De/Cypher Data Dive 📈
Pakistan’s carbon emissions are less than one percent in the global carbon trajectory, but it’s ranked among the ten most vulnerable countries to climate change, according to the Germanwatch think tank. The effects of climate change in Pakistan include a heightened frequency of extreme weather events, like the devastating floods that occurred in 2022.
Asia View
The War that Could Be: Pakistan on Israel-Iran Tensions
Written By Priyanka Garodia, Geopolitical Research Analyst – South Asia
The weekend was a tense time for the world as it awaited Israel’s reaction to the Iranian air strike. The events began on April 10th with an Israeli attack on an Iranian embassy in Damascus. Breaking from a long-standing tradition of ‘shadow warfare’ with Israel, Tehran retaliated with a launch of about 300 drones on Israel, most of which were intercepted in time, limiting damage. The fears of a regional war breaking out were palpable given Israel-Iran’s historic animosity. Israel’s response to the airstrike was an attack at Isfahan, Iran’s nuclear facility with no sustained damage being reported thus far. Iran has downplayed the attack and shows no indication of escalating the situation.
Economic Consequences: While war has not emerged out of the confrontations yet – it can have severe repercussions for South Asia. Brent crude saw prices hike to $90 a barrel, risk premiums kicked in to limit shock and the threat of global inflation was high. However, given Iran’s pragmatic response to the Isfahan attack, prices have stabilised and markets remain calm. Crude oil has slipped below 87$ a barrel while the US has imposed fresher sanctions on Iranian oil.
Maritime Trade Routes: The Strait of Hormuz connects the Gulf of Oman and the Persian Gulf. It oversees the trade of a third of the world’s oil found in the Arabian peninsula. The Suez Canal on the other end is a major artery for maritime trade connecting Asia with Europe. It sees about 12% of global trade and around 50 ships pass through the canal daily. A war between Israel and Iran will disrupt these routes leading to a potential energy crisis for South Asia that relies heavily on its oil supply from the region. A disruption in oil supply could spiral into an energy crisis and trigger a global economic recession with increased commodity prices.
The South Asian Perspective: Pakistan, Bangladesh and the rest of South Asia have significant relations with the Middle East. Pakistan could have a lot to lose. Islamabad shares a border with Iran and has a massive migrant population working in the region. A regional conflict would interrupt incomes and could reflect on the domestic economy of Pakistan as remittances slow down – an economic fallout Pakistan does not need. A series of attacks between Pakistan and Iran have added to tensions between the countries. Iran launched a direct attack on the Jaish-al-Adl (Army of Justice) in the Pakistan province of Baluchistan and Pakistan responded with attacks of its own. Diplomatic ties were suspended between both nations and have only resumed normalcy now, given that the Iranian president Ebrahim Raisi, is due to visit its neighbour today.
Pakistan draws considerable support from the Sunni Arab world including Saudi Arabia and has been balancing its relations with Riyadh and Tehran diplomatically. It does not have formal diplomatic relations with Israel, however, it maintains close economic ties with most of its allies including USA and Saudi Arabia. Given its domestic economic concerns, it simply cannot afford to lose economic allies. Pakistan has formally pushed for caution and de-escalation of the situation.
Conclusion: The ‘show of force’ vs the ‘act of deterrence’ debates have characterised most of Israel-Iran’s actions. The possibility of war between the countries could lead to Iran trading its ‘Axis of Resistance’, a foreign policy strategy of using proxies and indirect war mechanisms, for the direct involvement of its allies in the region. This, in turn, could evoke a larger ‘Shia vs Sunni’ conflict with Saudi Arabia getting involved. The tit-for-tat exchanges between Israel-Iran have led to growing anxieties especially given Iran’s declaration of revisiting its nuclear policy if existentially threatened. A series of sanctions imposed by the UK and the US on Iran’s drone technology have led to this hardline declaration. Russia’s open declaration of support and the systematic expansion of cooperative relations between China, North Korea and Iran do not help matters either. War could have devastating impacts on South Asia and the world.
Af-Pak De/Cypher
22 April, 2024
Top Stories📜 this week
Iran president to visit Pakistan from Monday to Wednesday, Pakistan says
Iranian President Ebrahim Raisi will make an official visit to Pakistan this week, Islamabad said on Sunday, as the two Muslim neighbours seek to mend ties after tit-for-tat missile strikes in January. The visit, which Pakistan’s Ministry of Foreign Affairs said would take place from Monday to Wednesday, had been in doubt as Middle East tensions rose after Iran launched an unprecedented attack on Israel a week ago. Central Iran received what sources said was an Israeli attack on Friday. Read more: Reuters.
WB vows complete backing for Pakistan’s economic stabilization reforms
The World Bank has pledged full support to Pakistan for economic stabilization and revenue enhancement through reforms and digitalization programs. Federal Minister for Finance and Revenue, Muhammad Aurangzeb, discussed Pakistan’s progress under the 9-month Standby Arrangement (SBA) program and ongoing reforms with President World Bank Group, Ajay Banga. They highlighted priority areas such as taxation, energy, and privatization. Read more: Pakistan Today.
Saudi deputy defense minister arrives in Pakistan to finalize bilateral security projects
Saudi Assistant Defense Minister Talal Bin Abdullah Bin Turki Al-Otaibi is in Pakistan on a two-day visit to finalize defense-related bilateral projects, the Pakistani defense ministry said in a statement on Wednesday. Pakistan maintains close military ties with Saudi Arabia, providing extensive support, arms, and training to the Saudi armed forces. Read more: Arab News.
Tehran to release Pakistanis on board seized vessel
Iran has okayed the release of Pakistani nationals on board a Portuguese-flagged container ship, which was seized by Iranian forces in the Strait of Hormuz following its retaliation against Israel for an attack on its Damascus consulate earlier this month. Read more: Dawn.
Pakistan tops world in hep C infections
An alarming report from the World Health Organisation (WHO) indicates that Pakistan had the highest number of viral hepatitis C infections in the world, around 8.8 million, and accounts for 44 per cent of all new hepatitis C infections attributed to unsafe medical injections. In previous years, Egypt reported the largest number of hepatitis C and B cases, followed by Pakistan. Read more: Dawn.
Pakistan seeks to engage with Global Gateway Strategy through European Investment Bank
Prime Minister Shehbaz Sharif on Thursday met Ambassador of the European Union, Riina Kionka, and sought the EU’s support to help Pakistan carry out important reforms in various sectors and engage with the Global Gateway Strategy through the European Investment Bank. Pakistan’s GSP+ status is a special trade arrangement offered by the EU to developing economies in return for their commitment to implement 27 international conventions on human rights, environmental protection and governance. Read more: Arab News.
Saudi Arabia agrees to increase rice imports from Pakistan to 20% — Pakistani official
Saudi Arabia has agreed to increase rice imports from Pakistan to 20 percent of the Kingdom’s total requirement, a Pakistani official said on Wednesday, as the South Asian nation gears up to achieve the $3 billion rice exports for the first time ever. Pakistan and Saudi Arabia have been closely working to increase their bilateral trade and investment, including a recent commitment to invest about $5 billion in Pakistan. Riyadh currently imports 7 percent of its rice requirements from Pakistan as per the Trade Development Authority of Pakistan. The increased imports indicate the Kingdom’s desire to help Pakistan economically. Read more: Arab News.
Dharna commission suggests laws to regulate spy agencies
The Faizabad Dharna Commission, formed to investigate the Tehreek-i-Labbaik Pakistan’s (TLP) 2017 sit-in, has sent its report to the federal government recommending, among other things, legislation and drafting of rules and SOPs to regulate the working of intelligence agencies. The report noted that the involvement of the army or its affiliated agency in civilian matters adversely affects the fair image of the institution. The three-member body, headed by retired police officer Syed Akhtar Ali Shah and consisting of former IGP Islamabad Tahir Alam Khan and Additional Interior Secretary Khushal Khan, also called for “zero tolerance” towards violent extremism and suggested the government review its policies to address the root causes of the menace. Read more: Dawn.
High-profile Afghan Taliban religious scholar assassinated in Pakistan
Afghanistan’s Taliban government confirmed Friday that one of its leading religious scholars was assassinated by unknown assailants in neighbouring Pakistan. There were no immediate claims of responsibility for the deadly shooting. Taliban spokesman Zabihullah Mujahid said Friday on social media platform X that Akhundzada was part of a government oversight committee of top Islamic scholars and taught at the central “jihadi” madrasa, or Isla mic seminary, in the southern Afghan city of Kandahar. Mujahid also tweeted a picture of the deceased man. Read more: Voice of America.
Pakistani province issues flood alert and warns of heavy loss of life due to glacial melting
Authorities in Khyber Pakhtunkhwa issued a flood alert due to melting glaciers in multiple districts. They warned of potential worsening floods, advising people to relocate to safer areas. In the last five days, 46 individuals, including 25 children, have perished in rain-related incidents in the province. Read more: Ground News.
Pakistan Terror Network Will Be It’s Undoing
Written By De/Cypher Team
1. Pakistan’s inconsistent policy towards different militant groups has fueled a terrorism crisis within the country. The state has historically allowed some terrorist groups to operate freely while cracking down on others, leading to a complex situation where some militants are seen as instruments of regional influence and others as enemies.
2. The country’s political and economic troubles are deeply intertwined with its approach to terrorism. Pakistan’s support for certain jihadi groups and its participation in the U.S.-led war against terrorism have eroded its international standing and led to internal attacks against its military and security forces.
3. The Tehrik-e-Taliban Pakistan (TTP), an offshoot of the Afghan Taliban, has been responsible for numerous attacks in Pakistan and seeks to overthrow the government to create an Islamic emirate. The TTP’s ideology is aligned with the Afghan branch but draws its leaders from within Pakistan.
4. Pakistan’s security services and some politicians have advocated a nuanced approach to the TTP and other militant groups, suggesting that these groups reflect Islamic aspirations that need not be seen as inimical to Pakistan. However, events have shown that compromise with armed and violent radical Islamist groups is impossible.
5. The economic impact of domestic terrorism in Pakistan is significant, with the country losing an estimated $123 billion due to terrorism. This has affected foreign investment, tourism, and added to the defense budget.
6. Periodic negotiations between the Pakistani government and militant groups have failed to resolve the conflict, with several peace deals and cease-fire agreements breaking down. The TTP terminated the latest cease-fire in November and threatened new attacks across Pakistan.
7. Pakistan’s leaders are urged to recognize that violent, radical Islamists cannot be placated with negotiated settlements. They hold strong beliefs and a sense of destiny, and believe in using violence to shape the world according to their outlook.
8. The country needs a national consensus and the full support of its generals to end years of uncertainty about their policy on terrorism. However, there is currently no sign that the country is moving in that direction.
9. The sources suggest that Pakistan’s approach to terrorism has been counterproductive and has led to a situation where the country is both a victim and a perpetrator of terrorism.
De/Cypher Lighthouse 🔦
Are Airports Hotspots for Money Laundering?
Summarized by De/Cypher Team, Published in Wall Street Journal
“Billions in Dirty Money Flies Under the Radar at World’s Busiest Airports” from The Wall Street Journal highlights a significant issue of money laundering through air travel, particularly focusing on the Heathrow-to-Dubai route. Here are the key insights from the article:
1. Lack of Cash Scanning at Airports: The article points out that most airports, including Heathrow and those in the U.S., do not scan passenger luggage for cash. This is primarily due to the high costs associated with such scanning in terms of equipment and personnel. The only requirement at Heathrow is for passengers to declare if they are carrying more than the equivalent of around $10,000, which was not done in the cases described.
2. Ease of Smuggling via Airports: The article describes how billions of dollars in cash are smuggled through airports to countries with fewer regulations. The United Arab Emirates, for example, allows any amount of cash as long as it is declared upon entry. This creates a loophole that has been exploited by money launderers to move large sums of money undetected
3. Specific Cases of Money Laundering: The article details the operations of individuals like Jo-Emma Larvin and Abdulla Alfalasi who were involved in smuggling large amounts of cash. Larvin, for instance, was caught transporting millions of pounds in cash from Heathrow to Dubai without declaring it. Alfalasi managed a more extensive operation, involving multiple couriers to transport cash, which he then converted into gold or other currencies in Dubai.
4. Consequences and Legal Actions: Despite the scale of these operations, the penalties for getting caught are relatively minor compared to the amounts of money involved. The article mentions that Alfalasi was eventually arrested and sentenced to over nine years in prison, and assets worth millions were seized. However, many couriers receive lighter sentences or suspended sentences, highlighting the challenges in deterring such crimes.
5. Systemic Issues and Criticisms: The article also touches on the broader systemic issues, such as the lack of stringent checks at airports and the role of banks. Increased scrutiny by banks has pushed money launderers to use air transport as a less monitored channel. There is also criticism of the authorities and airlines for not taking enough responsibility to detect and prevent these activities.
Overall, the article sheds light on the significant challenge of combating money laundering through international air travel, emphasizing the need for better coordination and stricter enforcement of existing laws to close loopholes that allow such large-scale illegal activities to continue.
Bangladesh De/Cypher
22 April, 2024
Top Stories📜 this week
Bangladesh, Qatar to sign 6 deals, 5 MoUs during Qatar emir’s visit
Bangladesh and Qatar are set to sign 11 cooperation agreements, including six deals and five MoUs, during the visit of Qatar’s Emir Sheikh Tamim bin Hamad Al Thani to Dhaka. The agreements cover various areas such as taxation, legal affairs, investment promotion, transportation, and youth and sports cooperation. Read more: The Daily Star
Several deals to be signed during PM’s Thailand visit: MoFA
During Prime Minister Sheikh Hasina’s upcoming visit to Thailand from April 24 to 29, several agreements and memorandums of understanding are anticipated to be signed between Dhaka and Bangkok. Prime Minister Hasina, leading a high-level delegation, will engage in bilateral talks with her Thai counterpart, attend a royal audience with the King and Queen of Thailand, and participate in the 80th Session of the Commission for UNESCAP, aiming to strengthen cooperation between the two nations. Read more: New Age
Bangladesh, Greece vow to further strengthen bilateral relations
Foreign Minister Hasan Mahmud and Greek Foreign Minister George Gerapetritis met during the 9th Our Ocean Conference in Athens, pledging to strengthen bilateral cooperation across various sectors such as migration, trade, shipping, and renewable energy. Greece expressed interest in opening a diplomatic mission in Dhaka, emphasizing the need to enhance bilateral trade and investment. Read more: Dhaka Tribune
Dhaka seeks duty, quota-free access from Washington
During a meeting of the Trade and Investment Cooperation Forum Agreement (Ticfa) Council, Bangladesh urged the United States to grant duty-free and quota-free market access for Bangladeshi apparel made from US cotton. The request was made by the Ministry of Commerce during discussions with a delegation from the Office of the United States Trade Representative (USTR). The meeting also addressed labor rights issues and Bangladesh’s efforts to prevent violence and harassment against union organizers and workers. Read more: Business Post
Dhaka, Kathmandu for operationalisation of BBIN to boost trade, connectivity
During Foreign Office Consultations, Bangladesh and Nepal emphasized operationalizing the BBIN Motor Vehicles Agreement to boost trade and connectivity. Discussions also covered expediting a tripartite power agreement and enhancing cooperation in various sectors like trade, transit, and education. An MoU between their Foreign Service Academies was signed to strengthen diplomatic ties. Read more: Financial Express
Heatwave causes nationwide patient surge, children most vulnerable
A nationwide heatwave in Bangladesh is causing a surge in health issues among children, with hospitals reporting increased cases of pneumonia, fever, and diarrhoea. Bangladesh Shishu Hospital notes a significant rise in pneumonia cases this April compared to previous years. Meanwhile, districts like Chuadanga, Jashore, and Cumilla are grappling with overcrowded hospitals and a spike in child patients, primarily due to respiratory problems exacerbated by the heatwave. Read more: TBS
Bangladesh to introduce drone technology to assess crop losses
Bangladesh is set to adopt remote sensing and drone technology to assess crop damage caused by extreme weather or diseases, with 20 Department of Agricultural Extension (DAE) officers undergoing training. The program, jointly organized by DAE and ADB, includes classroom sessions on GIS and remote sensing analysis, followed by field trips to collect ground data. This initiative aims to enhance agricultural productivity and food security amidst climate change threats, supported by innovative solutions and funding from ADB and Japan. Read more: Daily Bonik Barta
Initiating dialogue with ‘terrorist organisation’ KNF urged
The Kuki-Chin National Front (KNF) has been deemed a terrorist organization following incidents of bank robbery and arms looting in Bandarban district, prompting calls to resume dialogue with them for rehabilitation. Social leaders of ethnic minority communities urge clarity from the Bom community regarding their association with KNF. Despite allegations, some maintain that not all Bom community members are involved, advocating for continued peace talks to reintegrate wayward youths. The peace establishment committee, formed to engage with KNF, previously conducted virtual and in-person meetings in an effort to curb terrorist activities in the region. Read more: Prothom Alo
Dr Yunus’ bail extended in labour law violation case
Nobel Laureate Prof Muhammad Yunus and three Grameen Telecom directors had their bail extended until May 23 by a Dhaka tribunal in a labour law violation case. Earlier sentenced to six months in jail, they appeared before the tribunal seeking permanent bail. Read more: Jago News 24
Bangladeshi architect Marina Tabassum on Time’s 100 Most Influential People list
Bangladeshi architect Marina Tabassum has been recognized in Time’s 100 Most Influential People of 2024 list for her dedication to sustainable architecture and community-focused design. Renowned for her commitment to local cultures and environmental consciousness, Tabassum’s work, including the Bait Ur Rouf Mosque, reflects her unique approach and global impact. She emphasizes the importance of buildings being in harmony with their surroundings, particularly in the face of climate change challenges like increased flood risks in Bangladesh. Read more: TBS
Bangladesh Braces for Ripple Effects of Middle East War
Written by De/Cypher Team
The escalating conflict in the Middle East casts a long shadow over Bangladesh, a country far from the battlefield but inextricably linked to the region’s economic and social fabric. While Bangladesh has not yet felt a direct impact, the government and business community are concerned about the potential consequences. Bangladesh’s major stock market indices fell on April 15th due to intense selling pressure, as investors were concerned that the economy will suffer another global crisis as a result of Iran’s attacks on Israel.
Rising Costs and Trade Disruptions: Economists predict a significant economic impact if the war escalates. The most likely outcome is an increase in oil and gas prices, which is a major concern for Bangladesh, which relies heavily on imports for energy. This translates into higher operational costs across all sectors, which could lead to inflation and a strain on household budgets. Aside from energy, disruptions to trade routes are a major concern. The Strait of Hormuz, a critical artery for Bangladesh’s trade with some Middle Eastern countries, may be affected. This could lead to delays and higher shipping costs, limiting exports, particularly in the garment industry, which is a critical pillar of Bangladesh’s economy.
Garment Industry on Edge: Apparel exporters, who are already struggling due to the Red Sea route blockade caused by the Houthi attacks in December 2023, are especially concerned. A wider war could cause a drop in global consumer spending, affecting purchase orders. Buyers may also seek alternative sourcing locations with shorter lead times, jeopardizing Bangladesh’s competitive advantage. While the US and EU remain the primary destinations for Bangladeshi garments, some Middle Eastern countries like UAE and Saudi Arabia are emerging markets. A war could dampen consumer spending in these regions, impacting Bangladesh’s export growth.
Remittances: The Middle East is also a major source of Bangladeshi migrant workers, and remittances provide a critical source of income for many families. A prolonged war could cripple these countries’ economies, reducing labor demand. This would not only affect remittance flows, but it could also lead to the return of Bangladeshi workers, putting additional strain on the domestic job market.
Government Measures and Long-Term Impact: Recognizing the potential dangers, Bangladesh’s government is taking proactive measures. Prime Minister Sheikh Hasina has directed ministers to closely monitor the situation and prepare for any consequences, such as rising fuel prices. This could include looking into alternative energy sources or implementing subsidies to reduce the impact on citizens.
The full extent of the war’s impact on Bangladesh remains unknown. Much depends on how long and how intense the war is. While Bangladesh is not directly involved in the Middle East conflict, its economic ties and reliance on imported energy make it vulnerable to the war’s aftermath. The government’s proactive approach is admirable; however, navigating the potential economic turmoil will necessitate resilience and a willingness to adapt to a shifting global landscape.
Bangladesh BTI Report 2024
Summarized By De/Cypher Team, Published in Bertelsmann Stiftung
The Bertelsmann Stiftung’s Transformation Index (BTI) 2024 provides a comprehensive analysis of the political and economic transformation processes in Bangladesh from February 1, 2021, to January 31, 2023. The report highlights significant democratic backsliding and increasing authoritarian tendencies in the country, exacerbated by economic challenges and the COVID-19 pandemic.
I. Political Transformation
Democratic Backsliding:
Bangladesh has experienced a significant decline in democratic practices, with the ruling Awami League (AL) government tightening its grip on power. The government has been criticized for severe human rights violations, including extrajudicial killings, torture, and enforced disappearances. The use of oppressive laws like the Digital Security Act (DSA) has facilitated unwarranted arrests and stifled free speech. The United States imposed sanctions on the Rapid Action Battalion (RAB) due to these abuses.
Electoral Integrity and Political Participation:
The credibility of elections in Bangladesh has severely deteriorated. The 2018 elections were highly manipulated, leading to a near-total control of the parliament by the AL. The opposition, primarily the Bangladesh Nationalist Party (BNP), has been systematically weakened through legal and extrajudicial measures. The upcoming 2024 elections are anticipated to face similar issues, with no significant reforms in sight to ensure fairness or transparency.
Governance and Rule of Law:
The separation of powers is virtually non-existent, with the executive branch dominating both the legislature and judiciary. This concentration of power has eroded checks and balances, making the judiciary and legislative bodies subservient to the executive. Corruption is rampant, and there is a significant lack of accountability for government officials.
II. Economic Transformation
Economic Challenges:
Bangladesh’s economy has been hit hard by the COVID-19 pandemic, which exacerbated existing economic issues such as high inflation and a dwindling foreign exchange reserve. The government has sought substantial loans from international bodies like the IMF and the World Bank to manage the economic crisis. However, economic growth forecasts have been revised downwards, reflecting ongoing economic difficulties.
Market and Competition:
The market economy in Bangladesh faces significant challenges, including high barriers to business, corruption, and an underdeveloped financial sector. The informal sector, which employs the majority of the workforce, has been particularly vulnerable. Despite these challenges, the government has continued to prioritize infrastructure projects, often at the expense of economic stability and inclusivity.
III. Social Transformation
Social Inequalities:
There are profound social and economic inequalities in Bangladesh. The pandemic has pushed a significant portion of the population into poverty, exacerbating existing disparities. Access to basic services like healthcare and education remains uneven, with rural areas particularly disadvantaged.
IV. International Relations
Global Standing:
Bangladesh’s international relations are complex, influenced by its strategic position between major powers like India and China. While the country has managed to secure international support for economic development and handling the Rohingya refugee crisis, its deteriorating democratic credentials and human rights record have raised concerns internationally.
Conclusion:
The BTI 2024 report paints a grim picture of Bangladesh’s trajectory towards increasing authoritarianism and economic instability. It highlights the urgent need for reforms to restore democratic norms and address economic challenges to prevent further erosion of governance quality and social cohesion.
Asia Headlines Quick Recap 🌏
Landslide win for pro-China leader’s party in Maldives vote
Muizzu’s People’s National Congress (PNC) won a landslide victory in the Maldives’ parliamentary elections, taking more than two-thirds of the seats in the 93-member parliament. Read more: TBS
Israeli Military Intelligence Chief Resigns Over Oct. 7 Failure
The head of Israel’s military intelligence directorate, Maj. Gen. Aharon Haliva, has resigned due to failures surrounding Hamas’ unprecedented attack on October 7, 2023. Haliva’s resignation marks the first senior figure to step down due to his role in the attack. Read more: Bloomberg
South Korean doctors reject government proposal to end strike
South Korea’s leading doctors’ association rejected the government’s revised medical reform plan. With hospitals canceling treatments, patients have expressed dismay, raising fears of a collapsing healthcare system. Read more: CNA
Asian chip shares open lower on Nvidia drop and AI concerns
Asian chip shares opened lower following a decline in Nvidia’s U.S. stock over the weekend, fueled by concerns about the sustainability of the artificial intelligence (AI) boom. Read more: Nikkei
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