Israel aims at repairing relationship with ruling junta in United States

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Angry Americans Hysterical Reactions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Pakistan Stock Exchange Benchmark Index Declines 3.4%WoW

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

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

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

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

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

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

United States supports Iron Dome funding for Israel

The US House of Representative passed legislation on Thursday to provide US$ one billion to support Israel’s Iron Dome missile defense system.

The standalone bill to ensure the Iron Dome funding passed handily on a bipartisan basis, 420-9, with two Democrats voting present. Eight liberal Democrats and one Republican voted in opposition.

The debate over the Iron Dome funding once again laid bare the internal Democratic divisions over Israel, which have repeatedly flared since they took over the House majority two years ago.

Those tensions flashed on the House floor Thursday as Rep. Rashida Tlaib, the lone Palestinian American member of Congress, spoke out against the Iron Dome funding.

“We cannot be talking only about Israelis’ need for safety at a time when Palestinians are living under a violent apartheid system,” Tlaib said, calling the Israeli government an apartheid regime.

“We should also be talking about Palestinian need for security from Israeli attacks,” she said. 

Rep. Ted Deutch, who is Jew, subsequently abandoned his prepared remarks and angrily blasted Tlaib for having besmirched our ally.

“I cannot, I cannot allow one of my colleagues to stand on the floor of the House of Representatives and label the Jewish democratic state of Israel an apartheid state. I reject it,” Deutch said.

The Senate is expected to consider the standalone Iron Dome funding bill at a later time.

United States paving way for export of Iranian fuel to Afghanistan

Reportedly, the US administration is reviewing waiver of 2018 sanctions, which allowed Afghanistan to purchase Iranian gasoline and diesel.

According to the details a State Department spokesperson told London-based Middle East Eye online news outlet that the waiver put in place by former president Donald Trump's administration remains under active review after the overthrow of the Afghan government last month.

An amendment to repeal a part of the waiver reached the House Foreign Relations Committee last month but was blocked by the Committee Chairman Gregory Meeks.

According to Alex Zerden, who led the Treasury Department's office at the US embassy in Kabul from 2018 to 2019, the sanctions waiver on Iranian fuel exports to Afghanistan was intended at the time to protect Kabul even as Washington was pushing ahead its maximum pressure campaign against Tehran. 

“There were real concerns about Iran sanctions harming Afghanistan's economy and a waiver to import Iranian fuel was seen as crucial,” Zerden noted.

Trump left the 2015 Iran nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA) in 2018 and reimposed the sanctions on Tehran that had been lifted.

Zerden said the 2018 waiver on Iranian fuel sales to Afghanistan was intended to allow fuel traders to skip the sanctions imposed on Tehran, but not Taliban sanctions.

Taliban have already been subject to a range of US sanctions under an executive order enacted after the 9/11 attacks.

Howard Shatz, a senior economist at the Rand Corporation, said that even if Washington wanted to enforce the sanctions, it could prove difficult. “We don't have a lot of leverage with Iran and Afghanistan,” he said.

Zerden said, "Enforcing violations of sanctions would be difficult because this occurs outside formal financial channels." 

The fuel sales take place in cash at the Iranian-Afghan border. Most of the transactions occur through Afghanistan's informal Hawala banking system.

The main Iranian fuel exports to Afghanistan are gasoline and diesel. Iran exported about 400,000 tons of fuel to its eastern neighbor from May 2020 to May 2021, according to a report published by PetroView, an Iranian oil and gas research and consultancy platform.

Iranian fuel flows have been vital to Afghanistan in the last few years, according to traders and an Afghan Government report.

Between March 2020 and March 2021, Iran accounted for US$367 million of imports, mostly fuel, according to the report compiled by the Afghan Ministry of Finance, chambers of commerce, and data from private enterprises.

Meeting of Foreign Ministers of SAARC countries scheduled for 25th September cancelled

A meeting of foreign ministers of South Asian Association for Regional Cooperation (SAARC) countries, scheduled on Saturday, 25th September 2021 in New York, has been cancelled.

It is being stated by certain quarters that Pakistan wanted the Taliban to represent Afghanistan in the SAARC meet.

India along with some other members objected to the proposal and due to lack of consensus or concurrence, the meeting has to be cancelled.

Nepal is the host of the meeting, which is annually held on the sidelines of the United Nations General Assembly.

An official letter sent by the SAARC secretariat to the foreign ministries of the eight countries stated it received a note verbal or unsigned diplomatic correspondence from Nepal’s foreign ministry that stated the informal meeting of foreign ministers will not take place because of the lack of concurrence from all member states.

Sovereign Palestinian State: Best option for maintaining peace in Middle East

US President Joe Biden said on Tuesday that a sovereign and democratic Palestinian state is the best way to ensure Israel's future. “We must seek a future of greater peace and security for all people of the Middle East,” Biden said in a speech at the UN General Assembly.

“The commitment of the United States to Israel's security is without question and our support for an independent Jewish state is unequivocal,” he said.

“But I continue to believe that a two-state solution is the best way to ensure Israel's future as a Jewish democratic state, living in peace alongside a viable, sovereign and democratic Palestinian state,” he said.

“We're a long way from that goal at this moment but we should never allow ourselves to give up on the possibility of progress.”

The US will help resolve crises from Iran to the Korean Peninsula to Ethiopia, Biden told the annual UNGA gathering.

The world faces a “decisive decade”, Biden said, one in which leaders must work together to combat a raging coronavirus pandemic, global climate change and cyber threats. He said the US will double its financial commitment on climate aid and spend $10 billion to fight hunger.

Biden did not ever say the words “China” or “Beijing” but sprinkled implicit references to America's increasingly powerful authoritarian competitor throughout his speech, as the two nations butt heads in the Indo-Pacific and on trade and human rights issues.

He said the US will compete vigorously, both economically and to push democratic systems and rule of law.

“We'll stand up for our allies and our friends and oppose attempts by stronger countries to dominate weaker ones, whether through changes to territory by force, economic coercion, technical exploitation or disinformation. But we're not seeking — I'll say it again — we are not seeking a new Cold War or a world divided into rigid blocs,” Biden said.

Biden came to the UN facing criticism at home and abroad for a chaotic US withdrawal from Afghanistan that left some Americans and Afghan allies still in that country and struggling to get out.

His vow for allied unity is being tested by a three-way agreement among the US, Australia and Britain that undermined a French submarine deal and left France feeling stabbed in the back.

“We've ended 20 years of conflict in Afghanistan and as we close this era of relentless war, we're opening a new era of relentless diplomacy,” Biden said.

He vowed to defend vital US national interests, but said that “the mission must be clear and achievable,” and the American military “must not be used as the answer to every problem we see around the world”.

Biden, a Democrat, hoped to present a compelling case that the US remains a reliable ally to its partners around the world after four years of America First policies pursued by his Republican predecessor Donald Trump.

UN Secretary General Antonio Guterres, who begins a second five-year term at the helm of the world ,warned earlier of the dangers of the growing gap between China and the US, the world's largest economies.

“I fear our world is creeping towards two different sets of economic, trade, financial and technology rules, two divergent approaches in the development of artificial intelligence — and ultimately two different military and geopolitical strategies,” Guterres said.

“This is a recipe for trouble. It would be far less predictable than the Cold War,” Guterres said.