning it into law.

Friday, 10 April 2020

And finally Saudi Arabia bows down before US mantra


The decision by OPEC plus to cut production can be termed a time-out to avert a tripartite war. Lately, there has been significant deterioration in relations between the United States and Saudi Arabia.
Reportedly, nearly 50 US Republican lawmakers warned Saudi Crown Prince Mohammed bin Salman on the eve of this week’s OPEC oil ministers’ video-conference that economic and military cooperation between the United States and Saudi Arabia was at risk. The congressmen demanded that the kingdom must convince Russia to save oil marker from a collapsed.
The United Arab Emirates (UAE) had joined Saudi Arabia in raising production in a move that was sparked by Russia’s initial refusal to extend production cuts agreed early this year but more fundamentally was designed to knock out competition from US shale producers that had turned the United States into the world’s largest oil producer.
It is being portrayed that Saudi Arabia, Russia and the UAE share a desire to render the US shale industry uncompetitive. The prime objective of Russia is to end the US hegemony by stripping it off its status of largest oil producing country.
The threats for Arabian Peninsula monarchs and the US have been raised by the collapse of the oil price as well as demand in the midst of a global economic meltdown.
For Saudi Arabia and the UAE, the stakes were their relationship with the US and significant reputational damage with a move that put at risk tens of millions of American jobs at a time more than 17 million people have been rendered jobless in the United States in the past four weeks.
Oil is but the tip of an iceberg in efforts, particularly in the case of the UAE, to manage a divergence in interests with the United States without tarnishing the country’s carefully groomed image as one of Washington’s closest allies in the Middle East.
Emirati gestures were designed to ensure that it would not be a target in any military confrontation between the United States and Iran.
However, when UAE began reaching out to Iran last year by sending a coast guard delegation to Tehran to discuss maritime security in the wake of alleged Iranian attacks on oil tankers off the coast of the Emirate, the relationship got bitter.
The Trump administration remained silent when the UAE last October released US$700 million in frozen Iranian assets that ran counter to US efforts to strangle Iran economically with harsh sanctions.
While the United States reportedly blocked an Iranian request for US$5 billion from the International Monetary Fund (IMF) to fight the virus, the UAE was among the first nations to facilitate aid shipments to the Islamic republic.
The shipments led to a rare March 15 telephonic conversation between UAE foreign minister Abdullah bin Zayed bin Sultan Al Nahyan and his Iranian counterpart, Mohammad Javid Zarif.
UAE officials stressed that there would be no real breakthrough in Emirati-Iranian relations as long as Iran supported proxies like Hezbollah in Lebanon, pro-Iranian militias in Iraq and Houth rebels in Yemen. The UAE gesture contrasted starkly with a Saudi refusal to capitalize on the pandemic.
A against this, Saudi Arabia appeared to reinforce battle lines by accusing Iran of “direct responsibility” for the spread of the virus. Government-controlled media charged that Iran’s allies, Qatar and Turkey, had deliberately mismanaged the crisis.
Moreover, the kingdom, backing a US refusal to ease sanctioning of Iran, prevented the Non-Aligned Movement from condemning the Trump administration’s hard line.
In a further indication of a divergence of interests, the UAE was alleged for trying to sabotage US support for Turkey’s military intervention in northern Syria as well as a Turkish-Russian engineered ceasefire in the region.
It was also reported that UAE Crown Prince Mohammed bin Zayed had promised Syrian President Bashar al-Assad US$3 billion, out of this US$250 million were paid upfront to break the ceasefire in Idlib, one of the last rebel strongholds in Syria.
Prince Mohammed had hoped to tie Turkey up in fighting in Syria, which would complicate Turkish military support for the internationally recognized Libyan government in Tripoli. The UAE aids Libyan rebel forces led by Field Marshal Khalifa Haftar.
A tweet by Prince Mohammed on 28th March declaring support for Syria in the fight against the coronavirus was designed to keep secret the real reason for the UAE payment.
“I discussed with Syrian President Bashar al-Assad by phone the repercussions of the spread of the coronavirus and assured him of the UAE’s support of and assistance for the brotherly Syrian people in these exceptional circumstances. Human solidarity in times of adversity supersedes all else, Sisterly Syria will not be alone in these difficult circumstances,” Prince Mohammed said. It is unlikely that Prince Mohammed’s explanations will convince policymakers in Washington.
Nevertheless, the United States, Saudi Arabia and the UAE are likely to hide cracks in their relations, but it is only a matter of time the cracks will re-appear.




Saturday, 4 April 2020

Pakistan Stock Exchange outperforms other global equity benchmarks WoW basis


Continuing the momentum gained in the latter part of last week, the benchmark index of Pakistan Stock Exchange (PSX) closed the week ended on 3rd April 2020 at 31,622 points, posting 12.5%WoW gain. It was the highest ever in points gain, (up 3,512 points WoW) and highest weekly gain in percentage terms since February 2000, outperforming other global equity benchmarks on weekly basis. Across the board attractive valuations, cabinet approval of the stimulus package announced last week and kick-start of essential industries in the coming week (another incentive package for Construction sector announced on Friday) aided investor sentiment in tandem with encouraging news flow regarding number of recoveries from coronavirus. For the week top gainers included: ASTL, CHCC, MLCF, PIOC and KAPCO.
As a result, average traded volume jumped to 227.7 million shares, from 150.0 million shares traded a week ago. Within main board items, Cements led the show, gaining 26.0%WoW on expectation of the construction sector incentive package and news flow suggesting initiation of construction activities at Diamer Bhasha dam. It was followed by E&Ps/OMCs gaining 15.7/23.2%WoW, on Brent price rising more than 30% in anticipation of deal between Saudi Arabia and Russia. Flow wise, net buyers were Individuals (US$13.0 million), Mutual Funds (US$10.3 million), and Insurance (US$9.0 million), mostly absorbing sale by foreigners (US$36.1 million).
On the international front, global institutional investors continue to sell despite undemanding valuations driven by redemption pressures across both active and passive investment strategies. At the same sovereign allocators of global capital are also calling in redemptions due to calls for support from respective governments to fund relief measures as economies face various levels of impacts due to the virus outbreak. A fresh round of allocations may only be likely over the medium to longer term as economies only gradually reopen within the backdrop of large scale stimulus programs launched by central banks. Stimulus programs will eventually translate into higher risk tolerance improving allocations towards frontier and emerging markets.
Analysts advocate buy-and-hold investment strategy with a long term investment horizon since the impact of coronavirus outbreak is yet to be completely gauged. They also suggest continuing to monitor data regarding the virus, testing capacity augmentation, provincial measures to mandate social distancing (including length and severity of lockdowns.