Pakistan's biggest problem: lack of good governance

The matter of grave concern is that Pakistan suffers from three deficits: 1) budget deficit, 2) trade deficit and 3) trust deficit. Though we have listed trust deficit on number three, may economic analysts term it ‘mother of all evils’. The public trust in the ruling regime is at the lowest ebb. That is the reason Pakistan’s GDP growth rate has been hovering around 3 percent for years.

According to the experts the GDP growth rate is low because new investment is scanty, balancing, modernization and replacements are virtually nonexistent. To be honest the existing units face declining capacity utilization, which is leading to closure of the productive facilities.

The ruling regime often take pride in saying, ‘Pakistan is one of the best performing market’. The reality is around 500 companies are listed at the local stock exchange and only a small number of new companies listed is the last one decade. Banks are thriving because of huge investment in the government securities, exploration and production companies make fortune due to high international prices of crude oil, fertilizer plants are working below optimum capacity utilization, country imports huge quantity of refined products because of dismal capacity utilization and the list can continue.

To overcome budget the government has imposed huge taxes on each and every product, including lifesaving drugs and food items. Imposition of petroleum development levy increases power generation cost as well as transportation and logistics cost. High electricity and gas tariff encourage theft, which is evident from ballooning circular debt.

Over the last three years no effort has been made to contain expenditures, which prompts the government to borrow more, to be honest the government borrows to pay off the debt.

To conclude the government is creating new entities, which promise bringing in huge investment. One fails to understand if the existing industries are closing, local entrepreneurs and educated people are leaving the country, why should foreigners select Pakistan as an investment destination? The rulers must remember actions talk louder than words.

Egypt: Gaza Border Security Concerns

Egyptian Army Chief of Staff Ahmed Fathy Khalifa made an unannounced visit on Thursday to the country’s border with the Gaza Strip to assess the security situation, reports Saudi Gazette.

During the visit, he reaffirmed the armed forces' readiness, stating, "The armed forces are capable of defending the homeland's borders, a generation after another."

The visit followed accusations from a high-level Egyptian source who claimed Israeli Prime Minister Benjamin Netanyahu was obstructing Gaza cease-fire and prisoner swap negotiations by alleging that weapons were being smuggled through the Egypt-Gaza border.

The Philadelphi Corridor, a demilitarized zone along Egypt's border with Gaza, remains a contentious issue in ongoing cease-fire and prisoner swap talks between Israel and Hamas.

Netanyahu has insisted on maintaining a military presence along the corridor, describing it as a crucial supply route for Hamas to rearm, a claim Egypt vehemently denies.

Israel's continued offensive in Gaza since a Hamas attack on October 07 last year has led to the deaths of over 40,800 Palestinians, mostly women and children, and injured nearly 94,300, according to local health authorities.

Mediation efforts by the United States, Qatar, and Egypt have stalled due to Netanyahu’s refusal to agree to a cease-fire and prisoner exchange.

The ongoing blockade of Gaza has resulted in critical shortages of food, water, and medical supplies, causing severe humanitarian distress and drawing accusations of genocide against Israel at the International Court of Justice.

 

New Red Sea Services Launched

According to Seatrade Maritime News, global line Ocean Network Express (ONE) and regional player SeaLead have announced new services calling at ports in, or at the entrance to, the Red Sea.

Ocean Network Express (ONE) said is launching a new weekly service Red Sea Gulf India 2 (RG2). The new service calls Mundra, Jebel Ali, Jeddah, Sohkna, and Aqaba.

The new service will provide additional coverage as well as increasing connectivity and frequency to the Red Sea, on top of ONE’s existing Red Sea Gulf India Service (RGI).

The largest container lines, including ONE, have rerouted nearly all their long-haul services between Asia – Europe/ Med and the US East Coast via the Cape of Good Hope due to the security situation in the Red Sea and to avoid the threat of Houthi attack.

ONE has also suspended its Asia Red Sea 1 service which normally connects Northeast Asia and Red Sea via Southeast Asia.

However, for trades within the Middle East region to Red Sea ports there are few other viable options than to continue sailing through the Red Sea.

Regional player SeaLead is one of those that has continued to sail through the Red Sea and has add3d a new Far East India Djibouti (FID) service that starts on September 05, 2024.

New service calls Djibouti which is on the African shore of the Bab-el-Mandeb Strait, a narrow waterway at the southern entrance to the Red Sea where the Houthi in Yemen have launched attacks on commercial ships transiting the waters since last November.

Suleyman Avci, Global Chief Executive Officer at SeaLead, said, "This service is a strategic step forward, enhancing our capabilities in China, India, and East Africa. By leveraging Djibouti's crucial maritime hub, which connects the Red Sea, we are providing greater coverage and ensuring faster, more reliable connections for our customers, solidifying SeaLead's role in shaping global trade."

The FID service originates in Shanghai, calling Ningbo, Nansha, Port Klang, Colombo, Nhava Sheva, and Mundra before reaching Djibouti.

According to SeaLead’s website it operates an India – Turkiye service, Turkiye – Red Sea that connects to the Port of Jeddah, and a China – East Asia – Turkiye route, all of which transit the Red Sea.

 

Women in Iranian cabinet

Haleh Esfandiari of Wilson Center, discusses the singular appointment of a woman to the new Iranian presidential cabinet. She reviews the short history of female appointees and discusses the expectations of President Masoud Pezeshkian regarding women’s issues.

Iran’s new president, Masoud Pezeshkian, appointed one woman, Farzaneh Sadegh, to his cabinet as minister of roads and urban development. This is only the second time in the 45-year history of the Islamic Republic that a woman has made it into the cabinet. Even so, she faced strong opposition in the Majlis, or parliament, whose members must approve all cabinet appointments.  

The deputies claimed they objected to her appointment not because of her sex but because of her lack of qualifications. But Sadegh is hardly unqualified: she is an engineer by training, has experience serving in different parts of the government, including as deputy minister of urban planning, and proved herself a tough match for objecting parliamentarians. She reminded them that she has always spoken her mind, objected to policies of previous administrations in which she served, and owes nothing to anyone. 

Nevertheless, President Pezeshkian was able to overcome parliamentary opposition to her appointment by invoking the name of the Supreme Leader, Ali Khamenei. Pezeshkian reported that Sadegh was the choice of Ayatollah Khamenei himself and that the highest authority in the land (meaning the Supreme Leader) had approved his cabinet choices. Thus, the deputies dutifully fell into line and gave Sadegh their vote of confidence. 

The parliament’s reaction to Sadegh as a cabinet choice repeats a common pattern in the history of the Islamic Republic. Previously, President Mahmoud Ahmadi Nejad tried to name three women for cabinet posts; the parliament rejected two and approved one, Marzieh Vahid Dastjerdi as minister of health. She was not reappointed in Ahmadi-Nejad’s second term due to a fallout with the president. 

Other previous presidents, including ‘reformist’ presidents Hashemi-Rafsanjani, Mohammad Khatami, and Hassan Rouhani, did not even try to name women to their cabinets, wishing to avoid disputes with parliament. The ultra-conservative Ebrahim Raisi followed suit. A handful of women have been elected to successive parliaments, ranging from four in the first parliament (1979-1983) to 16 in the current parliament, but the Majlis has remained a bastion of male members. 

Presidents have sought to appease the women’s constituency by appointing women as advisors and vice presidents (Presidents can appoint several vice presidents, assigning them different responsibilities). The reason is simple: the president does not need parliamentary approval for such appointments. Presidents Khatami, Rouhani, and Ahmadi Nejad named women variously as vice presidents for environmental affairs, women’s affairs, and cultural affairs. 

Following this tradition, Pezeshkian named two women as vice-presidents: Shina Ansari, a career environmentalist, as head of the Department of the Environment, and Zahra Behrouz-Azar as vice-president for women’s affairs. Behrouz-Azar has been a critic of the morality police and their harsh crackdown, arrests, and mistreatment of women during the 2022 protest movement and against the enforcement of the hijab.

President Pezeshkian also appointed Fatemeh Mohajerani as the government spokesperson, a first in the history of the Islamic Republic. According to the Tehran Times, a daily English paper in Iran, she has a doctorate in business administration from the Edinburgh campus of Heriot-Watt University in Scotland. Her career has been mostly as an educator. 

Activist women are waiting to see whether President Pezeshkian will curb the morality police and provide a safe environment for women on the streets, in public places, and on university campuses, and whether he will secure the release of the many young women and men serving long prison sentences. He recently told his minister of higher education to look into reinstating university professors and students dismissed for participating in the 2022 ‘Women, Life, Freedom’ protests. For the moment, the public has adopted a ‘wait and see’ attitude towards the president, but their patience may not last long. 

 

 

Saudi Arabia slams Israeli statements regarding Philadelphi Corridor

Saudi Arabia strongly condemned the recent Israeli statements with regard to the Philadelphi Corridor, a narrow band along Gaza’s border with Egypt.

The Ministry of Foreign Affairs expressed the Kingdom’s strong condemnation and denunciation of the Israeli statements regarding the Philadelphi Corridor, and the futile attempts to justify the continued Israeli violations of international laws and norms. In a statement carried by the Saudi Press Agency, the ministry vowed its solidarity and support for Egypt in the face of these Israeli allegations.

Saudi Arabia warned of the consequences of these provocative statements, and their repercussions in undermining the mediation efforts being undertaken by Egypt, Qatar, and the United States of America, to reach a permanent ceasefire.

The ministry stated that such provocative statements would increase the severity of the dangerous escalation witnessed by the region. It also emphasized the importance of putting an end to the suffering of the Palestinian people, and the necessity of concerted international efforts to enable them to exercise their inherent right to self-determination, and establish their independent state on the 1967 borders with East Jerusalem as its capital.

The ministry statement comes in the wake of the recent statement of Israeli Prime Minister Benjamin Netanyahu that the Philadelphi Corridor will be under the control of Israel in any ceasefire deal.

Türkiye arrests Mossad financial network chief

Istanbul Police have arrested Liridon Rexhepi, identified by the Turkish National Intelligence Organization (MIT) as the head of Mossad’s financial network in Türkiye, security sources said on Tuesday.

According to the sources, Rexhepi was responsible for managing the financial operations of the Israeli intelligence agency Mossad within Türkiye.

Under the instructions of Israeli intelligence, he allegedly conducted drone surveillance and psychological operations against Palestinian politicians and transferred funds to field agents gathering intelligence on Syria.

Rexhepi’s activities, including suspicious financial transactions, were closely monitored by MIT, revealing significant money transfers through Western Union to Mossad field agents in Türkiye.

MIT had tracked his activities since he entered the country on August 25, culminating in his detention on August 30 by MIT and Istanbul Police. During interrogation, Rexhepi admitted to his role in transferring funds.

Two more ships hit in Red Sea

According to the Seatrade Maritime News, two successful attacks on merchant ships in the Red Sea were carried out within hours of each other during the morning of September 02, 2024.

According to UKMTO reports, the first attack occurred when a vessel was struck by two unknown projectiles around 70 nautical miles northwest of Saleef, Yemen. A third explosion was reported close to the vessel, and no casualties were suffered during the attack. 

“Damage control is underway,” the report stated.

Media reports claim the vessel was Blue Lagoon I, a Panama-flagged shuttle tanker, and the projectiles have since been confirmed as missiles.

In a separate incident a ship was hit by an Uncrewed Aerial System 58 nautical miles west of Al Hudaydah, according to the master’s report to UKMTO.

Both ships reported that they were proceeding to their next ports of call.

The attacks come as tanker Sounion remains ablaze off Yemen. The ship was attacked by Houthis on August 21 and has been on fire since August 23 when Houthi forces boarded the ship and planted remotely-detonated explosives across its deck.

The Houthis, who claimed responsibility for the initial attack and recorded the subsequent boarding and remote detonation of explosives, have given their approval for salvors to approach the stricken tanker. Sounion is carrying around a million barrels of crude oil, and poses a significant risk to navigation and the environment.