JEDDAH, 13 July 2022, (TON): On behalf of Saudi Foreign Minister Prince Faisal bin Farhan, Deputy Foreign Minister Waleed Al-Khuraiji met Foreign Minister of the Maldives Abdulla Shahid in Jeddah.

Shahid is the first Maldivian politician to become president of the General Assembly of the UN. The 76th session started in September 2021 and will run until September 2022.

During the meeting, the two parties discussed bilateral relations between their countries and ways to strengthen them in various fields.

Both ministers also exchanged views on regional and international issues of common interest.

NEW YORK, 13 July 2022, (TON): When Arab leaders sit down with US President Joe Biden in Riyadh this week, one topic they will no doubt be eager to raise is the threat posed by Iran and how Tehran’s nuclear ambitions can be thwarted or contained.

During his campaign for the presidential nomination in 2020, Biden vowed to re-enter the 2015 nuclear deal with Iran, from which his predecessor Donald Trump had withdrawn in 2018 arguing it did not go far enough.

Although keen to revive the deal he had helped broker as Barack Obama’s vice president, Biden said “it needed updating to take into consideration Iran’s malign activities in the region, which analysts say have since proliferated.”

WASHINGTON, 13 July 2022, (TON): President Joe Biden plans to meet with Mexican President Andrés Manuel López Obrador for discussions the White House says will showcase the underlying strength of a relationship that of late has been more notable for the leaders’ disagreements on issues including energy and Ukraine policy.

López Obrador declined Biden’s invitation to the Summit of the Americas in Los Angeles last month after unsuccessfully urging the U.S. to include the leaders of Cuba, Nicaragua and Venezuela all countries with anti-democratic regimes.

The Mexican leader also has called U.S. support for Ukraine in its war with Russia a crass error and criticized the U.S. for moving more swiftly to provide military funding to Ukraine than financial aid to Central America.

BRUSSELS, 13 July 2022, (TON): EU finance ministers approved one billion euros in financial aid to Ukraine, billing it as a first instalment of a promised nine-billion-euro rescue package agreed by European leaders in May.

Zbynek Stanjura, the finance minister of the Czech Republic said “this will give Ukraine the necessary funds to cover urgent needs and ensure the operation of critical infrastructure.”

EU diplomats said the rest of the nine billion euros was still held up as some member states argued over whether a country at war was in a position to sign on to long-term loans.

One EU diplomat said “I wish the amount were greater.”

The one billion euros announced is in addition to 1.2 billion euros disbursed earlier this year by the European Union, bringing the bloc’s total financial aid to Ukraine since the invasion on February 24 to 2.2 billion euros.

DHAKA, 13 July 2022, (TON): A delegation from the International Monetary Fund is set to arrive in Dhaka tomorrow on a nine-day trip to discuss the government's request for a $4.5 billion loan in the form of budgetary support.

Rahul Anand, division chief in the IMF's Asia and Pacific Department, will lead the team during talks with the senior officials of the finance ministry, the central bank, the National Board of Revenue and the Economic Relations Division.

An official of the finance ministry said “if everything proceeds smoothly, the loan deal could be finalised by October this year.”

KABUL, 13 July 2022, (TON): The leader of the Resistance Front, Ahmad Massoud, stressed the need for political dialogue to solve the current Afghan problems. 

However, he emphasized that as long as the Islamic Emirate will not reach an understanding, there is no other option but to stand against them. 

He said “we have shared our concerns with all western and eastern countries regarding Afghanistan. The situation of Afghanistan needs serious assessment, it needs serious attention. Afghanistan needs to reach political stability through any kind of pressure.”

He added “the Taliban or any other group should find a political solution in cooperation with the region and the world to solve the problems of Afghanistan, otherwise, the problems in Afghanistan can once again reach out to the region and world,” said Ahmad Massoud, leader of the Resistance Front.” 

This comes as the forces of the Resistance Front have a small foothold in the mountains of Afghanistan. 

DHAKA, 13 July 2022, (TON): The newly-appointed United Nations resident coordinator to Bangladesh Gwyn Lewis called on the main opposition Bangladesh Nationalist Party leaders at the party chairperson’s office at Gulshan in the capital.

Accompanied by her peace and development adviser Becky Adda-Dontoh, Gwyn Lewis held a meeting with the BNP secretary general Mirza Fakhrul Islam Alamgir at 2:00pm and the meeting lasted for one hour and a half.

The party’s media wing member Shyrul Kabir Khan said “the BNP standing committee member Amir Khasru Mahmud Chowdhury and its organising secretary Shama Obaed.”

Asked about the meeting, Amir Khasru told media “they were not willing to brief the press about the meeting with the UN officials.”

DHAKA, 13 July 2022, (TON): Foreign Minister AK Abdul Momen said “former Japanese Prime Minister Shinzo Abe had played a very significant role in developing comprehensive relations with Bangladesh.”

Momen said recalling Prime Minister Sheikh Hasina's visit to Japan and a return visit by Abe in Dhaka "we have developed a very warm relationship which helped Japan to come forward in implementing mega projects in Bangladesh.”

The foreign minister made the remarks after signing the condolence book at the Japanese Embassy in Dhaka.

Momen said Abe’s assassination by a gunman "it's unbelievable, specially in a country like Japan where laws are followed strictly. We are deeply shocked.”

DHAKA, 13 July 2022, (TON): Bangladesh and Argentina signed a Memorandum of Understanding on the establishment of the ‘Bilateral Consultations’ between the two countries.

A foreign ministry press release said “the MoU would lay the platform for regular discussions between the two governments of Bangladesh and Argentina.”  

Argentine Undersecretary on Foreign Policy, International Trade and Worship Claudio Javier Rozencwaig and Bangladesh foreign ministry's Secretary Shabbir Ahmad Chowdhury signed the MoU on behalf of their respected sides.  

Foreign Secretary Masud Bin Momen and Argentine Ambassador to Bangladesh Hugo Gobbi witnessed the MoU signing ceremony.  

By TON Research Desk

All South Asian countries, not just Sri Lanka, are facing economic problems such as a shortage of essential commodities, rising inflation, a fall in the value of the local currency against the US dollar, and social and political unrest triggered by economic issues. Only the intensity varies.

The roots of these domestic problems lie both in the domestic sphere and the international sphere. International relations could either help solve these politico-economic problems or themselves become reasons for tension. South Asian nations, barring India, are heavily dependent on foreign aid.

The economic problems of Sri Lanka are currently facing are entrenched in internal misconduct over many years. Corrupt tax policies, poor tax collection, unrestrained borrowing in dollars to fund non-income generating projects, unnecessary lockdowns with severe constraints during the pandemic, unjustifiable tax concessions, and irresponsible recruitment to an already bloated government. Ultimately, this led to Sri Lanka’s defaulting on international loan repayments and going to India and the rest of the world.

China has been one of the largest creditors to Sri Lanka for 19.9% of the island’s Public and Publicly Guaranteed Debt (PPG), which includes commercial lending to government and State-owned enterprises. Chinese PPG debt is 20% of the debt service. The Foreign Currency Term Financing Facility (FCTFF) extended by China enabled the government to use the money without conditions and that helped it muddle through the financial crunch in 2020 and 2021. In April 2022, debt repayment became impossible and the government had to default to the extent of US$ 26 billion.

China refused to restructure the repayment of the debt owed to it. Instead, it asked Sri Lanka to accept re-financing of the Chinese debt, be financially prudent, open the country to Chinese FDI and sign an FTA with it. But Sri Lanka is unable to meet these conditions and is hoping that China will soon relent and revise its rigid conditions.

Although India’s GDP is growing by 8.7% after a slide during the pandemic, it continues to be burdened by poverty which is being managed by costly subsidies and aid. India has banned the export of wheat fearing a shortage. There is a fuel shortage that is being met by importing from Russia confronting sanctions held by the US, and India. While the economy is in tatters, youth unemployment is also growing.

Against this background, India’s capability to help Sri Lanka is limited. New Delhi is now dragging its feet on giving Sri Lanka an additional US$ 500 million for fuel. New Delhi is eagerly waiting for the IMF’s bailout for Sri Lanka, as that will inspire the West to come to Sri Lanka’s aid and relieve India of a part of the burden.

Meanwhile, India has been using humanitarian aid as a grip to gain some investment projects from Sri Lanka to make up for the 10-year drought of projects caused by Colombo’s pro-China tilt. India is wanting projects in the renewable energy, infrastructure, and connectivity sectors. However, these have suffered opposition from nationalists who see foreign investments as an abridgment of national sovereignty.

The opposition Samagi Jana Balawegaya (SJB) leader Lakshman Kiriella has warned of an agitation if the Trincomalee harbor is given to India for development. There has been opposition to two renewable energy projects given to India’s Adani group for a US$ 500 million investment.

Pakistan too is in awful passages, in frantic need of an IMF bailout package. The need is for a renewal of the hindered US$ 6 billion IMF capacity and the instant relief of US$ 900 million as forex assets have fallen below US$ 10 billion, enough only for 45 days of imports. But getting an IMF loan comes with strict conditions, which Pakistan would find hard to meet. It has to reduce the budget deficit, improve tax collection, phase out electricity subsidies and reduce forex market intervention by the federal bank.

The current economic crisis in Pakistan is primarily attributed to its extensive spending on non-developmental and economically unviable projects like the China-funded China-Pakistan Economic Corridor (CPEC). China had lent Pakistan US$ 64 billion for CPEC, which is not yielding results yet. However, China recently lent US$ 2.3 billion to help Pakistan tide over the forex crisis.

Bangladesh is also facing macroeconomic despite its South Asian success story marked by high inflation, an escalated current account deficit, bad growth in payments. However, in terms of foreign liability, Bangladesh is not under stress. The government is aware that it must be judicious since many of the megaprojects are foreign-debt-financed and foreign debt has risen. There are also concerns over the lack of proper feasibility studies and the cost and time overruns of foreign-funded projects.

In 2015, China surpassed India as Bangladesh’s largest trading partner. China is heavily involved in infrastructure projects which are worth more than US$ 10 billion. Bangladesh is set to receive an investment worth US$ 40 billion from China. China supplies raw materials to Bangladesh’s main industry garments.

The US is chiefly disturbed over China’s entrance into Bangladesh and is trying to persuade it into becoming part of the anti-China nautical security “Indo-Pacific” alliance. However, Dhaka has told Washington that it will consider joining only if there is a clear economic aspect to the Indo-Pacific project which is now palpably military.

Nepal has problems with the US, China as well as India. By virtue of its historical, religious, and cultural ties with Nepal, India has vested interests in Nepalese politics and acts to safeguard them. India uses the fact that Nepal is a landlocked country with easy access to the outside world only through the Nepal-India border. However, it is not liked in Nepal, despite India’s substantial developmental aid. Encouraged by China, Nepal is trying to find passages via the northern border with China.

There are Sino-Nepalese power generation projects. China has also offered duty-free treatment for 98% of the goods imported by China. Separately from Pakistan, Nepal is the only other South Asian country that is part the China’s Belt and Road Initiative (BRI).

The US forced Nepal into joining its Millennium Challenge Corporation (MCC) developmental compact. The US$ 500 million MCC was seen by Nepal as against its sovereignty. It was ratified very reluctantly. However, Nepal declined to receive the US State Partnership Program (SPP), which came under the US Defense Department. Nepal, like Bangladesh, is opposed to defense pacts that might provoke neighboring China.