Donald Lu in Dhaka again

Visiting United States assistant secretary of state for South and Central Asian Affairs Donald Lu is scheduled to hold meetings with the ministries of foreign affairs and environment, forest and climate change.

During his visit, he would meet with government officials, civil society leaders, and other Bangladeshis to discuss US-Bangladesh cooperation, including addressing the climate crisis and deepening economic ties, according to a statement of the US embassy in Dhaka.

The US assistant secretary is scheduled to pay a courtesy call on foreign minister Hasan Mahmud and hold a meeting with foreign secretary Masud Bin Momen at the ministry.

Arriving in Dhaka on a three-day visit, Donald Lu on Tuesday had a meeting with civil society representatives at the residence of the US ambassador to Bangladesh Peter Haas in the afternoon before joining a dinner at the Gulshan residence of prime minister’s private industry and investment adviser Salman F Rahman, officials in Dhaka confirmed.

The Daily Star editor Mahfuz Anam, rights activist Nur Khan Liton, environmental activist Sohanur Rahman and labour leaders Kalpona Ahter and Babul Akter were present in the meeting with Lu at the ambassador’s residence.

Law minister Anisul Huq, state minister for commerce Ahsanul Islam, state minister for information and broadcasting Mohammad Ali Arafat, former state minister for foreign affairs Md Shahriar Alam and foreign secretary Masud Bin Momen, among others, attended the dinner hosted by Salman F Rahman.

During his previous visit in January 2023, he had a breakfast meeting with Salman at his residence.

Asked about specific reason why on the third visit to Bangladesh within 17 months the US assistant secretary was not holding meeting with any political party leaders unlike his previous two visits, the US state department deputy spokesperson Vedant Patel told a routine press briefing in Washington on May 13 that a lot of factors went into whom their government officials met with or not.

‘A lot of factors go into who our government officials meet with or not—the schedule, time of day, lots of other things. Assistant secretary Lu is on a swing through a number of South Asian countries—specifically India, Sri Lanka and Bangladesh. He is there to strengthen bilateral cooperation with each country and to demonstrate US support for a free, open, and prosperous Indo-Pacific region,’ he said,

‘In Bangladesh, he will meet with government officials, civil society leaders, and other Bangladeshis to talk about deepening our US-Bangladeshi cooperation, including deepening our economic ties in ways that we can collaborate further to address climate issues,’ Patel said, responding to a question whether the US had shifted its position on internal political matters of Bangladesh.

Foreign minister Hasan Mahmud said that the issues relating to the US visa policy for Bangladesh announced before the January 07 elections and Dhaka’s call for withdrawal of restrictions on the Rapid Action Battalion might come up during the visit of Donald Lu.

He said that Bangladesh had a very good relation with the US, and president Joe Biden, in a message to prime minister Sheikh Hasina conveyed on her assumption of office for the fourth consecutive term in January, expressed his willingness to take the relation to a new height.

In September 2023, the US Department of State announced that it had started imposing visa restrictions on individuals involved in undermining the democratic election process in Bangladesh.

The announcement came at a time when the Election Commission of Bangladesh started making preparations for the January 07 election.

In December 2021, the US imposed sanctions against seven former and serving officials of the RAB and the force itself over allegations of rights abuse.

Dhaka on several occasions called upon the US authorities for the withdrawal of the sanctions.

 

 

 

Abandon Biden

As public anger grows over Israel’s assault on the Palestinian people, US government officials and mainstream media are desperately trying to control the narrative.

Speaking about the student protests in New York, CNN anchor Kasie Hunt said late last month: “Some pretty stunning images coming to us overnight … We also are just learning at this hour that banners have been hung from the hall. They read ‘Hind’s Hall’ and ‘Intifada’. Hind is a reference to a woman who was killed in Gaza. Intifada, of course, a reference to uprising, violent struggles the Palestinians has had over the years against Israel.”

Where does one even begin? Someone purporting to be a journalist apparently won’t even pretend to make an effort to check on a story that went around the world, when a five-year-old Palestinian girl, Hind Rajab, called out from a besieged car where several family members had just been killed. 

As the young girl waited for help to arrive, the two Palestinian Red Crescent medics coming to her aid were also killed by Israeli fire. Hind’s last words to emergency service workers over the phone, before a volley of bullets was heard, were: “The tank is next to us. We are in the car and next to the tank.”

CNN later tweeted saying that Hunt “misspoke and corrected herself on the show immediately after”.

As for intifada, the iconic images of the First Intifada – launched in December 1987 after an Israeli vehicle hit and killed four Palestinians in Gaza’s Jabalia refugee camp – were those of boys and young men armed with rocks and slingshots, facing down Israeli tanks, snipers and bulldozers. 

The Second Intifada, which began in September 2000, was accompanied by another iconic image: that of a father, Jamal al-Durrah, clutching his 12-year-old son in an attempt to shield him from Israeli gunfire. The boy was hit and died soon afterwards.

More than 10,000 children were wounded during the Second Intifada, and nearly 5,000 Palestinians of all ages were killed. Durrah has lost more family members since Israel declared war on Gaza last October. 

Apparently “violence” is only something committed against Israel, while Palestinians mostly “die” rather than being “killed”, according to the vagaries of western mainstream media syntax. 

On that same CNN segment, New Yorker journalist Evan Osnos told Hunt, “There was an interesting moment last week. You were beginning to see university administrators come to an idea, a principle. You saw the president of Princeton say the goal should be the maximum expression without intimidation or obstruction … This is something else, because students, Jewish students on campus at Columbia, are going to wake up this morning and say this does not satisfy that standard.” 

Even though many campus protesters are themselves Jewish, these comments suggest that “Jewish students” are only those to whom harm is caused by pro-Palestinian demonstrators – not those who are outraged by Zionist manipulation and the instrumentalization of their very identity and history in order to carry out a genocide.

This is not even to mention the anger and disappointment that many people feel at seeing university presidents and government officials calling on fully armed police to protect the policies of a foreign government, rather than the rights of US citizens.

Much depends on whether Israel can be stopped. It is the US that holds almost all the leverage

Such grotesque twisting of reality does not take place in a vacuum, but rather infects every nook and cranny of US propaganda and mainstream rhetoric, imagery, culture and institutional norms, as more and more aspects of “public life” face a relentless assault by corporate and governmental power. 

The irony is that as this has taken place, and as the truly ignominious Antisemitism Awareness Act has been passed by the US House of Representatives to put another nail in the coffin of the First Amendment, more Americans than ever are aware of the atrocities being committed against Palestinians in Gaza and the occupied West Bank. 

Perhaps more importantly, they understand that these atrocities are paid for by US tax dollars, and fully supported by a political class that has given up any pretence of representing its constituents.

The desperate attempt to expand the definition of “antisemitism” in the US and Europe, while imposing new legal codes to prevent scrutiny of Israel’s actions, is a last-ditch effort by western powers and their representatives to maintain control over the narrative. But as they have abandoned their constituencies, their constituencies are abandoning them.

As the sitting US president mumbles a warning for Israel not to invade Haifa (instead of Rafah), or goes on about an uncle who was allegedly eaten by cannibals during the Second World War, an increasing portion of the US ruling class – from university presidents to mainstream journalists – find themselves in the position that Joe Biden was in as a candidate: hunkered down in their bunkers, as public contempt rises.

This disappearance of almost any stable reference point in the public sphere is truly a precarious moment in the life of the nation, and seems like a harbinger of some kind of dystopian totalitarianism – many aspects of which are already present. 

While all state and corporate power remains focused on further fragmenting and demonizing the populace, keeping everyone at each other’s throats and inventing new classes of victims, we can only hope that some glimmer of human commonality will finally emerge, before this century is plunged into a catastrophic spiral of killing and destruction like that of the previous century. 

Much depends on whether Israel can be stopped. It is the US that holds almost all the leverage, and this is where more pressure must be placed. 

Courtesy: Information Clearing House

Saudi-British trade surpasses US$21 billion

Prime Minister Rishi Sunak revealed that bilateral trade between Britain and Saudi Arabia has exceeded 17 billion pounds or US$21 billion.

 “Today we are launching the next phase of the deep and growing partnership between Britain and Saudi Arabia. Over the next two days, we will hear from Saudi leaders and companies about how to make Vision 2030 a reality, and the tremendous opportunities it presents to all of us,” he said while addressing, through a video conference, the opening session of the GREAT Futures Initiative Conference, which kicked off at the King Abdullah Financial District in Riyadh on Tuesday.

The two-day conference is one of the initiatives of the Saudi-British Strategic Partnership Council, chaired by Saudi Crown Prince and Prime Minister Mohammed bin Salman and Rishi Sunak. 

“I know British businesses here will relish the opportunity to showcase the best our country has to offer,” the prime minister said.

Sunak revealed that nearly 25,000 Britons live in Saudi Arabia at present.

“Since the launch of the new electronic visa exemption regime in June 2022, Britain has welcomed more than 400,000 Saudis. The United Kingdom excels globally in the fields of technology and innovation, and thousands of Saudis have graduated from British universities in finance, fashion, luxury product sales, and others,” he told the conference participants.

British Deputy Prime Minister Oliver Dowden is among several British and Saudi ministers, as well as Saudi and international experts and specialists who are addressing the conference. As many as 800 participants from the public and private sectors of both countries are taking part in the event.

In his speech at the conference, Dowden said that the pace of change in Saudi Arabia in terms of the economic, social and cultural aspects is exceptional.

“We do not just want to support the Saudi Vision 2030, but we want to be part of it.” Referring to the conference, he said the Kingdom’s hosting of such an event is a wonderful example and shows British talent to the world: “We participate in leading the economic and social elements of our relations as a means of work, execution and transformation.”

Dowden said that this would significantly increase mutual prosperity and demonstrate that a modern, forward-looking partnership can meet the challenges of the 21st century.

Dowden noted that he was accompanied by a giant delegation to this event that included more than 450 people, which is the largest British trade mission in a decade and the largest ever from Britain to Saudi Arabia.

He pointed out that the talented lawyers, consultants, financial experts, architects and designers in Britain can help turn this vision into a reality, and highlighted that their work are meant to strengthen the presence of British companies in the Kingdom, and to accelerate the vital trade ties that make the mutual relations between the two countries of great value.

According to the British deputy prime minister, Saudi Arabia, through its mega projects and cities, is paving the way for how societies can harness innovative technologies to achieve amazing change.

“The partnership between the two kingdoms is a two-way street, as the two countries open their markets to each other. So that investments, tourism exports, and cooperation can flow in both directions,” he added.

The conference is aimed to enhance economic relations between the two countries in various promising sectors as well as to develop mutual trade and investment. The conference will feature 47 sessions and workshops with 127 speakers from both public and private sectors, covering 13 promising economic sectors, including tourism, culture, education, health, sports, investment, trade, and financial services, in addition to signing six agreements in the fields of education and training, tourism, and real estate development.

Earlier, Dowden said that the conference is an important opportunity to build partnerships between the business sectors of both countries, keeping pace with the future, innovation, and creativity. It also allows British companies to familiarize themselves with relevant business regulations, incentives, and advantages for conducting business in Saudi Arabia.

On his part, Minister of Commerce Dr. Majed Al-Qasabi stressed that the conference is an opportunity to enhance cooperation and economic partnership in 13 vital and promising sectors. He also highlighted that it paves the way for extensive partnerships focusing on innovation and creativity in sectors of mutual interest.

Iran to launch sea passenger lines to Dubai and Oman

The secretary of Iran’s Supreme Council of Free Industrial-Trade and Special Economic Zones said sea passenger lines are planned to be launched from Qeshm and Kish islands to the Sultanate of Oman and Dubai in the United Arab Emirates (UAE).

Hojatollah Abdolmaleki pointed to the development of sea tourism and transportation of sea passengers in the free zones of the country and said that in addition to developing the domestic sea lines, there are plans to launch recreational and passenger lines from Kish and Qeshm islands to the destinations of Dubai and Oman.

The development of maritime tourism and transportation of sea passengers in the free zones of the country have been put on the agenda of the council, Abdolmaleki emphasized.

He stressed that Qeshm and Kish islands have high capacities for launching maritime lines to Persian Gulf littoral states.

Given the keenness of investors in the private sector, the country would witness the commissioning of these international maritime lines which will boost maritime tourism in the region, he underscored.

Abdolmaleki said more than 100 investment packages, valued at €1.0 billion, have been presented to the investors of the private sector.

Emphasizing that the free zones have become a safe place for preventing capital flight from the country, the adviser to the Iranian president stated that the presence of both domestic and foreign tourists in the free zones has contributed to the economic development of the country.

 

State of Pakistan Economy

Pakistan’s macroeconomic conditions improved, according to the State of Pakistan’s Economy Report for the H1FY24 released today by the State Bank of Pakistan (SBP). The Report contains the analysis prepared on data outturns for the July-December FY24. According to the Report, the real economic activities moderately recovered against the contraction last year, while Stand-By Arrangement (SBA) with the IMF helped reduce stress on external account.

Meanwhile, current account deficit narrowed considerably, amid continued contractionary monetary and fiscal policies, better agriculture produce and ease in global commodity prices. On fiscal side, primary balance posted a higher surplus during H1FY24 compared to H1FY23 on account of strong growth in both tax and non-tax revenues that outpaced increase in non-interest expenditure. Despite restrained domestic demand, inflationary pressures remained persistent at elevated levels, the Report noted.

The real GDP, driven by agriculture sector, grew by 1.7 percent in H1FY24. The recovery in agriculture sector also supported some of the agro-based industries. In addition, withdrawal of import prioritization measures improved availability of raw materials for industry, the report said. The approval of the IMF’s SBA eased external borrowing constraints, leading to an increase in financial inflows during H1FY24. In addition, lower scheduled external loan repayments compared to H1-FY23 and significant reduction in current account deficit, on account of decline in imports as well as upsurge in exports supported the build-up in SBP’s FX reserves.

Despite subdued domestic demand and decline in global commodity prices, states the Report, a combination of lingering structural issues, PKR depreciation compared to H1-FY23, increase in government spending, and supply shocks kept the National CPI (NCPI) inflation at elevated levels. A number of factors including higher input costs, increase in indirect taxes, and implementation of upward revision in minimum wage announced in the FY24 budget, alongside the second-round effects of administered prices of food and energy items, were responsible for the persistence in the core inflation during H1-FY24.

The Report highlights that despite some improvement in macroeconomic indicators, economy continues to grapple with the structural bottlenecks. The major issues include limited savings, low investments in physical and human capital, weak productivity, stagnant exports, narrow tax base, and inefficiencies in PSEs. Additionally, political uncertainty exacerbates the situation through inconsistency in economic policies, weak governance and public administration, hindering investment and thus economic development. These underscore the need for policy reforms to ensure sustainable development over the medium to long-term.

The Report includes a Special Chapter that analyzes long-term trends in inflation and its determinants in Pakistan. The chapter also sheds light on policy and structural factors influencing inflation including monetary policy framework, fiscal and debt policy, trade openness, agricultural efficiency, productivity and demographic trends. The chapter concludes that reducing political and policy uncertainties and more fiscal consolidation can help bring inflation down at a faster pace in the short run. The chapter also emphasizes on addressing longstanding structural issues to achieve low and stable inflation over the medium term, without overburdening monetary policy and the consequent high economic costs.

The Report expects continuation of modest economic recovery in the second half of FY24. In the backdrop of improvements in business confidence, high frequency demand indicators since November 2023, and prospects for a good wheat production during FY24, the SBP projects real GDP growth in the range of 2 – 3 percent for FY24. The NCPI inflation, on the other hand, is expected to remain downward trajectory despite uncertainties persisting in both domestic economy and international commodity market.

Keeping these developments in view, the SBP projects the average NCPI inflation in the range of 23 – 25 percent for FY24, lower than 29.2 percent in FY23, and is expected to come down to 5 – 7 percent range by September 2025. On external account, the CAD is projected to remain lower than earlier estimates, amid slightly improved global outlook and domestic growth prospects to boost foreign exchange earnings from exports and remittances.

The SBP projects the current account deficit in the range of 0.5 – 1.5 percent of GDP for FY24. This macroeconomic outlook remains susceptible to escalating geopolitical tensions, unfavorable weather conditions, adverse movements in global oil prices, and subsequent external account pressures. Further adjustments in energy prices and fiscal consolidation -warranted for slowing the pace of debt accumulation - may also weigh on economic activities and inflation.

Renewable diesel glut hits US refiners

A rush by US fuel makers to recalibrate their plants to produce renewable diesel has created a supply glut for low-emissions biofuels, hammering profit margins for refiners and threatening to impede a young industry.

Turmoil in the biomass-based diesel sector, an umbrella term for renewable diesel and biodiesel, could become a roadblock to future investments in biofuels, the US Energy Information Administration (EIA) said this year. That could potentially stall the transition away from traditional fossil fuels.

Some producers of these biofuels have already shuttered plants this year, and industry participants say more are set to go out of business before the year's end.

US renewable diesel production capacity nearly quadrupled following the coronavirus pandemic from just 791 million gallons a year in 2021 to 3 billion gallons by 2023, as refiners sought ways to survive the transition away from their petroleum-based products.

Combined with biodiesel, total US output capacity for biomass-based diesel surpassed 5 billion gallons by 2023.

Renewable diesel is a complete substitute for diesel, whereas biodiesel can only be used as a blend, making the former more attractive for producers.

Both compete for the same feedstock - biomass, such as used cooking oil and vegetable oils - and are more expensive to produce than petroleum-based diesel, so their demand relies almost entirely on governmental blending mandates and tax credits.

But blending targets for biomass-based diesel, set under the US Environmental Protection Agency's Renewable Fuel Standards (RFS) program, generate combined demand of just up to 4.5 billion gallons a year through 2025, according to Scott Irwin, a professor at the University of Illinois.

That is already below existing domestic production, before factoring in imports. By 2025, Irwin estimates US renewable diesel and biodiesel output capacity will top 7 billion gallons.

"The crux of the matter is that market participants convinced themselves that 'if we build it, the EPA will mandate it'. That didn't happen," Irwin said.

The oversupply has cut prices of Renewable Identification Numbers (RINs) - the credits refiners earn under RFS for producing or importing biofuels - to the lowest in five years. D4 RINs tied to biodiesel and renewable diesel fell below 40 cents a gallon in February for the first time since 2019.

Negotiations with IMF: No room for complacency

The IMF Staff report, following the second and final review of the SBA program, broadly commends Pakistan’s’ efforts to stabilize the economy.

Pakistan completed the nine-month program in April 2024 having met all key objectives and structural benchmarks of the program.

The IMF welcomed the authorities trying to engage the Fund for another program. Nonetheless, the Fund has cautioned that there are ‘exceptionally high’ risks to the current macro stability – emanating from volatile geopolitics, delayed reforms, still high inflation and high government debt.

The IMF considers SBP’s stance of holding the policy rate as appropriate, until there are greater signs of disinflation and risks of upside from PKR weakness and external shocks have been minimized – through buildup of greater foreign exchange reserves. Reserves held by SBP stood at US$9.1 billion by May 03, 2024, equivalent to about two months’ imports.

Future Energy sector reforms include: 1) rebasing of power tariff (likely by July 2024), 2) implementing WACOG in the gas chain (for better recovery as it spreads out the cost of expensive imported LNG to all gas consumers) and 3) re-negotiation of power tariffs with IPPs that came online after 2015.

The first two measures are inflationary, but the third measure might be the hardest to deliver for the authorities.

Many of the remaining IPPs which have not had a tariff revision are CPEC plants and will entail negotiations with the Chinese government, who has not been flexible on this front since the time of the PTI government.

The IMF has also stressed on discontinuing gas supply to industries for captive power, so that they move to the national grid for their power needs; this will ensure recovery of capacity payments from a larger pool of consumers, in turn reducing the weighted average power tariff.

Pakistan is expected to increase FBR’s tax revenues by 18% in FY25 to PKR11 trillion from estimated PKR9.4 trillion in FY24 (estimated nominal GDP growth of 13% for FY25). The growth in collection is expected to come mostly from direct taxes (expected to rise 15%YoY which include income tax) and sales taxes (up 21%YoY).

Pakistan’s gross external debt payments for FY25 are projected at US$21.0 billion, compared to US$22.6 billion for FY24 and an earlier projection for FY25 of US$22.2 billion.

As per the SBP, Pakistan has improved its external debt maturity profile during FY24, reducing the stock of ST borrowings (from foreign commercial banks).