Finding reasons behind the US support for war in Ukraine

Biden Administration could have avoided pushing Ukraine into war in the first place by not inviting Russian immediate neighbor to join NATO, but it chose the war. Many are of the view that it was not for any love for the people of Ukraine.

Is it because it is a country populated by white people? In 1994, President Clinton did nothing while genocide of Tutsi ethnic Rwandans was going on in Rwanda resulting in the deaths of some 500,000 to 662,000. Was that utter neglect because those were black people?

Or is it because there is a considerable number of Ukrainians living in the United States who would vote for Biden’s reelection in 2024?

Or is it because usually a war president gets reelected?

Or was it that Biden wanted to look “macho”, a president who cowed down Russia?

Or are Biden administration and the Pentagon pursuing the policy suggested by recent Rand Corporation thesis to break up Russia by weakening it by this brutal war?

Or are he and the democrats paying back the ‘defense’ contractors—for their donations to the Democrats during elections-- with billions of dollars in profit by this war?

The Rand Corporation’s April 2019 article on Russia recommends that we should overextend and weaken Russia by directly addressing its vulnerabilities, anxieties, and strengths, exploiting areas of its weakness while undermining Russia’s current advantages.

Further it states that “Russia’s greatest vulnerability, in any competition with the United States is its economy.” It seems the reason; United States has embarked upon provoking Russia to invade Ukraine.

United States is using double edged sword: 1) weakening Russia militarily by this proxy war and 2) weakening Russia economically by brutal sanctions ever imposed on a country.

The US administration government has doled out more than US$54 billion in arms and other categories. It is anticipated that more will come as the war drags on.

These billions in donation to Ukraine, a country that is 9,181 kilometers away from the United States and has no strategic value to the United States.

These billions are not coming from president or politicians; this is taxpayers’ money. The taxpayers must ask the government, why to donate such huge amounts to a country which has done nothing for America?

President Biden’s son, Hunter Biden supposedly made US$11 million from 2013 to 2018, being made member of Board of Directors of Ukraine gas company, Burisma, though he had no knowledge of gas production, refining or transportation.

Biden, Nancy Pelosi, Michell McConnel, Jill Biden and others went and paid visit to Zelensky and his wife. Why so much love and respect for Ukraine and its president?

The US provocation of Russia resulting in this brutal but avoidable war will go down in history as one the most irresponsible and reckless act committed by the United States, a foreign policy blunder that could trigger a nuclear war between Russia and the United States.

 

United States targets Chinese and UAE firms

According to a Reuters report, the United States on Monday imposed sanctions on Chinese and other firms it said helped to sell tens of millions of dollars' in Iranian oil and petrochemical products to East Asia as it seeks to raise pressure on Tehran to curb its nuclear program.

The US Treasury and the US State Departments have imposed sanctions on a total of six companies, four based in Hong Kong, one in Singapore, and one in the United Arab Emirates (UAE) in actions that were announced in separate statements.

The Treasury accused Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), one of Iran's largest petrochemical brokers, of using the firms to facilitate the sale of Iranian petroleum and petrochemical products to East Asia.

The Treasury targeted UAE-based Blue Cactus Heavy Equipment and Machinery Spare Parts Trading, which it said helped sell millions of dollars of Iranian-origin petroleum products to Hong Kong-based Triliance Petrochemical Company, which has previously been sanctioned by the United States.

It also targeted Hong Kong-based Farwell Canyon HK and Shekufei International Trading Company for facilitating such sales for onward shipment to buyers in East Asia.

The Treasury accused PGPICC of using the firms' bank accounts, along with those of Hong Kong and Malaysia-based PZNFR Trading, to collect millions of dollars in proceeds.

Separately, the State Department sanctioned Singapore-based Pioneer Ship Management for allegedly managing a vessel that carried Iranian petroleum products and Hong Kong-based Golden Warrior Shipping Company, for alleged transactions related to Iranian oil and petroleum products.

The actions freeze US-based assets and generally bar Americans from dealing with them. Others that engage in certain transactions with the targeted firms also risk being sanctioned.

The steps represent the third round of US-Iran related sanctions against Chinese firms in the last two months.

Since taking office in 2021, US President Joe Biden has been loath to sanction Chinese entities engaged in oil trade with Iran due to hopes of securing an agreement to revive the 2015 Iran nuclear deal.

Efforts to resurrect the deal - under which Iran had curbed its nuclear program in exchange for relief from US and other sanctions - have so far failed, leading Washington to look for other ways to increase pressure on Tehran.

"The United States continues to pursue the path of diplomacy to achieve a mutual return to full implementation of the Joint Comprehensive Plan of Action," the Treasury's Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, said in the statement, referring to the 2015 deal by its formal name.

"Until such time as Iran is ready to return to full implementation of its commitments, we will continue to enforce sanctions on the illicit sale of Iranian petroleum and petrochemicals."

Reacting to the new sanctions, Iran's Foreign Ministry spokesperson Nasser Kanaani said in a statement that Iran will respond decisively and firmly to the White House's continuation of sanctions.

Ship carrying 26,000 tons corn leaves Ukraine

According to The Joint Co-ordination Centre (JCC) of the Black Sea Grain Initiative, Razoni sailed from the port of Odesa today in the early hours, carrying 26,000 tons of corn destined for Lebanon.

Ukraine Minister for Infrastructure, Alexander Kubrakov, said 16 ships have been blockaded in Odesa since the start of the war and are awaiting their turn to sail.

 “In parallel, we will receive applications for the arrival of new vessels to load agricultural products,” said Kubrakov.

JCC was set up to co-ordinate the agreement between Russia, Ukraine and the UN to facilitate the safe export of Ukraine’s large grain stocks to the world market—the Black Sea Grain Initiative. JCC comprises representatives from Ukraine, Russia, Turkey and the UN.

The shipment aboard Razoni is expected to arrive in Turkish waters for inspection on August 02, 2022, before sailing to its final destination, Tripoli.

Under the terms of Black Sea Grain Initiative, co-ordinates have been established to create a Humanitarian Maritime Corridor. The details of the corridor have been distributed and the JCC requested participants to ensure their militaries are aware of the vessel’s passage and its right to safety.

“Today Ukraine, together with partners, takes another step to prevent world hunger,” said Ukraine Minister for Infrastructure Alexander Kubrakov.

“Unlocking ports will provide at least US$1 billion in foreign exchange revenue to the economy and an opportunity for the agricultural sector to plan for next year.”

Signed on July 22, 2022, the 120-day deal allows for the export of grain from western Ukraine ports Yuzhne, Chornomorsk, and Odesa, ports which accounted for 65% of Ukraine’s total grain exports over the past five years, according to Bimco.

While the ports historically account for almost two-thirds of grain exports, volume will undoubtedly be limited by various impacts of Russia's invasion of Ukraine.

 “With this deal, the UN hopes to increase monthly grain exports from Ukraine by five million tons. However, since over the past five years, these three ports have not ever handled such a high amount of grain, meeting this target could prove to be a challenge,” said Niels Rasmussen, Chief Shipping Analyst at Bimco.

“Even if port logistics accelerate to expedite exports, the need to escort ships in and out of the ports is likely to cause some congestion.” 

There are also questions over whether seafarers, operators, ship owners, and insurers will be willing and able to work in the region.

Ukraine is a significant producer of grains and oilseeds, with arable land accounting for around 55% of its land area according to the US Department for Agriculture (USDA) and agriculture accounting for 41% of Ukraine’s total exports by value in 2021.

Some 22 million tons of grain are stranded in Ukraine ready for export, and a further export surplus of 25 million tons is expected from the 2022 harvest. There is an urgent need to move grain; with the wheat harvest underway and corn harvest to follow in September, stored grain needs to be exported swiftly to make room for the new crop.

“A significant obstacle to Ukrainian grain exports will be the voyage risk and corresponding insurance premiums. For the shipping of Ukrainian grain to be attractive, high rates will be necessary to mitigate risk-related expenses,” said Rasmussen. “Russia’s recent missile strikes in ports such as Odesa will add to the insecurity and uncertainty of operating in the Black Sea.” 

The impact of the war in Ukraine has hit production for key agricultural exports. Usually the world’s largest producer and exporter of sunflower meal and oil, Ukraine’s sunflower meal exports are forecast to fall from almost 66% of global exports to 40%, and sunflower oil exports are forecast down from almost half of global exports to 35%.

 “Due to limited global supply of wheat and maize, a return of Ukrainian grain to the global market would positively impact the Panamax, Supramax and Handysize segments. Additionally, the boost in Ukrainian exports would help combat inflation and food insecurity, particularly in emerging economies, and help bring needed stability to the global economy,” said Bimco.

 

Pakistan: Strategy for Navigating FY23

Through a joint statement issued by Ministry of Finance and State Bank of Pakistan, all the stakeholders and public in general has been assured that the present trauma will ease. While one may not agree with some of the points, this is an official strategy and only wait and see stance could be adopted.

Pakistan’s problems are temporary and are being forcefully addressed

Pakistan’s foreign exchange reserves have fallen since February as foreign exchange inflows have been outpaced by outflows. The inflows mainly comprise of multilateral loans from the IMF, World Bank and ADB; bilateral assistance in the form of deposits and loans from friendly countries like China, Saudi Arabia, and the UAE; and commercial borrowing from foreign banks and through the issuance of Eurobonds and Sukuks. The paucity of inflows has happened in large part due to the delay in completing the next review of the IMF program, which has lingered since February due to policy slippages. Meanwhile, on the outflows side, debt servicing on foreign borrowing has continued as repayments on these debts have been coming due over this period.

At the same time, the exchange rate has come under significant pressure, especially since mid-June. It has been driven by general US dollar tightening, a rise in the current account deficit (exacerbated by a heavy energy import bill in June), the decline in foreign exchange reserves, and worsening sentiment due to uncertainty about the IMF program and domestic politics.

However, important developments have happened recently that will address both of these temporary issues. On July 13, the critical milestone of a staff-level agreement on completing the next IMF review was reached. As of today, all prior actions for completing the review have been met and the formal Board meeting to disburse the next tranche of US$1.2 billion is expected in a couple of weeks. At the same time, macroeconomic policies—both fiscal policy and monetary policy—have been appropriately tightened to reduce demand-led pressures and rein in the current account deficit. Finally, the government has clearly announced that it intends to serve out the rest of its term until October 2023 and is ready to implement all the conditions agreed with the Fund over the remaining 12 months of the IMF program.

In FY23, Pakistan’s gross financing needs will be more than fully met under the ongoing IMF program

The financing needs stem from a current account deficit of around US$10 billion and principal repayments on external debt of around US$24 billion.

In order to bolster Pakistan’s foreign exchange reserves position, it is important for Pakistan to be slightly over-financed relative to these needs.

As a result, an extra cushion of US$4 billion is planned over the next 12 months. This funding commitment is being arranged through a number of different channels, including from friendly countries that helped Pakistan in a similar way at the beginning of the IMF program in June 2019.

Important measures have been taken to contain the current account deficit

In addition to high global commodity prices, the large current account deficit in FY22 was driven by rapid domestic demand (growth reached almost 6 percent for two consecutive years leading to overheating of the economy), artificially low domestic energy prices due to the February subsidy package, an unbudgeted and procyclical fiscal expansion, and heavy energy imports in June to minimize load-shedding and build inventories.

To contain this deficit going forward, the policy rate was raised by 800 basis points, the energy subsidy package has been reversed, and the FY23 budget targets a consolidation of nearly 2.5 percent of GDP, centered on tax increases while protecting the most vulnerable. This will help cool domestic demand, including for fuel and electricity.

In addition, temporary administrative measures have been taken to contain the import bill, including requiring prior approval before importing automobiles, mobile phones and machinery. These measures will be eased as the current account deficit shrinks in the coming months.

These measures are working, the import bill fell significantly in July, as energy imports have declined and non-energy imports continue to moderate

Foreign exchange payments in July were significantly lower than in June. This is true for both oil and non-oil payments. Altogether, payments were a sustainable US$6.1 billion in July compared to US$7.9 billion in June.

The latest trade data indicate that non-oil imports continue to fall. Specifically, non-oil imports fell by 5.7%QoQ during Q4 FY22. They are expected to reduce further going forward.

Looking ahead, a considerable slowdown has been witnessed in LC opening in recent weeks, again for both oil as well as non-oil commodities. Based on market reports, there was an 11%MoM decline in Oil Marketing Companies sales volume in June.

After the surge in energy imports in June, a stock of diesel and furnace oil sufficient for 5 and 8 weeks, respectively, is now available in the country, much higher than the normal range of 2 to 4 weeks in the past. This implies a lower need for petroleum imports going forward.

With the recent rains and storage of water in the dams, hydroelectricity is also likely to increase and need to generate electricity on imported fuel is expected to decline going forward.

As a result of these trends, the import bill is likely to shrink going forward and should begin to manifest itself more forcefully in lower FX payments over the next 1-2 months.

Overall, imports are expected to decline in coming months due to a decline in global commodity prices, the higher oil stock, the unfolding impact of higher domestic prices of petroleum products, adjustments in electricity and gas tariffs, the removal of tax exemptions under the FY23 budget, administrative measures taken to curtail imports, and the lagged impact of the monetary and fiscal tightening that has been undertaken.

The Rupee has overshot temporarily but it is expected to appreciate in line with fundamentals over the next few months

Around half of the Rupee depreciation since December 2021 can be attributed to the global surge in the US dollar, following historic tightening by the Federal Reserve and heightened risk aversion.

Of the remaining half, some is driven by domestic fundamentals, in particular, the widening of the current account deficit, especially in the last few months. As noted above, the deficit is expected to narrow going forward as the temporary surge in the import bill is brought under control. As this happens, the Rupee is expected to gradually strengthen.

The remaining depreciation has been overdone and driven by sentiment. The Rupee has overshot due to concerns about domestic politics and the IMF program. This uncertainty is being resolved, such that the sentiment-driven part of the Rupee depreciation will also unwind over the coming period.

Where the market has become disorderly, the State Bank has continued to step in through sales of US dollars to calm the markets and will continue to do so, as needed in the future. Strong steps to counter any speculation have also been taken, including close monitoring and inspections of banks and exchange companies. Further additional measures will be taken as situation warrants.

Rumors that a particular level of the exchange rate has been agreed with the IMF are completely unfounded. The exchange rate is flexible and market-determined, and will remain so, but any disorderly movements are being countered.

Going forward, as the current account deficit is curtailed and sentiment improves, we fully expect the Rupee to appreciate. Indeed, this was the experience during the beginning of the IMF program in 2019, when the Rupee strengthened considerably after a period of weakness in the lead-up to the program.

Clearly, the Rupee can overshoot temporarily as it has done recently. However, it moves both ways over time. We expect this pattern to re-assert itself in the coming period. As a result, the Rupee should strengthen in line with improved fundamentals in the form of a smaller current account deficit as well as stronger sentiment.

Beirut silo collapses ahead of blast anniversary

Part of the grain silos at Beirut Port collapsed on Sunday just days before the second anniversary of the massive explosion that damaged them, sending a cloud of dust over the capital and reviving traumatic memories of the blast that killed more than 215 people. There were no immediate reports of injuries.

Lebanese officials warned last week that part of the silos - a towering reminder of the catastrophic August 04, 2020 explosion - could collapse after the northern portion began tilting at an accelerated rate.

"It was the same feeling as when the blast happened, we remembered the explosion," said Tarek Hussein, a resident of nearby Karantina area, who was out buying groceries with his son when the collapse happened. "A few big pieces fell and my son got scared when he saw it," he said.

A fire had been smoldering in the silos for several weeks which officials said was the result of summer heat igniting fermenting grains that have been left rotting inside since the explosion.

The 2020 blast was caused by ammonium nitrate unsafely stored at the port since 2013. It is widely seen by Lebanese as a symbol of corruption and bad governance by a ruling elite that has also steered the country into a devastating financial collapse.

One of the most powerful non-nuclear blasts on record, the explosion wounded some 6,000 people and shattered swathes of Beirut, leaving tens of thousands of people homeless.

Ali Hamie, the minister of transport and public works in the caretaker government, told Reuters he feared more parts of the silos could collapse imminently.

Environment Minister Nasser Yassin said that while the authorities did not know if other parts of the silos would fall, the southern part was more stable.

The fire at the silos, glowing orange at night inside a port that still resembles a disaster zone, had put many Beirut residents on edge for weeks.

The government took a decision in April to destroy silos, angering victims' families who wanted them left to preserve the memory of the blast. Parliament last week failed to adopt a law that would have protected them from demolition.

Citizens' hopes that there will be accountability for the 2020 blast have dimmed as the investigating judge has faced high-level political resistance, including legal complaints lodged by senior officials he has sought to interrogate.

Prime Minister-designate Najib Mikati has said he rejects any interference in the probe and wants it to run its course.

However, reflecting mistrust of authorities, many people have said they believed the fire was started intentionally or deliberately not been contained.

Divina Abojaoude, an engineer and member of a committee representing the families of victims, residents and experts, said the silos did not have to fall.

"They were tilting gradually and needed support, and our whole goal was to get them supported," she told Reuters.

"The fire was natural and sped things up. If the government wanted to, they could have contained the fire and reduced it, but we have suspicions they wanted the silos to collapse."

Earlier this month, the economy minister cited difficulties in extinguishing the fire, including the risk of the silos being knocked over or the blaze spreading as a result of air pressure generated by army helicopters.

Fadi Hussein, a Karantina resident, said he believed the collapse was intentional to remove "any trace of August 04, 2020".

"We are not worried for ourselves, but for our children, from the pollution," resulting from the silos' collapse, he said, noting that power cuts in the country meant he was unable to even turn on a fan at home to reduce the impact of the dust.

Nancy Pelosi sets off on Asia tour

According to South China Morning Post, US House Speaker Nancy Pelosi has begun her anticipated trip to Asia, with her office naming four destinations but making no mention of Taiwan. 

This comes amid more stormy warnings from Beijing amid heightened tensions over her planned visit to the island.

Pelosi, No 3 in the line of US presidential succession, is leading a six-member congressional delegation to Singapore, Malaysia, South Korea and Japan, according to a statement released by her office on Sunday.

The statement skipped any mention of Taiwan, after days of intense speculation about a likely stop there fuelled tensions, with Beijing calling it a provocation and warning Washington against playing with fire.

“In Singapore, Malaysia, South Korea and Japan, our delegation will hold high-level meetings to discuss how we can further advance our shared interests and values, including peace and security, economic growth and trade, the Covid-19 pandemic, the climate crisis, human rights and democratic governance,” the statement quoted Pelosi as saying.

“America is firmly committed to smart, strategic engagement in the region, understanding that a free and flourishing Indo-Pacific is crucial to prosperity in our nation and around the globe,” the 82-year-old Democratic lawmaker said.

Beijing regards Taiwan to be a breakaway province, to be reunited by force if necessary, and warns against any official exchange with the self-governed island.

It earlier said Pelosi’s planned trip to Taiwan was a move to support Taiwan independence, in violation of one-China policy, followed by the United States.

On Thursday, Biden and China’s Xi Jinping spoke on the phone for over two hours. During the call, Biden tried to reassure Xi that US policy towards Taiwan has not changed.

“On Taiwan, President Biden emphasized that US policy has not changed and that the US strongly opposes unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait,” an official readout on the White House website said.

After the leaders’ phone call, China’s Foreign Ministry quoted Xi as telling Biden that those who play with fire will perish by it and that they hoped the United States will be clear-eyed about this.

However, Pelosi indicated on Friday that she will be on a trip to Asia, but did not mention Taiwan. “I am very excited if we were to go to the countries that you will hear about along the way,” she said, Reuters reported.

White House spokesman John Kirby said, “Where she (Pelosi) is going to go and what she is going to do is up to the speaker to speak to.”

However, he added that the United States has not observed any signs of a specific military threat from China. “(We have) seen no physical, tangible indications of anything untoward with regard to Taiwan,” Kirby said.

  

United States remains adamant at not releasing frozen Afghan assets

Please allow me to begin my today’s blog with the Iranian indictment, “United States is the biggest terrorist in this world”. The United States is often accused of killing of hundreds and thousands of people every year in proxy wars or through direct assaults. 

It played ‘the game of death’ in Afghanistan for four decades. After facing the defeat in August last year, it may have pulled its troops from Afghanistan but it is still making lives of Afghans miserable on one or the other pretext.

It is a fact that the United States has neither recognized the Taliban government nor allows other countries to recognize their government is Afghanistan. On top of all it has frozen Afghan foreign exchange reserves. The acts of United States tantamount to worst kind of aggression against Afghans, as the country find it almost impossible to import even basic necessities due to non-availability of foreign exchange.

To maintain the US hegemony in Afghanistan, Secretary of State Antony Blinken has launched the US-Afghan Consultative Mechanism (USACM), which would enable Afghan citizens to communicate directly with American policymakers.

Addressing the launching ceremony, the top US diplomat said that besides Pakistan, the Organization of Islamic Cooperation, Qatar and Turkey, and others were also backing US efforts to convince the Taliban to reverse their decision to keep Afghan girls out of school.

The new platform — USACM — is aimed at bringing together Afghan women, journalists, and at-risk ethnic and religious communities with the representatives of the US State Department. It will facilitate regular engagement with the US government on issues ranging from human rights documentation to women in Islam.

With USACM’s launch, “We are taking these relationships to the next level. That’s why I’m so pleased about today,” Secretary Blinken said. He identified the group’s priorities as supporting income-generating activities for Afghan women; strategizing ways to help Afghan human rights monitors safely document abuses, and devising new methods to promote religious freedom.

The United States has discussed with Taliban officials the possible release of Afghan central bank’s assets frozen after the fall of Kabul in August last year. The two sides discussed ongoing efforts to enable the US$3.5 billion Afghan central bank reserves to be used for the benefit of the Afghan people.

However, in nearly one year, the US administration has failed in addressing the urgent humanitarian situation in Afghanistan.

To further complicate the situation a meeting, involving Special Representative for Afghanistan Thomas West and Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson, took place on Wednesday in Tashkent. The meetings took place after the conclusion of the Tashkent Conference on Afghanistan that Uzbekistan hosted on July 26.

Media reports on the meeting claimed that the talks had made some progress and the US and Taliban officials had exchanged proposals for unfreezing the assets. But some differences remained unresolved.

One of the key differences was over the Taliban’s refusal to replace the bank’s top political appointees, “one of whom is under US sanctions as are several of the movement’s leaders,” one of the reports added.