Iran: Candidates advised to follow ethics

Ayatollah Ahmed Jannati, the secretary of Iran’s Guardian Council, has advised presidential candidates to adhere to legal requirements, regulations, and ethical norms during their campaigns.

“We hope that the candidates and their supporters, by observing legal standards and ethical principles in their election campaigns, will pave the way for a dignified religious democratic election,” he stated on Wednesday. 

Also warning against foul play, the spokesman for Iran’s Judiciary said the candidates’ conduct is being closely monitored.

“Everything is being monitored, and if any unethical behavior related to the election is observed, judicial authorities will take action against individuals in accordance with the law,” Asqar Jahangir announced. 

On Wednesday, there were also discussions about the candidates that the Guardian Council did not approve to contest the presidential elections.

In the past days, some of the rejected nominees took to social media to protest, claiming that the Guardian Council had made errors in evaluating the registered nominees.

In response, the Guardian Council spokesperson refuted these claims, stating that the vetting process is thorough and cannot be influenced by any political group or individual.

“At first, a report about the backgrounds and qualifications of each candidate was presented, and then inquiries about the individuals were raised. Then, based on their knowledge and information, the members of the Guardian Council independently expressed their opinions. Finally, a vote was taken,” Tahan Nazif explained during an interview with the khamenei.ir.

He added that none of the individuals in the 12-member council can be swayed by external pressure or influence. 

In addition to discussing practical economic policies to improve the national economy, two presidential candidates addressed the JCPOA and negotiations with Western nations on Wednesday.

Mostafa Pourmohammadi highlighted his past experience in negotiations with foreign adversaries to argue that he could reach beneficial agreements with the West. 

“I negotiated with Saddam, many of my close associates were martyred by him. I negotiated with the worst enemy of the Iranian nation. Still, with strength, the backing of national power and intelligence, and negotiation techniques, I managed to reach results,” he said during a televised address. “The battlefield and diplomacy should complement each other,” he added. 

Saeed Jalili also commented on negotiations with Western nations indirectly, criticizing Hassan Rouhani’s government who in Jalili’s words, tied every aspect of the economy to the revival of the JCPOA.  

“Before President Raisi's government, it was claimed that oil could not be sold due to US sanctions, and we provided solutions for oil exports to the government at that time. These solutions were taken seriously by President Raisi's government, and our oil sales reached over 1.5 million barrels per day. The surge in exports from almost zero proved that sanctions could be neutralized,” he said. 

 

Pakistan: Federal Budget FY25 Highlights

The Federal Budget was announced on Wednesday with a commitment to continue the fiscal consolidation seen last year. Most of the targets are in line with IMF guideline which will help in getting long term financing facility.

While no major reforms were seen on the exports, energy and other sectors, many tax exemptions have been removed.

Government has adapted significant tax measures to get incremental tax revenues of PKR3.7 trillion, taking total FBR taxes to PKR12.97 trillion from current year estimated number of PKR9.25 trillion.

Including petroleum development levy (PDL) in tax revenues, the FBR tax to GDP ratio for FY25 is estimated to reach 11.5% from 9.62% in FY24. For last five years this has remained 9.7% of GDP. To recall, PDL used to be tax revenue till FY20.

Analysts believe, tax measures taken under this budget are quite balanced and less inflationary than expected, as earlier it was considered that government will increase GST by 1% etc. These measures will pave the way for IMF program, if approved from the parliament.

Overall budget aims to ensure primary surplus of 2% of GDP or PKR2.5 trillion (excluding provincial surplus 1% of GDP), which is in line with the IMF guidelines.

 Some of the key announcements from the budget are: 

GDP growth target

Government has set a GDP growth target of 3.6% for FY25 as against provisional GDP growth of 2.4% for FY24. Government expects Agriculture, Industrial and Services sector to grow by 2.0%, 4.4% and 4.1%, respectively during FY25.

Analysts believe, GDP target of 3.6% is achievable as industries has started reflecting V shaped recovery; LSM index in 3QFY24 has achieved growth of 1.47%. Approximately 50% of the subsectors have recovered and posted positive growth. Going forward, with the expected decline in interest rates, industrial growth target of 4.4% seems achievable. Services sector is also expected to grow 4.1% on the back of low base, expected recovery in industrial growth and subsequently in advances of the banks, the services sector is also expected to post more than 4% growth.

The total budget outlay is set at PKR18.87 trillion for FY25, up 25%.

Markup Expense

Markup expense is envisaged at PKR9.8 trillion, 18% higher than revised estimate for FY24. Surge in Markup expense is primarily due to increase in debt to finance fiscal deficit. This will take markup expense as % of tax revenues to 75% from 5 year average of 63%. Actual interest expense for FY25 may remain lower than projected numbers due to expected fall in interest rates.

Current Expenditure

Total Current Expenditures are estimated at PKR17.2 trillion for FY25, up 21% from revised estimates of FY24. Government has earmarked subsidies of PKR1.4 trillion as compared to revised estimates of PKR1.0 trillion for FY24.

Development Expenditure

Development expenditure is estimated at PKR3.8 trillion for FY25, up 58% YoY; within this, federal PSDP is kept at PKR1.5 trillion, up 80% from revised figure for FY24. In federal PSDP, 81% of the budget is diverted to existing projects, while only 19% is allocated for new projects.

Defense Expenditure

The Defense Expenditure has been set at PKR2.1 trillion for FY25, 14% higher as compared to PKR1.86 trillion for FY24.

Revenue

FBR Tax Revenue target has been set at PKR12.97 trillion up 40% for estimated collection of PKR9.25 trillion for FY24. This is higher than average growth of 20% in last five years. Though the target is high, Government is likely to collect around PKR12 trillion based on the new tax measures. The balance numbers can be achieved through reduction in significant higher PSDP allocation.

The Non Tax Revenue target has been set at PKR4.8 trillion up 64% from last year’s revised estimate of PKR2.9 trillion, where the government has budgeted PKR1.3 trillion under petroleum development levy (PDL) up 33% from FY24 estimated number of PKR960 billion.

From State Bank, government has estimated dividends of PKR2.5 trillion, more than 157% higher than FY24 number of PKR972 billion. This seems to be higher than the governor state bank’s comment in analyst briefing on April 29, 2024 that SBP will provide over PKR2 trillion to the government next year.

Fiscal Deficit

The government has estimated a fiscal deficit at PKR7.3 trillion, 5.9% of GDP (6.8% excluding provincial surplus) for FY25 as compared to estimated Fiscal Deficit of PKR7.8 trillion, 7.4% of GDP (7.9% excluding provincial surplus) for FY24. This includes provincial surplus of PKR1.2 trillion in FY25 as compared to revised estimate of PKR539 billion for FY24.

Primary Balance

The government has primary surplus target of PKR2.5 trillion (2.0% of GDP) for FY25 as against estimated surplus of 0.4% for FY24. IMF estimates primary surplus of 0.4% of GDP for FY25 in its May 2024 report. Excluding provincial surplus, primary surplus would be 1% of GDP for FY25 and deficit of 0.13% for FY24.

Current Account

Interestingly government projects a Current Account Deficit of US$3.7 billion for FY25, which will be higher than FY24 as it is expected to be a year of surplus of US$100-200 million.

Taxation Measures

Government has relied on natural increase in Tax Revenues in line with estimated 17% increase in nominal GDP along with few of the following measures;

Increase in FED on cement by PKR1/kg to PKR3/kg. This will yield revenues of approximately PKR40 billion to Government.

Pensions reforms will save approximately PKR40 to PKR45 billion.

Capital gain tax for non filers is increased to 45%, while for the filers it is proposed uniform 15%.

Exporter (textile, IT, and rice etc) will be required to pay normal tax, earlier it was 1% full and final tax. This will help Government to collect extra PKR50 to PKR100 billion.

Tier one retailers of textile and leather will be required to pay 18% from 15%.

Standard sales tax of 18% on mobile phones will result in additional tax revenues of PKR50 to PKR100 billion.

Sales Tax exemptions granted to FATA/PATA are removed in phased manner. This will bring additional taxes of PKR10 to PKR20 billion.

Removal of exemption on custom duties on import of Hybrid vehicles and luxury electric vehicles.

No of slabs for salaried tax are reduced, while the maximum tax is proposed to be unchanged. However, for non salaried person, maximum slab is increased to 45%

Advance withholding tax on non filers Retailers, Wholesalers, and distributors is increased to 2.5% from current 1%.

Increase in PDL limit to PKR80 per liter (minimum PKR60) on HSD and MS oil. This will help government to collect around PKR350 billion.

United States losing grip over Middle East

The events of October 07, 2023, marked a significant turning point for both Israel and the Arab world. The attack by Hamas has initiated a new era in regional dynamics. In the years leading up to this, four Arab League members—Bahrain, Morocco, Sudan, and the United Arab Emirates—had begun normalizing diplomatic relations with Israel. As of late 2023, Saudi Arabia was also considering a similar move.

However, the attack by Hamas and Israel’s subsequent military action in Gaza has halted progress toward normalization. Saudi Arabia announced it would not proceed with normalization until Israel takes steps toward establishing a Palestinian state. Additionally, Jordan recalled its ambassador to Israel, and a planned visit by Israeli Prime Minister Benjamin Netanyahu to Morocco was canceled.

Arab leaders are increasingly concerned as public opposition to the war in Gaza grows. Protests have erupted in many Arab countries, with demonstrators in Jordan and Morocco demanding the end of their countries' peace treaties with Israel. This public sentiment highlights frustration over perceived government inaction.

October 07 may also prove pivotal for the United States. The Gaza conflict has significantly damaged Arab public opinion of the US, complicating its efforts to resolve the Gaza crisis, manage Iran, and counter China's influence in the Middle East.

Arab Barometer’s surveys reveal a significant drop in favorable views of the US across the Arab world, reversing a trend of improved opinions seen up to 2022. In contrast, views of China have improved, driven by dissatisfaction with US policies rather than specific approval of Chinese actions regarding Gaza.

For US leaders, resolving the Gaza conflict and fostering a permanent Israeli-Palestinian settlement are crucial. Additionally, securing the Red Sea and building a regional alliance to counter Iran and limit China’s influence are key objectives. However, achieving these goals requires the cooperation of Arab states, which is difficult with the current level of public skepticism toward the US.

The belief that Arab leaders are indifferent to public opinion is a misconception. The Arab Spring and subsequent protests have shown that public sentiment can influence leadership changes. Hence, US policymakers must consider Arab public opinion to effectively engage with the region.

Surveys indicate that Arab skepticism towards the US can be reversed through policy changes. Measures such as advocating for a ceasefire in Gaza, increasing humanitarian aid, and supporting a two-state solution could improve perceptions of the US. Ultimately, demonstrating concern for Palestinian suffering as much as for Israeli suffering is crucial for the US to regain trust among Arab citizens.

Iran: Candidates receive mixed response

Schedules of the six candidates running for president in the June 28 elections were abuzz with activities and interviews, as they faced conflicting views on their announced policies

Each of the six candidates has selected a campaign manager. Notably, Ali Nikzad, the former Iranian minister of housing and urban development, has been chosen by Mohammad Baqer Qalibaf to lead the candidate's promotional efforts. Nikzad was unable to secure approval from the Guardian Council to run as a candidate.

The candidate who garnered the most attention on Tuesday was Masoud Pezeshkian, seen as the reformists' sole chance to reclaim influence. Pezeshkian's earlier statements on national television drew backlash from conservatives, who argued that the candidates appear to lack concrete strategies for crucial matters such as the economy, housing, and foreign policy.

Pezeshkian’s supporters and prominent figures holding moderate and reformist views were quick to come to his defense. The secretary general of the Servants of Construction Party argued that even though Pezeshkian has outlined no plans, he would never do something “detrimental” to the general public as he is “close to the masses”.  

Notably, former Vice President Is’haq Jahangiri, another face among the 74 failing to run for president this year, announced his full support for Pezeshkian. “He is the epitome of sincerity, assertiveness, courage, and moral living,” Jahangiri wrote in a post on X. 

Jahangiri was the vice president under Hassan Rouhani, who won the presidential elections twice with high votes. While the former vice president is undoubtedly considered to be a valuable source of support for Pezeshkian, analysts argue that the collapse of the Joint Comprehensive Plan of Action (JCPOA) has caused many voters to decouple from Rouhani and his allies, potentially limiting Jahangiri's influence in helping Pezeshkian collect votes. 

Remarks by conservatives on national television did not seem to stir much debate on Tuesday. Reformists and moderates mostly drew on previous assumptions to portray some of them as politicians with no flexibility. 

A prominent analyst suggested that none of the four conservatives stand a chance of winning the presidency unless some of them withdraw in support of others. Similar cautionary signals suggest that Pezeshkian may still present a significant challenge to his conservative rivals, despite uncertainties surrounding his popularity.

Mostafa Pourmohammadi, who is believed to hold somewhat moderate views, also spoke to the people on Tuesday. In his remarks, he had a vague emphasis on “happiness”, stating that the government should prepare means of becoming and staying happy for the citizens.

Courtesy: Tehran Times

 

Netanyahu and Gantz two sides of same coin

The resignation of Benny Gantz from Prime Minister Benjamin Netanyahu’s war cabinet has laid bare widening cracks within the Israeli establishment as the regime’s global isolation deepens over its genocidal war on the Gaza Strip.

"Unfortunately, Netanyahu is preventing us from approaching true victory, which is the justification for the painful ongoing crisis," Gantz said in a televised statement on Sunday evening as he announced his resignation. 

Undoubtedly, it is a fallacy that Gantz would have acted any differently than Netanyahu if he had been in Bibi’s shoes following the October 07 Hamas attack. Gantz is playing the blame game when he accuses Netanyahu, known as Bibi, of denying Israel “true victory” because both of them want to see the elimination of Hamas from Gaza.

Gantz is Netanyahu’s chief political rival. Polls suggest if snap elections were held today, he would be the winner. 
Hence, making such critical remarks is not surprising. 

Both Netanyahu and Gantz are criminals who have the blood of a large number of Palestinians on their hands.   

The slaughter of more than 37,000 Palestinians in Gaza since October 07, 2023 is just the tip of the iceberg.  

Gantz had already threatened to step down if Netanyahu did not lay out how Israel would achieve its “six strategic goals” in Gaza which include the end of Hamas rule in Gaza.

More than eight months have passed since Israel declared war on Gaza following Hamas’ surprise military operation in southern Israel on October 07. Israel has not only failed to bring Hamas to its knees but the regime has suffered major defeats at the hands of resistance fighters on the battlefield. 

Laying out plans for defeating Hamas is just wishful thinking because the resistance movement has become stronger and support for it has grown in the Palestinian territories over the past months. 

True victory for them means defeating Hamas, but this dream will remain elusive even if Gantz or others succeed Netanyahu. 

Netanyahu and his coalition partners still have 64 of the Israeli parliament’s 120 seats. His cabinet will not collapse following the resignation of Gantz if far-right ministers, namely National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich do not make good on their threats to leave the cabinet. 

Netanyahu could safely stay in office till elections are due in October 2026. But he will become more heavily reliant on far-right ministers who now want a spot in the war cabinet to replace Gantz.  

Gantz’s decision to quit the war cabinet could be a clever ploy because he wants to shirk responsibility for Israel’s failure to achieve its military goals in Gaza. He wants to appear as a savior and woo voters in a future election. 

Netanyahu, criticized his move, saying in a post on X, “Benny, this is not the time to quit the campaign, this is the time to join forces."

Far-right ministers made a blistering attack on Gantz too.

 “There is no act less stately than withdrawing from the government during a war,” Smotrich said.

He accused Gantz of fulfilling the demands of Hamas, Lebanon’s Hezbollah, and Iran by his decision to leave the war cabinet. 

Netanyahu regime has vowed to continue the Gaza war in defiance of growing international calls to reach a deal with Hamas.  

The United States and its allies blame Netanyahu for the continuation of the Gaza war. They have depicted Gantz as a centrist politician who can end the onslaught. 

A question arises, is Gantz different from Netanyahu?

Undoubtedly, it is a fallacy that Gantz would have acted any differently than Netanyahu if he had been in Bibi’s shoes following the October 07 Hamas attack.

Gantz is a former chief of staff of the Israeli military and also a former war minister. 

He was the army chief when the regime launched war on Gaza in 2012. The Israeli rights group B’Tselem said the Israeli army under Gantz’s leadership killed nearly 170 Palestinians during the war. 

In another war against Gaza in 2014, more than 2,000 Palestinians including over 500 children were butchered by Israeli forces while Gantz was still the army chief. 

The Israeli army also killed hundreds of Palestinians in Gaza in May 2021 and August 2023 when Gantz was the regime’s war minister. 

In his 2019 campaign for the Israeli Keneseth, Gantz put out a video of destruction in Gaza in the 2014 war. In that video, he bragged about sending parts of Gaza “back to the Stone Age”. 

This is in addition to the killings of Palestinians in the West Bank at the hands of Israeli forces during the era that Gantz held top military posts. 

The comments made by Gantz and the Israeli military’s brutalities when he was the chief of staff and war minister clearly show how he thinks about Palestinians. 

Now it seems Netanyahu is playing the role of the bad cop and Gantz is the role of the good cop.

But, in essence, they are members of the bogus apartheid regime. 

As long as the US and its Western allies continue to support Israel, the regime will not end acts of genocide in the Palestinian territories. The regime seeks to make the Palestinian territories uninhabitable for Palestinians and force them to leave their homes, which amounts to ethnic cleansing. 

 Courtesy: Tehran Times

Forecasting gold price movement

Gold prices hit a record of over US$2,400 per troy ounce in mid-May. The commodity is up by around 20% over the last year and is up by close to 50% since late 2022, and is now nearly double the level that prevailed for much of the 2010s.

Two key factors are at play behind this Bull Run. The first is smoldering geopolitical tensions amid US-China frictions and wars in the Middle East and Europe, which have stoked safe-haven demand. The second—and perhaps most important—is central bank purchases.

Monetary authorities snapped up more than 1,000 tons of the metal in 2022 and 2023, around double the average of the prior decade, and gobbled up a record amount in Q1 2024 as they looked to diversify their reserves and hedge against potential currency depreciation. These drivers outweighed a strong US dollar and high interest rates, which generally tend to weigh on gold prices.

Analysts have become increasingly optimistic on the outlook of yellow metal so far this year. The average gold prices forecast for 2024–2028 are about 10% higher now than back in January. The metal in the coming years will remain—for the first time in history—comfortably above US$2,000 per troy ounce.

The drivers of this bright projection are manifold. Firstly, gold jewelry consumption is set to rise globally as emerging market consumers become ever-wealthier. Moreover, geopolitical risk will likely remain, spurring safe-haven demand.

Furthermore, the growth of high-tech manufacturing will also require more gold; the metal is used in most automobiles and consumer electronics.

Finally, production of the metal is seen as fairly stagnant ahead, as declining grades and the depletion of mine reserves offset the impact of new mines and expansions.

The outlook for silver prices is also upbeat

Gold and silver prices tend to move in close correlation, given that both are used in jewelry and as investment and safe-haven assets. As with gold prices, silver prices peaked in mid-May at an over-decade high, and are seen at historically elevated levels of over US$25 per troy ounce over forecast horizon to 2028. But silver has one crucial difference to gold. It is more widely used in industry, particularly in high-growth sectors such as solar panels and electric cars, which will give an extra boost for silver prices in the coming years. Couple this with the metal’s currently high price discount with gold and silver looks even more appealing. Gold may be capturing most of the headlines right now, but prospects for silver prices are at least as bright.

 

Democrats to Boycott Netanyahu Speech

A growing number of House Democrats plan to boycott Israeli Prime Minister Benjamin Netanyahu's upcoming speech to Congress on July 24, criticizing his approach to the Hamas conflict and his disregard for President Biden's preferred strategies.

Netanyahu's upcoming speech to Congress has deepened existing divisions among House Democrats. While some plan to boycott in protest of his policies and actions, others will attend to demonstrate their support for Israel as a vital ally. This event underscores the broader debate within the party over the best approach to the Israeli-Palestinian conflict and US foreign policy in the Middle East.

Several lawmakers, such as Hank Johnson, have explicitly stated their intention to avoid the event, reflecting a long-standing animosity toward Netanyahu's conservative policies and actions, including his criticisms of the Iran nuclear deal during Obama's presidency.

In 2015, Netanyahu's speech to Congress sparked a similar boycott due to his opposition to the Iran deal and Speaker John Boehner's coordination of the event without consulting the White House.

This year, at least 58 lawmakers plan to boycott again, among them Lloyd Doggett and Jan Schakowsky, both critical of Netanyahu's actions in the Gaza conflict. They argue that his approach has led to unnecessary loss of life and that he should focus on peace efforts rather than addressing Congress.

While some Democrats plan to boycott the speech, others intend to attend to show solidarity with Israel. Juan Vargas emphasized the importance of supporting Israel as a democratically, despite internal divisions within the Democratic caucus. Top House Democrats, including Pete Aguilar and House Minority Leader Hakeem Jeffries, acknowledge that each member must decide whether to attend based on their beliefs and the views of their constituents.

Netanyahu's visit highlights ongoing tensions within the Democratic Party regarding US policy toward Israel and the Palestinian territories. Pro-Israel Democrats often clash with pro-Palestinian progressives over civilian casualties in Gaza.

The announcement of Netanyahu's address by Speaker Mike Johnson and Senate Minority Leader Mitch McConnell excluded Senate Majority Leader Chuck Schumer and Jeffries, despite their earlier support for the invitation.

Former Speaker Nancy Pelosi expressed her disapproval of the invitation, arguing that she would not have extended it if she were still leading House Democrats.

Schumer, while critical of Netanyahu's policies, believes in the importance of maintaining strong US-Israel relations.

Supporters of the speech, like Josh Gottheimer, argue that hearing from a key ally like Israel is crucial, especially given the ongoing threats from groups like Hamas and Iran-backed proxies. They emphasize the need for continued collaboration between the US and Israel in combating terrorism and ensuring regional stability.