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Afraid of the gun; Taliban supreme leader fears of a coup

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Hibatullah Akhundzada, the supreme leader of the Taliban, has ordered the security institutions that without his permission, “no one can distribute or use the military equipment registered by the ministries of defense and interior, the directorate of intelligence and other independent institutions.”

Experts and analysts have considered this move by Hibatullah as last resort to weaken the position of defense minister, Yaqoob Mujahid, interior minister, Sirajuddin Haqqani and the head of Taliban intelligence, Abdul Haq Wasiq in order to prevent a possible internal coup that was initiated by these three top officials.

In the first article of the order, it is mentioned that no person can distribute military equipment registered in the reserves of the ministries of defense, interior and intelligence, or issue an order to distribute it without the order of Hibatullah.

This decree titled “Regarding the distribution, protection and supervision of registered military equipment”, specifies that whenever an Emirate entity (Taliban-related entity) needs weapons, ammunition, night vision cameras, telecommunications and other military equipment” must receive the approval order from the leader of the Taliban.

Also, in the second article of this decree, it is stated that whenever one of the military departments of the Taliban needs military equipment, it must send its request to Hibatullah’s office in Kandahar.

In the third article of the decree, it is emphasized that if the military equipment was distributed or used without the permission of the Taliban leader before the issuance of this decree, they must be returned to the reserves.

Ministries of defense, interior and head of intelligence department are banned from disturbing military weapons.

According to this article, Hibatullah entrusted the ministries of defense and interior, as well as the general directorate of Taliban intelligence, with the responsibility to report the list of available military equipment to the directorate of registration, and protection of military equipment.

This order of the Taliban leader has been considered as another step in the direction of concentrating more power in the hands of Mullah Hibatullah in Kandahar. Many have seen it as a sign of Hibatullah’s increasing distrust of senior Taliban officials in Kabul. Previously, some senior Taliban officials, including Sirajuddin Haqqani, have openly disobeyed Hibatullah’s order to prohibit photography and filming and have not followed the order of their supreme leader.

(R) Defense Minister Mullah Yaqoob Mujahid and (L) Interior Minister Sirajuddin Haqqani.

Previously, several reports have been published about the sale of military equipment left over from the US troops and Afghan security forces during the republic government. Even the US-elected president Donald Trump, repeatedly mentioned this issue during his election campaigns. Not long ago, the government of Pakistan also announced that the Pakistan security forces have discovered and confiscated a car carrying US weapons smuggled from Afghanistan.

Pakistani media reported that this equipment included M4 assault rifles, night vision cameras and thousands of rounds of ammunition, which were transported in a truck carrying vegetables. Pakistani security officials have estimated the total value of weapons smuggled from Afghanistan in this truck to be 126,354 US dollars.

The cost of US’s remaining equipment in Afghanistan estimated over 7 billion US dollars

The Pentagon has already announced that after the withdrawal of US forces from Afghanistan, about 7 billion dollars of military equipment fell into the hands of the Taliban. This equipment reached the hands of the Taliban after the fall of Afghanistan on 15 August, 2021.

It has been reported that when the US forces left Afghanistan, there were 78 US-made aircrafts in the country, whose value reached 1 billion dollars. According to CNN, with the end of the US military presence, a total of more than 9,000 air-to-ground munitions worth more than six and a half million dollars have remained in Afghanistan.

The report also states that out of a total of 96,000 military vehicles, more than 40,000 units, including 12,000 Humvees (armored tanks), fell into the hands of the Taliban. Moreover, out of a total of more than 400,000 weapons that the US gave to the forces of the former Afghan government, about 300,000 remain in the country.

Almost all “communications equipment, including mobile base stations, portable and hand-held commercial and military radio systems, and associated transmitters and encryption devices, all remain in Afghanistan,” according to the report.

The report added that “almost all” of the equipment for night vision cameras, surveillance, biometric and positioning equipment,” a total of nearly 42 thousand pieces of specialized equipment, remained in Afghanistan.

Meanwhile, Five Mi 17 helicopters of the then Afghan army, which were transferred to Ukraine for repair before the collapse of the government, have also returned to Afghanistan and now are used by the Taliban.

It should be noted that the internal rivalries in the Taliban, especially among the different factions of this group, is one of the important reasons for Mullah Hibatullah’s distrust of some Taliban officials. Some officials, including interior minister Sirajuddin Haqqani and defense minister Mohammad Yaqub Mujahid, gained a lot of power, especially during the Taliban’s war against foreign forces, and Mullah Hibatullah may be worried that these officials are trying to expand their power, which is a clear threat to his position as the Taliban leader.

ASIA

Japan’s exports rise despite global risks, boosted by China

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Japan’s exports rose more than expected in October, driven by strong demand from China and other parts of Asia, despite growing uncertainties in global markets.

Exports increased by 3.1% year-on-year, led by significant growth in shipments of chip-making equipment, particularly to China, according to the Finance Ministry’s report on Wednesday. This marked a rebound following the first drop in 10 months in September. October’s figures exceeded economists’ forecasts of a 1% rise and were also bolstered by increased shipments of medical products to the United States.

Meanwhile, imports edged up by 0.4%, defying expectations of a 1.9% decline. As a result, the trade deficit widened to 461.2 billion yen ($2.98 billion), compared to 294.1 billion yen in the previous month.

This stronger-than-expected export performance has raised optimism about Japan’s economic recovery. Although the country’s gross domestic product (GDP) expanded for the second consecutive quarter through September, the pace of growth has been tempered by the drag from net exports.

“Today’s data raises hopes that external demand will revive in the October-December quarter,” said Hiroshi Miyazaki, Senior Research Fellow at the Itochu Research Institute. “The Chinese government’s stimulus measures have stabilized its economy and reversed the prior decline.”

Exports to China rose by 1.5% last month, rebounding from a 7.3% drop in September, with semiconductor manufacturing equipment exports surging by nearly a third. These gains align with signs that China’s stimulus policies are beginning to yield results, driving growth in certain sectors and boosting consumer spending.

Notably, Japanese exports grew despite the yen’s strengthening against the dollar, averaging 145.87 yen per dollar in October—2% stronger than the previous year, according to ministry data.

The export rebound occurs against a backdrop of heightened concerns about global trade policies. Business leaders are bracing for the potential return of Donald Trump to the White House, with fears that his proposed tariffs—60% on imports from China and 20% on other nations—could disrupt international commerce.

Some regions are already experiencing a slowdown. Shipments to the United States and Europe declined by 6.2% and 11.3%, respectively, in October.

The Bank of Japan (BoJ) is closely monitoring these developments. BoJ Governor Kazuo Ueda noted on Monday that while the Federal Reserve’s prospects for a soft landing have improved, risks tied to the U.S. economy and their impact on global markets require careful consideration.

The most pressing concern for Japan’s trade outlook is the impact of potential U.S. tariffs. Historical data from the U.S.-China trade war (2018-2019) suggests that a 1% increase in export prices, including tariffs, led to a 0.35 percentage-point reduction in profit margins for Chinese exporters, according to research from Stanford University’s Centre for Chinese Economics and Institutions. A similar scenario could hurt Japanese firms’ profitability, counteracting gains from the yen’s depreciation.

“We are not yet at a stage where Trump’s tariff policy is clearly impacting export volumes or exporters’ behavior,” Miyazaki told The Japan Times. “However, there remains significant uncertainty, and we must continue to monitor the policy stance of the next Trump administration,” he added.

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IMF reviews Pakistan’s $7bn bailout

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An International Monetary Fund (IMF) team conducted an unscheduled visit to Pakistan last week to assess the country’s progress on the terms of its $7 billion bailout package. The surprise visit, coming less than two months after the loan’s approval, has raised questions about the future of the bailout program. IMF staff are expected to present their findings to the Washington-based executive board for review.

What prompted the IMF’s unexpected visit to Pakistan?

Several officials, speaking to Nikkei Asia on condition of anonymity, highlighted key factors prompting the visit. These included a $685 million shortfall in the government’s tax collection target for the first quarter of the current fiscal year and a $2.5 billion deficit in the external financing required under the bailout terms. Compounding these issues was the failed sale of Pakistan International Airlines (PIA), a key component of the IMF-recommended privatisation drive.

While routine IMF program review visits are standard, the timing of this visit—just seven weeks after board approval—has raised concerns. “This suggests significant difficulties in implementing the program,” said Naafey Sardar, an economics professor at St. Olaf College in the United States, speaking to Nikkei Asia.

Ikram ul Haq, a lawyer specializing in economic and tax policy, added, “The reality is that the government’s promises to the IMF have not been fulfilled.”

What were the key issues discussed?

The IMF raised the issue of the tax gap and urged action to ensure that Pakistan meets its annual tax collection target of $46 billion.

Islamabad was also asked to engage with Saudi Arabia and China, the largest investor, to bridge the external financing gap. Promised energy sector reforms and the repayment of billions of dollars of debt owed to mostly Chinese-backed power plants in Pakistan were also discussed.

Another issue was for the IMF to press provincial governments for more funds, such as the Benazir Income Support Programme, which provides a $2.1 billion annual cash transfer for poverty alleviation, currently paid for by the central government.

How does agricultural income tax fit into this picture?

As part of the loan agreement, Pakistan’s provinces missed an end-October deadline to harmonize their agricultural income tax laws with the federal income tax.

The IMF had previously said that Pakistan’s loan agreement would be in jeopardy if agricultural income remained largely untaxed. During the meetings, provincial government officials told the IMF that they would face significant difficulties in implementing a higher tax.

Economist Aqdas Afzal said such a move would face significant opposition from big landowners, who are disproportionately represented in the federal and provincial assemblies.

“Given the weak mandate of the current government, a higher agricultural income tax is unlikely as it could trigger major social and political unrest,” he added.

What assurances has the government given to the IMF?

Pakistan has assured the IMF that it will increase the provincial agricultural income tax rate by up to 45 percent. It has also pledged to meet annual tax collection targets and to continue reforms in the energy sector and state-owned enterprises.

“This is an ongoing dialogue process and there have been discussions [with the IMF] on energy and SOE reforms, the privatization agenda and public finance,” Pakistan’s Finance and Revenue Minister Muhammad Aurangzeb told local media.

Haq, a tax expert, said the government’s primary focus would be on meeting the six-month revenue collection target set by Pakistan’s Federal Board of Revenue, a government agency that regulates and collects taxes.

What are the challenges ahead for Pakistan’s loan agreement?

Meeting tough tax targets and implementing structural reforms are major hurdles for the government to overcome.

The IMF has previously cancelled other loan programmes when conditions were not met. Payments to Pakistan could be suspended or stopped altogether, which would be a serious blow to a country struggling with a sputtering economy.

The IMF is pressing for cuts in government spending.

“Structural reforms are being resisted by vested interests, making efforts to meet IMF conditions even more difficult,” Haq said.

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Australia, Japan, and the U.S. seek to institutionalize cooperation ahead of Trump’s arrival

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As Asia prepares for potential instability ahead of Donald Trump’s potential return to the White House, Australia, Japan, and the United States are taking significant steps to strengthen their strategic partnerships.

Before Trump’s anticipated inauguration in January, U.S. Defense Secretary Lloyd Austin is working to reinforce Washington’s network of like-minded allies cultivated during President Joe Biden’s administration to counter China’s growing influence in the Indo-Pacific region. Under Biden, the United States has deepened defense ties with regional players such as Japan, South Korea, and the Philippines to address China’s expansionist strategies.

Austin’s first stop on this mission was Australia, where he joined his Australian and Japanese counterparts to announce that Japanese soldiers would now participate in an annual rotation alongside U.S. Marines in Darwin.

“Recognizing the critical role of the trilateral partnership in maintaining regional stability, we are committed to trilateral policy coordination and consultation on regional security challenges and contingencies,” the three nations’ defense ministers stated in a joint announcement on Sunday, emphasizing concerns over China’s growing regional presence.

In their statement, the ministers highlighted their “grave concern” over “destabilizing actions” in the East and South China Seas, specifically referencing “dangerous behavior” by the Chinese military toward Philippine vessels and other maritime actors. They also underscored the importance of maintaining “peace and stability” in the Taiwan Strait as a key regional priority.

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