BERLIN — The Biden administration is developing plans to further choke Russia’s oil revenues with the long-term goal of destroying the country’s central role in the global energy economy, current and former U.S. officials say, a major escalatory step that could put the United States in political conflict with China, India, Turkey and other nations that buy Russian oil.
The proposed measures include imposing a price cap on Russian oil, backed by so-called secondary sanctions, which would punish foreign buyers that do not comply with U.S. restrictions by blocking them from doing business with American companies and those of partner nations. As President Vladimir V. Putin wages war in Ukraine, the United States and its allies have imposed sanctions on Russia that have battered its economy. But the nearly $20 billion per month that Russia continues to reap from oil sales could sustain the sort of grinding conflict underway in eastern Ukraine and finance any future aggressions, according to officials and experts.
U.S. officials say the main question now is how to starve Moscow of that money while ensuring that global oil supplies do not drop, which could lead to a rise in prices that benefits Mr. Putin and worsens inflation in the United States and elsewhere. As U.S. elections loom, President Biden has said a top priority is dealing with inflation. While U.S. officials say they do not want to immediately take large amounts of Russian oil off the market, they are trying to push countries to wean themselves off those imports in the coming months. A U.S. ban on sales of critical technologies to Russia is partly aimed at crippling its oil companies over many years. U.S. officials say the market will eventually adjust as the Russian industry fades.
Russia’s oil industry is already under pressure. The United States banned Russian oil imports in March, and the European Union hopes to announce a similar measure soon. Its foreign ministers discussed a potential embargo in Brussels on Monday. The Group of 7 industrialized nations, which includes Britain, Japan and Canada, agreed this month to gradually phase out Russian oil imports and their finance ministers are meeting in Bonn, Germany, this week to discuss details.
“We very much support the efforts that Europe, the European Union, is making to wean itself off of Russian energy, whether that’s oil or ultimately gas,” Antony J. Blinken, the secretary of state, said in Berlin on Sunday when asked about future energy sanctions at a news conference of the North Atlantic Treaty Organization. “It’s not going to end overnight, but Europe is clearly on track to move decisively in that direction.” “As this is happening, the United States has taken a number of steps to help,” he added.
But Russian oil exports increased in April, and soaring prices mean that Russia has earned 50 percent more in revenues this year compared to the same period in 2021, according to a new report from the International Energy Agency in Paris. India and Turkey, a NATO member, have increased their purchases. South Korea is buying less but remains a major customer, as does China, which criticizes U.S. sanctions. The result is a Russian war machine still powered by petrodollars.
American officials are looking at “what can be done in the more immediate term to reduce the revenues that the Kremlin is generating from selling oil, and make sure countries outside the sanctions coalition, like China and India, don’t undercut the sanctions by just buying more oil,” said Edward Fishman, who oversaw sanctions policy at the State Department after Russia annexed Crimea in 2014.
The Biden administration is looking at various types of secondary sanctions and has yet to settle on a definite course of action, according to the officials, who spoke on the condition of anonymity to discuss policies still under internal consideration. The United States imposed secondary sanctions to cut off Iran’s exports in an effort to curtail its nuclear program.
Large foreign companies generally comply with U.S. regulations to avoid sanctions if they engage in commerce with American companies or partner nations. “If we’re talking about Rubicons to cross, I think the biggest one is the secondary sanctions piece,” said Richard Nephew, a scholar at Columbia University who was a senior official on sanctions in the Obama and Biden administrations. “That means we tell other countries: If you do business with Russia, you can’t do business with the U.S.”
But sanctions have a mixed record. Severe economic isolation has done little to change the behavior of governments from Iran to North Korea to Cuba and Venezuela.
One measure American officials are discussing would require foreign companies to pay a below-market price for Russian oil — or suffer U.S. sanctions. Washington would assign a price for Russian oil that is well under the global market value, which is currently more than $100 per barrel. Russia’s last budget set a break-even price for its oil above $40. A price cap would reduce Russia’s profits without increasing global energy costs.
The U.S. government could also cut off most Russian access to payments for oil. Washington would do this by issuing a regulation that requires foreign banks dealing in payments to put the money in an escrow account if they want to avoid sanctions. Russia would be able to access the money only to purchase essential goods like food and medicine. And as those mechanisms are put in place, U.S. officials would press nations to gradually decrease their purchases of Russian oil, as they did with Iranian oil.
“There wouldn’t be a ban on Russian oil and gas per se,” said Maria Snegovaya, a visiting scholar at George Washington University who has studied sanctions on Russia. “Partly this is because that would send the price skyrocketing. Russia can benefit from a skyrocketing price.”
But enforcing escrow payments or price caps globally could be difficult. Under the new measures, the United States would have to confront nations that are not part of the existing sanctions coalition and, like India and China, want to maintain good relations with Russia.
In 2020, the Trump administration imposed sanctions on companies in China, Vietnam and the United Arab Emirates for their roles in the purchase or transport of Iranian oil.
Experts say the measures could be announced in response to a new Russian provocation, such as a chemical weapons attack, or to give Kyiv more leverage if Ukraine starts serious negotiations with Moscow.
U.S. officials want to ensure that European and Asian partners remain united with Washington on any new sanctions. But some European officials say certain measures, such as a price cap or tariffs on Russian oil, would be ineffective or too complicated to enact.
“We continue to look at those things,” Janet Yellen, the U.S. treasury secretary, said in Bonn on Wednesday. “You know, this is important for Europe to decide what they think is best.” American officials say they have crunched numbers to see to what extent Russia would be starved of revenues if major buyers paid only a fraction of the market price for oil.
If the European Union decides to impose a price cap on their purchases rather than an outright embargo, Asian and Middle Eastern buyers of Russian oil might insist on paying the same low price, a U.S. official said. “The advantage of a straight price cap is you go to the Chinese or the Indians and you say, we’re going to force you to save money!” said Daniel Fried, a retired diplomat who has served as the State Department’s coordinator for sanctions policy.
The toughest sanction imposed by the United States and European Union on Russia so far has blocked the Russian central bank’s access to foreign currency reserves in global accounts. That led to a plummet in the value of the ruble. But the bank has amassed foreign currency from Russian companies that are paid in dollars and euros for commodities, including energy.
U.S. and European officials have focused discussions on oil sanctions, leaving out the thornier question of Russian natural gas exports. European nations rely on Russian gas to heat homes and power businesses, and it cannot be easily replaced. There are signs that large Chinese state-owned oil companies are holding back on signing new oil contracts with Russia, given the uncertainty over sanctions. American officials say that while China has given diplomatic and rhetorical support to Mr. Putin, Chinese companies and the government have not sent economic or military aid to Russia. Chinese companies might be waiting until Russian commodity prices fall further before signing new contracts. And they also want to avoid secondary sanctions, said Alexander Gabuev, a senior fellow at the Carnegie Endowment for International Peace. Chinese companies are not well versed in sanctions compliance, he added, so the executives tend to err on the side of caution.
The Biden administration is also discussing another way to inflict pain on Russia: legally seizing the Russian central bank assets that were frozen in accounts overseas during the war, as well as those of Russian tycoons, and giving them to Ukraine for reconstruction, U.S. officials say.
As with the proposed energy sanctions, the United States is exploring the idea with European nations and members of the Group of 7.
Edward Wong reported from Berlin, Paris and Washington, and Michael Crowley from Washington. Matina Stevis-Gridneff contributed reporting from Brussels.
The US’ grand strategy pretty much amounts to preparing for what many fear might be the inevitable conventional phase of what some are already calling the ongoing Third World War that’s thus far only being waged through hybrid (economic, financial, information, proxy, etc.) means.
Russia’songoingspecialmilitaryoperation in Ukraine prompted the US to decisively shift for the time being to focusing more on “containing” it than China, which has thus far succeeded in uniting the West under its previously fading hegemony. Nevertheless, this temporary pivot raised questions about the US’ hegemonic commitment to “containing” China in the Asia-Pacific, made all the more uncertain by India’s proud flexing of its strategic autonomy by continuing to practice a policy of principled neutrality towards the Ukrainian Conflict in spite of unprecedented American pressure to condemn and sanction Moscow.
Biden’s trip to South Korea and Japan gives the US the opportunity to recalibrate its Eurasian “containment” strategy in light of these new international conditions. He’ll participate in a meeting with the Quad while in Tokyo on 24 May, during which time the American leader will have to make the best out of India’s refusal to join that network’s anti-Russian crusade while still trying to find a role for it play in “containing” China despite that South Asian state being left out of AUKUS. Furthermore, India’s trust in the US has greatly deteriorated due to America’s hegemonic pressure campaign against it.
The only way that the US can simultaneously “contain” Russia and China is to rely on a supercontinental-wide version of its “Lead From Behind” model that was first experimented with during NATO’s War on Libya in 2011. This concept refers to the US getting regional partners with shared interests to do the proverbial “heavy lifting” while it provides all the necessary back-end assistance such as intelligence and logistics, not to mention occasionally “leading from the front” by publicly setting the agenda and directly confronting the targeted state.
In the Western Eurasian theater of the NewColdWar, the US’ plans to incorporate Finland and Sweden into NATO are aimed at complicating Russia’s regional security environment, dividing its focus, and thus creating opportunities for the EU to more effectively leverage its existing military capabilities to continue threatening Russia’s national security interests. The US’ 100,000 troops will remain in the continent to serve as credible tripwires against any Russian kinetic action towards its NATO vassals while mostly focusing on enhancing their capabilities to “contain” that country.
For instance, Poland could become a regional center of NATO gravity in the “Three Seas Initiative” (3SI) across Central & Eastern Europe (CEE) that Warsaw envisions falling within its “sphere of influence”. The Scandinavian countries (Denmark/Finland/Iceland/Norway/Sweden), meanwhile, would form their own so-called “Viking Bloc”. Similarly, Bulgaria and Romania could function as the US’ Balkan outposts in the Black Sea. France and Germany might move towards a so-called “EU Army” that could involve them all while the UK could assist the US in managing all of this per its junior partnership in that hegemonic axis.
On the Eastern Eurasian front, India can’t be relied upon to “contain” China “to the last Indian” like the US manipulated Ukraine into “containing” Russia “to the last Ukrainian”. This throws a major spanner in America’s grand strategic plans, but it’s not an irreparable problem in principle. India can still function as a siphon of foreign investment from China, especially if the People’s Republic continues practicing its zero-COVID policy that’s hurt supply chains, but it still has a long way to go before reaching that point. Nevertheless, India’s economic role in this “containment” model is more promising than its military one.
AUKUS is indisputably the “tip of the sphere” when it comes to the US’ military “containment” plans against China, and this emerging network will likely recruit more regional partners such as the Philippines and South Korea. Moreover, NATO is expanding to the Asia-Pacific under the false pretext of the EU’s response to the China-Solomon Islands deal, so that’ll help “share the burden” of US hegemony there. It might even be the case that this bloc’s Balkan, CEE, and Scandinavian members take the lead in “containing” Russia while its Western European ones shift to “containing” China in the Asia-Pacific.
For this grand strategic scenario to materialize, the US must first “lead from the front” by formulating these complex plans and providing incentives for every member to play their envisioned roles. This will include setting the agenda through public statements, providing economic incentives (e.g. preferential trade deals and/or threatening to impose “secondary sanctions” against all who don’t curtail their ties with Russia and China), selling state-of-the-arm military equipment, carrying out joint military exercises, and devising a joint infowar strategy for all its partners to participate in against those two.
The task ahead is unprecedented in scale and scope but represents the only way that America has any credible chance of stopping the decline of its unipolar hegemony, not to mention potentially reversing it in some respects like it just succeeded in doing in the EU. It pretty much amounts to preparing for what many fear might be the inevitable conventional phase of what some are already calling the ongoing Third World War that’s thus far only being waged through hybrid (economic, financial, information, proxy, etc.) means. The US doesn’t seem deterred by this though and is proceeding at full speed ahead.
How can you be so sure Jorge ? Please allow me 10 minutes to make my case with this focused, easy to follow, all-inclusive, and fully vetted explanation. Then I humbly and cordially challenge any individual or institution to prove me wrong. If history is any guide, banning Russian oil would turn EU members into failed states. Furthermore it would FUBAR world market dynamics by altering Russia´s current stabilizing role thus triggering moving parts into motion.
6 key criteria
Beware: the reliable provision of Russian oil to the EU is essential because of its quality, quantities, price, service and delivery enlargement that Europe needs to constantly grow. Banning Russian oil means finding many different oils – from many new unproven vendors – that would have to render the same homogenized profile of delivery, quality, quantity, price, service and enlargeability that Russia reliably provides today. Nothing less, of course. Think about it.
Otherwise we cannot have the Europe we now know and the future Europe we need. All 6 factors are required. Not enough quantity adequately delivered means degraded European lives and failing economy, with shut down plants and refineries affecting transportation, heating, hospitals & schools, highly limited military, unemployment, etc., etc.
A different or lower oil quality means poor performance and operational risks with serious breakdown troubles and injuries plus down-time probably beyond repair. Not low enough price — Russian fuels are good & cheap — means disrupting the EU and the world with inflation beyond imagination. And as Procurement Depts. know well, an utmost reliable vendor service is paramount also to allow for mutual growth. Russia is a vetted, close-by, one-stop, well “oiled” 6-criteria compliant vendor. Instead, the EU´s losing proposition is a far away beach-front bazaar with seaborne delivery only, shipped by a fleet too small for purpose. A single non-compliant vendor is simply unacceptable, period.
Furthermore, Russia´s oil sales to Europe provide a stabilizing critical mass to compensate for world market variations
3 impossible missions 3
The huge problem is that there are 3 and only 3 ways out of this terribly EU mis-managed fuel sourcing hellish-crazy messy mess. For all 3 options in order to comply with the 6 oil criteria briefly explained before (more on that later) the EU would be required to import variable quantities from several different yet unknown vendors having
(1) fully compliant export-ready oil grades to be produced beyond and incremental to current production (#)
and/or…
(2) fully compliant oil grades found deep underground somewhere yet unknown per definition 0% available today
or…
(3) modify every single piece of machinery in the EU to fuel them with different non-compliant non-Russian oils…
and with no possible “toggle switch” to convert from one type of oil to another… We´d have a forcefull life-long linkage between one vendor and his supposedly constant oil deliveries, which would be different from other vendors and their supposedly constant deliveries made to other EU consumers. NO interchangeability here.
(#) It´d have to be “incremental” export volumes beyond current production for two reasons: one would be potential growth in EU demand and the second reason is that no vendor will leave traditional customers abandoned high & dry just because the EU has now gone bananas. Furthermore, these contracts could might all turn out being short-term ephemeral un-sustainable ´purchases of convenience´ without continuity to be dropped the instant the EU´s “ban Russia´s oil” stops dead in its tracks for plenty of good reasons and thus discarding this nonsensical idea altogether.
Be it as it may, all 3 options require to find, negotiate, contract, plan for, test, schedule and get delivery of fully compliant Russian-oil substitutes. Per definition Option (2) does not exist today – if ever — and can only be considered for 2030 planning purposes or beyond in view of the firm 2022 EU deadline premise. Option (1) requires to import varying qualities, quantities, and prices of oils currently in production somewhere, if any are found, which as explained later due to current circumstances and overlapping requirements turns out to be 99% doubtful. Option (3) requires to modify, retrofit and adapt each and every European refinery, chemical & processing plant, machinery, engines, etc. etc. — everything powered by fuels really — for individual, specific not-interchangeable non-Russian oil substitutes which would all be slightly different at the very least and expensive. As shall be duly shown Option (3) is impossible.
“ We will make sure to phase out Russian oil in an orderly fashion in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets” – said Ursula von der Leyen, President of the European Commission. Quick response, no that will NOT happen Ursula. Neither markets nor Russia nor EU Green Standards nor prices nor regulators will let you do any of that. It will necessarily be very chaotic although most Europeans may not yet know it. Renewables and fancy footwork such as hydrogen or dirty coal & fuel oil will make things worse. Bankruptcies and unemployment would follow. Specifics are presented later herein. Let me explain.
Now comes what would normally be described as a multiple-ring circus with the animals and clowns running lose.
Technically speaking, all three options should be dismissed altogether, particularly under current most unfavorable circumstances. Also beware that Europe needs to avoid a self-inflicted Armageddon depression. The reason is an EU ban on Russian oil means per Option (1) to engage in a years-long import development project with non-vetted vendors (from Africa ?) covering absolutely 100% of all the EU current and future oil consumption. So the EU should necessarily replace ALL the Russian oil Europe could possibly ever consume, NOT just a part. Because Russia now has other priorities and will no longer cooperate with and adapt to EU needs and timing in any way. So forget about gradual Russian oil substitution. It´d be the opposite Ursula. For example, and just to entertain the idea, even if eventually achieving constant delivery of 75% fully-compliant non-Russian oil per Option (1) – impossible — it´d still mean digging a 25% deep hole into Europe´s economy, which Russia will not help to solve by supplying the missing 25% oil. The Druzhba pipeline supplies land-locked refineries in Poland, Germany, Hungary, Slovakia and Czechia, so no need to shut down all of Europe. Just triggering a strong negative impact on a couple of countries would be enough A brief cut-off on Germany´s Schwedt refinery or Slovakia´s Slovnaft would be unbelievably catastrophic by shutting down continuous year-round processes which cannot be re-started and would mean irreparable harm. So the EU would need to substitute forever with whatever ALL of the almost infinite and excellent quick & safe delivery Russian oils. Europe just makes naïve and rigid moves ignoring Russia´s clever dynamic capabilities. Judo comes to mind. Ask Finland how does the Russian gut punch feel while now being cut off from both Russian nat-gas and electric power.
And if EU politicians don´t know or don´t care they´ll still very soon participate front and center in a fast & furious crash course on basic high school chemistry that will turn their faces pale, I promise. Hungary has publically exposed the problem: “the EU has ‘no solution’ to fix damage from Russian oil ban”. Also promised, history will not be kind with the EU leadership both for absent fuels and everyday consumer staples with “prices out of the solar system”. The EU relies on cheap and efficient Russian energy for many things such as transportation, heating, and electricity. The drop in supplies will lead to blackouts, shutdowns in industries and unemployment pushing inflation to unmanageable levels Ref #6 https://www.rt.com/news/555297-hungary-eu-no-solution/ .
Renewables have other known serious problems but also require humongous loads of Russian nat-gas, oil, coal, minerals and commodities. Wind turbines require thousands of tons of nickel and rare earths. Any such large structures are moved and erected with Russian fuel-powered equipment. Solar energy requires silver beyond belief. When renewables in large quantities are added to the electrical grid, costs go up – not down — as they have to be backstopped by thermal plants that today run on Russian fuels. “The more renewables you add, the more natural gas you need”. Ref #10 https://www.zerohedge.com/geopolitical/lighting-gas-under-european-feet-how-politicians-journalists-get-energy-so-wrong
The 3 options above are impossible to deploy for many reasons besides timing. For example, even if ever found, these 3 options need to be contracted, planned for, tested, scheduled, and delivered under very strict conditions that Russian sources already comply with regularly and reliably. Europeans are necessarily very much used to proven, vetted, Russian vendors and will not be acceptable to find it otherwise. It´d hurt Europe badly and possibly leading to outward chaos by continuous damage beyond repair of machinery, processes, sensitive devices and installations that EU plants currently have in place. With Russian sourcing, European production runs swift and smooth humming in all 8 cylinders… but not so with possible others… even if physical deliveries were adequately met. Also it´s easy to imagine vendors having something that Europe would buy, that still under current circumstances would not even wish to entertain the idea of offering anything to Europe let alone helping it out in any way shape or form. Think India and China, the world´s factory countries in many ways. And of course Russia would not help out Europe in any of the above 3 impossible missions. Russia will naturally – and probably very effectively — hinder any European effort or solution to replace Russian exports. The risky low tides and strong headwinds are fully against Europe, not Russia.
petro-logistics 101
So then why do I say ´impossible´ ? The short answer is that “petro-logistics” make it physically impossible to ban Russian oil from Europe no matter how it´s diced or sliced as explained hereinafter in layman´s language. The name of this game means that “plug & play” of ensured adequate substitutes for Russian oil grades – options (1) and (2) respectively — are and will always remain clearly absent in quantities anywhere near large enough to make any difference for European needs. Chemical composition and physical parameters matter lots. Options (1) & (2) are out.
Option (1) – In the very best of cases, only useless, tiny small, and sporadical deliveries — if any, actually — would ideally be found, let alone effectively contracted on a necessarily predictable basis. I´d call them minor deliveries of substitutes not comparable to Russian oil. At any rate, the above would be operationally un-manageable as no plant can run if receiving supplies on a highly variable and ocassional basis of now-you-have-it (maybe) now-you-don´t (sorry) with feeds of dubious quality and composition. The EU today has highly sensitive plants finely tuned and used to Russian high quality oil during decades. So no plant runs without continuous, foreseeably constant feed of the right quality product (read chemical and physical properties) in large enough quantities which most probably will grow in time as demand increases. Otherwise no processing works as expected, or I´d rather say nothing works, period. This is shared by anybody with minimum plant hands-on or managerial experience, even millennials. So these facts all by themselves pretty much blow out options (1) and (2) out of the water. I confess that many times I disbelieve having to present such basic explanations. And no high sulphur content allowed as hydrotreating has reached its limits long ago
In a nutshell, the world wasn´t anywhere nearly prepared for an EU ban on Russian oil… or other Russian fuels…
Franz marries Natasha
Early this century, former German Chancellor Gerhard Schröder´s philosophy and policies led to a very clear and conclusive European strategy vis-á-vis energy sourcing. Very simply put in everyday terms, fuel-wise Europe married fuel-rich Russia and soon had plenty of babies that have now grown-up and crave for Russian food. Now enter the violent situation re Ukraine thru NATO´s provocation according to Pope Francis, and with an idle North Stream 2 fully wasted and just sitting pretty. So the whole European successful exporter industrial base was conceived, designed, built, and operated under the ´Russian fuels´ premise. That is why every EU government has failed to find the architectonics — let alone build — a realistic energy strategy that does not depend exclusively on Russia´s capability as an EXTRAordinary and reliable commodities exporter, most specially fuels. So Franz married gorgeous Natasha and raised a family. But now, per Anglo-Saxon ill-intentioned directives, Franz forces a divorce. The problem is that their children still demand Natasha´s Russian food. Ref #11 https://www.politico.eu/article/pope-francis-nato-cause-ukraine-invasion-russia/
helpfull SKovacs
The comments section of my latest article gained greatly from the input offered by SKovacs an excellent and friendly poster who shared his first hand 30-year knowledge in the oil & gas business with us all.
Please see link referenced below. So I´ll just summarize and/or quote what this most experienced poster had to say
many EU refineries have been built to process certain types of oils found in Russia. The very design & build of these refineries (and petrochemical plants) was based on certain specific oil types within narrow variation in blend/quality and steady supply — variation normally of less than 15% vol/day — guaranteed for over 30 years (most commonly 50+ years). Obviously enough, the continuous supply of quality feeds is critical to the operation of a refinery or any chemical plant.
adapting an EU refinery to new types of oils is not an easy task. Every adaptation of a chemical plant or refinery or ore processing plant requires first a detailed laboratory knowledge of the new blend, and formal guarantees for its continuous delivery for decades, convoluted & lengthy contracts and procurement processes, extremely detailed engineering plans, manufacturing of parts, shipping, installation, testing, commissioning, optimization, permitting etc. etc. etc. before it can be declared “done”. Any element of this incomplete list, if missing, renders the whole affair a failure both technically and economically…
the above assumes guaranteed efficient and continuous shipping and receiving network(s) are always in place and fully operational (!) Such work involves thousands of people, complex processes and of course many billions of euros, regulatory permitting process, inherent lawsuits etc., i.e. A LOT OF TIME – years !
Europe deprived of oil/gas/metallurgical coal from Russia — and also iron ore — is unlikely to build much. Never mind the finer components that require other alloy metals which are also provided by Russia…
As already described, chemical plants and refineries are very closely matched and subtly calibrated to very specific and foreseeable supply feedstocks which are also very difficult to substitute. Changing anything requires lots of time, effort, money, dedicated facilities, experimentation, specific expertise, risk, and most important fixed, unchanging feeds always complying with specs. This means that Russia today supplies Europe with exclusive unreplaceable oil & gas grades of very specific chemical content (even coal grades) that would be impossible to get from third parties fast enough and cheap enough. So it´s a very delicate and tight matching already achieved between European facilities and reliable and vetted Russian fuels and other inputs that cannot be altered or replaced, let alone all at the same time (!!) or else… So another factor is the “sudden death” moment, no possible easy-does-it slow and smooth transition phasing out the Russian stuff one at a time and gradually phasing in our new whatever stuff… It´d be like trying to change a tyre as you keep driving without ever stopping the car okay ? Ref #13 https://www.ifo.de/en/node/69417
what for ?
And this banning of Russian oil idea defeats the supposed purpose as Russia would end up earning much more by exporting far less. And the higher the price of oil, the higher the inflationary pressure worldwide destroying the income of regular people. Go figure…By the way, it´s a single oil world market Ref #14 https://www.bbc.com/news/business-60656673
And of course, Russia wouldn´t dare to retaliate against its oil ban with delivery reductions of, say, gas or uranium, would they?
logistics
Banning Russian oil also means altering the traditional direction of logistic flows which is costly and risky. New shipping freighters are unprepared for unknown delivery schedules and product specs. Ports and oceans are different, same with shipping lanes, climates, seasonal availabilities of hydrocarbons and shipping vessels types and sizes which means lots of negotiation, coordination, funding, expertise, risk, new fixed and variable costs and surprises from yet unknown trade and business partners, new procedures, brokers, insurance companies, etc. Also expected continuity, LNG & LPG terminal bottlenecks, processing, availability, cost, weather restrictions when most needed.
Russia´s oil & gas pipe delivery to the EU is safe, clean, and cheap. Russian sea freighted oil comes for nearby ports.
EU acquatics + age & Whatsapp
Altering the Russian energy sourcing strategy now leaves Europe gasping for air with its nose dangerously close to the waterline. By design, chemically speaking Russian feeds are a European absolute sine-qua-non. It is technically unfeasible and unsustainable for Europe not to count on Russian oil & gas. Politics – or war for that matter — can´t change that. If this Russian oil ban is ever implemented, European operational and maintenance staff & field personnel would probably demand being switched to other jobs… or will drag their feet… or would simply resign thus necessarily compounding the problem to unchartered depths. New, young, inexperienced hands do not help under these experimental circumstances, trust me. With or without Whatsapp, having baldy and/or grey-haired guys around is a greatly-appreciated feature/asset, never a bug. Many would be called back from retirement, read my lips.
now some petrophysics
So option (1) applies to all non-Russian oils currently under production but not necessarily offered for sale. Option (2) refers to future oil theoretically down in subsurface in yet untapped reservoirs of hyper-low possible existence in ultra-low production volumes. If you are in the business agreed it´s pure nonsense to go into the details of such an experiment. But apparently the topic now needs to be politically addressed and explained, so bear with me and so be it. To make a long story short, petro-physically speaking these Russian oil grades actually cannot exist elsewhere for very clear and well-known limiting geological parameters. So not only these oil grades can´t be sourced somewhere else but it´d also be a monumental royal waste of time and money to look for such down in subsurfaces yet unknown,
to no avail. Nobody in the business will invest time, money, expertise and valuable people in such failed idea. No way.
pain but no gain
But be it as it may with options (1) and (2) no complying Russian oil & gas grades are available anywhere outside of Russia, neither today nor in the future, let alone in quantity and quality and required vendor reliability to make any difference. And it would certainly focus the European attention properly if everyone please gets used to this idea, the faster the better, Ursula included. So the supposed ´Russian oil ban´ is impossible simply because Russian oil grades do not have and will not have any complying substitutes for the foreseeable future anywhere above or below ground. Such tremendous conclusion leaves one and only one hellaceous alternative open to be discussed in detail below – namely Option (3) — as from the “Mohammed and the Mountain” paragraph thereafter. But so as to avoid running around in circles proposing impossible chimeras, Europeans at large and most specially EU politicians should not forget that today or in the future Russian oil grades are un-replaceable for European consumption. What´s left is technically dreadful and socio-politically most dangerous as we shall soon read about below as Option (3)
LNG / LPG ?
Lots of suggested overly optimistic “solutions” were posited regarding LNG / LPG. Not so. The comments section of my latest article covered this very thoroughly. Please see link below. Most especially we should all thank SKovacs once again for sharing a lot of his 30-year first-hand knowledge in the industry with us all. So I´ll just summarize and/or quote what this most experienced poster has reported regarding LNG / LPG.
There are not enough vessels — oil tankers nor lNG tankers — to replace existing pipelines. At least, a few dozen more are needed. How long and what does it take to build these? Who would build them? By when?
European countries are extremely bureaucratic, so say ~20 years to have 1 LNG terminal ready where this is possible and if not vetoed by the local council. Meanwhile, a pipeline must be connected from the terminal to the existing grid… with further complications at every level. What capacity should these terminals have vis-á-vis the related new pipelines? Nobody can know that today [and thus adding even more load to timing demands]
Transit times on the tankers change and existing EU southern pipelines are probably at full capacity already.
Tankers are far more costly to operate as liquefied gas has to be kept liquefied re power-hungry refrigeration.
Tankers have a more costly service life than other bulk tankers, if only for the regulation/inspection requirements. So therefore they are a higher risk with higher cost per cubic meter of gas transported vs. cheap, reliable, safe, environmentally friendlier pipelines.
the EU needs several LNG terminals to receive and process liquefied nat-gas. The sites have to be carefully chosen, their expensive environmental impact assessments completed (which can take 5 to 15 years) with engineering design that can also take years with limited room for direct carbon copy of other designs, plus ground preparation construction would take 1-2 years + manufacturing of plant and modules (usually in Korea and China, would they now agree ? ) which need contracts, capacity, materials, etc, lots of time and shipping.
By the time all is said and done ~15+ years went by per first-hand knowledge…
All LNG terminals are owned/built/operated by consortiums of gigantic multinational companies, not governments. They cost 10’s of billions to design and build, which need to be borrowed from banks.
The borrower must prove that it has a solid plan with guarantees in place to repay the loan with interest.
The owner/operator of the terminal has all sorts of other very important liabilities.
Germany had 15 nuclear plants in operation. But no more. The last 3 operating nuclear plants in Germany were scheduled to be decommissioned permanently in 2022. Part of the “Green Agenda” in the EU is to eliminate nuclear plants. France does not approve this, but is having technical trouble with its nuclear plants. France has said it will shut down 50% of its nuclear plants for critical maintenance this year at the worst possible timing imaginable. No uranium as usually imported from Russia is the final monkey wrench shoved merciless inside the guts of the European engine.
Question: but what if such Russian oil grades substitutes were prospected for and luckily found in the future ? That´s Option (2) which would first require lots of time we don´t have, plus tons of money, and a major serious ´life or death´ European-led major fossils fuels project in order to adequately and successfully explore such hypothetical reservoirs nobody has heard of today and with zero guarantees in a most risky and extraordinarily expensive business The EU Green Plan environmental agenda would not allow for that either. Plus those hypothetical reservoirs would also need to be geologically studied and mapped, with many thousands of sample cores lab tested before wild-catted or factory drilled and fracked (if allowed) to industrially produce and deliver thru today´s non-existent infrastructure in yet unknown reservoirs most surely in the middle of nowhere in politically and environmentally unstable environments.
And as happens 95% of the time, even if luck strikes big in Europe´s favor, such oil grades would only be found in very small rapidly depleting volumes (boom & bust oil towns) not anywhere close to solving the Russian massive oil availability problem Europe now faces per its own misdoings. Of course, also needed would be tons of infrastructure which doesn´t exist today, including many special heavy-duty traffic-intensive roads, thousands of housing quarters, plenty of power generation and power distribution lines and equipment, readily available water in enormously large quantities, environmental and political approval (with “not in my back yard” mentality working against you) regulator´s intervention, reasonable year-round climate, etc. etc. etc. No need to go on, is there ? Oh…
… and no money
Normally, if successful, the above takes 10 to 15 years or more (!) and even if ever found such oil grades would be prohibitively expensive as in UN-payable. Europe simply does not have or earn that kind of money which the ECB cannot print either. We are talking many trillions of euros in an already 990% overloaded financial system ready to break its own back with a single added straw. Christine Madeleine Odette Lagarde – President of the European Central Bank — would not authorize such nonsense, sanctions or no sanctions. She knows better than that.
physical chemistry & engineering
So Russian oil grades do not have available substitutes both in the needed quality and quantities, neither currently under production nor subsurface for future exploitation. Accordingly, the only other possible solution is exactly the other wayaround ( Option 3 ) which does exist as a most unprobable possibility and is enormously difficult and time + resource consuming to execute. Actually, under current circumstances, this “other” alternative is absolutely impossible to put into practice simultaneously and throughout Europe with the same fixed deadline. When you “phase out” all of the current Russian oil as the EU´s leading politician Ursula von der Leyen emphatically repeats… well, to put it kindly Ursula… you better simultaneously “phase-in” the corresponding operationally-adequate replacement for such. Or else you would be perpetrating the Mother of all Suicides of the Europe we know. Such phase-out / phase-in tango is very difficult to dance about with, let alone without absolutely any help from Russia. So, as if they had not learned anything during the past two centuries, Europeans are happily playing Russian roulette with their own gun.
Mohammed and the mountain
Refineries and chemical plants cannot be fed anywhere near the way you feed your dog, period. This means that if the Mountain won’t go to Mohammed, then Mohammed must come to the Mountain, namely all of these highly technical European chemical plants, refineries and machinery have to be either (a) newly built from scratch or (b) completely re-vamped and retrofitted thru an enormous effort that will consume humongous amounts of euros, human resources, expertise, trials & errors, risk and lots of hard work and lots and lots of TIME we do not have. Enter Option (3)
mission impossible #3
Below please find a very brief descriptive summary of the basic requirements involved for such Option (3) EU-wide project. Actually there are many more, so this listing just pretends to give readers an idea of the category and caliber of the major endeavor Europe would be facing, namely mission impossible Option (3).
All refineries, chemical plants, etc.,etc. etc. in very broad terms need to undergo all of what is explained below which has been detailed only for the sake of completeness and the corresponding credibility. But actually any minimally experienced person that only knows some basic chemistry and process engineering concepts would understand that it should be absolutely unnecessary to continue describing the head-on technical/practical crash that the whole of Europe would be facing if adopting the only remaining game in town, namely Option (3) or better yet Chaos (3)
Chinese fire drill
In sum, in order for installed plants & processing capabilities to remain as they are intact & untouched, per options (1) and (2) Europe would need to effectively find, negotiate, contract, plan for, test, schedule and receive year-round rain or shine come hell or highwater adequate Russian oil grade substitutes in the right quantities, qualities, vendor reliability and prices. That is out of the question as it just doesn´t exist and will not exist either for reasons explained.
The only card left is to modify all current European chemical plants and refineries etc by adapting them to whatever feeds of whatever quality and variations are effectively found, contracted and delivered by non-Russian vendors willing and able to sell to Europe under current circumstances. Oh, by the way, this would have to be done throughout Europe and all at the same time. A Chinese fire drill would be considered a well-organized event in comparison.
Option (3) : modify, adapt, retrofit European refineries, chemical plants, equipment etc for non-Russian substitutes of unknown origin with yet undefined all-around characteristics nor vendor track record. These oils would all be slightly different (not interchangeable) and definitely more expensive. No “toggle-switch” for alternate feed of different oils.
Option (3) requires executing the above modifications to every single European plant and piece of equipment at the very same time and with the same deadline. Of course, this is impossible to do simultaneously. And it´d still be monstrous to do it gradually, but if the decision were ever made it would require Russia´s accommodation so as to allow for a gradually growing part of EU industry modified and fueled by new non-Russian sources while the rest still awaits modification thus still requiring Russian oil grades which Russia would not supply in the way that Europe would need to keep importing. The human resources and expertise required are nonexistent even if every single retired engineer and technician went back to work very hard. IMPOSSIBLE in many ways, just simply IMPOSSIBLE
Overall agreement on European energy sourcing philosophy (years)
Role of nuclear energy & LPG / LNG & renewables (years)
European Green Plan implementation status and goals (open, probably never)
Oil & gas & coal substitutes and suppliers approval to replace Russian imports (years)
Schedule, plans, consultant vetting + industry input & feedback for new feeds (years)
Site selection candidates for each country with adequate location for new plants (many months)
New oil & gas feed contractor pre-selection (many months)
Contractor bidding process etc. etc. etc. (many months)
Bid evaluation process, bid homologation and Contractor selection (months)
Trials and Testing (many months)
All of the above is explained in the simplest possible language for an enormously broad & technical topic but that still affects everybody´s own daily lives. The time periods estimates required mostly do not overlap, they are sequential.
Not mentioned, one way out is to rewind back to Feb. 1 for the EU to keep buying Russian oils directly from Russia. Another way out is to keep buying the same Russian oil but from third parties at a far higher price, per “triangulation”.
The decline of the US dollar, the three ‘systems’, the sanctions war on Russia, on the eve of the publication of Prof. Hudson’s new book: The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism.”
UPDATE: This wonderful transcript is now available just underneath the video
Transcript
BENJAMIN NORTON: Hey, everyone. I’m Ben Norton, and this is the Multipolarista podcast. And I have the great pleasure of being joined today by one of my favorite guests, one of I think the most important economists in the world today. I’m speaking with Professor Michael Hudson.
If you’ve seen any of the interviews I’ve done with Professor Hudson over the past few years, you probably know that he’s a brilliant analyst. He always has, I think, the best analysis to understand what’s going on economically and also politically, geopolitically, in the world today.
And right now is, I think, a very important moment to have Professor Hudson on today. We’re going to talk about the economic war on Russia and the process of economic decoupling between Russia and China and the West, which is something that Professor Hudson has talked about for many years. And that really has accelerated with the Western sanctions on Russia over Ukraine.
We’re also going to talk about the decline in U.S. dollar hegemony. A recent report from the International Monetary Fund, which is dominated by the U.S., acknowledged that the use of the dollar in foreign bank reserves is gradually declining.
Now, it’s not going to disappear overnight. But even the IMF is acknowledging that dollar hegemony is eroding. And, of course, the IMF acknowledged that the Western sanctions on Russia are going to further erode the hegemony of the U.S. dollar.
We now see Russia doing business with China in the Chinese yuan. Russia is also doing business with India with the Indian rupee. And of course Russia has been telling Europe that if it wants to buy Russian energy, it has to do so with Russian rubles.
So there’s so much to talk about today, Professor Hudson, but I want to begin in the first half of this interview today talking about a new book that you’re just about to publish.
Today is Monday, May 9th. You said on Wednesday, May 11th, the book comes out. And it’s called “The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism.”
And everything that I just prefaced this interview with, discussing the economic war in Russia and sanctions and decoupling, this is all deeply related to what you talk about in this book. And I had the pleasure of getting an early copy and reading through it. It’s a really important book, I think.
And you talk about this fundamental divide internationally – and this is a divide that actually goes back historically as well – between these three models for different economic systems you discuss: finance capitalism, industrial capitalism, and socialism.
And your argument is that the U.S. empire has been a force for imposing neoliberalism, which is a particular form of finance capitalism, which is nonproductive, in which finance capital destroys productive industries in pursuit of rent-seeking, and what you call the rentier class.
So instead of producing, as the classical bourgeois economists had said capitalism would be a productive system instead, finance capitalism is fundamentally a system of destruction and debt.
And your argument is that this is deeply rooted in U.S. foreign policy. This is the U.S. foreign policy strategy for expanding its economic power, is imposing this finance capitalist model on the world.
So can you expand further on your argument about the fight between finance capitalism, industrial capitalism, and socialism, and why you decided to publish this book now?
MICHAEL HUDSON: Well the book came out of a series of 10 lectures that I did for my Chinese audience. I’ve been a professor at Peking University for a number of years in economics, and have professorships at other universities, Wuhan and Hong Kong.
And I have a fairly large audience of about 65,000 people per lecture there. And I was asked to give my general overview, sort of a history of economic development in the West, for the Chinese.
And in order to understand today’s finance capitalism, you have to understand what industrial capitalism was, as it was described in the 19th century.
And it’s often forgotten, or played down, that industrial capitalism was revolutionary. What it was trying to do – from the physiocrats in France in the late 18th century to Adam Smith, John Stuart Mill, Marx, and the whole late-19th century flowering of socialism – the ideal of classical value theory and rent theory, was to say what is the actual value, the cost value of producing goods and services?
And what is earned by the capitalist, when he employs labor to make a profit, and what is unearned? And what is unearned was the landlord class. That was the hereditary warrior class that conquered all of the European kingdoms in the Middle Ages.
And the attempt by England’s industrialists was saying, look, we cannot become the workshop of the world; we cannot undersell foreign countries if we have a landlord class ripping off all of the money in land rent.
And if we have predatory banking, or the wealthy people just lend really for buying property, or making distressed loans or predatory loans that have nothing to do with financing actual capital formation.
Well, what made this capitalism revolutionary was the British industrialists and advocates of industry, even the bankers in Ricardo’s time, said, well, in order to overthrow the landlord class, which controls the House of Lords and all of the upper chambers of government in Europe, we have to have democratic reform.
If we have democratic reform and give voting to the people, they’re going to vote against the landlord class, and then we can have an efficient economy where our prices of our exports and our goods and services reflect the actual cost of production, not the rake off for the rentiers class, not the rake off of what landlords take, not the rake off of what predatory bankers take.
And the whole long 19th century leading up to World War One was this revolutionary value theory that depicted land rent and monopoly rent and financial returns as being unearned income and wanting to strip it away.
And all of this seemed to be moving toward socialism. The industrialists were all in favor of government public utilities, of government enterprise, because they said, if the government doesn’t provide health care, then individuals are going to have to pay it, and it’ll cost a lot of money, like it does in the United States.
And so you had the conservative prime minister of England, Benjamin Disraeli, saying, health, all is health, we’ve got to provide public health for the people.
And it was the conservative Bismarck in Germany that said, we’ve got to provide pensions. If labor has to save up for the pensions, then it’s not going to have enough money to buy the goods and services that we Germans are producing. We have got to make pensions public.
So all of this move towards socialism was not only in favor of increasing living standards, which soared in the 19th century, but also in freeing the economy from the rentier class, from the landlords, from the bankers.
And for the classical economists, a free market was a market free from landlords, free from bankers, free from monopolists.
Well, needless to say, the rentiers fought back. And by after World War Two, we’ve seen a continual anti-classical theory replacing the classical idea of free markets with a value of free theory, saying, well, everybody earns whatever they they have. All wealth is earned, not unearned. And if Goldman Sachs partners are paid more than anyone else, that’s because they’re so productive.
So you had a move rejecting classical economics, a junk economics, and a kind of artificial economics that doesn’t really talk about how finance capitalism has worked.
And as it turns out, the business plan of finance capitalism was so predatory that it was anti-industrial.
That’s why President Clinton in the United States moved to invite China into the International Labor Organization, saying, well, we can fight wage rises in America by a race to the bottom. We can we can hire Asians to do work, and that will cause unemployment here. And that’s wonderful for the industrialists. It will basically cut wages and keep American wages down.
Well, that basically is the strategy of finance capitalism, and the aim of finance capitalism is not to invest in factories, and plant equipment, and research and development, but to live in the short term, but to make money by financial engineering, not industrial engineering.
And it becomes predatory, and so you have the whole ideological attack on public enterprise. You have Frederick Hayek’s “The Road to Serfdom,” where you say, if government provides public healthcare, that’s “the road to serfdom,” where actually it’s finance capitalism that is the road to debt peonage and serfdom.
And you have now a whole disparagement of government. And all of this is a counter-revolution to the revolutionary impetus of industrial capitalism in its early stages.
And it’s true that corporations now are just as right-wing as the the banks and the hedge funds. But that’s because corporate industry has been taken over by the financial sector, and the heads of almost every industrial corporation are rewarded the how high they can push the stock price, to exercise the stock options they’re paid in.
And you increase the stock price not by investing more, not by hiring more labor or increasing productivity or increasing sales, but simply by using whatever income you have to buy back your stocks. And by buying back your stocks, this forces up their price.
And, most of all, by giving political contributions in this country to the Democrats and Republicans alike, who appoint Federal Reserve heads that have spent $7-9 trillion buying up stocks and bonds to increase the price of buying a retirement income, to increase Wall Street prices, to increase housing prices, and make America even less competitive industrially.
So finance capitalism is what has essentially de-industrialized the United States and turned the Midwest into a Rust Belt.
Well, the alternative, obviously, are the societies that have not followed this neoliberal finance capitalist plan. And the most successful economy, obviously, has been China, which is why it has been spending so much time there.
And China has done exactly what 19th-century United States, Germany, England, and France did. It has kept basic utilities, basic needs, housing, and above all, finance and banking, in the public domain, as public utilities.
Instead of having an independent financial sector operating on its own self-interest, the Bank of China creates the money. And the Bank of China lends money by deciding, where do we need to have investment in real estate to provide housing for the population at as low a price as we can make it? How do we build up the industry? How do we provide an educational system with training? How do we provide health?
And the fact is that the central planning in an efficient socialist style, not the Stalinist planning that everybody refers to of Russia, but a mixed economy as you have in China, which is truly a mixed economy, with guidance, like the French planification.
Well, that is obviously the way in which you survive and you avoid the kind of overloading the economy with debt service, with high rents, with high payments to the health-care monopoly in the United States, by avoiding all of this payment to a rentier class that has what the classical economists call unearned income, predatory income.
And instead of unseating them, we’ve put them in charge, and made the banks and Wall Street, and the city of London, and the Paris Bourse, the central planners.
So we do have central planning much more centralized than anything that was dreamed by the socialists. But the planning, the centralized planning is done by the financial sector.
And financial planning is short-termism; it’s short-term planning; it’s take your money and run. And that’s what is stripping and impoverishing the global economy today.
BENJAMIN NORTON: Absolutely. And, in your book, you write about the important distinction between the classical economic idea of a so-called free market, and how, you argue that, neoliberals turn that idea on its head.
So this is what you write in your book. And this is, again, Michael Hudson’s new book, “The Destiny of Civilization,” which is out this week. You write:
“The neoliberal ideology inverts the classical idea of a free market from one that is free from economic rent to one that is free for the rentier classes” – that is the rent-extracting classes – “to extract rent and gain dominance.”
So they they completely flip the idea of what it means to have a free market.
And then you note that, “in contrast to classical political economy, this neoliberal ideology promotes tax favoritism for rentiers, privatization, financialization, and deregulation.” And you discuss all of that.
That is, of course, what we could call the Washington consensus.
And then you argue that “U.S. foreign policy seeks to extend this neoliberal rentier program throughout the world.”
And you have a very interesting section of your book where you discuss this concept as “free-trade imperialism.”
So can you talk about what your idea of “free-trade imperialism” is and how it relates to U.S. foreign policy?
MICHAEL HUDSON: Well, the Nobel Prize is given basically for junk economics. And probably the worst junk economist of the century was Paul Samuelson.
He made the absurd claim that he proved mathematically that, if you have free trade then, and don’t have tariffs, and don’t have any government protection, then everyone will become more equal. At least the proportions between labor and capital will be more equal. Well, the reality is just the opposite.
And the term “free-trade imperialism” was actually created by a British historian of trade theory who pointed out that, wait a minute, when England went for free trade, the idea was, if we have free trade, we can stifle other countries from being able to industrialize, because if we have free trade, then we can tell America, we will open our doors to your markets – meaning the markets of the slave South, that Britain supported – and in exchange, you will open your markets to our industrial goods.
And America followed that until the Civil War, which was fought not only over slavery, but by the Republican Party after 1853 that said very explicitly, if we’re going to win the election – the Whigs never could win – if we, the new party, are going to win the election and industrialize America, we’ve got to integrate ourselves with the anti-slavery issue, with emancipation, but for us, the economic war of America is a war of, either we’re going to have protective tariffs in the North, or we’re going to end up as a non-industrial, raw materials-producing society, as the South wants.
And that was the debate from 1815, when the Napoleonic wars ended and world trade began again, until really the Civil War.
And America became strong in the way that Germany became strong too, by having protective tariffs, in order to have prices large enough to nurture what was called infant industry, to nurture American manufacturing.
And I wrote a long book about this, published some years ago based on my PhD dissertation, “America’s Protectionist Takeoff.”
Well, the English tried to fight against other countries protecting their economy, saying that if you just have free trade, you’ll get rich. Whereas the reality is, if we have free trade, you’ll get poor, if you’re not already able to have industrial and labor productivity and agricultural productivity on par with the most advanced countries.
Free trade was an attempt to prevent other countries from investing government money and building up their agriculture, and building up their industry, and building up their productivity, and creating a school system, to raise wages, to make wages more productive.
And the American protectionists said, well, we’re going to have a high-wage economy because high-wage labor undersells pauper labor. And skilled, well-fed, well-rested American labor can produce much more than the pauper labor of other countries that have free trade.
Well, what the leading American protectionist economist, Erasmus Peshine Smith, went to Japan and helped industrial help Japan break away from British free trade, helped Japan industrialize.
And other American economists, other foreign economists, all picked up the ideas of the American protectionist, like Friedrich List went to Germany promoting protectionism.
And Peshine Smith’s book, “The Manual of Political Economy,” was translated into all the foreign languages – Japanese, Italian, French, German.
And you had Europe realizing that free trade polarizes economies. Well, it was this that after World War One, and especially World War Two, when you had orthodox economics turning into basically propaganda.
That’s where you and Samuelson and others try to convince other countries, governments are bad, leave everything to the wealthy people, to the finance people, trickle-down economies, it’s all going to trickle down, don’t worry, just give more money to the rich, and don’t have any government interference with markets.
Whereas America had got rich by interfering with markets, to shape them in the years leading up to World War One.
But after World War One, America had already achieved its industrial dominance. And it was after World War One that America said, ok, now our protective tariffs have enabled us to outproduce all the other countries, and our protectionist agriculture especially – the most protected sector in America, has always been agriculture, since the 1930s.
Basically it said, well, now we can outproduce other countries, we can undersell them, now we can tell them to go for free trade.
And after World War Two, the Americans created the World Bank for economic impoverishment, and the International Monetary Austerity Fund.
And the World Bank’s leading objective was to prevent other countries from investing in their own food production.
The guiding line of the World Bank was, we’ve got to provide infrastructure for building up plantation agriculture in Latin America, and Africa, and other countries, so that they will grow tropical export crops, but they cannot be permitted to grow grain or wheat to feed themselves; they must be dependent on the United States.
And so the function of free trade, the World Bank, and the International Monetary Fund has been to finance dependency, backed up by the American support of dictatorships throughout Latin America who agree to have client oligarchies supporting pro-American trade patterns and avoiding any kind of self-reliance, so that the United States can do what it has recently done to Russia and other countries, impose sanctions – say, well, now that you depended on us for your grain, we can now impose sanctions, and you can’t feed yourself if you don’t follow the policies we want.
That was the policy that America tried to use against China after Mao’s revolution. And fortunately for China, Canada broke that monopoly, and said, well, we’re going to sell grain to China. And China was always very friendly to Canada in those earlier decades.
So basically, free trade means no government, no socialism. It means central planning essentially by Wall Street – countries should let American firms come in, buy control of their raw materials, resources, control of their oil and gas, and mineral rights, and forests and plantations, and basically let other countries send their whole economic surplus to the United States, where it will be duly financialized to buy out other countries’ raw materials and rent yielding resources.
BENJAMIN NORTON: Yeah, and in your book, you have a very funny passage that I think really encapsulates this ideology that you’re talking about here.
You referred to Charles Wilson, who was the secretary of defense under Eisenhower in the U.S., and he was also the former CEO of General Motors.
And he famously said, “What’s good for General Motors is good for the country.” And that idea has morphed into the idea that, “What’s good for Wall Street is good for America.”
And then you note that “this merged with evangelistic U.S. foreign policy that says ‘What’s good for America is good for the world.’ And therefore the logical syllogism is clear: ‘What’s good for Wall Street is good for the world.’”
And you describe this, you link it to the new cold war, this idea that what’s good for the U.S. is good for the world and what’s good for Wall Street is good for the U.S., therefore, what’s good for Wall Street is good for the world.
You argue, “We must recognize how finance capitalism has gained power over industrial economies, above all in the United States, from which it seeks to project itself globally, led by the financialized U.S. economy. Today’s new Cold War is a fight to impose rentier-based finance capitalism on the entire world.”
And this is such an important analysis. Because among those very few people of us who talk about this idea of the new cold war and how dangerous it is, there are very few people who frame it in economic terms.
Usually we frame it in political terms, right, the geopolitical interests between the US and the EU on one side, and China and Russia on the other.
And going back to Brzezinski and The Grand Chessboard, his 1997 book, where he talks about the importance of preventing near strategic competitors from emerging in Eurasia. That’s of course a geopolitical discussion and economics is part of it, but it’s often not at the forefront.
But your analysis I think is even more important, and more accurate, because your argument is not only is it geopolitical, but the geopolitical struggle is rooted in economics. And this is an economic struggle between systems.
So talk talk more about the new cold war and how you see it.
MICHAEL HUDSON: Well, as we’re seeing now, the world is dividing into two parts. We can see that in the fight against Russia, which is also a fight against China, and against India, as you noted. And it seems Indonesia and other countries as well.
The United States is pushing a world that can be controlled by American investors. The ideal of the American neoliberal plan is to do to other countries what it did to Russia after 1991: take all of your public domain, your oil companies, your nickel mines, your electric utilities, give them all to the wealthy oligarchy, that can only make money once it’s taken control of these companies, by selling the stocks to the West.
The West will buy out oil, just like Mikhail Khodorkovsky tried to sell Yukos oil to Standard Oil in the West. And we’ve got to put an oligarchy that will sell all of the national domain, all of the patrimony and natural resources, and all the companies, to American investors on the cheap.
The Russian stock market led all the stock markets in the world from 1994 up to about 1998. This was a huge rip off. The United States wants to be able to do that to the rest of the world.
And it was furious when Russia said, we’ve lost more population as a result of neoliberalism than we did in all of World War Two fighting against Nazism. We’ve got to stop.
And Russia began to say, we’ve got to use Russia’s population, and industry, and natural resources for Russia’s benefit, not for the United States’ benefit.
Well, the United States was absolutely furious with this. And the fury has erupted in the NATO war against Russia in the last few months, and what’s ongoing now.
And the United States says, U.S. State Department officials have said, what we want to do is carve up Russia into maybe four different countries: Siberia, western Russia, southern Russia or Central Asia, maybe northern Russia.
And once we’ve done that, we cut Russia off from China, then we go into China. We finance, we send ISIS and al-Qaeda into the Uyghur areas, the Muslim areas, and we start a color revolution there. And then we break up China, into a northern part, a southern part, a central part.
And once we break them up, we can more or less control them. And we can then come in, buy up their resources, and take over their industry, their labor, and their government, and get richer to obtain from China, Russia, India, Indonesia, and Iran the wealth that we’re no longer producing in the United States, now that we de-industrialized.
So the world is dividing into two parts. And it’s not simply the United States and its European satellites on the one hand versus the non-white population on the other hand; it’s finance capitalism versus the rest of the world, which is protecting itself by socialism, which in many ways fulfills what was the ideal of industrial capitalism during the 19th century, when industrial capitalism was actually progressive.
And it was progressive. That’s part of the whole theme of my book. It was revolutionary. It tried to free economies from the legacy of feudalism, from the legacy of hereditary landlords.
And now the financial class is no longer the landlord class, but the landlord class pays most of its rent to the financial class in the form of mortgage interest, as it borrows money to buy property and housing and commercial sites on credit.
And you have the kind of financialization that has increased housing prices in the United States to over 40% of income, that is officially guaranteed for mortgages. That has priced American labor out of the market.
Privatized health care, 18% of GDP, that is pricing America out of the world market. Debt, auto debt, student debt, which in other countries education is free; that’s pricing America out of the market.
So you have a basically un-competitive economy that’s committing financial suicide, following the same dynamic that destroyed the Roman empire, where a predatory oligarchy took over and maintained power by an assassination policy of its critics, just very similar to what America has been doing in Latin America and other countries.
So you’re having history repeat itself with this same kind of world split. And this split couldn’t have occurred back in the 1970s, with the Bandung Conference in Indonesia. There were other attempts by the Non-Aligned nations to break free of American imperialism, but they didn’t have a critical mass.
So right now, for the first time, you have a critical mass. And you have the ability of China, Iran, Russia, India, other countries together to be self-sufficient. They don’t need relations with the United States.
They can handle their own; they can create their own monetary system outside of the International Monetary Fund, which is basically an arm of the Defense Department. They can give loans to build up the infrastructure of countries outside of the World Bank, which is basically an arm of the Defense Department, the deep state.
So you have the American economy – essentially a merger between the military-industrial complex and the Wall Street FIRE sector, finance, insurance, and real estate – really cannot develop any more than the Roman Empire could develop, by trying to obtain militarily what it could not produce at home anymore.
Well, China and other countries, now that they have their industrial base, the raw materials, the food, the ability to feed themselves, the agriculture, and the technology, they can go their own way.
And so we’re seeing in the last few months the beginning of a war that is going to go on for, I think, 20 years, maybe 30 or 40 years. The world is splitting away.
And it won’t be a pretty sight, because the United States and its European satellites are trying to fight to prevent an inevitable break away they cannot prevent, any more than Europe’s landlord class could prevent industrial capitalism from developing in the 19th century.
BENJAMIN NORTON: Yeah, and this is a good segue to what I wanted to ask you about, Professor Hudson, which is the economic war on Russia.
And I should say, of course, that today is May 9th. Today is Victory Day in Russia, celebrating the Soviet Union’s victory over Nazi Germany in World War Two. Not the US and British victory over Nazi Germany, the Soviet victory, in which 27 million Soviets died.
And actually I should say that, here on YouTube, in the comment section, there are some Russians who are your fans, Professor Hudson, saying they’re thanking you for your cogent analysis of Russia.
But on the subject of Russia, Professor Hudson, we now have seen that since Russia’s military intervention in Ukraine on February 24th, we saw really what could be referred to as financial shock-and-awe. That’s a term that’s been used.
Just as when the U.S. invaded Iraq, it waged a military shock-and-awe campaign on Iraq. Well, now it is waging economic or financial shock-and-awe on Russia.
And Russia has been referred to as the most heavily sanctioned country in history. Which I think is probably accurate, although maybe the DPRK, maybe North Korea, is more sanctioned. But I mean we’re talking about levels of sanctions not seen against a country of this size ever.
And you can also refer to it as the contemporary equivalent of medieval siege warfare against Russia.
Joe Biden, in a speech in Poland, made it clear what Washington’s goal is: it’s regime change. The U.S. wants to overthrow the Russian government, as it did in the Soviet Union in 1991, and clearly install a a pliant alcoholic neoliberal puppet like Boris Yeltsin.
So can you talk about, from an economic perspective, what do you see as the effects of this economic war on Russia?
And specifically in terms of the concept of decoupling, which you have talked about for years, and you have said that the Western sanctions on Russia and China were accelerating that process of decoupling. And this was before the financial shock-and-awe we’ve seen.
So you talked about a move away from this neoliberal globalization where everything is interconnected, or at least capital is interconnected globally, to the creation of a kind of, what you could say is kind of an economic iron curtain.
But how do you see that also in terms of integrating the Eurasian economies more deeply?
And also what is the effect on the European economies, which my impression is that Europe is going to become what you call an economic dead zone, more and more reliant on the U.S., whereas Russia, China, and Iran, and even potentially India, Pakistan, Bangladesh, Indonesia – we’re seeing much more economic integration of Asia, which is, of course, where the majority of humanity lives.
MICHAEL HUDSON: Well you have used the words shock-and-awe, picking it up from the U.S. statements of shock-and-awe. There hasn’t been any shock-and-awe; there’s been a self-defeating piffle, and laughter.
That’s not all. There was an attempt to grab $300 billion of Russia’s foreign reserves, saying, well, any country that leaves their reserves in American banks or in the American Monetary Fund to stabilize their currency, we can grab if we don’t like their policy.
So the idea was, now Russia is going to go broke. It can’t afford to buy anything without U.S. dollars. And the people are going to get so angry, they’re going to vote against Putin. And then we can pour in our money to twerps like Navalny and other right-wingers who have promised to be the new Yeltsins.
Well, it didn’t work that way. They did grab the $300 billion of Russia’s reserves. Russia immediately said, ok, we have our own money. We now, fortunately, have enough oil and gas that we don’t have to sell to Europe and Germany. If they want to freeze in the dark and let their pipes burst when the weather gets cold, that’s their problem. We’ll sell to India, and China, and other countries.
And there was, for a few days, the ruble plunged, by saying, uh oh, what is Russia going to do? So all the foreign exchange traders thought, you can trust Biden to have a really brilliant policies.
I think Paul Krugman, the Nobel Prize winner, said Biden is the greatest American president since Roosevelt, or since Truman, that he was so smart. Well, that’s why Krugman got the Nobel Prize, for making statements like that.
So immediately Russia said, well, obviously we can’t get paid in dollars anymore, or in euros, because, you’ll just grab them, so you’ll have to buy oil and gas in rubles. We’re going to price it in our own currency. Just like China had talked about pricing its exports in yuan.
And so what has happened is that immediately the ruble not only recovered, but is now selling at a higher rate than it was before the American sanctions. So there was no shock at all. The Americans felt shock.
The Americans are shocked. The Americans are awed. The Russians are laughing and everything is going their way.
So it’s almost as if – I would not accuse Biden of being on the pay of Russia, and I would not say that the leaders of Congress are the Russian agents, but if they were Russian agents, if they were paid by Russia, they could not have done a better job of helping Russia catalyzing its protectionism that it wouldn’t do itself.
The fact is that President Putin and many of the people around him still were neoliberals. I mean, they began as neoliberals, in the ’90s.
They began by hoping that they could make an arrangement with Germany and Europe, that Europe would develop their industry and make Russia as efficient an economy as Germany or the United States. Well, obviously that hasn’t happened.
All the same, they didn’t think of imposing protective tariffs as the United States did. They didn’t protect their agriculture. They bought grain, and cheese, and other agricultural products from the Baltics, and from other countries.
Well, now that, once the Americans put on the sanctions, beginning already under the Trump administration, all of a sudden Russia had to produce its own food.
And it did. It made the investment. It is now the largest agricultural exporter in the world, not a food-deficit country. It’s not importing any more cheese from Lithuania and the Baltics. It has its own cheese segment.
And the sanctions are forcing Russia to do exactly what the United States, Germany, and other protectionist countries did in the 19th century, developing their own industry by isolating it from low-priced foreign imports that would be priced so low that the Russians otherwise could not afford to make the investment in factories, plants, equipment, research, and development.
So what the United States has done is actually catalyze Russia moving together.
And also, for three or four years, I have been talking with Russians, and with the Chinese, and other countries about the need to de-dollarize. If you want to develop your own economy, you have to develop your economy in your own interest with public spending and planning, independent from the United States.
Well, now everybody thought that, well, in a few years it may take a decade for China, Russia, Iran, all these countries to break away from the U.S. But America said, we’re going to help you, we’re going to speed up the breakaway process. We’re going to isolate you. So you’ve got to band together against us.
So that’s exactly what it has done. You can just imagine how the Russians are crying all the way to the bank about this.
And how China is watching what the Americans are doing to Russia, and listening to President Biden saying, you know, Russia is not our real enemy, our real enemy of China. And when we’re finished with Russia, then we’re going to go against China and do the same thing to it.
Well you can imagine what this is leading the Chinese government to try to plan to be sufficiently independent from the United States, so that similar type sanctions will not hurt it.
And President Xi in the last few weeks has said we’ve got to make China as independent as possible. We’ve got to make our own computer chips. We’ve got to not depend on the United States for anything, except maybe Walt Disney movies. That’s basically about it.
So it’s as if – you know, I had mentioned earlier that finance lives in the short term. American policy, being financial policy, lives in the short term. And it’s looking at if it can make a quick, a quick victory, and forget about what’s going to happen next.
I’m told that, years ago, already from the war with Iran, and then Iraq and Syria, in the State Department, if there were Arab specialists who spoke Arabic, they were all fired. Because they said, well, if you can speak Arabic, you must’ve learned Arabic because you’re sympathetic with them. You’re fired. We won’t have anyone who can read Arabic here.
Well, now in the last decade or so, they fired all the Russia specialists from the the State Department and CIA, saying, well, if you can read Russian, why would you want to learn Russian? You must like something in Russia. You wanted to learn it. You’re fired.
So they have people who have no idea of what’s happening in Russia, no idea what’s happening in these other countries. And they’re blinded by their ideology.
And if anyone would say, wait a minute now, public planning and making education a public utility is actually making them more competitive, well, that’s against the ideology. That’s not the corporate type.
And they’re taught, well, we really can’t trust people, maybe they’re tending toward socialism, and they’re out the door.
So you’re having American policy pretty much run by the blind, and the Europeans are simply taking orders, and money in little white envelopes from the United States, to just show their loyalty, and basically are willing to spend three to seven times as much for their energy, for their liquefied natural gas and oil, by buying from the United States, than they are by a long-term contract with Russia.
Europe is willing to spend now $5 trillion on putting together ports that can handle shipping tankers for liquefied natural gas instead of relying on the Russian pipeline, the Nord Stream Two, that’s already there.
So Europe is making an enormous sacrifice. If it doesn’t have Russian gas, and it refuses to pay rubles, it says, if you don’t give us our gas and oil for free, you’re attacking us, because we’ve been getting all of your oil and gas for free, because all the dollars, all the money we pay, you’ve recycled to the United States in your foreign reserves. Thank heavens, the U.S. can grab it all. If you don’t continue to give it to us for free, then you’re attacking us.
To the United States, other countries protecting their economy, other countries trying to raise their living standards, and especially other countries undertaking land reform, are viewed as enemies of the United States, because they’re an enemy of the neoliberal American financial system.
And the idea of the unipolar world where the United States gets all of the profits, and rents, and interests of the world economy, just as ancient Rome stripped its provinces by getting all of their wealth and income for themselves, not producing it at home, while impoverishing their own domestic population. It’s just an exact parallel.
So Europe is willing to say, well, ok, if we don’t have a Russian gas, well, that means that our chemical companies cannot buy the gas to make the fertilizer to make our crops grow, and our agricultural productivity is going to fall by about 50%.
We’re also going to spend a lot more money on America’s military, NATO arms to support NATO. So higher food, higher military spending, higher energy costs.
This ends Europe as an industrial rival to Asia, and Eurasia, I should say, because now the Chinese Belt and Road Initiative and other spending investment, capital investment, throughout Western Asia is creating a new productive plant that is not only self-sufficient, but is leaving the United States and Europe without any industrial competitive power. They’ve priced themselves out of the world market. They’re no longer competitive.
So the world is developing. And I’m sure the only way that the NATO countries can fight against it is militarily, by threatening to bomb. But they can’t fight economically. They can’t fight financially. They tried by disconnecting Russia from the SWIFT system. It put it in its own system very quickly.
It really is left without a strategy, except that it’s done a wonderful job of controlling the public relations dimension of this war, making it appear as if somehow other countries are the aggressors, in not letting America exploit them, and making it appear as if Russia is the aggressor in Ukraine, instead of NATO prodding and prodding Russia to say, we’re going to capture your port at Crimea, and we’re going to attack the Russian-speakers if you don’t fight back, and we’re going to keep bombing them year after year, from 2014 on, we’re going to keep bombing them until you protect them.
So all of this is treated as if America is purely defending itself. Well, this is what the Nazis said in World War Two. Hitler and Goebbels said, we can always mobilize a population to support our war by saying it’s a war to defend ourselves.
And that’s how the United States in Europe are doing it. Not only are they pulling a strategy out of Goebbels’ Nazi book, but a few weeks ago, Germany went to the museums, the military museums, where they had the old Panzer tanks from World War Two, and they sent the Panzer tanks, the Nazi tanks from World War II, to Ukraine, saying this is symbolic, now we can fight Russia with the same German Nazi tanks run by the neo-Nazi groups, that Zelensky is supporting, the same Nazi fight against Russia. We can reenact World War Two with the same tanks, even symbolically, to show that this is a fight of Naziism, and neoliberalism, against Eurasia.
BENJAMIN NORTON: We’ve also seen Germany not only re-militarizing, but also boosting its relations with Japan. There are some terrifying echoes of of World War Two.
But you mentioned something that I want to analyze a little bit more, which is the strength of the Russian ruble. I talked about the concept of financial shock-and-awe that was waged on Russia. And President Biden said, “the Russian ruble has become rubble,” he joked. He said the Russian ruble has become rubble.
Well, that’s actually not at all what happened. This is the value of the dollar to Russian rubles, right now [showing a graph]. Russian rubles are at 69 to the dollar. A few days ago, it was at 64, or 65 to the dollar, which is actually better than it was even before the Russian war in Ukraine, which began in February 24th.
And it did spike, and there was a peak here, at which it was devalued to 139 to the dollar, about half the value it has now. But in the months leading up to the Russian military intervention, in November and December, it was around 75 to the dollar.
So the ruble has actually strengthened despite these sanctions. And here’s a report from Reuters from five days ago, that was May 4th: the “Rouble leaps to over 2-year high vs dollar, euro as EU ups sanctions.” So the ruble is doing quite well.
And you talked about the Russian mechanism to force Europe to buy energy exports from Russia in the Russian ruble. And this graphic here, for people watching, it’s in Russian, but really it just shows this mechanism in which a European firm that wants to buy gas from Russia’s state owned gas giant Gazprom, it has to send the money in euros to the Gazprombank, which is the obviously the bank that works with Gazprom, and then it puts it in a special account in euros, and then that is sold in the Moscow exchange for Russian rubles.
And then those rubles are put in another special account, called a K account, that belongs to that European firm. It has two accounts, two special accounts with Gazprombank, one in euros, one in rubles. And then this special ruble account sends that money to Gazprom. And then once the money reaches Gazprom, that’s when Russia considers that the payment officially went through.
So this is the mechanism by which Russia is getting paid in rubles. And much of Europe claimed at first that they would not do so, but eventually they gave in. So that’s an incredible development.
And related to that, what I wanted to ask you about, is I think another reason that the Russian ruble has strengthened and stabilized is not only because Russia continues to maintain constant exports of energy to Europe and other parts of the world.
You can talk about the central bank policies. But one of the policies is that the Russian central bank has basically put the ruble on gold, which I think is a very interesting and historic development.
And we saw that from the beginning of April until the end of June, the Bank of Russia says that it’s going to buy gold at a fixed price of 5000 rubles per gram of gold. And then the question is whether or not in July, when this policy ends, if it’s going to continue, and if the ruble will basically become fixed, it become pegged to gold like the U.S. dollar was up until 1971.
So you don’t think it will be? So talk about this policy. Do you think that that the gold standard is going to come back? Or apparently you don’t think so.
MICHAEL HUDSON: No, Russia is not going on on the gold standard. What it is doing is investing, its foreign exchange in the only way that is not grabbable. It’s investing it in gold; it’s putting gold in its reserves.
It is not setting its exchange rate according to the price of gold, but it is buying gold with what it has been getting.
I want to go back to your talk about rubble. You talked about, “from ruble to rubble,” what President Biden said.
There have been a lot of pictures of rubble in the news for the last few days. For instance, there are talks of, here’s a Ukrainian picture, and look at this picture of a Russian tank, we shot it down, it’s rubble. Turns out it’s a Ukrainian tank, that they just say it was the Russian tank we shot down.
So basically, they’re taking their own destruction, and they’re saying that, while they’re being destroyed, they’re saying, no, this is a picture of Russia being destroyed, Russian assets, not Ukrainian assets being destroyed.
Well, the similar thing is with the Russian ruble. America says, look, we’ve isolated the the ruble. Well, what has happened? If you isolate the ruble and you say we’re not going to export anything more to Russia, so it’s not going to be able to spend any of its rubles on buying American or European products.
Well, meanwhile, Russia can continue to earn rubles from Germany and Europe, and it can continue to earn foreign exchange from other countries that it’s selling its agriculture to at rising prices, its oil and gas at rising prices, too. So obviously, the balance of payments is going way up.
And they believe that what is in store is a new monetary system that is an alternative to the dollar IMF system.
And in this system other countries will hold their reserves in each other’s currencies. In other words, Russia will hold Indian rupees and Chinese yuan. China will hold rupees and Russian rubles.
There will be the equivalent of what Keynes thought of as something like artificial special drawing rights that the banks will be able to create to help fund governments to undertake capital investment.
But for settlements settling balance of payments deficits among countries, once they don’t have enough foreign exchange to make a swap, they will use gold as the means of settlement, because gold is a pure asset. It’s not a liability.
Any foreign currency basically is held in a foreign country that has the power to do what America did to Russia and just grab it all, and say, we’re just wiping it all out.
It’s as if you have a bank account, and the bank says, we’ve just emptied out your account to give it to one of our friends, and you don’t have it anymore. You can’t do that if gold is held in your own country.
Venezuela made the problem of keeping its gold in England, trusting England, saying that, even if there is war, they’ll never interrupt gold and finance. And England just grabbed Venezuela’s gold.
So, obviously, countries are not going to leave their gold in other countries. Even little Germany has asked America to begin sending back the gold that it has in the Federal Reserve Bank of America because it’s worried that what if it ever buys Russian gas again? America will grab all of Germany’s gold, grab all the German money, and it’ll be like World War One all over again.
So this act that America did of grabbing Russian money, Afghanistan’s foreign reserves it grabbed, this is telling all the other countries, pull all your money out of dollars. What are they going to put it in? There’s not that much they can put it in that it is absolutely safe.
So gold is a flight to safety today, because it’s one of the things that all of the world realizes as having an international value for settling balance of payments deficits, that is independent of world politics.
So that’s the explanation. Russia is not going on gold. It’s going on an independent standard from the United States with gold as an element of its foreign reserve, just as it’s holding Chinese yuan and Indian rupees.
It’s not going on the rupee standard. It’s not going on the yuan standard. And it’s not going on the gold standard. But these are elements of its foreign reserves.
BENJAMIN NORTON: I have a question for you. It’s kind of a more technical question that I’ve always wondered. And I’ve tried to do research on this, because there’s not much information.
So we know that that the U.S. and European Union have frozen over $300 billion from Russia’s central bank foreign exchange reserves. And of course they did this after doing the same to Iran, to Venezuela, to Afghanistan, which is now threatening a famine in Afghanistan that could kill more people than died in the 20-year NATO-U.S. military occupation of Afghanistan, which is another topic that really needs to get more coverage.
And I should add, by the way, that the US and the EU, they’ve frozen nearly half of Russia’s central bank’s foreign exchange reserves, and are now saying they’re not going to give it back. So they stole it. I mean, they stole half of its reserves.
My question is, what is the mechanism by which they effectively freeze and steal those reserves?
Because my understanding is that there is of course a physical element of those reserves, which you’re talking about, which is gold. But not all of the $640 billion in Russia’s central bank reserves is physical currency, right? A lot of it is just computerized? It’s number in computers and bank accounts.
So when when the U.S. and the EU steal this money from central banks like in Russia or Afghanistan – obviously in the case of Venezuela, as you mentioned, they physically stole the gold. But if it’s not gold, is it physical cash stored in Moscow, like physical dollars and euros? Or it’s mostly just numbers in a computer, which is why they can steal it?
MICHAEL HUDSON: Every country needs to manage its exchange rates, and there’s always like an up-and-down and a zigzag in the flow of payments for imports and exports, investment, capital movements, debt service, all of that.
So countries want to stabilize their exchange rate. How do they do that? Well, most of the big exchange markets are in New York and in London.
So countries would leave their money in correspondent banks. Like when Iran, at the time under the shah, kept that foreign reserve in the Chase Manhattan Bank. So when Iran, after the revolution and Khomeini came in, and Iran wanted to pay interest on the foreign debt that the shah had run up, they told Chase, please, here’s our bondholders, please pay them.
Well Chase was told by the Treasury, don’t pay them, just take the money and hold it. So Chase said, we put a freeze on your account. And so Iran defaulted, and then Chase and the State Department said, oh, Iran defaulted, it missed the payment. Now, all the money that it’s due for foreign debt has to be paid all at once. And Chase paid all of the bondholders off. No more money in the account. It was all emptied out.
Suppose you had an account in Chase Manhattan. And they said, ok, now you’ve done something really bad, you put Michael Hudson on the show. We’re going to grab your account. We’re going to give it to Mr. Guaidó, because he needs the money in Venezuela because the people still are not voting for him. So all of a sudden, you won’t have money in your account. It’ll go to Mr. Guaidó’s account.
Well, that’s what happened with Russia. They took the money. They grabbed the money from Russia’s account. And they said, half the money we’re going to give to, I think, to the 9/11 people, because we all know that it was Russia that bombed the World Trade Center on 9/11.
And we’re going to give it to all sorts of other people who suffered all over the world. It’s all Russia’s fault.
BENJAMIN NORTON: But Professor Hudson, when you say that they seized Russia’s assets, you mean the assets held by the Russian central bank in foreign bank accounts?
MICHAEL HUDSON: Yes, yes.
BENJAMIN NORTON: And these are not physical assets, these are numbers in a computer, right?
MICHAEL HUDSON: In Venezuela’s case, Venezuela had used some of its oil company earnings to buy oil stations and refining companies and the United States actually grabbed the ownership of the gas stations and the refineries and distribution system that Venezuela had in America.
BENJAMIN NORTON: It’s called Citgo.
MICHAEL HUDSON: Citgo, yeah. Russia doesn’t really have any capital investments in the United States. It did have bank accounts, and that was all that the United States could grab.
BENJAMIN NORTON: So when you say that, when Russia, at least for now, the central bank is allowing convertibility of rubles at a set rate into gold, that’s a temporary policy to make sure that they have a physical asset that their central bank can hold on to, because if they have dollars or euros in their reserves, my understanding is that’s not physical cash, it’s actually just numbers in a computer, so they don’t have it physically in their bank reserves, so it’s easy to steal that money.
Obviously, if they had billions of dollars worth of cash, of paper cash, it would be much harder to steal it, but if it’s just on a bank account, if it’s numbers in a computer, then they can just freeze it.
So I think this is also a reflection of a point that you’ve also made about the financialization of the economy, is it’s also just a lot of this capital is not even physical capital.
MICHAEL HUDSON: Yes. Savings take the form – one person’s savings is another person’s debt. So these are Russia’s deposits in American banks that it used to buy or sell rubles, or to buy goods from America, or to receive payments in, if Russia exports something such as oil. Americans buyers of Russian oil would put the money into the Russian bank account.
They never dreamed that this would be grabbed. But now Russia says, ok, you’ve grabbed our money, now that means that we get to grab all of your assets in Russia. This is great! All of your stock holdings in nickel, and Yukos, and all these other companies, ok, you’ve got the money, we have the assets, look at us as just buying the assets on the cheap.
And the Western investors in Russia have all been selling their Russian assets to show that they’re good American citizens in NATO, and the Russians are buying up these European and American assets on the cheap, largely by borrowing money from the banks, that get the money from the central bank, now that they’re so wealthy, and all of the foreign exchange reserves is a result of the American shock-and-awe statement, that’s sort of shock-and-awe in reverse.
So Russia is coming through just fine. And you can imagine how the American strategists are gnashing the teeth. They don’t understand how Russia was able to avoid being bankrupted by this.
They really are not economists. They’re not really financiers. They’re foreign-policy strategists. They’re ideologues that are not very well educated in how to think about the future and how to recognize the fact that the world can actually change from what it is today into something else. And sometimes that change is not in America’s interests. That is sort of not a permitted thought over here.
So essentially, Americans and Europe are operating in the blind, and Russia and China, and Iran, and India, are all looking at how are we going to restructure the world so that we come out of it more prosperous than we were before, not more impoverished. That’s really what the world is dividing into.
BENJAMIN NORTON: Professor Hudson, I don’t know if this is directly related, but it’s it’s something that’s always been a very curious question in my mind.
Germany, back in 2016 and 2017, it moved, physically moved, its central bank’s gold reserves, which had been stored in New York, London, and Paris, and it physically moved those reserves, those gold reserves, to Frankfurt.
Now this was before the U.S. and Britain stole Venezuela’s gold reserves and other reserves. But do you know anything about what motivated Germany’s central bank to move the physical location of its gold reserves into Germany itself?
MICHAEL HUDSON: I don’t think it’s all moved yet. It’s still going on. Gold is very heavy, as heavy has lead, basically. And America said, well, we can only do a little bit, trickle by trickle. So America has been returning the gold very slowly.
So I think Germany, with all of its history of hyper inflation, I think just realizes that, now that gold is not used to settle balance of payments deficits anymore – the gold that Germany had in America was all of the exports that it made to the United States during the Vietnam War. This is Vietnam War gold.
You remember that President de Gaulle would every month cash in, the dollars that America spent in Vietnam would all be spent from Vietnam to Paris, the dollars would end up there, the central bank of Paris would essentially buy gold on the London exchange and keep the gold either in New York or in London.
Well, Germany, because America defeated Germany, and it wasn’t going to keep its gold in Russia, that defeated it even more, it said, well, ok, we’re cashing in our surplus dollars for gold, but we’re going to hold the gold in America.
But now it says, well, America is never going to settle its balance of payments deficits and its foreign debt in gold again, because it doesn’t have any balance of payments surplus, any ability to do that.
It’s going to spend its export surplus and its investment surplus on war. So it’s never going to be able to pay. That’s obvious. Let’s get the gold back.
That was the calculation that every country was making already a decade ago. They realized that America can never repay its foreign debt, unlike other countries.
When other countries can’t pay their foreign debt, they have to go to the International Monetary Fund, that tells them, well, we’ll make you a loan, but you have to sell off your natural resource reserves to the Americans, or we won’t lend you the money.
Well, basically, that’s not going to happen anymore. They realized that America is just going to say, haha, we’re just not going to pay.
Well, now other countries are saying, wait a minute, if America’s never going to repay its foreign debt, why do the Global South countries have to pay their debt to the IMF and the World Bank, all this dollar debt to dollar bondholders?
If America won’t pay, we don’t have to pay. Let’s have a clean slate. Let’s start from the beginning. And we’re only going to have debt and credit relations with friendly countries, not countries that want to go to war with us like America did in Afghanistan, Syria, Iraq, Iran, and now Russia.
So that’s basically what’s happening.
BENJAMIN NORTON: Great. And just to wrap up here, I have another question. And I know your time is limited, so I really appreciate you being here.
I have a quick question about the decline in U.S. dollar hegemony. We were talking about the strength of the ruble, the economic war on Russia; we talked about the bilateral trade that’s growing between Russia and China using the Chinese yuan, between Russia and India using the Indian rupee. And Iran also is talking about doing business with a basket of currencies.
I want to point to a report that was recently published by economists who work with the IMF. And I published an article about this over at Multipolarista.com, “IMF admits US dollar hegemony declining due to rise of Chinese yuan and sanctions on Russia.”
And there is this report that was published by the IMF, by these economists, and I cite you, Professor Hudson, in this report. It’s a working paper from the IMF, published in March, titled “The Stealth Erosion of Dollar Dominance.”
And here’s a graph, for people watching, here’s a graph from the report. And it shows not a large, but a noticeable and consistent decline in the use of the holding of the U.S. dollar in the foreign exchange reserves of central banks around the world. So this is around the world.
And it has declined in the past years from about 70% of central bank exchange reserves to about 60%. So a 10% decline. That’s not massive, but it’s steady and I think it’s going to accelerate.
And at the same time they’ve also found an increase in the use of what they call “non-traditional currencies” in the foreign exchange reserves of central banks around the world.
And here you can see this graph. I mean it looks like a significant influence because if you look at the y-axis it’s only from 90 to 100. But there is a significant increase in the use of other currencies in foreign exchange reserves, aside from the U.S. dollar, the euro, the Japanese yen, and the British pound. And the currency that is increasingly popular is the Chinese yuan.
So that’s one half of my question. The other half is about this interesting report that was published in the Financial Times, and it’s titled “Russia Sanctions Threaten to Erode Dominance of Dollar, says IMF.”
And the FT interviewed the IMF’s first deputy managing director, Gita Gopinath, who acknowledged that the sanctions imposed on Russia over its military intervention in Ukraine could lead to what she says “fragmentation at a smaller level.”
And she did say that the dollar is eroding influence, but “would remain the major global currency.”
So, that’s a two part question. I’m wondering if you could talk about the decline in U.S. dollar hegemony and how the sanctions will potentially erode that. And then the other half of the question is, can you comment on the declining use of dollars in foreign exchange reserves?
MICHAEL HUDSON: Well, this is what my book “Super Imperialism” was all about. When I first published it in 1972, I could see how the whole thing was unfolding for the next 50 years. And we just published last year a third edition of it, bringing it up to date.
Dollar hegemony means America’s entire balance of payments deficit in the ’50s, ’60s, and ’70s was military. So the dollars that were being pumped into the world economy were the result of military spending.
But the dollars would end up in foreign central banks, especially from Asia to France, Germany, others. What were they going to do with it? Well after 1971 they could not buy gold anymore, so all they could do was buy U.S. Treasury securities. IOUs.
And so they re-lent to the Treasury all the money that America was spending militarily. And the more money America spent in waging its cold war militarily against the world, the more money central banks would lend to the U.S. government to finance the U.S. deficit that was spent largely on the military-industrial complex and foreign military operations.
So dollar hegemony was a free lunch financing America’s almost 800 military bases across the world, to fight against communism, defined as any country that doesn’t let American industry and finance buy control of its raw materials, agriculture, resources.
And this has now come to an end. Right now America has grabbed Afghanistan’s, and Russia’s gold. All of a sudden it’s obvious that, this summer, there’s going to be an enormous squeeze on Third World countries, on the Global South.
Their energy prices are going to go way up, and that’s going to hurt them just like the oil shock of 1974 and 1975 did.
They’re going to have to pay higher food costs, because of food prices are going to go way up now that the Ukraine war is erupting.
And a lot of their foreign debt, dollarized debt service, is coming due. And they’re facing a choice: if they pay the foreign debt, they can’t afford to buy the oil and energy that they need to run their factories and heat their homes. They can’t afford to buy the food to feed their people. Whose interests are they going to put first?
Well of course their leaders are going to put America’s interests first, and their own interests second, because their leaders, if they’re a client oligarchy, are put in power by the U.S. military, as sort of miniature Pinochets, throughout Latin America and other countries.
So suppose other countries decide, well, we’re going to feed ourselves and we’re not going to wreck our economy just to pay foreign bondholders. We’re a sovereign country. We’re going to put our national interests first.
Well, then the United States can say, aha, we’re going to grab all of your foreign assets in the United States.
Well, other countries can say, oh, they’re going to do to us just what they did to Afghanistan and Russia. Let’s move our money out of the United States quickly. If we don’t have dollars, well, it’s true, we can’t pay our dollar bondholders, but at least we can, in international markets, we can buy the food and the energy we need.
And so the tensions, the disruption of world prices, and inflation, and trade that is a result of the NATO attack on Russia, now threatens to drive all of the southern hemisphere countries into an alliance with Russia, China, India, and all the rest.
So America basically is creating a new Berlin Wall, but the wall is isolating itself from other countries, and driving other countries all together into what I hope will be a happy, self-sufficient, non-U.S. globalized economy.
BENJAMIN NORTON: Well, I want to thank you, Professor Michael Hudson. It’s always a real pleasure having you. I know you’re very busy, so thank you for giving us so much of your time.
I’ll say that the comment section here on YouTube has been very vibrant, with some interesting conversation. And what’s nice is there are people from all over the world, from the U.S., Latin America, Europe, and from Russia. So it’s good to see a mix of people.
And for anyone who wants to listen to this, you can check out the podcast version if you look up Multipolarista on Spotify, and iTunes, and all the other podcast platforms.
And I’ll just say, while I wrap up here, that today we were talking about, at the beginning of this discussion, a new book that Michael Hudson is publishing this week. It is called “The Destiny of Civilization: Finance Capitalism, Industrial Capitalism, or Socialism.”
It’s a very good book. I had the privilege of getting a review copy early. So definitely check out that book.
You can also find all of Professor Hudson’s writings at michael-hudson.com.
Thanks, Professor Hudson.
MICHAEL HUDSON: It’s really good to be here. It was a good discussion.
Turkey’s decision to close its airspace to Russian military and civilian aircraft bound for northern Syria surprised many observers. Foreign Minister Mevlut Cavusoglu’s announcement of this decision to Turkish journalists during his Latin America tour raised many questions about its future implications for Russian-Turkish relations.
It is unlikely that this decision may have been one of the outcomes of a Turkish-American deal following discreet contacts between President Recep Tayyip Erdogan and his US counterpart Joe Biden to clamp down on Russia. Unlike his predecessor Donald Trump, Biden believes that it is difficult to achieve regional security without Turkey, which is an original member of NATO. And so the deal between the two countries included expanding economic cooperation and meeting Turkey’s defense needs, particularly in the advanced F-35s, Patriot and THAAD missile systems.
There are several explanations for Ankara’s decision. The first is that the US exerted pressure on Turkey after it became evident that the Russians commanded the battle of Mariupol and other southeastern Ukrainian areas from the Russian airbase of Hemeimim in northern Syria – from which strategic strikes were carried out against Ukrainian forces.
A second possible explanation is that Erdogan succeeded in improving his country’s relations with Washington, taking full advantage of the desperate US need for regional allies in NATO’s proxy war in Ukraine.
But where one loses, another gains. On the back of the surprise Turkish decision, Tehran cleverly offered to allow Russian aircraft to use Iranian airspace to reach naval and air bases in northern Syria. While these flight times may be longer, there are instant benefits for the two countries, especially Iran, which has now further enhanced its strategic relations with the Russia-China axis. Iran has not been ambiguous: since the outbreak of the Ukrainian military crisis, it has failed to condemn Moscow’s actions and has stood quietly in the Russian trench.
Russian President Vladimir Putin has been generous with his Turkish counterpart. He forgave Erdogan for his 2015 mistake when Turkish air defenses shot down a Russian Sukhoi plane that allegedly penetrated Turkey’s airspace near the Syrian-Turkish border for a few seconds. It took a series of expansive Russian punishments for the Turkish president to apologize in all languages, including Russian, for the mishap.
Putin has showed understanding, and even patience, over the Turkish occupation of areas in northern Syria, contrary to the wishes of his staunch allies in Damascus. However, Ankara’s latest decision to establish a ‘Russian no-fly zone’ will not be so easy to forgive, especially if followed by further measures such as banning the passage of Russian military vessels through the Bosphorus and Dardanelles straits to the Mediterranean, in accordance with the Montreux Agreement.
This remains an option in light of the rapid – if stealthy – improvement in Turkish-US relations. But choosing to align with Washington on Ukraine also risks racking up Russian-engineered military, political, and economic costs for Turkey, one year out from the country’s pivotal elections.
Further aligning with the US also means Erdogan will not be able to continue playing his carefully crafted role as a “neutral” mediator in this crisis, and host the upcoming summit meeting between the Turkish and Ukrainian presidents.
Turkish aspirations to expand trade cooperation with Russia to $100 billion dollars per annum will also be impacted, and the sale of further Russian S-400 missile defense systems to Turkey will be unlikely. More seriously, Russia may respond by developing or expanding relations with the separatist Kurdistan Workers’ Party (PKK) and supporting its operations in Turkey.
Politically speaking, the Russian military operation in Ukraine is a matter of life and death for Putin. Therefore his response to Ankara’s belligerent moves are likely to be decisive and could possibly play out on several fronts:
The Syrian front: To keep the balance in Russian relations with Turkey, Putin strongly opposed the Syrian leadership’s desire to invade Idlib to eliminate the jihadist terror groups based there and restore territorial control back to Damascus. While Moscow’s position may not yet change, renewed, intensive Russian military operations in Idlib will lead to an increase in Syrians fleeing to Turkish territory, which already hosts over 3 million Syrian refugees.
Strengthening Russian-Iranian relations: This will have a negative impact on Erdogan’s regional ambitions – especially in West and Central Asia – taking into account that China, which forms the third and strongest arm of this budding alliance is a full-fledged member of this troika.
The Arab Front: Turkey’s desire to improve its relations with Saudi Arabia, Egypt and other Persian Gulf and Arab states may be hindered in light of the rapprochement of these countries with Russia and China, which coincides with the breakdown of their relations with their traditional American ally. There is much the Russia-Iran-China (RIC) alliance can do in West Asia to unsettle Ankara’s relations within the region. It is worth noting that Riyadh has not yet responded to Turkish diplomatic outreach, significantly on the closure of the file of the state-sanctioned murder of Saudi journalist Jamal Khashoggi.
Erdogan’s leadership in recent months has been characterized by confusion and volatility. Recent political developments include Ankara’s unpopular improvement in ties with Israel, its gradual involvement in the Ukraine crisis, and its warming relations with Washington. These come at a critical time, not only amid a nation-wide economic crisis but also a year before presidential and legislative elections that pose a serious threat to Erdogan’s reign.
President Putin may have decided initially to overlook Turkey’s sale of the Bayraktar drones that have arguably contributed in the deaths of some 2,000 Russian soldiers in Ukraine, and reluctantly accepted its role as an intermediary in the crisis. At the strategic level, though, it will be difficult for him to tolerate Turkey’s accelerated bias toward the west.
It is true that Turkey is a regional power, and militarily strong, but it is also true that the US-led camp toward which it is tilting is in decline, torn apart by divisions, and failing dramatically in its economic sanctions regime against Russia. Furthermore, this camp is facing an alliance of two super-powers, a nuclear third (India), and a fourth on the way (Iran), together comprising more than half of the world’s population.
President Erdogan’s gamble with Russia is risky and may backfire, at just the wrong time.
The views expressed in this article do not necessarily reflect those of The Cradle.
Like it or not, it is fairly obvious that Russia today is leading events and continues to affect reality mostly in the way that she believes is in her best strategic interests. In other words, cornered Russia had a Plan, a tangible, thought-out, thoroughly vetted – most probably in writing – articulate, fairly all-inclusive, flexible enough yet in-depth Plan that we now learn took years to conceive, develop and massage in multiple fronts. So today Russian leaders focus on the same page swiftly singing along agreed “choir book lyrics” so to speak. Militarily, in due time Russia will succeed per her own goals & terms, not ours. Second-guessing Russia´s Plan is now a blogosphere sport amongst commentariati, but really to no avail. Only “observer” status is granted if not a Russian national with deep involvement in its execution.
… the West does not
Meanwhile, Western “unfriendlies” respond flat-footed like disjointed cartoon characters angrily improvising piecemeal reactions sometimes doubling down on doubtful… if not plain dead-wrong… decisions which are later flip-flopped trying catch up with Russian-led events. Elmer Fudd comes to mind per Ref #5. All the sanctions imposed on Russia have been counter-productive and the Rouble today is stronger than ever. The underlying factor that governs the worldwide Big Bang Breton Woods III revolution (more on that later) is that, for better or for worse, Russia has a Plan and the West just reacts with hit-and-miss off-balance punches zig-zagging its way along without North or compass.
So in order to remain coherent with the currently unconscionable US-European mad-house, one next step in the works — preferably under the supervision of surely knowledgeable stiff upper lip UK Royal Navy instructors – would be for Russian ships to be seized in international waters (cargo included) just like pirates in the 17th century British Caribbean. Don´t smile, as Argentina, Venezuela, Iran and Libya have already been through this not that long ago.
And while they are at it, these ´special forces´ could also comply with the US President´s program by looking out for aircraft of any size, type or purpose – including drones and choppers – plus all fine cars & motorcycles, boats, real estate, embassies, consulates, works of art, jewelry, property at large either government or privately owned. They´ve already seized the Gazprom subsidiary Germania because of its sudden “violations to German trade law”, so…
Constitutional Scholar US Judge Andrew Napolitano summarized it with eloquence : “As if to run even further away from US constitutional norms, a group of legal academics began arguing last week that the property seized from Russians is not really owned by human beings.” If not humans, what would 145 million Russians be then ? “As well, when the [US] feds interfere with contract rights by prohibiting compliance with lawful contracts, that, too, implicates due process and can only be done constitutionally after a jury verdict in the government’s favor, at a trial at which the [US] feds have been able to prove fault…Similarly, when they freeze Russian assets in American banks, they engage in a seizure, and seizures can only constitutionally be done with a search warrant based on probable cause of crime”
So visualize high-tech policing forces mandated by the Western-world´s top leader with the mission of seizing Russian whatever anywhere international, including mid-flight. And ask yourself, why not ? It´d be consistent with other measures already taken along the same lines. Please recall that the Western “unfriendlies” — with absolutely no legal teeth — by means of a few keyboard strokes have already frozen (and will eventually “arrest”…) Russia´s international banking accounts to the tune of several hundreds of billions of dollars… that still are 100% “un-usable”, as in worth-less… and which our Western “unfriendlies” per US National Security Advisor Jake Sullivan might even think of confiscating altogether, no ? So let´s not mince words and, as the Canadian truckers´ experience proved, today Western world property rights (dominium proprietas) as we have known them for many centuries have ceased to exist.
Harassment to nowhere
“The [Russian] embassy is essentially under a blockade by the US authorities. Bank of America has shut down the accounts of our general consulates in Houston and New York” Ambassador Anatoly Antonov added that diplomats are also receiving threats. How can the much-claimed diplomacy effort ever succeed if the Russian embassy in the US is under blockade with acts of vandalism on the building? Attacks on Russian missions also took place elsewhere, with vehicles rammed into the gates in Dublin and Bucharest. Activists defaced mission buildings with paint in Austria and Latvia. Ref # 11 https://www.rt.com/russia/554433-russian-embassy-blocked-washington/
Along the same lines, the West also has and keeps trying very hard to divide the Russians, to no avail.
The West just keeps sending weapons to Ukraine hoping to prolong the conflict and bleed out Russia.
“Statista” reports that the number of sanctions against Russian individuals and entities imposed by the US, the EU and select countries like Switzerland, the UK and Japan before 22 February was 2754 and between 22 February and 8 March was 2827, of which 366 on entities and remaining on individuals. Adding up both sums means a grand total of 5581 active sanctions today on Russia “the most sanctioned country in the world”. Full credit to T. Sabri Öncü per
And to be fully consistent, as the US did with Japanese communities during WW2, it would be expected for Russian-born individuals now in Western countries – tourists, students, children, researchers and diplomats included — to end up jailed in Guantanamos somewhere. Yet again, why not ? Because if the idea is to bother and “punish” Russia, the size and type of “seizure” would not matter much as long as it serves the stated purpose. So the philosophy may well be to just keep prodding the Russian bear until it slips… ( like with a nuclear slip a-la-9/11 ?) … once it gets fed up of so much terribly arbitrary and needless harm. The problem is that militarily speaking the Russians seem to be more than ready for such, Always.Being.Ahead.Of.Events. Apparently our civilized West does not have anything near a “Plan” other than provoking Russia as fast as possible as long as possible with the largest possible damage, right ?
Over the cuckoos nest
If on New Year´s Eve 2022 – only 4 short months ago and with a splendid Nord Stream 2 Russia-Europe oil & gas shining pipeline 100% ready for commissioning — somebody had premonitioned anything anywhere close to the current European suicidal strategy… most probably such individual would have been readily admissioned in a mental care institution for careful evaluation of unavoidable experimental therapies for such unprecedented delusions.
As Russian officials have pretty much repeated in so many words: “We don´t have to be friends if you don´t want to, only arms-length trading partners and business associates. But don´t make us your enemies, we do not want or need to have enemies, and neither should you”. Mind you, under any jurisprudence self-defense is still 100% legitimate.
Nazi nightmares
Germans still endure a very deep shameful-guilt complex regarding what led to and happened during World War 2. Today, Europe at large is working and bullying very hard to eventually develop – or exceed — the very same guilt complex without ever stopping for one single minute to follow and understand what Europe – actively fostered by the US and UK – is doing to Russia for no reason or gain of its own, only self-damage. Plain unwarranted Russophobia.
[ hint: don´t love them, just do business… ]
“…there are 30-some right-wing extremist groups operating in Ukraine – (all numerous and US-trained) — that have been formally integrated into Ukraine’s armed forces…which promote an intolerant and illiberal ideology… ”
Europe has not yet understood the implications of Russia now going full speed ahead for import substitution policies with the 80% of the world that still trades and works hard on planet Earth. Russia has already well underway specific agendas for the immediate welcome and establishment of Chinese and Indian SMBs into Russia´s new Bretton Woods III economy leaving Western “unfriendlies” aside and strengthening ties with countries just as sick and tired of Western bullying nonsense as Russia is after being badly pushed around so much for so long. While Europe – and the Western world at large – badly needs Russian produce at any cost. Paraphrasing infamous US Treasury Secretary John Connally, smirking a Mona Lisa smile, Russians could now say “Sorry, our commodities, your problem”…
De-globalization for YOU, not us
True enough, consumer societies and globalized economies may soon be ending for the 20% of the Western world. But the remaining 80% of world population is currently undergoing a massive crowding-in process simply trying to join the unavoidable forces of history behind the Russia-led spanking new Big Bang. Those left out would have nowhere to hide, constituting the real ´pariahs on the global stage´ that White House Press Secretary Jen Psaki has been keenly looking for lately the poor soul.
In her Plan — not without difficulties — Russia already has huge fallback trading partners willing and able to join Russia´s Bretton Woods III arrangements, including no more and no less than bellwether China and India. The
recent “no limits” agreement with China is simply fullyunprecedented. This “New Yorker” article clearly explains why
Europe, instead, has left itself deeply confused hanging idly high and dry in a vacuum chamber neither
complying with the Minsk agreements that Europeans actively pursued and endorsed, which would mean working with Russia, not 100% against it, nor
finding a viable and reasonable European outcome for their nonsensical Russophobia – mission impossible
understanding how badly Europe needs sustained import of Russian + Ukraine commodities for years to come
The lack of sufficient current and future stable year-round supply of Russian unreplaceable produce will mean very bad news for Europe. This includes many other essentials besides the specific Russian oil & gas & coal grades without which in a matter of months if not weeks Europe will become un-livable chaos with rolling power black-outs, fuels and food very hard to find enough of… with migrants roaming and ´camping out´ in streets, parks or churchyards and cemeteries (yes, just like in North Africa…) without shelter, food, health care, schools, jobs or money… and with the tired European middle-classes inevitably joining the coming revolt sooner rather than later. Per The Guardian, “…come October, it’s going to get horrific, truly horrific … a scale beyond what we can deal with”.
Rabobank´s take on food security is that: “ When The ´Food System´ Breaks Down, Everything Will Break Down With It”.
The last few decades have witnessed several wars, like the Iraq war, Libya war, Yemen war, Syria war, the Afghan war, etc. But all of such wars were designed by the US and executed along with NATO/ US allies. The US-style of wars, was first building a narrative, using media as propaganda, and then, involving the UN and international community, or convincing the rest of the world for its war acts. As a result, the US achieved its objectives without getting blamed for wars, aggressions, invasions, etc. Although millions were killed, millions were injured, many serious with lifetime disabilities, millions of houses were destroyed making millions of people homeless, forcing millions of people to live in refugee camps or take asylum in other countries and spend the rest of their lives in misery. Infrastructure was damaged, the economy was destroyed, social systems were damaged totally, changed regime installed puppets and dictated them to serve American interests, etc.
All wars are equally bad and harmful to humankind. Either the victims are Muslims, Christians, Jews, or any other religion. Whether, the victims are black, yellow, or white, are equally precious. Irrespective of race, religion, ethnicity, nationality, or social status, all lives deserve equal treatment and respect. The UN charter guarantees the protection of all humankind equally.
But Ukraine war is very special and bears different consequences:-
The Russia-Ukraine conflict has not only created a worldwide political, diplomatic, economic, food, and energy crisis but has also exposed the double standards of the world powers towards the principles of international politics and global governance.
It is expected the conflict to be a long-drawn-out affair. This is reinforced by the fact that despite the inclination of the Russian leadership or military to end the war at an early stage, on the ground trends in the shape of military armament and around 50,000 non-state actors in Ukraine offer a very alarming specter.
The war is not a choice but perhaps a strategic compulsion that Moscow felt for several reasons like challenges ranging from the global world order to the expansion of NATO and also concerns regarding the political leadership of Ukraine and its policies.
It is an ideational conflict that shows the level of violence and degree of pain and cost that could be inflicted on Russia by the US-led western alliance. The war seems to be a grave miscalculation on Russia’s part because the ability of the western world to cause pain in an enduring fashion across several domains beyond the kinetic tactical or operational battlefield of Ukraine will make it very difficult for Moscow to sustain and achieve its objectives.
China views this conflict with a lot of concern because it offers more challenges than opportunities. A weakened Russia is not in the Chinese interest. Moreover, the revival and rearmament of NATO also indirectly do not augur well for Beijing in terms of future prospects. Another aspect is that although China wants to sustain its global economic growth but not at the cost of disturbing its trade relations with the west.
It is highlighted the buildup of the Quad, the Indo-Pacific strategy, and the recent rise of QUAD 2.0. If all these are added up most of these things are aimed at containing China and disrupting its global rise. This conflict has perhaps reminded Washington that they cannot afford to only concentrate the major share of their hard power only on Asia-Pacific and need to maintain their security commitment towards the west and Europe as well.
In the regional context, India was seen in flux because its military forces are heavily dependent on Russia for meeting its technological and operational needs but it is facing a very difficult challenge due to its growing diplomatic and economic ties with the US. As such Delhi will find it rather difficult to balance these contrasting challenges.
The Muslim world was urged to introspect because they have been accused of over 20 years of terrorism but this reality dawning in eastern Europe allows them to look at how other civilizations and value systems call upon non-state actors and militant organizations when they are challenged and how they are presented in the Western-dominated media.
In terms of identity, it poses a simultaneous challenge in terms of race, religion, and nationalism. The western alliance sees this as the frustration of the Russian orthodox Christianity facing the challenge of the western world order which is characterized by the Protestants and Catholics.
The societal aspect should be seen in the context of globalization and the perpetual process of the interconnectedness of the different civilizations, societies, peoples, cultures, and economies. This is perhaps the biggest challenge globalization has received in terms of a counter-globalization movement.
The economic aspect is not just playing out in the sanctions regime but also the trade and currency wars, and the grave concern that Beijing has because to sustain its economic expansion and global influence it is heavily dependent on Western Europe and America for maintaining its export market which is worth over $600 billion. The increasing energy prices pose a huge challenge for the developing world and the governments, especially immediately after the COVID crisis.
In the political domain, it is the greatest test of the current world order and a complex contest between the ideational powers, revivalist powers, and states that want to be identified based on nationalism. It is an ideational challenge to the status quo world order by a frustrated and provoked Russia which wants to be respected for its economic, political and strategic revival.
In terms of the security domain, the conflict has led to the revival and rearmament of NATO, which does not augur well for China and Russia. It also has reduced Russian energy leverage and soft power on Western Europe and revived sub-conventional warfare as a means of great power contest in the east European theater.
Russia is angered by the eastward expansion of NATO and has challenged the Western-led world order. He also said that Western sanctions could affect Pakistan’s ability to benefit from improving ties with Moscow, in terms of meeting its energy needs.
Ukraine conflict has created a worldwide economic, energy, and food crisis that has affected all the countries including Pakistan.
The conflict represents a Russian challenge to the US exceptionalism which the Western world is contesting by supporting the Ukraine government through militants which presents the world an opportunity to recover from its excessive focus on the Muslim world.
The Western powers cannot have one set of rules for themselves and another for other countries in terms of security and prosperity and Russia is no longer willing to access this contradictory Western approach.
Ukraine War is an ideational conflict for the US which should not merely be seen in a geopolitical context while Russia, through this military operation, wants to show the world that it is back on the world stage.
This conflict offers more challenges than opportunities for Beijing and although the Western powers view China as standing on the Russian side a weakened Russia is not in Chinese interests.
India faced a complex dilemma of maintaining its very close defense cooperation with Russia and simultaneously building deep and long-term strategic and diplomatic ties with the United States.
Muslim societies should start thinking of alternative arrangements, such as a monetary union and common market, to address their concerns during international crises.
The world banking system and global energy supply chain have badly suffered due to this conflict. He said that more than one trillion dollars have been stuck in the global banking system due to the war.
Author: Prof. Engr. Zamir Ahmed Awan, Sinologist (ex-Diplomat), Editor, Analyst, Non-Resident Fellow of CCG (Center for China and Globalization). (E-mail: awanzamir@yahoo.com).
Question: The big question that most are asking is the reason for this operation, the reason for President Putin to take the country to war at a time when we have seen negotiations and talks taking place. What was the reason? We know that America said that Russia was going to carry out operations. New Delhi certainly was not aware of it. Many countries said that it is not something that is going to happen, but it did happen.
Sergey Lavrov: The real reason is the complacency of most countries of the world after the end of World War II, when our Western colleagues, led by the United States, declared themselves winners and in violation of the promises to the Soviet and Russian leadership started moving NATO eastward. They kept saying: “Don’t worry, this is a defensive alliance, it is not a threat to Russian security.” It was a defensive alliance when there were NATO and the Warsaw Treaty, and there was the Berlin Wall, as you remember, both physical and geopolitical. It was very clear what was the “line of defence” for this “defensive alliance.”
When the opponent disappeared, both the Warsaw Treaty disappeared and the Soviet Union disappeared, they decided that they will move the “line of defence eastward.” They did this five times without explaining against whom they are going to defend themselves, but in the process building up their advanced assault capacities and choosing the former Soviet republics, especially Ukraine, as the springboard against the Russian interests.
As early as 2003, for example, when they had a presidential election in Ukraine, the West was publicly and blatantly demanding Ukrainians: you must choose, are you with Russia or with Europe? Then, of course, they started pulling Ukraine into the European Union Association Agreement. The agreement provided for zero tariffs for Ukrainian goods in Europe, and European goods in Ukraine. We had a free trade area agreement with Ukraine in the context of the Commonwealth of Independent States. So, we told our Ukrainian neighbours: guys, we have zero tariffs with you, but we have protection with the European Union, because we negotiated WTO entry for 18 years. For some time, we did manage to protect some sectors of the Russian economy – agriculture, insurance, banking, and some others – with considerable tariffs. We told them: if you have zero [tariffs] with Europe and zero [tariffs] with us, we are not protected against European goods, which was part of the deal when we entered the WTO.
Then in 2013, when the Ukrainian President understood the problem, he asked the European Union to postpone the signature of the Association Agreement. We suggested that the three of us – Russia, Ukraine, and the EU – could sit together and discuss how to proceed. The European Union in a very arrogant way said that this is none of your business, we do not put our nose in your trade with China or other countries, so this is going to happen. Then the President of Ukraine decided to postpone this ceremony. The next morning, the demonstrators were on Maidan in Kiev.
In February 2014, the European Union helped negotiate a deal between the President and the opposition. Next morning, the signatures of the European Union representatives – France, Germany and Poland – were absolutely ignored by the opposition, who staged a coup and declared that they are creating a “government of the winners,” that they will cancel the special status of the Russian language. They threatened to throw ethnic Russians out of Crimea, they sent armed groups to storm the Crimean parliament. That is how the war started. The Crimeans said: “We don’t want to have anything [to do] with you, leave us alone.” As a I said, there was a threat from armed groups. The eastern areas of Ukraine said: “Guys, we do not support your coup, leave us alone.” They never attacked the rest of Ukraine. The putschists attacked them, having called them terrorists. They called them terrorists for eight long years.
We managed to stop this bloodshed in February 2015 – the so-called Minsk Agreements were signed, providing Eastern Ukraine with some special status, language, the right to have some local police, special economic relations with the adjacent Russian regions. It was basically the same as [the agreement] the European Union negotiated for the north of Kosovo where Serbs live. In both cases, the European Union failed totally to deliver on what was guaranteed by the signatures of its members. For eight long years, the respective governments of Ukraine and Presidents of Ukraine were saying, blatantly and publicly, that they were not going to implement the Minsk agreements, that they will move to Plan B. They continued to shell the territories of these [self-] proclaimed republics during all these years. We warned the Europeans, the Americans, and Ukraine that they are ignoring something which was endorsed by the United Nations Security Council. To no avail.
People do not want to go back into this history because they prefer to take events on their immediate merit, but these particular events are rooted in the desire of the United States and what we call the collective West, to rule, to dominate the world and just show everybody that there would be no multipolarity. It would be only unipolarity.
And that they can declare Iraq, Syria, Libya, Yugoslavia, located tens of thousands of miles from the United States, threats to their security, and can do whatever they please there, levelling cities, like they did with Mosul in Iraq, and Raqqa in Syria. Russia has been warning all its colleagues that just on our borders you have been creating a springboard against us: you have been pumping arms into Ukraine, you have been totally ignoring the legislation of Ukraine, which prohibited, completely prohibited the Russian language, you have been encouraging neo-Nazi ideologies and practices. The neo-Nazi battalions were very much active against the territories which proclaimed themselves independent and who were promised special status. It’s inside Ukraine.
It was all linked with Ukraine becoming NATO’s springboard, and NATO expansion. They were saying that Ukraine will be in NATO. Nobody can stop Ukraine if it so wishes. Then President Zelensky said that he might think about coming back to possess nuclear weapons. In November last year, my President suggested to the United States and to NATO to sit down, to cool off, and to discuss how we can agree on security guarantees without NATO’s further eastward expansion. They refused. In the process, the Ukrainian army radically intensified the shelling of those republics in violation of all the ceasefire agreements. We didn’t have any other choice but to recognise them, to sign mutual assistance treaties with them, and, in response to their request, to send our troops as part of special operation to protect their lives.
Question: You provided the basics: the history, as well as the present context. But you also said, President Putin himself said, that this is not targeting civilians or the citizens, people of Ukraine. It is to do with the administration. We know that in international foreign policy parlance it is used quite often: not in my backyard. America says it all the time, and many other countries say it. But should an entire people, and entire population be punished for an administration wanting to carry out independent foreign policy?
Sergey Lavrov: I don’t think it’s about any independence. Since 2013, and maybe even earlier, hundreds and hundreds of US, UK, and other Western security and military experts have been openly sitting in the Ukrainian Ministry of Defence and the Ukrainian security apparatus. They basically were running the place.
As for the civilians, immediately when this special operation started in response to the request from Donetsk and Lugansk in full compliance with Article 51 of the United Nations Charter, when it was announced by President Putin, he said that the sole purpose of this operation is to demilitarise and denazify Ukrainians – these two problems of the country are intimately linked. We have been targeting only military infrastructure. Unfortunately, the Ukrainian army and the so-called nationalist battalions, which are using Nazi insignia, swastikas, which was borrowed from Indian history, but twisted the wrong way, and insignia of Waffen-SS battalions, these people were using and continue to use civilians as human shields. They were placing heavy weapons in the middle of towns and cities, next to schools, next to kindergartens, to hospitals. The internet is full of the testimonies of the people who were living in these places, and who were asking these people not to do this.
Unfortunately, nobody in the West actually pays attention to the facts, which we have been providing. Instead, they are staging some fake situations, like a couple of weeks ago with the place called Bucha. The Russian troops left on March 30, I think, and for three days the city was back in the hands of the Ukrainian administration. The mayor of Bucha Anatoly Fedoruk was publicly saying that the city is back to normal life. Only on the fourth day, they started showing images of dozens of corpses lying in the street, which was only a few days before shown as being back to normal. Then a few days later in the city of Kramatorsk, which was fully in the Ukrainian hands, they summoned people to the railway station, and attacked them with a Tochka-U missile. It was proven beyond any doubt that the missile was fired by the Ukrainian army. That’s why the next morning it was out of the news in the West because everybody understood the obvious nature of this provocation. Now, The New York Times says that they have the proof that cluster bombs were used by the Ukrainian army.
Speaking of civilians and the rules of international humanitarian law, I can once again assure you that our army operates against the military infrastructure and not against civilians.
Question: Mr Lavrov, you said that Russian forces have only targeted military facilities. Even if there were military facilities or tanks that have been placed in civilian areas, Russian forces did not show restraint in taking them down. Hence, there are civilians who have been killed. There has been bloodshed, whether it is the outskirts of Kiev, primarily Mariupol, Volnovakha – absolutely raised to the ground. Some responsibility has to be taken by the Russians also on the bloodshed?
Sergey Lavrov: It is always terrible when military activities bring damage to the civilians and to the civilian sector, to civilian infrastructure. As I said, when people have been killing ethnic Russians, citizens of Ukraine, in the east for eight years, no TV representatives, be it Asian, be it African, be it Latin American, be it European, be it the United States, paid any attention to this. The Russian journalists have been working on the contact line, on the side of the republics, round the clock, showing the atrocities committed by the Ukrainian neo-Nazis and Ukrainian armed forces. And during all those years not a single foreign journalist cared to come to the other part of this line of contact to see what was going on there.
The statistics available from the Organisation for Security and Cooperation in Europe indicate that the damage afflicted on the civilians and the civilian infrastructure on the side of the republics, the [self-] proclaimed republics, was five times more and bigger than the same figure for the territory controlled by the Ukrainian government.
This is not to say that we can just ignore the victims and the damage to the civilian infrastructure, but once again I want to emphasise a very important thing. This outcry started only when the Russians decided to protect Russians who are citizens of Ukraine and who were absolutely discriminated. There was no outcry when the city of Raqqa, for example, in Syria was levelled with dozens and hundreds of corpses lying there unattended for weeks and weeks. The American military never had any scruples about achieving their military goals, be it in Syria, be it in Iraq, be it in Afghanistan, for that matter.
This is a tragedy, when people die. But we cannot tolerate the situation when our Western colleagues say that they can do anything they want. They can encourage the government in Kiev to be as Russophobic as it takes. They would not tell them to stop prohibiting the Russian language in education, in media, stop banning all Russian speaking channels, including Ukrainian channels, they would not tell them not to prosecute the opposition, who favours dialogue with Russia, and to stop violating the commitments to give special status to the territories where the Russian speaking population dominates.
Question: You made a very important point because India Today has travelled to Donetsk and we have been putting out these reports. It is very important because it is important to understand the plight of Russian descent and Russian speaking people in Ukraine. There is no taking away from that. We will talk about Donbass. But coming to the allegations against Russia of genocide, of war crimes, and on the fact that chemical weapons have been used by Russian forces, what do you have to say to the visuals? You said that there were no bodies. There were bodies in the basements that have been found much later that would have been found anyway much later. Will there be no investigation that will be carried out? Why just say that it did not happen?
Sergey Lavrov: We are investigating the atrocities of the neo-Nazi battalions of Ukraine and of Ukrainian armed forces. There is a special commission created by the Russian chamber – there is a public organisation which is very experienced. They have been discovering the fakes staged by the so-called White Helmets in Syria, in many other cases. We will not cease our efforts to establish the truth.
We are used to the fact that the United States, the United Kingdom, and other Western countries have a very interesting habit: they just throw in news when they believe this news will work ideologically for their benefit, and then, when it comes to the facts, and when more facts are discovered, putting a big question mark on their assertions, they just lose interest.
2007, London. Poisoning of Mr Litvinenko. Huge outcry. The investigation begins, and after a few weeks a public inquiry is announced, which in the UK means that it is secret. Until now, we cannot get the facts about what had happened to Mr Litvinenko.
2014, Malaysian Airlines Boeing. Shot down over Ukraine. We presented a huge amount of facts. We requested that we be part of the investigation – no way. Ukrainians who did not close their skies during the conflict were invited to this investigation group, Russia was not. Malaysia, as the owner of the plane, was invited only five months later after the Australians, the Dutch. They and the Malaysians agreed among themselves that anything coming out of this room must be subject to consensus, meaning that Ukraine, which did not close the skies, had a veto power on this investigation. We could not get the truth on this one as well.
2019, Salisbury poisoning. The people disappeared. The only proof which was made public is “highly likely,” as Theresa May said. The Brits insisted on the expulsion of Russian diplomats by most of the European countries. When I asked my friends, did they provide proof beyond the public statements about “highly likely” it was Russia, they said “no, but they promised to.” I checked one year later, whether this was done, it was not done. And so on, and so forth.
2020. Our opposition blogger Mr Navalny was poisoned. We asked the Germans. We immediately responded to the German request to let him go to the Berlin hospital. Twenty-four hours after the request he was flown to Berlin. We don’t have any confirmation who was flying with him, where did they get the bottle which is the key element in this investigation. When we asked the Germans to show us the formula which they discovered in his blood, they said this is a military secret.
It is us who until now insist on the truth about Litvinenko, about the Skripals, about Malaysian Boeing, and about Navalny. The stories that they stage in Ukraine these days are of the same nature.
Question: Going back to the investigations, you are saying that that Azov battalion is absolutely shameful, yes, they should be investigated. They are neo-Nazis, and they should not have been incorporated or integrated into any military regime in any country. But if you introspect and look at your own people as well, is there any instance of denying and rejecting claims? Will there be investigations against your own people if they have done wrong? Will they be held accountable?
Sergey Lavrov: We have a law that prohibits the military to do anything which is not allowed under international humanitarian law. Any violations are registered and investigated.
On Azov, it is interesting that you mentioned it. Azov was listed in the United States in 2014 or 2015 as a group that cannot be supported, that cannot legitimately operate, and it was prohibited by Congress to provide any assistance to this battalion. Everybody forgot about this or rather they certainly remember what this group is about, and they decided to put their money on this group.
In Japan, as you know, they passed a special decree by the government that Azov is no longer a neo-Nazi group, and the Japanese government apologises for listing Azov as such. And of course when President Zelensky in his camouflage was asked about Azov by some journalists, who felt that something was wrong with these neo-Nazi trends, Zelensky said quietly: Azov, they are what they are, we have many groups like this. They are part of our army.
You, I mean the media, started asking questions about Azov only when the military operation was launched. For eight long years, nobody lifted a finger, nobody bothered about what was being groomed in Ukraine, as a continuation, or rather a resurrection, of what was boiling in Europe in 1930s.
Question: President Zelensky said that Russia plans to use tactical nuclear weapons.
Sergey Lavrov: He says many things. Depends on what he drinks and what he smokes. He says many things.
Question: Do you think it was a strategic miscalculation by President Zelensky to take on Russia when there was no certain assurance from NATO and the European Union that they would actually back Ukraine?
Sergey Lavrov: President Zelensky came to power with the promise of peace. He said that he will reach peace on the basis of the Minsk Agreements. A few months later, he said he cannot implement the Minsk Agreements because the Minsk Agreements are “unimplementable.”
Question: It was the Russian forces, the DPR.
Sergey Lavrov: No, he never said that it was because of the military situation on the ground. He said that it is unthinkable for Ukraine to give special status to any part of his territory. But it was very “thinkable,” if I may say so, when Ukraine was created, to put together the territories which now (those in the west) never celebrate Victory Day, May 9, and the eastern territories, which would never celebrate the heroes honoured in the west: those who collaborated with Hitler. With this difficult composition of territories, to say that Ukraine can only be a unitary state, and that it would not give special status to these people even if the Security Council demands so, I believe that this was not very far-sighted.
Had he cooperated as he promised to his electorate when he was elected, had he cooperated in implementing the Minsk Agreements, the crisis would have been over long ago.
Question: Did the West betray Zelensky?
Sergey Lavrov: No, I think the West played Zelensky against Russia and did everything to strengthen the desire to ignore the Minsk Agreements.
The “West” is a broad notion. It’s the United States and the Brits. The rest of the West, including the European Union, is just an obedient servant.
Question: Tactical nuclear weapons. Will Russia ever use them?
Sergey Lavrov: Ask Mr Zelensky. We never mentioned this. He mentioned this. So, his intelligence must have provided him some news. I cannot comment something which a not very adequate person pronounces.
Question: As a P5 member, as a nuclear power, will nuclear be an option at all, on the table at all?
Sergey Lavrov: When the Soviet Union and the United States in 1987, Gorbachev and Reagan, decided that they have special responsibility for peace on this planet, they signed the solemn declaration that there could be no winners in a nuclear war, and therefore a nuclear war must never be launched.
After the Trump administration came to office, we have been telling them, because tensions were aggravated: “Why don’t we try to send a positive political message to the entire universe and to reiterate what Gorbachev and Reagan pronounced?” During all the four years of the administration, they refused to do so.
But we were really encouraged when President Biden was inaugurated. Five days after his inauguration, we repeated this offer, he first agreed to extend the [New] START treaty without any preconditions. In June 2021, when they met with President Putin in Geneva, they issued this declaration. This declaration was issued on our initiative. After the Americans and the Russians said that there must be no nuclear war, that they won’t think about it, we started to promote the same commitment in the context of the P5. Not the United States, not UK, not France – Russia. Eventually, earlier this year, in January this year, the P5, at the level of presidents and heads of government, issued the statement which we initiated and which we were pushing through for all these years.
Question: So nuclear is off the table?
Sergey Lavrov: This statement, both the Russian-American statement, and the P5 summit statement, were issued on the strong insistence of the Russian Federation.
Question: Coming back to the Donbass region, DPR, LPR. The independence of these republics is non-negotiable for Russia when you talk to Ukraine. What happens if the negotiations succeed between Ukraine and Russia and should there be a settlement, will Russia withdraw from other areas: Sumy, Kharkov, Zaporozhye, Kherson, Nikolayev?
Sergey Lavrov: I thought you are a journalist, but you can be a spy. I am not discussing the military operation, for obvious reasons it is never the case.
On the territorial situation, we recognise DPR and LPR within the administrative boundaries of the former Ukrainian Soviet Socialist Republic. The Minsk agreements were signed when these two territories were split roughly half and half. Now the militias of these republics are fighting to get their territory back.
When they had a referendum in 2014, it was held on the entire territories of the former regions. But then the coup leaders started the war, which they called an anti-terrorist operation, and they took a considerable chunk of both regions. So, yes, we recognise LPR and DPR within their declared territories as a result of the referendum.
Question: Which in fact includes Mariupol and Volnovakha, as part of Donetsk.
Sergey Lavrov: Yes.
Question: My question is, if there is a settlement between the two sides, and they recognise, which President Zelensky said he would not, he said that they are going to fight for Donbass to the very end, so where are the red lines?
Sergey Lavrov: I cannot intelligently discuss what President Zelensky says because he always changes his mind diametrically.
He was the initiator of the negotiations, which we accepted. At some point we were disappointed because they were changing their mind every time, coming late, leaving early, but then in Istanbul, about one month ago, it was on March 29, they brought a paper, saying that we are not going to be a member of any military alliance, that they will be neutral. In return, they asked for security guarantees, preferably P5, maybe some others, and it was written and initialled by the head of the heads of delegations. The security guarantees they were asking for would not cover Crimea and the territories in the east of Ukraine.
It was not our language, it was their language. Now President Zelensky says “no way.” They started backtracking even earlier. But this is a paper with the signature of the head of the Ukrainian delegation. So, before we can intelligently discuss what he says one day or another, we need to have clarity about the credibility of this person and about his team.
Question: Was there any understanding in Istanbul on the withdrawal of Russian troops from Kiev, as well?
Sergey Lavrov: We changed the configuration of our presence. This was announced immediately after Istanbul that since we believed that they brought something which could serve as a basis [of an agreement], we made a goodwill gesture, and we changed the configuration in the Kiev and Chernigov areas.
This was not appreciated at all. Instead, this Bucha thing was immediately staged and played, like Skripals were played in Salisbury, like the Malaysian Boeing, like Navalny, played, but immediately put aside when the hard facts were presented which they cannot challenge.
Question: There are mayors who have been appointed now by Russia in Berdyansk and Melitopol, and they are saying that they will hold a referendum, that they are not going to go back. Is that the plan?
Sergey Lavrov: That’s the outmost democracy, right? A referendum – people saying what they want.
Question: Which means that you are securing your land boundary in Sumy and Kharkov, but also the waters, if you look at Zaporozhye, Nikolayev.
Sergey Lavrov: People have been suffering in all these places for eight long years, when neo-Nazis were prohibiting them to speak their own language, prohibiting them to commemorate the heroes of World War II, of the Great Patriotic War, prohibiting to have parades and to have any events to commemorate the fallen, the parents, the grandparents of these people.
Now when they have thrown away these neo-Nazis, and say that now we will decide who will be running the place – this is our mayor, this is our legislature, I believe that this is a manifestation of democracy after so many years of oppression.
Question: It seems that Ukraine has lost more land than it would have gained by negotiating on Donbass.
Sergey Lavrov: It’s the decision of those who have been running Ukraine, of those who have been sabotaging the Minsk agreements, in spite of the UN Security Council decision. We are not up for regime change in Ukraine. We have said this repeatedly. We want the Ukrainians themselves to decide how they want to live further in a way, which would not repeat the Minsk agreements, when they did decide that they did not want to do anything with the coup leaders, who immediately said that they are against anything Russian: culture, language, everything what these people cherish. Then they were promised something by the European Union and cheated.
We want the people to be free. To decide how they want to live in Ukraine.
Question: Russia is one of the most sanctioned countries in the world. How long can you sustain?
Sergey Lavrov: I don’t think we are thinking in the context of sustaining. Sustaining means, you know, you sustain, you take some hardships, and hope that, sooner or later, this would be over.
Russia has been under sanctions all along – Jackson–Vanik, then it was repealed, but Magnitsky Act was introduced, then we were punished for the free vote of the Crimeans, we were punished for supporting those who were in favour of keeping the Minsk agreements, but the Ukrainian government did not want them to get what they promised, and so on and so forth.
So, now we have come to a very straightforward conclusion. We cannot rely on our Western colleagues in any part of our life, which has strategic significance, be it food security, which we managed to ensure ourselves after 2014, be it, of course, defence, and be it some strategic sectors where high-tech is developing and indicating the future of the mankind. We did not have time to achieve self-sufficiency in all these areas, but in most cases, we resolved this issue. Of course, we are open to cooperation with all other countries who do not use illegal, illegitimate unilateral measures in violation of the UN Charter.
India is among those. We cooperate bilaterally. I visited a couple of months ago, and we cooperate in many international organisations.
Question: Speaking of India, India is under immense pressure to sever ties, to cut down imports of energy, of fuel, but India has stood its ground. In terms of reliability, is there a concern that India should have with regards to the kind of defence cooperation both countries have? Could there be delays in deliveries of critical weapons systems that India is buying from Russia, such as the S-400s? What is the conversation you have been having with New Delhi on this ground?
Sergey Lavrov: India is our very old friend. We called our relationship a long time ago a strategic partnership. Then, about 20 years ago, the Indian friends said: why don’t we call it a “privileged strategic partnership?” Sometime later, they said that this was not enough. Let’s call it “especially privileged strategic partnership.” This is a unique description of the bilateral relations between India and Russia.
With India, long before all this became such a hot potato, we supported Prime Minister Narendra Modi’s concept “Make in India” and we started substituting simple trade with local production, shifting production of the goods needed by India on your territory. It was for quite a number of years already that we have been promoting the use of our national currencies in settlements between the governments of the two countries.
We promoted national information systems, transmission systems, like SWIFT. You have your own, we have our won. They are being used more and more. Payment cards: we have MIR, you have RuPay. They are mutually supportive. It is not, you know, a huge percentage, of the overall volume of trade, but it is steadily growing. On defence, we can provide anything India wants. Technology transfers in the context of defence cooperation are absolutely unprecedented for any of India’s outside partners.
Question: We have got away with a waiver from the United States for the S-400s, but future collaborations, could they become difficult?
Sergey Lavrov: You know, when the Americans say that they are in favour of democracy all over the world, they mean only a very specific thing – that it is up to them to decide who is democracy, and who deserves to have some good attitude on behalf of Washington. When they convened this summit of democracies, you only need to look through the list of invitees, to understand that it is not about real democracies, it is about something else. The Americans now run all over the world, their ambassadors have priority number one to go to the foreign ministry, to the government of the country where they serve and say: “You must stop talking to Russia, you must join sanctions against Russia.”
Well, long before this crisis, I have been talking to the Americans, to the Europeans, I told them: when you say democracy, democracy, and at the conferences you always want this language on rule of law and democracy, I asked them about adding that apart from the national level, we want democracy and the rule of law internationally. They don’t like it. When they push everybody in this anti-Russian camp, when they go to India, when they go to China, to Turkey, to Egypt, countries with their own thousands years of history of civilization, of culture, and when they are not even ashamed to publicly tell you what to do, I believe something is wrong not only with manners, which always has been the case, but something is wrong with the mentality.
When Antony Blinken, the US Secretary of State, says publicly: “We, the United States, has not yet decided whether to introduce sanctions against India for the S-400s,” they have not decided what is good for you. His under-secretary Wendy Sherman later said: “We must help India understand what is important for its security.” How about that?
Question: I suppose your counterpart gave them a befitting reply on how to conduct one’s foreign policy?
Sergey Lavrov: Absolutely. I respect Subrahmanyam Jaishankar very much. He is a seasoned diplomat, and he is a real patriot of his country. He said that we will be taking the decisions on the basis of what India believes it needs for its development, for its security. It’s respectful. Not too many countries can say something like this.
Question: You mentioned China. For us, the China factor is very important. Russia has a unique relationship when it comes to ties with China and ties with India. You mentioned the United States of America, so again, I am going to go back to the US. Recently, in one of the visits, deputy national security advisor said that should India continue ties with Russia, there will be consequences. If, he said, there is another incident at the LAC, then the US will not come to India’s rescue. The statement is flawed, because there are two points. One is that he said “should there be another incident,” not recognising that the Chinese are still on Indian soil. Secondly, he said that they will not come to India’s rescue, but they did not come in the first place. But where does Russia stand?
Sergey Lavrov: We stand in favour of resolving any conflicts on the basis of arrangements negotiated directly between the parties, like, just like it was in Ukraine, when the two parties, the rebels, as they are called, the separatists, as they are called, for us they are self-proclaimed republics, on the one side, and the government, which came to power as a result of the coup, on the other side had a deal, negotiated and endorsed by the Security Council. It is another matter that the government, with the instigation of the West, failed to deliver, but the method is the one which we believe should be applied everywhere.
After those incidents on the border, we welcomed the resumption of the discussions between the military of India and China, the discussions between the politicians, at the level of the foreign ministers, and we hope that this would be resolved. We cannot use those threats, which are absolutely normal for the Americans, who say “or else, there would be consequences.” It is their favourite statement.
What we would like to do, as Russia, we would like to promote the formats where India, Russia, and China participate together. It started in 1996-1997, when Russia’s Foreign Minister at that time, Yevgeny Primakov, suggested the RIC format – the troika formed by Russia, India, and China. It happened, and we continue to convene in this format. I think, last November there was probably the 20th ministerial meeting. Not only foreign ministers, but also ministers of economy, ministers of trade, political scientists meet, which may not be very much publicised, but it is a very useful format.
We were very much in favour, even we were the leading force in the Shanghai Cooperation Organisation to promote this, of the full membership of India, together with Pakistan, in this organisation. This is another premise for China and India to be together in the company of their neighbours, and to build more confidence.
Question: Finally, before I let you go, sir, Europe is looking to halt gas from Russia. Come summer, policies might get harsher. But you are looking for the dedollarisation of the global energy market by dealing in roubles. How do you propose to do that, should they start halting?
Sergey Lavrov: There will be no change for the Europeans and other countries who buy our gas. The reason for this decision was very simple and obvious. When they froze the Russian assets in dollars, euro, yens, and the pound sterling for the amount of more than 300 billion euros or dollars, those were mostly the money kept in Western banks after we received payments from them, from the Western countries, for our gas deliveries.
In other words, they paid us, and they stole the money from us because those were the currencies which are linked to the Western banking system. So what we told them to do: they would not be paying directly to Gazprom’s accounts abroad, but they would be paying to a bank called Gazprombank. It is an independent entity. They would be paying the same amount which they have to pay under the existing contracts, but they will pay these amounts to a special account which they have to open with this bank. There would be a parallel account in roubles. So they pay euros, and then inside this bank these euros are transferred to the rouble account, and from this account Gazprom receives roubles.
Question: So you are not running losses at all on the money Russia is to receive from Europe? There is no money that has been stopped?
Sergey Lavrov: Exactly. As of now, they would not be able to keep the money in their banks, the money that they not even owe us, but which they paid to us already. I believe this is something which does not contradict contracts. They would still be paying in euros or dollars or whatever was the currency of the contract, but we will have insurance that this robbery would not happen again.
Question: Finally, sir, before I let you go, I have to go back to that question on eastern Ukraine. Intensification of war efforts now in eastern Ukraine – is the trigger the flagship warship Moskva that sunk. What really happened there? Is that one of the triggers now why we see more intensification against Ukraine?
Sergey Lavrov: No, this operation in the east of Ukraine is aimed, as was announced from the very beginning, to fully liberate the Donetsk and Lugansk republics. This operation will continue. Another stage of this operation is beginning. I am sure that this will be a very important moment of this entire special operation.
Question: What happened to the warship?
Sergey Lavrov: It is for the Ministry of Defence. They explained what happened and I cannot add anything to this.
Question: On that note, many thanks for joining us here on India Today. It was indeed a pleasure, sir.
Sergey Lavrov: Thank you very much.
Question: That was the Foreign Minister of Russia speaking exclusively to India Today.
Notes on information availability from the Russian Federation:
The best video is on Telegram: https://t.me/MFARussia/12362 This is the first complete address from the Russian MFA that they posted on Telegram since the attack on the availability of Russian information started. It is also a complete interview in English and without translators.
The Indian interviewer is smart and respectful. Mr. Lavrov is patient and clear.
It is still a hit-and-miss exercise to get complete information from Russian professional sources. You can see these interviews live on Ruptly but there is no playback. The videos and transcripts are on the Russian Foreign Ministry site, but frequently there is no playback. In copying this transcript just a while ago, the Russian MFA site went down again.
It is important to see or read these completely in order to find nuance and context. It seems to be a fashionable journalistic method to report on one or two snippets only. In that, the Russian media sources are not helping us to help them. Here is an example. Mr. Lavrov’s takeaway quote on being asked about Zelenski, is: “He says many things, depending on what he drinks or what he smokes.” RT decided to shorten that, and said: “He says many things, depending on what he drinks.” Incorrectly reporting even direct quotes does not serve the Russian cause.
By Michael Hudson and posted with the author’s permission
It is now clear that today’s escalation of the New Cold War was planned over a year ago, with serious strategy associated with America’s plan to block Nord Stream 2 as part of its aim of blocking Western Europe (“NATO”) from seeking prosperity by mutual trade and investment with China and Russia.
As President Biden and U.S. national-security reports announced, China was seen as the major enemy. Despite China’s helpful role in enabling corporate America to drive down labor’s wage rates by de-industrializing the U.S. economy in favor of Chinese industrialization, China’s growth was recognized as posing the Ultimate Terror: prosperity through socialism. Socialist industrialization always has been perceived to be the great enemy of the rentier economy that has taken over most nations in the century since World War I ended, and especially since the 1980s. The result today is a clash of economic systems – socialist industrialization vs. neoliberal finance capitalism.
That makes the New Cold War against China an implicit opening act of what threatens to be a long-drawn-out World War III. The U.S. strategy is to pry away China’s most likely economic allies, especially Russia, Central Asia, South Asia and East Asia. The question was, where to start the carve-up and isolation.
Russia was seen as presenting the greatest opportunity to begin isolating, both from China and from the NATO Eurozone. A sequence of increasingly severe – and hopefully fatal – sanctions against Russia was drawn up to block NATO from trading with it. All that was needed to ignite the geopolitical earthquake was a casus belli.
That was arranged easily enough. The escalating New Cold War could have been launched in the Near East – over resistance to America’s grabbing of Iraqi oil fields, or against Iran and countries helping it survive economically, or in East Africa. Plans for coups, color revolutions and regime change have been drawn up for all these areas, and America’s African army has been built up especially fast over the past year or two. But Ukraine has been subjected to a U.S.-backed civil war for eight years, since the 2014 Maidan coup, and offered the chance for the greatest first victory in this confrontation against China, Russia and their allies.
So the Russian-speaking Donetsk and Luhansk regions were shelled with increasing intensity, and when Russia still refrained from responding, plans reportedly were drawn up for a great showdown to commence in late February – beginning with a blitzkrieg Western Ukrainian attack organized by U.S. advisors and armed by NATO.
Russia’s preemptive defense of the two Eastern Ukrainian provinces and its subsequent military destruction of the Ukrainian army, navy and air force over the past two months has been used as the excuse to start imposing the U.S.-designed sanctions program that we are seeing unfolding today. Western Europe has dutifully gone along whole-hog. Instead of buying Russian gas, oil and food grains, it will buy these from the United States, along with sharply increased arms imports.
The prospective fall in the Euro/Dollar exchange rate
It therefore is appropriate to look at how this is likely to affect Western Europe’s balance of payments and hence the euro’s exchange rate against the dollar.
European trade and investment prior to the War to Impose Sanctions had promised a rising mutual prosperity between Germany, France and other NATO countries vis-à-vis Russia and China. Russia was providing abundant energy at a competitive price, and this energy was to make a quantum leap with Nord Stream 2. Europe was to earn the foreign exchange to pay for this rising import trade by a combination of exporting more industrial manufactures to Russia and capital investment in developing the Russian economy, e.g. by German auto companies and financial investment. This bilateral trade and investment is now stopped – and will remain stopped for many, many years, given NATO’s confiscation of Russia’s foreign reserves kept in euros and British sterling, and the European Russophobia being fanned by U.S. propaganda media.
In its place, NATO countries will purchase U.S. LNG – but they will need to spend billions of dollars building sufficient port capacity, which may take until perhaps 2024. (Good luck until then.) The energy shortage will sharply raise the world price of gas and oil. NATO countries also will step up their purchases of arms from the U.S. military-industrial complex. The near-panic buying will also raise the price for arms. And food prices also will rise as a result of the desperate grain shortfalls resulting from a cessation of imports from Russia and Ukraine on the one hand, and the shortage of ammonia fertilizer made from gas.
All three of these trade dynamics will strengthen the dollar vis-à-vis the euro. The question is, how will Europe balance its international payments with the United States? What does it have to export that the U.S. economy will accept as its own protectionist interests gain influence, now that global free trade is dying quickly?
The answer is, not much. So what will Europe do?
I could make a modest proposal. Now that Europe has pretty much ceased to be a politically independent state, it is beginning to look more like Panama and Liberia – “flag of convenience” offshore banking centers that are not real “states” because they don’t issue their own currency, but use the U.S. dollar. Since the eurozone has been created with monetary handcuffs limiting its ability to create money to spend into the economy beyond the limit of 3 percent of GDP, why not simply throw in the financial towel and adopt the U.S. dollar, like Ecuador, Somalia and the Turks and Caicos Islands? That would give foreign investors security against currency depreciation in their rising trade with Europe and its export financing.
For Europe, the alternative is that the dollar-cost of its foreign debt taken on to finance its widening trade deficit with the United States for oil, arms and food will explode. The cost in euros will be even greater as the currency falls against the dollar. Interest rates will rise, slowing investment and making Europe even more dependent on imports. The eurozone will turn into an economic dead zone.
For the United States, this is Dollar Hegemony on steroids – at least vis-à-vis Europe. The continent would become a somewhat larger version of Puerto Rico.
The dollar vis-à-vis Global South currencies
The full-blown version of the New Cold War triggered by the “Ukraine War” risks turning into the opening salvo of World War III, and is likely to last at least a decade, perhaps two, as the U.S. extends the fight between neoliberalism and socialism to encompass a worldwide conflict. Apart from the U.S. economic conquest of Europe, its strategists are seeking to lock in African, South American and Asian countries along similar lines to what has been planned for Europe.
The sharp rise in energy and food prices will hit food-deficit and oil-deficit economies hard – at the same time that their foreign dollar-denominated debts to bondholders and banks are falling due and the dollar’s exchange rate is rising against their own currency. Many African and Latin American countries – especially North Africa – face a choice between going hungry, cutting back their gasoline and electricity use, or borrowing the dollars to cover their dependency on U.S.-shaped trade.
There has been talk of IMF issues of new SDRs to finance the rising trade and payments deficits. But such credit always comes with strings attached. The IMF has its own policy of sanctioning countries that do not obey U.S. policy. The first U.S. demand will be that these countries boycott Russia, China and their emerging trade and currency self-help alliance. “Why should we give you SDRs or extend new dollar loans to you, if you are simply going to spend these in Russia, China and other countries that we have declared to be enemies,” the U.S. officials will ask.
At least, this is the plan. I would not be surprised to see some African country become the “next Ukraine,” with U.S. proxy troops (there are still plenty of Wahabi advocates and mercenaries) fighting against the armies and populations of countries seeking to feed themselves with grain from Russian farms, and power their economies with oil or gas from Russian wells – not to speak of participating in China’s Belt and Road Initiative that was, after all, the trigger to America’s launching of its new war for global neoliberal hegemony.
The world economy is being enflamed, and the United States has prepared for a military response and weaponization of its own oil and agricultural export trade, arms trade and demands for countries to choose which side of the New Iron Curtain they wish to join.
But what is in this for Europe? Greek labor unions already are demonstrating against the sanctions being imposed. And in Hungary, Prime Minister Viktor Orban has just won an election on what is basically an anti-EU and anti-U.S. worldview, starting with paying for Russian gas in roubles. How many other countries will break ranks – and how long will it take?
What is in this for the Global South countries being squeezed – not merely as “collateral damage” to the deep shortages and soaring prices for energy and food, but as the very objective of U.S. strategy as it inaugurates the great splitting of the world economy in two? India has already told U.S. diplomats that its economy is naturally connected with those of Russia and China. Pakistan finds the same calculus at work.
From the U.S. vantage point, all that needs to be answered is, “What’s in it for the local politicians and client oligarchies that we reward for delivering their countries?”
From its planning stages, U.S. diplomatic strategists viewed the looming World War III as a war of economic systems. What side will countries choose: their own economic interest and social cohesion, or submission to local political leaders installed by U.S. meddling like the $5 billion that Assistant Secretary of State Victoria Nuland bragged of having invested in Ukraine’s neo-Nazi parties eight years ago to initiate the fighting that has erupted into today’s war?
In the face of all this political meddling and media propaganda, how long will it take the rest of the world to realize that there’s a global war underway, with World War III on the horizon? The real problem is that by the time the world understands what is going on, the global fracture will already have enabled Russia, China and Eurasia to create a real non-neoliberal New World Order that does not need NATO countries and which has lost trust and hope for mutual economic gains with them. The military battlefield will be littered with economic corpses.
CBS correspondent Charlie D’Agata has prompted backlash after comparing violence in Afghanistan to the invasion of “relatively civilized” Ukraine. (Photo: video grab)
When a gruesome six-minute video of Ukrainian soldiers shooting and torturing handcuffed and tied up Russian soldiers circulated online, outraged people on social media and elsewhere compared this barbaric behavior to that of Daesh.
In a rare admission of moral responsibility, Oleksiy Arestovych, an adviser to the Ukrainian President, quickly reminded Ukrainian fighters of their responsibility under international law. “I would like to remind all our military, civilian and defense forces, once again, that the abuse of prisoners is a war crime that has no amnesty under military law and has no statute of limitations,” he said, asserting that “We are a European army”, as if the latter is synonymous with civilized behavior.
Even that supposed claim of responsibility conveyed subtle racism, as if to suggest that non-westerners, non-Europeans, may carry out such grisly and cowardly violence, but certainly not the more rational, humane and intellectually superior Europeans.
The comment, though less obvious, reminds one of the racist remarks by CBS’ foreign correspondent, Charlie D’Agata, on February 26, when he shamelessly compared Middle Eastern cities with the Ukrainian capital, Kyiv, stating that “Unlike Iraq or Afghanistan, (…) this is a relatively civilized, relatively European city”.
The Russia-Ukraine war has been a stage of racist comments and behavior, some explicit and obvious, others implicit and indirect. Far from being implicit, however, Bulgarian Prime Minister, Kiril Petkov, did not mince words when, last February, he addressed the issue of Ukrainian refugees. Europe can benefit from Ukrainian refugees, he said, because “these people are Europeans. (…) These people are intelligent, they are educated people. This is not the refugee wave we have been used to, people we were not sure about their identity, people with unclear pasts, who could have been even terrorists.”
One of many other telling episodes that highlight western racism, but also continued denial of its grim reality, was an interview conducted by the Italian newspaper, La Repubblica, with the Ukrainian Azov Battalion Commander, Dmytro Kuharchuck. The latter’s militia is known for its far-right politics, outright racism and horrific acts of violence. Yet, the newspaper described Kuharchuck as “the kind of fighter you don’t expect. He reads Kant and he doesn’t only use his bazooka.”If this is not the very definition of denial, what is?
That said, our proud European friends must be careful before supplanting the word ‘European’ with ‘civilization’ and respect for human rights. They ought not to forget their past or rewrite their history because, after all, racially-based slavery is a European and western brand. The slave trade, as a result of which millions of slaves were shipped from Africa during the course of four centuries, was very much European. According to Encyclopedia Virginia, 1.8 million people “died on the Middle Passage of the transatlantic slave trade”. Other estimations put the number much higher.
Colonialism is another European quality. Starting in the 15th century, and lasting for centuries afterward, colonialism ravaged the entire Global South. Unlike the slave trade, colonialism enslaved entirepeoples and divided whole continents, like Africa, among European spheres of influence.
The nation of Congo was literally owned by one person, Belgian King Leopold II. India was effectively controlled and colonized by the British East India Company and, later, by the British government. The fate of South America was largely determined by the US-imposed Monroe Doctrines of 1823. For nearly 200 years, this continent has paid – and continues to pay – an extremely heavy price of US colonialism and neocolonialism. No numbers or figures can possibly express the destruction and death toll inflicted by Western-European colonialism on the rest of the world, simply because the victims are still being counted. But for the sake of illustration, according to American historian, Adam Hochschild, ten million people have died in Congo alone from 1885 to 1908.
And how can we forget that World War I and II are also entirely European, leaving behind around 40 million and 75 million dead, respectively. (Other estimations are significantly higher). The gruesomeness of these European wars can only be compared to the atrocities committed, also by Europeans, throughout the South, for hundreds of years prior.
Mere months after The North Atlantic Treaty Organization (NATO) was formed in 1949, the eager western partners were quick to flex their muscles in Korea in 1950, instigating a war that lasted for three years, resulting in the death of nearly 5 million people. The Korean war, like many other NATO-instigated conflicts, remains an unhealed wound to this day.
The list goes on and on, from the disgraceful Opium Wars on China, starting in 1839, to the nuclear bombings of Japan in 1945, to the destruction of Vietnam, Laos, Cambodia, in 1954, 1959 and 1970 respectively, to the political meddling, military interventions and regime change in numerous countries around the world. They are all the work of the West, of the US and its ever-willing ‘European partners’, all done in the name of spreading democracy, freedom and human rights.
If it were not for the Europeans, Palestine would have gained its independence decades ago, and its people, this writer included, would have not been made refugees, suffering under the yoke of Zionist Israel. If it were not for the US and the Europeans, Iraq would have remained a sovereign country and millions of lives would have been spared in one of the world’s oldest civilizations; and Afghanistan would have not endured this untold hardship. Even when the US and its European friends finally relented and left Afghanistan last year, they continue to hold the country hostage, by blocking the release of its funds, leading to actual starvation among the people of that war-torn country.
So before bragging about the virtues of Europe, and the demeaning of everyone else, the likes of Arestovych, D’Agata, and Petkov should take a look at themselves in the mirror and reconsider their unsubstantiated ethnocentric view of the world and of history. In fact, if anyone deserves bragging rights it is those colonized nations that resisted colonialism, the slaves that fought for their freedom, and the oppressed nations that resisted their European oppressors, despite the pain and suffering that such struggles entailed.
Sadly, for Europe, however, instead of using the Russia-Ukraine war as an opportunity to reflect on the future of the European project, whatever that is, it is being used as an opportunity to score cheap points against the very victims of Europe everywhere. Once more, valuable lessons remain unlearned.
– Ramzy Baroud is a journalist and the Editor of The Palestine Chronicle. He is the author of six books. His latest book, co-edited with Ilan Pappé, is “Our Vision for Liberation: Engaged Palestinian Leaders and Intellectuals Speak out”. Dr. Baroud is a Non-resident Senior Research Fellow at the Center for Islam and Global Affairs (CIGA). His website iswww.ramzybaroud.net
“Events like these only happen once every century”: Sergei Glazyev on the breaking of an epoch and the change of ways.
Is it possible to stabilize the ruble in three days? And why are the Ukrainian ‘zombies’ not giving up?
“After failing to weaken the People’s Republic of China head-on through a trade war, the Americans shifted the main blow to Russia, which they see as a weak link in world geopolitics and economics. The Anglo-Saxons are striving to realize their age-old Russophobic ideas of destroying our country, and at the same time weakening China, because the strategic alliance of the Russian Federation and China is too tough for the United States. They have neither the economic nor military power to destroy us together, and not separately,” says Sergey Glazyev, Academician of the Russian Academy of Sciences, former adviser to the President of the Russian Federation. About what opportunities are now opening up for the Russian economy, whether the Central Bank panders to the enemy and whether a new world currency will replace the dollar, Glazyev spoke in an interview with BUSINESS Online.
“The new world economic order is socialist in ideology”
– Sergey Yuryevich, commenting on today’s tragic events, you wrote in your Telegram channel that we should have read your book about the “last world war”, written about 6 years ago. How did you manage to predict everything so accurately?
– The fact is that there are long-term patterns of economic development, the analysis and understanding of which makes it possible to predict the events that are taking place at the present time. We are now experiencing a simultaneous change in the technological and world economic structures, while the technological basis of the economy is changing, there is a transition to fundamentally new technologies, and the management system is also changing. Events like this happen about once a century. However, technological structures change about once every 50 years, and their change is usually accompanied by a technological revolution, depression and an arms race. And world economic structures change once every 100 years, and their change is accompanied by world wars and social revolutions. This is due to the fact that the ruling elite of the countries of the core of the old world economic order impedes changes, does not take into account the emergence of more effective management systems, tries to block the development of new world leaders using them, and tries to maintain its hegemony and its monopoly position by any means, including military and revolutionary ones.
Say, 100 years ago, the British Empire was trying to maintain its hegemony in the world. When it was already losing economically to the combined resources of the Russian Empire and Germany, the First World War, provoked by British intelligence, was unleashed, during which all three European empires self-liquidated. I am talking about the collapse of tsarist Russia, the German and Austro-Hungarian empires, but here we can even put a fourth – the Ottoman Port. As for Britain, for some time it retained global dominance and even became the largest empire on the planet. But due to the inexorable laws of socio-economic development, the colonial world economic structure, based in fact on slave labor, could no longer ensure economic growth. The two fundamentally new political models that emerged – the Soviet and the American ones – demonstrated a much greater efficiency of production, since they were already organized on other principles: not on private family capitalism, but on the strength of large transnational corporations with centralized structures for regulating the economy and with limitless monetary emission of credit through fiat money (paper or electronic means – ed. note). They enabled the mass production of products much more efficiently than the administrative systems of the colonial empires of the XIX century.
The emergence of social states in the USSR and the USA with centralized control systems made it possible for a sharp jump in their economic development. In Europe, the corporate governance system was formed, unfortunately, according to the Nazi model in Germany, and also not without the help of British intelligence. Hitler, relying on the support of the British intelligence services and American capital, quite quickly deployed a centralized corporate management system in Germany, which allowed the Third Reich to very quickly capture the whole of Europe. With God’s help, we defeated this German (more precisely, European – taking into account today’s realities) fascism. After that, two models remained in the world, which I attribute to the imperial world economic structure: Soviet and Western (with the center in the USA). After the collapse of the Soviet Union, which could not withstand global competition due to the fact that the directive system of government was not flexible enough to meet the needs of technological progress, the United States seized global dominance for a while.
– But now this period of “American unipolar loneliness” is already ending, and, probably, not only thanks to Russia, but primarily to China and the Asian regions as such. Is it not?
– Indeed, the hierarchical vertical structures characteristic of the imperial world economy turned out to be too rigid to ensure continuous innovation processes and lost their comparative effectiveness in ensuring the growth of the world economy. On its periphery, a new world economic order has been formed, which is based on flexible management models, a network organization of production, where the state works as an integrator, uniting the interests of various social groups around achieving one goal – raising the public welfare. The most impressive example of such an integral world economic structure today is China, which for more than 30 years has outpaced the growth rate of the American economy by three times. At the moment, China is already surpassing the United States in terms of output, exports of high-tech goods, and growth rates.
Another example of a model of a new world economic order, which we called integral (due to the fact that the state in it unites all social groups of different interests), is India. It has a different political system, but it also has the primacy of public interests over private ones, and the state seeks to maximize growth rates in order to fight poverty. In this sense, the new world economic order is socialist in ideology. At the same time, it uses market mechanisms of competition, which makes it possible to provide the highest concentration of resources for making a technological revolution with goals to ensure economic leaps based on a new advanced technological order. If we look at growth rates after 1995, we see that the Chinese economy has grown 10 times, while the US economy has grown by only 15 percent. Thus, it is already obvious to everyone that at present the pace of world economic development is shifting to Asia: China, India and the countries of Southeast Asia already produce more products than the US and the EU. If we add to them Japan or Korea, in which the management system is similar in its principles to the integration of society around the goal of increasing public welfare, then we can say that today this new world economic structure already dominates the world, and the center of reproduction of the world economy has moved to Southeast Asia. Of course, the American ruling elite cannot agree with this.
– To come to terms with it, I would say…
– Yes. They, like the British Empire once, seek to maintain their hegemony in the world. The events taking place today are a manifestation of how the US financial and powerful oligarchic elite are trying to maintain world domination. It can be said that for the past 15 years it has been waging a world hybrid war, seeking to chaoticize countries beyond its control and restrain the development of the People’s Republic of China. But due to the already archaic system of governance, they cannot do this. The financial crisis of 2008 was such a transitional moment when the life cycle of the outgoing technological order actually ended and the process of massive redistribution of capital into a new technological order began, the core of which is a complex of nanobioengineering and information communication technologies. All countries began to pump up the economy with money. The simplest thing a modern government can do is to give all businesses access to cheap long-term money so they can adopt new technologies. But, if in America and Europe such funds went mainly into financial bubbles and covered the budget deficit, then in China this colossal money emission was completely directed to the growth of production and the development of new technologies. There were no financial bubbles, while the ultra-high monetization of the Chinese economy did not result in inflation, the growth of the money supply was accompanied by an increase in the production of goods, the introduction of new advanced technologies and an increase in public welfare.
Today, economic competition has already led to the fact that the United States has lost its leadership. If you remember, Donald Trump tried to contain the development of China through a trade war, but nothing came out of it.
“The Americans have opened a biological front of war by launching the coronavirus in China”
– Why? Did Trump, accustomed to taking risks and going all-in, lack the determination?
– And even Trump couldn’t get it out, because China has a more efficient management system that allows you to concentrate the available production resources to the fullest. At the same time, effective money management keeps money emission in the contour of expanded reproduction of the real sector of the economy, focusing on financing investments in development. China has the highest savings rate of any country, with about 45 percent of GDP invested, compared with 20 percent in the United States or Russia. This, in fact, ensures the ultra-high growth rates of the Chinese economy.
In short, the US was doomed to lose this trade war because China could produce more efficiently and finance development cheaper. The entire banking system in China is state-owned, it works as a single development institution, directing cash flows to expand production and master new technologies. In the United States, the emission of money goes to finance the budget deficit and is redistributed into financial bubbles. As a result, the efficiency of the US financial and economic system is 20 percent – there only every fifth dollar reaches the real sector, and in China almost 90 percent (that is, almost all the yuan that is created by the Central Bank of the PRC) feeds the contours of the expansion of production and ensures ultra-high economic growth.
Trump’s attempts to limit China’s development through trade war methods have failed. At the same time, they boomeranged at the United States itself. Then the Americans opened a biological war front by launching the coronavirus in China, hoping that the Chinese leadership would not cope with this epidemic and chaos would arise in China. However, the epidemic has demonstrated the low efficiency of healthcare and has created chaos in the United States itself. The Chinese system of government has shown much greater efficiency here as well. In the Celestial Empire, the mortality rate is significantly lower, and the pandemic was dealt with much faster there. Already in 2020, they even reached economic growth of 2 percent, while in the United States there was a decline of 10 percent of GDP (analysts noted the largest drop since the Second World War – ed. note). Now the Chinese have restored the growth rate of about 7 percent per year, and there is no doubt that the PRC will continue to develop confidently, expanding the production of a new technological order.
In parallel with the trade war against China, American intelligence services were preparing a war against Russia, since the Anglo-Saxon geopolitical tradition considers our country the main obstacle to establishing world domination of the US and British power and financial elite. It must be said that the war against the Russian Federation unfolded immediately after the annexation of Crimea and after the American special services organized a coup d’état in Ukraine. It can be said that they tricked Russia into agreeing to the American occupation of Ukraine, considering it as a temporary phenomenon. However, the Americans took root on ‘Ukrainian Independence’, created not only strongholds, growing Nazis under their wing, but also trained the Nazi armed forces, gave the Nazis the opportunity to receive a military education, trained them in their academies, ‘sewed together’ all the Armed Forces of Ukraine with them. And for 8 years they have been preparing the Armed Forces of Ukraine for the fight against the only enemy – Russia. While the mass media, which in Ukraine are also completely controlled by the Americans, formed the image of the enemy in the public mind.
In addition, the United States used the monetary and financial front of the hybrid war against the Russian Federation. Already in 2014, they introduced the first financial sanctions and knocked out a significant part of Western loans from the Russian economy. Now we are witnessing the next phase, when they have actually disconnected Russia from the world monetary and financial system, which they dominate. However, I predicted all this 10 years ago, based on the theory of changing world economic structures and the specific logic of the US ruling elite, focused on world domination. Anglo-Saxon geopolitics is traditionally oriented against the Russian Empire and its successors, the USSR and the Russian Federation, because, since the days of the British Empire, Russia has been seen as the main opponent of the Anglo-Saxons. All the so-called geopolitical science that was being written in London came down, in fact, to a set of recommendations on how to destroy Russia as the dominant force in Eurasia. I mean all sorts of speculative constructions like “countries of the sea against countries of the land” and so on.
– How did Russia get in the way of the ‘sea countries’ that much? After all, geographically with the UK, we have never bordered.
– In this regard, a formula was invented: whoever controls Eurasia controls the whole world. Actually, applied developments have already gone further. Zbigniew Brzezinski’s theorem is known that in order to defeat Russia as a superpower, Ukraine must be torn off from it. All this political dogma, which, it would seem, has long gone down in history, is nevertheless reproduced today in the thinking of the American political elite. I must say that there are still courses in geopolitics of the XIX century at Harvard and Yale University, sharpening the brains of future American politicians against Russia. So they, in fact, jumped on this old and time-tested Russophobic stream, which has always been characteristic of Anglo-Saxon geopolitics. And, considering Russia as the main opponent of their dominance in the world, in accordance with the proposal of Brzezinski, they used Ukraine as an outpost, more precisely, as a tool to undermine Russia, weaken it and, in the long run, destroy it as a sovereign state.
So, what is happening today was easily predicted based on a combination of long-term patterns of economic development, which actually doomed the world to a hybrid war, and the traditional Russophobia of the Anglo-Saxon political elite. After the weakening of the PRC did not work out through a trade war, the Americans transferred the main blow of their military and political power to Russia, which they consider to be a weak link in world geopolitics and economics. In addition, the Anglo-Saxons seek to establish dominance over Russia in order to realize their age-old Russophobic ideas of destroying our country, and at the same time weakening China, because the strategic alliance of the Russian Federation and China is too tough for the United States. They have neither the economic nor the military power to destroy us together, neither separately, which is why the United States initially sought to quarrel us with China. That didn’t work for them. But they, using our, I would say, placidity, seized control over Ukraine, and today they are using our fraternal republic as a weapon of war to destroy Russia, and then to seize control of our resources in order, I repeat, to strengthen their position and weaken China’s position. In general, this is all obvious, like two plus two equals four.
“The Americans will not be able to win, just as the British did not succeed in their time”
– Probably, this is obvious, but not for everyone. Among the Russian elite there are many opponents of an alliance with China. At least, before the special operation in Ukraine, it seemed to these people that American and Western culture is more understandable and closer to us than hieroglyphic Chinese wisdom, and that we will always find a common language with our “Western partners”.
– You know, back in 2015 I wrote the book “The Last World War. The USA is Starting and Losing”, which you mentioned at the beginning of the conversation – everything was thought out and justified there. The United States embarked on a worldwide hybrid war – started with the Orange Revolutions to disrupt regions of the world it did not control – in order to strengthen its position and weaken the position of geopolitical rivals. After the famous Munich speech of President Putin (February 2007 – ed. Note), they realized that they had lost control over Yeltsin’s Russia, and this seriously worried them. In 2008, the financial crisis broke out and it became clear that the transition to a new technological order was beginning, and the old world economic order and the previous management system no longer ensured sustainable economic development. China was now leading the way. Well, then afterwards the logic of deploying of a world war happens, only not in the forms that existed 100 years ago, but on three conditional fronts – monetary-financial (where the United States still dominates the world), trade-economic (where they have already lost superiority to China) and information-cognitive (where the Americans also have technologies that are superior to ours). They use all three of these fronts in an attempt to keep the initiative and maintain the hegemony of their corporations.
Well and finally, the fourth front is the biological one, which opened with the advent of the coronavirus from the US-Chinese laboratory in Wuhan. Today we see that a whole network of biological laboratories existed in Ukraine. So the United States has long been preparing to open the biological front of the world war.
The fifth, and most obvious, front is, in fact, the front of combat fighting – as the last tool for forcing the states that they control into unquestioning obedience. Today, the situation on this front is also escalating. That is, active operations are underway on all five fronts of the world hybrid war, and the result can be predicted. The Americans will not be able to win, just as the British did not succeed in their time. Although Britain formally won World War II, they lost politically and economically. The British lost their entire empire, losing more than 90 percent of the territory and 95 percent of the population. Two years after World War II, where they were the winners, their empire collapsed like a house of cards, because the other two winners – the USSR and the USA – did not need this empire and viewed it as an anachronism. Also, the world will not need American transnational corporations, the American dollar, American monetary and financial technologies and financial pyramids. All this will be a thing of the past in the near future. Southeast Asia will become the obvious leader in world economic development, and a new world economic order will be formed before our very eyes.
– To paraphrase [Erich] Remarque, we can say that changes have finally come on the western front. But what signs do you see of this powerful global system soon becoming a thing of the past?
– After the Americans seized first the Venezuelan foreign exchange reserves and handed them over to the opposition, then the Afghan foreign exchange reserves, before that the Iranian ones, and now the Russian ones, it became completely clear that the dollar ceased to be the world currency. Following the Americans, the Europeans also committed this stupidity – the euro and the pound ceased to be world currencies. Therefore, the old monetary and financial system is living its last days. After American dollars that no one needs are sent back to America from Asian countries, the collapse of the world monetary and financial system based on dollars and euros is inevitable. Leading countries are switching to national currencies, and the euro and the dollar are ceasing to be foreign exchange reserves.
– How do you see the world after the disappearance of the dollar monopoly?
– We are currently working on a project for an international treaty on the introduction of a new world settlement currency pegged to the national currencies of the participating countries and to exchange commodities that determine real values. We won’t need American and European banks. A new payment system based on modern digital technologies with blockchain is developing in the world, where banks lose their importance. Classical capitalism based on private banks is fading away. International law is being restored. All key international relations, including the issuance of world currency circulation, begin to form on the basis of agreements. At the same time, the significance of national sovereignty is being restored, because sovereign countries are coming to an agreement. The basis of global economic cooperation is joint investment in order to improve the well-being of peoples. Trade liberalization ceases to be some kind of priority, national priorities are respected, each state builds such a system for protecting the internal market and its economic space that it considers necessary. That is, the era of liberal globalization is over. Before our eyes, a new world economic structure is being formed – an integral one, in which some states and private banks lose their private monopoly on the issue of money, on the use of military force, and so on.
“The third scenario is catastrophic. Destruction of mankind”
– Why did you call your book “The Last World War”? What feeds your hope that this global war is really the last one?
– I called this world war the last one, because we see that there are several scenarios of movement out of today’s crisis. The first scenario, which I have already talked about, is calm and prosperous. It consists in overcoming the US monopoly. In order to do this in the financial sector, you need to abandon the dollar. In order to overcome the monopoly in the information and cognitive sphere, it is necessary to isolate our information space from the American one and switch to our own information technologies. Creating their own contours of the reproduction of the economy, but without the US dollar and the euro and relying on their information technologies for managing money, the countries of the new world economic order ensure high rates of economic development, while the Western world is collapsing. There they have a situation of collapse of financial pyramids, disorganization and a growing economic crisis, aggravated by growing inflation due to the uncontrolled issue of money over the past 12 years.
The second scenario of a possible development of events is similar to the one that Hitler wanted to realize during the period of the change of previous world economic structures. This is an attempt to create a world government with a superhuman ideology. If Hitler conceived the German nation as superhumans, then the current ideologists of world domination impose on humanity the transition to a post-humanoid state. In contrast to the post-humanism of the West, the core countries of the new world economic order are characterized by a socialist ideology, albeit with respect for private interests, protection of private property and the use of market mechanisms. In China, India, Japan, and Korea, socialist ideology dominates – or rather, a mixture of socialist ideology, national interests, and market competition. It is this mixture that forms a fundamentally new power-political elite, focused on economic development and the growth of the well-being of nations.
It is different for Western politicians, intellectuals and businessmen. What we see today is an attempt to form a certain image of a new world order with a world government at the head, where people are driven into an electronic concentration camp. You can see by the example of restrictions during the pandemic how it happened: all people are given tags, access to public goods is regulated through QR codes, everyone is forced to walk in formation. By the way, in the scenario of the Rockefeller Foundation back in 2009, the pandemic and, in fact, everything that happened in connection with it, was amazingly sorted into pieces – they actually predicted the future. This scenario was called Lock Step, that is, “Walk in formation”, and the Western world followed it. Sacrificing their own democratic values, they try to force people to obey commands. International organizations, including the World Health Organization, are used as a kind of stronghold for assembling a world government that would be subordinate to private capital.
But, I must say, Donald Trump greatly interfered with these plans, because he stopped the signing of agreements on Transatlantic and Trans-Pacific partnerships, where all countries participating in the agreements sacrificed national sovereignty in all disputes with big business. And you need to understand that today any transnational corporation can act as a foreign investor, including in the United States. According to these agreements, if there is foreign capital in the business, then in a dispute with the national government, some kind of international arbitration court is formed, it is not clear how and by whom it was drawn up. And these unelected judges, appointed, in fact, by big international business, these disputes are resolved. In fact, it was about the fact that the state was losing all sovereignty in regulating relations with big business. However, Trump stopped the agreement – the United States never signed it. Thus, the process of forming a world government was stopped. This is the second alternative, and it is now in crisis due to the collapse of the idea of globalization and the gradual abandonment of ‘pandemic’ restrictions.
It must be understood that the option of a world government is incompatible with sovereign Russia, with our independence and role in the world. Within the framework of the globalist scenario, the Russian Federation is viewed as a territory that is intended for exploitation by Western transnational corporations. The “indigenous population” must serve their interests. Under such a scenario, Russia disappears as an independent entity, just like China, by the way. The Western world government may incorporate some of our oligarchs into its version of the future, but only in second and third-rate roles.
The third scenario is catastrophic. The destruction of humanity…
– That same apocalypse which everybody talks about?
– Well, not everyone… But everyone, of course, is afraid. By the way, about the American biological laboratories that are engaged in the synthesis of dangerous viruses, it was mentioned in my other book, which was published a little later: “Plague of the XXI century: how to avoid disaster and overcome the crisis?”
I remember back in 1996, when I had to work in the UN Security Council, I proposed to develop the concept of national biological security. Because even then, almost 30 years ago, genetics was a sufficiently developed science to synthesize viruses directed against people of a certain race or a certain gender, a certain age. This has been possible for a long time. It is possible to make a virus that will only work against whites, or vice versa, only against blacks, only against men, or only against women. Now the Americans are going further – you see that, data which agrees with our Ministry of Defense, they announced the day before, that American biological laboratories were developing viruses targeted against the Slavs. Apparently, it is possible today – to make a virus against some ethnic group that has its own genetic code.
What is happening in Ukraine today is an echo of the agony of the US power elite, which cannot come to terms with the fact that they will no longer be a world leader. This becomes clear to everyone – at least to those who are not connected with the Americans by their own interests and are not subject to their cognitive influence.
I’ll give you an example. When the US imposed sanctions on Russia in 2014, I asked my Chinese colleagues: “Do you think the Americans can impose sanctions with regards to China?” They were certain that they can’t. They said that it was impossible, because the US depends on China just as strongly as China depends on the US. That is, America will be more expensive for itself. Two years had passed, and Trump launched a trade war against China. And Beijing now understood that America is an enemy that will drown the Chinese economic miracle by all means. Prior to this, my reasonings with my Chinese colleagues were not very convincing, just as, however, my book you mentioned did not greatly influence our political and economic elite. My arguments were dismissed. Although we have been saying for many, many years that the dollar should be refused. Foreign exchange reserves should have been removed from dollar instruments, from the euros-to-gold, it should have been necessary to switch to our own monetary and financial system, develop our own settlements in national currencies with partners. We have been offering all this since the 2000s, when it was already clear what the world economic development was leading to. And now, finally, everyone has seen the light.
“The Americans zombified Ukrainians and turned 150-200 thousand people into a fighting machine that works without thinking”
– Judging by the heart-rending howl that comes from the camp of the liberals, as well as the events in Ukraine, not everyone has seen the light yet.
– Yes, we are faced with the fact that in 8 years the Americans have managed to fool the Ukrainian people so much that the people who resist the Russian army, the so-called Armed Forces of Ukraine, look simply zombified. They are manipulated like puppets. It is not Zelensky who commands the Ukrainian Army, not even the Ministry of Defense of Ukraine and the General Staff – but the Pentagon. It commands very effectively from the point of view in the fight of “to the last Ukrainian soldier”, because these zombie guys do not give up. But they are in an absolutely hopeless situation. All experts have already acknowledged that Russia won the military special operation, that the Ukraine has no chance of resistance, that the entire military infrastructure has been destroyed… The Armed Forces of Ukraine is only left with surrendering in order to minimize human losses. However, Ukrainian officers (and especially, of course, nationalists) act like zombies controlled from the outside – they follow instructions from the Pentagon that come to their personal computers and special tablets.
Moreover, the Americans command their marionettes from the Armed Forces of Ukraine, breaking them into the appropriate units. Each unit is assigned a number, and every number is given artificial ‘military intelligence’ with tasks every day. They really turned 150-200 thousand people into a fighting machine that works without thinking, only stupidly follows all their orders. For 8 years, they have achieved that they forced a significant part of the youth of Ukraine not only to stand up against Russia, but through brainwashing made them their weak-willed tools. Not just cannon fodder, but controlled cannon fodder.
Being in an absolutely hopeless situation, surrounded, deprived of any supply at all, they still continue the senseless war, dooming themselves to death, and dragging the surrounding civilians with them to the grave. This is a clear example of how modern American technology works. We must understand that in front of us, we have a very powerful force. You know, before [the war], we have heard from Russian experts and politicians that the Ukrainians themselves will suffocate economically and then crawl to us, and in general where will Ukraine go without us? After all, it will not be able to ensure the reproduction of the economy without our resources and cooperation with us. Indeed, Ukraine has entered a state of economic catastrophe, as we expected, as we explained to our Ukrainian colleagues. The Ukrainian republic has become the poorest state in Europe along with Moldova. Due to the fact that Ukraine has terminated ties with Russia, its losses amount to more than 100 billion dollars. Nevertheless, this did not prevent American and British political strategists and instructors from forming a 200,000-strong army of thugs and murderers who completely inadequately imagine reality and are an obedient instrument of American interests.
– Aren’t there equally obedient American marionettes in Russia? Is it only Ukrainians who were zombified?
– Yes, and here it should be noted that practically the same thing is happening with the Central Bank, but only on other issues.
– Before we move on to the Central Bank, let me clarify. You said that you are working on introducing a new currency. And in what format and with what team?
– We have been doing this for a long time as a group of scholars. 10 years ago, at the Astana Economic Forum, we presented the report “Toward sustainable growth through a fair world economic order” with a project for the transition to a new world financial and monetary system, where we proposed to reform the IMF system based on the so-called special drawing rights, and on the basis of a modified IMF system – to create a worldwide accounting currency. By the way, this idea aroused great interest then: our project was recognized as the best international economic project. But in a practical sense, none of the states, represented by the official monetary authorities, was interested in this project. Although it was followed by Nursultan Nazarbayev’s publications, which proposed a new currency. If I remember correctly, he offered Altyn.
– Altyn? That is interesting.
Yes, the publication of his article on this topic even took place in Izvestia. But the matter did not come to negotiations and political decisions, and to this day it is rather a proposal of experts. But I am sure that the current situation is forcing us to create new payment-settlement instruments very quickly, because the dollar will practically be impossible to use, and the ruble, due to the incompetent policy of the Central Bank, which, in fact, acts in the interests of international speculators, cannot find sustainability.
Objectively, the ruble could become a reserve currency along with the yuan and the rupee. It would be possible to move to a multi-currency system based on national currencies. But we still need some equivalent for pricing… Now we are working on the concept of the exchange space of the Eurasian Economic Union, where one of the tasks is the formation of new pricing criteria. That is, if we want metal prices to be formed not in London, but here in Russia, just like oil prices, then this implies the emergence of some other currency, especially if we want to act not only within the Eurasian Economic Union, and in Eurasia in a broad sense, at the center of a new world economic order, to which I include China, India, Indochina, Japan, Korea and Iran. These are large countries, all of which have their own fundamental national interests. After the current stories with the confiscation of [Russia’s] dollar reserves, I think no country will want to use another country’s currency as a reserve. So a new tool is needed. And from my point of view, such a tool, for a start, can become some kind of synthetic settlement currency, which would be built as such an aggregated index.
– Can I have some examples? What it is?
– Well, let’s say, ECU ₠ (European Currency Unit) – there was such an experience in the European Union. It was built like a basket of currencies. All countries that participate in the creation of a new accounting currency should be entitled to the presence of their national currency in this basket. And the common currency is formed as an index, as a weighted average component of these national currencies. Well, to this we must add, from my point of view, commodities: not only gold, but also oil, and metal, and grain, and water. A sort of commodity harness, which, according to our estimates, should include about 20 goods. They, in fact, form world price proportions and therefore must participate in the basket for the formation of a new accounting currency. And an international treaty is needed, which will determine the rules for the circulation of this currency and create an organization like the International Monetary Fund. By the way, 15 years ago we proposed reforming the IMF, but now it is already obvious that a new monetary financial system will have to be built without the West. Perhaps someday Europe will join it and the US will also be forced to admit it. But so far it is clear that we will have to build without them, for example, on the basis of the Shanghai Cooperation Organization. However, these are just expert developments, which we will submit to the authorities in the coming month.
– And at the level of the government or at the level of the president?
– We will first send it to the departments that are responsible for these issues. We will hold discussions, develop some kind of common understanding, and then go to the political level.
“The Central Bank continues the policy of pandering to the enemy”
– In your Telegram channel, you write that all that remains is to nationalize the Bank of Russia. Why hasn’t it been done yet? For example, there is a point of view that Elvira Nabiullina remains at her post as a screen, but will no longer manages anything serious. Can you refute or confirm this?
– You know, I don’t want to engage in conspiracy theories.
– This is a conspiracy theory?
– Yes, we can talk about the American Deep State in conspiracy terms. In this case, conspiracy theories are a very appropriate direction of thought, because in America, behind the screen of presidents and congressmen, there are some deep forces – special services. And in our Fatherland, everything is simple. We have a president, a head of state who has built a vertical form of power. It is absolutely clear in our country how the parliament and the judiciary are formed. Here, no conspiracy theory, in general, can be applied. The same goes for the Central Bank. Let me remind you that, according to the law on the Central Bank, all its property is federal property. Therefore, the Central Bank is a state structure, there is not the slightest doubt about it.
– And they always said that the Central Bank was separated, as if on the sidelines.
– The Board of Directors of the Central Bank is appointed by the State Duma on the proposal of the President. I served for many years as its representative on the national banking board, which oversees the activities of the Central Bank. I can say that there is no doubt that the Central Bank is the state body for regulating monetary circulation, and it is also the main financial regulator in the country.
But there are nuances. The Constitution stipulates that the Central Bank conducts its policy independently, that is, it is independent of the government. But this does not mean that it is independent of the state. This is a state-owned agency. Here the judicial system in our country is also officially independent of the government. Therefore, being an independent body, the Central Bank is nevertheless formed as a state regulatory body and must perform the tasks that are necessary for the development of our economy. To do this, it is necessary to involve the Central Bank in strategic planning. The classics of monetary circulation stipulates that the main goal of the monetary authorities, that is, the Central Bank, should be to create conditions for maximizing investment. That is what the banking system should be doing – maximizing investment. Because the more investments, the more production, the higher the technical level, the lower the costs and the lower the inflation, the more stable the economy. It is possible to achieve macroeconomic stabilization in the modern economy only on the basis of accelerated scientific and technological progress. Attempts to target inflation (such a buzzword), which the Central Bank has been practically imitating for the past 10 years, by manipulating the key interest rate against the backdrop of a freely floating ruble, is short-sighted, primitive and counterproductive. Usually these measures are recommended by the IMF for underdeveloped countries that themselves do not know how to think.
What is inflation targeting in practice? This is an extremely primitive and internally contradictory set of measures, the application of which drives the economy into a stagflation trap. The Central Bank threw the ruble into free float, which is absurd from the point of view of inflation targeting in an open economy, where the exchange rate directly affects prices. And we see how the devaluation of the ruble periodically accelerates prices. In addition, they reduced monetary policy to only one absolutely primitive tool – the manipulation of the key interest rate. But the key rate is the percentage at which the Central Bank lends money to the economy and withdraws money from the economy. Its attempts to suppress inflation by raising the interest rate cannot succeed in today’s economy, because the higher the interest rate, the less credit, the less investment, the lower the technical level and competitiveness. The decrease in the latter entails the devaluation of the ruble in 3-4 years, after they raise the interest rate, supposedly to fight inflation. Having let the ruble exchange rate float freely, they, in fact, gave it at the mercy of currency speculators.
The Americans really like these politics, so they praise the leadership of our Central Bank and the Ministry of Finance in every possible way. After all, what is important to them? So that everything is tied to the dollar, so that the ruble is a ‘junk’ currency that is unstable. And this is a paradox, because the amount of foreign exchange reserves of the Russian Federation has recently been 3 times more than the ruble money supply! This means that the Central Bank could have stabilized the exchange rate at any level. But it didn’t do that.
And who are the speculators to whom the Central Bank actually threw the ruble to be torn to pieces? The main speculators are American hedge funds, which actually shape the ruble exchange rate by manipulating the market. But the Central Bank does not notice this, or rather, pretends to not notice. In order to keep them in the foreign exchange market by raising the interest rate, the Central Bank kills credit and makes our economy dependent on foreign sources of credit, and the foreign exchange financial system dependent on the interests of speculators. This is in whose interests the Central Bank works, hiding behind cool buzzwords like ‘inflation targeting’, which has shamefully failed in these past years in terms of real price dynamics. So in our country the weakest point of the entire national security system in general is the Central Bank. Its leadership is hit by the enemy’s cognitive-weapon, in other words, zombified by it. In fact, our monetary authorities are doing what the enemy needs.
By the way, I proved mathematically and chronologically that the first wave of sanctions was imposed against Russia only after the Central Bank prepared the ground for this, namely, it let the ruble exchange rate float freely and announced that it would raise the interest rate, if inflation would start in the country. As soon as the Central Bank moved to this strange policy, the Americans immediately imposed sanctions. Their speculators ensured the collapse of the ruble exchange rate, this caused an inflationary wave, and the Central Bank, on the instructions of the IMF, raised the interest rate, which completely paralyzed our economy. The total damage from this policy today has already reached 50 trillion rubles of non-produced products and about 20 trillion rubles of unfinished investments. Now you have to add to this the 300 billion dollars invested in foreign assets, which are now frozen – that’s the damage.
Therefore, when we talk about the nationalization of the Central Bank, we are not talking about formally nationalizing it (it has already been nationalized), but about bringing it into a policy of conformity with national interests. Right now, its policy is contrary to national interests. And there is no conspiracy here. We see in whose interests such a policy is pursued. The Central Bank raised interest rates to 20 percent, giving the bankers a dominant position in the economy. Possessing the most expensive and scarce resource, money, they determine which enterprise will survive, and which enterprise will die, go bankrupt, and so on. Rising interest rates are holding the entire Russian economy hostage to a handful of bankers. This is the first. Secondly, the leadership of the Central Bank allowed another collapse of the ruble exchange rate and closed the currency exchange. As a result, today banks have become the main currency speculators: they buy currency for about 90 rubles per dollar, and sell it for 125. The difference settles down for them as excess profit.
– But why, in your opinion, does the Central Bank of the Russian Federation pursue a policy in the interests of the enemy?
– As I said, it does this on the recommendation of the International Monetary Fund. But its interests are also shared by our large banks, which objectively like this policy, as well as our monetary and financial structures, which are also involved in manipulating the ruble exchange rate. Therefore, an influential lobby is formed around this policy, which supports this policy based on its own private interests. These interests run counter to the interests of the country, they are directly opposite to them. And, if you look at what the Central Bank is doing today, I have no doubts that it continues the policy of actually pandering to the enemy. It undermines macroeconomic stability by allowing international speculators to manipulate the ruble exchange rate and does not control the foreign exchange position of banks that have become currency speculators, although the Central Bank could easily withdraw banks from the foreign exchange market by fixing their foreign exchange position, forbidding banks to buy foreign currency. And secondly – by raising the interest rate, the Central Bank actually killed investments in the development of the Russian economy, which are very much needed right now, primarily for import substitution and for the restoration of economic sovereignty, while our leadership says that we should not be afraid of sanctions, because they create conditions for economic growth, for import substitutions…
Look, about a third of EU imports have left our market. These are huge opportunities for import substitution. If we assume that our enterprises begin to develop these markets, then we will develop at a rate of 15 percent per year. But this requires loans. Import substitution cannot arise without loans. We need loans to set up production facilities, to master new technologies, to load idle production capacities. We have long developed such a strategy of advanced development at the Academy of Sciences, and we are promoting it. But, unfortunately, the insane, from our point of view, policy of the Central Bank has quite specific influential structures which it likes and supports. That is why the policy is so stable.
“It is possible to stabilize the ruble in three days”
– Sergey Yuryevich, if this is not conspiracy theory, then why does the Central Bank continue to pursue such a policy? Only based on the interests of lobbyists?
– To whom is the war, and to whom is the mother dear. Commercial banks earn a 40% profit on currency speculation. You bought 90 rubles per dollar – sold it for 125. 35 rubles – nothing is easier! As a result, we have inflation, imports are becoming more expensive, everyone sees this insane rate. Prices for all goods are rising, but the banks are making super profits.
Again, a very influential lobby has formed around this policy, and admitting the failure of such a strategy for many people means, in fact, admitting their incompetence and even sabotage. And speculators with large banks are quite influential structures in our country that influence decision-making.
– Well and what, does this information not reach the first person (Putin), is it blocked?
– When I was an adviser, I communicated this information.
– Were you listened to?
– Yes, there were discussions, discussed at the Economic Council, then it was closed so as not to irritate the officials. Now I don’t want to comment on it. We see today that if we do not change the monetary policy, then it will simply be impossible for us to survive in this hybrid war. We now need to counter economic sanctions with a serious increase in domestic production. There are production facilities for this, people, raw materials, brains – too, but there is no money. Right now, the simplest thing that the state can give people is money.
– What is your feeling? Is there an understanding at the top?
– I think that you need to directly address this question to them.
– But many people call you almost the Number 1 person in the current situation – a public figure who can save Russia.
– Thank you for this review. I try my best.
– I just want to understand: if before there was no prophet in our Fatherland, now has he appeared? Is this a temporary situation with the Central Bank?
– It is so protracted, I would say, for 30 years. If we had carried out a competent monetary policy in accordance with the requirements of the new world economic order, the integral system, we would have developed like China – by 10 percent a year. There were such possibilities. And we basically been stomping in the same spot for these past 30 years. So the point is not even whether they listen or not, you just need to look objectively and see how China and India are developing and how we are developing. What prevented us from developing in exactly the same way?
Moreover, the control system of the new world economic order, which I describe in my books, is universal. She worked successfully in Japan before the Americans broke the Japanese economic growth. And even in Ethiopia, where they also began to form this management model (and achieved growth by several times). That is, this universal management model of the modern economy, focused on the growth of social welfare through investment in a new technological order, needs to be implemented. At the same time, of course, the targeted use of money implies a high responsibility. Throwing money from a helicopter – is not our thing.
– It’s not our path.
– We are talking about targeted credit emission based on modern digital tools with a strict control system focused on investments in new technologies. We know how to do this, how to minimize the human factor through the introduction of digital technologies, including the digital ruble. But this is disadvantageous for those who still adhere to the old strategies. They made a cash cow out of Russia, they sucked out 100 billion dollars from it abroad to offshore companies.But now the Americans have closed offshorization for us. There is a real opportunity, we must use it.
– What would you advise people? Now the main query on the Internet search engines is where to invest money in an era of turbulence. What should people do?
– First of all, do not make sudden movements, I would say that. In any case, what certainly is not necessary – to run after dollars or euros. Because we do not know what will happen next with these currencies. If our system is disconnected from the Western system, then our banks cannot effectively invest dollars and euros anywhere except in currency speculation. But I hope that our authorities will still curb the foreign exchange market.
In this context, what the banks did, raising the interest rate on foreign currency deposits sharply, turned out to be a clear overkill, which spurred panic. I think the ruble will stabilize if, of course, speculators are removed from the foreign exchange market and foreign currency is sold only for importers and people who transfer money abroad within reasonable limits to relatives or are going on a business trip in accordance with the regulations. The rest is to block the channels of currency leakage. Then our foreign exchange inflow will normalize again.
You know, we have a very positive trade balance. Mandatory sale of 80% of foreign exchange earnings has been introduced. If this revenue is sold on the stock exchange, then the amount of currency will be more than what importers need. We will have a surplus of currency. This means that the ruble will strengthen, that is, it will return to the old indicators – 80 or even 70 rubles per dollar. But until the Central Bank removes speculators from the market and allows commercial banks to become such, the ruble exchange rate will not stabilize. So, unfortunately, the monetary authorities have not yet come to their senses and have not begun to implement the correct policy of macroeconomic stabilization, I can’t give any advice other than investing in gold if possible (especially since the government removed VAT from gold). There are no other real assets and no safe haven.
– So, buy gold?
– Buy the essentials. Or invest in real estate, in something reliable. As for investments in dollars and euros… They have ceased to be a currency for us. This is no longer a currency, but some obligations of other countries that may or may not be fulfilled. So we need to look for other possibilities. But I would like to emphasize once again that with the right policies, we can very quickly stabilize the ruble and even restore its purchasing power.
– And in what perspective, after all?
– It can be done even tomorrow, you understand? The Primakov government and [Viktor] Gerashchenko did it in one week.
– Is the government capable of doing this?
– Of course it can. To do this, in general, two decisions need to be made: to fix the currency position of commercial banks and introduce the norms for the sale of foreign currency for non-trading operations, to keep the freely convertible foreign exchange market only for trading operations. That’s all. This can be written in 15 minutes and announced within a day, introduced within three days – and the ruble will stabilize.
The preplanned consolidation of the US-led Western bloc in response to Russia’s special operation in Ukraine that Washington itself provoked ended up breathing new life into the game-changing rapprochement between China and India that might otherwise not have happened so soon, let alone at all.
The US exploited Russia’s ongoingspecialmilitaryoperation in Ukraine, which Washington itself provoked by refusing to respect Moscow’s national security red lines in that country in particular and in the region more broadly, to reassert its declining hegemony over Europe. The continent surrendered its strategic sovereignty to its transatlantic patron without firing a shot, and they’re now all increasingly pressured to follow Poland’s “de-Russification” lead by drastically curtailing and ultimately completely cutting off their ties with that Eurasian Great Power. The consolidation of this US-led Western bloc amidst the latest tensions in the New Cold War’s Western Eurasian theater between Russia and the US couldn’t be without consequence for its Eastern Eurasian theater between China and the US.
China astutely observed that regional rival India with whom relations have entered an unprecedented low in recent years following summer 2020’s clashes over the Galwan River Valley has impressively practiced a policy of principled neutrality by refusing to take its Western partners’ side against Russia. Some in Beijing were growing concerned that their counterparts in New Delhi were prepared to play a similar vanguard role against the People’s Republic as Poland plays against Russia but those worries were removed after watching how confidently India defied its partners’ pressure in defense of its objective grand strategic interests. Furthermore, the complications in Indian-American relations since summer 2020 also contributed to New Delhi recalibrating its multi-alignment policy in favor of Russia.
Ironically enough, at precisely the moment when the US could have decisively turned India into its top anti-Chinese vanguard in Asia, former President Donald Trump’s administration inexplicably abandoned it and began abusing this Great Power as though it were just another Global South state. Being the proud civilization-state that it is, India couldn’t tolerate this for long and ultimately realized that it was being manipulated as a proxy against the People’s Republic without receiving anything of tangible benefit in return. This insight contributed to its strategists’ recalibrating their country’s multi-alignment policy by inviting President Putin to visit last December and thus beginning the new era of Russian-Indian relations whereby these two Great Powers are informally attempting to assemble a “Neo-NAM”.
The revival of the Old Cold War-era Non-Aligned Movement in the New Cold War context is intended to create a third pole of influence in the present bi-multipolar transitional phase between unipolarity and multipolarity so as to maximize the strategic autonomy of those Great Powers and comparatively smaller countries caught between the American and Chinese superpowers’ global rivalry. Nevertheless, only one of those two primary protagonists is in support of the international principles enshrined in the UN Charter, and that’s China. This means that the People’s Republic can actually assist the Neo-NAM to a certain degree as a means of reducing its members’ dependence on the declining American unipolar hegemon and thus accelerating the ultimate transition to multipolarity.
That insight explains one of the reasons behind the unexpected rapprochement between Asian rivals China and India that became undeniable following Foreign Minister Wang Yi’s unscheduled trip to New Delhi after first visiting Islamabad for the Organization of Islamic Cooperation’s (OIC) Foreign Ministers Conference and then paying a similarly unscheduled trip to neighboring Kabul. This historic South Asian sojourn was intended as a peace mission overseen by the top diplomat of the People’s Republic, all with the intent of ensuring stability and certainty in this geostrategic region through which multiple global processes are presently converging. It can therefore be rightly described as game-changing since it signals that the US’ efforts to divide and rule China and India have failed.
In fact, one can even conclude that the preplanned consolidation of the US-led Western bloc in response to Russia’s special operation in Ukraine that Washington itself provoked ended up breathing new life into this game-changing rapprochement that might otherwise not have happened so soon, let alone at all. After the US prompted India to flex its strategic autonomy through its policy of principled neutrality and thus showing the world that it’s still truly as independent as it’s always claimed, China keenly took note and realized that now was the perfect time to initiate a high-profile outreach to its rival in pursuit of their shared interests related to accelerating the ongoing global systemic transition to multipolarity. United by their equally excellent strategic partnerships with Russia, China and India began talking again.
It’s this resumption of interpersonal dialogue between the top Chinese and India diplomats that represents one of the most counterproductive consequences of the US-led West’s preplanned response to Russia apart from President Putin’s geo-economic judo move announcing that his country will only accept rubles from newly designated unfriendly countries for their energy payments. Taken together, these outcomes prove that America hadn’t fully thought everything through when it decided to provoke Russia into commencing its ongoing operation in Ukraine to uphold the integrity of its national security red lines. Other than the symbolically prestigious consolidation of the US-led Western bloc, everything else runs the risk of being utterly disastrous for America, especially if China and India end up reconciling.
Ed Note: Mr Lavrov held various pressers in his travels to China, India and the meetings between Afghanistan’s neighbouring countries (Russia, China, Iran, Pakistan, Tajikistan, Turkmenistan and Uzbekistan). If you are interested, that speech contains the rebuilding of Afghanistan and the progress being made. It is here: https://www.mid.ru/en/foreign_policy/news/1807302/
The main take-away (and there are many) from Mr Lavrov’s visits, is of course this:
A new reality is taking shape: the unipolar world is irretrievably receding into the past and a multi-polar world is being born. This is an objective process that cannot be stopped. There won’t be one single ruler in this new reality. All key states with a decisive influence on the world economy and politics will have to come to terms. Being aware of their special status, they will ensure the observance of the fundamental principles of the UN Charter, including the main one – the sovereign equality of states. Nobody on Earth will be considered a second-rate player. All nations are equal and sovereign.
Instead of featuring all the pressers and speeches, this time we focus on India, because the detail level of a new financial system becomes clearer. This is the source: https://www.mid.ru/en/foreign_policy/news/1807582/
Posted by Amarynth
1 April 2022 18:13
Foreign Minister Sergey Lavrov’s answers to media questions following talks with Minister of External Affairs of India Subrahmanyam Jaishankar, New Delhi, April 1, 2022
Question: How would you assess your talks with the minister? How can Russia support India at a time when it faces security challenges from its neighbours?
Sergey Lavrov: The talks can be characterised by the relations which we have developed with India for many decades. Our relations are a strategic partnership, even a specially privileged strategic partnership, as our Indian friends called it some time ago. And this was the basis on which we have been promoting our cooperation in all areas: the economy, military-technical, humanitarian, investment and many other fields.
And I believe that India’s foreign policy is characterised by independence and by concentrating on its own legitimate national interests. The same policy foundation exists in the Russian Federation, and this makes us, as big countries, good friends and old partners, an important part of international relations.
We have always respected each other’s interests and we always tried to accommodate the interests of the other. This was the underlying approach to our discussion, which covered all bilateral areas of cooperation, and covered, of course, international and regional issues. The situation in the region is not perfect, as with any other place in the world. We support Indian efforts to consolidate the regional countries and promote mutually beneficial projects in South Asia in particular.
Question: For a long time, Russia has been building close relations with the Western countries. Today, economic cooperation has been virtually destroyed. You are on your first Asian tour since the start of the special operation in Ukraine. First you visited China, and now India. Does this mean Russia will seek replacement markets for oil and gas in this region?
Sergey Lavrov: I believe China and India are natural destinations for this tour. Both countries are Russia’s close partners. The three of us participate in a number of international formats, including BRICS, the SCO, and formats that have developed around ASEAN: the East Asia Summit (EAS) and the ASEAN Regional Security Forum (ARF). There is also the RIC (Russia, India, China) format. RIC Foreign Ministers have met a couple of dozen times since its inception (more than twenty years ago). The last meeting took place in the autumn of 2021. A detailed document was adopted reflecting our common approaches to a number of international issues. It paves the way for further actions in this direction.
In China, my colleague, Chinese Foreign Minister Wang Yi, and I discussed the further activities of the RIC association. Today, Minister Subrahmanyam Jaishankar and I discussed ways to develop this format and use it more intensively in the interests of stabilising international relations and ensuring equality in international affairs. This is especially relevant given that all the three countries – Russia, India and China – are members of the UN Security Council now. So we have many plans.
As for markets, we have never imposed our products on anyone. If countries that are interested in trade with Russia have specific needs and want to expand their range of imports, we are always ready to make agreements based on a balance of interests and mutual benefit.
Question: A question regarding potential talks between Vladimir Putin and Vladimir Zelensky. Do you know which country they might be held in? The talks started in Belarus and were continued in Turkey. Israel offered mediation as well. When might a peace treaty be initialised between the Russian and Ukrainian foreign ministries?
Sergey Lavrov: There are no approved plans for this. The talks must continue. Our negotiators commented on the latest round of talks in Istanbul where the Ukrainian representatives “put on paper,” for the first time, their vision of the agreement that must be reached. This needs to take shape first. We are preparing a response. There is some progress there. Above all, they recognised that Ukraine cannot be a bloc country, that it cannot “find happiness” by joining the North Atlantic Alliance. Nuclear-free, bloc-free, neutral status is already recognised as an absolute must. Likewise, we saw much more understanding of one more reality. I am referring to the situation with Crimea and Donbass. We are still working on the next potential meetings. We will announce updates on this.
Question: What were the key subjects of your conversation with Indian Foreign Minister Jaishankar? Did you discuss the introduction of an efficient rouble and rupee settlement mechanism for bilateral trade, including India’s purchases of Russian oil? Was the issue of cooperation between Russia, India and China touched on at the talks in Beijing and in New Delhi?
How do you assess India’s fears of a possible delay in supplying Russian military equipment, including the S-400, due to the crisis in Ukraine?
Sergey Lavrov: Well, as regards the use of the rouble and rupee in our financial and trade transactions, I would like to remind you that many years ago we started moving away from the dollar and the euro to the more extensive use of national currencies in our relations with India, with China and many other countries.
Under the circumstances, I believe this trend will be intensified, which is only natural and obvious. We are ready to supply India with any items it wants to purchase. I already referred to this. We have very good relations between the trade ministries, the ministries of finance, and I have no doubt that this would be a way to bypass the artificial impediments that have been created by the illegal unilateral sanctions by the West.
This relates also to the area of military-technical cooperation. We have no doubt that a solution would be found; the respective ministries are working on this.
Question: The United States is exerting pressure on India to involve it into an anti-Russia campaign. Does this pressure affect relations between Russia and India? Are you confident that our countries’ partnership will not be damaged?
Sergey Lavrov: I am confident about this because our partnership does not depend on opportunistic considerations. Moreover, it does not depend on illegal methods of dictate and blackmail. It is absolutely pointless to apply such a policy to countries like Russia, India, China, and many others. This shows that those who are offering and implementing such a policy, who impose it on others do not have a good understanding of the national identity of the countries they are trying to talk to in a language of blackmail and ultimatums.
Question: How do you look at India’s position on this ongoing war? What did you tell your Indian counterpart? Did you offer oil supplies to India?
Have you reached a compromise on the rupees and roubles arrangement for payments?
Even Mr Putin and you are sanctioned by the US and the EU: How do you look at this scenario?Sergey Lavrov: Every Russian has been sanctioned by the US and the European Union, so there is no surprise to me. The Western colleagues just made their real face known these days. I do not have the slightest doubt that most countries on Earth understand what is going on and understand the inadmissibility of the manners which are being demonstrated by our Western – very, very unreliable – partners.
As regards India’s position on the developments in Ukraine, – you called it a war, which is not true, as it is a special operation, which is being conducted with maximum attention being paid to not do any damage to the civilian infrastructure. The military infrastructure is being targeted, and the aim is to deprive the Kiev regime of the capacity to pose any threat to Russia. This capacity has been built and strengthened for many years by the United States and other NATO countries, which wanted to make an “anti-Russia” out of our neighbouring and fraternal country.
I already mentioned [payments in] roubles and rupees. This process is going on for many years. The reason for moving to national currencies is again the absolutely unreliable nature of our Western counterparts. We do not want to depend on a system, which could be closed at any time; and we do not want to depend on a system which has masters who can steal your money overnight.
I already mentioned oil supplies and the supplies of high-technology to India. If India wants to buy anything from us, we are ready to discuss it and reach mutually acceptable forms of cooperation.
Question: Considering the Western sanctions, will Russia boost trade with India and in which areas?
Sergey Lavrov: This is the normal course of events. We are open to mutually beneficial and mutually respectful relations in all areas, including trade and investment activity. When you encounter absolutely unjustified hostility and reaction that goes beyond all reasonable limits in one part of the world, it is, objectively, only natural that your partners elsewhere start playing a greater role in you trade and economic activity. This is not surprising. This has happened before. The sanctions were not imposed yesterday. We have been under intense sanctions imposed by the West and some other countries for many years now – at least, ten years. We already have experience in living under such circumstances and living in a way that is good for both us and our partners. Rest assured that this is how it will be this time as well.
Question: Does it bother you what Western countries think of Russia’s plan “B”? Refusing to pay for gas in roubles, France and Germany said they would not accept such an approach by the Kremlin since it violates the current contracts. What do you think?
Sergey Lavrov: As regards gas supplies to Europe, President Vladimir Putin was very elaborate: he announced the signing of a decree, which provided for a scheme acceptable, as far as I could understand, to the Western countries. We cannot use the old scheme, because, as I said, they paid us in their currencies and then they seized our accounts. It is like the gold rush in the United States at some point when the country was founded by those who fled Europe because they were outlaws, as far as I recall. So the scheme that was presented is an honest scheme. It allows us to, eventually, get payments for gas in roubles, and that was the original goal.
Question: Do you think that India has not taken a hawkish stand against Russia, despite the pressure from Western capitals, because of its dependence on the discounted crude oil and also the import of S 400 missiles and kalashnikovs?
Sergey Lavrov: You know, I cannot even imagine that India is taking some stands because India is under pressure. We respect, as I said earlier, India’s concentration on its basic principles, namely, that the Indian foreign policy is built upon the legitimate national interests of that country and its people. That is, basically, all I can say in response to your question.
Question: There is much talk that India may act as a mediator between Moscow and Kiev. More than that, they say that Indian Prime Minister Narendra Modi may mediate talks between the Russian and Ukrainian presidents. Did you discuss this issue and is it possible?
Sergey Lavrov: I did not hear talks like this. We respect the well-considered position of India, which does not give in to pressure through blackmail and dictates. Many other serious countries, which do not accept language like this, are taking the same approach. Probably, India will see a role for itself in finding a solution to the problems that have led to the current situation, I mean the issue of equal and indivisible security in Europe, and will help assert the principles of justice in these matters, and explain to our mutual partners that their attempts to deny Russia the right to security guarantees are futile.
We want security guarantees to be provided to Ukraine, all European countries and Russia, in keeping with the documents which have been approved by the OSCE over many previous years and have declared the principle, according to which no country should seek to strengthen its security at the expense of the security of others. The root of all problems lies here.
The West has ignored its obligations and worked to present Russia as a direct military and ideological threat, playing up to neo-Nazi trends and practices in Ukraine. I think if India with its position of justice and rational approaches to resolving international issues manages to support these processes, nobody is likely to object.
Question: It has been reported around the world for several weeks now that the Russophobic sentiment is sweeping entire regions. People are suffering from things not seen since the Middle Ages and things they bear no responsibility for. How does the Foreign Ministry respond to this? Perhaps dedicated centres for collecting information or assistance centres will be formed? What will happen next on this track and what else needs to be done?
Sergey Lavrov: We have commented on this situation many times. It really is reminiscent of the Middle Ages, real Russophobic mayhem. It’s as if the West was masquerading as a polite and well-mannered partner in the international arena for all these decades. In fact, this outwardly presentable mask was hiding its true face. It has now manifested itself on a scale that no one could even imagine. Everything Russian face ostracism and prohibition.
The Foundation for Supporting and Protecting the Rights of Compatriots Living Abroad has been operating in dozens of countries for a long time now helping organise legal assistance to compatriots in challenging circumstances.
Modern challenges call for global efforts at the level of international organisations. They must highlight the unacceptability of such “actions” on the part of our Western partners. Discrimination is rampant and the “values” that the West has been touting for many years (presumption of innocence, inviolability of property, free market rules, etc.) have been torn up.Not to mention what is being done to religion and the Russian Orthodox Church not only in Ukraine, but also in the EU countries which consider themselves civilised. This conversation is overdue. Everything that is happening now is directly undermining the obligations of the organisers of these “actions” under the UN Charter and the OSCE. Without this conversation, we will not be able to overcome the situation the West has created not only in its relations with Russia, but also in international relations. This is a message for all of us.
Over the past couple of years, the United States has completely thwarted all attempts by Europe to strive for independence or strategic autonomy. Lone voices that are heard, in particular from France, no longer decide anything. Germany has completely reconciled itself to its role as US ally, blindly following in the wake of US policies. Everything is being done to recreate a unipolar world and proclaim this process as a “fight of democracies against autocracies.” What kind of democracy is this? As things stand, with Washington in the lead, they themselves, collectively, have become an autocracy in the international arena. They believe they can do anything and get away with it.
Should the United States claim to face a threat somewhere around the globe (as was the case in Iraq, Libya, or Syria thousands of kilometres away from their coasts, which usually turns out to be fake or based on false evidence) Washington is “entitled” to do what it wants, such as kill hundreds of thousands of civilians or level whole cities to the ground, such as Raqqa, Syria. This approach will inform the West’s future actions in all regions unless it is stopped.
Should any other country, not only Russia, see a direct threat in weapons, military biological programmes (as it lately transpired), or the creation of foreign military bases in a neighbouring country (in this case, right on the border with our country), the West considers this, as well as the fact that Russia defends its own interests, unacceptable. This is much deeper and broader than just the special military operation in Ukraine and ensuring its neutrality under collectively assumed security guarantees. This is a matter of the world order, in which all the rules of decency, international law and their own “values” (the West promoted them as part of its model of globalisation) were trampled upon by the West itself.
You can’t get away from having this conversation, and China, India and other countries realise this.I read the speech by Indian Foreign Minister Subrahmanyam Jaishankar at yesterday’s meeting on Indian-British cooperation. He noted that the newly arisen issues in international affairs touch on the very foundations of the world order, which must change to become equal and multipolar, without sovereigns and dictators.
Question: My first question is, why India? Secondly, Russia is actually hammered by a lot of sanctions, including on SWIFT-code. Will you recommend India or any other friend country to use an alternative payment gateway?
Sergey Lavrov: Why India? Because we are friends and we regularly exchange visits.
As for SWIFT, for many years, as I said, when the nature of our Western partners, who are entirely unreliable, became more and more obvious and known, we started developing national payment systems. In Russia, the Central Bank several years ago established a system of communication of financial information. India has a similar system which is called RuPay. And it is absolutely clear that more and more transactions would be done through these systems using national currencies, bypassing the dollar, euro and other currencies, which proved totally unreliable.
موقف غالبية بلدان الجنوب، وبينهم حلفاء تاريخيون للولايات المتحدة، من النزاع الدائر في أوكرانيا، ورفضهم إدانة روسيا وفرض عقوبات عليها، مؤشّر قوي جديد إلى التراجع المستمرّ والمتسارع للهيمنة الأميركية. مَن كان يتصوّر، حتى بضع سنوات خلت، أن السعودية مثلاً، التي سارت خلف واشنطن طوال عقود الحرب الباردة وبعدها، واندرجت في استراتيجيتها العامّة ليس في الشرق الأوسط وحده، بل في أميركا اللاتينية وأفريقيا أيضاً، سترفض الانحياز إليها في مواجهتها الحيوية الراهنة مع موسكو؟ أمّا الهند، التي تحوّلت منذ مطلع الألفية الثانية إلى حليف رئيس، بنظر الاستراتيجيين الأميركيين، في مقابل الصين، وشريك بارز في «كواد»، فإن موقفها من النزاع في أوكرانيا، وقرارها مضاعفة وارداتها من النفط الروسي بأربع مرّات، والدفع بالروبل وليس بالدولار، ولّد صدمة جديدة لهؤلاء الخبراء الاستراتيجيين. المقاربة التركية للنزاع في أوكرانيا، وإن كانت مختلفة عن تلك المذكورة، تتمايز بوضوح عن نظيرتها الأميركية: هي أمدّت كييف بالسلاح، خاصة بمسيّرات «بيرقدار»، لكنها رفضت فرض عقوبات على موسكو، وتلعب دوراً نشيطاً في الوساطة بين الطرفَين.
هذا بالنسبة لحلفاء واشنطن، أمّا خصومها، فإن مواقفهم تتراوح بين الدعم العلني أو الضمني لروسيا. لكلّ دولة من دول الجنوب دوافع خاصة تفسّر تموضعها خارج المعسكر الذي تقوده الولايات المتحدة في مجابهتها المحتدمة مع منافِسيها الاستراتيجيين في روسيا والصين، وفي تنمية شراكات متعدّدة الأبعاد معهما، غير أن المحصّلة النهائية لمثل هذه التموضعات والشراكات، تشكّل منعطفاً حاسماً في مسار العلاقات الدولية منذ نهاية الحرب العالمية الثانية. فعجز الإمبراطورية المنحدرة عن ضبط الحلفاء، ناهيك عن التصدّي الناجح للأعداء، يشي بتفكّك منظومة السيطرة الغربية على المعمورة، وبداية مرحلة طويلة من الصراعات الدولية والإقليمية في بقاع مختلفة منها، ستحدّد مآلاتها شكل النظام الدولي الذي سيعاد بناؤه. ولا شك في أن للفوضى العالمية الآخذة في الاتّساع، تداعيات أكيدة ووازنة على صراعنا المديد مع المشروع الاستيطاني الصهيوني.
حالة الفوضى الصراع بين الدول الكبرى ليس صنواً للفوضى بالضرورة. ففي مرحلة ما بعد الحرب العالمية الثانية، انقسم العالم إلى معسكرَين، ضمّ كلّ منهما مجموعة من الدول والأحزاب والتنظيمات ذات الخلفيات الأيديولوجية والسياسية المتعدّدة، ما أدى إلى نشوء نظام القطبية الثنائية. كانت للقطبَين الرئيسيَن، أي الولايات المتحدة والاتحاد السوفياتي، قدرة تأثير وضبط تختلف درجاتها مع أطراف معسكرَيهما، التي تمتّع بعضها بهامش استقلالية نسبية. غير أن مَن يستعرض الحروب والنزاعات التي دارت في تلك المرحلة، سيجد أن كلّاً من القطبين امتلك إمكانية التدخّل في مسارها، و»إقناع» حليفه المحلي أو الإقليمي بالتصعيد أو بتخفيض حدّة الصراع في فترات معينة، وبـ»اقتراح» حلول لهذه الصراعات، تنسجم مع الأجندة الدولية للقطب المعنيّ. فالاتحاد السوفياتي الذي دعم الدول العربية والمقاومة الفلسطينية في صراعها مع الكيان الصهيوني، ساهم في إقناعها بأن يكون هدفها النهائي هو التسوية السلمية على قاعدة القرارات الدولية، وإن لم تكن هذه المساهمة هي العامل الوحيد الذي يفسّر قبول الأطراف الرسمية العربية والفلسطينية بهذا السقف السياسي. الأمر نفسه ينسحب، وإن بأشكال ودرجات مختلفة، على حروب ونزاعات وقعت آنذاك، وسعى كلّ من القطبَين إلى توظيفها في إطار استراتيجيته العامة، أو ضبطها لمنع اتّساعها واستعارها.
الفراغ الناجم عن تراجع الهيمنة الأميركية، وعدم وجود قوى مرشّحة للحلول مكانها، ستعمل القوى الإقليمية على تعبئته
بعد انهيار الاتحاد السوفياتي، حاولت الولايات المتحدة فرض نظام الآحادية القطبية، وشنّت لهذه الغاية حروباً عدوانية مدمرة، غير أنه بات من الواضح أنها فشلت في ذلك تماماً. ما نشهده اليوم هو مجابهة بين معسكر أطلسي بقيادة الولايات المتحدة، ومحور روسي – صيني أصبحت أوكرانيا إحدى ساحاته. لكن بقيّة العالم، أي بلدان الجنوب، وبينها قوى إقليمية وازنة، اختارت «عدم الانحياز» إلى أيّ من الطرفين. أصبح «عدم الانحياز»، ولو الظرفي، بالنسبة لهذه البلدان، أسهل ممّا كان عليه في فترة تشكّل المنظّمة التي تحمل هذا الاسم، والتي تعرّض أعضاؤها لضغوط هائلة، من قِبَل الولايات المتحدة أساساً، لحملهم على الانحياز أو إسقاط أنظمتهم الوطنية. وعلى رغم احتفاظ عدد من بلدان الجنوب بتحالفاتها الدولية، فإن هامش استقلاليتها قد اتّسع، وأضحت تعطي الأولوية لأجندتها الخاصة، حتى ولو لم تتقاطع مع أجندة الحليف الدولي. يقول فرانسيس فوكوياما، في مقابلة مع «ذي نيو ستايتسمان»، بأننا «ربّما نرى نهاية نهاية التاريخ». الفراغ الناجم عن تراجع الهيمنة الأميركية، وعدم وجود قوى دولية مرشّحة حالياً للحلول في مكانها، في منطقتنا وفي مناطق أخرى، ستعمل القوى الإقليمية على تعبئته من خلال النزاع في ما بينها أو التوصّل إلى تفاهمات وترتيبات.
أولوية فلسطين
منذ أن أدرك الحلفاء الإقليميون للولايات المتحدة قرارها «التخفّف من أعباء الشرق الأوسط»، وهو توجّه سيتعزّز في سياستها الخارجية في سياق حربها بالوكالة مع روسيا في أوكرانيا، وهم يعملون على بناء تحالف «عربي» – صهيوني في مواجهة قوى المقاومة في الإقليم، وفي القلب منها إيران. هذه هي الغاية الحقيقية لـ»اتفاقية أبراهام»، ولقمم شرم الشيخ والنقب. غير أن الإمارات، وهي الطرف الرئيس الذي اشترك في صياغة هذا المشروع أيام إدارة دونالد ترامب، شرعت من جهة أخرى في السعي لتطبيع علاقاتها مع إيران، وتطوير المصالح المشتركة معها. السعودية لم تشارك حتى الآن رسمياً في التحالف المذكور، لكن وجود البحرين تمّ بعد ضوء أخضر منها. إلّا أن ولي عهدها دعا بدوره إلى إقامة علاقات حسن جوار مع إيران. تعلم جميع أطراف هذا التحالف هشاشته، وفي مقدّمتها الكيان الصهيوني. وتعلم قوى المقاومة ذلك، وفي طليعتها الشعب الفلسطيني، تغيُّر أولويات القوى الغربية، وانشغالها بمواجهات استراتيجية كبرى مع روسيا والصين ستزداد حدّة في المدى المنظور، وتستتبع تراجع أولوية صراعات المنطقة على أجندتها. هذا ما يثير ذعر قادة الكيان، وما يفسّر التقاط أبناء الشعب الفلسطيني وتنظيماته المقاوِمة لهذه الفرصة وتصعيد العمل المقاوم. انفجار انتفاضة شعبية عارمة ضدّ الاحتلال مدعومة بالنار، نار البنادق والصواريخ، سيفرض التراجع على العدو، وسيقلب الطاولة على مشاريع التحالفات الخيانية. الفوضى العالمية الراهنة هي السياق الأنسب لفرض أولوية فلسطين على جدول أعمال الجميع، عبر جولة جديدة من المجابهة تبني على ما حقّقته معركة «سيف القدس» المجيدة.
Let’s start with the largest and most impactful news today:
-Another emergency helicopter evacuation in Mariupol has been shotdown, ironically as claimed by DPR – with a requisitioned American Stinger missile. Remember I said those missiles are junk against Russian craft outfitted with advanced DIRCM (Vitebsk L-370 and Rychag AVM) but Ukr craft are not so fortunate.
There is various rumor out there and it’s too early for much of it to be confirmed but here’s some tidbits I can report:
-There was 3 helicopters previously shotdown in the past days, apparently whoever they were trying to evacuate is of extreme importance as they’re desperately sacrificing many choppers and crews for this.
-Today there are reports there were not one but 2 shot down, and 2 actually got away. Some say there were 4 total choppers that came for the evac at night flying extremely low to evade radars coming in over Berdyansk and then onto the Azov Sea. Maybe those Stingers in DPR hands weren’t so effective.
-Now this is very speculative rumor but Gleb Bazov reports the following claims:
“Sources indicate that, at #Azovstal, a group totaling 20—of #US (#American) & #UK (#British) military advisors of #Azov defenders, as well as several UK #SBU (#Ukraine|ian secrete police) advisors—is holed up, together with Azov fighters. They were too late to evacuate.
Sources indicate that, at #Azovstal, a group totaling 20—of #US (#American) & #UK (#British) military advisors of #Azov defenders, as well as several UK #SBU (#Ukraine|ian secrete police) advisors—is holed up, together with Azov fighters. They were too late to evacuate.”
-Take this with a large grain of salt BUT, if true then it would clearly explain the extremely disproportionate and desperate efforts to evacuate these surrounded VIP targets in Azovstal factory. Why else would Ukr command risk the downing of so many helis and crews which were lost in their attempt to exfiltrate these high value personnel?
There were at least 13 dead that we know of so far and at least 2 survivors. One of them is already being interviewed and giving up information, in fact he appears to be the source of the info about the other escaped choppers and how many there were total, etc. Here’s one of the survivors being interviewed:
Here is a video of the aftermath, warning – many gruesome scenes are shown at the crash site.
I’m sure in the coming hours there will be a lot of important information extracted from them. But ultimately, these desperate last ditch operations are an obvious sign that Azov in Mariupol has collapsed and the rats are fleeing the sinking ship.
-In other news, South Ossetia has now joined DPR / LPR in announcing they will hold a referendum to join the Russian Federation proper. Ossetians immediately took to the streets in celebration:
“1. The referendum will be held separately from the presidential elections, which are scheduled for April 10. 2. Consultations are already underway on legal and practical issues of organizing a referendum on joining Russia. 3. The State Duma declares that the dates for the referendum are May-June. Legislation allows South Ossetia to become part of Russia, if it expresses such a desire. 4. After the reunification of South Ossetia with Russia, South Ossetia wants to unite with North Ossetia so that all Ossetians can live in one subject of the Russian Federation.”
It appears Russia is really consolidating its territories. We’ve already announced that LPR / DPR will be holding referendums once the hostilities are ended, in order to join the RF. Now earlier today Ukrainian Intelligence released a statement that Russia is “planning to hold an independence referendum in Kherson”. This could be propaganda from their side, but if not then it can be an inkling into Russia’s plans, and a confirmation of theories that Russia may intend to take not just LPR / DPR but the large swath of land stretching towards Odessa as well. Kherson is one of the regions where Russia is already setting up administrative infrastructure including Russian broadcasting, Ruble payments, etc.
This brings me to another important topic: Operation Z has clearly ruptured the world order and has precipitated tectonic shifts which are happening both as direct and indirect result of Russia’s actions. The unipolar globalist world order is now finally and truly crumbling and in its place, ushering in what China/Russia has now called the ‘Fair World Order’.
1. Syria’s Assad recently visited and was welcomed in the UAE, which was his first visit to an Arab country since the onset of the Syrian war in 2011. The rapprochement ended with the Crown Prince of UAE calling for all foreign powers illegally occupying Syria to leave and many bilateral trade/economic deals were discussed.
3. India and China, the world’s 1st and 3rd most powerful economies by GDP PPP (a particularly relevant metric in light of what we’re talking about) are exploring increasingly major avenues of settlement mechanisms in native currencies. https://www.rt.com/business/552993-russia-india-swift-alternative-trade/
A tectonic reorganization of the world order is happening before our very eyes, and experts increasingly signal the coming death of not only the dollar, but the western financial system.
Now onto some developments on the ground. There aren’t a lot to speak of due to the fact that Russia is currently conducting its major reorganization and repositioning of troops in preparation for the beginning of Phase 2, as we all now know. Phase 2 will likely begin with the capture of Mariupol which now appears more eminent than ever, given today’s news of desperate, last ditch helicopter escape attempts.
In general, around Kiev and Kherson, Russia has dug in defensively. In Izyum and the north Mariupol/Donbass line, Russia continues to fight. The largest gains in the past 24 hours have been Russia seizing towns such as Zolota Nyva just east of Velyka Novosilka, which is an important Ukrainian command center in that region. It will likely be the first and biggest target to liberate once Phase 2 begins. For now it seems RF forces will continue surrounding it.
-A few comments on the operation in general. Many people continue to question the efficacy of Russia’s planning and general strategy. Here are a few reminders. From the horse’s mouth itself:
The advisor to Zelensky, Arestovych today has released a statement saying that, “Russia has practically destroyed our entire defense industry, and are now finishing it off.”
Here’s General Macgregor’s statement from earlier:
“Retired US Army Colonel McGregor: ✔️ I think in a few weeks people will know that the losses of the Ukrainian forces are very high, much more than anyone admits. I think there will be a different view on Russian operations.”
Here is one Russian analyst from Telegram whose view I mostly agree with. His description of the Operation Z so far:
“Let go of panic. 1. There is virtually no offensive near Kiev, Chernigov and Sumy. They hoped that they would take it with a light cavalry attack, as in 2014. But it didn’t work out. 2. The grouping needs to be rotated and increased. These are additional reserves. 3. The 2014 plan didn’t work. At the first stage, those territories that managed to occupy were lucky. Now just fight by all the rules. And this means combined arms combat and leveled with the ground, otherwise nothing. Attacking in all directions is unrealistic. 4. The first step is to finish off the grouping in the Donbass. Under it, it is realistic to collect another 15-20 thousand reserves and things will go more fun. Then Zaporozhye, Nikolaev and Odessa. It will not be possible to increase the grouping in all directions. 5. You can’t get through to Nikolaev from the south. There is the Southern Bug River Delta, there is no room for maneuver. You need to approach from Zaporozhye and Kryvyi Rih. Otherwise, the distances there are such that the enemy keeps under fire control a narrow supply line from Kherson itself. 6. Near Nikolaev and Odessa, a powerful enemy grouping is sitting, the second largest after the Donbass. Plus, units of the Armed Forces of Ukraine and the territorial defense from Kherson departed there. As a result, the light units of the landing force brush aside the second largest grouping there. And they successfully brush aside, no one can poke their nose at Kherson. 7. The grouping near Nikolaev is aggressive, it is impossible to leave it in the rear. There are no resources to simultaneously finish off the grouping in the Donbass and in Nikolaev, and even go to Kyiv. Therefore, we focus on the south direction.
This is not a drain, this is a revision of doctrine. Nobody is going anywhere.”
-So, the important takeaways. What he says is, Russia HOPED that they could accomplish another takeover like the 2014 Crimea scenario ‘without firing a shot’ by doing what he calls a ‘light cavalry attack’ on the major capital cities like Kiev and Kharkov. This is in reference to the Russian light VDV & Spetnaz assault which moved swiftly on those cities in the opening, with mostly BMD and Tigr vehicles and without much heavy support.
In short, this was a calculated gambit by Russia, but it in no way invalidates the greater overall plan, which still would have required those multiple fronts to be established for the reasons we’re now all familiar with (which I spoke about in the last update) of maneuver warfare and pinning strategies.
Think about it, if you have a chance to possibly end the entire war in a day or two in a fast lightning attack to symbolically capture key cities and possibly the country’s leadership, wouldn’t you take it? But as Andrei Martynov explained once, how military planning works is you never bank on just one strategy. There are many “envelopes” as he described in his video, and you take the first plan, if it doesn’t work, you open up the next envelope for the 2nd contingency, etc. So, of course naturally Russia would take the chance to see if it can quickly bring an end without much bloodshed, why wouldn’t it? But don’t think in a million years, Russia would ever have completely banked on such a low probability success, and in fact had full ‘main’ and much more reliable battle plans to fall back on if the gambit didn’t work out.
Now here are the reasons for why Russia would have had to open all those multiple fronts anyway, and why attacking in many directions at once was not just some foolhardy plan that “didn’t work”. In fact it succeeded in most of its important operational objectives as I will outline below.
Russia absolutely had to secure some of the key targets of potential false flags by the Kiev regime. This meant securing places like the Chernobyl plant, Zaporizhzhia nuclear plant, possibly the Kharkov nuclear institute, various important dams and infrastructural objects which, if detonated, could create mass civilian casualty false flags that would be blamed on the Russians, and of course the infamous Biolabs.
-Chernobyl was a must, because its name alone brings a haunted specter to most of Europe and the world, and Ukraine script writers would have loved (and attempted to) use it for a big false flag scenario. So this absolutely required Russian forces to enter from the northern axis to secure this.
-Zaporizhzhia. What most don’t know is this plant is not only the #1 largest Nuclear plant in all of Europe, but in top 10 in the world, with only some Asian plants ahead of it.
So clearly such a high value target had to be secured as it had the potential for an unprecedented false flag (and we almost came to that if you recall) and various nuclear blackmail attempts from the Kiev regime. So this provides full validation for Russia’s axis from the south towards Zaporizhzhia.
In the same region as you know, Russia had to unblock the dam stifling all water to Crimea. And of course then there are the biolabs, which Russia had to capture in a timely manner not only to prevent them being used to stage false flags, but to prevent the U.S. intel exfiltration of important and incriminating documents which Russia luckily got in time from some of them. Seeing as how there are many biolabs in multiple directions, this alone justified Russian advances towards certain disparate fronts in the opening in order to capture these very significant targets.
So in short, there are extremely clear reasons for why Russia didn’t follow a simple-minded strategy some people seemed to think would have been ‘more conducive to winning the conflict quickly’ such as the idea of sending all troops only to the Donbass and clearing the cauldron first, while leaving the rest of the country to finish later. This idea is very shortsighted for the above reasons as there was a whole array of critical objectives Russia had to achieve simultaneously.
People not well versed in military matters tend to think in a very binary fashion, where something is either black or white. That’s not how things work. Operational objectives are conceived in a fashion where one action can achieve as many collateral objectives as possible for the sake of efficiency; in short: killing multiple birds with one stone. So as I’ve outlined, as an example, when Russia had to establish an offensive from the north to secure Chernobyl, and then to also pin down forces in Kiev nearby so that they could not relieve the groupings in the East, the other multifaceted objective would have also called to ‘attempt’ to seize Kiev with a quick lightning strike just to see if it was possible to end the war early with as little bloodshed as possible. Unfortunately, Ukrainians and 5th/6th columnist seemed to have misread this chancy gambit as some sort of major ‘Russian failure’ as if Russia’s sole and only objective was to take Kiev and now it has failed. No, as I have outlined above, it was a minor tertiary sub-objective as part of a much broader and more important operational battle plan which was fully successfully achieved.
Lastly, I wanted to repeat some of my calculations I’ve made in thread comments.
The other part of the collective west’s failure in correctly estimating Russia’s successes thus far has stemmed from what appears to be an incorrect calculation of Russia’s force disposition in Ukraine. You see, early on in the operation, the Pentagon made some statements about Russia utilizing 150-200k troops and “100% of all its allocated troops” and everyone, including most of us in the resistance sphere, just ran with those numbers and assumed them as base standards. But in reality, those numbers are highly questionable and there is no proof whatsoever that Russia has committed that many forces, nor has Russian MOD ever officially declared any amounts.
However, what we can glean is the following:
Russia is listed as having ~280k official troops in its ground army. However this is counting both kontraktniki and conscripts. The ratio I could find in RF armed forces is about 62% to 38% so that would leave about 173k of those as contract regulars which can be used in Ukraine (remember, Putin has prohibited conscript use)
There are an additional 45k VDV and ~15k Spetnaz and also Naval Infantry (Marines) of about 12k. The conscript percentages are much lower in them, so let’s just say there’s roughly 50k+ total usable troops from this group. Then there’s National Guard (Rosgvardia) which appears to have a massive 350k+.
My thought has been that Russia has so far not used anywhere near the ‘claimed’ 150-200k. It could be as little as 80-100k or less. But let’s just say even if they have used 150-180k, then according to my estimates, Russia could still have at the least (173k + 50k = 223k subtracted from the current estimates of troops in theater) 50-70k troops available still to inject, and much more if my own hunch is correct that Russia is using no where near the amounts the Pentagon claims (of course it conveniently fits Pentagon’s narrative to pretend Russia has exhausted all of its forces, etc). And this is not counting the National Guard simply because I’m not certain of the parameters of its use, though clearly we’ve seen many Rosgvardia troops in Ukraine. But this could add another huge amount.
So in short, I believe once Mariupol is fully captured, we could see the additional injection of tens of thousands of troops at the minimum, to finish off the Donbass cauldron. And recent reports from the frontline, written by a soldier in Izyum state that the “feeling in the air” is that a major Donbass battle / operation will begin soon, and it will go much faster than before. If Russia does inject these huge reserves and goes all out for Donbass, then we could see the cauldron collapse very quickly.
As for Mariupol, clearly it’s close to the end. Satellite photos today indicate rapid advances towards the absolute southern ends near the water.
Judging by the fires visible on Sentinel satellite imagery, fighting in central Mariupol is moving south towards the coast. It's possible this is where the remaining territory in the city where Ukrainian forces are in control. pic.twitter.com/GXYv7bdPjG
And by the way, Putin’s approval rating in Russia continues to skyrocket. I reported a while back that prior to the operation it was in the 60% range (still much higher than any western leader like Biden (sub 40%), Macron and Johnson (both in the 20-30%). As the operation started, Putin’s rating went to 70, then to 80. Now the newest Levada center polls show a massive 83%, the highest approval rating of any world leader.
And in fact on many index it is now LOWER than before the conflict. Some index had it at 83 to 1 dollar on February 22, and it is now showing as 79-81 on many indexes to the great chagrin of the west.
In fact in the biggest face slapping irony, the Ruble is now being hailed in financial circles as the greatest performing currency in the world for the month of March.
Lastly, the RF forces continue taking lots of Ukr prisoners all over:
While the Chechens and RF / DPR forces continue pounding the Azov Nazis all over:
Mariupol was battered by Ukraine’s right-wing Azov battalion well before Moscow launched its military ops. In Russian hands, this strategic steelworks port can transform into a hub of Eurasian connectivity.
Mariupol sits on the strategic Sea of Azov at the tip of the Black Sea, and is the ‘Mecca’ of Europe’s steel industry. Its conquest by Russia can pave the way for a Eurasian railroad and connectivity surge.
Mariupol, the strategic Sea of Azov port, remains in the eye of the storm in Ukraine.
The NATO narrative is that Azovstal – one of Europe’s biggest iron and steel works – was nearly destroyed by the Russian Army and its allied Donetsk forces who “lay siege” to Mariupol.
The true story is that the neo-Nazi Azov batallion took scores of Mariupol civilians as human shields since the start of the Russian military operation in Ukraine, and retreated to Azovstal as a last stand. After an ultimatum delivered last week, they are now being completely exterminated by the Russian and Donetsk forces and Chechen Spetsnaz.
Azovstal, part of the Metinvest group controlled by Ukraine’s wealthiest oligarch, Rinat Akhmetov, is indeed one of the biggest metallurgic plants in Europe, self-described as a “high-performance integrated metallurgical enterprise that produces coke and sinter, steel as well as high-quality rolled products, bars and shapes.”
Amidst a flurry of testimonials detailing the horrors inflicted by the Azov neo-Nazis on Mariupol’s civilian population, a way more auspicious, invisible story bodes well for the immediate future.
Russia is the world’s fifth largest steel producer, apart from holding huge iron and coal deposits. Mariupol – a steel Mecca – used to source coal from Donbass, but under de facto neo-Nazi rule since the 2014 Maidan events, was turned into an importer. Iron, for instance, started to be supplied from Krivbas in Ukraine, over 200 kilometers away.
After Donetsk solidifies itself as an independent republic or, via referendum, chooses to become part of the Russian Federation, this situation is bound to change.
Azovstal is invested in a broad product line of very useful stuff: structural steel, rail for railroads, hardened steel for chains, mining equipment, rolled steel used in factory apparatus, trucks and railroad cars. Parts of the factory complex are quite modern while some, decades old, are badly in need of upgrading, which Russian industry can certainly provide.
Strategically, this is a huge complex, right at the Sea of Azov, which is now, for all practical purposes, incorporated into the Donetsk People’s Republic, and close to the Black Sea. That implies a short trip to the Eastern Mediterranean, including many potential customers in West Asia. And crossing Suez and reaching the Indian Ocean, are customers all across South and Southeast Asia.
So the Donetsk People’s Republic, possibly part of the future Novorossiya, and even part of Russia, will be in control of a lot of steel-making capacity for southern Europe, West Asia, and beyond.
One of the inevitable consequences is that it will be able to supply a real freight railroad construction boom in Russia, China and the Central Asian ‘stans.’ Railroad construction happens to be the privileged connectivity mode for Beijing’s ambitious Belt and Road Initiative (BRI). And, crucially, of the increasingly turbo-charged International North South Transportation Corridor (INSTC).
So, mid-term, Mariupol should expect to become one of the key hubs of a boom in north-south routes – INSTC across Russia and linking with the ‘stans’ – as well as major BRI upgrades east-west and sub-BRI corridors.
Interlocked Eurasia
The INSTC’s main players are Russia, Iran and India – which are now, post-NATO sanctions, in advanced interconnection mode, complete with devising mechanisms to bypass the US dollar in their trade. Azerbaijan is another important INSTC player, yet more volatile because it privileges Turkey’s connectivity designs in the Caucasus.
The INSTC network will also be progressively interconnecting with Pakistan – and that means the China-Pakistan Economic Corridor (CPEC), a key BRI hub, which is slowly but surely expanding to Afghanistan. Foreign Minister Wang Yi’s impromptu visit to Kabul late last week was to advance the incorporation of Afghanistan to the New Silk Roads.
All that is happening as Moscow – extremely close to New Delhi – is simultaneously expanding trade relations with Islamabad. All three, crucially, are Shanghai Cooperation Organization (SCO) members.
So the grand North-South design spells out fluent connectivity from the Russian mainland to the Caucasus (Azerbaijan), to West Asia (Iran) all the way to South Asia (India and Pakistan). None of these key players have demonized or sanctioned Russia despite ongoing US pressures to do so.
Strategically, that represents the Russian multipolar concept of Greater Eurasian Partnership in action in terms of trade and connectivity – in parallel and complimentary with BRI because India, eager to install a rupee-ruble mechanism to buy energy, in this case is an absolutely crucial Russia partner, matching China’s reported $400 billion strategic deal with Iran. In practice, the Greater Eurasia Partnership will facilitate smoother connectivity between Russia, Iran, Pakistan and India.
The NATO universe, meanwhile, is congenitally incapable of even recognizing the complexity of the alignment, not to mention analyze its implications. What we have is the interlocking of BRI, INTSC and the Greater Eurasia Partnership on the ground – all notions that are regarded as anathema in the Washington Beltway.
All that of course is being designed amidst a game-changing geoeconomic moment, as Russia, starting this Thursday, will only accept payment for its gas in rubles from “unfriendly” nations.
Parallel to the Greater Eurasia Partnership, BRI, since it was launched in 2013, is also progressively weaving a complex, integrated Eurasian network of partnerships: financial/economic, connectivity, physical infrastructure building, economic/trade corridors. BRI’s role as a co-shaper of institutions of global governance, including normative foundations, has also been crucial, much to the despair of the NATO alliance.
Time to de-westernize
Yet only now the Global South, especially, will start to observe the full spectrum of the China-Russia play across the Eurasian sphere. Moscow and Beijing are deeply involved in a joint drive to de-westernize globalist governance, if not shatter it altogether.
Russia from now on will be even more meticulous in its institution-building, coalescing the Eurasia Economic Union (EAEU), the SCO and the Collective Security Treaty Organization (CSTO) – a Eurasian military alliance of select post-Soviet states – in a geopolitical context of irreversible institutional and normative divide between Russia and the West.
At the same time, the Greater Eurasia Partnership will be solidifying Russia as the ultimate Eurasian bridge, creating a common space across Eurasia which could even ignore vassalized Europe.
Meanwhile in real life, BRI, as much as the INSTC, will be increasingly plugged into the Black Sea (hello, Mariupol). And BRI itself may even be prone to re-evaluation in its emphasis of linking western China to western Europe’s shrinking industrial base.
There will be no point in privileging the northern BRI corridors – China-Mongolia-Russia via the Trans-Siberian, and the Eurasian land bridge via Kazakhstan – when you have Europe descending into medieval dementia.
BRI’s renewed focus will be on gaining access to irreplaceable commodities – and that means Russia – as well as securing essential supplies for Chinese production. Commodity-rich nations, such as Kazakhstan and many players in Africa, shall become the top future markets for China.
In a pre-Covid loop across Central Asia, one constantly heard that China builds plants and high-speed railways while Europe at best writes white papers. It can always get worse.
The EU as occupied American territory is now descending, fast, from center of global power to the status of inconsequential peripheral player, a mere struggling market in the far periphery of China’s “community of shared destiny.”
The views expressed in this article do not necessarily reflect those of The Cradle.
العملية العسكرية الواسعة التي تقوم بها روسيا في أوكرانيا لها تداعيات مفصلية على صعيد التوازنات الدولية والإقليمية كما أنها تعيد رسم الخرائط السياسية والاقتصادية والثقافية. النتائج الأولية لتلك العملية، التي لم تنته عند إعداد هذه المقاربة تدلّ بوضوح على التغييرات التي رُصدت منذ عدّة سنوات ولكنها لم تكن ظاهرة للجميع. فالغرب في أفول متسرّع والامبراطورية الأميركية في حال تفكّك تنذر بانهيارات داخلية تضع وجود الولايات المتحدة قاب قوسين على الأقل بالنسبة للشكل التي نعرفها.
فالنتائج على الصعيد السياسة والاقتصاد، دوليا وإقليميا، انعكست على التحالفات القائمة وعلى بروز تحالفات جديدة. فعلى صعيد التحالفات القائمة نرى التصدّع داخل أوروبا الغربية بين الدول ومؤسسة الاتحاد الأوروبي، كما نرى تصدّعا بين الدول الأوروبية البارزة كألمانيا وفرنسا مثلا مع الولايات المتحدة رغم التحليلات التي تفيد أن قبضة الولايات المتحدة ازدادت بسبب العملية العسكرية الروسية وضرورة تأمين “وحدة الصف”. فهذه “الوحدة” التي كانت هشّة قبل الأزمة زادت في هشاشتها رغم المظاهر. فدول مثل المانيا وفرنسا أصبحت في واجهة المتلقي للعقوبات التي تفرضها الولايات المتحدة على روسيا سواء على الصعيد الصناعي أو الطاقة أو المال. والسردية الإعلامية ضدّ روسيا في الدول الأوروبية لن تصمد أمام الواقع الاقتصادي الجديد الذي تفرضه سياسة العقوبات التي بدأت مفاعيلها ترتدّ على الدول الأوروبية على صعيد ارتفاع أسعار السلع بشكل عام والطاقة بشكل خاص. فأوروبا تستورد حوالي الثلثين من حاجاتها الغازية والنفطية من روسيا حيث لألمانيا حصة الأسد (40 بالمائة من حاجاتها الغازية تأتي من روسيا).
أما على صعيد التحالفات الجديدة فنرى تقارباً لم يكن متوقّعاً بين الهند والصين وخاصة بعد التهديدات التي أطلقتها مؤخراً إدارة بايدن تجاه الهند. وفي أميركا الجنوبية هناك توجه واضح نحو تقارب مع كلّ من روسيا والصين. أما في أفريقيا، فالدول الأفريقية بدأت تقدّر النموذج الروسي الصيني في العلاقات الدولية المبني على القانون الدولي ومبدأ “رابح رابح” للجميع. تجلّى ذلك بعدم الموافقة على المشاركة في العقوبات التي تريد فرضها الولايات المتحدة والاتحاد الأوروبي على روسيا. أما التصعيد الأميركي المتمثل بمعاقبة كل من يخالف قرارها ويستمر في التعامل معها فكان الردّ الروسي ومعه دول الكتلة الاوراسية بعرض نظام مالي خارج الدولار. ما زلنا في بداية الطريق لنظام مدفوعات جديد خارج الدولار ولكن النتيجة الفورية هي تخفيف وطأة التهديدات الأميركية بعزل الدول “المتمرّدة” عن منظومة السويفت.
هنا لا بدّ لنا من الإشارة إلى أنّ المواجهة القائمة في أوكرانيا هي في الحقيقة مواجهة كونية تأخذ عدة أشكال متكاملة وليست متناقضة. فهي مواجهة بين الرأس المالية الصناعية المتحالفة مع الاشتراكية ((روسيا والصين ومن يتماهى معهما) والرأس المالية التي تتعاطى فقط في المال (الغرب). وهي أيضا بين العولمة المالية (الغرب) والعولمة المبنية على الهويات القومية والخصوصيات. وهي مواجهة بين رؤية للنظام العالمي المبني على “القيم والأحكام” (الغرب) ورؤية مبنية على القانون الدولي (روسيا، الصين ودول الجنوب الإجمالي). هي مواجهة بين الاقتصاد الفعلي الإنتاجي والاقتصاد الافتراضي المالي الريعي. هذه بعض من المواجهات في السياق الفعلي للصراع القائم والتي كل واحدة منها تستحق مقاربة منفصلة قد نقدمها في مرحلة لاحقة.
الغرب لا يعتبر روسيا منه
وفي خطاب في غاية الأهمية الذي القاه الرئيس الروسي في 16 آذار/ مارس أعلن فيه القطيعة الرسمية مع الغرب بشكل عام على الصعيد الاقتصادي والسياسي. أشار الرئيس الروسي في خطابه إلى القرصنة التي مارسها الغرب تجاه الموجودات والأصول المالية الروسية ما قطع شريان الثقة بالمؤسسات والقوانين الغربية. وشّجع المستثمرين الروس في الغرب على العودة إلى روسيا والعمل في روسيا لأن الغرب سيسرق أموالهم كما فعلت الولايات المتحدة والمملكة المتحدة بحق الأموال الإيرانية والفنزويلية والليبية ما يدلّ على الاستسهال في سرقة من يعتبرونهم دونهم حضاريا. الغرب لا يعتبر روسيا من الغرب بل جزءاً من الشرق البغيض. حروب البلوبونيز اليونانية الفارسية في العصور القديمة قبل الميلاد وحملات الفرنجة على بلاد الشرق واستعمار كل هذه الدول من قبل الغرب دلائل تؤكّد على العنصرية المتجذّرة وانعدام معايير الاخلاق عند النخب الحاكمة الغربية.
هذه القطيعة مع الغرب بشكل عام ومع أوروبا الغربية بشكل خاص تعني أن سلامة الاقتصادي الأوروبي مهدّدة بشكل بنيوي سينعكس بشكل تلقائي على الاستقرار الاجتماعي والسياسي في تلك البلدان. فإذا كان تجميد الأصول المالية والاحتياطي الروسي الموجود في الغرب مظهرا من “مظاهر القوّة” فإن ذلك يعكس أيضا سذاجة الغرب الذي وقع ضحية لتلك العنجهية. فلا يمكننا أن نقرأ ونفهم ما حصل إلاّ من منظور لاعب الشطرنج الماهر الذي يضحّي عن قصد وتعمّد لبيدق في افتتاح اللعبة ليحقق مكسباً استراتيجياً في السيطرة على وسط طاولة الشطرنج. هذا ما يُعرف ب “مناورة الملكة” أو (queen gambit). فالرئيس الروسي وفريقه خطّطا للعملية العسكرية على الأقل منذ 2014 وبالتالي كانا يدركان أن الغرب سيقدم على مصادرة الأموال كما حصل مع إيران عندما قامت الثورة الإسلامية، وكما صادرت أموال ليبيا، وفي ما بعد أموال فنزويلا ومؤخرا أموال أفغانستان. تسرّعت حكومات الغرب بوضع اليد على الأصول الروسية ولكن بالتالي قالت لمعظم العالم أن الأموال المودعة في المصارف الغربية أموال تقوم بقرصنتها متى شاءت. هذا سيسهّل إقامة منظومة مدفوعات مالية دولية جديدة خارج إطار سيطرة الغرب بشكل عام والولايات المتحدة بشكل خاص. كما تنذر بأفول الدولار الحتمي حيث الدول قد تتوقف عن طلب الدولار لتلبية حاجات التجارة الخارجية كما تمهّد لتسعير السلع الاستراتيجية بأسعار غير الدولار أو غير مستندة إلى الدولار. هذا ما قصدناه في مقال سابق أنّ الولايات المتحدة حقّقت مكاسب تكتيكية ظرفية ولكن في المقابل تكبّدت بخسارة استراتيجية قد تنذر بزوال إمبراطورتيها الافتراضية تمهيداً ربما لزوالها كدولة أو كيان سياسي. الدرس الأساسي لتلك المناورة هو اعتبار الدولار (الاحتياط النقدي المعمول به منذ السبعينات) لا قيمة له بينما الأساس هو الغاز والنفط!
في هذا السياق لا بد من الإشارة إلى التقدّم في الإجراءات بين دول آسيا الوسطى وروسيا والصين حول إنشاء نظام مدفوعات خارج إطار الدولار. ففي المؤتمر الذي عقد مؤخرا في مطلع شهر آذار/ مارس 2022 في مدينة يريفان في أرمينيا بين مسؤولين من الدول الخمسة للمجموعة الاوراسية (روسيا، بيلاروسيا، أرمينيا، كير غستان، طاجكستان) إضافة إلى دولة كازاخستان تم الاتفاق على إنشاء المؤسسات المالية للمدفوعات على أن تقدّم مسودات هيكلية والنظام الداخلي خلال شهرين. وهذا النظام قد يعتمد العملات الوطنية لدول آسيا مستندة إلى اليوان الصيني. أما على الصعيد الداخلي الروسي فالتعامل بالروبل المستند إلى الذهب سيعيد السياسات النقدية التي كانت تستند إلى نظام التبادل المرتكز على الذهب ولا يخضع لتقلّبات الأسواق المالية والمضاربة. الفكرة الأساسية هنا هي ضرورة ربط العملات بالاقتصاد العيني وليس بالاقتصاد الافتراضي الذي فرضته الولايات المتحدة على العالم خلال العقود الخمسة الماضية.
ما يعزّز التوجّه إلى إيجاد منظومة مالية مختلفة عن تلك التي تعتمد الدولار قرار الرئيس الروسي تجاه الدول “غير الصديقة” بعدم قبول دفع مستحقات مشترياتها من الغاز والنفط بعملة غير الروبل الروسي. هذا قرار كبير وإنْ كان محصوراً بالدول غير الصديقة لأنه ترجمة عملية لرفض التعامل بالدولار. والقرار الروسي يلغي تلقائياً أهداف الهجوم على الروبل بغية خلق اضطرابات داخلية لأنّ القرار يعني ارتفاع الطلب على الروبل وانخفاض الطلب على الدولار. فهذا قرار استراتيجي يعني ان المواجهة مع الدولار أصبحت مفتوحة وانّ موجة العزوف عن الدولار في التجارة العالمية (de-dollarization) يعني نهاية هيمنة الولايات المتحدة على الاقتصاد العالمي، بل أيضاً على السياسة الدولية بفقدانها سلاحها الأساسي أيّ الدولار.
القطيعة مع الغرب ليست سياسية واقتصادية فحسب بل باتت ثقافية. فالعنصرية التي طغت على السردية الغربية لأحداث أوكرانيا اسقطت جميع الأقنعة التي كان تُخفي (لمن لم يكن يريد أن يرى ذلك) ادّعاءات الغرب بـ “الديمقراطية” و “حقوق الإنسان” و “حكم القانون والمؤسسات” و “التنوير” و “الحداثة” و “معاداة العنصرية” وسائر الأوهام والأكاذيب التي تسوّقها النخب الغربية وفقاً لمصالحها الضيّقة. فحتى المواطن الأميركي صُدم من عنصرية مراسلي المحطات الأميركية التي كانت تراسل من “ارض الميدان” في تصنيف المهاجرين والنازحين الاوكرانيين كناس أصحاب العيون الزرقاء والشعر الأشقر والبشرة البيضاء! أيجوز ذلك في دول متحضّرة ليست كالعراق أو أفغانستان أو سورية!؟
لن تكون أوكرانيا كما عرفها العالم
الإجراءات الغربية تجاه روسيا لها تداعيات كبيرة على جميع الأطراف المتصارعة وعلى مجمل العالم. المتضرّر الأكبر هو أوكرانيا حيث مستقبلها أصبح فعلياً قاب قوسين. فعندما تسكت المدافع لن تكون أوكرانيا كما عرفها العالم بل ربما مجموعة من الأقاليم منها تحت السيطرة الروسية، ومنها تحت السيطرة البولونية، ومنها تحت السيطرة المجرية والرومانية. أما أوكرانيا بحدّ ذاتها فقد لا تتجاوز ما يوازي 30 بالمائة من المساحة الحالية وستكون معزولة عن البحر الأسود.
المتضرر الثاني هو أوروبا الغربية بشكل عام وألمانيا بشكل خاص. فأوروبا بحاجة إلى روسيا بينما الأخيرة ليست بحاجة إليها. ليس هناك ما يمكن أن تعطيه أوروبا الغربية لروسيا بينما تحتاج أوروبا للطاقة التي توردها إليها روسيا إضافة إلى المعادن الأساسية للصناعات الغربية وإضافة إلى الحبوب التي تنتجها روسيا وأوكرانيا. أما المانيا فتستورد حوالي 40 بالمائة من احتياجاتها من الغاز الروسي بعد أن أقفلت محطّات انتاج الطاقة النووية. فأصبح اقتصادها مرتبطا بالغاز الروسي. وتجميد خط الشمال 2 (نورستريم 2) سيجعلها تستورد طاقة من الغاز السائل بكلفة تفوق عشر أضعاف أو أكثر وبعد أن تكون بنت محطات تفريغ وتخزين الغاز المستورد من الولايات المتحدة أو قطر وإيجاد الأساطيل التي تستطيع نقل هذه الطاقة بالكميات المطلوبة. وهذا لن يحصل قبل عدة سنوات وبكلفة مرتفعة. أضافة إلى كل ذلك فالشركات اتي كانت معنية بتشغيل نورستريم 2 ستنقلب على الدولة الألمانية وتطالبها بتعويضات تقدر بأكثر من 20 مليار يورو. أما الشريك الروسي غازبروم فقد استطاع التعويض عن خسارة عدم تشغيل نورستريم 2 عبر ارتفاع أسعار الغاز في العالم. وعلى صعيد آخر فإن ارتفاع كلفة الطاقة ستؤثر بشكل مباشر على القدرة التنافسية الصناعية الألمانية وخاصة تجاه الصين والعديد من الدول النامية ما يمكن أن يدخلها في عصر ما بعد التصنيع وتصبح دولة ضعيفة وهزيلة كما أصبحت المملكة المتحدة وفرنسا والولايات المتحدة. فالاقتصاد الافتراضي الريعي لا يمكن أن يصمد أمام قوة اندفاع الاقتصاد العيني المنتج الذي تتمتع به دول كالصين والهند والبرازيل وماليزيا وحتى الجمهورية الإسلامية في إيران وغدا دول المشرق العربي والمغربي.
ارتفاع أسعار الطاقة سيؤدّي إلى ارتفاع أسعار المواد والسلع في كل أنحاء العالم وخاصة في أوروبا والولايات المتحدة. فإضافة إلى ضعف النمو في الإنتاج بسبب جائحة الكورونا جاء النقص في المواد وخاصة المواد الغذائية وأضيف إليها رفع كلفة الطاقة. فبالحد الأدنى ستدخل أوروبا الغربية مرحلة انكماش اقتصادي كبير قد يصل إلى مستوى كساد ويتلازم معه في المرحلة الاولي تضخم في الأسعار الاستهلاكية والإنتاجية مما يخلق حلقة مفرغة من انخفاض الإنتاج إلى انخفاض في الدخل إلى انخفاض في الاستهلاك إلى انخفاض في الإنتاج وكذلك دواليك. أما على صعيد الدول النامية، وخاصة في أفريقيا، فإن العقوبات المفروضة على روسيا ستخلق أزمة غذاء حيث 25 دولة تستورد حوالي ثلث حاجياتها من الحبوب من روسيا. ودولة بنين تستورد مائة بالمائة من احتياجاتها في القمح والحبوب من روسيا. وفي هذا السياق الدول العربية لن تكون بمنأى عن تداعيات الازمة الغذائية. فدول كمصر واليمن وسوريا ولبنان تستورد الحبوب من روسيا وأوكرانيا. فانقطاع التوريد من روسيا وأوكرانيا سيخلق أزمة اجتماعية إضافية على الازمات التي تمر بها كل هذه الدول وخاصة اليمن ولبنان.
لذلك يمكن القول ان العقوبات المفروضة على روسيا ستؤدّي إلى زعزعة الاستقرار في أوروبا الغربية وإلى أزمات عميقة في الاقتصاد العالمي ناهيك عن التداعيات الاجتماعيات في دول العالم الخاضع لسياسة العقوبات. وهذه الزعزعة والازمة الاقتصادية التي ستتفاقم سيكون لها ارتدادات سياسية كبيرة يكون الغرب الخاسر الأكبر. فالولايات المتحدة بدلا من أن توحد العالم ضد روسيا توحد العالم ضدّها. والتحالفات القديمة والقائمة في الغرب بدأت تشهد تصدّعات بينها ومع الولايات المتحدة.
والولايات المتحدة بنفسها ليست بمنأى عن تداعيات الفشل في المواجهة في أوكرانيا. فالتحالف الذي أوصل بايدن إلى البيت الأبيض يشهد تصدّعا لأن الرئيس الأميركي لا يميل إلى التصعيد في المواجهة التي يعرف أنها خاسرة. ويساند الرئيس الأميركي البنتاغون. لكن بالمقابل تحالف المحافظين الجدد والمتدخلين الليبراليين والاعلام وأجهزة المخابرات يريد التصعيد. وهو غاضب من بايدن. لذلك قامت صحيفة “نيويورك تايمز” بنشر خبر يؤكّد صحّة المعلومات عن حاسوب هنتر بايدن، نجل الرئيس الأميركي، المليء بمعلومات تفضح فساد عائلة بايدن في أوكرانيا. وهذا الحاسوب تمّ التستّر عنه خلال الحملة الانتخابية الرئاسية في 2020 لأنّ المعلومات قد تلغي فرص فوز بايدن في الانتخابات. والسؤال الذي يطرح لماذا أقدمت الصحيفة الأميركية على نشر هذا الخبر؟ هناك من يعتقد ان التأكيد على صحة المعلومات الفاضحة قد تشكّل إنذاراً أخيراً لبايدن ليلتزم بما هو مُقرّر. من جهة أخرى أعلنت صحيفة “الغارديان” البريطانية عن نشر كتاب في 3 أيار/ مايو بعنوان “لن يمر ذلك: ترامب، بايدن، والمعركة لمستقبل أميركا” للكاتبين الصحافيين من “نيويورك تايمز” جوناتان مارتن والكس بيرنز يشير إلى أنّ زوجة بايدن لم تكن ترغب بوجود كمالا هاريس كنائب رئيس. أيّ هناك موجة متنامية في الإعلام المهيمن يوحى بأنه فقد ثقته ببايدن. وبما أنّ وضع الحزب والإدارة حرج للغاية فاحتمالات الفوضى الداخلية كبيرة جدا مما يؤثّر على أداء الإدارة في مواجهة مختلف القضايا والأزمات التي افتعلتها.
أما على الصعيد العربي، فبدأت تظهر تباشير المراجعات السياسية الكبرى عند حلفاء الولايات المتحدة حيث نظرية ملكية الولايات المتحدة لـ 99 بالمائة من الأوراق بدأت تترنح كيف لا نقول تسقط بشكل نهائي عند العديد من الدول وفي مقدمتها دول الخليج ومصر.
من ضمن إرهاصات في التحولات العربية “تمرّد” بعض دول الخليج على القرار الأميركي بالخروج عن قرارات أوبك + التي تضم روسيا. كما ان عدم اخذ مكالمات الرئيس الأميركي لكل من ولي عهد بلاد الحرمين وولي عهد دولة الإمارات العربية المتحدة لم يكن ممكنا تصوّرها منذ ما قبل اندلاع الأزمة الأوكرانية. أضف إلى كل ذلك تصريحات بعض المسؤولين حول تخفيف الاستثمارات في الولايات المتحدة والقبول بالتعامل بعملات غير الدولار في تسعير بعض السلع الاستراتيجية يهدّد مكانة الدولار كعملة احتياط وحيدة أو حتى رئيسية في النظام العالمي.
أنّ كلّ تلك التحوّلات المفصلية في العالم لم تكن لتحصل لولا محور المقاومة وخاصة صمود سورية واليمن وإفشال المشروع الأميركي في العراق وتنامي مقاومة الشعب الفلسطيني. فلا يعتقدّن أحد أنّ الدور العربي كان غائبا بل هو الذي أتاح الفرصة لكلّ من الصين وروسيا والجمهورية الإسلامية في إيران لبناء قدراتها بينما محور المقاومة كان يتصدّى ويُفشّل المشروع الأميركي الصهيوني. فالسيطرة على آسيا هي الشرط الضروري للسيطرة على العالم والمشرق العربي هو البوّابة لها. فمن يتحكم بتلك البوّابة يستطيع أن يسيطر على آسيا. محور المقاومة أفشل المحاولات الأميركية الصهيونية وهو الذي سيكون بيضة القبّان في التوازنات الدولية الجديدة إذا ما أحسن التعاطي مع المعطيات الجديدة على الصعيد المحّلي في كل مكوّن من مكوّنات المحور.
*باحث وكاتب اقتصادي سياسي والأمين العام السابق للمؤتمر القومي العربي وعضو الهيئة التأسيسية للمنتدى الاقتصادي والاجتماعي
Following Putin’s announcement about selling gas for Rubles only to hostile nations, I decided to reach out to Michael Hudson and ask him (my level, primitive) questions. Here is our full email exchange:
Andrei: Russia has declared that she will only sell gas to “hostile countries” for Rubles. Which means that to non-hostile countries she will continue to sell in Dollars/Euros. Can these hostile countries still purchase gas from Russia but via third countries?
Michael Hudson: There seem to be two ways for hostile countries to buy Russian gas. One seems to be to use Russian banks that are not banned from SWIFT. The other way would indeed seem to be to go through what looks to develop as a formal or informal third-country bank or exchange. India and China would seem to be the best positioned for this role. U.S. diplomats will be pressing India to impose its own sanctions on Russia, and there is a strong pro-U.S. constituency there. But even Modi sees the obvious superior benefits of benefiting from India’s geopolitical position with Russia and China’s Belt and Road Initiative relative to whatever the U.S. has to
Back in the 1960s the West dealt with the Soviet Union using barter deals. Arranging this barter became a big banking business. Barter is the typical “final stage” of the deterioration of a credit economy into a money economy that breaks down. Over the medium term, a new international financial organization needs to be created as an alternative to the dollarized IMF to handle such intra-bloc transactions in today’s new multipolarizing world.
Andrei: These hostile nations would pay extra for that service, but they would not have to get Rubles. Is that even possible?
Michael Hudson: Presumably Russia would not absorb the added bank costs of avoiding U.S. sanctions. It would simply add them on to the price, after setting the price at which it hopes to end up with – preferably at the original “old” ruble/euro or ruble/dollar exchange rate, not the post-attack depreciated rate.
Andrei: Question: Do you believe that the EU will agree to pay Roubles or will they take the total loss of 40% of their energy?
Michael Hudson: They will pay – or be voted out of office. If they WERE to cut their energy imports from Russia, the distress-price of gas would soar and there would be drastic shortages disrupting the economy. Energy is productivity and GDP. For Russia, of course, this is an opportunity to make the break now instead of later – and leave NATO to take the blame for the interruption of supply. So if I were Russia, I would not be in a hurry to help solve the foreign-payment problem. The same goes for non-oil raw materials, from neon to palladium to titanium, nickel and aluminum.
Andrei: So far, this applies only to natural gas. Do you believe that Russia will extend this to petroleum, wheat and fertilizers and, if yes, what will the effect from this be for the world economy?
Michael Hudson: All Russian exports are affected by these currency controls, because all bank transfers are sanctioned in the way discussed above. Russia has no use for dollars or euros, because these can be grabbed. It needs to have complete control over whatever monetary assets it receives, now that past norms of international law and financial policy no longer apply.
Andrei: Russia has A LOT of natural resources and a lot of technologies/commodities. If she is successful in her efforts to become paid in Rubles, could it be that the Ruble, which would then be a natural resources/ commodities backed currency, could become a major “refuge” currency.
Michael Hudson: I’m not sure what a “refuge” currency is, but the ruble will become a self-standing currency. If its balance of trade and payment improves, the problem may be to keep it from rising. If that happens, the question will be whether a rising ruble would oblige buyers of Russian exports to pay more in their own currency. A new multilateral financial system is in the process of being structured as we’re having this discussion. Will there be speculation? Forward selling? Short squeezes and Soros-type raids? Who will be the participants and under what rules …?
Andrei: How hard a hit would this Russian decision potentially have on the dollar? And MBS negotiating with the PRC for oil sales in Renminbi. Do you think that China and Russia will bring down the Petrodollar and will we see a commodities-backed Ruble and a commodities-backed Yuan replacing the Dollar?
Michael Hudson: The petrodollar will remain between the United States and its allies. But alongside it, there will be the Saudi-yuan and India-yuan arrangements for trade in oil, minerals, industrial products and probably international investment. Trade in these products will be able to occur in a number of currencies, probably on a number of exchanges. It is not clear whether some formal or informal arbitrage may develop between these areas. That is part of what is to be designed. To oversee and regulate the resulting financial and trade arrangements, an alternative to the IMF is needed. The U.S. will not join any organization in which it does not have veto power, so we will see a division of the world into different trading and monetary areas. The result is not so much a conflict as two quite different operating philosophies as the non-U.S. world develops its alternative to financialized neoliberalism.
Andrei: The US has basically stolen Russian gold and foreign currency. The Russians claim that the US has shot itself in the foot and that this will ruin the reputation of the dollar, do you agree with that?
Michael Hudson: Absolutely: Iran after the Shah was overthrown, Afghanistan’s foreign reserves earlier this year, Venezuela’s gold held in the Bank of England, and now Russia. Even timid Germany has asked that airplanes begin flying its gold held in the New York Fed back to Germany!
Andrei: do you think that Russia will retaliate against the US/UK/EU and nationalize/seize their assets in Russia or even in countries friendly to Russia (China?)?
Michael Hudson: Russia is very careful to do everything according to international law – which, of course, has a wide variety of precedents and excuses, and whose courts tend to be dominated by U.S. judges backing U.S. versions of what is legal under whatever it announces to be the “rules-based order of the day” instead of the “rule of law” along UN lines. To the extent that NATO investors abandon their assets in Russia, these may be sold – perhaps at a distress discount – to buyers who promise to maintain the business. Russia might impose severe fines for abandonment, as when landlords abandon buildings causing local expenditures on cleanup costs. Abandonment causes a “public nuisance.”
This would be a cause for immediate confiscation of current taxes, rent payments and salaries or payments for current supplies (including electricity and fuel) are not paid. Think what would happen if the gas bill were not paid and pipes froze and flooded a property. There is an entire world of penalties that could be applied.
International law provides for some recovery of assets wrongly confiscated – as the U.S. confiscations of Russian-owned reserves and personal property would seem to be. At this point Russia really has nothing to lose. It looks like there is not going to be much Russian-European cross investment for quite some time. Russia finally has given up on its hopes to “turn West” after 1991. It was a dream that turned into a nightmare, and President Putin and Lavrov have expressed their disgust with Europe acting in so uncivilized a matter. So for Russia – and increasingly other countries – NATO Europe and North America are the new barbarians at the gate. Russia is turning
That of course is precisely the aim of U.S. policy – to lock Europe into its own dollarized neoliberal order, blocking any mutual prosperity achieved by trade and investment with Russia or, behind it, with China. It looks like today’s sanctions are permanent for the next few years. So of course Russia needs to keep formerly NATO-owned enterprises operating. Let the NATO investors recover compensation from what the United States has grabbed. (Hint: the U.S. may simply begin to grab China’s or Latin American or near Eastern reserves to pay NATO investors who have lost in Russia. That is the model of using Afghan money to pay victims of Saudi Arabia’s 9/11 attack two decades ago.)
Andrei: finally, what question, if any, did I forget to ask and what would you reply to it?
Michael Hudson: Your questions are about specific problems and solutions. But the overall resolution needs to be system-wide, not patchwork. These specific problems cannot really be solved without a far-reaching institutional restructuring of the international financial system, world trade, a world court, and a UN without US veto power. And such an institutional reformation requires an economic doctrine to provide its basic principles. A New International Economic Order will be constructed on non-neoliberal principles – along the lines of what used to be called socialism, when that was what people expected industrial capitalism to be evolving into.
Andrei: thank you so much for your time and expertise!!
only the #1 largest Nuclear plant in all of Europe, but in top 10 in the world, with only some Asian plants ahead of it.
UPROOTED PALESTINIANS: SALAM ALQUDS ALAYKUM 
