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Italy-Gulf Bilateral Ties: More Room for Growth

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Due to historical and geographic factors, Italy has rarely figured as a protagonist in the dynamics of the Gulf region and it has mainly focused its foreign policy activism on its immediate neighborhood: the Mediterranean and North Africa.

However, Rome has signaled an interest in playing a more visible, active role in the GCC space and Italy-Gulf bilateral ties have registered exponential growth during the past decades. Three main areas of cooperation – security, economy, and energy – have significantly contributed to building a friendly diplomatic environment.

Security Cooperation

Italy came to play a more significant role in the Gulf area in the early 1990s by contributing to the US-led Operation Desert Storm against the backdrop of Saddam’s invasion of Kuwait.

Although Italian troops were rarely dispatched to the Arabian Peninsula since then, they visibly contributed to promoting security and stability in the GCC’s immediate neighborhood. Italy took an active role in the US-led Global War on Terrorism after 9/11 by participating in military missions in Afghanistan and Iraq.

Italian troops rarely engaged in combat operations when deployed to the Middle East. In most cases, Italy’s armed forces were tasked with non-combat duties. As a peacekeeper, an interposition force separating warring parties in combat zones, and head of training programs for local security forces, Italy’s army has consolidated a decades-long experience in deconfliction.

Italy has always been characterized by a strong maritime vocation and a long naval history. Still today, Italy markedly depends on sea transport lanes for its trade and energy supplies. Therefore, Italy is deeply committed to freedom of navigation and safe transit across chokepoints.

Through its naval assets, Italy is devoted to improving the security and stability of shipping lanes, providing mariners with a safe maritime environment, and intervening and protecting them from the malign activities of state- and non-state actors.

Italy has emerged as an active contributor to several maritime security platforms implemented in the waters off the Arabian Peninsula. From the US-backed Combined Maritime Forces to the counter-piracy EU NAVFOR Operation Atalanta and the French-led European Maritime Awareness in the Strait of Hormuz mission, Italy has regularly dispatched its naval assets to protect shipping lanes in Middle East waters.

More recently, Italy’s armed forces will contribute to ensuring the defense and security of Qatar’s 2022 FIFA World Cup. The Italian contingent will provide full-spectrum support to the Qatari security forces to ensure the safe and regular running of the sporting event, which is expected to gather thousands of football fans.

Economic Cooperation

As the second EU manufacturing powerhouse, Italy eyes the GCC market as a promising destination to export its commodities and services. Italy-GCC trade exchanges are still adjusting to the shocks brought about by the Covid-19 pandemic and the Russia-Ukraine war, but data for the 2022’s first-semester signal a promising positive trend that, in most cases, markedly outweighs the same period in 2021.

While single cases display slightly different figures, precision mechanical products, chemical products, food products, pharmaceutical and medical products represent the bulk of Italian export to the Gulf region. Among the GCC member states, the UAE stands out as the biggest recipient of Italian export, with a value of roughly 3.8 billion euros between January and August 2022.

Some GCC countries have positioned themselves at the forefront of the freight and passenger transport industry. Many Gulf-based companies have consolidated sound expertise in offering logistics services as well as storage and distribution solutions.

Due to their capacity to develop more competitive and efficient logistics solutions that suit the increasingly demanding needs of constantly adjusting global markets, Gulf-based logistics companies have positioned themselves as trendsetters in the transport industry. Thanks to its unique geography, the Arabian Peninsula is set to become a critical transmission knot in global trade supplies and a vital logistics connector between East and West.

With a close interest in gaining a solid connection to global trade lanes to export its high-value-added commodities while securing stable access to supply chains to import energy products and raw materials to process at home, Italy eyes with growing attention the home-grown logistics solutions offered by the Gulf countries.

Energy Cooperation

With a solid industrial fabric and no direct access to domestic energy sources, Italy has traditionally satisfied a high-quantity demand for electric energy for industrial and residential use by heavily importing energy products. However, the shortcomings of energy supply chains that emerged during the Covid-19 pandemic, the growing concerns regarding the long-term implications of climate change, and the severe impacts of the Russia-Ukraine war on the global energy markets have driven Italy to double down its efforts in further diversifying the country’s energy mix and pivoting it towards green products.

While the GCC states still see the export of hydrocarbon products playing a prominent role in their economies, they all have set for themselves ambitious decarbonization targets and are investing massive financial resources in the development of state-of-the-art solutions to support the green transition. With the GCC countries eyeing growing attention to creative initiatives to pivot their economies away from an oil revenue-based model, Italy-Gulf ties might reach new heights through cooperation in renewable energies-driven joint initiatives. 

Future outlooks

With a new parliament taking office and a government swearing-in last October, Italy has recently entered a new phase of its political lifecycle. Still, Italy’s positioning in the international arena is unlikely to experience radical changes.

By nominating some veterans of Italian politics at the top of critical ministries, such as the then-President of the European Parliament Antonio Tajani at Foreign Affairs and Guido Crosetto at the Defense, the government headed by PM Giorgia Meloni signals to international observers that Italy’s geopolitical and strategic posture will remain solidly anchored in the Atlantist and European camps.

PM Meloni’s pragmatic understanding of international affairs calls for the new Italian government to maintain a reassuring foreign policy posture. The Mediterranean and North Africa are bound to remain the priority areas where Italy will spend most of its diplomatic energies. Still, the need to cultivate more profound and meaningful ties with the Gulf countries is gradually becoming more relevant in Italy’s foreign policy compass.

Rome’s latest moves in the Gulf tell a story of growing resolve by Italy to contribute to upholding a secure maritime environment. The dispatching of troops and warships is a concrete display of Italy’s increasing interest and closer attention to the Gulf and its geopolitical undercurrents.

Leonardo Jacopo Maria Mazzucco is a researcher in the Strategic Studies Department at Trends Research & Advisory, a think tank in Abu Dhabi. He is also an analyst at Gulf State Analytics (GSA), a Washington-based geopolitical risk consultancy. Mr. Mazzucco has an MA degree in Comparative International Relations from Ca’ Foscari University of Venice. Besides, he completed a second MA degree in Middle Eastern Studies at the Graduate School of Economics and International Relations at the Catholic University of the Sacred Heart in Milan, Italy. Mr. Mazzucco’s pieces have been published by numerous outlets, such as the Gulf International Forum, the Middle East Institute, Inside Arabia, the Middle East Institute – National University of Singapore, and the Arab Gulf States Institute in Washington (AGSIW).

Europe

Strong will to enhance bilateral relations between Serbia and Pakistan

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Although the Republic of Serbia and the Islamic Republic of Pakistan are two sovereigns, independent states, with different cultures, religions, languages, histories, and ethnicities. One is located in Europe and the other in Asia. Yet, there exist so many similarities and commonalities, which provide a strong basis and convergence of interests.

Both, Serbia and Pakistan, are developing countries and struggling to improve their national economies and the standard of life of respective nations. Both nations were victims of the Western world and sanctions. Ugly media has been projecting a distorted image of both countries. Hindrances created by Superpowers in the path of development are a common phenomenon in both cases.

People in both countries are hardworking, strong, resilient, and capable of surviving in harsh circumstances. Both have demonstrated in the past that they can resist pressures from any superpower. Both have learned the lessons from past bitter experiences and are determined not to repeat the same in the future.

In my recent visit to the Republic of Serbia, I noticed that there exists a fair awareness in Serbian regarding Pakistan. I came into a cross with the general public and common people and they know a lot about Pakistan. They have shown strong feelings for Pakistan. There exists immense goodwill for Pakistan among Serbian youth.

Both countries are in the process of industrialization and promoting trade. Currently, both countries are earning from the export of workforce and human resources. Serbian youth are working in Western Europe and sending back foreign exchange. And Pakistan workforce finds a convenient destination in the Middle East for earning more and sending back foreign exchange to Pakistan. But, both nations have the potential to earn through export and foreign trade.

Serbia is known as the gateway to Europe and Pakistan is the gateway to Oil-rich Middle East, South Asia, East Asia, Central Asia, and Eurasia. Both countries can utilize each other for re-export too.

Both countries are far away from each other but, a strong bond of friendship and mutual understanding is admirable. Based on the convergence of interests, we can cooperate with each other. Especially can help each other in their areas of weaknesses and benefit from each other’s strengths.

Serbia has vast cultivatable land and is rich in water resources, very niche in the agriculture sector. Whereas its population is limited to only 7 million approximately. While Pakistan is 250 million population and a strong workforce in the agriculture sector. Both nations can positively collaborate and cooperate in the Agriculture sector.

The Republic of Serbia is in the process of Industrialization, especially in the automotive sector, whereas, Pakistan has a strong base for industrialization and is rich in the technical and skilled workforce. Pakistan has established a rich supply chain for industrialization and Serbia can benefit from Pakistan’s strength.

Science, Technology, Research, Innovation, and Higher Education is the important area where both can benefit from collaboration and cooperation. Pakistan has world-ranked Universities, recognized globally with English as a medium of study, and can meet the demand of Serbian youth. Whereas Serbia has the edge in the IT sector, Pakistani youth can be beneficiaries of Serbian facilities.

However, to achieve the real benefits from each other’s strengths, there is a need to do a lot of homework. There is a dire need to promote people-to-people contact and mutual visit at all levels. Scholars, intellectuals, academia, and media can play a vital role in bringing both nations closer.

Governments in both countries may take appropriate policy measures to strengthen the relations like relaxing visa regimes, removing tax barriers, and introducing attractive policies to each other’s nationals in various fields of life.

To promote trade, Free Trade Agreement (FTA) can be signed among them and formulate a trade policy benefitting each other. Similarly, investment mechanisms need to be devised to attract investment from each other country.

Media has a long-lasting impact and collaboration between two nations in Media will greatly help to build a positive narrative of both countries and simultaneously need to counter negativism in the ugly media in some countries over-engaged in distorting our image.

There is a strong will to enhance our bilateral relationship between the two nations, and whenever there is a will, there is a way. I am optimistic that bilateral relations will grow exponentially in the days to come.

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Europe

The Economist: “Europe looks like… a sucker”

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© European Union 2019 – EP

Don’t be fooled by the rush of good news from Europe in the past few weeks. A brutal economic squeeze will pose a test of Europe’s resilience in 2023 and beyond, – predicts “The Economist”.

There is a growing fear that the recasting of the global energy system, American economic populism and geopolitical rifts threaten the long-run competitiveness of the European Union and non-members, including Britain.

Energy prices are down from the summer and a run of good weather means that gas storage is nearly full. But the energy crisis still poses dangers.

Gas prices are six times higher than their long-run average. On November 22nd Russia threatened to throttle the last operational pipeline to Europe. Europe’s gas storage will need to be refilled once again in 2023, this time without any piped Russian gas whatsoever.

The war is also creating financial vulnerabilities. Energy inflation is spilling over into the rest of Europe’s economy, creating an acute dilemma for the European Central Bank. It needs to raise interest rates to control prices. But if it goes too far it could destabilize the Eurozone’s weaker members, not least indebted Italy.

Too many of Europe’s industrial firms, especially German ones, have relied on abundant energy inputs from Russia. The prospect of severed relations with Russia, structurally higher costs and a decoupling of the West and China has meant a reckoning in many boardrooms.

That fear has been amplified by America’s economic nationalism which threatens to draw activity across the Atlantic in a whirlwind of subsidies and protectionism. President Joe Biden’s ‘Inflation Reduction Act’ involves $400 bn of handouts for energy, manufacturing and transport and includes make-in-America provisions.

In many ways the scheme resembles the industrial policies that China has pursued for decades. As the other two pillars of the world economy become more interventionist and protectionist, Europe, with its quaint insistence on upholding World Trade Organization rules on free trade, looks like a sucker.

Many bosses warn that the combination of expensive energy and American subsidies leaves Europe at risk of mass deindustrialization.

Compared with its pre-COVID GDP trajectory, Europe has done worse than any other economic bloc. Of the world’s 100 most valuable firms, only 14 are European.

America’s financial and military support for Ukraine vastly exceeds Europe’s, and America resents the EU’s failure to pay for its own security.

America is irritated by Europe’s economic torpor and its failure to defend itself; Europe is outraged by America’s economic populism.

…High-level relationship – where will it all lead to?

International Affairs

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Europe

More Europeans will perish from energy crisis than Ukraine war death toll

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More people will perish in Europe this winter because of unaffordable household energy costs than those who have died on the battlefield in the Ukraine war, according to research by the British weekly newspaper The Economist.

Last week, the United Nations said the official civilian death toll from the Ukraine war has risen to nearly 6,900, with civilian injuries topping 10,000.

Whilst the death of military forces in Ukraine has been difficult to verify, the number of soldiers thought to have died in Ukraine is estimated at 25,000-30,000 for each side.

The Economist modeled the effect of the unprecedented hike in gas and electricity bills this winter and concluded that the current cost of energy will likely lead to an extra 147,000 deaths if it is a typical winter.

Should Europe experience a particularly harsh winter, which is something likely when considering the growing effects of climate change, that number could rise to 185,000. That is a rise of 6.0%. It also reports that a harsh winter could cost a total of 335,000 extra lives.

Even in the rare case of a mild winter, that figure would still be high with tens of thousands of extra deaths than in previous years. If it is a mild winter, research by The Economic indicates the death toll would be 79,000.

The Economist’s statistical model included all 27 European Union member countries along with the United Kingdom, Switzerland, and Norway.

It is anticipated that Governments across Western Europe would be alarmed and concerned by these shocking figures published by the study.

But it remains to be seen what measures these governments will take to prevent so many extra fatalities in their own countries because of the energy shortage.

The energy crisis itself began when Europe, which was heavily reliant on Russian gas, imposed heavy sanctions on Russian energy exports following Moscow’s war in Ukraine. Before the war, Russia supplied 40-50% of the EU’s natural-gas imports. One of Europe’s strongest economies, Germany for example, had become dependent on Moscow’s gas flows and had no Plan B.

The move clearly backfired on Western economies, with inflation reaching record levels not seen in decades, mainly as a result of the soaring energy prices. That has left pensioners and other poorer as well as middle-class income households facing a choice of putting food on the table this winter or heating their homes.

The study by The Economist says that despite European attempts to stockpile as much gas as possible to fill their storage facilities, many consumers are still being hurt by the rise in wholesale energy costs.

It adds that even as market prices for fuel have slightly declined from their peaks, the real average residential European gas and electricity costs are 144% and 78% above the figures for 2000-19.

As it is being hurt the most, Europe could take serious and concrete efforts to push both Kyiv and Moscow to the negotiating table and hold peace talks that would bring an end to the war.

That would ease a lot of problems facing the continent – and the world – from energy shortages to the global food supply chain disrupted by the war.

However, critics argue, this would backfire on many Western arms manufacturers who are making lucrative profits from their weapons shipments to the warzone.

There are many officials and other influential figures in the West, especially the U.S. congress (despite America not being included in a study by The Economist), who have links to arms manufacturers; which makes the possibility of peace somewhat unlikely.

While the United States has sent weapons to the tune of $40 billion dollars, European countries show no sign of opting for peace with the new British Prime Minister Rishi Sunak, the latest to announce plans of maintaining or increasing military aid to Ukraine next year

The other course of action is for Western governments to ease the cost-of-living crisis by spending more on social welfare and hiking the tax rates for the rich.

This would save lives by allowing families to heat their homes but many Western governments are taking the opposite route, by claiming they need to cut spending in order to strengthen economic growth in the long run. 

As things stand, the new research by the Economist will add to the fears already facing families in Europe ahead of the winter season. The lower the temperatures will be in Western Europe, the more likely it will be that higher-than-usual death tolls are going to hit the continent. 

As The Economist notes, although heatwaves get more press coverage, cold temperatures are usually deadlier than hot ones. Between December and February, 21% more Europeans die per week than from June to August.

The report says that in the past, changes in energy prices had a minor effect on mortality rates in Europe. But this year’s hikes to household bills are remarkably large.

The Ukraine conflict has exposed other massive costs that have accompanied the violence. The Organization for Economic Co-operation and Development estimates that the world economy in 2023 will be US$2.8 trillion smaller than was estimated in December 2021, before the fighting erupted in February.

The British weekly newspaper, which built a statistical model to assess the effects of the sharp rise in energy prices, forecasts deaths based on weather, demography, influenza, energy efficiency, incomes, government spending, and electricity costs, which are closely correlated to prices for a wide variety of heating fuels.

It used data from 2000-19, (excluding 2020 and 2021 because of covid-19) and says the model was highly accurate, accounting for 90% of the variation in death rates.

High fuel prices can exacerbate the effect of low temperatures on deaths, by deterring people from using heat and raising their exposure to cold.

It says that with average weather, the study found a 10% rise in electricity prices is associated with a 0.6% increase in deaths, though this number is greater in cold weeks and smaller in mild ones.

In recent decades’ consumer energy prices have had only a modest impact on winter mortality, because energy prices have moved or swung back and forth in a regular rhythm.

In a typical European country, increasing fuel prices from their lowest level in 2000-19 reduce the temperature from the highest level in that period to the lowest which means colder weather increases the death rate by 12%.

The study cites the case of Italy, where electricity bills have surged to nearly 200% since 2020, extending the situation, which it said was a linear relationship that yields extremely high death estimates. It has been reported that the country will suffer the most extra deaths. The results show that Italy, which has an older population along with soaring higher electricity prices makes it the most vulnerable. 

Other countries such as Estonia and Finland are also expected to suffer from higher fatalities on a per-person basis. People in Britain and France will also be affected. The model for the effects of fatalities from high energy costs did not include Ukraine.

However, damage to the energy infrastructure in Ukraine as a result of the war, will also certainly have a dire humanitarian effect on Ukrainians as well.

Over the past weeks, many reports have emerged citing Europeans as saying they will be forced to switch the heating off because of the high fuel prices, essentially exacerbating the effect of cold temperatures on deaths by raising people’s exposure to low temperatures.

The most vulnerable people in Europe, the elderly and those living alone or on low pay to medium paychecks will pay the highest price: Death.

Tehran Times

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