Hezbollah-linked Analyst on reality of Russia’s alliance with Iran/Hezbollah – English Subs

Source

Hezbollah-linked Analyst on reality of Russia’s alliance with Iran/Hezbollah – English Subs

Here’s our first video translation after YouTube terminated our channel:

Description:

Senior political analyst Anees Naqqash, who has very close ties to Hezbollah and enjoys an authoritative status on various Lebanese, Syrian and Arab media outlets, was asked in a recent interview on Lebanese television: how can Iran & the ‘Resistance Axis’ be strategically allied to Russia while Moscow’s officials repeatedly announce their commitment to Israel’s security?

The ‘Resistance Axis’ here broadly refers to a strategic anti-Israel/anti-US imperialism alliance composed of, but not limited to, Iran, Syria, Hezbollah, Iraq’s Hashed al-Shaabi, Yemen’s Ansarullah, and various Palestinian armed factions.

Source: OTV Lebanon (YouTube)

Date: 20 February, 2019

Transcript:

Host:

However there is something that remains unclear till now, and that is the Russian-Iranian relationship. I’d like you to shed some light on this, and to clarify some ambiguities if they exist. How do you describe the relationship between Iran and Russia and its continuation in the region, especially in Syria?

Naqqash:

This ambiguity that can be seen is a media plan. Meaning that there is a ‘media kitchen’ whose aim is to portray as if there are contradictions, in order to undo this alliance. We can see that some of the political objectives of some Americans is to undo the Chinese-Russian alliance. Some (Americans) such as Trump, say that we must get closer to Russia in order to isolate China, while others say we must work with China to isolate Russia.

In this region here, some (Americans) believe that the Russian-Iranian alliance is a great threat, firstly because it brought a power – that is an adversary of the United States – to the Middle East region. Secondly, because (this alliance) strengthened the Resistance Axis – without (Russia) becoming a (formal) part of the Resistance Axis. The Resistance Axis became stronger because it now had air cover, air defence, (greater) intelligence (data), coordination e.t.c. According to (reliable) information, the ones who brought the Russians to the region – to Syria – were the Iranians, and not the other way around. (The Iranians) brought them, meaning they convinced them to come – ‘brought’ is probably not a nice word – what convinced them to come is the following, and these are the words of Jalili to President Putin – (Saeed) Jalili was the head of (the Supreme) National Security (Council):

‘The main weak point of the United States in the world is the Middle East region, and we are able to weaken it to a greater extent if we were to cooperate, because we have clear evidence that demonstrates how we have already weakened the United States (in the Middle East)’. This is the specific point that ‘clicked’ for President Putin, and so he took the decision at that time to come to Syria, after he took guarantees that the Resistance (Axis) is the one that will work on the ground, while (Putin) is to take care of the air power.

The second point which convinced (Putin) of this alliance is the issue of terrorism. This terrorism is not limited to Syria or Iraq, but rather, could (even) reach the Fergana Valley: the border region between Afghanistan and Russia (i.e. the Soviet Union), and it is well known that Chechnya was ablaze before President Putin came and ended this armed rebellion, you also have Tatarstan, Dagestan, and 7-8 Muslim republics in the Russian Federation, the British, American, and Saudi intelligence work day and night on (these republics) in order to ignite this region. Hence there is an interest (to fight terrorism), and so President Putin had said on many occasions that ‘we are fighting them in Syria so that they do not come to us’. This issue even extended to China, with the Uyghurs and the separatist threat, and today (China) has a problem, money is being pumped (into this region), and you have 4,000 Uyghurs who came to fight in Syria, I don’t know who brought them here from China and trained them…

Therefore these (Iranian-Russian) understandings are strategic. As for geopolitics, today the Chinese-Russian-Iranian understanding regarding Afghanistan, which is the heart of Central Asia, and which forms an intersection for more than one border and state, (this understanding) is in place and continues very strongly. Meaning that the Russian-Iranian strategic understanding does not stop at the Syrian file, but rather extends to international (geopolitical) equations related to confronting the United States’ influence, and relates to the safeguarding of the security of Russia and China. If you are protecting a state’s internal security, this is very important for such (major) states. For this reason (Russia) is a strategic ally in more than one way. Now in Syria on the ground, if you have differences like whether to start with Idlib first as opposed to Deir az-Zour, or should we suffice ourselves with (this or that)…all this goes back to the varying perspectives of both (Iran and Russia).

Iran is a first-degree regional power, which views (things) as a regional power, and Russia is a global power that views (things) as a global power. For this reason, the Iranians cannot say ‘I can attract the Turks 100% to my axis’, because there is a certain balance (of power) between the Turks and the Iranians. The Russians can dream, work on, and achieve this result, in the sense that they have the ability to pull the Turks out of NATO and bring it into the Shanghai (Organisation). The Iranians are unable to do this…and this (sometimes) causes a difference – to some extent – between Russian and Iranian tactics. With regards to Israel, the Russians are not with the liberation of Palestine in the sense that we talk about. However, (Russia) is not against the ‘Resistance Axis’ being strong (and capable) of confronting Israel, and the Israeli army, which is an American and Western tool, all its weapons are Western-made, when Russian weapons are victorious over Western weapons – we saw how the Kornet (anti-tank missile) began to be sold throughout the world, we saw how Saudi Arabia and the Emirates are buying today the S-400 and how everyone is rushing towards Russian weapons – all this is because of the manifestation (of the effectiveness) of Russian weapons in the region, beginning with the resistance Hezbollah, and ending with the (direct) Russian presence in the (Middle East).

Host:

But sorry…Russia, according to the words of prominent (Russian) officials, has pledged to safeguard the security of Israel. How does Iran reconcile between its strong alliance or partnership with Russia who in turn pledges to safeguard Israel’s security? And the Russians have said this and announce it every day. The Russians say we are committed to Israel’s security. It is as if the (Russians) reached an agreement with the Americans, telling the (Americans) ‘not to worry, you could leave Syria, leave the security of Israel to us. You don’t talk to Iran and (Hezbollah), but we’ll talk to them, you guys don’t worry’….

——————–

A commitment to the security of Israel, is different to defending Israel. The United States says ‘we are committed to ensuring that Israel remains stronger than all Arab states, and we are committed to its security and defending it’. Russia does not (tell Israel) I am committed to defending you, because (Russia) acts within international law. Any state that respects international law and is a member of (the UN) – Israel is a recognised member (of this body) and hence (Russia) says that it abides by this. Meaning that (Russia) does not (officially support) a full-scale regional war. (However) is (Russia) able to prevent the Resistance Axis or Syria from taking a decision to retake the Golan (Heights)? No he is not, because this also falls under international law.

Host:

So why did (the Russians) move Iran and Hezbollah away from southern Syria?

Naqqash:

I take you back to President Putin’s statement that ‘we must go back to the ceasefire agreement, and to remind (all sides) that the Golan (Heights) is occupied land’. (Putin) did not forget to say this last part. Whether (the Russians) moved the Iranians away from the Golan (Heights) or brought them closer to it, these are really just details. Why are they just details? Let me tell you what the Israelis (themselves) say today, after Netanyahu got all happy, the Israelis today say that: ‘we now have intelligence that (the Iranians & Hezbollah) took off their military uniforms and put on Syrian army uniforms’.

Host:

Oh okay, I get it.

Naqqash:

The (Israelis) are saying this, not me. Secondly, (it is a fact) that the Resistance Axis is present in Syria, and that it has committed itself – in an official Iranian-Syrian agreement – to rebuilding the Syrian Armed Forces to the highest level, such that it can thwart all dangers. What does this mean? It means we wish to make the Syrian army stronger than what it was, and we want it to have a missile capability – what kind of missile capability? If Israel is afraid of the Lebanese missile capability (of Hezbollah), what about if this same capability was also now present in Syria? Despite the fact that – and I don’t hide things from our people, things that the Israelis already know – that 90% of the missiles in Lebanon are Syrian-made, or come via Syrian capabilities, so if (the Syrians) are giving me, does that mean they don’t have (such missiles)?

Host:

Are they Syrian-made or Iranian-made in Syria?

Naqqash:

No no, today technology can be transferred, just like when you get the ‘under license’ right you can manufacture yourself.

Host:

Franchise..

Naqqash:

Yes franchise, or through cooperation, sometimes you have experience in something and I have experience in something – they are openly cooperating, (Iran & Syria) made an agreement, they officially signed it between the two states, with the aim of building up the Syrian Armed Forces.

So today Israel’s problem is that you have a Resistance Axis whose presence has extended, between Syria and Lebanon, and so things have now changed. Where do the Russians stand regarding these developments? Will they tell (President) Assad you are not allowed to arm yourself, or you are not allowed to retake the Golan (Heights), or that you must become weaker?

Ofcourse, if some think that the Resistance Axis was going to come and place the flag of Hezbollah in Dara’a or on the Syrian borders with the Zionist entity, this would be considered as a type of incitement for the international community…yet who will prevent a Syrian decision today to militarily take back the Golan (Heights)? International law allows them to do this, international law! And Russia allows (the Syrians) to do this and (in fact) wish they actually do (retake it). And the Resistance Axis does not want from Syria anything more than this. The issue of the liberation of Palestine will be pursued by the Resistance Axis via other contexts.

Therefore, there are no real (Iran-Russia) contradictions…to the contrary, coordination, especially between the Russian forces and Hezbollah, is at its highest level. And the Russians are greatly impressed by Hezbollah’s fighters, as resistance fighters who fought in 50-degree Celsius temperatures in the (Syrian) deserts, and they fought in -14 degree Celsius temperatures during the snowstorms in the mountaintops. This all occurred under the eyes of the Russians, who saw (Hezbollah’s) coordination abilities, and (Hezbollah’s) ability to move not only small groups of guerrilla forces but also an entire ground force brigade.

When Sayyed Hassan (Nasrallah) said that they brought him the news that ‘we liberated a (Syrian) land mass five times the size of Lebanon’, it is true, (Nasrallah) said he was abit surprised at this news, but it is true, 50,000 square kilometres, (Hezbollah) was able to liberate and take control of this whole land area.

Host:

That’s right, using armoured and tactical brigades and…

Naqqash:

Yes all types of forces – thus huge, fundamental transformations have occurred.
For this reason when I say today (Nasrallah commands) half a million (trained) fighters (within the Resistance Axis), I am not exaggerating, and (the resistance enjoys) tactical, command, and operational capabilities much greater than what they were during the 2006 (war). For this reason (Nasrallah) said that we have 40 (military) regions in Lebanon today, just one of these regions contains within it more capabilities than the entire capabilities of (Hezbollah) in the year 2000. Thus there are very great transformations occurring in the balance of power.


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Iran looks East amid US trials and tribulations

February 12, 2019

Iran looks East amid US trials and tribulations

by Pepe Escobar (cross-posted with the Asia Times by special agreement with the author)

February 12, 2019

On the 40th anniversary of the Islamic Revolution, this past Friday, Supreme Leader Ayatollah Khamenei made an effort to express Iran’s geopolitical stance in simple terms: ‘We have good relations with all nations in the world, we don’t want to break relations with any European nation’, and an explanation of the slogan ‘Death to America’.

The Ayatollah said ‘Death to America’ “means death to Trump, John Bolton and Mike Pompeo. It means death to American rulers. We have no problems with the American people.”

So, the slogan is indeed a metaphor – as in death to US foreign policy as conducted for much of the past four decades.

That includes, of course, the dismantling, by the Trump administration, of the nuclear deal with Iran, known as the Joint Comprehensive Plan Of Action (JCPOA).

In a rash rebuke of the centrist government of President Hassan Rouhani and Foreign Minister Muhammad Javad Zarif – who negotiated the JCPOA with the Obama administration, as well as Russia, China, France, the UK and Germany – Khamenei stressed he would not have signed it. His legendary distrust of the US now seems more than vindicated.

Payment system

For the Europeans who signed the JCPOA, what’s left is trying to pick up the pieces. Enter Instex – the Instrument in Support of Trade Exchanges, a mechanism backed by the European Union, with its headquarters in Paris and run by a German banker, which in theory allows European banks and companies to keep trading with Iran without being fined, extra-territorially, by the US Department of Justice, or being totally excluded from the American market.

French Foreign Minister Jean-Yves Le Drian called it “an important geopolitical gesture.” But a “gesture” may not be enough, especially because initially it just covers humanitarian goods sold to Iran, such as pharmaceuticals, food and medical supplies.

Tehran pays Instex, and Instex reimburses the food and pharma companies involved. Further on down the road, small and medium-sized European companies might also use Instex to trade with Iran without being slapped with US sanctions.

What’s crucial in the long run about Instex is that the mechanism bypasses the US dollar. So, it will be under immense scrutiny all across the Global South. Instex won’t replace the Swift payment system anytime soon, because the capitalization is set at only $1 billion. The thing is whether other heavyweights, such as Russia, China and Turkey, will start using Instex to bypass US dollars and sanctions, trading way beyond “humanitarian goods”.

Instex, although an embryonic response, shows how Brussels and major European capitals are exasperated by the Trump administration’s unilateralism. Diplomats have been saying on and off the record that nothing will prevent the Europeans from doing business with Iran, buying their energy, investing in their market, and bypassing the US dollar in the process.

This has the potential to offer some breathing space to President Rouhani. The latest internal polls reveal that 40 years after the Islamic Revolution, over 70% of Iranians of all social classes have zero trust in any negotiations involving the US government. And that even includes an increasing number of millennials, for whom the Islamic Revolution is just an echo of a distant past.

That may not be the exact sentiment in Teherangeles, California – the capital of the Iranian diaspora, which may number over half a million people worldwide, mostly upper-middle-class. But it does reflect the pulse of the nation.

PayMon, crypto alternative

Over and over again, the Rouhani administration must tackle an insurmountable contradiction. National pride, boosted by Iran recapturing its role as a major power in Southwest Asia, is always undermined by intimations of social despair, as in countless families surviving on less than $200 a month, under rampant inflation and suffering the effects of the non-stop fall of the rial, whatever the feel-good factors constantly exhorted by the government.

An Iranian girl holds a poster of the late founder of the Islamic Republic Ayatollah Khomeini on the 40th anniversary of his return from exile in Paris at his mausoleum in Tehran on February 1. Photo: AFP

Already in regard to Instex, there has been a backlash. Iran has been told it must join the Financial Action Task Force (FATF), a global body that seeks to combat money laundering and the financing of terrorism, and that it must compromise on its missile program, which it regards as non-negotiable. The chief of Iran’s judiciary, Ayatollah Sadeq Amoli Larijani, branded the two conditions set by the Europeans as “humiliating”.

And on the European front, there’s no evidence yet that small companies trust that the Instex payment system will make them immune to retaliatory action by the US.

Iranians though are opening other creative fronts. Four banks – Bank Melli, Bank Mellat, Parsian Bank and Bank Pasargad – have developed a gold-backed cryptocurrency named PayMon, and negotiations are already advanced with the Europeans as well as Russia, Switzerland and South Africa to expand PayMon trading. Iranian officials are adamant that blockchain will be crucial to improve the nation’s economy.

The Iranian move mirrors Venezuela’s action in launching its own oil-backed cryptocurrency, the petro, last October. But count on the Blocking Iran Illicit Finance Act to swing into overdrive in the US Congress.

Meanwhile, Russia and Iran have all but bypassed the US dollar in bilateral trade, using only ruble and rial and “in case of urgent need, the euro, if we have no other options”, according to the Russian Ambassador to Iran, Levan Dzhagaryan.

China, Russia, Iran and Turkey – the four key vectors of ongoing Eurasia integration – are investing in bypassing the US dollar on trade by any mechanism necessary. The Eurasia Economic Union (EAEU) is also working on a common system for “boosting economic sovereignty”, as defined by President Putin. It has free-trade agreements with an array of partners, including China and Iran.

Arab NATO roll-call

This is the background in the run-up towards what is essentially an anti-Iran conference convened by the Trump administration in Warsaw this Wednesday.

No one in Europe that really matters wants to be publicly associated with Iranian demonization. Federica Mogherini, the EU foreign policy chief, is not going. EU-wide businesses increasingly tell their puny political leaders that the way to go is Greater Eurasia – from Lisbon to Vladivostok, from Murmansk to Mumbai, with Tehran in between, and everything linked to the China-driven Belt and Road Initiative.

Poland is an exception. Ruled by hardcore nationalists, it has been lobbying for a permanent US military base, which President Andrzej Duda wants to call “Fort Trump”.

Unable to force France, the UK, Germany and Italy out of doing business with Iran, what’s left for Washington is to have Persian Gulf governors plus Israel assembled in the same room, pledging their efforts towards an ill-defined, anti-Iran Arab NATO.

What this will certainly accomplish inside Iran is to promote even more hardliners and “Principlists” who are lobbying for a return to former President Ahmadinejad’s “Look East” strategy.

Iran is already looking East – considering its top Asian energy clients and the close ties with the Belt and Road Initiative and the EAEU. Team Rouhani now knows, in realpolitik terms, they cannot trust the US; and the EU is an immensely problematic partner. The next major step would be for Iran to become a full member of the Shanghai Cooperation Organization. China wants it. And Russia wants it.

Venezuela looks to have been targeted for regime change essentially because it’s trying to bypass the US dollar on trade. That should not be a problem for Iran, which has been a target for regime change for decades.

Cuba – “The Equilibrium of the World” – and Economy of Resistance

February 13, 2019

by Peter Koenig for The Saker Blog

Cuba – “The Equilibrium of the World” – and Economy of Resistance

The Forth International Conference for “The Equilibrium of the World” took place in Havana., Cuba from 28 to 31 January 2019. The Conference, organized by the José Marti Project of International Solidarity, was sponsored by UNESCO and a number of local and international organisms and NGOs. It coincided with the 60th Anniversary of the Cuban Revolution and as such was also a celebration of that successful demonstration to the world that socialism, solidarity and love for live can actually survive against all odds – and, yes, Cuba, has faced more hardship than any other country in recent history, through boycotts, embargoes and all sorts of economic sanctions, heinous military infiltrations and assassination attempts, initiated by the United States and followed, largely under threats from Washington, by most of the western world.

Viva Cuba! – A celebration well deserved – and in the name of José Marti, who was born 166 years ago, but whose thoughts and spiritual thinking for a new world are as valid today as they were then. They may perhaps best be summarized as love, solidarity, justice, living well for all and in peace. These principles were taken over by Fidel and Raul Castro, the Che and Hugo Chávez. They transcend current generations and reach far beyond Latin America.

The conference had many highlights; brilliant speakers; a torch march was organized at the University of Havana in honor of José Marti; and the organizers offered the participants an extraordinary music and modern ballet performance at the National Theater.

From my point of view some of the important messages came from the representative of China, who talked about the New Silk Road, or the Belt and Road Initiative (BRI), of building bridges and connecting countries and people, whereas the west was building walls. A Russian speaker sadly admitted that it took his government a long time and relentless trying to build alliances with the west – until they realized, relatively recently, that the west could not be trusted. Professor Adan Chavez Frias Chavez, Hugo’s brother, described an invasive history over the past 100 years by the United States of Latin America and called upon the brother nations of the Americas and the world to bond together in solidarity to resist the empire’s infringement and steady attempts to subjugate sovereign nations – with a vision towards a multipolar world of equals, of sovereign nations living together in peaceful relations.

***

My own presentation focused on Economy of Resistance. And what a better place than Cuba to talk about economy of resistance! Impossible. Cuba has a 60-year history of successful resistance against a massive embargo, ordered by Washington and followed by almost the entire western world, thus demonstrating that the west has been reduced to a US colony. This was true already during the Cold War, but became even clearer when the Soviet Union “fell”. Here too, the west, led by Washington, was instrumental in the collapse of the USSR – but that’s another story – and the US grabbed the opportunity to become the emperor of a unipolar world. Cuban troops also resisted and conquered the attempted US Bay of Pigs (Playa Girón) invasion launched by President Kennedy in 1961 – and not least, Fidel Castro survived more than 600 CIA initiated assassination attempts.

The principles of Economy of Resistance cover a vast domain of topics with many ramifications. This presentation focused on four key areas:

  • Food, medical and education sovereignty
  • Economic and financial sovereignty
  • The Fifth Column; and
  • Water Resources – a Human Right and a vital resource for survival.

On food, health and education sovereignty – Cuba is 100% autonomous, as far health and education go.

However, Cuba imports more than 70% of the food her citizens consume and that, at present, mostly from the European Union. Cuba has the capacity and agricultural potential to become not only fully self-sufficient, but to develop and process agricultural produce into an agricultural industry and become a net exporter of agricultural goods.

This process might be addressed as a priority policy issue. However, it will take some time to fully implement. Meanwhile, it may be wise to diversify imports from other parts of the world than the EU – i.e. Russia, China, Central Asia, friendly ALBA countries – because Europe is not trustworthy. They tell you today, they will always honor your purchasing contracts, but if the empire strikes down with sanctions – as they did recently for anyone doing business with Iran, Cuba may be “cooked”.

Spineless Europe will bend to the orders of Washington. They have demonstrated this time and again, not least with Iran, despite the fact that they signed the so-called Nuclear Deal, the Joint Comprehensive Plan of Action, or JCPOA, on 14 July 2015 (the permanent members of the United Nations Security Council – the United States, UK, Russia, France, and China—plus Germany and the EU – and Iran), after which Obama lifted all sanctions with Iran – only to have Trump break the agreement and reimpose the most draconian sanctions on Iran and on enterprises doing business with Iran. The US government, and by association Europe, does not adhere to any agreement, or any international law, for that matter, when it doesn’t suit them. There are plenty of indications – Venezuela today, to be followed by Nicaragua and Cuba. These should be valid signals for Cuba to diversify her food imports until full self-sufficiency is achieved.

Already in 2014, Mr. Putin said the ‘sanctions’ were the best thing that could have happened to Russia. It forced her to revamp her agriculture and rebuild her industrial parks with the latest technology – to become fully independent from imports. Today, sanctions are a mere propaganda tool of the west, but they have hardly an impact on Russia. Russia has become the largest wheat exporter in the world. – Cuba could do likewise. She has the agricultural potential to become fully food-autonomous.

On Economic and financial sovereignty – four facets are being addressed. The first one, foreign investments, Cuba may want to focus on (i) technology; (ii) assuring that a majority of the investment shares remains Cuban; (iii) using to the extent possible Cuba’s own capital (reserves) for investments. Foreign capital is bound to certain conditionalities imposed by foreign investors, thus, it bears exchange rate and other risks, to the point where potential profits from foreign assets are usually discounted by between 10% and 20%; and (iv) last but not least, Cuba ought to decide on the sectors for foreign investors – NOT the foreign investor.

Following scenario, as propagated by opposition lawyer and economist, Pablo de Cuba, in Miami, should be avoided:
“Cuba cedes a piece of her conditions of sovereignty and negotiates with foreign investors; puts a certain amount of discounted debt at the creditors’ disposal, so as to attract more investments in sectors that they, the investors choose, for the internal development of Cuba.”

As the hegemony of the US dollar is used to strangle any country that refuses to bend to the empire, a progressive dedollarization is of the order, meaning, in addition to the US dollar itself, move progressively away from all currencies that are intimately linked to the US dollar, i.e. Canadian and Australian dollars, Euro, Yen, Pound Sterling – and more. This is a strategy to be pursued in the short- and medium term, for the protection against more sanctions dished out by the US and its spineless allies.

Simultaneously, a rapprochement towards other monetary systems, for example in the east, especially based on the Chinese gold-convertible Petro-Yuan, may be seriously considered. Russia and China, and in fact the entire SCO (Shanghai Cooperation Organization), have already designed a monetary transfer system circumventing the western SWIFT system, which has every transaction channeled through and controlled by a US bank. This is the key motive for economic and financial sanctions. There is no reason why Cuba could not (gradually but pointedly) join such an alternative system, to move out of the western claws of embargo. The SCO members today encompass about half of the world population and control one third of the globe’s GDP.

Drawbacks would be that the import markets would have to be revisited and diversified, unless western suppliers would accept to be paid in CUC, or Yuan through a system different from SWIFT. Moving away from the western monetary transfer system may also impact remittances from Cubans living in the US and elsewhere in the west (about US$ 3.4 billion – 2017 – less than 4% of GDP). It would mean departing from monetary transactions in the Euro and European monetary zones.

Be aware – the future is in the East. The West is committing slowly but steadily suicide.

Another crucial advice is – stay away from IMF, World Bank, Inter-American Development Bank (IDB), World Trade Organization (WTO) – and the like. They are so-called international financial and trade organizations, all controlled by the US and her western “allies” – and tend to enslave their clients with debt.

Case in Point – Mexico: President Andres Manuel Lopez Obrador (AMLO), a leftist, has little margin to maneuver Mexico’s economy, inherited from his neoliberal predecessor, Enrique Peña Nieto. Mexico’s finances are shackled by the international banking system, led by the IMF, FED, WB and by association, the globalized Wall Street system. For example, AMLO intended to revive PEMEX, the petroleum state enterprise. The IMF told him that he first had to “financially sanitize” PEMEX, meaning putting PEMEX through a severe austerity program. The banking community agreed. In case AMLO wouldn’t follow their “advice”, they might strangle his country.

The CUC versus the Peso, a dual monetary system (CUC 1 = CuP 25.75), has also been used by China up to the mid-80s and by Germany after WWI, to develop export / import markets. However, there comes a time when the system could divide the population between those who have access to foreign currencies (CUC-convertible), and those who have no such access.

Also, the convertibility of the CUC with the Euro, Swiss franc, Pound Sterling and Yen, make the CUC, de facto, convertible with the dollar – hence, the CUC is dollarized. This is what Washington likes, to keep Cuba’s economy, despite the embargo, in the orbit of the dollar hegemony which will be used in an attempt to gradually integrate Cuba into the western, capitalist economy. – However, Washington will not succeed. Cuba is alert and has been resisting for the last 60 years.

The Fifth Column – refers to clandestine and / or overt infiltration of opposing and enemy elements into the government. They come in the form of NGOs, US-CIA trained local or foreigners to destabilize a country – and especially a country’s economy – from inside.

There are ever more countries that do not bend to the dictate of the empire and are targets for Fifth Columns – Russia, China, Iran, Syria, Venezuela, Pakistan and more – and Cuba?

The term, “Fifth Column” is attributed to General Emilio Mola, who during the Spanish civil war in 1936, informed his homologue, General Francisco Franco, that he has four columns of troops marching towards Madrid, and that they would be backed by a “fifth column”, hidden inside the city. With the support of this fifth column he expected to finish with (the legitimate) Republican government.

The process of “infiltration” is becoming ever more sophisticated, bolder and acting with total impunity. Perhaps the most (in)famous organization to foment Fifth Columns around the world, among many others, is the National Endowment for Democracy (NED), the extended arm of the CIA. It goes as a so-called NGO, or ‘foreign policy thinktank’ which receives hundreds of millions of dollars from the State Department to subvert non-obedient countries’ governments, bringing about regime change through infiltration of foreign trained, funded and armed disruptive forces, sowing social unrest and even “civil wars”. Cases in point are Ukraine, Syria, Afghanistan, Sudan, Somalia, Libya – and more – and now they attempt to topple Venezuela’s legitimate, democratically elected Government of Nicolás Maduro.

They work through national and international NGOs and even universities in the countries to be ‘regime changed’. Part of this ‘Infiltration” is a massive propaganda campaign and intimidation on so-called allies, or client states. The process to reach regime change may take years and billions of dollars. In the case of Ukraine, it took at least 5 years and 5 billion dollars. In Venezuela, the process towards regime change started some 20 years ago, as soon as Hugo Chavez was elected President in 1998. It brought about a failed coup in 2002 and was followed by ever increasing economic sanctions and physical military threats. Earlier this year, Washington was able to intimidating almost all of Europe and a large proportion of Latin America into accepting a US-trained implant, a Trump puppet, Juan Guaidó, as the interim president, attempting to push the true legitimate Maduro Government aside.

To put impunity to its crest, the Trump Government blocked 12 billion dollars of Venezuela’s foreign reserves in NY bank accounts and transferred the authority of access to the money to the illegitimate self-appointed interim president, Juan Guaidó. Along the same lines, the UK refused to return 1.2 billion dollars-worth of Venezuelan gold to Caracas. All these criminal acts would not be possible without the inside help, i.e. the “Fifth Column”, the members of which are often not readily identifiable.

It is not known, how often the empire attempted ‘regime change’ in Cuba. However, none of these attempts were successful. The Cuban Revolution will not be broken.

Water resources – is a Human Right and a vital component of an economy of resistance.

Water resources will be more precious in the future than petrol. The twin satellites GRACE (Gravity Recovery and Climate Experiment) discovered the systematic depletion of groundwater resources throughout the world, due to over-exploitation and massive contamination from agriculture and industrial waste. Examples, among many, are the northern Punjab region in India with massive, inefficient irrigation; and in Peru the Pacific coastal region, due to inefficient irrigation, unretained runoff rain- and river water into the Pacific Ocean, and destruction of entire watersheds through mining.

Privatization of water resources, not only of drinking water and water for irrigation, but of entire aquifers, is becoming an increasing calamity for the peoples of our planet. Again, with impunity, giant water corporations, led by France, the UK and the US are gradually and quietly encroaching on the diminishing fresh water resources, by privatizing them, so as to make water a commodity to be sold at “market prices”, manipulated by the water giants, hence, depriving ready access to drinking water to an ever-growing mass of increasingly impoverished populations, victims of globalized neoliberal economies. For example, Nestlé and Coca Cola have negotiated with former Brazilian President Temer, and now with Bolsonaro, a 100-year concession over the Guaraní aquiver, the largest known, renewable freshwater underground resource, 74% of which is under Brazil. Bolsonaro has already said, he would open up the Amazon area for private investors. That could mean privatization of the world’s largest pool of fresh water – the Amazon basin.

Economic Resistance means – Water is a Human Right and is part of a country’s sovereignty; water should NEVER be privatized.

For Cuba rainwater – on average about 1,300 mm / year – is the only resource of fresh water. Cuba, like most islands, is vulnerable to rainwater runoff, estimated at up to 80%. There are already water shortages during certain times of the year, resulting in droughts in specific regions. Small retention walls may help infiltrate rainwater into the ground, and at the same time regulate irrigation, provide drinking water and possibly generate electricity for local use through small hydroelectric plants.

The National Water Resources Institute (INRH – Instituto Nacional de Recursos Hidráulicos), is aware of this issue and is formulating a forward-looking water strategy and planning the construction of infrastructure works to secure a countrywide water balance.

Other challenges include the hygienic reuse and evacuation of waste water, as well as in the medium to long run an island-wide Integrated Water Resources Management (IWRM).

In Conclusion, Economic Resistance might be summarized as follows:

  • Self-sufficiency in food, health services and education. Cuba has achieved the latter two and is now aiming at achieving 100% agricultural autonomy – and in the meantime is advised diversifying food import markets.
  • Economic and financial sovereignty, including progressive dedollarization, deglobalizing monetary economy and creating internal monetary harmony.
  • The “Fifth Column” – always be aware of its existence and with perseverance keep going on the path of past successes, preventing the Fifth Column’s destabilizing actions.
  • Water resources autonomy – achieving countrywide Integrated Water Resources Management, with focus on protection, conservation and efficient water use.

***

Venezuela – The Straw that Breaks the Empire’s Back?

February 07, 2019

by Peter Koenig for The Saker Blog

Venezuela – The Straw that Breaks the Empire’s Back?

Venezuela in the limelight, on practically all the written, audio and visual mainstream media, as well as alternative media. A purposeful constant drip of outright lies and half-truths, “fake news”, as well as misleading information of all shades and hues about Venezuela is drumming our brains, slowly bending our minds towards believing that – yes, the US has a vital interest in meddling in Venezuela and bringing about “regime change”, because of primarily, the huge reserves of oil, but also of gold, coltan and other rare minerals; and, finally, simply because Washington needs full control of its “backyard”. – BUT, and yes, there is a huge BUT, as even some of the respected progressive alternative media pretend to know: Amidst all that recognition of the AngloZionist empire’s evil hands in Venezuela, their ‘but’ claims that Venezuela, specifically Presidents Chavez and now Maduro, are not blameless in their ‘economic chaos’. This distorts already the entire picture and serves the empire and all those who are hesitant because they have no clue, whom to support in this antagonistic US attempt for regime change.

For example, one alternative news article starts, “It is true that some of Venezuela’s economic problems are due to the ineptitudes of the Bolivarian government’s “socialist command” economy, but this overlooks the role played by the United States, the United Nations, and the European Union….”. Bingo, with such a low-blow beginning, the uninformed reader is already primed to ‘discount’ much of the interference by Washington and its minions. Some of the-so-called progressive writers have already been brain-smeared, by calling Nicolás Maduro a “dictator”, when in fact, there is hardly any country farther away from a dictatorship than Venezuela.

In the last 20 years and since Comandante Hugo Chavez Frias was first elected in 1998 and came to power in 1999, Venezuela had another 25 fully democratic elections, of which 6 took place in the last year and a half. They were all largely observed by the US based Carter Institute, the Latin American CELAC, some were even watched by the European Union (EU), the very vassal states that are now siding with Washington in calling President Maduro an illegitimate dictator – and instead, they side with and support the real illegitimate, never elected, US trained and appointed, Juan Guaidó. Former President Carter once said, of all the elections he and his Institute observed, the ones in Venezuela were by far the most transparent and democratic ones. By September 2017, the Carter Center had observed 104 elections in 39 countries.

Despite this evidence, Washington-paid and corrupted AngloZionist MSM are screaming and spreading lies, ‘election fraud’; and Nicolás Maduro is illegal, a dictator, oppressing his people, depriving them of food and medication, sowing famine – he has to go. Such lies are repeated at nauseatum. In a world flooded by pyramid-dollars (fake money), the presstitute media have no money problem. Dollars, the funding source for the massive lie-propaganda, are just printed as debt, never to be repaid again. So, why worry? The same Zionists who control the media also control the western money machines, i.e. the FED, Wall Street, the BIS (Bank for International Settlement, the so-called Central bank of central banks), the European Central Bank, the Bank of England and the banks of London. The western public, armchair warriors, all the way to caviar socialists, believe these lies. That’s how our unqualified brains apparently work.

A recent independent poll found that 86% of all Venezuelans, including from the opposition, want no interference by the US and her puppet allies, but want to remain a sovereign state, deciding themselves on how to resolve their internal problem – economics and otherwise.

Let me tell you something, if Mr. Maduro would be a dictator – and all the diabolical adjectives that he is smeared with were to apply, he would have long ago stopped the western propaganda machine, which is the western controlled media in Venezuela; they control 90% of the news in Venezuela. But he didn’t and doesn’t, because he believes in freedom of speech and freedom of the ‘media’ – even if the “media” are really nothing more than abject western lie-machines presstitute. Mr. Maduro is generous enough not to close them down – which any dictator – of which there are now many in Latin America (take a pick: Argentina, Chile, Ecuador, Brazil, Colombia, Paraguay, Uruguay, Guatemala, Honduras….) would have done long ago.

***

From the very beginning, when Hugo Chavez was first elected in 1998, Washington attempted to topple him to bring about “régime change”. The first real coup attempt took place on 11 April 2002. Under full command by Washington, Chavez was ousted for less than 2 days, when an on-swell of people and the vast majority of the military requested his reinstatement. Chavez was brought back from his island seclusion and, thus, the directly Washington-led coup d’état was defeated (“The Revolution Will Not Be Televised”). But the pressure mounted with economic sanctions becoming ever bolder and, in the case of Venezuela, they had severe economic and humanitarian impacts because Venezuela imports close to 90% of her food and medication – still today – and most of it from the US.

Both Chavez and Maduro had very little leeway of doing differently what they have already done. Sanctions, boycotts, outside money manipulations, driving inflation to astronomical levels and constant smear propaganda, these predicaments are biting hard. The US has a firm grip on Venezuela’s dollar dependency.

Last week, Washington confiscated about US$ 23 billion Venezuela’s reserve money in US banks, blocked them from use by the legitimate Maduro government, and, instead, handed them to their US-appointed, puppet, never elected, “president”, Juan Guaidó. – He is now able to use Venezuela’s money in his US-EU-and Lima-Group supported “shadow” government. Will he dare? – I don’t think so. However, he has already invited US petro, companies to come to Venezuela and invest in and take over the petrol industry. Of course, it will not happen, as President Maduro stays in power, firmly backed by the military.

All of this sounds like a bad joke. Did you ever heard of Juan Guaidó, before the US and her European vassals almost unanimously and obediently aped Washington in supporting him?

Likewise, the Bank of England withheld 1.2 billion dollars’ worth of Venezuelan reserve gold, refusing to respond to the Maduro Government’s request to return the gold to Caracas. Both cases represent an extreme breach of confidence. Up to now, it was ethically, commercially and financially unthinkable that reserve money and gold deposited in foreign banks would not be safe from hooligan theft – because that’s what it is, what the US is doing, stealing other countries money that was deposited in good fate in their banks.

In a recent interview with RT, President Maduro, said there was absolutely no need for “humanitarian aid”, as the UN suggested, prompted by the US. This so-called humanitarian aid has everywhere in the world only served to infiltrate ‘foreign and destabilizing’ elements into countries, just look at Syria, Libya, Iraq, Afghanistan, to name just a few. While the US$ 23 billion blocked in New York banks could have supplied Venezuela with 20 years-worth of medication for the Venezuelan people, Maduro asserted, Venezuela has enough liquidity to feed and medicate her people.

However, what this latest Trump plunder (the money and gold confiscation) does, is hammering one more nail in the western monetary system’s suicide coffin. It sends an ever-clearer signal to the rest of the world, to those that haven’t noticed yet, the AngloZionist empire cannot – I repeat – CANNOT – be trusted. Ever. And the European Union is intrinsically and “vassalically” linked to the Washington rogue state – not to be trusted either. There is virtually no circumstance under which a countries’ assets in western foreign lands – as bank deposits, or foreign investments – are safe. It will prompt a move away from the dollar system, away from the western (also entirely privately-owned) SWFT international transfer system by which sanctions can be enacted.

Indeed, the Russia and China and much of the SCO (Shanghai Organization Cooperation) members are no longer dealing in US dollars but in their own currencies. We are talking about half the world’s population broke free from the dollar hegemony. Europe has started a half-assed attempt to circumvent the dollar and SWIFT system for dealing with Iran. Europe’s special purpose vehicle, or SPV, is called INSTEX — short for Instrument in Support of Trade Exchanges. It is a project of Germany, France and the UK, suspiciously chaired by the latter, to be endorsed by all 28 EU members.

It aims in a first instance at shipping “humanitarian aid” to Iran. Similarly, to Venezuela, Iran’s foreign Minister, Javad Zarif, after learning about the details, considered the conditions of INSTEX as insulting and rejected any dealings with Europe under this system. Iran, he said, does not need “humanitarian aid”, not from Europe, not from anybody. In the meantime, what was to be expected, has already happened. The Trump Administration issued a stern warning of “sanctions” to the EU, if they would attempt to deal with Iran outside of the dollar system. Europe is likely caving in, as they always do.

***

Back in Venezuela, the NED (National Endowment for Democracy), the extended arm of the CIA, has for the last two decades trained funded and infiltrated ‘traitor’ agents into Venezuela, with the goal to assist the opposition to foment unrest, to carry out assassinations and other ‘false flags’, and to simply create chaos and unrest. However, some of these agents are also lodged in Venezuela’s financial institutions, as the Fifth Column, where they sabotage – often with threats – any economic policies that could rescue Venezuela from its economic predicament.

In June 2017, I was privileged to be a member of an economic advisory team to Mr. Maduro. During three days of intense discussions with government, a number of potential short- medium and long-term solutions emerged. They were well received by Mr. Maduro and his economic team. What became of these recommendations? – Well, maybe there are strong foreign-directed forces at play to prevent their implementation.

Clearly, any accusation that the Maduro Government may bear the blame for some of the economic chaos, have to be vigorously rejected. Mr. Maduro has very little space to maneuver the economy other than what he is already doing. His actions are severely limited by the ever-stronger squeeze by western claws.

With or without Venezuela’s new crypto currency, the oil-based Petro, the Venezuelan economy, including a major proportion of her imports, is strongly linked to the US dollar. With military threats and sanctions left and right, there is little that the Government can do in the immediate future to become autonomous. Yes, Russia and especially China will most likely help with balance of payment support loans, with investments in the oil industry to ease Venezuela’s US-dollar debt burden and vamp up oil production; and in the medium and longer run they may also help boosting Venezuela’s agricultural sector towards 100% food self-sufficiency.

What is the real reason, you may ask, behind Trump’s intense ‘coup d’état’ attempt – aka, Bolton, Pompeo and Elliott Abrams (the ‘regime change’ envoy), or the diabolical troika’s killer mission?

  • Is it oil and other natural riches, like gold, coltan, diamonds and many more rare minerals? Venezuela with some 301,000 MMbbl (billions of barrels) of known reserves has about 12% more hydrocarbon reserves than Saudi Arabia. Shipping from the Gulf to Texas refineries takes 40-45 days and the risk of passing through the Iran-controlled strait of Hormuz. Delivering oil from Venezuela to Texas takes some 2-4 days.
  • Is it that Venezuela committed a mortal sin when circumventing the petro-dollar, when trading her hydrocarbons, notably with China and Russia in other currencies, like the gold-convertible yuan? – Remember, Saddam Hussein and Muamar Gadhafi attempted similar dollar-escaping actions – and look what it brought them. The US-dollar hegemony depends very much on oil and gas trade in US dollars, as per an agreement of the seventies between the US and Saudi Arabia, head of OPEC.
  • Is it that Washington cannot tolerate any socialist or socialist leaning country in its “backyard”? – Cuba and Nicaragua beware!
  • Is Venezuela a crucial stepping stone to fully dominate Latin America and her resources? – And, hence, a step closer to ‘full power dominance’ of the world?
  • Or all of the above?

I believe it’s all of the above, with a strong accent on Venezuela’s abandoning the US-dollar as hydrocarbon trading currency – putting the dollar-hegemony even more at risk. Once the dollar ceases to be the main reserve currency, the US economy will slowly collapse – what it is already doing. Twenty years ago, the US-dollar dominated world reserve coffers with about 90%. Today that proportion has sunk to less than 60%. The dollar is rapidly being replaced by other currencies, notably the Chinese yuan.

Now let’s cut to the chase. – It is clear that the Trump Administration with these stupid actions of dishing out sanctions left and right, punishing allies and foes alike, if they deal with Russia, Iran, or Venezuela – and this special blunt regime change aggression in Venezuela, nominating a 35 year old US puppet, trained in the US by CIA as Venezuela’s new ‘interim president’, confiscating Venezuela’s reserve assets in New York and London, stopping importing petrol from Venezuela and punishing anybody who imports Venezuelan oil – except, of course, Russia and China. The ‘might’ of the US stops short of interfering in these non-dollar deals. With these and more ridiculous actions and military threats – Washington is actually not only isolating itself, but is accelerating the fall of the US economy. Ever more countries are seeking alternative ways of doing business with currencies and monetary systems other than the dollar-based fraudulent SWIFT, and eventually they will succeed. All they need to do is joining the China-Russia-SCO system of transfer in their local currencies and the currencies of the eastern SCO block – and dedollarization is moving a step further ahead.

Dedollarization is the key to the end of the US (dollar) hegemony, of the US economic supremacy. The arrogant Trump, plus the impunity of the unfettered diabolical and outright dumb Bolton-Pompeo-Abrams approach of military threats and intimidations, may just make Venezuela the straw that breaks the Empire’s back.

Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Vineyard of The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.

Peter Koenig is a Research Associate of the Centre for Research on Globalization.

Saker interview with Michael Hudson on Venezuela, February 7, 2019

February 06, 2019

[This interview was made for the Unz review]Saker interview with Michael Hudson on Venezuela, February 7, 2019

Introduction: There is a great deal of controversy about the true shape of the Venezuelan economy and whether Hugo Chavez’ and Nicholas Maduro’s reform and policies were crucial for the people of Venezuela or whether they were completely misguided and precipitated the current crises.  Anybody and everybody seems to have very strong held views about this.  But I don’t simply because I lack the expertise to have any such opinions.  So I decided to ask one of the most respected independent economists out there, Michael Hudson, for whom I have immense respect and whose analyses (including those he co-authored with Paul Craig Roberts) seem to be the most credible and honest ones you can find.  In fact, Paul Craig Roberts considers Hudson the “best economist in the world“!
I am deeply grateful to Michael for his replies which, I hope, will contribute to a honest and objective understanding of what really is taking place in Venezuela.
The Saker

The Saker: Could you summarize the state of Venezuela’s economy when Chavez came to power?

Michael Hudson: Venezuela was an oil monoculture. Its export revenue was spent largely on importing food and other necessities that it could have produced at home. Its trade was largely with the United States. So despite its oil wealth, it ran up foreign debt.

From the outset, U.S. oil companies have feared that Venezuela might someday use its oil revenues to benefit its overall population instead of letting the U.S. oil industry and its local comprador aristocracy siphon off its wealth. So the oil industry – backed by U.S. diplomacy – held Venezuela hostage in two ways.

First of all, oil refineries were not built in Venezuela, but in Trinidad and in the southern U.S. Gulf Coast states. This enabled U.S. oil companies – or the U.S. Government – to leave Venezuela without a means of “going it alone” and pursuing an independent policy with its oil, as it needed to have this oil refined. It doesn’t help to have oil reserves if you are unable to get this oil refined so as to be usable.

Second, Venezuela’s central bankers were persuaded to pledge their oil reserves and all assets of the state oil sector (including Citgo) as collateral for its foreign debt. This meant that if Venezuela defaulted (or was forced into default by U.S. banks refusing to make timely payment on its foreign debt), bondholders and U.S. oil majors would be in a legal position to take possession of Venezuelan oil assets.

These pro-U.S. policies made Venezuela a typically polarized Latin American oligarchy. Despite being nominally rich in oil revenue, its wealth was concentrated in the hands of a pro-U.S. oligarchy that let its domestic development be steered by the World Bank and IMF. The indigenous population, especially its rural racial minority as well as the urban underclass, was excluded from sharing in the country’s oil wealth. The oligarchy’s arrogant refusal to share the wealth, or even to make Venezuela self-sufficient in essentials, made the election of Hugo Chavez a natural outcome.

The Saker: Could you outline the various reforms and changes introduced by Hugo Chavez? What did he do right, and what did he do wrong?

Michael Hudson: Chavez sought to restore a mixed economy to Venezuela, using its government revenue – mainly from oil, of course – to develop infrastructure and domestic spending on health care, education, employment to raise living standards and productivity for his electoral constituency.

What he was unable to do was to clean up the embezzlement and built-in rake-off of income from the oil sector. And he was unable to stem the capital flight of the oligarchy, taking its wealth and moving it abroad – while running away themselves.

This was not “wrong”. It merely takes a long time to change an economy’s disruption – while the U.S. is using sanctions and “dirty tricks” to stop that process.

The Saker: What are, in your opinion, the causes of the current economic crisis in Venezuela – is it primarily due to mistakes by Chavez and Maduro or is the main cause US sabotage, subversion and sanctions?

Michael Hudson: There is no way that’s Chavez and Maduro could have pursued a pro-Venezuelan policy aimed at achieving economic independence without inciting fury, subversion and sanctions from the United States. American foreign policy remains as focused on oil as it was when it invaded Iraq under Dick Cheney’s regime. U.S. policy is to treat Venezuela as an extension of the U.S. economy, running a trade surplus in oil to spend in the United States or transfer its savings to U.S. banks.

By imposing sanctions that prevent Venezuela from gaining access to its U.S. bank deposits and the assets of its state-owned Citco, the United States is making it impossible for Venezuela to pay its foreign debt. This is forcing it into default, which U.S. diplomats hope to use as an excuse to foreclose on Venezuela’s oil resources and seize its foreign assets much as Paul Singer hedge fund sought to do with Argentina’s foreign assets.

Just as U.S. policy under Kissinger was to make Chile’s “economy scream,” so the U.S. is following the same path against Venezuela. It is using that country as a “demonstration effect” to warn other countries not to act in their self-interest in any way that prevents their economic surplus from being siphoned off by U.S. investors.

The Saker: What in your opinion should Maduro do next (assuming he stays in power and the USA does not overthrow him) to rescue the Venezuelan economy?

Michael Hudson: I cannot think of anything that President Maduro can do that he is not doing. At best, he can seek foreign support – and demonstrate to the world the need for an alternative international financial and economic system.

He already has begun to do this by trying to withdraw Venezuela’s gold from the Bank of England and Federal Reserve. This is turning into “asymmetrical warfare,” threatening what to de-sanctify the dollar standard in international finance. The refusal of England and the United States to grant an elected government control of its foreign assets demonstrates to the entire world that U.S. diplomats and courts alone can and will control foreign countries as an extension of U.S. nationalism.

The price of the U.S. economic attack on Venezuela is thus to fracture the global monetary system. Maduro’s defensive move is showing other countries the need to protect themselves from becoming “another Venezuela” by finding a new safe haven and paying agent for their gold, foreign exchange reserves and foreign debt financing, away from the dollar, sterling and euro areas.

The only way that Maduro can fight successfully is on the institutional level, upping the ante to move “outside the box.” His plan – and of course it is a longer-term plan – is to help catalyze a new international economic order independent of the U.S. dollar standard. It will work in the short run only if the United States believes that it can emerge from this fight as an honest financial broker, honest banking system and supporter of democratically elected regimes. The Trump administration is destroying illusion more thoroughly than any anti-imperialist critic or economic rival could do!

Over the longer run, Maduro also must develop Venezuelan agriculture, along much the same lines that the United States protected and developed its agriculture under the New Deal legislation of the 1930s – rural extension services, rural credit, seed advice, state marketing organizations for crop purchase and supply of mechanization, and the same kind of price supports that the United States has long used to subsidize domestic farm investment to increase productivity.

The Saker: What about the plan to introduce a oil-based crypto currency? Will that be an effective alternative to the dying Venezuelan Bolivar?

Michael Hudson: Only a national government can issue a currency. A “crypto” currency tied to the price of oil would become a hedging vehicle, prone to manipulation and price swings by forward sellers and buyers. A national currency must be based on the ability to tax, and Venezuela’s main tax source is oil revenue, which is being blocked from the United States. So Venezuela’s position is like that of the German mark coming out of its hyperinflation of the early 1920s. The only solution involves balance-of-payments support. It looks like the only such support will come from outside the dollar sphere.

The solution to any hyperinflation must be negotiated diplomatically and be supported by other governments. My history of international trade and financial theory, Trade, Develpoment and Foreign Debt, describes the German reparations problem and how its hyperinflation was solved by the Rentenmark.

Venezuela’s economic-rent tax would fall on oil, and luxury real estate sites, as well as monopoly prices, and on high incomes (mainly financial and monopoly income). This requires a logic to frame such tax and monetary policy. I have tried to explain how to achieve monetary and hence political independence for the past half-century. China is applying such policy most effectively. It is able to do so because it is a large and self-sufficient economy in essentials, running a large enough export surplus to pay for its food imports. Venezuela is in no such position. That is why it is looking to China for support at this time.

The Saker: How much assistance do China, Russia and Iran provide and how much can they do to help?  Do you think that these three countries together can help counter-act US sabotage, subversion and sanctions?

Michael Hudson: None of these countries have a current capacity to refine Venezuelan oil. This makes it difficult for them to take payment in Venezuelan oil. Only a long-term supply contract (paid for in advance) would be workable. And even in that case, what would China and Russia do if the United States simply grabbed their property in Venezuela, or refused to let Russia’s oil company take possession of Citco? In that case, the only response would be to seize U.S. investments in their own country as compensation.

At least China and Russia can provide an alternative bank clearing mechanism to SWIFT, so that Venezuela can by pass the U.S. financial system and keep its assets from being grabbed at will by U.S. authorities or bondholders. And of course, they can provide safe-keeping for however much of Venezuela’s gold it can get back from New York and London.

Looking ahead, therefore, China, Russia, Iran and other countries need to set up a new international court to adjudicate the coming diplomatic crisis and its financial and military consequences. Such a court – and its associated international bank as an alternative to the U.S.-controlled IMF and World Bank – needs a clear ideology to frame a set of principles of nationhood and international rights with power to implement and enforce its judgments.

This would confront U.S. financial strategists with a choice: if they continue to treat the IMF, World Bank, ITO and NATO as extensions of increasingly aggressive U.S. foreign policy, they will risk isolating the United States. Europe will have to choose whether to remain a U.S. economic and military satellite, or to throw in its lot with Eurasia.

However, Daniel Yergin reports in the Wall Street Journal (Feb. 7) that China is trying to hedge its bets by opening a back-door negotiation with Guaido’s group, apparently to get the same deal that it has negotiated with Maduro’s government. But any such deal seems unlikely to be honored in practice, given U.S. animosity toward China and Guaido’s total reliance on U.S. covert support.

The Saker: Venezuela kept a lot of its gold in the UK and money in the USA.  How could Chavez and Maduro trust these countries or did they not have another choice?  Are there viable alternatives to New York and London or are they still the “only game in town” for the world’s central banks?

Michael Hudson: There was never real trust in the Bank of England or Federal Reserve, but it seemed unthinkable that they would refuse to permit an official depositor from withdrawing its own gold. The usual motto is “Trust but verify.” But the unwillingness (or inability) of the Bank of England to verify means that the formerly unthinkable has now arrived: Have these central banks sold this gold forward in the post-London Gold Pool and its successor commodity markets in their attempt to keep down the price so as to maintain the appearance of a solvent U.S. dollar standard.

Paul Craig Roberts has described how this system works. There are forward markets for currencies, stocks and bonds. The Federal Reserve can offer to buy a stock in three months at, say, 10% over the current price. Speculators will by the stock, bidding up the price, so as to take advantage of “the market’s” promise to buy the stock. So by the time three months have passed, the price will have risen. That is largely how the U.S. “Plunge Protection Team” has supported the U.S. stock market.

The system works in reverse to hold down gold prices. The central banks holding gold can get together and offer to sell gold at a low price in three months. “The market” will realize that with low-priced gold being sold, there’s no point in buying more gold and bidding its price up. So the forward-settlement market shapes today’s market.

The question is, have gold buyers (such as the Russian and Chinese government) bought so much gold that the U.S. Fed and the Bank of England have actually had to “make good” on their forward sales, and steadily depleted their gold? In this case, they would have been “living for the moment,” keeping down gold prices for as long as they could, knowing that once the world returns to the pre-1971 gold-exchange standard for intergovernmental balance-of-payments deficits, the U.S. will run out of gold and be unable to maintain its overseas military spending (not to mention its trade deficit and foreign disinvestment in the U.S. stock and bond markets). My book on Super-Imperialism explains why running out of gold forced the Vietnam War to an end. The same logic would apply today to America’s vast network of military bases throughout the world.

Refusal of England and the U.S. to pay Venezuela means that other countries means that foreign official gold reserves can be held hostage to U.S. foreign policy, and even to judgments by U.S. courts to award this gold to foreign creditors or to whoever might bring a lawsuit under U.S. law against these countries.

This hostage-taking now makes it urgent for other countries to develop a viable alternative, especially as the world de-dedollarizes and a gold-exchange standard remains the only way of constraining the military-induced balance of payments deficit of the United States or any other country mounting a military attack. A military empire is very expensive – and gold is a “peaceful” constraint on military-induced payments deficits. (I spell out the details in my Super Imperialism: The Economic Strategy of American Empire (1972), updated in German as Finanzimperium(2017).

The U.S. has overplayed its hand in destroying the foundation of the dollar-centered global financial order. That order has enabled the United States to be “the exceptional nation” able to run balance-of-payments deficits and foreign debt that it has no intention (or ability) to pay, claiming that the dollars thrown off by its foreign military spending “supply” other countries with their central bank reserves (held in the form of loans to the U.S. Treasury – Treasury bonds and bills – to finance the U.S. budget deficit and its military spending, as well as the largely military U.S. balance-of-payments deficit.

Given the fact that the EU is acting as a branch of NATO and the U.S. banking system, that alternative would have to be associated with the Shanghai Cooperation Organization, and the gold would have to be kept in Russia and/or China.

The Saker:  What can other Latin American countries such as Bolivia, Nicaragua, Cuba and, maybe, Uruguay and Mexico do to help Venezuela?

Michael Hudson: The best thing neighboring Latin American countries can do is to join in creating a vehicle to promote de-dollarization and, with it, an international institution to oversee the writedown of debts that are beyond the ability of countries to pay without imposing austerity and thereby destroying their economies.

An alternative also is needed to the World Bank that would make loans in domestic currency, above all to subsidize investment in domestic food production so as to protect the economy against foreign food-sanctions – the equivalent of a military siege to force surrender by imposing famine conditions. This World Bank for Economic Acceleration would put the development of self-reliance for its members first, instead of promoting export competition while loading borrowers down with foreign debt that would make them prone to the kind of financial blackmail that Venezuela is experiencing.

Being a Roman Catholic country, Venezuela might ask for papal support for a debt write-down and an international institution to oversee the ability to pay by debtor countries without imposing austerity, emigration, depopulation and forced privatization of the public domain.

Two international principles are needed. First, no country should be obliged to pay foreign debt in a currency (such as the dollar or its satellites) whose banking system acts to prevents payment.

Second, no country should be obliged to pay foreign debt at the price of losing its domestic autonomy as a state: the right to determine its own foreign policy, to tax and to create its own money, and to be free of having to privatize its public assets to pay foreign creditors. Any such debt is a “bad loan” reflecting the creditor’s own irresponsibility or, even worse, pernicious asset grab in a foreclosure that was the whole point of the loan.

The Saker:  Thank you very much for taking the time to reply to my questions!

CPEC and The New Great Game on the Roof of the World — Astute News

On top of the graceful Baltit Fort, overlooking the Hunza Valley’s Shangri-La-style splendor, it’s impossible not to feel dizzy at the view: an overwhelming collision of millennia of geology and centuries of history. We are at the heart of Gilgit-Baltistan, in Pakistan’s Northern Areas, or – as legend rules, the Roof of the World. This […]

via CPEC and The New Great Game on the Roof of the World — Astute News

How the New Silk Roads are merging into Greater Eurasia

December 13, 2018How the New Silk Roads are merging into Greater Eurasia

Russia is keen to push economic integration with parts of Asia and this fits in with China’s Belt and Road Initiative

by Pepe Escobar (cross-posted with The Asia Times by special agreement with the author)

The concept of Greater Eurasia has been discussed at the highest levels of Russian academia and policy-making for some time. This week the policy was presented at the Council of Ministers and looks set to be enshrined, without fanfare, as the main guideline of Russian foreign policy for the foreseeable future.

President Putin is unconditionally engaged to make it a success. Already at the St Petersburg International Economic Forum in 2016, Putin referred to an emerging “Eurasian partnership”.

I was privileged over the past week to engage in excellent discussions in Moscow with some of the top Russian analysts and policymakers involved in advancing Greater Eurasia.

Three particularly stand out: Yaroslav Lissovolik, program director of the Valdai Discussion Club and an expert on the politics and economics of the Global South; Glenn Diesen, author of the seminal Russia’s Geoeconomic Strategy for a Greater Eurasia; and the legendary Professor Sergey Karaganov, dean of the Faculty of World Economy and International Affairs at the National Research University Higher School of Economics and honorary chairman of the Presidium of the Council on Foreign and Defense Policy, who received me in his office for an off-the-record conversation.

The framework for Great Eurasia has been dissected in detail by the indispensable Valdai Discussion Club, particularly on Rediscovering the Identity, the sixth part of a series called Toward the Great Ocean, published last September, and authored by an academic who’s who on the Russian Far East, led by Leonid Blyakher of the Pacific National University in Khabarovsk and coordinated by Karaganov, director of the project.

The conceptual heart of Greater Eurasia is Russia’s Turn to the East, or pivot to Asia, home of the economic and technological markets of the future. This implies Greater Eurasia proceeding in symbiosis with China’s New Silk Roads, or Belt and Road Initiative (BRI). And yet this advanced stage of the Russia-China strategic partnership does not mean Moscow will neglect its myriad close ties to Europe.

Russian Far East experts are very much aware of the “Eurocentrism of a considerable portion of Russian elites.” They know how almost the entire economic, demographic and ideological environment in Russia has been closely intertwined with Europe for three centuries. They recognize that Russia has borrowed Europe’s high culture and its system of military organization. But now, they argue, it’s time, as a great Eurasian power, to profit from “an original and self-sustained fusion of many civilizations”; Russia not just as a trade or connectivity point, but as a “civilizational bridge”.

Legacy of Genghis Khan 

What my conversations, especially with Lissovolik, Diesen and Karaganov, have revealed is something absolutely groundbreaking – and virtually ignored across the West; Russia is aiming to establish a new paradigm not only in geopolitics and geoeconomics, but also on a cultural and ideological level.

Conditions are certainly ripe for it. Northeast Asia is immersed in a power vacuum. The Trump administration’s priority – as well as the US National Security Strategy’s – is containment of China. Both Japan and South Korea, slowly but surely, are getting closer to Russia.

Culturally, retracing Russia’s past, Greater Eurasia analysts may puzzle misinformed Western eyes. ‘Towards the Great Ocean’, the Valdai report supervised by Karaganov, notes the influence of Byzantium, which “preserved classical culture and made it embrace the best of the Orient culture at a time when Europe was sinking into the Dark Ages.” Byzantium inspired Russia to adopt Orthodox Christianity.

It also stresses the role of the Mongols over Russia’s political system. “The political traditions of most Asian countries are based on the legacy of the Mongols. Arguably, both Russia and China are rooted in Genghis Khan’s empire,” it says.

If the current Russian political system may be deemed authoritarian – or, as claimed in Paris and Berlin, an exponent of “illiberalism” – top Russian academics argue that a market economy protected by lean, mean military power performs way more efficiently than crisis-ridden Western liberal democracy.

As China heads West in myriad forms, Greater Eurasia and the Belt and Road Initiative are bound to merge. Eurasia is crisscrossed by mighty mountain ranges such as the Pamirs and deserts like the Taklamakan and the Karakum. The best ground route runs via Russia or via Kazakhstan to Russia. In crucial soft power terms, Russian remains the lingua franca in Mongolia, Central Asia and the Caucasus.

And that leads us to the utmost importance of an upgraded Trans-Siberian railway – Eurasia’s current connectivity core. In parallel, the transportation systems of the Central Asian “stans” are closely integrated with the Russian network of roads; all that is bound to be enhanced in the near future by Chinese-built high-speed rail.

Iran and Turkey are conducting their own versions of a pivot to Asia. A free-trade agreement between Iran and the Eurasia Economic Union (EAEU) was approved in early December. Iran and India are also bound to strike a free-trade agreement. Iran is a big player in the International North-South Transport Corridor (INSTC), which is essential in driving closer economic integration between Russia and India.

The Caspian Sea, after a recent deal between its five littoral states, is re-emerging as a major trading post in Central Eurasia. Russia and Iran are involved in a joint project to build a gas pipeline to India.

Kazakhstan shows how Greater Eurasia and BRI are complementary; Astana is both a member of BRI and the EAEU. The same applies to gateway Vladivostok, Eurasia’s entry point for both South Korea and Japan, as well as Russia’s entry point to Northeast Asia.

Ultimately, Russia’s regional aim is to connect China’s northern provinces with Eurasia via the Trans-Siberian and the Chinese Eastern Railway – with Chita in China and Khabarovsk in Russia totally inter-connected.

And all across the spectrum, Moscow aims at maximizing return on the crown jewels of the Russian Far East; agriculture, water resources, minerals, lumber, oil and gas. Construction of liquefied natural gas (LNG) plants in Yamal vastly benefits China, Japan and South Korea.

Community spirit

Eurasianism, as initially conceptualized in the early 20th century by the geographer PN Savitsky, the geopolitician GV Vernadsky and the cultural historian VN Ilyn, among others, regarded Russian culture as a unique, complex combination of East and West, and the Russian people as belonging to “a fully original Eurasian community”.

That certainly still applies. But as Valdai Club analysts argue, the upgraded concept of Greater Eurasia “is not targeted against Europe or the West”; it aims to include at least a significant part of the EU.

The Chinese leadership describes BRI not only as connectivity corridors, but also as a “community”. Russians use a similar term applied to Greater Eurasia; sobornost (“community spirit”).

As Alexander Lukin of the Higher School of Economics and an expert on the SCO has constantly stressed, including in his book China and Russia: The New Rapprochement, this is all about the interconnection of Greater Eurasia, BRI, EAEU, SCO, INSTC, BRICS, BRICS Plus and ASEAN.

The cream of the crop of Russian intellectuals – at the Valdai Club and the Higher School of Economics – as well as top Chinese analysts, are in sync. Karaganov himself constantly reiterates that the concept of Greater Eurasia was arrived at, “jointly and officially”, by the Russia-China partnership; “a common space for economic, logistic and information cooperation, peace and security from Shanghai to Lisbon and New Delhi to Murmansk”.

The concept of Greater Eurasia is, of course, a work in progress. What my conversations in Moscow revealed is its extraordinary ambition; positioning Russia as a key geoeconomic and geopolitical crossroads linking the economic systems of North Eurasia, Central and Southwest Asia.

As Diesen notes, Russia and China have become inevitable allies because of their “shared objective of restructuring global value-chains and developing a multipolar world”. It’s no wonder Beijing’s drive to develop state-of-the-art national technological platforms is provoking so much anger in Washington. And in terms of the big picture, it makes perfect sense for BRI to be harmonized with Russia’s economic connectivity drive for Greater Eurasia.

That’s irreversible. The dogs of demonization, containment, sanctions and even war may bark all they want, but the Eurasia integration caravan keeps moving along.

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