Chinese soldiers may enter Afghanistan after departure of US troops

A very interesting, but equally perturbing situation is likely to emerge in Afghanistan. As the United States has announced to completely withdraw troops by 11 September, China has expressed its intentions to deploy its troops.

According to a report, Beijing may consider sending a peacekeeping force to Afghanistan if the security situation in the South Asian country poses a threat to the neighboring Chinese province of Xinjiang after American troops pull out.

US President Joe Biden said on Wednesday that he would withdraw all remaining US troops – about 2,500 – from Afghanistan by 11^th September, the 20th anniversary of the terrorist attack on the United States.

The withdrawal may pose a threat to Afghanistan’s security and stability, which could spill over into Xinjiang and disrupt China’s counterterrorism efforts.

In 2018, China trained Afghan troops and helped set up a mountain brigade. The training took place in China and the aim of the brigade was to counter possible attacks by al-Qaeda and Islamic State.

“The security forces of the Afghan government are not capable of ensuring Afghan security,” said Sun Qi, an international relations specialist at the Shanghai Academy of Social Sciences.

“The situation in Afghanistan might go further into chaos in the future. Cross-border crime, drug trafficking and smuggling of firearms may proliferate,” he said.

China may send peacekeeping troops to Afghanistan under the terms of the UN Charter, according to an international relations specialist at the Shanghai Academy of Social Sciences.

While Beijing would not station troops in Afghanistan, it might work with other countries in the region to promote political stability and reduce the security risk to China, Sun said.

 “If the security situation poses a significant threat, China may send peacekeeping troops along with humanitarian assistance to the region under the terms of the Charter of the United Nations to ensure the safety and interests of Chinese people and companies there,” he said.

Chinese foreign ministry spokesman Zhao Lijian informed that foreign troops stationed in Afghanistan should withdraw in a “responsible and orderly manner” to prevent terrorist forces from taking advantage of the chaos.

“The United States is the biggest external factor affecting the Afghan issue. The relevant decisions and actions of the United States should fully respect the sovereignty, independence and territorial integrity of Afghanistan, earnestly take responsibility for maintaining the results of peace and reconstruction in Afghanistan,” he said.

Soon after Biden’s announcement, Nato secretary general Jens Stoltenberg said the alliance planned to withdraw its troops – about 7,000 – from Afghanistan by next month. Australian Prime Minister Scott Morrison said on Thursday that Australia would also complete its military withdrawal from Afghanistan in September.

Other experts said China was unlikely to push too hard to gain influence in Afghanistan as there was already fierce competition in the region.

“A number of countries, including Pakistan, India and Russia, want to exert their influence in the region, so China really needs to be careful of getting involved in the chaos,” said Wang Jin, a research fellow at the Charhar Institute think tank in northern China.

China and the US were unlikely to engage in any significant cooperation in Afghanistan after the US troop withdrawal, given the tensions between the two countries, he said.

“We can see from the withdrawal of US troops that the willingness of the US to intervene in Afghanistan’s affairs is declining,” he said.

“Primarily the idea of solving local conflicts by establishing a Western-style democracy in Afghanistan has failed.”

Sun said the US was likely to withdraw its military deployments from Central Asia and redeploy them to the Asia-Pacific.

“The withdrawal from Afghanistan allows the US to boost its military presence in Asia-Pacific and Indian Ocean regions, with the aim of containing China,” he said.

“The US is highly likely to increase its military activity in the South China Sea and China-Indochina peninsula.”

Can secret talks between India and Pakistan yield any result?

It is believed that both India and Pakistan are busy in minimizing tension on the instructions of some external forces. This may bring a temporary calm for a while, but just can’t establish sustainable peace. The lingering on of Kashmir issue can be attributed to super powers fighting a sort of proxy wars in the region, including Afghan war going on for nearly twenty years.

Analysts say that now besides United States, China and Russia are also controlling the string. Ironically, these super powers don’t wish to engage in any direct encounter but want the proxies to hit strategic interests of each other.

Let everyone keep in mind that Russia and other Central Asian countries want access to warm waters, though Afghanistan and Pakistan. Similarly, China wants full control and security of projects being constructed under the auspicious of CEPC.

According to a Reuters news, top intelligence officers from India and Pakistan held secret talks in Dubai in January this year in a new effort to calm military tension over the disputed Himalayan region of Kashmir.

While the super powers are pursuing their agenda, hawks present in India, Pakistan and Afghanistan continue to play the role of ‘spoilers’. Ironically the status of these hawks keeps on changing from friend to foe to friend.

Having read the preamble, now let us talk about secret talks going on between India and Pakistan on the behest of United Arab Emirates or to be little rude China and United States.

Keeping a few points in mind that over the last 74 years Kashmir issue has not been resolved, both the countries have fought numerous wars and attained the status of atomic powers to stain supremacy on each other, while millions of people on both sides of the border live below the poverty line, maintaining peace and tranquility in the regions seems only diabolic thinking

Both the Pakistan and Indian governments have re-opened a backdoor diplomacy aimed at a modest roadmap to normalizing ties. Such meetings have taken place in the past too, especially during times of crises but never been publicly acknowledged.

 It is not loner a secret that Indian and Pakistan intelligence officials have been meeting for several months in third countries. It is believed that these meeting have been held in Thailand, Dubai and London between the highest level people.

There is a lot that can still go wrong, it is fraught that is why nobody is talking it up in public, we don't even have a name for this, it's not a peace process, one can call it a re-engagement.

"It’s better for India and Pakistan to talk than not talk, and even better that it should be done quietly than in a glare of publicity," said Myra MacDonald, a former Reuters journalist who has just published a book on India, Pakistan and war on the frontiers of Kashmir.

Analysts don't see these meeting going beyond a basic management of tensions, possibly to tide both countries over a difficult period - Pakistan needs to address the fallout of the US withdrawal from Afghanistan, while India has to confront a far more volatile situation on its disputed frontier with China.

Joe Biden faces resistance on withdrawal of troops from Afghanistan

President Joe Biden announced on Wednesday of a complete withdrawal of United States from Afghanistan by 11^th September this year. The announcement aims at closing the longest war of the United States.

However, many analysts, even within the US, remain skeptical of sustainable peace in Afghanistan, which has reduced to rudiments in two decades of fighting.

As officials disclosed Biden’s pullout plans, the US intelligence community renewed deep concerns about the outlook for the US-backed government in Kabul, which is clinging to an eroding stalemate.

“The Afghan government will struggle to hold the Taliban at bay if the coalition withdraws support,” said the US assessment, which was sent to Congress.

Kabul continues to face setbacks on the battlefield, and the Taliban are confident that they can achieve military victory.

The Democratic President had faced the 1st May withdrawal deadline, set by his Republican predecessor, Donald Trump, who tried but failed to pull the troops out before he left office.

Biden’s decision to keep 2,500 troops in Afghanistan past that 1^st May 1 deadline, but officials suggested troops could fully depart before 11^th September, the US troop numbers in Afghanistan peaked at more than 100,000 in 2011.

“There is no military solution to the problems plaguing Afghanistan, and we will focus our efforts on supporting the ongoing peace process,” a senior administration official said.

It remains unclear how Biden’s move would affect a planned 10-day summit about Afghanistan starting on 24^th April in Istanbul that is due to include the United Nations and Qatar.

Taliban, which were ousted from power in 2001 by the US-led troops, said they would not take part in any summits that would make decisions about Afghanistan until all foreign forces had left the country.

Critics said the departure plan appeared to surrender Afghanistan to an uncertain fate, something that experts say was perhaps inevitable.

 “There is no good way that the US can withdraw from Afghanistan. It cannot claim victory, and it cannot wait indefinitely for some cosmetic form of peace,” said Anthony Cordesman at the Center for Strategic and International Studies think tank in Washington.

Democratic Senator Jack Reed, chairman of the Senate Armed Services Committee, called it a very difficult decision for Biden.

“There is no easy answer,” Reed said.

US officials can claim to have, years ago, decimated al Qaeda’s core leadership in the region. But ties between the Taliban and al Qaeda elements persist.

By withdrawing without a clear victory, the United States opens itself to criticism that a withdrawal is a de facto admission of failure.

The war began as a search for al Qaeda leader Osama bin Laden following the Islamist militant group’s 9/11 attacks, when hijackers slammed airplanes into the World Trade Center in New York City and the Pentagon outside Washington, killing almost 3,000 people.

Successive US presidents sought to extricate themselves from Afghanistan, but those hopes were confounded by concerns about Afghan security forces, endemic corruption in Afghanistan and the resiliency of a Taliban insurgency that enjoyed safe haven across Afghanistan.

Senate Republican leader Mitch McConnell accused Biden of planning to “turn tail and abandon the fight in Afghanistan.”

“Precipitously withdrawing US forces from Afghanistan is a grave mistake,” McConnell said, adding that effective counterterrorism operations require presence and partners on the ground.

Even Biden’s allies in Congress fretted about the impact a withdrawal would have on human rights, given the gains - particularly for women and girls - in Afghanistan in the past two decades.

The senior administration official said US troops were not the best solution for preserving human rights gains, saying that aggressive diplomatic, humanitarian and economic measures are needed instead.

Ship stuck in Suez Canal still held by Egyptian authorities to recover US$ one billion

The world cheered when Evergreen cargo vessel was freed from the sides of the Suez Canal on March 29, 2021, but it is still held as ‘hostage’ to recover a king's ransom. The ship is still inside the Suez Canal, in a wider area called the Great Bitter Lake.

Egyptian authorities say they will let the mega ship go only after the ship's owners pay US$ one billion to compensate for the week that the canal was shut down. 

It seems that there are other reasons for detaining the ship. First there was little concern when ship grounded. Then work to afloat the ship moved at snail’s speed. And now the ship is being held as hostage to recover the booty.

The investigation can be completed in a few hours simply by listing to the captain of the ship, its key crew members and Egyptian pilots.

On the face value the Suez Canal authority (SCA) seems at fault and should be held liable to pay all others including the ship owners. It was their responsibility to use efficient pilot boats to escort this mega ship. If the weather was bad and visibility was poor they should have not pushed the ship into the Canal. And if they were confident of their skills, they should have also kept the control with them; they just can’t put the blame on the ship crew.

The SCA can still fight the case in a competent court of law, but holding the ship indefinitely tantamount to ‘Marine Terrorism’.

Osama Rabie, Chairman, SCA said on Egyptian state television that the country will hold onto the ship while it investigates what happened and until the ship's owner pay US$ one billion.

The losses for the period ending March 29, that the ship was stuck and blocked traffic flow through the canal comes to less than US$100 million in lost transit fees and there are also the costs to free the ship and other expenses to reimburse.

"The vessel will remain here until investigations are complete and compensation is paid," he said, according to The Wall Street Journal. 

"The minute they agree to pay the compensation, the vessel will be allowed to move."

It's not just Egyptian authorities who are asking for money. The Wall Street Journal said insurance claims for the boat's week in the spotlight could include losses for perishable goods as well as supply-chain disruptions.

Interestingly, Japanese company, Shoei Kisen Kaisha that owns the ship told the Journal it is in discussions with Egyptian authorities and cooperating in the investigation but has not officially, heard about the billion-dollar ransom.

The Company has started liability-limiting court proceedings in London. A representative of the International Transport Workers Federation, also based in London, told the Wall Street Journal that the crew appears to be well treated while they remain on board the ship.

Drying US oil pipelines

According to a Reuters report, pipeline companies in the United States went on a construction spree throughout 2018 and 2019 to handle blistering growth in crude production that touched a record 13 million barrels per day (bpd). 

However, the coronavirus pandemic crushed both fuel demand and oil production, and neither has recovered fully, leaving many pipelines unused.

Major pipeline companies are exploring ways to ship other products in those lines and considering selling stakes in operations to raise cash.

The coronavirus pandemic upended the global energy supply system and worldwide fuel demand. Gasoline consumption in the US is now estimated to be past its peak and as refiners process less crude, producers are not filling pipelines used to transport it.

By the fourth quarter, total utilization of the largest oil pipelines from the Permian is expected to drop to 57%, consultancy Wood Mackenzie said. The nadir during the last market bust in 2016 was roughly 70%.

The US crude output is currently about 11 million bpd, and is not expected to grow much until 2022. But more pipelines were already set to come online, growing the gap between production and capacity covered by long-term contracts to a record over one million bpd in February, according to energy research firm East Daley Capital.

"We do not expect to be at pre-COVID production levels by end-2022," said Saad Rahim, chief economist at Commodities Merchant Trafigura.

The top three Permian pipeline companies are offering discounts to entice shippers and stem the fall in volumes. Companies rely on long-term contracts that require customers to ship a certain volume of oil or pay a penalty. Now companies are renegotiating those agreements at lower rates when they are close to expiring, to keep their customers.

Magellan Midstream Partners LP’s transportation and terminals revenue slid 9% to about US$1.8 billion in 2020, the lowest since 2017. The Company has only enough long-term contracts to fill its 275,000-bpd Longhorn pipeline to 70% capacity over the next six years, Magellan said.

With more pipelines adding to competition, Magellan expects daily volumes on Longhorn to drop to an average 230,000 bpd this year versus 270,000 bpd in 2020. A Magellan spokesman said the company could use its marketing arm to buy space on the Longhorn line and sell it to ad-hoc buyers.

Plains All American Pipeline LP’s transportation revenues fell about 13% to $2 billion in 2020, and warned that earnings could suffer further if production declines. Plains did not comment for this story.

Pipeline companies can make some money even when oil is not flowing through pipelines. Producers pay what are known as deficiency payments - penalties for not shipping oil. Still, those payments are small. Plains reported $71 million in deficiency payments in 2020, less than 4% of its overall transportation segment revenue.

Some companies are considering retrofitting pipelines to ship liquids besides crude, such as renewable fuels.

Enterprise Products Partners LP’s co-Chief Executive Jim Teague recently told analysts that he was fielding queries from a petrochemical company that needs pipeline transport and storage for potential hydrogen projects.

Enterprise’s crude pipelines and services revenues plunged 35% in 2020. In February, it said it has long-term contracts to ship about 1 million bpd through 2028 and beyond, compared with average volumes of 2 to 2.2 million bpd over the past two years.

The company did not comment for this story.

As pipeline companies have struggled, investor returns have suffered. The Alerian MLP index, which tracks the performance of midstream companies, is down 24% since the beginning of 2020, compared with a 27% return for the S&P 500.

“A lot of companies had to cut their dividends,” said Rob Thummel, senior portfolio manager at TortoiseEcofin. “It has created some skepticism on the investor base about the sustainability of the sector.”

Rising remittances prove issuing Eurobonds was a bad decision for Pakistan

In one of my recent blogs I had opposed the idea of flotation of Eurobonds. It was based on two premises: 1) the issue will add to debt servicing and 2) the rate of return being offered is fabulous. I had also suggested that whatever amount Eurobond will provide would be mobilized in less than a month.

A review of remittance received indicates that receipts extended their unprecedented streak for the 10th consecutive month in March 2021 and rose to US$2.7 billion for the month, 20% higher than earlier month and 43% higher than March 2020. 

Cumulatively during first 9 months of current financial year (FY 21) remittances rose to US$21.5 billion, up 26% over the same period of FY20.

Remittance inflows during the period under review were mainly originated from Saudi Arabia (US$5.7 billion), United Arab Emirates (US$4.5 billion), United Kingdom (US$2.9 billion) and the United States (US$1.9 billion).

Proactive policy measures taken by the Government of Pakistan (GoP) and State Bank of Pakistan (SBP) to encourage inflows through official channels, limited cross border travel due to the COVID-19 and orderly foreign exchange market conditions contributed to this sustained rise in workers’ remittances.

I am still concerned about deteriorating balance of trade situation of Pakistan. The deficit during first nine months of FY21 swelled to US$21.241 billion from US$17.352 billion over the corresponding months of last year, reflecting an increase of 22.4%. The surge in trade deficit has been mainly led by higher growth in imports and lower growth in exports.

During the period under review, import bill increased by 14.68% to US$39.91 billion, from US$34.799 billion. This hike was contributed by import of raw material as well as import of wheat, sugar and cotton. As against this, export proceeds rose by 7% to US$18.669 billion, from US$17.447 billion.

I am also inclined to draw a conclusion that Pakistan would have faced serious balance of payment crisis, had there been not so huge influx of remittances. Even IMF tranches and borrowing from friendly countries would have proved too paltry.

Therefore, it is suggested that GoP must look into the problems faced by overseas Pakistani, particularly those living in UAE and Saudi Arabia. Similarly, efforts should also be made to convince these countries to resolve problems faced by Pakistanis.

 

Israel attacks Iranian nuclear facility at Natanz

Mossad was reportedly behind the cyberattack at the Natanz nuclear plant on Sunday that caused extensive damage to Iran’s main uranium enrichment facility.

Western sources quoted in Israeli media said the attack, which was initially referred to as an accident by Iran, was carried out by the Mossad.

Iran admitted on Sunday evening that the accident was the result of a terrorist act.

The country’s nuclear chief, Ali Akbar Salehi, said the international community and the International Atomic Energy Agency needed to deal with what he called nuclear terrorism. Iran reserves the right to take action against the perpetrators, he was quoted as saying.

The incident at Natanz was not an accident, and the damage was worse than what Iran had initially presented to the public, a source confirmed to The Jerusalem Post. Western sources said the facility was hit by a cyberattack.

IDF Chief of Staff Lt.-Gen. Aviv Kohavi gave a rare strong hint pointing to Israeli involvement on Sunday.

 “The IDF’s actions throughout the Middle East are not hidden from our enemies’ vision, who are observing us, seeing our capabilities and carefully considering their next steps,” he said in a speech honoring Israel’s fallen soldiers.

“By virtue of clever operational activities, the past year was one of the most secure years that the citizens of the State of Israel have known,” Kohavi said.

“We will continue to act, combining power and discretion, determination and responsibility – all of this to guarantee the security of the State of Israel.”

Prime Minister Benjamin Netanyahu, at an Independence Day event on Sunday with the heads of the security branches, said, “The struggle against Iran and its proxies and the Iranian armament efforts is a huge mission.”

In a possible reference to the reported Mossad operation taking the uranium enrichment machines off-line within hours of their launch, he said: “The situation that exists today will not necessarily be the situation that will exist tomorrow.”

Natanz has in the past been targeted by Israeli cyber operations, according to foreign reports. In 2010, the Stuxnet virus attacked the facility in a joint operation with the US, destroying more than 1,000 centrifuges.

Iran said there no injuries or pollution were caused by the incident on Sunday. Malek Shariati-Niasar, an Iranian MP and spokesman for a parliamentary energy commission, wrote that the incident was highly suspected as being “sabotage,” being that it occurred on Iran’s National Nuclear Technology Day and amid the renewal of talks between the Islamic Republic and Western nations on the Joint Comprehensive Plan of Action nuclear deal of 2015.

The Iranian parliament was following the details of the incident and would announce an opinion on the matter after receiving and summarizing the information, he said.

Earlier on Sunday, Iran said a problem with the electrical distribution grid of the Natanz site had caused an incident.

Iranian MP Ali Haddad placed the blame for the incident on Israel.

“Yesterday the assassination of a nuclear scientist and today the attack on the Iranian ship Saviz and the sabotage of the Natanz nuclear facility,” he tweeted.

Haddad called for deterrence and not restraint. “When commitment is translated as restraint, the Zionist enemy dares to strike more blows,” he said.

The attack against Natanz took place a day after Iran began injecting uranium hexafluoride gas into advanced IR-6 and IR-5 centrifuges at Natanz and was revealed as US Secretary of Defense Lloyd Austin was visiting Israel.

It also came less than a month after the IAEA reported that Iran had restarted enrichment at the Natanz facility and less than a year after Israel was blamed by foreign reports for an alleged attack on the facility, which reportedly had significantly impacted Iran’s nuclear program.

Iran is still nowhere near having recovered to the point where it had been before that July 2020 explosion in terms of its capacity for assembling new advanced centrifuges, the Post recently reported.

In the alleged attack last year, Iranian reports originally referred to the explosion as an incident without providing further details.

“The centrifuge assembly hall was blown up by the enemy a few months ago, but we did not stop and temporarily set up the hall that made up for the lost hall,” Iranian nuclear chief Salehi said Saturday, according to Iran’s semi-official Fars News Agency. He did not specify which “enemy” was behind the attack last year.

Iran is working to move sensitive facilities at Natanz further underground and hopes the new underground halls will be ready next year, Salehi said.

Tensions are rising between Israel and Iran amid a number of attacks on Iranian and Israeli maritime vessels, with recent reports claiming that Israel has hit dozens of Iranian ships in recent years.

On Tuesday, a spokesman for the Iranian military blamed Israel and the US for causing an explosion on the Islamic Revolutionary Guards Corps’ Saviz vessel in the Red Sea, Sputnik news reported last Thursday.

“The United States undoubtedly has a hand in all attempts to undermine and harm Iran,” the spokesman said in a statement, adding that Tehran was not accusing any of the Gulf states of being involved in the incident.

Iran is meeting with European and American officials to discuss a possible return to the JCPOA.

Netanyahu has warned multiple times in the past week that Israel would defend itself against Iranian threats, stressing that Jerusalem would work to combat Tehran’s nuclear ambitions.