Pakistan facing repercussions of “Absolutely Not”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Top US generals contradict President Joe Biden

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Investors getting jittery

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

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

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

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

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

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

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

Israel trying to buy out loyalty of Jordan

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Germany gets ready for most unpredictable elections

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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