Palestinians condemn comments by head of European Commission

Palestinians have described remarks about Israel by the head of the European Commission as inappropriate, false and discriminatory.

It follows a congratulatory video message by Ursula von der Leyen on Israel's Independence Day. In it she praised Israel, among others, for having made the desert bloom.

It has sparked an unusual diplomatic spat between the Palestinian Authority (PA) and the European Union (EU), its main donor.

A spokesperson for the commission told the BBC, "The EU is unpleasantly surprised by the inappropriate statement of the Palestinian foreign ministry accusing the president of the European Commission of racism."

The PA singled out Ms von der Leyen's suggestion that Israel had cultivated barren land, calling it an anti-Palestinian racist trope.

The phrase making the desert bloom is commonly used by Israel and its backers to describe what they view as the country's success in developing the land since the founding of Israel in 1948.

However, Palestinians argue that it erases their history and suggests that the land was previously uninhabited or untended.

The PA is calling for an apology from the European Commission president.

"Seventy-five years ago, a dream was realized with Israel's Independence Day," Ms von der Leyen said in her message. "After the greatest tragedy in human history, the Jewish people could finally build a home in the promised land."

"Today, we celebrate 75 years of vibrant democracy in the heart of the Middle East, 75 years of dynamism, ingenuity and groundbreaking innovations. You have literally made the desert bloom, as I could see during my visit to the Negev last year."

The PA statement describes the message, addressed to Israel's President Isaac Herzog, as propagandist discourse and part of an ongoing dispossession of Palestinians.

The PA claims it "dehumanizes and erases the Palestinian people and falsifies their rich history and civilization".

In addition, it says that the European statement whitewashes Israel's occupation of lands Palestinians claim for their hoped-for future state and denies what they call the Nakba (Arabic for catastrophe) of 1948.

Some 700,000 Palestinians fled or were forced to leave their homes in the war that followed the Israel's creation.

Palestinians mark Nakba Day on May 15 according to the Gregorian calendar, while the timing of Israel's Independence Day follows the Hebrew calendar.

Some Palestinians on social media have also criticized or mocked the European leader for her comments about shared values with Israel.

The European Commission is part of the executive of the European Union.

The spokesman for the commission stressed the EU's diplomatic ties with the PA, pointing out that Ms von der Leyen met PA Prime Minister Mohammed Shtayyeh when she visited the region in June 2022.

They said a meeting to co-ordinate the delivery of international aid to the Palestinians was due to take place in Brussels next week.

"The EU is actively looking for solutions for the difficult situation of the Palestinian people," they added.

Iran seizes oil tanker in Gulf of Oman

Iran seized a Marshall Islands-flagged oil tanker in the Gulf of Oman in international waters on Thursday, the US Navy said, the latest in a series of seizures or attacks on commercial vessels in sensitive Gulf waters since 2019.

Iran's army said it had seized a Marshall Islands-flagged oil tanker in the Gulf of Oman after it collided with an Iranian boat, injuring several crewmen, Iranian state media reported.

"Two members of the boat's crew are missing and several were injured due to the collision of the ship with the boat," an army statement said.

The US Navy identified the vessel as the Advantage Sweet. According to Refinitiv ship tracking data, it is a Suezmax crude tanker that had been chartered by oil major Chevron and had last docked in Kuwait.

Chevron said it is aware of the situation involving the Advantage Sweet and is in contact with the vessel operator with the hope of resolving this situation as soon as possible, a spokesperson said.

The vessel's destination was listed as the US Gulf of Mexico port of Houston, ship tracking data showed.

The Marshall Islands Maritime Administrator said it was aware of the situation and was in communication with the vessel's owner/operator.

"Iran's continued harassment of vessels and interference with navigational rights in regional waters are a threat to maritime security and the global economy," the US Navy said, adding Iran has in the past two years unlawfully seized at least five commercial vessels in the Middle East.

The US Navy added that after sending a P-8 Poseidon maritime patrol aircraft to monitor the situation, "we have since been able to determine the IRIN (Iranian navy) conducted the seizure".

About a fifth of the world's crude oil and oil products passes through the Strait of Hormuz, a narrow choke point between Iran and Oman which the Advantage Sweet had passed through, according to data from analytics firm Vortexa.

Maritime security company, Ambrey said the vessel had been boarded via helicopter. "The vessel did not show any signs of conducting evasive maneuvers prior to the incident," it said.

Munro Anderson, with maritime security company Dryad, said separately that Iran usually detained vessels for "leverage or signalling".

"The working hypothesis at the moment is that it could either be an arbitrary detention of a vessel by Iran in response to the US sailing its first unmanned vessel through the region last week - as a show of force," he said. "Or, it could be in response to the sanctions on the 24th (of April) by the US against personnel in Iran connected to the IRGC (elite Revolutionary Guards)."

Since 2019 there have been a series of attacks on shipping in the strategic Gulf waters at times of tension between the United States and Iran.

Iran last November released two Greek-flagged tankers it seized in the Gulf in May in response to the confiscation of oil by the United States from an Iranian-flagged tanker off the Greek coast.

Indirect talks between Tehran and Washington to revive Iran's 2015 nuclear pact with world powers have stalled since September over a range of issues, including the Islamic Republic's violent crackdown on popular protests, Tehran's sale of drones to Russia and acceleration of its nuclear program.

The US Navy Fifth Fleet is based at the Gulf island state of Bahrain, called on Iran to immediately release the tanker.

The ship issued a distress call during the seizure, the U.S. Navy statement said.

According to the International Maritime Organization shipping database, the Advantage Sweet is owned by a China-registered company called SPDBFL No One Hundred & Eighty-Seven (Tianjin) Ship Leasing Co Ltd.

 

US economy posts paltry growth in first quarter

US economic growth slowed dramatically in the first three months of 2023, according to data released Thursday by the Bureau of Economic Analysis (BEA). 

Gross domestic product (GDP), the measure of all goods and services produced, rose at an annualized rate of 1.1% in the first quarter; it is down from 2.6% in the fourth quarter of 2022. 

Economists had forecasted country’s GDP to grow at an annualized rate of 2% in the first quarter. Analysts cautioned that much of the growth took place in January thanks in part to usually warm weather, but economic activity began to fall off fast in March. 

While retail sales fell in March as inflation and higher borrowing costs hit consumers, household spending still rose 3.7% during the first quarter from the last three months of 2022.

“The US economy eked out modest growth in the first quarter on the back of strong consumer spending. But the consumer ended the quarter on a sour note, calling into question the sustainability of economic growth moving forward,” said Morning Consult chief economist John Leer in an analysis.

“Without a robust consumer, we’re likely to see more volatility and uncertainty in economic activity through the end of the year.”

The unexpectedly steep slowdown in economic growth is the latest sign of the US economy feeling the brunt of stubborn inflation and steep Federal Reserve rate hikes intended to bring prices down.

The aftermath of the March 2023 banking crisis and fears of another financial crunch are also slowing the economy through steeper borrowing costs and lower consumer confidence.

Business investment plunged 12.5% between the end of last year and the beginning of 2023, sapping strength from the economy.

“We think the first quarter will be followed by a modest outright decline in the second quarter, marking the start of a recession which we expect to last until the fall,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a research note ahead of the report.

“We’ll have a much better idea once the extent of the credit tightening, triggered by the banking crisis, becomes clear.”

From here, economists largely expect economic growth to deteriorate rapidly. The Conference Board forecasts US GDP to contract 1.8 percent in the second quarter amid fears of a looming recession. 

Consumer demand is finally cooling after years of elevated inflation and a flurry of Fed interest rate hikes. Banks are pulling back on commercial lending following the failure of Silicon Valley Bank, slowing the growth of businesses that rely on financing.

“The job market and consumer spending have held up remarkably well despite the Fed raising interest rates as high and as fast as they have and so far that doesn’t seem to be falling apart, but the economy is slowing and inflation is not anywhere near the Fed’s target of 2%,” said Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, in a Thursday statement.

Prices for consumer goods rose 4.2% during the first quarter, up from a 3.7% quarterly inflation rate during the fourth quarter of 2022. The Fed aims for annual inflation of 2% and may be compelled to keep raising rates if inflation remains high even as the economy slows.

The Fed’s rate-setting committee will meet May 1-2 and decide whether to issue another 0.25-percentage point rate hike or step back as the economy shows clear signs of slowing down.

Fed officials expect to raise rates at least one more time in 2023, according to projections from their March meeting, but did not commit to a course of action for May.

The slowdown in economic growth also poses a serious political challenge for President Biden, whose recently launched reelection campaign may depend largely on the strength of the economy.

Under Biden, the US regained millions of jobs lost to the COVID-19 recession and saw the unemployment rate drop back down to 3.5% — its level in February 2020, which was the lowest jobless rate in 50 years.

The rapid rebound also helped millions of Americans find new jobs with better compensation or working conditions as employers battled to fill record numbers of open positions.

Even so, American households are still struggling amid high inflation, rising borrowing costs, and now a pullback in business investment that could leave the US closer to recession.

 

Iran: Copper can earn US$10 billion

The development of the copper industry and the support of the development plans for the sector can lead to earning US$10 billion of income for the country, the chairman of Iran Copper Association stated.

Regarding the amount of copper reserves and mining capacity of Iran, Bahram Shakouri said the reserves discovered in the country are 54 million tons, of which usually 50% can be extracted, underlining, “With this amount of reserve, we have a good position in the world.”

“Now, with the new discoveries, our position in terms of copper reserves in the world has improved, in a way that today we have reached 6% of the world's reserves from 4% in the past, and our position in the world has increased from the 8th to the 5th place”, he continued.

The chairman of the Iran Copper Association further said, “There is no balance between our reserves and production”, and continued, “We must go in the direction of extracting 3% to 5% of the reserves in accordance with our position. If we propose today that the industry can earn US$10 billion, it should be able to produce one million tons of copper cathodes, which is based on global norms.”

“Considering 54 million tons of reserves in the country, of which at least 27 million tons can be extracted, and we have 3% to 5% of the world's copper reserves, it is reasonable and logical to reach one million tons of copper cathode production, and if this does not happen, we have failed”, Shakouri reiterated.

“The world's movement towards the use of clean technologies and innovations will increase the consumption of non-ferrous metals such as copper, and in the coming years, there will be a need to supply copper up to four times today,” Shakouri had said last November.

The increase in demand will increase the price of copper, and accordingly, we must move towards completing the copper chain in Iran, he added.

“Today, the copper chain is complete with cathode production in the country, while more than 50% of the copper cathode is being exported, and if we can create more added value in this sector, we will have more exports and gain more revenue,” Shakouri concluded.

Copper cathode is the primary raw material input for the production of copper rods for the wire and cable industry.

Being located on the Alpine-Himalayan orogenic belt, of which about 12.5% is located in Iran, the country should contribute greatly to the fourfold increase in the world’s copper production by 2050, Shakouri has stated.

Stressing the need for planning to increase Iran's share in the world’s copper production, he added: "To increase our share in the global copper production in the 2050 horizon, we must develop both exploration and extraction and discover new world-class reserves.”

Also in mid-March, the head of the National Iranian Copper Industries Company (NICIC) said the country’s copper production is going to reach one million tons in the next six years.

Ali Rostami noted that in the case of reaching the above-mentioned output, the country’s copper export is also going to hit US$10 billion.

 

Pakistan: Will general elections be held in October 2023?

Besides facing dire economic challenges, Pakistan has been passing through a political crisis as well. The political quagmire has exacerbated. Investors’ confidence already shattered amid fears of default on foreign loans, has been battered further by uncertainties hovering over the elections schedule. This raises the million dollar question will the Elections be held in 2023.

The Elections for the National Assembly have become due by October 2023 as per the constitution. The dissolution of two Provincial Assemblies ahead of the October schedule and the judicial orders to hold early elections makes the situation untenable.

According to Polls conducted by Pakistan’s leading brokerage house, Topline Securities, 60-70% respondents feel elections will be held before October or in October 2023, while 20-30% think it will be delayed.

If National Elections are held around October 2023, there is high probability that Khan led PTI may get highest seats in National Assembly, surveys and polls forecast, unless Khan meets with disqualification, party breakup, etc. due to under trial cases against him.

With risk that present prime minister, Shehbaz Sharif may be disqualified by Supreme Court on contempt, another much talked about scenario has been that the present coalition government (PDM) might get its office term extended beyond October 2023. The government might invoke the Article 232 of the constitution under the garb of ‘emergency’ in the country on the pretext of security concerns or/and financial crisis.

Hypothetically, if the government undertakes such measures, matter might be challenged by the opposition in the court of law and the court may give its ruling over the government decision. It could linger the matter further and crisis may persist persist.

Another option could be the military rule. The country has witnessed direct military rule for 33 out of 75 years in Pakistan. Chances of direct military rule are slim, 10% as per our Poll.

To cool down the situation efforts of dialogue between political parties to sort out this elections related matter has started. This out of the court settlement, through dialogues can be a catalyst to cooling political heat and lead to any decision regarding the Elections for the national and provincial assemblies.

The brokerage house believes, this uncertain political theatre would keep on reflecting on the stock market, economy and currency. However, once the truce is carved the current political battles, the focus will be imminently back on economy.

The brokerage house in one of its earlier reports “Pakistan’s Debt Restructuring” dated December 03, 2022 and report “Pakistan Debt Restructuring – Part 2” dated January 24, 2023 the crucial factor or the Achilles heel of the current debt is the short term rollovers that have increased by 9 times to over US$12 billion since 2015.

The brokerage house is of the view that external debt restructuring is the litmus test, the mode of restructuring, and how orderly or disorderly are done, will determine Pakistan’s economic vulnerabilities.

Pakistan new government should ideally try to convert its short-term external loans with long term with the help of friendly countries like China, Saudi Arabia and UAE etc. If that is not doable, then Pakistan should try G-20 common framework of debt restructuring. These are less painful and will help in economic recovery.

 

 

China to send special envoy to Ukraine

Chinese President Xi Jinping spoke to Ukrainian counterpart Volodymyr Zelensky over the phone on Wednesday. The call was the first time the two leaders had talked since the Russian invasion of Ukraine in February 2022.

China has faced mounting criticism over its stance on the war, with Beijing’s assertion of neutrality failing to convince Western governments because of its disproportionate interaction with Moscow.

During the call, Xi pledged long-term cooperation with Ukraine, and said China will send its special envoy on Eurasian affairs to Ukraine and other countries.

The envoy, former vice-minister of foreign affairs Li Hui, would be the most senior Chinese official to set foot on Ukrainian soil since the war began. He was China’s ambassador to Russia for 10 years, from 2009 to 2019.

Xi also said mutual respect for sovereignty and territorial integrity was the political foundation of bilateral relations.

He did not mention Russia by name at all, according to the CCTV report, though he reiterated China’s stance on the war and called for more dialogue.

Xi had held multiple calls with Russian President Vladimir Putin since the invasion, and even led a delegation to Moscow in March – his first overseas trip since beginning a historic third term.

The call also came just two weeks after French President Emmanuel Macron and European Commission President Ursula von der Leyen visited China and said they had urged Xi to call Zelensky.

Xi had replied that the conversation could happen when the conditions and time are right, according to von der Leyen.

 

United States allows J P Morgan payment route for Russian grain export

The United States gave J P Morgan permission to process payments for agricultural exports via the Russian Agricultural Bank, but the arrangement was no substitute for reconnecting the bank to the SWIFT system, two Russian sources told Reuters.

Access to the SWIFT payment system is one of Russia's main demands in negotiations over the future of the Black Sea grain export deal, which the United Nations says helps to tackle a global food crisis that has been aggravated by the Ukraine war.

The Kremlin has repeatedly warned the deal will not be renewed beyond May 18 unless the West removes obstacles to Russian grain and fertilizer exports, including the financing and insurance of exports.

A Russian source, who spoke on condition of anonymity, said the US Office of Foreign Assets Control (OFAC) had allowed JPMorgan to process the transaction.

"JPMorgan received permission from OFAC to carry out payment for agricultural procure - but the process is difficult," said the first Russian source.

A second Russian source said that JPMorgan and Russian Agricultural Bank, which is under US and European Union sanctions, were both specifically given exemptions to execute a single transaction.

It involved grain and was denominated in US dollars, according to the second Russian source. A third source also said the transaction was for grain.

Reuters could not ascertain who the exporter was or the destination of the supply.

The JPMorgan route was proposed as an alternative to reconnecting Russian Agricultural Bank (known as Rosselkhozbank) to SWIFT, but could be terminated at any time, the first Russian source said. "This cannot replace SWIFT," the source said.

Another source familiar with the transaction said the US State Department and US Treasury had asked JPMorgan to carry out the very limited and highly monitored transaction in relation to the export of agricultural materials, which occurred this month.

Russian Foreign Minister Sergei Lavrov on Tuesday told a briefing at the United Nations that one bank kindly consented to finance one operation, but that was not an acceptable long-term solution, Lavrov did not name the bank.