Qatar to host Iran United States talks on reviving 2015 nuclear deal

According to a Reuters report, Qatar will host indirect talks between Iran and the United States in coming days. Iranian media also reported on Monday that amid a push by the European Union to break a months-long impasse in negotiations to reinstate a 2015 nuclear pact.

"Iran has chosen Qatar to host the talks because of Doha's friendly ties with Tehran," Mohammad Marandi, a media adviser to Iran's top nuclear negotiator, told the ISNA news agency.

A source briefed on the visit said that US Special Envoy for Iran, Robert Malley, was expected to arrive in Doha on Monday and meet with the Qatari foreign minister. An Iranian official told Reuters that Iran's chief nuclear negotiator, Ali Bagheri Kani, would be in Doha for the talks on Tuesday and Wednesday.

Iran's foreign ministry was not immediately available for comment and the Qatari government didn’t comment. Later, however, Iran's Tasnim news agency cited a source at Iran's foreign ministry as saying that "Bagheri will travel to Doha on Tuesday".

The pact appeared close to being secured in March when the European Union invited foreign ministers representing the accord's parties to Vienna to finalize an agreement after 11 months of indirect talks between Tehran and President Joe Biden's administration.

But the talks have since been suspended, chiefly over Tehran's insistence that Washington remove the Islamic Revolutionary Guard Corps (IRGC), its elite security force, from the US Foreign Terrorist Organization (FTO) list.

Last week, one Iranian and one European official told Reuters that Iran had dropped its demand for the removal of the IRGC's FTO sanctions, but still two issues, including one on sanctions, remained to be resolved.

"Nothing is agreed until everything is agreed," Iran's Foreign Ministry spokesman, Saeed Khatibzadeh, said on Monday.

The 2015 nuclear pact imposed restrictions on Iran's nuclear activities in exchange for the lifting of international sanctions. Then-President Donald Trump pulled the United States out of the deal in 2018, reimposing tough economic sanctions on Tehran.

Iran's clerical establishment responded by breaching the pact's nuclear restrictions, including a 3.67% cap on the level to which it could purify uranium and a 202.8-kg limit on its enriched uranium stock.

Joe Biden to ask G7 nations to ban import of Russian gold

US President, Joe Biden said Sunday that the Group of Seven (G7) nations will ban Russian gold imports to further impose financial costs on Moscow for its invasion of Ukraine.  

“The United States has imposed unprecedented costs on Putin to deny him the revenue he needs to fund his war against Ukraine,” Biden tweeted on Sunday. “Together, the G7 will announce that we will ban the import of Russian gold, a major export that rakes in tens of billions of dollars for Russia.” 

Biden’s announcement came on the first day of a G7 meeting in Germany; a formal announcement is expected later on during the summit.  

While it does not bring in as much money as energy, gold is a major source of revenue for the Russian economy. Restricting exports to G7 economies will cause more financial strain to Russia as it wages the war in Ukraine.  

The G7 includes the United States, France, Canada, Germany, Japan, the United Kingdom and Italy.  

The US and its allies have been searching for more ways to punish Russia for the bloody war that recently entered its fifth month. Biden has announced waves of penalties coordinated with allies that range from sanctions on Russian officials and oligarchs to export controls to sanctions on major Russian banks.  

Still, Europeans are limited in what they can do because of their dependence on Russian energy imports. European countries have vowed to phase out Russian oil but have not taken steps like the US to do so immediately.  

Biden administration officials teased new announcements to squeeze Russia ahead of Biden’s trip to Europe and it is possible there will be more announcements beyond the plan to ban Russian gold imports.  

Biden embarked on the trip to Europe for the G7 meeting and, later, a North Atlantic Treaty Organization (NATO) summit with the goal of demonstrating unity with allies on keeping up pressure on Russia even as the war roils the global economy. 

Biden spent Sunday morning meeting with German Chancellor Olaf Scholz and later participated in a working lunch with other leaders.  

A White House readout of Biden’s meeting with Scholz indicated Ukraine was a main topic of conversation.  

“The leaders underlined their commitment to Ukraine’s sovereignty and territorial integrity, as well as their continued provision of military, economic, humanitarian, and diplomatic support to help Ukraine defend its democracy against Russian aggression,” the White House readout said. “The leaders also discussed efforts to alleviate the impacts of Russia’s war in Ukraine on global food and energy security.” 

Biden also thanked Scholz for committing to boosting Germany’s defense spending above NATO’s 2% of gross domestic product target.  

A White House official characterized the meeting as “very warm and friendly” and said there was “very broad alignment on all of the issues that they discussed and all the common challenges that our countries are working on together.”

 

Russia-Azerbaijan-Iran-Pakistan railway route

Chairman of the Russia-Iran Joint Trade Council has said Moscow is pursuing the development of trade and transit through the Russia-Azerbaijan-Iran-Pakistan railway route, the portal of the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) reported.

Speaking in a meeting with ICCIMA Head Gholam-Hossein Shafeie on Saturday, Vladimir Abedinov proposed to form a working group between the representatives of the chambers of commerce of Russia, Azerbaijan, Iran, and Pakistan to explore various aspects of the trade through the mentioned route.

Expressing Russia’s willingness to strengthen trade relations with Iran, the official pointed to the western sanctions against Russia and said, "These sanctions have changed the transit and logistics routes in the region. Since the impact of sanctions has caused Russia's trade relations to undergo significant changes. In this regard, we are looking for new transportation routes in the region.”

“Completion of the Rasht-Astara route is of great importance for Russia's trade purposes. This route paves the way for Russia to access Pakistan,” Abedinov said.

He further noted that Russia can also access Pakistan and India by sending its cargoes to Iran’s northern ports by vessel and then transit them through Iran to Pakistan and India.

"This is a complex route; therefore, Russia seeks to replace it with the railway through Azerbaijan to Iran, Pakistan, and India,” he added.

Shafeie for his part pointed to the current conditions as special for the whole region and considered it necessary to make special decisions in accordance with these conditions.

According to the ICCIMA head, considering the current situation, the Iranian government has made the issue of transit a priority in its goals and plans, although there are infrastructural problems in the port area on both the Iranian and Russian sides.

He further mentioned some of the problems regarding rail transportation to Pakistan, saying, “The railway problems in Pakistan are not easily solved despite Iran's efforts. For example, a shipment was sent by rail from Iran to Lahore, Pakistan, which took 35 days to arrive to the destination.”

 

Pakistan being pushed to imminent default

Having followed the rhetoric of the economic team headed by Prime Minister Shehbaz Sharif and spending hours in listening to trade and industry and economic analysts, I am forced to arrive at the conclusion that all the steps being taken are hastening Pakistan’s default process.  

If anyone is still living under some kind of illusion, he/she must understand that the foreign exchange reserves held by Pakistan have almost exhausted, whatever, numbers are being quoted are ‘borrowed’ not ‘owned’ by Pakistan.

Therefore, the top of the agenda item should be getting the US$ one billion IMF trance released. Once this amount is released only then other friendly countries and multilateral financial institutions will start disbursing the count.

Along with this, the ‘disaster recovery plan’ has to be supported by taking measures for luring remittances, boosting exports and containing import.

I believe the worst deficit being faced by the incumbent government is ‘confidence deficit’. Without mincing words, it may be said that most of the decisions taken since coming into power are not aimed at strengthening the economy but creating ‘financial chaos’.

For boosting exports, Pakistan’s competitive advantage has to be restored. Hike in interest rate, electricity and gas tariffs and POL prices will only erode competitiveness of the local manufacturers. If they can’t compete in the global markets, the objective of boosting exports just can’t be achieved.

It has become a must that economic team must learn to remain silent and avoid giving funny statements i.e. taking lesser tea. They just can’t deny the fact that no reduction has been made in the salary and perks of elected representatives, bureaucracy and judiciary. On the contrary there are proposals to increase their salaries and perks.

There is a lot of talk about ‘circular debt’ but no admission that the root cause of this menace is ‘blatant theft’ going on with the connivance of high officials of the utility companies.

Prime Minister was prompt in imposing 10% super tax on companies, but there was no is mention about taxing income from agriculture.

Always a refuge is taken behind ‘taxing income from agriculture being a provincial subject’. If taxing all income is the responsibility of the federal government why taxing income from agriculture is a provincial subject?

If the provincial governments keeps on failing in collecting tax on income from agriculture, these should be ‘stripped off’ this right.

Last but not the least; indiscriminate load shedding in the name of saving fossil oil/gas is the most illogical approach.

Therefore, there is an urgent need to produce exportable surplus by boost working of industrial units, attaining synergy and optimizing cost of production.

 

Pakistan Stock Exchange posts 2.6%WoW decline

During the week ended on June 24, 2022, news flow was dominated by the accord between the Government of Pakistan (GoP) and the International Monetary Fund (IMF). 

On Friday, the Prime Minister announced that a 10% super tax will be imposed on large sectors in FY23, causing the Pakistan Stock Exchange benchmark index to lose 1,665 points in one day, closing the market at 41,052 points or 2.6%WoW decline.

Earlier on Tuesday, it was announced that an agreement had been reached, in which the GoP revised the FBR collection target for FY23 to PKR7.4 trillion from PKR7.0 trillion.

Average volume for the Index surged to 300.5 million shares, up 72.6%WoW mainly due to Friday’s grand sell-off.

Other major news flows during the week were: 1) loan agreement signed with consortium of Chinese banks for US$2.3 billion, 2) FDI shrank 29%YoY in May, 3) cost of power generation surges by 131% YoY due to high fuel costs, 4) May banking spread plunges 42bpsMoM, 5) GoP mulled pledging five federal assets to issue Sukuk, and 6) ECC approved PKR149 billion in payments to IPPs and KE.

The top performing sectors were: Vanaspati & Allied industries, Power, Tobacco, Insurance, and Refinery, while the least favorite sectors were: Automobiles, Textile, Cement, Close-end mutual fund, and Banking.

Stock-wise, top performers were: POML, EFUG, KEL, SML, and PAKT, while laggards were: CHCC, KTML, GATM, MLCF, and JVDC.

Flow-wise, Insurance companies remained as the net sellers, offloading US$8.4 million followed by Foreigners (US$2.4 million), Mutual funds (US$1.1 million), NBFCs (US$0.7 million), and Companies (US$0.1 million), while Individuals (US$7.0 million), Banks (US$2.1 million), Brokers (US$0.2 million), and Other organizations (US$3.4 million) were on the buying side.

The super tax imposed on large sectors has come as a major shock to all players in the market. With profitability of these sectors decreasing by 10%, the market sentiment is surely negative as players look to liquidate their positions. Add inflationary pressure and rising interest rates to the mix, and this creates a strong bearish environment for the market. With that being said, the agreement with IMF is crucial for the country, with further financing now expected to be available from World Bank, China, and Saudi Arabia which will alleviate the downward pressure on the currency along with supporting the depleted foreign exchange reserves, hence having the potential to trigger a bull-run in the short term.

Israel occupying Palestinian lands for more than half a century

Fifty-five years after Israel began occupying Palestinian lands; it is more difficult than ever to imagine a way out. The seeds of the two-state solution that were planted by visionary leaders on both sides have failed to take root. 

All that remains is a fatalistic acceptance of the conflict’s insolubility. For both the occupied and the occupier, the future is bleak

Over the last 55 years Israel has been occupying Palestinian lands, there have been two intifadas, four wars in Gaza, and a long series of failed efforts to negotiate a two-state solution roughly adhering to Israel’s pre-1967 borders. The situation may truly be as hopeless as it seems.

Intransigence on both sides—which no US president has managed to overcome, though virtually every one since the Six-Day War has tried—has gotten us to this point. While the Palestinians have sometimes embraced international diplomacy, they have also engaged in periods of obdurate resistance. It was the Palestinians who thwarted two promising peace initiatives, led by the forward-looking Israeli governments of Ehud Barak and Ehud Olmert.

Given sentiment in Israel today, they might not get another chance. With each failed peace process, the promise of peace has lost its potency as a mobilizing cause in Israel. Meanwhile, Israel has gradually tightened its control over the occupied territories, with virtually no international pushback. Even the Arab states—six of which have normalized ties with Israel—seem to have grown indifferent to the agony of the Palestinians.

All of this has driven Israeli voters radically to the right, leaving Israel’s peace camp demoralized and weak. The religious-nationalist bloc that former Prime Minister Benjamin Netanyahu leads now represents the majority of Israelis. And as far-right as Netanyahu may be, he is practically a leftist compared to the tens of thousands of radical Jewish nationalists who marched through Jerusalem’s Muslim Quarter on Jerusalem Day last month waving Israeli flags, repeating violent and Islamophobic chants like ‘death to Arabs’, and attacking Palestinians.

When Algerians rebelled against their French occupiers in one of the most brutal anti-colonial wars of the post-1945 era, the philosopher Jean-Paul Sartre wrote, ‘It is not their violence, but ours, which turns back on itself.’ In fact, the French found the violence being enacted in their name so abhorrent that 75% of them voted to grant Algeria independence in the 1961 referendum.

A similar sentiment is difficult to discern in Israel. On the contrary, popular support for the military’s fight against ‘Palestinian terrorism’ is overwhelming.

To be sure, Israel has known its share of mass demonstrations in support of a peace deal, with protest movements like Women in Black still going strong. Israeli non-government organizations such as B’Tselem, Peace Now and Breaking the Silence work hard to alert Israeli society of the sins of occupation. Joint Israeli–Palestinian organizations, like those bringing together family members of those lost to the ongoing conflict, do similarly admirable work.

But none of these efforts has had a transformative impact on the peace process. This stands in stark contrast to the experience in Northern Ireland during the Troubles, when checkpoints, home searches, abusive language, blackmail, beatings and arbitrary arrests were once standard practice, just as they are today in the occupied Palestinian territories.

In Northern Ireland, pressure from civil-society groups and NGOs eventually drove the security forces to curb abusive practices, improve their recruitment processes and introduce training for dealing with intercommunity tensions. The path to peace in Northern Ireland was paved largely by a mobilized civil society.

In Israel, however, only the Supreme Court stands between the military and worse behavior. The reason seems to lie in the nature of the conflict. Algeria’s war of independence was an anti-colonial struggle taking place far away from France’s shores. And the Troubles came down to an intercommunity cleavage, which could be resolved through disarmament and power sharing.

The Israeli–Palestinian conflict, by contrast, is existential. The question of where to draw borders is not merely practical; it has deep religious and cultural significance. For the Palestinians, Israel is the occupying power, impinging on their right to self-determination, but it is also their homeland. And for the now-dominant Israeli right, the occupied territories are the cradle of Jewish Biblical civilisation.

By fighting for the same lands, the two sides are effectively calling for the unconditional exclusion, even destruction, of the other. That goes a long way towards explaining their eagerness to alter the demographic balance—Israel through Jewish immigration and the expansion of settlements, and the Palestinians by demanding the ‘right of return’ for all refugees. Yasser Arafat, the late founder of the Palestine Liberation Organization, once called the womb of the Palestinian woman his ‘strongest weapon’ against Israel, as it would give the Palestinians a demographic advantage in the occupied territories.

Even if Israel did accede to the creation of a Palestinian state, it might continue to face threats to its survival. After all, Palestine wouldn’t be located far from its borders, like Algeria was from France.

What if a radical Islamist group rose to power in Palestine and challenged the peace agreement? What if state-building faltered or failed, generating rising instability on Israel’s doorstep? Or what if Palestine became a frontline outpost of a hostile foreign power? Already, Hamas and Hezbollah—with robust assistance from Iran—have turned Gaza and southern Lebanon, respectively, into launching pads for missiles targeting Israeli territory.

 

Pakistan one of the best customers of IMF

According to a report by The Express Tribune dated April 29, 2019, Pakistan has borrowed around SDR 13.79 billion from the International Monetary Fund (IMF), out of which 47% of the loans were secured by PPP, followed by PML-N at 35%, while the military dictatorships lag behind with a mere 18%.

Pakistan joined (IMF) in 1950 as newly established country was facing fiscal problems since its creation in 1947 from British rule. In 1958, for the first time, Pakistan went to IMF for bailout. For this, IMF lent out US$25,000,000 ‑ originally the loan-amount is given in SDR; for this article it is considered to be 1SDR = 1USD to Pakistan on standby arrangement basis on December 08, 1958.

Pakistan again went to IMF in 1965. This time, IMF gave US$37,500,000 to war-torn nation on 16 March 16, 1965.

Three years later, Pakistan again went to IMF for third time for balance of payment problems for which IMF gave US$75,000,000 on October 17, 1968.

In 1971, Pakistan lost its Eastern half, East Pakistan, after the Bangladesh Liberation War. This war caused huge loses to Pakistan. For which, Pakistan got loan a loan of US$84,000,000 in 1972, second loan of US$75,000,000 in 1973 and fourth of US$75,000,000 in 1974 to meet its growing needs. 

In 1977, a standby arrangement of US$80,000,000 was made on urgent basis. 

Three years later, an extended facility of US$349,000,000 was reached in 1980.

Struggle of Pakistan continued, as Pakistan withdrew another US$730,000,000 as Pakistan was already part of US cold war against Soviet Union.

Another era was started, as democracy came back to Pakistan but old ways to handle economy poorly continued. 

Benazir Bhutto government withdrew US$194,480,000 as standby arrangement and another US$382,410,000 in shape of structural adjustment facility commitment on December 28, 1988.

In 1990, government of Nawaz Sharif decided against going to IMF instead arranged donations from friendly countries like Saudi Arabia.

In 1993, Benazir Bhutto again came to power and her government again went to IMF and reached an agreement to get standby arrangement of US$88,000,000 on September 16, 1993.

Poor handling of economy continued by her government as she got loan of US$123,200,000 under the extended fund facility and another US$172,200,000 were borrowed on February 22, 1994.

During that period economy of Pakistan remained in poor shape and Pakistan had to go to IMF again for record third in the period of Bhutto government.

This time Pakistan got an amount of US$294,690,000 on 13 December 1995.

 In 1997, Nawaz Sharif came to power. Benazir Bhutto government was sacked and left economy of Pakistan in worst shape.

Sharif government went to IMF on urgent basis for the first time and reached an agreement to get two amounts of US$265,370,000 and US$113,740,000 on October 20, 1997.

In 2008, Yousaf Raza Gillani received a US$7.6 billion loan from the IMF.

In 2018, Imran Khan became Prime Minister of Pakistan. For this, they arranged friendly loans from Saudi Arabia, United Arab Emirates and China to avoid tough IMF conditions. 

In 2019, when economic conditions worsened, they went to IMF for the twenty-second time for a loan of US$1 billion. 

IMF gave loan based on conditions such as hike in energy tariffs, removal of energy subsidy, increase in taxation, privatization of public entities and fiscal adjustments to the budget.