Pakistan: Likely impact of Middle East conflict

Iran’s unprecedented drone/missile attacks on Israel on April 13 has raised the risk of a wider regional conflict in the Middle East. The attacks by Iran were largely intercepted by Israel. Still, any further retaliatory exchanges between the two countries could worsen the disruption of shipping routes through the region and thus lift global freights – in turn leading to higher commodity prices in the coming months. The escalation is likely to affect Pakistan in multiple ways.

From the Pakistan market’s standpoint any escalation will test two key expectations that have driven the YTD rally at Pakistan Stock Exchange, monetary easing and Pakistan’s negotiation with the IMF for another program.

On the flipside, the market will draw comfort from the prospect of fresh bilateral assistance and investments from Saudi Arabia and the release of final tranche of US$1.1 billion by end April.

Global shipping costs and commodity prices are likely to rise. Even in case of a de-escalation of the conflict, it threatens to worsen the disruption of shipping routes through the region, similar to that through the Red Sea. There is an increased risk of the following in the near term:

Surge in global oil prices toward US$100/bbl: The Red Sea disruption since November 2023, along with the extension of OPEC Plus supply cuts, has lifted Brent from US$78/bbl at the start of 2024 to nearly US$90/bbl, despite a weak global economic recovery.

Surge in the global shipping costs, through elevated insurance premiums on shipments through the region.

Global food prices could also rise, because of the rise in shipping costs and higher fertilizer prices, which the region exports. Food exports from South Asia, such as rice from India and Pakistan, to the rest of the world could be disrupted as well.

Potential delay in the start of interest rate cuts: An escalated conflict will have negative implications for Pakistan’s CA balance and inflation. In a scenario where global prices of crude oil, chemicals and food commodities rise by 10% in the coming months, Pakistan’s trade and CA deficit could expand up to US$300 million per month.

It is also likely that, in an escalated conflict, Pakistan’s exports and remittances may shrink, due to a disruption in shipping routes and economic concerns in the GCC, respectively.

Together these could spell a reversal in the exchange rate parity which has been stable around 280 since the start of year 2024. Note that, as per the SBP, Pakistan has a funding gap of around US$3 billion until June 2024, excluding the US$1 billion Eurobond repaid on April 12, 2024.

Multiple explosions reported in Iran

Explosions were reported inside of Iran while unconfirmed reports indicated multiple Iranian sites were struck, possibly by Israel.

The semi-official Iranian Fars News Agency reported explosions near the city of Isfahan in central Iran. The state-run Iranian news agency Press TV also reported explosions in Isfahan but noted the reasons were still unknown.

Other unconfirmed reports indicate potential strikes near the cities of Daraa in Syria and Baghdad in Iraq.

Flights were being diverted around western Iran early Friday morning local time, according to the Associated Press.

It’s not clear what the immediate targets were if the strikes happened and if Israel is behind them, but Isfahan is home to Iranian nuclear facilities and sites.

Iran warned earlier on Thursday that the targeting of nuclear sites could result in the change of the nuclear doctrine in Tehran, which does not have nuclear weapons but possesses enriched uranium and holds the capacity to obtain them.

The alleged Israeli strikes will likely inflame tensions even further in the Middle East, which is already embroiled in conflicts in Gaza and in northern Israel and southern Lebanon.

Israeli officials pledged earlier this week to respond to Iran, which sent a flurry of some 300 missiles and drones at Israel last weekend.

That attack, which was largely defeated by Israeli and allied defense systems, came in response to an alleged Israeli strike near the Iranian embassy in Syria that killed two high-ranking commanders.

The Biden administration pushed Israel not to respond to Iran, but Israeli officials were publicly arguing that such a brazen Iranian attack must be answered.

Iran, in turn, publicly warned that any Israeli attack would be met with a much harsher response than last weekend’s assault.

 

Over 2,000 foreigners to visit Iran Expo 2024

Iranian Industry, Mining, and Trade Minister has said over 2,000 traders and businesspersons from various countries are expected to visit the 6th International Export Potential Exhibition of the Islamic Republic of Iran, dubbed Iran Expo 2024,

“High-ranking officials of 70 countries have been invited to visit the sixth exhibition of Iran’s export capabilities -Iran Expo 2024,” Abbas Aliabadi said.

The exhibition will be inaugurated on April 27 and run through May 1, 2024, the minister said.

Noting that the first edition of the Iran Expo was held in 2013, Aliabadi predicted that more than 2,000 foreign traders and merchants from various countries would participate in the latest edition of the exhibition.

This exhibition will cover seven major groups of commodities including food industries, agriculture and fisheries, handwoven carpets, handicrafts and tourism, medicine, medical equipment and chemical products, building industry, technical and engineering services, and also the petrochemical group.

Promoting trade and economic relations with other countries, booming production, propelling the business environment of the private sector to the international arena, and creating a new trade and economic discourse with various countries have been cited as the main aims of holding the exhibition.

 

NATO losing proxy war against Russia

Lately the British media (Telegraph and Guardian) reported allegations that Russia was using chemical weapons against Ukrainian troops and, as if that was not bad enough, the Russian military was also endangering the biggest nuclear power plant in Europe.

Former CIA officer John Kiriakou discusses these reports and concludes that the incidents are false-flag operations orchestrated by Western sponsors of the Ukrainian regime. Kiriakou says it is the CIA that has a notorious track record of engaging in dirty tricks when its operations are going badly.

And, to be sure, the NATO proxy war in Ukraine against Russia is going very badly indeed. Russia has the military upper hand, while the NATO-backed Kiev regime is facing collapse.

A defeat for Washington and its NATO partners in Ukraine would be a political disaster for the Western powers. Hence they are getting desperate.

This explains the upsurge in Western media reports that Russia has started to use chemical weapons and that Russia is endangering the nuclear power plant at Zaporozhye, Europe’s largest civilian nuclear power station.

The latter insinuation by the Western media is particularly absurd. Russia took control of the Zaporozhye Nuclear Power Plant in March 2022.

It should be obvious that the NATO-backed regime is the perpetrator of nuclear terrorism yet the Western governments, media and the UN’s International Atomic Energy Agency all adopt a shameful ambiguity about the perpetrator. The Western sponsors are covering up for a nuclear terrorist regime in Kiev because the Western governments are fully complicit in the terrorism.

John Kiriakou points out that the same playbook was used in Syria. When the Syrian Arab Army was gaining the military upper hand against NATO-sponsored jihadi mercenaries trying to overthrow the Syrian government, the Western media then reported alleged chemical weapons attacks by the Syrian army.

That resulted in the United States, Britain, and France launching air strikes against Syria. It turned out that the chemical weapon attacks were false flags conducted by the CIA and MI6-trained proxies.

Now that the NATO powers are losing the war in Ukraine against Russia – a war that they have invested in on an unprecedented colossal scale – the reaction is to repeat the false flag playbook as a desperate way to create a chemical or radiological disaster to justify an escalation of the war, perhaps by direct NATO intervention.

It does not matter to the Western warmongering elite that the safety of the planet is being recklessly jeopardized.

The same Western warmongering ruling establishments have fomented world wars and countless other wars costing tens of millions of lives. Their criminal recklessness knows no bounds.

John Kiriakou was jailed by the US government for two years after he blew the whistle on the CIA’s torture program. He now works as an independent journalist and commentator and has gained worldwide respect for his integrity and truth-telling.

 

 

 

 

Iran-Russia Rasht Astara Railway

Tehran and Moscow are finalizing the draft of a contract for the implementation of the agreement to construct the Rasht-Astara Railway.

In a meeting held between Deputy Minister of Russian Railways Sergey Pavlov and Iran’s Ambassador to Russia Kazem Jalali, the two sides emphasized compiling the contract for the implementation of the agreement to construct the Rasht-Astara Railway.

During the meeting, the two sides explored avenues for the development of transportation within the framework of the International North-South Transport Corridor (INSTC).

In addition, the two sides examined the trend of bilateral cooperation regarding the construction of the Rasht-Astara Railway with the framework of the INSTC, according to the website of Iran's Ministry of Roads and Urban Development.

The Deputy Minister of Russian Railways acknowledged during the meeting that transporting containerized cargo from the eastern side of the INSTC registered a 400 percent growth through ‘Sarakhs’ and ‘Incheh boroun’ customs in the first quarter of the current year (January-March) compared to the same period last year.

Talks are ongoing between Tehran and Moscow to determine the tariff for transporting chemical fertilizer and coal from Russia to Iran, the United Arab Emirates and India, Pavlov added.

Iran and Russia, both under harsh Western sanctions, on May 17 inked an agreement on the long-stalled construction of a railway connecting the northern Iranian cities of Rasht and Astara.

Spanning 162 km, the railway is a crucial element of the INSTC. The corridor integrates road, rail, and sea transportation, facilitating the movement of goods between Russia and India via Iran.

Through a video conference, Iranian President Ebrahim Raisi and his Russian counterpart Vladimir Putin addressed the ceremony in Tehran where the two countries' transport ministers signed the agreement.

Raisi thanked Putin and the Russian government for their involvement in the initiative and referred to it as an "important strategic step" in bilateral cooperation that will benefit all countries involved in the INSTC. Putin, for his part, called the occasion a "landmark moment for the entire global transport infrastructure."

According to this agreement, the Russian Federation will invest 1.6 billion euros in this railway route.

Iran has been a key player in the INSTC and stands to benefit greatly from its full realization. As reported by Amwaj media, the Raisi government has seemingly banked significantly on transit becoming a top revenue generator. But Iran stands to gain from the project in more ways.

The operationalization of the corridor could mean improved relations between Iran and India, aligning New Delhi more closely with Tehran’s regional interests.

A vital element of the INSTC, the Rasht-Astara railway project has been stalled for years due to costs, engineering, and logistical complications.

Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei stressed the importance of completing the stretch of the railway in his July 2022 meeting with Putin in Tehran.

VTB's new office in Tehran is part of Iran and Russia's ongoing efforts to connect their banking systems.

The two countries signed an agreement on January 29 to link their inter-bank messaging systems.

Due to Western sanctions, both countries have been cut off from SWIFT—a leading Belgium-based financial messaging service.

Both Iran and Russia are looking to reap the potential economic benefits of increased transit amid Western sanctions.

The Raisi government seeks to mitigate the adverse effects of sanctions through de-dollarization of trade and the establishment of direct banking and payment channels outside the international banking system.

 

Middle East can't afford more conflicts

Saudi Foreign Minister Prince Faisal bin Farhan reaffirmed on Tuesday that the Middle East cannot afford further conflict, amid heightened tensions between Iran and Israel.

Addressing a joint press conference with his Pakistani counterpart Ishaq Dar in Islamabad on Tuesday during his official visit to Pakistan, leading a high-level delegation, Prince Faisal urged all parties to prioritize de-escalation.

Prince Faisal and Dar called for immediate ceasefire in the Gaza Strip. While regretting the failure of the international community to ensure ceasefire in Gaza, both leaders demanded its immediate enforcement, opening of a humanitarian corridor and averting of famine that was leading to a catastrophe.

Prince Faisal said that a ceasefire in the Gaza Strip, which has been besieged for months due to the Israeli war, has become a necessity.

He said international efforts aimed at achieving a ceasefire in Gaza have been wholly insufficient. He emphasized the need for intensified efforts to alleviate the suffering of Palestinians in Gaza and stressed the urgency of implementing an immediate ceasefire.

Prince Faisal called for an immediate end to the killings and sufferings of the people of Gaza. Palestinians were already living in an unstable region leading to a catastrophe in Gaza and ‘there is no need for further confrontation’, he said adding that ‘de-escalation should be everybody’s priority.

Prince Faisal said that so far more than 33,000 people had been killed in Gaza. “They are now facing a famine like situation and starving to death as the international humanitarian aid is not getting in. It is a complete failure of the international community,” he observed.

Terming the situation unacceptable, the Saudi minister said there was no justification to it. In reality, he said, the two United Nations resolutions regarding immediate ceasefire in Gaza had not seen implementation. Efforts were seen after six Western aid workers were killed but not when 33,000 Palestinians died which showed the double standards, he regretted.

On his part, Dar said Pakistan and Saudi Arabia shared the same feelings on Gaza, while calling upon the international community to help end the genocide.

“The world conscience must wake up and enforce an immediate and unconditional ceasefire to ensure unimpeded humanitarian aid. More Palestinians should not be killed due to starvation,” he said, and demanded for a global probe into the crimes committed against humanity in Gaza.

Prince Faisal and Dar reiterated the need to build up and convert the bilateral strong partnership into a strategic partnership and further promote economic cooperation for the mutual benefit of the two countries.

Prince Faisal termed his meetings with the Pakistani leadership very productive. He emphasized the importance of strategic partnership between the two countries and expressed commitment for strengthening of investment.

“The Saudi delegation was impressed with the proactive and business focused approach of the Pakistani side. There were significant investment opportunities in Pakistan, and termed their visit ‘very positive on their perspective’, which would lay the groundwork for future ventures.”

The Saudi minister also emphasized the need to tap the untapped potential in Pakistan. “We should continue to work closely for the economic progress and regional security with historic bilateral cooperation,” he added.

Saudi foreign minister leads high-level delegation to Pakistan

Saudi Arabia’s Foreign Minister Prince Faisal Bin Farhan arrived in Pakistan on Monday for a two-day official visit, aimed at bolstering economic ties and advancing mutual interests.

Leading a distinguished delegation, the foreign minister is joined by several key figures, including the Minister of Environment, Water and Agriculture, Eng. Abdulrahman Al-Fadhli; Minister of Industry and Mineral Resources, Bandar Al Khorayef; Advisor at the Royal Court Mohammed Al-Tuwaijri; and Assistant Minister of Investment, Eng. Ibrahim Al-Mubarak, among other senior officials from the Ministry of Energy, the Public Investment Fund, and the Saudi Fund for Development.

The delegation's visit follows a recent meeting between Crown Prince and Prime Minister Mohammed Bin Salman and Pakistani Prime Minister Shehbaz Sharif in Makkah, underscoring a commitment to expedite a previously discussed US$5 billion investment package.

Discussions during this visit will focus on enhancing bilateral cooperation across diverse sectors, including significant investments in Pakistan’s Reko Diq mining project, which involves one of the largest undeveloped reserves of copper and gold in the world.

The Saudi delegation is set to engage in comprehensive talks with Pakistani leaders, including the president, the prime minister, the foreign minister, and other key stakeholders.

These discussions are expected to cover a wide range of topics such as agriculture, trade, energy, minerals, IT, and transport.