Deliberations on payment mechanism in Afghanistan-Pakistan trade

During the first deliberation session on barter trade and other irritants facing Afghanistan-Pakistan trade, members from various relevant trade bodies and Chambers, the house unanimously resolved, “It is better to use banking channels for financial transactions”. 

The barter can be added as an alternative, umpteenth number of countries trade with Afghanistan and use third party payment method via international corresponding banks and face no sanctions and problems from any international agency like FATF.

These countries include CARs, Turkey, South Korea and some Far eastern countries, UAE, some European countries, China and India. The foremost action expected from State Bank of Pakistan is to discuss this with international corresponding and local commercial banks with support of Ministries and OFAC (A US Treasury sub agency) to remove barriers for Pakistan to bring in much needed foreign currency. This has been pending since a year and business community has voiced the issue at all levels.”

Later house deliberated all aspects relating to barter trade mechanism with Afghanistan and agreed that the process shall be developed carefully keeping in view the matters of credibility, integrity, efficiency, legality, government’s role, dispute resolution and arbitration, matters of sales tax refund and duty drawback, readiness of PSW, FBR, Pakistan Customs and where necessary the role of SBP to amend the needed clauses to support barter trade mechanism.

The house suggested that barter trade shall be started on trial basis for 3 months and re-evaluated for its feasibility. The matters of deficit and surplus, starting with zero rated categories like pharma and food items, relaxing and reducing duties on Afghan products to bring competitiveness with other countries like India and identification of 10 or more items initially for barter from both sides to ensure balance of trade were discussed.

To manage payments, it will require escrow account which must have multiple signatories to ensure transparency and formation of check and balance system.

Sales tax refunds and duty drawback are already a big issue in case of trade via land which will enhance in case of barter, to counter this, Jawed Bilwani, President PAJCCI, suggested to process barter trade under “Export Processing Zones” mechanism to make it better organized and easily monitored with less stress for business community.

The legality and framework for this alternate will be worked out and proposed to the Ministry accordingly. Additionally a SRO needs to be finalized prior to ensure the mechanism of Sales tax refund and duty drawbacks without further regulatory requirements else the interest of business community in this arrangement will be lost and a lucrative trading opportunity will not realize the full potential.

 

Barter trade shall only be used as alternate and shall not include products and companies which are already trading in dollars. Use of foreign exchange companies was not well received as it will increase the element of illegal payments and may fall under FATF regulations.

PSW & FBR system must have special module under this category for efficient management and to be linked with PAJCCI to reduce duplication of efforts and paper work while verifying transactions and arranging payments.

Zubair Motiwala said, “Detailed report of the session will be shared with participants, further cross border sessions will be held in coming weeks and later with Afghan side as joint session to finalize the proposal to be presented to both governments”.

He stated that PAJCCI strongly believes that using established banking procedures is preferable for trading but will use its experience to bring about viable barter trade mechanism while keeping in view all legal and practical requirements.

 

Chinese oil import from Iran on the rise, others to follow

China’s determination to bring Iran into its sphere of influence, and Iran’s increasing ability to evade international sanctions on oil consignments due to the crisis in the European theatre. 

Iran is likely to become more brazen over hydrocarbon exports in future, a US-based energy expert has told Seatrade Maritime News.

“Iran is an integral part of China’s Belt and Road Initiative. China has spent billions of dollars on its relationship with Iran and is positioning itself to spend billions more. This relationship is for the long term, covering the security, defense, and energy sectors. Iran is able to mitigate the effect of sanctions, and China can further its geopolitical ambitions to transform from a regional to global power,” Justin Dargin, an analyst at Oxford University, said.

The increase in Iranian exports can be perceived as the Iranian government assessing the Biden administration’s resolve to intervene forcefully, Dargin believes. A focus on bringing Iran back to the negotiating table, domestic concerns over Covid and inflation, and the United States and European Union efforts to restrain Russia, have encouraged Iran to pursue its sanctions-busting activity without fear of repercussions.

“Also, while Obama initiated the American ‘retreat’ from the Middle East to implement the Asian pivot, Trump exacerbated the perception of American isolationism.

The White House’s chaotic withdrawal from Afghanistan fed the perception that the US’s Middle East policy lacks any coherence. It is the perfect vacuum for China to enlarge its relationship with Iran. The Biden Administration has not attempted to punish to any appreciable degree the sanctions-evading activity,” he said.

“In light of these factors, it is likely that Iran will continue to engage and even expand its oil exports beneath the radar. It could become even more brazen in the process as Iran’s customers disregard the threat of an American response while the US is entangled in the European theatre.”

The Wall Street Journal said Iran's oil exports, largely China-bound, rose to 870,000 barrels a day in the first three months of the year, up 30% from an average of 668,000 barrels a day in full-year 2021.

Iran also anticipates that sanctions will be lifted soon as the world seeks additional oil supplies to mitigate Russian sanctions, amid supply shortfalls and volatility, Dargin said.

The National Iranian Tanker Company (NITC) recently announced that it will construct new crude tankers while it sends about 24 aging ships to be repaired in a bid to return to the global market.     

“This shows that Iran is readying itself to begin exports in short order. Several NITC tankers have even begun transiting international waters with their Automatic Identification Systems (AIS) turned on in highly visible trade with Iran’s Asian customers,” he said.

“Iran does have one of the largest tanker fleets globally, with an approximate total deadweight of 15.5 million tons. Still, it will take enormous modernization—inspection, testing, certification, and renovating and refurbishing—to restore the fleet to transit international waters in an appreciable capacity. But, with the windfall profits Iran has, it will not be economically hurting as it was several years ago.”

When the Trump administration reimposed sanctions to further isolate Iran under its ‘maximum pressure’ framework, Iranian production dropped precipitously after 2018, but has since rebounded to pre-sanctions levels of approximately 3.8 million barrels per day (mbpd) in anticipation that sanctions will be lifted at some point in the near future.

“However, while Biden entered office hoping that the nuclear deal could be revived, expectancy has fallen due to the stark rise in oil prices and increases in exports to Iran’s main allies, both of which reduced the internal and external pressure on Iran to compromise,” he said.

In the wake of the Russian invasion and the need for more global oil supply, there is little appetite to place additional pressure on Iran. Most of Iran’s oil heads to China, and China is buying more oil now than before the sanctions. India was purchasing Iranian oil but ceased in mid-2019 to comply with American sanctions, Dargin said.

“However, India is ready to buy Iranian crude once sanctions are lifted as its refiners have begun prepping. The Indian government has created a contractual template to swiftly reenter negotiations once Iranian oil is somewhat sanitized. This is also the trend with Iran’s other major Asian customers, such as South Korea, constructing the groundwork with working talks for importing Iranian crude, which is reasonably priced and simple to process compared to other grades,” he said.

The White House believes that China tranships Iranian crude to North Korea. Syria, Lebanon, and Iraq are other regional customers, while Malaysia and other countries serve as transhipment points to relabel the oil. Companies from several countries, some in Southern Africa, are being investigated for facilitating illicit Iranian oil trade, Dargin said.

“To sum up, it appears that Iran is becoming quite brazen with its oil exports, even with the hope of a speedy ‘legal’ return to the global market somewhat in tatters at the moment. Iranian ships have begun to turn on their AIS and China is importing ever-higher amounts of Iranian crude,” he said.

“Further, Iran is banking on the fact that the US and Europe are distracted by the European theater to take much notice or express concern about its activities. It seems that the global community will also, if not facilitate, then turn a blind eye to, Iranian shipments, if this relieves the pressure on the global oil market in the prelude to a continental-wide Russian oil ban.”

 

Who is responsible for killing of one million US citizens? COVID or Administration

According to a report by The Hill, deaths from COVID-19 have reached one million in the United States. The source of this data is none other than the Centers for Disease Control and Prevention. 

The US has had more deaths per capita than Western Europe or Canada. While new deaths have fallen, the total death count is still rising.

It is also expected that the United States, like other countries, has under counted the true number of deaths from the coronavirus.

Illustrating how high one million deaths originally seemed, then-President Donald Trump said in March 2020 that holding the country to between 100,000 and 200,000 deaths would mean “we all, together, have done a very good job.” 

Deaths have continued stacking up even into 2021 and 2022, after vaccines became widely available, disproportionately among people who did not get vaccinated or did not get booster shots.  

An analysis from the Peterson Center on Healthcare and the Kaiser Family Foundation found that about 234,000 US COVID-19 deaths, or roughly one quarter of the total, could have been prevented if people had been vaccinated. 

The share is even higher, at 60%, of deaths since vaccines became widely available in June 2021.  

“Since vaccines became widely available last summer, a total of 389,000 adults in the United States have died of COVID-19, and 6 in 10 of those deaths — about 234,000 deaths — could have been prevented by timely vaccinations,” the researchers found. “This analysis underscores the importance of continued efforts to increase the number of people vaccinated and boosted against COVID-19.” 

Globally, the World Health Organization recently reported that the total number of deaths is more than twice the number officially reported, once indirect deaths due to factors like health care systems being overwhelmed are taken into account. That wider total is almost 15 million deaths worldwide.  

While vaccines and booster shots continue to provide important protection against severe disease, new variants of the virus have thrown curveballs that have meant cases continue to spread, though they are much less dangerous among vaccinated and boosted people.  

There are still more than 300 people dying every day from the virus in the US on average, according to a New York Times tracker, though that is one of the lowest levels since the pandemic began. In addition to vaccinations, a new treatment pill from Pfizer known as Paxlovid has helped to take some of the teeth out of the virus.  

The White House is preparing for another wave of the virus in the fall and winter, which could infect as many as 100 million Americans, a senior administration official said earlier this month.  

The administration argues the country now has the tools to make such a wave much more manageable, and that the number of cases could be lower if Congress provides the funding necessary to purchase updated vaccines, more tests, and additional treatments. Without those tools, the virus could take a much more significant toll in a coming wave.  

As much of the country looks to move past the virus, though, funding is stalled in Congress. Republicans have opposed new funding unless it can be paid for with cuts elsewhere, and the parties have sparred over how to pay for it. The GOP has also demanded a vote to overturn the Biden administration’s move to lift a Trump-era pandemic border policy known as Title 42.  

White House COVID-19 response coordinator Ashish Jha on Twitter pointed to a hopeful trend, that even as cases have risen recently in the Northeast, deaths have stayed largely flat, which he attributed to high booster rates in those states and the effectiveness of new treatments. 

But he said funding is needed to ensure supplies of treatments and updated vaccines are available.  

“We’re at a point in the pandemic where we know how to manage the virus,” he wrote.  

Governor State Bank of Pakistan, new Chairman of Asian Clearing Union (ACU)

Dr. Murtaza Syed, Acting Governor State Bank of Pakistan (SBP) assumed the charge of Chairman of the Board of Directors of the Asian Clearing Union (ACU) in the 50th meeting of the ACU Board held in Islamabad on May 13, 2022 in both physical and virtual modes.

Established in 1974 with permanent headquarters in Iran, the Asian Clearing Union (ACU) is a payment arrangement system whereby member countries settle payments for intra-regional transactions among their central banks on a net multilateral basis. Currently, the Central Banks of Bangladesh, Bhutan, Iran, India, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are members of the ACU. The main objectives of the clearing union are to facilitate payments among member countries for eligible transactions, thereby economizing on the use of foreign exchange reserves and transfer costs, as well as promoting trade and banking relations among the participating countries. 

The Secretary General of ACU, Mrs. Lida Borhan Azad, presented the annual report on the operations of the union for the year 2020, which the Board approved and adopted.

The Board reviewed progress on the ongoing projects being undertaken by the union. It reviewed a new web based messaging system and constituted a sub-committee to finalize the recommendations for its implementation within six months. The Board also considered the report on issues faced by traders under the ACU mechanism and decided to implement the recommendations in the next three months. 

While appreciating the report on the use of domestic currencies for settlement of trade transactions prepared by the Reserve Bank of India (RBI), the Board requested RBI to convene a virtual seminar to enable member countries to gain a fuller understanding of the proposed mechanism. The Governors and head of the delegations of the countries also gave a broad overview of the economic development in their respective economies and shared their experiences in addressing the challenges emerging in the post COVID-19 global landscape.

Governor Central Bank of Myanmar, Than Nyein, Vice Governor Central Bank of Iran, Dr.Mohsen Karimi, Chief Economist Central Bank of Bangladesh Md. Habib ur Rehman, and Executive Director Nepal Rastra Bank Ramu Paudel participated in the meeting physically. Governor Dr. P. Nandalal Weerasinghe, and Deputy Governor of Central Bank of Sri Lanka, T.M.J.Y.P Fernando, Governor Maldives Monetary Authority Ali Hashim, Ms. Yangchen Tshogel Central Bank of Bhutan and Executive Director RBI Radha Shyam Ratho, attended the meeting virtually.

At the conclusion of the Board meeting, Mrs. Lida Borhan Azad relinquished the charge of Secretary General of the ACU after distinguished service of the Union for 15 years. While appreciating the services of Mrs. Lida Borhan, the Board appointed Farhad Morsali as the new Secretary General of the ACU, as recommended by the Central Bank of Iran.

The meeting ended with all member countries emphasizing their commitment to further enhancing their trade and banking relationships. It was decided that central bank digital currencies (CBDCs) would be the special topic on which research would be conducted during Pakistan’s chairmanship of the ACU over the next twelve months.

Shehbaz Sharif taking Pakistan further away from reconciliation with IMF

It may be said without mincing words and unequivocally that the latest decision of Prime Minister Shehbaz Sharif not to increase electricity and gas tariffs and prices of petroleum products has pushed Pakistan further away from reconciliation with International Monetary Fund (IMF).

Yesterday he was required to approve the increases, as a preamble to the commencement of negotiations between IMF and Pakistan. On the contrary he not only didn’t approve the increase, but announced a plan to pay Rs224 billion subsidies for four months spanning March-June 2022, without giving any clue as to how this additional amount will be mobilized.

As Sri Lanka started moving towards eminent default, many experts in Pakistan also started ringing bells that the country could also meet the same fate. At present Pakistan has foreign exchange reserves barely enough to meet six-week import. In case neither IMF nor any other friendly country extend the helping hand, default looks certain.

To add to the knowledge, a ‘fitness certificate from IMF’ is a must and without it no multilateral institution will be ready to extend fund. It is on record that Saudi Arabia has also said categorically that first Pakistan has to ‘normalize’ relations with IMF and only then it will give the promised dollars.

It is necessary to reiterate that IMF has promised: 1) to extend the tenure of the current program for another two years and 2) to raise the amount to US$8 billion, from US$6 billion. Now it is for Pakistan to agree on the terms and conditions and also to meet the agreed targets.

The consultations have been scheduled for May 18, 2022 and Pakistan was required to increase electricity and gas tariffs and raise petroleum prices. To be honest the incumbent government has not only failed in meeting the pre-requisite but also providing a time line for meeting these.

Imran Khan’s opponents have already started saying that he is responsible for the current mess. However, they tend to forget that by moving a non-confidence move against Khan and accepting the offices, they have accepted the challenge to put the economy on track.

To conclude please allow me to say that the incumbent Prime Minister and his team of economic advisors have failed in the first test. Even the bigger challenge is presentation of federal budget for the next financial year.

They have two options: 1) please IMF and remain in power or 2) go for the early elections. Ironically they can’t exercise either of the option because they will lose the support of masses and will not be able to get simple majority in the next election, what to talk of attaining 2/3 majority.   

Can election in Lebanon restore peace and stability in the country?

In Lebanon polling is being held today (Sunday) and the country’s future could depend on a high turnout among the diasporas and voting changes in the country. However, the Hezbollah stranglehold on the country is expected to remain.

Israel terms this Catch-22 that it has been facing for years. It wants to Lebanon to be stable and successful. It accuses Hezbollah of siphoning off resources to build up its arsenal. Israel believes, if Lebanon is weakened, Hezbollah wins by forcing Lebanese to flee the country as it continues to grow its Iranian-financed tentacles.

According to reports more than 100,000 Lebanese living abroad have already cast ballots for the parliamentary election, many backing political newcomers after the worst crisis since Lebanon’s 1975-90 civil war led to widespread poverty and a wave of emigration. Sunday’s election would be the first for the 128-member legislature since mass protests in October 2019 against political elites widely seen as responsible for decades of corruption and mismanagement.

The western media says, “Once a successful country seen as a stable, prosperous, diverse and beautiful global destination for tourists and intellectuals has long fallen into religious extremism and chaos”.

It is often alleged that Hezbollah has benefited from the chaos. When Saudi Arabia and Sunni Arab powers grew concerned about the Iranian-backed Shi’ite extremist movement, Lebanon began to look like it could fall into sectarian conflict similar to Iraq.

Later Riyadh appeared to withdraw support. Saudi Arabia had helped guarantee peace in the country after the Civil War of the 1970s and 1980s. However, the demographic-sectarian balance that underpins politics in Lebanon has been hijacked.

Western media openly says that Hezbollah not only uses Lebanon as a launching pad for threats against Israel; it also threatens the entire region. Yet Hezbollah does not have a way to solely control the parliament in Lebanon, and the sectarian voting system means it must ally with Christian and Druze parties. It has successfully done so in the past, controlling appointments to the presidency and even coming to control ministries.

The biggest tragedy is that Lebanon faces a huge financial crisis. Reports say that 80% of Lebanese are already in living poverty, and the Lebanese currency is losing value. This is likely, in part, the fault of the country’s elites who keep their money abroad.

Western media also plays mantra that the pandemic, inflation and the new crisis in Ukraine that has disrupted some global food supplies will add to the woes of the small country. Consider also that supply chain issues related to China mean that Lebanon will suffer even more. Endless and tough lockdowns in places like Shanghai are spreading global chaos. Lebanon was already on the brink. What might happen next?

Some media reports see Lebanon as being a victim of rivalries in the region. This posits that actors like Iran prey on Lebanon because they want to harm Israel. However the reality is much more complex. Iran uses Lebanon as an outlet to the Mediterranean, and Tehran is now involved via militias in the drug trade from Syria that threatens Jordan and the Gulf.

According to the western media, Lebanon is part of the Iranian axis, even though many Lebanese don’t approve of this hijacking. The UN has failed to rein in Hezbollah and enforce demands that its illegal weapons do not percolate around the country, yet Hezbollah continues to build up an arsenal.

A recent video appeared to show a new anti-ship missile in Hezbollah’s hands. Israel recently upgraded and received new naval platforms, such as the Sa’ar 6. This will matter in any future conflict with the armed Lebanese terror group.

Hezbollah also slammed US mediator Amos Hochstein recently, proclaiming in a video that it did not want to meet with any more “Steins,” a thinly veiled antisemitic reference that sought to highlight Hochstein’s Jewish background. With this language, it is hard to be optimistic about any future negotiations with Lebanon that might settle the maritime boundary and also enable peace and stability.

The US mantra is that Lebanese should work closely with the US and partners in the region to make sure Lebanon remains stable, regardless of the outcome of the election.

 

 

Iran calls on Muslims to halt Israeli atrocities

In a statement issued on the occasion of Nakba Day, which commemorates the illegal Zionist regime of Israel, Iran's Foreign Ministry noted that the only option to ensure Palestinian rights is for governments and Muslim nations to embrace resistance against the occupiers.

Any compromise with the Islamic Ummah's sworn foes, according to Foreign Ministry, supports the apartheid Zionist regime's heinous deeds and human rights violations.

The full text of the statement is as follows:

“May 14, 1948, the Nakba Day, is reminiscent of occupation, massacre and displacement of the true owners of the Palestinian land at the hands of Zionist occupiers and usurpers, and the onset of a trend of systematic violations of the Palestinian nation’s natural and basic rights.

Since that date, the criminal Zionists — backed by some Western powers — have usurped the holy land of Palestine with the forceful use of weapons and through carnage and plunder, laying the foundation for lasting insecurity and instability in the West Asia region, a situation that continues to this day.

The anniversary of the Nakba Day once again reminds the world’s governments and nations of their human and legal duty of defending the Palestinian people’s rights and puts on display the failure of international institutions and organizations to resolve one of the longest-running humanitarian and political crises in the world.

This comes especially at a time when the usurper Zionist regime has started a new round of desecrations of Palestine’s religious sites, Islamic sanctities and al-Quds as well as slaughter of the defenseless Palestinian people, which has, of course, been met with a crushing response from Palestine’s popular resistance and Intifada, with God’s grace.

The Islamic Republic of Iran’s Ministry of Foreign Affairs emphasizes addressing the issue of Palestine, as the foremost and principal issue of the Muslim world, and considers attempts by global Zionism to drive the issue into oblivion is doomed to failure.

As shown by history, any compromise with the sworn enemies of the Islamic Ummah encourages the apartheid Zionist government’s inhumane acts and violations of human rights. Muslim nations and leaders should know that the only way to realize the Palestinian people’s rights is maintaining Islamic unity and convergence and the world’s freedom-seeking governments and Muslim nations’ support for the resistance against occupiers and bullying powers.

The Islamic Republic of Iran believes that just and lasting peace will not be established in West Asia unless through the resolution of the fundamental issues in this crisis, including ending the organized occupation of Palestine, securing a return of refugees, deciding Palestine’s future through a referendum participated by all of its true owners, and finally, the formation of a unified Palestinian government, with Quds al-Sharif as its capital.

While expressing its full solidarity with the Palestinian people’s ideal cause and paying tribute to the martyrs and fighters on the path to freedom and the Muslims’ First Qibla, the Islamic Republic of Iran invites all governments and international bodies to shoulder their human and legal duties vis-à-vis the oppressed Palestinian people and prevent a continuation of occupation and crimes by the regime occupying al-Quds and the spread of this regime’s racist policies in occupied Palestine.”