EP 228 | Daily Global Insights | Aug 19, 2021 | Global News | US News | India News | Markets

Sree Iyer: Namaskar, Episode 228 and welcome to Daily Global Insights Insights with Sri and Sree. Today is Aug 19th, Thursday and in global news we have, Deposed Afghan President Ashraf Ghani resurfaces in the United Arab Emirates. The United States bars Afghans from accessing billions of reserves held in US bank account & blocks International IMF loans. NATO’s warns of military strikes if Taliban host International terrorists again. Videos and photos revealed Taliban violence across Afghanistan. Namaskar and welcome to PGurus channel Sridharji.

Sridhar Chityala: Namaskar and Good morning to everybody or good evening to everybody in other parts of the world and looking forward to an exciting day and session.  I think you set the context very well, the Afghans saga continues this is the most dominant topic in the world today. Yes, Mr Ghani surfaces in the United Arab Emirates. It seems like discussions have also been started between the Taliban and the prior President Mr Hamid Karzai.  And EU and the  United States or the global coalition is making the best attempts to find out what they can do. One of the first things that they’ve done is block 10 billion dollars or 9.5 billion dollars of the reserves, by the United States. They also work with IMF to block, any kind of credits and loans that is likely to be granted to the Taliban. Then, the EU had very categorically and clearly warned that they cannot have used bases in Afghanistan, both India EU and even many Republican Senators have stood up and spoken about a potential threat looming as a result of these bases being used. So I think there’s a warning that is very clearly being sent to the Taliban.

Sree Iyer: Taliban’s exiled leaders, led by co-founder and negotiator Mullah Abdul Ghani Baradar returns to Afghanistan to form the Government. Turkey, to decide on Taliban recognition after the government is formed says, Turkish foreign minister. So what is usually Turkey is in the front of all these Islamic moves, something I see here as a hesitation. I think Afghanistan is predominantly Suni and so is Turkey. So what is the Dynamics going on, sir?

Sridhar Chityala: The Dynamics that are going on here are Turkey wants to be a good member of the International Community as it tries to assert and expand, its leadership as the one representing the broader Islamic base. So I think that’s one of their first objectives. They are also trying to have a dialogue going with Israel. They have a dialogue going with UAE. They also trying to open a dialogue with the Southeast. So all this indicates that Turkey wants to be at least right now being part of the international coalition, whether it remains or not time will tell. Remember Turkey is not one of the four countries, which have the high commission or which have their embassy depending on which nomenclature it is, you know, operating in China has its diplomatic presence. Iran has its diplomatic presence. Pakistan has a diplomatic presence and Russia has a diplomatic presence, Turkey doesn’t

Sree Iyer: EU states should take in people in immediate danger, in Afghanistan. Afghans, rescued to Germany describe, terrifying scenes at the Kabul Airport and the chaos. Dutch evacuation from Afghanistan begins after the initial failed attempts. And the United Kingdom unveils a scheme to take in up to 20,000 Afghan refugees over the coming years. Emmanuel Macron of France, demands a robust EU against illegal immigration, you have the legal immigration of those people who are able to catch the flight outside of Kabul, but you also have this illegal immigration, which is just people trying to stipple in. Sridharji is just another exodus like the Syrian problem that is being all created.

Sridhar Chityala: In other words, you’re putting a context which is, is this Arab spring two except the Arab Spring to emanating from Afghanistan. It possibly in one way you can infer that it looks that way. India has opened up its e-pass system to look at this emergency Visa approval process. The United States already has had 900 people come in that C-17, not all of them are Americans, there are a fair amount of refugees. Now, you are seeing a broader concerted effort coming from Europe, ranging from Germany, Holland, the United Kingdom and maybe other parts of the EU, but certainly, the Eastern Province have not raised their hands. So and all these people are likely to come in, in no categorized, organized manner because outside of  Kabul or Bagram or whether you want to call it as Hamid Karzai international airport. You know, the outside of the airport is controlled by the Taliban, inside of the airport is controlled and managed by the US Forces. So whosoever is getting in, there’s no time for anybody to kind of validate those documents. They are just coming on board with whatever input or whatever documents that they can show. So the question, therefore, is what happens when they land, you receive them and you put them and then, you know, you’re going to grant them amnesty and give in.

So, this looks like what you have mentioned and in one single stroke, this disastrous lack of strategy based Biden execution of exit, not all presidents are wrong. Okay, maybe bush is wrong. Maybe Obama is wrong. Maybe Trump is wrong. But the challenge for Biden is he, knew Afghanistan, having served eight years as a vice president under Obama is number one.

And number two, he says that you know, he was a very well thought of exit strategy, the person who Executes the exit strategy in the end with this type of chaos becomes accountable for the outcomes and faces the criticism. And so this is what is going on. Why Biden gets blamed? Biden gets blamed basically because they floundered on the exit strategy, and the consequences of that, we heard about the consequences of terrorism the base to being used. The consequences of all these people coming in and potentially can create problems in the future.

Sree Iyer: And now China has started its drumbeat again. China holds assault drills near Southern Taiwan. Do you think the United States will be responding very swiftly. Should China indulge in any misadventure on the Taiwan Straits sir?

Sridhar Chityala:  I will be a fool to guess based on what has happened in the past 72 hours, sir. So therefore we have to see what happens as the events unfold but the past 72 hours is any evidence. We have a major problem in that part of the world.

Sree Iyer: And Israeli Prime Minister Naftali Bennett to visit the White House in late August, and this must be a very critical meeting because I think he is coming here for the first time after becoming the Prime Minister. How do you see this visit, sir?

Sridhar Chityala:  I think that this meeting would have had two different sets of agendas. One, pre-Afghan and now post Afghan. You have seen the lurking danger from the post-Afghan. So this may be a far more, you know, I am here to take your input. I am here to support you, which is what they said, even to responding to an earlier question. Both Biden and the members of the administration have stood by both Israel and have stood by Taiwan. Execution, execution, execution is the key.

So, coming back to respond to your question, which is namely Mr Naftali Bennet, this is going to be, how can you help? How can we make sure that we are supportive etc., Remember Polish, resenting of the reparations is also an item that is going to be discussed at the top because both Israel and the US  have taken a  very strong stand that they will fight this polish parliamentary resolution. So you got that agenda as well. In addition, you have Iran, you have Gaza, you have Iraq. You have Lebanon, and you have Palestine, the issues that are ripping Israel. So it would be interesting to see that how Biden Administration looks at this with a very different set of lenses in the context of what has happened.

Sree Iyer: In the United States news, the state Department says the Taliban appears to let Americans reach Kabul Airport. Pentagon says no plan to rescue Americans in Afghanistan who cannot get to the airport. Prisoners released by Taliban pose, serious security to the US, warns the House Republicans, should be all members of the House. I don’t know why only House Republicans need to be concerned about this.  Afghanistan blaming game begins with Pentagon, White House and Intel pointing fingers. Biden pledged to restore American standing around the world in peril, with the collapse of Afghanistan. I hear you loud and clear their Sridharji. This whole thing from the day, one of the Biden administration, he has done all self-inflicted wound. In other words, if he had done rip van winkle, I wonder if America would be better today than what it is now, just my loud thinking, sir.

Sridhar Chityala:  I think we have three main challenges. We don’t know who is running the United States at any given time.

Sree Iyer: You have made some very educated guesses, but please go ahead.

Sridhar Chityala:  We don’t who is running the United States, because you get different, different views. For example, I will give you just yesterday, the Army and pentagon is very clear. They are not on a rescue mission. They are basically retrieving people who can reach the airport, basically. Then, Mr Biden says, exactly opposite which is to say no, we will not leave any American behind. We’re going to make sure that every American is brought home. Then, there’s a June 11^th memo, which says that there is no obligation on the part of the US government, which was drafted, amended, drafted just on the threshold of this withdrawal, you know, which is basically it is not accountable for bringing back. And so, therefore, the government cannot be held responsible and face litigation. Now, if you take the law, then effectively, it means if you reach the airport you make it, if you don’t reach, you can’t make it.  This is what the Pentagon is saying. We’re not responsible. And I just explained in the first section that the outside of the airport is controlled by the Taliban. Some people say there are 15 checkpoints. Some people say there are 20 checkpoints. So they all have to make their way through these checkpoints to get inside the airport. Only when they get inside the airport and onto the Airfield, then you have the US Army. The US Army is guarding the plane and guarding the airport inside allowing people with some kind of checks to get in.

So, here is the contradiction between what Mr Biden says and what the Pentagon says and remember they are not being combated. They just have gone on a rescue mission, rescue meaning bring people back, repatriation or whatever the appropriate word that one can use. So this is an example of the contradictions. So this is how I probably would like to respond.

And again, you go back and play the video of Mr Biden a few days and now you playback what exactly has happened? You can see again the Stark differences. So Mr Biden has got a real problem in terms of his own personal credibility, as a president on a wide-ranging set of issues that confronts people and that make up his policies. Whether he’s influenced by Progressive on one side, whether is influenced by the middle course Democrats on the other side or whether he is influenced by to those who are on the right, right of the middle by democrats. We don’t know. But certainly, right now, the progressives are holding sway and that seems to be shaping the policy and the inconsistencies that are flowing through.

Sree Iyer:  The Biden administration unveiled, a proposal Wednesday to speed up, decisions on Asylum claims by giving the Department of Homeland Security officers, the power to grant Asylum to those at the border including Illegal immigrants. Yes, you heard that right without having to go through Immigration Court. The new proposed rules would also give Homeland Security, the power to catch and release people who ask for Asylum, when detention is unavailable or impracticable, all these apply to the Texas border. I’m sure it applies to New Mexico, as well as to Arizona and California. California also has the same thing for some reason, because we are having a recall election in a couple of weeks and people are not talking about this much, but I can tell you when the cat is out, the mice are playing, Sir, your thoughts.

Sridhar Chityala:  My thoughts are it’s an astonishing decision. Department of homeland security has been the root cause of the problem. There’s a whole range of issues that we have covered extensively in Daily Global Insights. Now, this is the latest makes it even more laughable where the courts have been taken out of the intervention. And so Department of Homeland, Security officials can make a decision and say, Okay, I see you are allowed to get in. Okay. You are allowed; get in. And we are going to give you the Asylum, based on whatever they say. So how is this going to validate, there is no process. So it’s an astonishing decision, but there is nothing surprising relative to the question that you raised last time. Okay. So, therefore, as I mentioned, you know, we want to have bags of lollies and bags of stuff also, handed over to all these people and we already covered that, I think two sessions ago. They’re going to be one funding for legal. They’re also going to be given funding for cultural orientation and integration, money going to be given to these people.  I mean, how do you rationally explain this is unbelievable.

Sree Iyer:  House GOP demands answers over the 87 billion dollars improper spending on entitlements. Pelosi and her top Democrats will not budge in the battle with moderates on the infrastructure bill battle, say they have Biden’s support. And I don’t know how good that means in terms of reality because today if there is an opinion poll taken, Biden is going to find himself in a lot of trouble. Your thoughts, sir.

Sridhar Chityala:  My thoughts are that always a fraud happens when you have this gigantic pool of money gets allocated and distributed and there is no way by which these huge volumes of money get that easily distributed without incidences of fraud. Now, this has been going on since 2019. So, this is the expansion of the Medicare and Medicaid Program that has happened, in 2019, I’m told that the house committee, you remember that the house has been under the control of the Democrats. So, therefore, this is coming from the house committee. The house committee has raised the question, which is namely, it says give us the documentation. In 2019, the fraud was 20 billion or 19 billion and in 2020 the fraud was around 67 billion, making it up 87 billion. This is on incorrect payments made to Medicare and Medicaid participants. What is the instance of payments? One-in-five, 20% of the payments that have been given under the Medicare Medicaid Program is fraudulent and that is according to the findings of the house committee. So how are we going to rectify this? We don’t know.

As far as the battle is concerned, Nancy Pelosi is very clear. She wants to have this green accord and climate Accord and probably even amnesty for all these illegal aliens stuck into and normalized as part of the 3.5 trillion dollars budget that they are seeking. Remember, there’s a difference between a stimulus and a budget.

A Budget once certain payments are approved under the budget. It has to be enacted as a law and it has been normalized as a recurring expense under the budgets. That’s the significance of this issue. So they would normalize all types of payments that were granted under this austerity stimulus program into normalization, you know, minimum income, Child Care payments, tax offsets, direct payments, and expansion of Medicare, Medicaid etc., all to be normalized as a recurring expense, within the budget. This could take few months because this all has to be, you know, passed as a law within, sorry, construct a bill, pass a bill and passed as a law. There were lots of negotiations. So this infrastructure, which they called imminent and almost important, is going to be stuck until such time this gets done.

Sree Iyer:  The mask and vaccine mandate debate goes on and Arizona blocks funding for schools, mandating masks. On the contrary, the neighbouring state of New Mexico is mandating masks of all above the age of two irrespective of vaccination status at public places.  Biden has threatened to sue states that fight the vaccine mandates. So, this vaccine stuff, the mask is going according to who is in power in what state it appears, sir.  your thoughts.

Sridhar Chityala: Well, I don’t know how scientifically or logically I can give explanations to some of these things because every day, the data changes, which is to say if you give the mask to Children, it affects them mentally, it creates problems. Then, you have the CDC mandate say, everybody needs to be mandated. Then, is it everybody needs to be mandated which is what age is the cut-off. So you have this dispute that is going on rather than giving an answer. What is right? What is wrong? What is now going on is the federal and state structure is being broken here. So the states also have Governors who administer the state. So they are accountable for their decisions and actions and the outcomes that come with it, but for Biden to mandate something sitting in the centre and say, I said so, you do this is not going to augur well in a very Democratic set-up.

Sree Iyer:  Texas Supreme Court rules, Democrats absent from the state capital can be arrested. So, now the government of Texas has an endorsement from the court that they can go ahead and arrest those people who have run away from there, that’s how I see it. You could see it differently. They are right now hold up in Washington DC. Some of them became Covid positive and then, they have to be quarantined. Suddenly, this thing is completely been buried under the carpet. Nobody knows where they are, what they are doing? I have no idea. Have they started trickling back into Texas, sir?

Sridhar Chityala: Not yet. Otherwise, they’ll be arrested, not yet, very soon, they will trickle back in. I think that the drama will start again.

Sree Iyer:  So, we have some incredible stuff going on here. And I can assure you, viewers, some of this drama is going to find its way back to India and you will start seeing similar things happening there too.

India news, Indian intelligence assessment has found, the Pakistani Terror groups are now in Kabul. India evacuates 150 Indo-Tibetan border patrol forces and sniffer dogs from Kabul. And Indian evacuation is supported by the United States and Tajik, and long drives Crossing Taliban checkpoints.

India presiding over the United Nations Security Council session on Afghanistan makes three specific points. I will let Sridharji explain these. Sridharji, there are some videos doing the rounds on social media where you can hear Punjabi being spoken on the streets of Kabul. And the only way that could be possible, is that there are elements of the Pakistani army because the Pakistani army is made up of Pashtuns and Punjabis for the most part. And clearly, that means that these guys are in bed with the Taliban.

Sridhar Chityala: Well, I think this, we have reported in Daily Global Insights based on all the data that we have seen and based on our research, that it was stated that this close to 20,000 mercenaries who makeup various constituents from various different states or countries are part of the 70,000 plus the Taliban army or Taliban forces. So, therefore, they could be, they could be from anywhere. The imprint of Pakistan has to be there because of their long-standing association between the Taliban and Pakistan. And many of these people probably have even taken shelter in Pakistan. So, therefore, I think it’s just a re-endorsement and people are extremely concerned and I think India is highlighting that.

So, India made these specific observations one is UNSC in the current format will not work. What it’s trying to say is, if Afghanistan is a problem for India, which is going to be a problem for India in conjunction with Pakistan as to who is there. How is it that India is not in member, Influential member of the United Nations Security Council? You have all other members who may not be directly affected. So they’re talking about the first point, subtly, the composition of the United Nations Security Council, it is not the only issue. Even China would be the other issue that India is adhering to.

I think the second they are saying is the Taliban has been propped by Pakistan, so, we have to make sure that they are not going to use the various bases to launch attacks into India, which would be concern, this is the third point that they were planning to make.

The second point is that the concern that India is expressing basically, because of the confluence of China and Pakistan sitting and assisting the Taliban. So these are the three essential points. One membership, two, the regional influence and impact whereby India is directly affected, third, whether those bases could be used, because again, India was a victim of an airport hijack that occurred plus, of course, a couple of other incidents, especially from Kandahar. And Kandahar is the basis of the Taliban.

Sree Iyer:  The Indian economy is rapid, normalizing to pre-pandemic levels says Mr Kumara, Mangalam Birla. Economy gaining traction with rapid pick up in manufacturing activity. India’s exports Surplus covid-19 testing kits are projected to touch 620 Million by September of 2021. Inflation is likely to stabilize for the rest of the year as per an RBI  August bulletin. Waiting for cabinet approval on the bill on cryptocurrency, according to the Finance Minister. Sridharji, some good news, India is still kind of thinking about crypto. I don’t know how well they understand what cryptocurrency means anyway, that’s just my concern. Your thoughts, sir.

Sridhar Chityala: My thoughts, are I think first on the economic front, they seem to be, you know, making their way, both on the manufacturing as well as the exports which we have covered quite extensively. Inflation seems to be in control, this is also the belief of the RBI, based on the number numbers that they’ve seen. So I think on the economic front, they seem to be on their way.

I think this kids test kits that they are talking about I think we’ve got to make sure that the number is correct, but the story is it a humongous number. They have probably a lot of it was either imported, developed locally, mostly developed locally, as a result of the need that arose in the early days of the Delta variant. So I think that’s good news that they are augmenting and using that as an export vehicle or generate export revenues.

With regard to Crypto, I think India is aware of crypto. The central bank has looked at it. They now recognize that the world is moving, and India cannot be left behind because now there are Cryptos that support the Sovereign currencies. So, I think, as you said, I am sure they will be able to leverage the resources. Remember there were two very strong technical people in the cabinet of Mr Modi, who are extremely capable. One of them was responsible for the early war origin of the chips in Intel. So therefore he comes with a great pedigree. And so I think they will leverage all of the resources plus, of course, IT capabilities that India has.

Sree Iyer:  The individual you mentioned has an amazing folk tongue, sir.  In his regional language, he is bashing BJP but is English channels are always probity poignant that just pick my observation.

A 3-kilometre area surrounding the naval installation no-fly zone warns Navy and Stern action for violation. So, we can see that India is starting to react to also the fact that there is an artificial Island coming up just outside of Colombo, which is going to be controlled by China. In fact, they have come up with the same East India Company model. They have a private company run that island. So I think these are all not good signs because India is trying to see how best it can Shore up the security around the naval basis, but it also has problems in three states now, in addition, to Kashmir. Kashmir seems to be a little bit stable, West Bengal, Tamil Nadu and Kerala. So that’s where we see. They have not looked at some of the other problems because there are so many other programs where we talk about all these things in more detail.

Let’s move on to the market unless Sridhar want to add something to the naval site’s fortification.

Sridhar Chityala: I think drones are a big threat to India. And I think they are trying to address that. They’re ahead of the game, which is, pretty good.

Sree Iyer:  Very good, very good. And in markets, markets sell off over Jitters in the potential shift in monetary policy and the consequent stimulus impact. There is also looming inflation and consumer sentiment in the back of investor minds. And now, we can share the market data Sridharji, take it away.

Sridhar Chityala: Yes, just to set the context yesterday basically, the Fed chairman spoke, the FED chairman gave an indication that they’re going to take for the programs will receive the positive signs of economic recovery. So that immediately sent the Jitters which is simply to say what’s going to happen with the monetary policy. So you saw it go Dows drop 380 points. They have dropped close to 250 or 230 points the day prior. S&P drops 47. So that’s what you saw in the index. The good news on the oil side is that you saw both Brent and crude, you know, now crude is below 65 and  Brent is around 67, well, below the $70 for which augurs well, but still, it will take few days, for the price has to flow through into the petrol pumps or the gas stations.

Then as far as the bond markets are concerned, the US is in a pretty good spot with a 10-year bond at 1.27, and the Bund and Japanese yen still make stable rates. Again, you know the Bitcoin and Ethereum fell and they are driven purely by volatility, demand and Supply they went up by about, a few thousand dollars. A couple of days ago and they fell close to about 2500 dollars, at least  from the Bitcoin side. It is just a reflection of the volatility.

The main headline news is the Central Bank, the FED here feels that the economy is back on momentum and they’re going to taper the asset purchase program and there is a fear in the mind of the investors that the Honeymoon is over, the market is tightening.

Sree Iyer:   With that, we bring to close today’s Daily Global Insights program will be back again tomorrow possibly may or may not happen tomorrow. We will let you know. There may be a weekend digest of what is happening because it’s so much news happening on a 24-hour cycle, that we might want to just wait and see how it plays out. We will keep you posted. For sure, we’ll be back next Monday. Thanks for joining. Namaskar and see you again very soon.

Sridhar Chityala: Namaskar, Thank you. Have a good evening. It was good to be in the session and have a wonderful evening or have a wonderful day depending on where you are. Thank you.