Global South: Gold-backed currencies to replace the US dollar

The adoption of commodity-backed currencies by the Global South could upend the US dollar’s dominance and level the playing field in international trade.

January 19 2023

Photo Credit: The Cradle

By Pepe Escobar

Let’s start with three interconnected multipolar-driven facts.

First: One of the key take aways from the World Economic Forum annual shindig in Davos, Switzerland is when Saudi Finance Minister Mohammed al-Jadaan, on a panel on “Saudi Arabia’s Transformation,” made it clear that Riyadh “will consider trading in currencies other than the US dollar.”

So is the petroyuan finally at hand? Possibly, but Al-Jadaan wisely opted for careful hedging: “We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the US and we want to develop that with Europe and other countries.”

Second: The Central Banks of Iran and Russia are studying the adoption of a “stable coin” for foreign trade settlements, replacing the US dollar, the ruble and the rial. The crypto crowd is already up in arms, mulling the pros and cons of a gold-backed central bank digital currency (CBDC) for trade that will be in fact impervious to the weaponized US dollar.

A gold-backed digital currency

The really attractive issue here is that this gold-backed digital currency would be particularly effective in the Special Economic Zone (SEZ) of Astrakhan, in the Caspian Sea.

Astrakhan is the key Russian port participating in the International North South Transportation Corridor (INTSC), with Russia processing cargo travelling across Iran in merchant ships all the way to West Asia, Africa, the Indian Ocean and South Asia.

The success of the INSTC – progressively tied to a gold-backed CBDC – will largely hinge on whether scores of Asian, West Asian and African nations refuse to apply US-dictated sanctions on both Russia and Iran.

As it stands, exports are mostly energy and agricultural products; Iranian companies are the third largest importer of Russian grain. Next will be turbines, polymers, medical equipment, and car parts. Only the Russia-Iran section of the INSTC represents a $25 billion business.

And then there’s the crucial energy angle of INSTC – whose main players are the Russia-Iran-India triad.

India’s purchases of Russian crude have increased year-by-year by a whopping factor of 33. India is the world’s third largest importer of oil; in December, it received 1.2 million barrels from Russia, which for several months now is positioned ahead of Iraq and Saudi Arabia as Delhi’s top supplier.

‘A fairer payment system’

Third: South Africa holds this year’s rotating BRICS presidency. And this year will mark the start of BRICS+ expansion, with candidates ranging from Algeria, Iran and Argentina to Turkey, Saudi Arabia and the UAE.

South African Foreign Minister Naledi Pandor has just confirmed that the BRICS do want to find a way to bypass the US dollar and thus create “a fairer payment system not skewed toward wealthier countries.”

For years now, Yaroslav Lissovolik, head of the analytical department of Russian Sberbank’s corporate and investment business has been a proponent of closer BRICS integration and the adoption of a BRICS reserve currency.

Lissovolik reminds us that the first proposal “to create a new reserve currency based on a basket of currencies of BRICS countries was formulated by the Valdai Club back in 2018.”

Are you ready for the R5?

The original idea revolved around a currency basket similar to the Special Drawing Rights (SDR) model, composed of the national currencies of BRICS members – and then, further on down the road, other currencies of the expanded BRICS+ circle.

Lissovolik explains that choosing BRICS national currencies made sense because “these were among the most liquid currencies across emerging markets. The name for the new reserve currency — R5 or R5+ — was based on the first letters of the BRICS currencies all of which begin with the letter R (real, ruble, rupee, renminbi, rand).”

So BRICS already have a platform for their in-depth deliberations in 2023. As Lissovolik notes, “in the longer run, the R5 BRICS currency could start to perform the role of settlements/payments as well as the store of value/reserves for the central banks of emerging market economies.”

It is virtually certain that the Chinese yuan will be prominent right from the start, taking advantage of its “already advanced reserve status.”

Potential candidates that could become part of the R5+ currency basket include the Singapore dollar and the UAE’s dirham.

Quite diplomatically, Lissovolik maintains that, “the R5 project can thus become one of the most important contributions of emerging markets to building a more secure international financial system.”

The R5, or R5+ project does intersect with what is being designed at the Eurasia Economic Union (EAEU), led by the Macro-Economics Minister of the Eurasia Economic Commission, Sergey Glazyev.

A new gold standard

In Golden Ruble 3.0 , his most recent paper, Glazyev makes a direct reference to two by now notorious reports by Credit Suisse strategist Zoltan Pozsar, formerly of the IMF, US Department of Treasury, and New York Federal Reserve: War and Commodity Encumbrance (December 27) and War and Currency Statecraft (December 29).

Pozsar is a staunch supporter of a Bretton Woods III – an idea that has been getting enormous traction among the Fed-skeptical crowd.

What’s quite intriguing is that the American Pozsar now directly quotes Russia’s Glazyev, and vice-versa, implying a fascinating convergence of their ideas.

Let’s start with Glazyev’s emphasis on the importance of gold. He notes the current accumulation of multibillion-dollar cash balances on the accounts of Russian exporters in “soft” currencies in the banks of Russia’s main foreign economic partners: EAEU nations, China, India, Iran, Turkey, and the UAE.

He then proceeds to explain how gold can be a unique tool to fight western sanctions if prices of oil and gas, food and fertilizers, metals and solid minerals are recalculated:

“Fixing the price of oil in gold at the level of 2 barrels per 1g will give a second increase in the price of gold in dollars, calculated Credit Suisse strategist Zoltan Pozsar. This would be an adequate response to the ‘price ceilings’ introduced by the west – a kind of ‘floor,’ a solid foundation. And India and China can take the place of global commodity traders instead of Glencore or Trafigura.”

So here we see Glazyev and Pozsar converging. Quite a few major players in New York will be amazed.

Glazyev then lays down the road toward Gold Ruble 3.0. The first gold standard was lobbied by the Rothschilds in the 19th century, which “gave them the opportunity to subordinate continental Europe to the British financial system through gold loans.” Golden Ruble 1.0, writes Glazyev, “provided the process of capitalist accumulation.”

Golden Ruble 2.0, after Bretton Woods, “ensured a rapid economic recovery after the war.” But then the “reformer Khrushchev canceled the peg of the ruble to gold, carrying out monetary reform in 1961 with the actual devaluation of the ruble by 2.5 times, forming conditions for the subsequent transformation of the country [Russia] into a “raw material appendage of the Western financial system.”

What Glazyev proposes now is for Russia to boost gold mining to as much as 3 percent of GDP: the basis for fast growth of the entire commodity sector (30 percent of Russian GDP). With the country becoming a world leader in gold production, it gets “a strong ruble, a strong budget and a strong economy.”

All Global South eggs in one basket

Meanwhile, at the heart of the EAEU discussions, Glazyev seems to be designing a new currency not only based on gold, but partly based on the oil and natural gas reserves of participating countries.

Pozsar seems to consider this potentially inflationary: it could be if it results in some excesses, considering the new currency would be linked to such a large base.

Off the record, New York banking sources admit the US dollar would be “wiped out, since it is a valueless fiat currency, should Sergey Glazyev link the new currency to gold. The reason is that the Bretton Woods system no longer has a gold base and has no intrinsic value, like the FTX crypto currency. Sergey’s plan also linking the currency to oil and natural gas seems to be a winner.”

So in fact Glazyev may be creating the whole currency structure for what Pozsar called, half in jest, the “G7 of the East”: the current 5 BRICS plus the next 2 which will be the first new members of BRICS+.

Both Glazyev and Pozsar know better than anyone that when Bretton Woods was created the US possessed most of Central Bank gold and controlled half the world’s GDP. This was the basis for the US to take over the whole global financial system.

Now vast swathes of the non-western world are paying close attention to Glazyev and the drive towards a new non-US dollar currency, complete with a new gold standard which would in time totally replace the US dollar.

Pozsar completely understood how Glazyev is pursuing a formula featuring a basket of currencies (as Lissovolik suggested). As much as he understood the groundbreaking drive towards the petroyuan. He describes the industrial ramifications thus:

“Since as we have just said Russia, Iran, and Venezuela account for about 40 percent of the world’s proven oil reserves, and each of them are currently selling oil to China for renminbi at a steep discount, we find BASF’s decision to permanently downsize its operations at its main plant in Ludwigshafen and instead shift its chemical operations to China was motivated by the fact that China is securing energy at discounts, not markups like Europe.”

The race to replace the dollar

One key takeaway is that energy-intensive major industries are going to be moving to China. Beijing has become a big exporter of Russian liquified natural gas (LNG) to Europe, while India has become a big exporter of Russian oil and refined products such as diesel – also to Europe. Both China and India – BRICS members – buy below market price from fellow BRICS member Russia and resell to Europe with a hefty profit. Sanctions? What sanctions?

Meanwhile, the race to constitute the new currency basket for a new monetary unit is on. This long-distance dialogue between Glazyev and Pozsar will become even more fascinating, as Glazyev will be trying to find a solution to what Pozsar has stated: tapping of natural resources for the creation of the new currency could be inflationary if money supply is increased too quickly.

All that is happening as Ukraine – a huge chasm at a critical junction of the New Silk Road blocking off Europe from Russia/China – slowly but surely disappears into a black void. The Empire may have gobbled up Europe for now, but what really matters geoeconomically, is how the absolute majority of the Global South is deciding to commit to the Russia/China-led block.

Economic dominance of BRICS+ may be no more than 7 years away – whatever toxicities may be concocted by that large, dysfunctional nuclear rogue state on the other side of the Atlantic. But first, let’s get that new currency going.

The views expressed in this article do not necessarily reflect those of The Cradle.

By the numbers: The de-dollarization of global trade

Data suggests that US dollar reserves in central banks are dwindling, as is the influence of the US on the world economy. This presents a unique opportunity for regional currencies and alternative payment systems to enter the vacuum.

January 13 2023

Photo Credit: The Cradle

By F.M. Shakil

The imposition of US trade restrictions and sanctions against a number of nations, including Russia, Iran, Cuba, North Korea, Iraq, and Syria have been politically ineffectual and have backfired against western economies. As a result, the US dollar has been losing its role as a major currency for the settlement of international business claims.

Because they do not adhere to the policies of the US and other western powers, over 24 countries have been the target of unilateral or partial trade sanctions. These limitations, nevertheless, have turned out to be detrimental to the economies of the Group of Seven (G7) nations and have begun to impact the US dollar’s hegemony in world trade.

In its space, a “new global commercial bloc” has risen to the fore, while alternatives to the western SWIFT banking messaging system for cross-border payments have also been created.

Geopolitical analyst Andrew Korybko tells The Cradle that the west’s extraordinary penalties and seizure of Russian assets abroad broke faith in the western-centric paradigm of globalization, which had been declining for years but had nonetheless managed to maintain the world standard.

“Rising multipolar countries sped up their plans for de-dollarization and diversification away from the western-centric model of globalization in favor of a more democratic, egalitarian, and just one – centered on non-western countries in response to these economic and financial disturbances,” he adds.

Dwindling dollar reserves  

The International Monetary Fund (IMF) recorded a decline in central bank holdings of US dollar reserves during the fourth quarter of 2020—which went from 71 percent to 59 percent—reflecting the US dollar’s waning influence on the world economy.

And it continues to worsen: Evidence of this can be seen in the fact that the bank’s holdings of dollar claims have decreased from $7 trillion in 2021 to $6.4 trillion at the end of March 2022.

According to the Currency Composition of Official Foreign Exchange Reserves (COFER) report by the IMF, the percentage of US dollars in central bank reserves has decreased by 12 percent since 1999, while the percentage of other currencies, particularly the Chinese yuan, have shown an increasing trend with a 9 percent rise during this period.

The study contends that the role of the dollar is waning due to competition from other currencies held by the bankers’ banks for international transactions – including the introduction of the euro – and reveals that this will have an impact on both the currency and bond markets if dollar reserves continue to shrink.

Alternative currencies and trade routes

To boost global commerce and Indian exports, the Reserve Bank of India (RBI) devised in July last year a rupee-settlement mechanism to fend off pressure on the Indian currency in the wake of Russia’s invasion of Ukraine and US-EU sanctions.

India has recently concluded agreements for currency exchanges of $75.4 billion with the UAE, Japan, and various South Asian nations. New Delhi has also informed South Korea and Turkey of its non-dollar-mediated exchange rates for each country’s currency. Currently, Turkey conducts business utilizing the national currencies of China (yuan) and Russia (ruble).

Iran has also proposed to the Shanghai Cooperation Organization (SCO) a euro-like SCO currency for trade among the Eurasian bloc to check the weaponization of the US dollar-dominated global financial system.

Mehdi Safari, Iran’s deputy foreign minister for economic diplomacy, informed the media earlier in June last year that the SCO received the proposal nearly two months ago.

“They must use multilateral institutions like BRICS and the SCO to this aim – and related ones, such as currency pools and potentially even the establishment of a new currency whose rate is based on a basket of their currencies, to mitigate the effects of trade-related restrictions,” Korybko remarked.

The International North-South Transport Corridor (INSTC) is being revived as a “sanctions-busting” project by Russia and Iran. The INSTC garnered renewed interest following the “sanctions from hell” imposed by the west on Moscow. Russia is now finalizing regulations that will allow Iranian ships free navigation along the Volga and Don rivers.

The INSTC was planned as a 7,200 km long multimodal transportation network including sea, road, and rail lines to carry freight between Russia, Central Asia, and the Caspian regions.

Ruble-Yuan Payment System

On 30 December, 2022, Russian President Vladimir Putin and his Chinese counterpart Xi Jinping held a video conference in which Putin reported that bilateral trade between the two countries had reached an all-time high with a 25 percent growth rate and that trade volumes were on track to reach $200 billion by next year, despite western sanctions and a hostile external environment.

Putin stated that there had been a “substantial growth in trade volumes” between January and November 2022, resulting in a 36 percent increase in trade to $6 billion. It is likely that the $200 billion bilateral trade target, if achieved by next year, will be conducted in Russian rubles and Chinese yuan, even though the details of the bilateral trade settlement were not specified in the video conference broadcast.

This is because Moscow and Beijing have already set up a cross-border interbank payment network similar to SWIFT, increased their gold purchases to give their currencies more stability, and signed agreements to swap national currencies in several regional and bilateral deals.

In addition, both Russia and China appear to have anticipated a potential US seizure of their financial assets, and in 2014 they collaborated on energy-centered treaties to strengthen their strategic trade links.

In 2017, the ruble-yuan “payment against payment” system was implemented along China’s Belt and Road Initiative (BRI). In 2019, the two countries signed an agreement to replace the dollar with national currencies in cross-border transactions and converted their $25 billion worth of trade to yuan (RMB) and rubles.

Independence from the dollar

This shift decreased their mutual reliance on the dollar, and currently, just over half of Russia’s exports are settled in US dollars, down from 80 percent in 2013. The bulk of trade between Russia and China is now conducted in local currencies.

Xinjiang in western China has also established itself as a key cross-border settlement center between China and Central Asia, making it a major financial hub in the region. Cumulative cross-border yuan settlement handled in Xinjiang exceeded 100 billion yuan ($14 billion) as early as 2013 and reached 260 billion yuan in 2018.

According to analyst Korybko, significant progress has been made in reducing reliance on the US dollar in international trade, but there is still much work to be done. He notes that the US is not likely to simply accept the challenges to its financial hegemony and is more likely to act to defend it.

“For this reason, it is expected that the US will try to enlist the support of key players by offering them preferential trade deals or the promise of such deals, while simultaneously stoking tensions between Russia, China, India, and Iran through information warfare and possibly threatening to tighten its secondary sanctions regime as ‘deterrence’.”

Eurasian Economic Union

Russia has been working to establish currency swap agreements with a number of trading partners, comprising the five-member Eurasian Economic Union (EEU), which includes Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan.

These agreements have enabled the Russian Federation to conduct over 70 percent of its trade in rubles and other regional currencies. With a population of 183 million and a GDP over $2.2 trillion, the EEU poses a formidable challenge to western hegemony over global financial transactions.

Iran and the EEU have recently concluded negotiations on the conditions of a free trade agreement covering over 7,500 categories of goods. When the next Iranian year begins on 21 March, 2023, a market with a potential size of 700 billion dollars will become available for Iranian goods and services.

BRICS is driving de-dollarization

The trend towards de-dollarization in international trade, particularly among the BRICS nations, has gained significant momentum in recent years – together they represent 41 percent of the world’s population, 24 percent of its GDP, and 16 percent of its commerce

In 2015, the BRICS New Development Bank, recommended the use of national currencies in trade. Four years later, the bank provided 25 percent of its $15 billion in financial assistance in local currencies, and plans to increase this to 50 percent in the coming years.

This shift towards de-dollarization is an important step for emerging economies as they seek to assert their role in the global economic system and reduce their reliance on the US dollar. While the adoption of de-dollarization may present some challenges and uncertainties, it is an important step towards a more diverse and balanced global economy.

The views expressed in this article do not necessarily reflect those of The Cradle.

Bye bye 1991-2022

January 10, 2023

by Pepe Escobar, posted with the author’s permission and widely cross-posted

2023 starts with collective NATO in Absolutely Freak Out Mode as Russian Defense Minister Shoigu announces that Russian Navy frigate Admiral Gorshkov is now on tour – complete with a set of Mr. Zircon’s hypersonic business cards.

The business tour will encompass the Atlantic and the Indian Ocean, and of course include the Mediterranean, the Roman Empire’s former Mare Nostrum. Mr. Zircon on the prowl has absolutely nothing to do with the war in Ukraine: it’s a sign of what happens next when it comes to frying much bigger fishes than a bunch of Kiev psychos.

The end of 2022 did seal the frying of the Big Ukraine Negotiation Fish. It has now been served on a hot plate – and fully digested. Moscow has made it painfully clear there’s no reason whatsoever to trust the “non-agreement capable” declining superpower.

So even taxi drivers in Dacca are now betting on when the much- vaunted “winter offensive” starts, and how far will it go. General Armageddon’s path ahead is clear: all-out demilitarization and de-electrification on steroids, complete with grinding up masses of Ukrainians at the lowest possible cost to the Russian Armed Forces in Donbass until Kiev psychos beg for mercy. Or not.

Another big fried fish on a hot plate at the end of 2022 was the 2014 Minsk Agreement. The cook was no other than former chancellor Merkel (“an attempt to buy time for Ukraine”). Implied is the not exactly smokin’ gun: the strategy of the Straussian/neo-con and neoliberal-con combo in charge of US foreign policy, from the beginning, was to unleash a Forever War, by proxy, against Russia.

Merkel may have been up to something telling the Russians, in their face, that she lied like crypto-Soprano Mike Pompeo, then she lied again and again, for years. That’s not embarrassing for Moscow, but for Berlin: yet another graphic demonstration of total vassalage to the Empire.

The response by the contemporary embodiment of Mercury, Russian Foreign Ministry’s Maria Zakharova, was equally intriguing: Merkel’s confession could be used as a specific reason – and evidence – for a tribunal judging Western politicians responsible for provoking the Russia-Ukraine proxy war.

No one will obviously confirm it on the record. But all this could be part of an evolving, secret Russia-Germany deal in the making, leading to Germany restoring at least some of its sovereignty.

Time to fry NATO fish

Meanwhile, deputy chairman of the Russian Security Council Dmitry Medvedev, visibly relishing his totally unplugged incarnation, expanded on the Fried Negotiation Fish saga. “Last warning to all nations”, as he framed it: “there can be no business with the Anglo-Saxon world [because] it is a thief, a swindler, a card-sharp that could do anything….From now on we will do without them until a new generation of sensible politicians comes to power… There is nobody in the West we could deal with about anything for any reason.”

Medvedev, significantly, recited more or less the same script, in person, to Xi Jinping in Beijing, days before the zoom to end all zooms – between Xi and Putin – that worked as a sort of informal closure of 2022, with the Russia-China strategic partnership perfectly in synch.

On the war front, General Armageddon’s new – offensive – groove is bound to lead in the next few months to an undisputable fact on the ground: a partition between a dysfunctional black hole or rump Ukraine on the west, and Novorossiya in the east.

Even the IMF is now reluctant to throw extra funds into the black hole. Kiev’s 2023 budget has an – unrealistic – $36 billion deficit. Half of the budget is military-related. The real deficit in 2022 was running at about $5 billion a month – and will inevitably balloon.

Tymofiy Mylovanov, a professor at the Kiev School of Economics, came up with a howler: the IMF is worried about Ukraine’s “debt sustainability”. He added, “if even the IMF is worried, imagine what private investors are thinking”. There will be no “investment” in rump Ukraine. Multinational vultures will grab land for nothing and whatever puny productive assets may remain.

Arguably the biggest fish to be fried in 2023 is the myth of NATO. Every serious military analyst, few Americans included, knows that the Russian Army and military industrial complex represents a superior system than what existed at the end of the USSR, and far superior to that of the US and the rest of NATO today.

The Mackinder-style final blow to a possible alliance between Germany (EU), Russia and China – which is what is really behind the US proxy war in Ukraine – is not proceeding according to the Straussian wet dream.

Saddam Hussein, former imperial vassal, was regime-changed because he wanted to bypass the petrodollar. Now we have the inevitable rise of the petroyuan – “in three to five years”, as Xi Jinping announced in Riyadh: you just can’t prevent it with Shock’n Awe on Beijing.

In 2008, Russia embarked on a massive rebuilding of missile forces and a 14-year plan to modernize land-based armed forces. Mr. Zircon presenting his hypersonic business card across the Mare Nostrum is just a small part of the Big Picture.

The myth of US power

The CIA abandoned Afghanistan in a humiliating retreat – even ditching the heroin ratline – just to relocate to Ukraine and continue playing the same old broken records. The CIA is behind the ongoing sabotage of Russian infrastructure – in tandem with MI6 and others. Sooner or later there will be blowback.

Few people – including CIA operatives – may know that New York City, for instance, may be destroyed with a single move: blowing up the George Washington bridge. The city can’t be supplied with food and most of its requirements without the bridge. The New York City electrical grid can be destroyed by knocking out the central controls; putting it back together could take a year.

Even trespassed by infinite layers of fog of war, the current situation in Ukraine is still a skirmish. The real war has not even started yet. It might – soon.

Apart from Ukraine and Poland there is no NATO force worth mentioning. Germany has a risible two-day supply of ammunition. Turkey will not send a single soldier to fight Russians in Ukraine.

Out of 80,000 US troops stationed in Europe, only 10% are weaponized. Recently 20,000 were added, not a big deal. If the Americans activated their troops in Europe – something rather ridiculous in itself – they would not have any place to land supplies or reinforcements. All airports and seaports would be destroyed by Russian hypersonic missiles in a matter of minutes – in continental Europe as well as the UK.

In addition, all fuel centers such as Rotterdam for oil and natural gas would be destroyed, as well as all military installations, including top American bases in Europe: Grafenwoehr, Hohenfels, Ramstein, Baumholder, Vilseck, Spangdahlem, and Wiesbaden in Germany (for the Army and Air Force); Aviano Air Base in Italy; Lajes Air Base in Portugal’s Azores islands; Naval Station Rota in Spain; Incirlik Air Base in Turkey; and Royal Air Force stations Lakenheath and Mildenhall in the UK.

All fighter jets and bombers would be destroyed – after they land or while landed: there would be no place to land except on the autobahn, where they would be sitting ducks.

Patriot missiles are worthless – as the whole Global South saw in Saudi Arabia when they tried to knock out Houthi missiles coming from Yemen. Israel’s Iron Dome can’t even knock out all primitive missiles coming from Gaza.

US military power is the supreme myth of the fish to be fried variety. Essentially they hide behind proxies – as the Ukraine Armed Forces. US forces are worthless except in turkey shoots as in Iraq in 1991 and 2003, against a disabled opponent in the middle of the desert with no air cover. And never forget how NATO was completely humiliated by the Taliban.

The final breaking point

2022 ended an era: the final breaking point of the “rules-based international order” established after the fall of the USSR.

The Empire entered Desperation Row, throwing everything and the kitchen sink – proxy war on Ukraine, AUKUS, Taiwan hysteria – to dismantle the set-up they created way back in 1991.

Globalization’s rollback is being implemented by the Empire itself. That ranges from stealing the EU energy market from Russia so the hapless vassals buy ultra-expensive US energy to smashing the entire semiconductor supply chain, forcibly rebuilding it around itself to “isolate” China.

The NATO vs. Russia war in Ukraine is just a cog in the wheel of the New Great Game. For the Global South, what really matters is how Eurasia – and beyond – are coordinating their integration process, from BRI to the BRICS+ expansion, from the SCO to the INSTC, from Opec+ to the Greater Eurasia Partnership.

We’re back to what the world looked like in 1914, or before 1939, only in a limited sense. There’s a plethora of nations struggling to expand their influence, but all of them are betting on multipolarity, or “peaceful modernization”, as Xi Jinping coined it, and not Forever Wars: China, Russia, India, Iran, Indonesia and others.

So bye bye 1991-2022. The hard work starts now. Welcome to the New Great Game on crack.

Why the CIA attempted a ‘Maidan uprising’ in Brazil

The failed coup in Brazil is the latest CIA stunt, just as the country is forging stronger ties with the east.

January 10 2023

Photo Credit: The Cradle

By Pepe Escobar

A former US intelligence official has confirmed that the shambolic Maidan remix staged in Brasilia on 8 January was a CIA operation, and linked it to the recent attempts at color revolution in Iran.

On Sunday, alleged supporters of former right-wing President Jair Bolsonaro stormed Brazil’s Congress, Supreme Court, and  presidential palace, bypassing flimsy security barricades, climbing on roofs, smashing windows, destroying public property including precious paintings, while calling for a military coup as part of a regime change scheme targeting elected President Luis Inacio “Lula” da Silva.

According to the US source, the reason for staging the operation – which bears visible signs of hasty planning – now, is that Brazil is set to reassert itself in global geopolitics alongside fellow BRICS states Russia, India, and China.

That suggests CIA planners are avid readers of Credit Suisse strategist Zoltan Pozsar, formerly of the New York Fed. In his ground-breaking 27 December report titled War and Commodity Encumbrance, Pozsar states that “the multipolar world order is being built not by G7 heads of state but by the ‘G7 of the East’ (the BRICS heads of state), which is a G5 really but because of ‘BRICSpansion’, I took the liberty to round up.”

He refers here to reports that Algeria, Argentina, Iran have already applied to join the BRICS – or rather its expanded version “BRICS+” – with further interest expressed by Saudi Arabia, Turkiye, Egypt, Afghanistan, and Indonesia.

The US source drew a parallel between the CIA’s Maidan in Brazil and a series of recent street demonstrations in Iran instrumentalized by the agency as part of a new color revolution drive: “These CIA operations in Brazil and Iran parallel the operation in Venezuela in 2002 that was highly successful at the start as rioters managed to seize Hugo Chavez.”

Enter the “G7 of the East”

Straussian neo-cons placed at the top of the CIA, irrespective of their political affiliation, are livid that the “G7 of the East” – as in the BRICS+ configuration of the near future – are fast moving out of the US dollar orbit.

Straussian John Bolton – who has just publicized his interest in running for the US presidency – is now demanding the ouster of Turkey from NATO as the Global South realigns rapidly within new multipolar institutions.

Russian Foreign Minister Sergey Lavrov and his new Chinese counterpart Qin Gang have just announced the merging of the China-driven Belt and Road Initiative (BRI) and the Russia-driven Eurasia Economic Union (EAEU). This means that the largest 21st century trade/connectivity/development project – the Chinese New Silk Roads – is now even more complex, and keeps expanding.

That sets the stage for the introduction, already being designed at various levels, of a new international trading currency aimed at supplanting then replacing the US dollar. Apart from an internal debate among the BRICS, one of the key vectors is the discussion team set up between the EAEU and China. When concluded, these deliberations will be presented to BRI-EAEU partner nations and of course the expanded BRICS+.

Lula at the helm in Brazil, in what is now his third non-successive presidential term, will offer a tremendous boost to BRICS+, In the 2000s, side by side with Russian President Putin and former Chinese President Hu Jintao, Lula was a key conceptualizer of a deeper role for BRICS, including trade in their own currencies.

BRICS as “the new G7 of the East,” as defined by Pozsar, is beyond anathema – as much for Straussian neo-cons as for neoliberal.

The US is being slowly but surely expelled from wider Eurasia by concerted actions of the Russia-China strategic partnership.

Ukraine is a black hole – where NATO faces a humiliation that will make Afghanistan look like Alice in Wonderland. A feeble EU being forced by Washington to de-industrialize and buy US Liquified Natural Gas (LNG) at absurdly high cost has no essential resources for the Empire to plunder.

Geoeconomically, that leaves the US-denominated “Western Hemisphere,” especially immense energy-rich Venezuela as the key target. And geopolitically, the key regional actor is Brazil.

The Straussian neo-con play is to pull all stops to prevent Chinese and Russian trade expansion and political influence in Latin America, which Washington – irrespective of international law and the concept of sovereignty, continues to call “our backyard.” In times where neoliberalism is so “inclusive” that Zionists wear swastikas, the Monroe Doctrine is back, on steroids.

All about the ‘strategy of tension’

Clues for Maidan in Brazil can be obtained, for instance, at the US Army Cyber Command at Fort Gordon, where it’s no secret the CIA deployed hundreds of assets across Brazil ahead of the recent presidential election – faithful to the “strategy of tension” playbook.

CIA chatter was intercepted at Fort Gordon since mid-2022. The main theme then was the imposition of the widespread narrative that ‘Lula could only win by cheating.’

A key target of the CIA operation was to discredit by all means the Brazilian electoral process, paving the way for a prepackaged narrative that is now unraveling: a defeated Bolsonaro fleeing Brazil and seeking refuge at former US president Donald Trump’s Mar-a-Lago mansion. Bolsonaro, advised by Steve Bannon, did flee Brazil, skipping Lula’s inauguration, but because he’s terrified he may be facing the slammer sooner rather than later. And by the way, he is in Orlando, not Mar-a-Lago.

The icing on the stale Maidan cake was what happened this past Sunday: fabricating a 8 January in Brasilia mirroring the events of 6 January, 2021 in Washington, and of course imprinting the Bolsonaro-Trump link on people’s minds.

The amateurish nature of 8 January in Brasilia suggests CIA planners got lost in their own plot. The whole farce had to be anticipated because of Pozsar’s report, which everyone-who-matters has read across the New York-Beltway axis.

What is clear, is that for some factions of the powerful US establishment, getting rid of Trump at all costs is even more crucial than crippling Brazil’s role in BRICS+.

When it comes to the internal factors of Maidan in Brazil, borrowing from novelist Gabriel Garcia Marquez, everything walks and talks like the Chronicle of a Coup Foretold. It is impossible that the security apparatus around Lula could not have foreseen these events, especially considering the tsunami of signs on social networks.

So there must have been a concerted effort to act softly – without any preventive big sticks – while just emitting the usual neoliberal babble.

After all, Lula’s cabinet is a mess, with ministers constantly clashing and some members supporting Bolsonaro even a few months ago. Lula calls it a “national unity government,” but it is more like a tawdry patchwork job.

Brazilian analyst Quantum Bird, a globally respected physics scholar who has returned home after a long stint in NATO lands, notes how there are “too many actors in play and too many antagonistic interests. Among Lula’s ministers, we find Bolsonarists, neoliberal-rentiers, climate interventionism converts, identity politics practitioners and a vast fauna of political neophytes and social climbers, all well aligned with Washington’s imperial interests.”

CIA-stoked ‘militants’ on the prowl

One plausible scenario is that powerful sectors of the Brazilian military – at the service of the usual Straussian neo-con think tanks, plus global finance capital – could not really pull off a real coup, considering massive popular rejection, and had to settle at best for a “soft” farce. That illustrates just how much this self-aggrandizing and highly corrupt military faction is isolated from Brazilian society.

What is deeply worrying, as Quantum Bird notes, is that the unanimity in condemning 8 January from all quarters, while no one took responsibility, “shows how Lula navigates virtually alone in a shallow sea infested by sharpened corals and hungry sharks.”

Lula’s position, he adds, “decreeing a federal intervention all by himself, without strong faces of his own government or relevant authorities, shows an improvised, disorganized and amateurish reaction.”

And all that, once again, after CIA-stoked “militants” had been organizing the “protests” openly on social media for days.

The same old CIA playbook though remains at work. It still boggles the mind how easy it is to subvert Brazil, one of the natural leaders of the Global South. Attempted old school coups cum regime change/color revolution scripts will keep being played – remember Kazakhstan in early 2021, and Iran only a few months ago.

As much as the self-aggrandizing faction of the Brazilian military may believe they control the nation, if Lula’s significant masses hit the streets in full force against the 8 January farce, the army’s impotence will be graphically imprinted. And since this is a CIA operation, the handlers will order their tropical military vassals to behave like ostriches.

The future, unfortunately, is ominous. The US establishment will not allow Brazil, the BRICS economy with the best potential after China, to be back in business with full force and in synch with the Russia-China strategic partnership.

Straussian neo-cons and neoliberals, certified geopolitical jackals and hyenas, will get even more ferocious as the “G7 of the East,” Brazil included, moves to end the suzerainty of the US dollar as imperial control of the world vanishes.

The views expressed in this article do not necessarily reflect those of The Cradle.

Why BRI is back with a bang in 2023

January 06 2023

As Beijing’s Belt and Road Initiative enters its 10th year, a strong Sino-Russian geostrategic partnership has revitalized the BRI across the Global South.

Photo Credit: The Cradle

By Pepe Escobar

The year 2022 ended with a Zoom call to end all Zoom calls: Presidents Vladimir Putin and Xi Jinping discussing all aspects of the Russia-China strategic partnership in an exclusive video call.

Putin told Xi how “Russia and China managed to ensure record high growth rates of mutual trade,” meaning “we will be able to reach our target of $200 billion by 2024 ahead of schedule.”

On their coordination to “form a just world order based on international law,” Putin emphasized how “we share the same views on the causes, course, and logic of the ongoing transformation of the global geopolitical landscape.”

Facing “unprecedented pressure and provocations from the west,” Putin noted how Russia-China are not only defending their own interests “but also all those who stand for a truly democratic world order and the right of countries to freely determine their own destiny.”

Earlier, Xi had announced that Beijing will hold the 3rd Belt and Road Forum in 2023. This has been confirmed, off the record, by diplomatic sources. The forum was initially designed to be bi-annual, first held in 2017 and then 2019. 2021 didn’t happen because of Covid-19.

The return of the forum signals not only a renewed drive but an extremely significant landmark as the Belt and Road Initiative (BRI), launched in Astana and then Jakarta in 2013, will be celebrating its 10th anniversary.

BRI version 2.0

That set the tone for 2023 across the whole geopolitical and geoeconomic spectrum. In parallel to its geoconomic breadth and reach, BRI has been conceived as China’s overarching foreign policy concept up to the mid-century. Now it’s time to tweak things. BRI 2.0 projects, along its several connectivity corridors, are bound to be re-dimensioned to adapt to the post-Covid environment, the reverberations of the war in Ukraine, and a deeply debt-distressed world.

Photo Credit: The Cradle
Map of BRI (Photo Credit: The Cradle)

And then there’s the interlocking of the connectivity drive via BRI with the connectivity drive via the International North South Transportation Corridor (INTSC), whose main players are Russia, Iran and India.

Expanding on the geoeconomic drive of the Russia-China partnership as discussed by Putin and Xi, the fact that Russia, China, Iran and India are developing interlocking trade partnerships should establish that BRICS members Russia, India and China, plus Iran as one of the upcoming members of the expanded BRICS+, are the ‘Quad’ that really matter across Eurasia.

The new Politburo Standing Committee in Beijing, which are totally aligned with Xi’s priorities, will be keenly focused on solidifying concentric spheres of geoeconomic influence across the Global South.

How China plays ‘strategic ambiguity’

This has nothing to do with balance of power, which is a western concept that additionally does not connect with China’s five millennia of history. Neither is this another inflection of “unity of the center” – the geopolitical representation according to which no nation is able to threaten the center, China, as long as it is able to maintain order.

These cultural factors that in the past may have prevented China from accepting an alliance under the concept of parity have now vanished when it comes to the Russia-China strategic partnership.

Back in February 2022, days before the events that led to Russia’s Special Military Operation (SMO) in Ukraine, Putin and Xi, in person, had announced that their partnership had “no limits” – even if they hold different approaches on how Moscow should deal with a Kiev lethally instrumentalized by the west to threaten Russia.

In a nutshell: Beijing will not “abandon” Moscow because of Ukraine – as much as it will not openly show support. The Chinese are playing their very own subtle interpretation of what Russians define as  “strategic ambiguity.”

Connectivity in West Asia

In West Asia, BRI projects will advance especially fast in Iran, as part of the 25-year deal signed between Beijing and Tehran and the definitive demise of the Joint Comprehensive Plan of Action (JCPOA) – or Iran nuclear deal – which will translate into no European investment in the Iranian economy.

Iran is not only a BRI partner but also a full-fledged Shanghai Cooperation Organization (SCO) member. It has clinched a free trade agreement with the Eurasia Economic Union (EAEU), which consists of post-Soviet states Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan.

And Iran is, today, arguably the key interconnector of the INSTC, opening up the Indian Ocean and beyond, interconnecting not only with Russia and India but also China, Southeast Asia, and even, potentially, Europe – assuming the EU leadership will one day see which way the wind is blowing.

Map of INSTC (Photo Credit: The Cradle)

So here we have heavily US-sanctioned Iran profiting simultaneously from BRI, INSTC and the EAEU free trade deal. The three critical BRICS members – India, China, Russia – will be particularly interested in the development of the trans-Iranian transit corridor – which happens to be the shortest route between most of the EU and South and Southeast Asia, and will provide faster, cheaper transportation.

Add to this the groundbreaking planned Russia-Transcaucasia-Iran electric power corridor, which could become the definitive connectivity link capable of smashing the antagonism between Azerbaijan and Armenia.

In the Arab world, Xi has already rearranged the chessboard. Xi’s December trip to Saudi Arabia should be the diplomatic blueprint on how to rapidly establish a post-modern quid pro quo between two ancient, proud civilizations to facilitate a New Silk Road revival.

Rise of the Petro-yuan

Beijing may have lost huge export markets within the collective west – so a replacement was needed. The Arab leaders who lined up in Riyadh to meet Xi saw ten thousand sharpened (western) knives suddenly approaching and calculated it was time to strike a new balance.

That means, among other things, that Saudi Crown Prince Mohammad bin Salman (MbS) has adopted a more multipolar agenda: no more weaponizing of Salafi-Jihadism across Eurasia, and a door wide open to the Russia-China strategic partnership. Hubris strikes hard at the heart of the Hegemon.

Credit Suisse strategist Zoltan Pozsar, in two striking successive newsletters, titled War and Commodity Encumbrance (December 27) and War and Currency Statecraft (December 29), pointed out the writing on the wall.

Pozsar fully understood what Xi meant when he said China is “ready to work with the GCC” to set up a “new paradigm of all-dimensional energy cooperation” within a timeline of “three to five years.”

China will continue to import a lot of crude, long-term, from GCC nations, and way more Liquified Natural Gas (LNG). Beijing will “strengthen our cooperation in the upstream sector, engineering services, as well as [downstream] storage, transportation, and refinery. The Shanghai Petroleum and Natural Gas Exchange platform will be fully utilized for RMB settlement in oil and gas trade…and we could start currency swap cooperation.”

Pozsar summed it all up, thus: “GCC oil flowing East + renminbi invoicing = the dawn of the petroyuan.”

And not only that. In parallel, the BRI gets a renewed drive, because the previous model – oil for weapons – will be replaced with oil for sustainable development (construction of factories, new job opportunities).

And that’s how BRI meets MbS’s Vision 2030.

Apart from Michael Hudson, Poszar may be the only western economic analyst who understands the global shift in power: “The multipolar world order,” he says,” is being built not by G7 heads of state but by the ‘G7 of the East’ (the BRICS heads of state), which is a G5 really.” Because of the move toward an expanded BRICS+, he took the liberty to round up the number.

And the rising global powers know how to balance their relations too. In West Asia, China is playing slightly different strands of the same BRI trade/connectivity strategy, one for Iran and another for the Persian Gulf monarchies.

China’s Comprehensive Strategic Partnership with Iran is a 25-year deal under which China invests $400 billion into Iran’s economy in exchange for a steady supply of Iranian oil at a steep discount. While at his summit with the GCC, Xi emphasized “investments in downstream petrochemical projects, manufacturing, and infrastructure” in exchange for paying for energy in yuan.

How to play the New Great Game

BRI 2.0 was also already on a roll during a series of Southeast Asian summits in November. When Xi met with Thai Prime Minister Prayut Chan-o-cha at the APEC (Asia-Pacific Economic Cooperation) Summit in Bangkok, they pledged to finally connect the up-and-running China-Laos high-speed railway to the Thai railway system. This is a 600km-long project, linking Bangkok to Nong Khai on the border with Laos, to be completed by 2028.

And in an extra BRI push, Beijing and Bangkok agreed to coordinate the development of China’s Shenzhen-Zhuhai-Hong Kong Greater Bay Area and the Yangtze River Delta with Thailand’s Eastern Economic Corridor (EEC).

In the long run, China essentially aims to replicate in West Asia its strategy across Southeast Asia. Beijing trades more with the ASEAN than with either Europe or the US. The ongoing, painful slow motion crash of the collective west may ruffle a few feathers in a civilization that has seen, from afar, the rise and fall of Greeks, Romans, Parthians, Arabs, Ottomans, Spanish, Dutch, British. The Hegemon after all is just the latest in a long list.

In practical terms, BRI 2.0 projects will now be subjected to more scrutiny: This will be the end of impractical proposals and sunk costs, with lifelines extended to an array of debt-distressed nations. BRI will be placed at the heart of BRICS+ expansion – building on a consultation panel in May 2022 attended by foreign ministers and representatives from South America, Africa and Asia that showed, in practice, the global range of possible candidate countries.

Implications for the Global South

Xi’s fresh mandate from the 20th Communist Party Congress has signaled the irreversible institutionalization of BRI, which happens to be his signature policy. The Global South is fast drawing serious conclusions, especially in contrast with the glaring politicization of the G20 that was visible at its November summit in Bali.

So Poszar is a rare gem: a western analyst who understands that the BRICS are the new G5 that matter, and that they’re leading the road towards BRICS+. He also gets that the Quad that really matters is the three main BRICS-plus-Iran.

Acute supply chain decoupling, the crescendo of western hysteria over Beijing’s position on the war in Ukraine, and serious setbacks on Chinese investments in the west all play on the development of BRI 2.0. Beijing will be focusing simultaneously on several nodes of the Global South, especially neighbors in ASEAN and across Eurasia.

Think, for instance, the Beijing-funded Jakarta-Bandung high-speed railway, Southeast Asia’s first: a BRI project opening this year as Indonesia hosts the rotating ASEAN chairmanship. China is also building the East Coast Rail Link in Malaysia and has renewed negotiations with the Philippines for three railway projects.

Then there are the superposed interconnections. The EAEU will clinch a free trade zone deal with Thailand. On the sidelines of the epic return of Luiz Inácio Lula da Silva to power in Brazil, this past Sunday, officials of Iran and Saudi Arabia met amid smiles to discuss – what else – BRICS+. Excellent choice of venue: Brazil is regarded by virtually every geopolitical player as prime neutral territory.

From Beijing’s point of view, the stakes could not be higher, as the drive behind BRI 2.0 across the Global South is not to allow China to be dependent on western markets. Evidence of this is in its combined approach towards Iran and the Arab world.

China losing both US and EU market demand, simultaneously, may end up being just a bump in the (multipolar) road, even as the crash of the collective west may seem suspiciously timed to take China down.

The year 2023 will proceed with China playing the New Great Game deep inside, crafting a globalization 2.0 that is institutionally supported by a network encompassing BRI, BRICS+, the SCO, and with the help of its Russian strategic partner, the EAEU and OPEC+ too. No wonder the usual suspects are dazed and confused.

The views expressed in this article do not necessarily reflect those of The Cradle.

De-dollarization: Slowly but surely

1 Jan 2023

Source: Agencies

By Al Mayadeen English 

What unites China and Russia in a trade/currency warfare against the US is the fact that they both oppose a unipolar world over a multipolar world.

It has been almost a year since the war in Ukraine began. Since then, talk of de-dollarization has picked up speed. Even prominent mainstream economists Galbraith (2022) and Eichengreen (2022) have joined the bandwagon, but they do not see an avalanche that could unseat the dollar yet, and rightly so, but as argued here, they do so for the wrong reasons.

Across the board, the mainstream peddles the point that the US financial market has depth that no other market has, and therefore, the dollar is irreplaceable. That is true for the moment. Where else can financial wealth be placed safely, traded and cashed in quickly other than the US market. I emphasized safely because such a market was not safe for confiscated Russian assets and it is proving to be unsafe for any would-be customer whose politics do not align with US imperial designs. Thus, the issue of depth and safety have subjective twists to them. Moreso, the occurrence of Russian asset seizure by Europe and the US begs the question: the financial market is deep for whom? 

Money, it ought to be remembered, is a social convention. It serves a function as a medium of exchange/reserve, as well as a savings medium. Money is also an idea (a form) with an aura whose very allure is to reproduce the social conditions for the creation of more money, through credit of course. Like all conventions, money also holds by some form of consensus. Any currency has to be recognized as value and it attains a status as a symbolic power by the knowledge people hold about it as both means of transaction and a social form. Of all the monies in circulation around the world, the dollar is unusual in the sense that it derives its legitimacy from the knowledge that the dollar is secure from many people of different nationalities around the globe.

The dollar and dollar instruments, like treasuries and bonds, are assumed risk-free. Pension funds for instance, which ensure against old age poverty, scramble to lodge in dollar assets that are set to grow and not lose but gain much value over time. People acknowledge that the dollar is a universal medium of exchange and savings, and such acknowledgment is the source of the power of the dollar. However, such common knowledge, which is the substance of dollar power, must also be constantly produced and reproduced. For that, there are theories that fit the bill.

For instance, instead of theorizing that money depends on real production capabilities, fiat money is said to depend on a capitalism of futurity and a tradability of debt. Although the US accounts for less than 20 percent of world output (production’s worth’, faith in the depth of its financial market and its credibility in the future as a state account for it covering the credit necessary for much of global transactions and savings.

Still, theories are pretty much ideological tools that show or hide some desired aspects of reality in order to serve the interests of different social groups. So, while it is true that the US nominally holds less than 20 percent of global output, much of global output depends on the US’ control of strategic resources and global chokepoints. These are delivered by the demonstrative power of its many military bases and capacity to destruct its foes.

As one can readily see, if the capacity to destruct and to infuse instability abroad are counted as production, then it is obvious that the US accounts for much more in production than the merely 20 percent it registers in its national accounts as GDP. Such a megalithic process is the true substance of the knowledge that upholds the dollar as the world reserve currency. It is this knowledge, reproduced on a global scale by the capacity to destruct, which is the real reason for the deep knowledge that props up the deep US financial market, as opposed to some hallucinatory moneyed economy whose debts are tradable, and it is the erosion of that capacity that is heralded by the rise of the multipolar world when Russia began its de-Nazification of Ukraine campaign. Changing that power structure behind the depth of US finance changes the acknowledgment that the US dollar is the sole undisputed universal currency on account of the universal power of the US. How so?

The resilience of Russia’s economy

When the Central Bank of Russia announced it pegged its national currency to gold, just a month after the conflict erupted, many saw the move as a blow to the dollar status quo – especially for the EU bloc, which heavily relied on Russia for supplies of cheap LNG. For them, it was out of the question to pay for oil in rubles. “We will not be blackmailed by Russia” to pay for gas in rubles, said Germany’s Finance Minister, Robert Habeck. In March 2022, US lawmakers introduced a bill to sanction Russian gold and then the EU followed suit. By June 2022, the Group of 7 agreed to implement a full-scale ban on the Russian gold market, completely sanctioning Moscow from exporting gold. By placing an embargo on Russia’s gold exports, freezing Russian assets and blocking Russian banks from using SWIFT, the West believed it could pressure Moscow. These sanctions against Russia threw Russia out of the dollar loop and were de-dollarizing Russia. The West was partially de-dollarizing the world by imposing more sanctions.  

Even though the sanctions did weaken the ruble at first, it did not take too long for the currency to rebound since many of the commodities Russia produces such as gas, wheat and fertilizers are priced in the ruble. In the span of ten months, the Ruble went from a volatile position in March to a stable currency by September. The ruble still stands stronger than pre-war levels, and as Russia keeps carrying out trade activities with third countries via new monetary channels, the situation of the ruble only serves to forecast that the crisis in Europe will exacerbate further and further. If anything, the fact that Russia still manages despite the sanctions proves that there is more to production estimated in dollar GDP to measure the real worth of an economy and its currency. It has become apparent that the commodity control-based standard of the dollar equally applies to the Ruble, which accounts for significant shares of wheat and oil. 

Furthermore, Russia’s new MIR payment system, which parallels SWIFT and MasterCard, said that by the end of September it issued more than 161 cards worldwide. By November, Russia decided to take a step further and called on all state members of the BRICS+ alliance to consider the possibility of establishing a single gold trade system. And just very recently, reports revealed that Russia was beginning to test international payments in digital currencies with companies. Unlike Iraq and Libya, and Venezuela, Russia is bigger and has proven resilient, especially with support from China. 

Getting ‘at’ China

Besides the vast amounts of money spent on financing Kiev, Ukrainian President Volodymyr Zelensky himself admitted that the war in Ukraine was a war ‘for’ the US. When he delivered an address at a joint session at the US Congress in December, he warned that if Russia were to win the war, the world order established by the US post-WWII would inevitably crumble – with it, the hegemony of the dollar. With China’s economy surpassing the US in real terms and commanding much of global production and trade, the possibility of an alternative financial system is around the corner – unless of course the balance of forces tilts in favor of the US as it defeats Russia in Ukraine and extends its hegemony to the Eurasian corridor.  

So what does the US really want with Russia? It wants Russia fragmented and China choked. China, Russia’s de facto ally, has been de-dollarizing its economy over the past decade. But that doesn’t necessarily imply both countries form ‘a bloc’ per se. Both Russia and China remain distinct governments with distinct policies and distinct ideologies. What really unites them in this trade/currency warfare is the fact that they both oppose a unipolar world over a multipolar world. They both want to develop at their own pace, their own way, without the interference of neoliberal or imperialist elements. In that sense, the conflict in Ukraine has a lot to do with China.

Even the most recent Pentagon defense strategy admits that Russia is not as threatening as China is, which it dubs as “the greatest security challenge for the US.” When that report was issued in October 2022, US Defense Secretary Lloyd Austin said that China “is the only competitor out there with both the intent to reshape the international order, and increasingly, the power to do so, while Russia on the other hand “can’t systematically challenge the US over the long term. But Russian aggression does pose an immediate and sharp threat to our interests and values.” Unlike the West, it took only seven decades for China to establish itself as a global superpower that has carried out the biggest poverty alleviation project in history.  It established such a record without enslaving or geocoding the planet and the environment.

Another important feature of the Chinese economy is the fact that it easily absorbs technologies from abroad and it’s good at meeting the standards of foreign markets. It’s a leading pioneer in a panoply of sectors which include space exploration, financial developments, medical advances, green technologies, urban construction, and military innovations. China’s economy is also relatively insulated from external shocks and capital flight by its non-convertible currency. It draws down on its massive currency reserves denominated in dollars – mainly US government debt – and invested in US treasury bonds, to protect against any short-term capital flow and to preserve the competitiveness of its own currency at times of crises. 

What really bothers the West is the fact that China was not only able to propel its entire population to higher standards of living, but it also assisted others in doing so. Through its Belt and Road Initiative (BRI), China promoted infrastructural ventures in some of the world’s poorest economies in a way that complemented their productive assets in facilitating productivity, growth, and economic mobility. The Asian country has defied neoliberalism both as an ideology and as an economic policy by upholding its own brand of socialism based on “Chinese characteristics”.

As part of its commitment to the internationalism of Mao Zedong, China through the demonstration effect, exported that model based on an anti-imperialist and nationalist mode of development to countries of the Global South. Being the world’s largest trading country, the world’s largest exporter, and one of the world’s largest holders of US debt, China never forced anyone to borrow from it in order to financially enslave them and/or to finance its war effort. Adding all this to China’s defiance of abiding to western sanctions against Russia, and you will have Sino-Western relations hitting an all-time low – particularly in light of accusations that China helped Russia circumvent the effects of sanctions. 

Given the developmental trajectory of China’s growth, which is detached from militarism and built on a working-class-led resistance, it is rather an arithmetic certainty that China will never morph into a war-mongering nation. It simply does not depend on war to grow. Moreover, having itself been the target of imperialism for centuries is enough to suggest that China in no way intends to pursue such an agenda – but rather strives to resist it, as it always did. Its very existence as a powerful socialist nation is antithetical to the ideological, financial, and military dominance of the post-WW2 Western order.

This only adds to the reasons why the US has been recently waging a series of provocations against China, both economically and politically. On the economic front, the US constrained China from exporting semiconductors to western markets and suspended the transfer of chip technologies to China. It also plans to cut Huawei’s access to US banks over allegations that the company is engaged in “economic espionage” against the US. On the political front, there was the whole Taiwan fiasco which was short-lived after Tsai Ing-wen was humiliatingly defeated in Taiwan’s last election. 

China retaliates

At some point, it is only natural for China to retaliate. To strike back at the financial hegemon by decreasing the global demand for US dollars is one such measure of retaliation. China’s de-dollarization strategy can basically be summed up as follows: creating trade payment systems based on the national currencies of trading partners, dumping US treasuries, and breaking the petrodollar system while buying massive amounts of gold. 

It may be recalled that China stores a considerable portion of its surplus in US Bonds. The standard idea of weaponizing bonds is often reiterated in what pundits dub the ‘nuclear option’, a theory that supposes China could sell off all of its treasuries in an attempt to destabilize the American economy. But then again that seems like a mythical alternative, which is likely to harm everyone including China. The potential flooding of the global exchange market with billions of dollars of American debt may cause the price of US treasury bonds to decrease and reciprocally interest rates to increase. The interest rates on US treasury bonds are the benchmark for borrowing throughout the global economy. So, in case they are abruptly raised, this may precipitate another global slowdown. 

China, as well as others, seek a reasonable solution to the US debt problem and a transfer to a more representative multi-polar currency and world-saving medium. At some point in the past, China held $3 trillion in US debt. In October 2022, it recorded treasury holdings to a 12-year low below the $1 trillion mark. It has been slowly ridding itself of being indebted to the US in the US’s own currency.

Over fears that china will endure a fate similar to that of Russia, that it will lose all its assets and dollars in case tensions increase, China has resorted to converting its bonds into real assets and proceeded by investing them in the third world as a counter-hegemonical strategy. China’s Belt and Road Initiative is the gateway to transform US-denominated money capital into real capital. Whereas US imperialism is about the incapacitation and disempowerment of the developing world, the Chinese funded BRI, which turns Chinese saved US dollars into third world plans and equipment, turns US bonds into weapons against the US. 

Breaking the petrodollar system

While reducing transactions in dollars diminishes global demand for the dollar, China and others with trade surpluses need to save in US treasuries for lack of alternatives. Analytically, an alternative to the US savings instruments from a multi-currency saving bond is not difficult to envisage. In fact that is what John Maynard Keynes proposed at Bretton-wood in 1944, but the proposal was declined by the US. The alternative muti-national savings instrument would come as natural outcome of shifting balance of forces globally, especially as the principal strategic commodity, oil, becomes denominated in currencies other than dollars.

Xi’s recent visit to Saudi Arabia is one step towards provisioning an alternative oil payment system. The visit amounted to a diplomatic offensive and was hailed as a landmark event on the strengthening of Sino-Arab ties as on December 20, 2022, the Chinese head of state attended the first ever China-Arab state summit and delivered a key speech “underscoring the importance of carrying forward the spirit of China-Arab friendship featuring solidarity and mutual assistance, equality and mutual benefit, inclusiveness and mutual learning, and jointly building a China-Arab community with a shared future in the new era.”

The move is clearly aimed at disrupting the petrodollar system, which has for the past 50 years upheld the US dollar as the sole currency to purchase oil. As is already known, the dollar-priced oil system is what redeemed the departure of the US from the gold standard in 1971. Being a source of energy upon which life depends, and a strategic commodity that accounts for about 20% of the global trade volume, having dollars is a prerequisite for an economy’s survival, and pricing the oil in dollars keeps the dollar high in demand. The more the US prints dollars to meet expanding trade demand, the more it could live off the rents of dollar seigniorage, or the ability to buy real assets from abroad with the credit it issues. No other empire in history enjoyed such privilege.

The modern imperial tributary system is that the US lends money in its own currency, and in return, it usurps the wealth produced by other nations. So when China says it wants to purchase oil using the Yuan and initiate separate deals, this means it is planning to lessen the global demand for the dollar, therefore lessen the capacity of the US to issue global credit, and hence, lessen its imperial rents.  

Gold is ok, but only partially

China has been hoarding much gold. It now has the highest gold reserves. For the first time since 2019, the central bank of China announced it increased its gold reserves with the purchase of 32 tons of gold in November, bringing the total up to 1980 tons amounting to $111.65 billion. Needless to say, the gold standard cannot supplant a fiat money system already based on commodities and production capabilities. However, having gold in addition to developing its own development bank and international lending institutions and payment system, China further securitizes its finance.  

Thus, gold demand in China is high because traders and investors consider the commodity as a buffer against extreme fluctuations and an effective store of value. The Chinese government monitors carefully the amount of gold that is brought in and out of the country. Being the biggest gold producer, China safeguards much of its gold production for itself. In addition, China intentionally uses the price arbitrage to get traders to purchase more gold from abroad. Most of that gold was purchased from the West, particularly the UK and the US, where gold is traded at a cheaper price. However, gold primacy alone is insufficient to create the acknowledgment of depth similar to that enjoyed by the US market.

Once more, that confidence in the dollar market is reproduced daily by the power of the US over strategic commodity channels around the world. The US is heir to the European colonial system and its control emerges from the transference between its physical and ideological powers. Therefore, gold alone is possibly only a gateway to dislodging a dollar system based on strategic commodity control.

The alternative to the US financial market is in the making

China has inked separate agreements, especially with Russia, with the aim of purchasing energy with a non-dollar currency. Though the de-dollarization of trade channels may achieve some results, one cannot deny the fact that the world still needs an alternative universal savings medium. On paper, designing a bond whose guarantors are the major powers is not a difficult task; however, such a task, if it were to materialize, undercuts the financial rents of US and US-associated elites.

A real de-dollarization requires a shift in the geopolitical context and an erosion of the consensus around the dollar. The war in Ukraine and the collapse of Europe augur the loss of the US and its dollar primacy. Unlike twentieth-century wars that caused the retreats of Europe to the benefit of the US, the current regression of Europe vis-à-vis Russia and China, also weakens the US. The case may be that the European working class, being more so a clone of capital than its antithesis, continues to self-harm at the behest of its bourgeoisie. It is then that the alternatives to the dollar and, more importantly, its bonds begin to take shape.

With 65 trillion dollars in off-balance sheet debts, and a CDO and Repo market rife with moral hazard, the chances of a major collapse are all too ominous. The transition will be gruesome given the fragile financial architecture. A smooth US debt workout is a must since the US is a huge net debtor in its own currency, which happens to be the world’s savings medium. Yet, the world must part with a system that pawns the future of man and nature by the power of the gun for the interests of so few. China and Russia have taken the bold decision to de-dollarize, to de-financialize wars and pollution and such must be the alternative for humanity.

Related Stories

Xi of Arabia and the petroyuan drive

Xi Jinping has made an offer difficult for the Arabian Peninsula to ignore: China will be guaranteed buyers of your oil and gas, but we will pay in yuan.

December 16 2022

Photo Credit: The Cradle

By Pepe Escobar

It would be so tempting to qualify Chinese President Xi Jinping landing in Riyadh a week ago, welcomed with royal pomp and circumstance, as Xi of Arabia proclaiming the dawn of the petroyuan era.

But it’s more complicated than that. As much as the seismic shift implied by the petroyuan move applies, Chinese diplomacy is way too sophisticated to engage in direct confrontation, especially with a wounded, ferocious Empire. So there’s way more going here than meets the (Eurasian) eye.

Xi of Arabia’s announcement was a prodigy of finesse: it was packaged as the internationalization of the yuan. From now on, Xi said, China will use the yuan for oil trade, through the Shanghai Petroleum and National Gas Exchange, and invited the Persian Gulf monarchies to get on board. Nearly 80 percent of trade in the global oil market continues to be priced in US dollars.

Ostensibly, Xi of Arabia, and his large Chinese delegation of officials and business leaders, met with the leaders of the Gulf Cooperation Council (GCC) to promote increased trade. Beijing promised to “import crude oil in a consistent manner and in large quantities from the GCC.” And the same goes for natural gas.

China has been the largest importer of crude on the planet for five years now – half of it from the Arabian peninsula, and more than a quarter from Saudi Arabia. So it’s no wonder that the prelude for Xi of Arabia’s lavish welcome in Riyadh was a special op-ed expanding the trading scope, and praising increased strategic/commercial partnerships across the GCC, complete with “5G communications, new energy, space and digital economy.”

Foreign Minister Wang Yi doubled down on the “strategic choice” of China and wider Arabia. Over $30 billion in trade deals were duly signed – quite a few significantly connected to China’s ambitious Belt and Road Initiative (BRI) projects.

And that brings us to the two key connections established by Xi of Arabia: the BRI and the Shanghai Cooperation Organization (SCO).

The Silk Roads of Arabia

BRI will get a serious boost by Beijing in 2023, with the return of the Belt and Road Forum. The first two bi-annual forums took place in 2017 and 2019. Nothing happened in 2021 because of China’s strict zero-Covid policy, now abandoned for all practical purposes.

The year 2023 is pregnant with meaning as BRI was first launched 10 years ago by Xi, first in Central Asia (Astana) and then Southeast Asia (Jakarta).

BRI not only embodies a complex, multi-track trans-Eurasian trade/connectivity drive but it is the overarching Chinese foreign policy concept at least until the mid-21st century. So the 2023 forum is expected to bring to the forefront a series of new and redesigned projects adapted to a post-Covid and debt-distressed world, and most of all to the loaded Atlanticism vs. Eurasianism geopolitical and geoeconomic sphere.

Also significantly, Xi of Arabia in December followed Xi of Samarkand in September – his first post-Covid overseas trip, for the SCO summit in which Iran officially joined as a full member. China and Iran in 2021 clinched a 25-year strategic partnership deal worth a potential $400 billion in investments. That’s the other node of China’s two-pronged West Asia strategy.

The nine permanent SCO members now represent 40 percent of the world’s population. One of their key decisions in Samarkand was to increase bilateral trade, and overall trade, in their own currencies.

And that further connects us to what has happening in Bishkek, Kyrgyzstan, in full synchronicity with Riyadh: the meeting of the Supreme Eurasia Economic Council, the policy implementation arm of the Eurasia Economic Union (EAEU).

Russian President Vladimir Putin, in Kyrgyzstan, could not have been more straightforward: “The work has accelerated in the transition to national currencies in mutual settlements… The process of creating a common payment infrastructure and integrating national systems for the transmission of financial information has begun.”

The next Supreme Eurasian Economic Council will take place in Russia in May 2023, ahead of the Belt and Road Forum. Take them together and we have the lineaments of the geoeconomic road map ahead: the drive towards the petroyuan proceeding in parallel to the drive towards a “common paying infrastructure” and most of all, a new alternative currency bypassing the US dollar.

That’s exactly what the head of the EAEU’s macroeconomic policy, Sergey Glazyev, has been designing, side by side with Chinese specialists.

Total Financial War

The move towards the petroyuan will be fraught with immense peril.

In every serious geoeconomic gaming scenario, it’s a given that an enfeebled petrodollar translates as the end of the imperial free lunch in effect for over five decades.

Concisely, in 1971, then-US President Richard “Tricky Dick” Nixon pulled the US from the gold standard; three years later, after the 1973 oil shock, Washington approached the Saudi oil minister, notorious Sheikh Yamani, with the proverbial offer-you-can’t-refuse: we buy your oil in US dollars and in return you buy our Treasury bonds, lots of weapons, and recycle whatever’s left in our banks.

Cue to Washington now suddenly able to dispense helicopter money – backed by nothing – ad infinitum, and the US dollar as the ultimate hegemonic weapon, complete with an array of sanctions over 30 nations who dare to disobey the unilaterally imposed “rules-based international order.”

Impulsively rocking this imperial boat is anathema. So Beijing and the GCC will adopt the petroyuan slowly but surely, and certainly with zero fanfare. The heart of the matter, once again, is their mutual exposure to the Western financial casino.

In the Chinese case, what to do, for instance, with those whopping $1 trillion in US Treasury bonds. In the Saudi case, it’s hard to think about “strategic autonomy” – such as what’s enjoyed by Iran – when the petrodollar is a staple of the Western financial system. The menu of possible imperial reactions includes everything from a soft coup/ regime change to Shock and Awe over Riyadh – followed by regime change.

Yet what the Chinese – and the Russians – are aiming at goes way beyond a Saudi (and Emirati) predicament. Beijing and Moscow have clearly identified how everything – the oil market, global commodities markets – is tied to the role of the US dollar as reserve currency.

And that’s exactly what the EAEU discussions; the SCO discussions; from now on the BRICS+ discussions; and Beijing’s two-pronged strategy across West Asia are focused to undermine.

Beijing and Moscow, within the BRICS framework, and further on within the SCO and the EAEU, have been closely coordinating their strategy since the first sanctions on Russia post-Maidan 2014, and the de facto trade war against China unleashed in 2018.

Now, after the February 2022 Special Military Operation launched by Moscow in Ukraine and NATO has devolved into, for all practical purposes, war against Russia, we have stepped beyond Hybrid War territory and are deep into Total Financial War.

SWIFTly drifting away

The whole Global South absorbed the “lesson” of the collective (institutional) west freezing, as in stealing, the foreign reserves of a G20 member, on top of it a nuclear superpower. If that happened to Russia, it could happen to anyone. There are no “rules” anymore.

Russia since 2014 has been improving its SPFS payment system, in parallel with China’s CIPS, both bypassing the western-led SWIFT banking messaging system, and increasingly used by Central Banks across Central Asia, Iran and India. All across Eurasia, more people are ditching Visa and Mastercard and using UnionPay and/or Mir cards, not to mention Alipay and WeChat Pay, both extremely popular across Southeast Asia.

Of course the petrodollar – and the US dollar, still representing under 60 percent of global foreign exchange reserves – will not ride into oblivion overnight. Xi of Arabia is just the latest chapter in a seismic shift now driven by a select group in the Global South, and not by the former “hyperpower.”

Trading in their own currencies and a new, global alternative currency is right at the top of the priorities of that long list of nations – from South America to Northern Africa and West Asia – eager to join BRICS+ or the SCO, and in quite a few cases, both.

The stakes could not be higher. And it’s all about subjugation or exercising full sovereignty. So let’s leave the last essential words to the foremost diplomat of our troubled times, Russia’s Sergey Lavrov, at the international interparty conference Eurasian Choice as a Basis for Strengthening Sovereignty:

“The main reason for today’s growing tensions is the stubborn striving of the collective West to maintain a historically diminishing domination in the international arena by any means it can… It is impossible to impede the strengthening of the independent centers of economic growth, financial might and political influence. They are emerging on our common continent of Eurasia, in Latin America, the Middle East and Africa.”

All aboard…the Sovereign Train.

The views expressed in this article do not necessarily reflect those of The Cradle.

The Global South births a new game-changing payment system

November 30, 2022

by Pepe Escobar, first published at The Cradle and posted with the author’s permission

Challenging the western monetary system, the Eurasia Economic Union is leading the Global South toward a new common payment system to bypass the US Dollar.

The Eurasia Economic Union (EAEU) is speeding up its design of a common payment system, which has been closely discussed for nearly a year with the Chinese under the stewardship of Sergei Glazyev, the EAEU’s minister in charge of Integration and Macro-economy.

Through its regulatory body, the Eurasian Economic Commission (EEC), the EAEU has just extended a very serious proposal to the BRICS nations (Brazil, Russia, India, China and South Africa) which, crucially, are already on the way to turning into BRICS+: a sort of G20 of the Global South.

The system will include a single payment card – in direct competition with Visa and Mastercard – merging the already existing Russian MIR, China’s UnionPay, India’s RuPay, Brazil’s Elo, and others.

That will represent a direct challenge to the western-designed (and enforced) monetary system, head on. And it comes on the heels of BRICS members already transacting their bilateral trade in local currencies, and bypassing the US dollar.

This EAEU-BRICS union was long in the making – and will now also move toward prefiguring a further geoeconomic merger with the member nations of the Shanghai Cooperation Organization (SCO).

The EAEU was established in 2015 as a customs union of Russia, Kazakhstan and Belarus, joined a year later by Armenia and Kyrgyzstan. Vietnam is already an EAEU free trade partner, and recently enshrined SCO member Iran is also clinching a deal.

The EAEU is designed to implement free movement of goods, services, capital, and workers between member countries. Ukraine would have been an EAEU member if not for the Maidan coup in 2014 masterminded by the Barack Obama administration.

Vladimir Kovalyov, adviser to the chairman of the EEC, summed it all up to Russian newspaper Izvestia. The focus is to establish a joint financial market, and the priority is to develop a common “exchange space:” “We’ve made substantial progress and now the work is focused on such sectors as banking, insurance, and the stock market.”

A new regulatory body for the proposed joint EEU-BRICS financial system will soon be established.

Meanwhile, trade and economic cooperation between the EAEU and BRICS have increased 1.5 times in the first half of 2022 alone.

The BRICS share in the total external trade turnover of the EAEU has reached 30 percent, Kovalyov revealed at the BRICS International Business Forum this past Monday in Moscow:

“It is advisable to combine the potentials of the BRICS and EAEU macro-financial development institutions, in particular the BRICS New Development Bank, the Asian Infrastructure Investment Bank (AIIB), as well as national development institutions. This will make it possible to achieve a synergistic effect and ensure synchronous investments in sustainable infrastructure, innovative production, and renewable energy sources.”

Here we once again see the advancing convergence of not only BRICS and EAEU but also the financial institutions deeply involved in projects under the China-led New Silk Roads, or Belt and Road Initiative (BRI).

Halting the Age of Plunder

As if all that was not game-changing enough, Russian President Vladimir Putin is raising the stakes by calling for a new international payment system based on blockchain and digital currencies.

The project for such a system was recently presented at the 1st Eurasian Economic Forum in Bishkek.

At the forum, the EAEU approved a draft agreement on cross-border placement and circulation of securities in member states, and amended technical regulations.

The next big step is to organize the agenda of a crucial meeting of the Supreme Eurasian Economic Council on 14 December in Moscow. Putin will be there – in person. And there’s nothing he would love more than to make a game-changing announcement.

All of these moves acquire even more importance as they connect to fast increasing, interlocking trade between Russia, China, India, and Iran: from Russia’s drive to build new pipelines serving its Chinese market – to Russia, Kazakhstan, and Uzbekistan discussing a gas union for both domestic supplies and exports, especially to main client China.

Slowly but surely, what is emerging is the Big Picture of an irretrievably fractured world featuring a dual trade/circulation system: one will be revolving around the remnants of the dollar system, the other is being built centered on the association of BRICS, EAEU, and SCO.

Pushing further on down the road, the recent pathetic metaphor coined by a tawdry Eurocrat boss: the “jungle” is breaking away from the “garden” with a vengeance. May the fracture persist, as a new international payment system – and then a new currency – will aim to halt for good the western-centric Age of Plunder.

US paralyzed by Islamic Republic of Iran’s strategic swing

Monday, 28 November 2022 6:18 PM  [ Last Update: Monday, 28 November 2022 6:21 PM ]

By Pepe Escobar

Iran’s parliament has just approved the accession of the Islamic Republic to the Shanghai Cooperation Organization (SCO), previously enshrined at the Samarkand summit last September, marking the culmination of a process that lasted no less than 15 years.  

Iran has already applied to become a member of the expanding BRICS+, which before 2025 will be inevitably configured as the alternative Global South G20 that really matters. 

Iran is already part of the Quad that really matters – alongside BRICS members Russia, China and India. Iran is deepening its strategic partnership with both China and Russia and increasing bilateral cooperation with India. 

Iran is a key Chinese partner in the New Silk Roads, or Belt and Road Initiative (BRI). It is set to clinch a free trade agreement with the Eurasia Economic Union (EAEU) and is a key node of the International North-South Transportation Corridor (INSTC), alongside Russia and India.     

All of the above configures the lightning-fast emergence of the Islamic Republic of Iran as a West Asia and Eurasia big power, with vast reach across the Global South. 

That has left the whole set of imperial “policies” towards Tehran lying in the dust.

So it’s no wonder that previously accumulated strands of Iranophobia – fed by the Empire over four decades — have recently metastasized into yet another color revolution offensive, fully supported and disseminated by Anglo-American media.

The playbook is always the same. Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei actually came up with a concise definition. The problem is not bands of oblivious rioters and/or mercenaries:  “the main confrontation”, he said, is with “global hegemony.”

Ayatollah Khamenei was somewhat echoed by American intellectual and author Noam Chomsky, who has remarked how an array of US sanctions over four decades have severely harmed the Iranian economy and “caused enormous suffering.”

Using Kurds as expendable assets

The latest color revolution overdrive overlaps with the manipulation of Kurds in both Syria and Iraq. From the imperial perspective, the proxy war in Syria, which is far from over, not only works as an additional front in the fight against Russia but also allows the instrumentalization of highly dependent Kurds against both Iran and Turkey.   

Iran is currently being attacked according to a perverse variation of the scheme applied to Syria in 2011. A sort of “permanent protest” situation has been imposed across vast swathes of northwestern Iran.

What changed in mid-November is that armed gangs started to apply terrorist tactics in several towns close to the Iraqi border, and were even believed to be weaponized enough to take control of some of the towns.  

Tehran inevitably had to send IRGC troops to contain the situation and beef up border security. They engaged in operations similar to what has been done before in Dara’a, in the Syrian southwest.

This military intervention was effective. But in a few latitudes, terror gangs continue to attack government infrastructure and even civilian property. The key fact is that Tehran prefers not to repress these unruly demonstrations using deadly force.

The really critical issue is not the protests per se: it’s the transfer of weapons by the Kurds from Iraq to Iran to bolster the color revolution scenario.

Tehran has issued a de facto ultimatum to Baghdad: get your act together with the Kurds, and make them understand the red lines.    

As it stands, Iran is massively employing Fateh ballistic missiles and Shahed-131 and Shahed-136 kamikaze drones against selected Kurdish terrorist bases in northern Iraq.

It’s debatable whether that will be enough to control the situation. What is clear is that the “Kurdish card”, if not tamed, could be easily played by the usual suspects in other Iranian provinces, considering the solid financial, military and informational support offered by Iraqi Kurds to Iranian Kurds.   

Turkey is facing a relatively similar problem with the Syrian Kurds instrumentalized by the US.

In northern Syria, they are mostly armed gangs posing as “Kurds”. So it’s quite possible that these Kurdish armed gangs, essentially played by Washington as useful idiots, may end up being decimated, simultaneously, in the short to medium term, by both Ankara and Tehran.

If all fails, pray for regime change

A geopolitical game-changer which was unthinkable until recently may soon be on the cards: a high-level meeting between Turkish President Recep Erdogan and his Syrian counterpart Bashar al-Assad (remember the decade-long refrain “Assad must go”?) in Russia, with mediation by none other than Russian president Vladimir Putin.

What would it take for Kurds to understand no state – be it Iran, Syria or Turkey – will offer them land for their own nation? Parameters could eventually change in case Iraqis in Baghdad finally manage to expel the US.

Before we get there, the fact is Iran has already turned West Asian geopolitics upside down – via its smart cruise missiles, extremely effective kamikaze drones, electronic warfare and even state-of-the-art hypersonic missiles.

Empire “planners” never saw this coming: a Russia-Iran strategic partnership that not only makes total sense geo-economically, but is also a military force multiplier.

Moreover, that is inscribed in the looming Big Picture on which the expanded BRICS+ is focusing: Eurasia (and beyond) integration via multimodal economic corridors such as the INTSC, pipelines and high-speed rail.   

The Empire’s Plan A, on Iran, was a mere nuclear deal (JCPOA), devised by the Barack Obama administration as nothing but a crude containment scheme.

Trump actually blew it all up – and there’s nothing left: a JCPOA revival, which has been – in theory – attempted for months in Vienna, was always a non-starter because the Americans themselves don’t know anymore what they want from it. 

So what’s left as Plan B for the Straussian neocon/neoliberal psychos in charge of US foreign policy is to hurl all manner of fall guys – from Kurds to the toxic MEK – into the Iran cauldron and, amplified 24/7 by hysterical mainstream media, pray for regime change.

Well, that’s not going to happen. Tehran just needs to wait, exercise restraint, and observe how so much color revolution virtue signaling will eventually fizzle out.

Pepe Escobar is an independent geopolitical analyst and author, focused on Eurasia integration. His latest book is Raging Twenties.

(The views expressed in this article are author’s own and do not necessarily reflect those of Press TV.)


Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.ir

www.presstv.co.uk

Related Videos

Arresting Mossad agents, dismantling terrorist networks, confiscating ammunition and weapons, these are some of what Iranian intelligence has revealed since the outbreak of the riots in the country.
The Israeli eye… a scheme to strike stability in Iran, the interactions of the Jerusalem process, and the fall of normalization in the streets of Qatar


LATEST NEWS

Goodbye G20, hello BRICS+

The increasingly irrelevant G20 Summit concluded with sure signs that BRICS+ will be the way forward for Global South cooperation.

November 17 2022

Photo Credit: The Cradle

By Pepe Escobar

The redeeming quality of a tense G20 held in Bali – otherwise managed by laudable Indonesian graciousness – was to sharply define which way the geopolitical winds are blowing.

That was encapsulated in the Summit’s two highlights: the much anticipated China-US presidential meeting – representing the most important bilateral relationship of the 21st century – and the final G20 statement.

The 3-hour, 30-minute-long face-to-face meeting between Chinese President Xi Jinping and his US counterpart Joe Biden – requested by the White House – took place at the Chinese delegation’s residence in Bali, and not at the G20 venue at the luxury Apurva Kempinski in Nusa Dua.

The Chinese Ministry of Foreign Affairs concisely outlined what really mattered. Specifically, Xi told Biden that Taiwan independence is simply out of the question. Xi also expressed hope that NATO, the EU, and the US will engage in “comprehensive dialogue” with Russia. Instead of confrontation, the Chinese president chose to highlight the layers of common interest and cooperation.

Biden, according to the Chinese, made several points. The US does not seek a New Cold War; does not support “Taiwan independence;” does not support “two Chinas” or “one China, one Taiwan”; does not seek “decoupling” from China; and does not want to contain Beijing.

However, the recent record shows Xi has few reasons to take Biden at face value.

The final G20 statement was an even fuzzier matter: the result of arduous compromise.

As much as the G20 is self-described as “the premier forum for global economic cooperation,” engaged to “address the world’s major economic challenges,” the G7 inside the G20 in Bali had the summit de facto hijacked by war. “War” gets almost double the number of mentions in the statement compared to “food” after all.

The collective west, including the Japanese vassal state, was bent on including the war in Ukraine and its “economic impacts” – especially the food and energy crisis – in the statement. Yet without offering even a shade of context, related to NATO expansion. What mattered was to blame Russia – for everything.

The Global South effect

It was up to this year’s G20 host Indonesia – and the next host, India – to exercise trademark Asian politeness and consensus building. Jakarta and New Delhi worked extremely hard to find wording that would be acceptable to both Moscow and Beijing. Call it the Global South effect.

Still, China wanted changes in the wording. This was opposed by western states, while Russia did not review the last-minute wording because Foreign Minister Sergey Lavrov had already departed.

On point 3 out of 52, the statement “expresses its deepest regret over the aggression of the Russian Federation against Ukraine and demands the complete and unconditional withdrawal of armed forces from the territory of Ukraine.”

“Russian aggression” is the standard NATO mantra – not shared by virtually the whole Global South.

The statement draws a direct correlation between the war and a non-contextualized “aggravation of pressing problems in the global economy – slowing economic growth, rising inflation, disruption of supply chains, worsening energy, and food security, increased risks to financial stability.”

As for this passage, it could not be more self-evident: “The use or threat of use of nuclear weapons is inadmissible. The peaceful resolution of conflicts, efforts to address crises, as well as diplomacy and dialogue, are vital. Today’s era must not be of war.”

This is ironic given that NATO and its public relations department, the EU, “represented” by the unelected eurocrats of the European Commission, don’t do “diplomacy and dialogue.”

Fixated with war

Instead the US, which controls NATO, has been weaponizing Ukraine, since March, by a whopping $91.3 billion, including the latest presidential request, this month, of $37.7 billion. That happens to be 33 percent more than Russia’s total (italics mine) military spending for 2022.

Extra evidence of the Bali Summit being hijacked by “war” was provided by the emergency meeting, called by the US, to debate what ended up being a Ukrainian S-300 missile falling on a Polish farm, and not the start of WWIII like some tabloids hysterically suggested.

Tellingly, there was absolutely no one from the Global South in the meeting – the sole Asian nation being the Japanese vassal, part of the G7.

Compounding the picture, we had the sinister Davos master Klaus Schwab once again impersonating a Bond villain at the B20 business forum, selling his Great Reset agenda of “rebuilding the world” through pandemics, famines, climate change, cyber attacks, and – of course – wars.

As if this was not ominous enough, Davos and its World Economic Forum are now ordering Africa – completely excluded from the G20 – to pay $2.8 trillion to “meet its obligations” under the Paris Agreement to minimize greenhouse gas emissions.

The demise of the G20 as we know it

The serious fracture between Global North and Global South, so evident in Bali, had already been suggested in Phnom Penh, as Cambodia hosted the East Asia Summit this past weekend.

The 10 members of ASEAN had made it very clear they remain unwilling to follow the US and the G7 in their collective demonization of Russia and in many aspects China.

The Southeast Asians are also not exactly excited by the US-concocted IPEF (Indo-Pacific Economic Framework), which will be irrelevant in terms of slowing down China’s extensive trade and connectivity across Southeast Asia.

And it gets worse. The self-described “leader of the free world” is shunning the extremely important APEC (Asia-Pacific Economic Cooperation) summit in Bangkok at the end of this week.

For very sensitive and sophisticated Asian cultures, this is seen as an affront. APEC, established way back in 1990s to promote trade across the Pacific Rim, is about serious Asia-Pacific business, not Americanized “Indo-Pacific” militarization.

The snub follows Biden’s latest blunder when he erroneously addressed Cambodia’s Hun Sen as “prime minister of Colombia” at the summit in Phnom Penh.

Lining up to join BRICS

It is safe to say that the G20 may have plunged into an irretrievable path toward irrelevancy. Even before the current Southeast Asian summit wave – in Phnom Penh, Bali and Bangkok – Lavrov had already signaled what comes next when he noted that “over a dozen countries” have applied to join BRICS (Brazil, Russia, India, China, South Africa).

Iran, Argentina, and Algeria have formally applied: Iran, alongside Russia, India, and China, is already part of the Eurasian Quad that really matters.

Turkey, Saudi Arabia, Egypt, and Afghanistan are extremely interested in becoming members. Indonesia just applied, in Bali. And then there’s the next wave: Kazakhstan, UAE, Thailand (possibly applying this weekend in Bangkok), Nigeria, Senegal, and Nicaragua.

It’s crucial to note that all of the above sent their Finance Ministers to a BRICS Expansion dialogue in May. A short but serious appraisal of the candidates reveals an astonishing unity in diversity.

Lavrov himself noted that it will take time for the current five BRICS to analyze the immense geopolitical and geoeconomic implications of expanding to the point of virtually reaching the size of the G20 – and without the collective west.

What unites the candidates above all is the possession of massive natural resources: oil and gas, precious metals, rare earths, rare minerals, coal, solar power, timber, agricultural land, fisheries, and fresh water. That’s the imperative when it comes to designing a new resource-based reserve currency to bypass the US dollar.

Let’s assume that it may take up to 2025 to have this new BRICS+ configuration up and running. That would represent roughly 45 percent of confirmed global oil reserves and over 60 percent of confirmed global gas reserves (and that will balloon if gas republic Turkmenistan later joins the group).

The combined GDP – in today’s figures – would be roughly $29.35 trillion; much larger than the US ($23 trillion) and at least double the EU ($14.5 trillion, and falling).

As it stands, BRICS account for 40 percent of the global population and 25 percent of GDP. BRICS+ would congregate 4.257 billion people: over 50 percent of the total global population as it stands.

BRI embraces BRICS+

BRICS+ will be striving towards interconnection with a maze of institutions: the most important are the Shanghai Cooperation Organization (SCO), itself featuring a list of players itching to become full members; strategic OPEC+, de facto led by Russia and Saudi Arabia; and the Belt and Road Initiative (BRI), China’s overarching trade and foreign policy framework for the 21st century. It is worth pointing out that early all crucial Asian players have joined the BRI.

Then there are the close links of BRICS with a plethora of regional trade blocs: ASEAN, Mercosur, GCC (Gulf Cooperation Council), Eurasia Economic Union (EAEU), Arab Trade Zone, African Continental Free Trade Area, ALBA, SAARC, and last but not least the Regional Comprehensive Economic Partnership (RCEP), the largest trade deal on the planet, which includes a majority of BRI partners.

BRICS+ and BRI is a match everywhere you look at it – from West Asia and Central Asia to the Southeast Asians (especially Indonesia and Thailand). The multiplier effect will be key – as BRI members will be inevitably attracting more candidates for BRICS+.

This will inevitably lead to a second wave of BRICS+ hopefuls including, most certainly, Azerbaijan, Mongolia, three more Central Asians (Uzbekistan, Tajikistan, and gas republic Turkmenistan), Pakistan, Vietnam, and Sri Lanka, and in Latin America, a hefty contingent featuring Chile, Cuba, Ecuador, Peru, Uruguay, Bolivia, and Venezuela.

Meanwhile, the role of the BRICS’s New Development Bank (NDB) as well as the China-led Asia Infrastructure Investment Bank (AIIB) will be enhanced – coordinating infrastructure loans across the spectrum, as BRICS+ will be increasingly shunning dictates imposed by the US-dominated IMF and the World Bank.

All of the above barely sketches the width and depth of the geopolitical and geoeconomic realignments further on down the road – affecting every nook and cranny of global trade and supply chain networks. The G7’s obsession in isolating and/or containing the top Eurasian players is turning on itself in the framework of the G20. In the end, it’s the G7 that may be isolated by the BRICS+ irresistible force.

The views expressed in this article do not necessarily reflect those of The Cradle.

Russia, India, China, Iran: the Quad that really matters

Tuesday, 15 November 2022 3:55 PM 

By Pepe Escobar

Southeast Asia is right at the center of international relations for a whole week viz a viz three consecutive summits: Association of South East Asian Nations (ASEAN) summit in Phnom Penh, the Group of Twenty (G20) summit in Bali, and the Asia-Pacific Economic Cooperation (APEC) summit in Bangkok.  

Eighteen nations accounting for roughly half of the global economy represented at the first in-person ASEAN summit since the Covid-19 pandemic in Cambodia: the ASEAN 10, Japan, South Korea, China, India, US, Russia, Australia, and New Zealand. 

With characteristic Asian politeness, the summit chair, Cambodian Prime Minister Hun Sen (or “Colombian”, according to the so-called “leader of the free world”), said the plenary meeting was somewhat heated, but the atmosphere was not tense: “Leaders talked in a mature way, no one left.”

It was up to Russian Foreign Minister Sergey Lavrov to express what was really significant at the end of the summit.

While praising the “inclusive, open, equal structure of security and cooperation at ASEAN”, Lavrov stressed how Europe and NATO “want to militarize the region in order to contain Russia and China’s interests in the Indo-Pacific.”

A manifestation of this policy is how “AUKUS is openly aiming at confrontation in the South China Sea,” he said.

Lavrov also stressed how the West, via the NATO military alliance, is accepting ASEAN “only nominally” while promoting a completely “unclear” agenda. 

What’s clear though is how NATO “has moved towards Russian borders several times and now declared at the Madrid summit that they have taken global responsibility.”

This leads us to the clincher: “NATO is moving their line of defense to the South China Sea.” And, Lavrov added, Beijing holds the same assessment.

Here, concisely, is the open “secret” of our current geopolitical incandescence. Washington’s number one priority is the containment of China. That implies blocking the EU from getting closer to the key Eurasia drivers  – China, Russia, and Iran – engaged in building the world’s largest free trade/connectivity environment.

Adding to the decades-long hybrid war against Iran, the infinite weaponizing of the Ukrainian black hole fits into the initial stages of the battle.

For the Empire, Iran cannot profit from becoming a provider of cheap, quality energy to the EU. And in parallel, Russia must be cut off from the EU. The next step is to force the EU to cut itself off from China.

All that fits into the wildest, warped Straussian/neo-con wet dreams: to attack China, by emboldening Taiwan, first Russia must be weakened, via the instrumentalization (and destruction) of Ukraine.

And all along the scenario, Europe simply has no agency.     

Putin, Raeisi and the Erdogan track

Real life across key Eurasia nodes reveals a completely different picture. Take the relaxed get-together in Tehran between Russia’s top security official Nikolai Patrushev and his Iranian counterpart Ali Shamkhani last week.

They discussed not only security matters but also serious business – as in turbo-charged trade.

The National Iranian Oil Company (NIOC) will sign a $40 billion deal next month with Gazprom, bypassing US sanctions, and encompassing the development of two gas fields and six oilfields, swaps in natural gas and oil products, LNG projects, and the construction of gas pipelines.

Immediately after the Patrushev-Shamkhani meeting, President Putin called President Ebrahim Raeisi to keep up the “interaction in politics, trade and the economy, including transport and logistics,” according to the Kremlin.

Iranian president reportedly more than “welcomed” the “strengthening” of Moscow-Tehran ties.

Patrushev unequivocally supported Tehran over the latest color revolution adventure perpetrated under the framework of the Empire’s endless hybrid war.

Iran and the EAEU are negotiating a Free Trade Agreement (FTA) in parallel to the swap deals with Russian oil. Soon, SWIFT may be completely bypassed. The whole Global South is watching.

Simultaneous to Putin’s phone call, Turkiye’s Recep Tayyip Erdogan – conducting his own diplomatic overdrive, and just back from a summit of Turkic nations in Samarkand – stressed that the US and the collective West are attacking Russia “almost without limits”. 

Erdogan made it clear that Russia is a “powerful” state and commended its “great resistance”.

The response came exactly 24 hours later. Turkish intelligence cut to the chase, pointing out that the terrorist bombing in the perpetually busy Istiklal pedestrian street in Istanbul was designed in Kobane in northern Syria, which essentially responds to the US.

That constitutes a de-facto act of war and may unleash serious consequences, including a profound revision of Turkiye’s presence inside NATO.

Iran’s multi-track strategy

A Russia-Iran strategic alliance manifests itself practically as a historical inevitability. It recalls the time when the erstwhile USSR helped Iran militarily via North Korea, after an enforced US/Europe blockade.

Putin and Raeisi are taking it to the next level. Moscow and Tehran are developing a joint strategy to defeat the weaponization of sanctions by the collective West.

Iran, after all, has an absolutely stellar record of smashing variants of “maximum pressure” to bits. Also, it is now linked to a strategic nuclear umbrella offered by the “RICs” in BRICS (Russia, India, China).

So, Tehran may now plan to develop its massive economic potential within the framework of BRI, SCO, INSTC, the Eurasia Economic Union (EAEU), and the Russian-led Greater Eurasia Partnership.

Moscow’s game is pure sophistication: engaging in a high-level strategic oil alliance with Saudi Arabia while deepening its strategic partnership with Iran.

Immediately after Patrushev’s visit, Tehran announced the development of an indigenously built hypersonic ballistic missile, quite similar to the Russian KH-47 M2 Khinzal.

And the other significant news was connectivity-wise: the completion of part of a railway from strategic Chabahar Port to the border with Turkmenistan. That means imminent direct rail connectivity to the Central Asian, Russian and Chinese spheres. 

Add to it the predominant role of OPEC+, the development of BRICS+, and the pan-Eurasian drive to pricing trade, insurance, security, investments in the ruble, yuan, rial, etc.

There’s also the fact that Tehran could not care less about the endless collective West procrastination on the Joint Comprehensive Plan of Action (JCPOA), commonly known as Iran nuclear deal: what really matters now is the deepening relationship with the “RICs” in BRICS. 

Tehran refused to sign a tampered-with EU draft nuclear deal in Vienna. Brussels was enraged; no Iranian oil will “save” Europe, replacing Russian oil under a nonsensical cap to be imposed next month.

And Washington was enraged because it was betting on internal tensions to split OPEC.  

Considering all of the above, no wonder US ‘Think Tankland’ is behaving like a bunch of headless chickens.  

The queue to join BRICS

During the Shanghai Cooperation Organization (SCO) summit in Samarkand last September, it was already tacit to all players how the Empire is cannibalizing its closest allies.

And how, simultaneously, the shrinking NATO-sphere is turning inwards, with a focus on The Enemy Within, relentlessly corralling average citizens to march in lockstep behind total compliance with a two-pronged war – hybrid and otherwise – against imperial peer competitors Russia and China.

Now compare it with Chinese President Xi Jinping in Samarkand presenting China and Russia, together, as the top “responsible global powers” bent on securing the emergence of multipolarity.

Samarkand also reaffirmed the strategic political partnership between Russia and India (Indian Prime Minister Narendra Modi called it an unbreakable friendship).

That was corroborated by the meeting between Lavrov and his Indian counterpart Subrahmanyam Jaishankar last week in Moscow.

Lavrov praised the strategic partnership in every crucial area – politics, trade and economics, investment, and technology, as well as “closely coordinated actions” at the UN Security Council, BRICS, SCO and the G20.

On BRICS, crucially, Lavrov confirmed that “over a dozen countries” are lining up for membership, including Iran: “We expect the work on coordinating the criteria and principles that should underlie BRICS expansion to not take much time”.

But first, the five members need to analyze the ground-breaking repercussions of an expanded BRICS+. 

Once again: contrast. What is the EU’s “response” to these developments? Coming up with yet another sanctions package against Iran, targeting officials and entities “connected with security affairs” as well as companies, for their alleged “violence and repressions”.

“Diplomacy”, collective West-style, barely registers as bullying.

Back to the real economy – as in the gas front – the national interests of Russia, Iran and Turkiye are increasingly intertwined; and that is bound to influence developments in Syria, Iraq, and Libya, and will be a key factor to facilitate Erdogan’s re-election next year.

As it stands, Riyadh for all practical purposes has performed a stunning 180-degree maneuver against Washington via OPEC+. That may signify, even in a twisted way, the onset of a process of unification of Arab interests, guided by Moscow.

Stranger things have happened in modern history. Now appears to be the time for the Arab world to be finally ready to join the Quad that really matters: Russia, India, China, and Iran.

(The views expressed in this article are the author’s own and do not necessarily reflect those of Press TV.)


Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.ir

www.presstv.co.uk

MORE STORIES

Rewiring Eurasia: Mr. Patrushev goes to Tehran

The meeting this week between two Eurasian security bosses is a further step toward dusting away the west’s oversized Asian footprint.

November 10 2022

Photo Credit: The Cradle

By Pepe Escobar

Two guys are hanging out in a cozy room in Tehran with a tantalizing new map of the world in the background.

Nothing to see here? On the contrary. These two Eurasian security giants are no less than the – unusually relaxed – Russian Security Council Secretary Nikolai Patrushev and Ali Shamkhani, the Secretary of Iran’s Supreme National Security Council.

And why are they so relaxed? Because the future prospects revolving around the main theme of their conversation – the Russia-Iran strategic partnership – could not be more exciting.

This was a very serious business affair: an official visit, at the invitation of Shamkhani.

Patrushev was in Tehran on the exact same day that Russian Minister of Defense Sergey Shoigu – following a recommendation from General Sergey Surovikin, the overall commander of the Special Military Operation – ordered a Russian retreat from Kherson.

Patrushev knew it for days – so he had no problem to step on a plane to take care of business in Tehran. After all, the Kherson drama is part of the Patrushev negotiations with US National Security Advisor Jake Sullivan on Ukraine, which have been going on for weeks, with Saudi Arabia as eventual go-between.

Besides Ukraine, the two discussed “information security, as well as measures to counter interference in the internal affairs of both countries by western special services,” according to a report by Russia’s TASS news agency.

Both countries, as we know, are particular targets of western information warfare and sabotage, with Iran currently the focus of one of these no-holds-barred, foreign-backed, destabilization campaign.

Patrushev was officially received by Iranian President Ebrahim Raisi, who went straight to the point: “The cooperation of independent countries is the strongest response to the sanctions and destabilization policies of the US and its allies.”

Patrushev, for his part, assured Raisi that for the Russian Federation, strategic relations with Iran are essential for Russian national security.

So that goes way beyond Geranium-2 kamikaze drones – the Russian cousins of the Shahed-136 – wreaking havoc in the Ukrainian battlefield. Which, by the way, elicited a direct mention later on by Shamkhani: “Iran welcomes a peaceful settlement in Ukraine and is in favor of peace based on dialogue between Moscow and Kiev.”

Patrushev and Shamkhani of course discussed security issues and the proverbial “cooperation in the international arena.” But what may be more significant is that the Russian delegation included officials from several key economic agencies.

There were no leaks – but that suggests serious economic connectivity remains at the heart of the strategic partnership between the two top sanctioned nations in Eurasia.

Key in the discussions was the Iranian focus on fast expansion of bilateral trade in national currencies – ruble and rial. That happens to be at the center of the drive by both the Shanghai Cooperation Organization (SCO) and BRICS towards multipolarity. Iran is now a full SCO member – the only West Asian nation to be part of the Asian strategic behemoth – and will apply to become part of BRICS+.

Have swap, will travel

The Patrushev-Shamkhani get together happened ahead of the signing, next month, of a whopping $40 billion energy deal with Gazprom, as previously announced by Iranian Deputy Foreign Minister Mahdi Safari.

The National Iranian Oil Company (NIOC) has already clinched an initial $6.5 billion deal. All that revolves around the development of two gas deposits and six oilfields; swaps in natural gas and oil products; LNG projects; and building more gas pipelines.

Last month, Russian Deputy Prime Minister Aleksandr Novak announced a swap of 5 million tons of oil and 10 billion cubic meters of gas, to be finished by the end of 2022. And he confirmed that “the amount of Russian investment in Iran’s oil fields will increase.”

Barter of course is ideal for Moscow and Tehran to jointly bypass interminably problematic sanctions and payment settlement issues – linked to the western financial system. On top of it, Russia and Iran are able to invest in direct trade links via the Caspian Sea.

At the recent Conference on Interaction and Confidence Building Measures in Asia (CICA) summit in Astana, Kazakhstan, Raisi forcefully proposed that a successful “new Asia” must necessarily develop an endogenous model for independent states.

As an SCO member, and playing a very important role, alongside Russia and India, in the International North-South Transportation Corridor (INSTC), Raisi is positioning Iran in a key vector of multilateralism.

Since Tehran entered the SCO, cooperation with both Russia and China, predictably, is on overdrive. Patrushev’s visit is part of that process. Tehran is leaving behind decades of Iranophobia and every possible declination of American “maximum pressure” – from sanctions to attempts at color revolution – to dynamically connect across Eurasia.

BRI, SCO, INSTC

Iran is a key Belt and Road Initiative (BRI) partner for China’s grand infrastructure project to connect Eurasia via road, sea, and train. In parallel, the multimodal Russian-led INSTC is essential to promote trade between the Indian subcontinent and Central Asia – at the same time solidifying Russia’s presence in the South Caucasus and the Caspian Sea region.

Iran and India have committed to offer part of Chabahar port in Iran to Central Asian nations, complete with access to exclusive economic zones.

At the recent SCO summit in Samarkand, both Russia and China made it quite clear – especially for the collective west – that Iran is no longer going to be treated as a pariah state.

So it is no wonder Iran that is entering a new business era with all members of the SCO under the sign of an emerging financial order being designed mostly by Russia, China and India. As far as strategic partnerships go, the ties between Russia and India (President Narendra Modi called it an unbreakable friendship) is as strong as those between Russia and China. And when it comes to Russia, that’s what Iran is aiming at.

The Patrushev-Shamkhani strategic meeting will hurl western hysteria to unseen levels – as it completely smashes Iranophobia and Russophobia in one fell swoop. Iran as a close ally is an unparalleled strategic asset for Russia in the drive towards multipolarity.

Iran and the Eurasian Economic Union (EAEU) are already negotiating a Free Trade Agreement (FTA) in parallel to those swaps involving Russian oil. The west’s reliance on the SWIFT banking messaging system hardly makes any difference to Russia and Iran. The Global South is watching it closely, especially in Iran’s neighborhood where oil is commonly traded in US dollars.

It is starting to become clear to anyone in the west with an IQ above room temperature that the Joint Comprehensive Plan of Action (JCPOA, or Iran nuclear deal), in the end, does not matter anymore. Iran’s future is directly connected to the success of three of the BRICS: Russia, China and India. Iran itself may soon become a BRICS+ member.

There’s more: Iran is even becoming a role model for the Persian Gulf: witness the lengthy queue of regional states aspiring toward gaining SCO membership. The Trumpian “Abraham Accords?” What’s that? BRICS/SCO/BRI is the only way to go in West Asia today.

The views expressed in this article do not necessarily reflect those of The Cradle.

Putin: ‘The Situation Is, to a Certain Extent, Revolutionary’

Putin in fact did nail where we are: on the edge of a Revolution.

October 31, 2022

Global Research,

By Pepe Escobar

In an all-encompassing address to the plenary session of the 19th annual meeting of the Valdai Club, President Putin delivered no less than a devastating, multi-layered critique of unipolarity.

From Shakespeare to the assassination of Gen Soleimani;

from musings on spirituality to the structure of the UN;

from Eurasia as the cradle of human civilization to the interconnection of BRI, SCO and the INSTC;

from nuclear dangers to that peripheral peninsula of Eurasia “blinded by the idea that Europeans are better than others”, the address painted a Brueghel-esque canvas of the “historical milestone” facing us, in the middle of “the most dangerous decade since the end of WWII.”

Putin even ventured that, in the words of the classics, “the situation is, to a certain extent, revolutionary” as “the upper classes cannot, and the lower classes do not want to live like this anymore”. So everything is in play, as “the future of the new world order is being shaped before our eyes.”

Way beyond a catchy slogan about the game the West is playing, “bloody, dangerous and dirty”, the address and Putin’s interventions at the subsequent Q&A should be analyzed as a coherent vision of past, present and future. Here we offer just a few of the highlights:

“The world is witnessing the degradation of world institutions, the erosion of the principle of collective security, the substitution of international law for ‘rules’”.

“Even at the height of the Cold War, nobody denied the existence of the culture and art of the Other. In the West, any alternative point of view is declared subversive.”

“The Nazis burned books. Now the Western fathers of ‘liberalism’ are banning Dostoevsky.”

“There are at least two ‘Wests’. The first is traditional, with a rich culture. The second is aggressive and colonial.”

“Russia has not and does not consider itself an enemy of the West.

Russia tried to build relations with the West and NATO – to live together in peace and harmony. Their response to all cooperation was simply ‘no’.”

“We do not need a nuclear strike on Ukraine, there is no point – neither political nor military.”

“In part” the situation between Russia and Ukraine can be considered a civil war: “When creating Ukraine, the Bolsheviks endowed it with primordially Russian territories – they gave it all of Little Russia, the entire Black Sea region, the entire Donbass. Ukraine evolved as an artificial state.”

Russia and China Haven’t Even Started to Ratchet Up the Pain Dial. Pepe Escobar

“Ukrainians and Russians are one people – this is a historical fact. Ukraine has evolved as an artificial state. The only country that can guarantee its sovereignty is the country which created it – Russia.”

“The unipolar world is coming to an end. The West is incapable of single-handedly ruling the world. The world stands at a historical milestone ahead of the most dangerous and important decade since World War II.”

“Humanity has two options – either we continue accumulating the burden of problems that is certain to crush all of us, or we can work together to find solutions.”

What do we do after the orgy?

Amidst a series of absorbing discussions, the heart of the matter at Valdai is its 2022 report, “A World Without Superpowers”.

The report’s central thesis – eminently correct – is that “the United States and its allies, in fact, no longer enjoy the status of dominant superpower, but the global infrastructure that serves it is still in place.”

Of course all major interconnected issues at the current crossroads were precipitated because” Russia became the first major power which, guided by its own ideas of security and fairness, chose to discard the benefits of ‘global peace’ created by the only superpower.”

Well, not exactly “global peace”; rather a Mafia-enforced ethos of “our way or the highway”. The report quite diplomatically characterizes the freezing of Russia’s gold and foreign currency reserves and the “mop up” of Russia’s property abroad as “Western jurisdictions”, “if necessary”, being “guided by political expediency rather than the law”.

That’s in fact outright theft, under the shadow of the “rules-based international order”.

The report – optimistically – foresees the advent of a sort of normalized “cold peace” as “the best available solution today” – acknowledging at least this is far from guaranteed, and “will not halt the fundamental rebuilding of the international system on new foundations.”

The foundation for evolving multipolarity has in fact been presented by the Russia-China strategic partnership only three weeks before imperially-ordered provocations forced Russia to launch the Special Military Operation (SMO).

In parallel, the financial lineaments of multipolarity had been proposed since at least July 2021, in a paper co-written by Professor Michael Hudson and Radhika Desai.

The Valdai report duly acknowledges the role of Global South medium-sized powers that “exemplify the democratization of international politics” and may “act as shock absorbers during periods of upheaval.” That’s a direct reference to the role of BRICS+ as key protagonists.

On the Big Picture across the chessboard, the analysis tends to get more realistic when it considers that “the triumph of ‘the only true idea’ makes effective dialogue and agreement with supporters of different views and values impossible by definition.”

Putin alluded to it several times in his address. There’s no evidence whatsoever the Empire and its vassals will be deviating from their normative, imposed, value-laden unilateralism.

As for world politics beginning to “rapidly return to a state of anarchy built on force”, that’s self-evident: only the Empire of Chaos wants to impose anarchy, as it completely ran out of geopolitical and geoeconomic tools to control rebel nations, apart from the sanctions tsunami.

So the report is correct when it identifies that the childish neo-Hegelian “end of history” wet dream in the end hit the wall of History: we’re back to the pattern of large scale conflicts between centers of power.

And it’s also a fact that “simply changing the ‘operator’ as it happened in earlier centuries” (as in the U.S. taking over from Britain) “just won’t work.”

China might harbor a desire to become the new sheriff, but the Beijing leadership definitely is not interested. And even if that happened the Hegemon would fiercely prevented it, as “the entire system” remains “under its control (primarily finance and the economy).”

So the only way out, once again, is multipolarity – which the report characterizes, rather vaguely, as “a world without superpowers”, still in need of “a system of self-regulation, which implies much greater freedom of action and responsibility for such actions.”

Stranger things have happened in History. As it stands, we are plunged deep into the maelstrom of complete collapse. Putin in fact did nail where we are: on the edge of a Revolution.

This article was first published by Strategic Culture Foundation

Note to readers: Please click the share buttons above. Follow us on Instagram and Twitter and subscribe to our Telegram Channel. Feel free to repost and share widely Global Research articles.

Pepe Escobar, born in Brazil, is a correspondent and editor-at-large at Asia Times and columnist for Consortium News and Strategic Culture. Since the mid-1980s he’s lived and worked as a foreign correspondent in London, Paris, Milan, Los Angeles, Singapore, Bangkok. He has extensively covered Pakistan, Afghanistan and Central Asia to China, Iran, Iraq and the wider Middle East. Pepe is the author of Globalistan – How the Globalized World is Dissolving into Liquid War; Red Zone Blues: A Snapshot of Baghdad during the Surge. He was contributing editor to The Empire and The Crescent and Tutto in Vendita in Italy. His last two books are Empire of Chaos and 2030. Pepe is also associated with the Paris-based European Academy of Geopolitics. When not on the road he lives between Paris and Bangkok.

He is a regular contributor to Global Research.

All Global Research articles can be read in 51 languages by activating the Translate Website button below the author’s name.

To receive Global Research’s Daily Newsletter (selected articles), click here.

Follow us on Instagram and Twitter and subscribe to our Telegram Channel. Feel free to repost and share widely Global Research articles.

The original source of this article is Global Research

Copyright © Pepe Escobar, Global Research, 2022

Everybody wants to hop on the BRICS Express

Eurasia is about to get a whole lot larger as countries line up to join the Chinese and Russian-led BRICS and SCO, to the detriment of the west

October 27 2022

By Pepe Escobar

Photo Credit: The Cradle

Let’s start with what is in fact a tale of Global South trade between two members of the Shanghai Cooperation Organization (SCO). At its heart is the already notorious Shahed-136 drone – or Geranium-2, in its Russian denomination: the AK-47 of postmodern aerial warfare.

The US, in yet another trademark hysteria fit rife with irony, accused Tehran of weaponizing the Russian Armed Forces. For both Tehran and Moscow, the superstar, value-for-money, and terribly efficient drone let loose in the Ukrainian battlefield is a state secret: its deployment prompted a flurry of denials from both sides. Whether these are made in Iran drones, or the design was bought and manufacturing takes place in Russia (the realistic option), is immaterial.

The record shows that the US weaponizes Ukraine to the hilt against Russia. The Empire is a de facto war combatant via an array of “consultants,” advisers, trainers, mercenaries, heavy weapons, munitions, satellite intel, and electronic warfare. And yet imperial functionaries swear they are not part of the war. They are, once again, lying.

Welcome to yet another graphic instance of the “rules-based international order” at work. The Hegemon always decides which rules apply, and when. Anyone opposing it is an enemy of “freedom,” “democracy,” or whatever platitude du jour, and should be – what else – punished by arbitrary sanctions.

In the case of sanctioned-to-oblivion Iran, for decades now, the result has been predictably another round of sanctions. That’s irrelevant. What matters is that, according to Iran’s Islamic Revolutionary Guard Corps (IRGC), no less than 22 nations – and counting – are joining the queue because they also want to get into the Shahed groove.

Even Leader of the Islamic Revolution, Ayatollah Ali Khamenei, gleefully joined the fray, commenting on how the Shahed-136 is no photoshop.

The race towards BRICS+

What the new sanctions package against Iran really “accomplished” is to deliver an additional blow to the increasingly problematic signing of the revived nuclear deal in Vienna. More Iranian oil on the market would actually relieve Washington’s predicament after the recent epic snub by OPEC+.

A categorical imperative though remains. Iranophobia – just like Russophobia – always prevails for the Straussians/neo-con war advocates in charge of US foreign policy and their European vassals.

So here we have yet another hostile escalation in both Iran-US and Iran-EU relations, as the unelected junta in Brussels also sanctioned manufacturer Shahed Aviation Industries and three Iranian generals.

Now compare this with the fate of the Turkish Bayraktar TB2 drone – which unlike the “flowers in the sky” (Russia’s Geraniums) has performed miserably in the battlefield.

Kiev tried to convince the Turks to use a Motor Sich weapons factory in Ukraine or come up with a new company in Transcarpathia/Lviv to build Bayraktars. Motor Sich’s oligarch President Vyacheslav Boguslayev, aged 84, has been charged with treason because of his links to Russia, and may be exchanged for Ukrainian prisoners of war.

In the end, the deal fizzled out because of Ankara’s exceptional enthusiasm in working to establish a new gas hub in Turkey – a personal suggestion from Russian President Vladimir Putin to his Turkish counterpart Recep Tayyip Erdogan.

And that bring us to the advancing interconnection between BRICS and the 9-member SCO – to which this Russia-Iran instance of military trade is inextricably linked.

The SCO, led by China and Russia, is a pan-Eurasian institution originally focused on counter-terrorism but now increasingly geared towards geoeconomic – and geopolitical – cooperation. BRICS, led by the triad of Russia, India, and China overlaps with the SCO agenda geoeconomically and geopoliticallly, expanding it to Africa, Latin America and beyond: that’s the concept of BRICS+, analyzed in detail in a recent Valdai Club report, and fully embraced by the Russia-China strategic partnership.

The report weighs the pros and cons of three scenarios involving possible, upcoming BRICS+ candidates:

First, nations that were invited by Beijing to be part of the 2017 BRICS summit (Egypt, Kenya, Mexico, Thailand, Tajikistan).

Second, nations that were part of the BRICS foreign ministers’ meeting in May this year (Argentina, Egypt, Indonesia, Kazakhstan, Nigeria, UAE, Saudi Arabia, Senegal, Thailand).

Third, key G20 economies (Argentina, Indonesia, Mexico, Saudi Arabia, Turkiye).

And then there’s Iran, which has already already shown interest in joining BRICS.

South African President Cyril Ramaphosa has recently confirmed that “several countries” are absolutely dying to join BRICS. Among them, a crucial West Asia player: Saudi Arabia.

What makes it even more astonishing is that only three years ago, under former US President Donald Trump’s administration, Crown Prince Muhammad bin Salman (MbS) – the kingdom’s de fact ruler – was dead set on joining a sort of Arab NATO as a privileged imperial ally.

Diplomatic sources confirm that the day after the US pulled out of Afghanistan, MbS’s envoys started seriously negotiating with both Moscow and Beijing.

Assuming BRICS approves Riyadh’s candidacy in 2023 by the necessary consensus, one can barely imagine its earth-shattering consequences for the petrodollar. At the same time, it is important not to underestimate the capacity of US foreign policy controllers to wreak havoc.

The only reason Washington tolerates Riyadh’s regime is the petrodollar. The Saudis cannot be allowed to pursue an independent, truly sovereign foreign policy. If that happens, the geopolitical realignment will concern not only Saudi Arabia but the entire Persian Gulf.

Yet that’s increasingly likely after OPEC+ de facto chose the BRICS/SCO path led by Russia-China – in what can be interpreted as a “soft” preamble for the end of the petrodollar.

The Riyadh-Tehran-Ankara triad

Iran made known its interest to join BRICS even before Saudi Arabia. According to Persian Gulf diplomatic sources, they are already engaged in a somewhat secret channel via Iraq trying to get their act together. Turkey will soon follow – certainly on BRICS and possibly the SCO, where Ankara currently carries the status of extremely interested observer.

Now imagine this triad – Riyadh, Tehran, Ankara – closely joined with Russia, India, China (the actual core of the BRICS), and eventually in the SCO, where Iran is as yet the only West Asian nation to be inducted as a full member.

The strategic blow to the Empire will go off the charts. The discussions leading to BRICS+ are focusing on the challenging path towards a commodity-backed global currency capable of bypassing US dollar primacy.

Several interconnected steps point towards increasing symbiosis between BRICS+ and SCO. The latter’s members states have already agreed on a road map for gradually increasing trade in national currencies in mutual settlements.

The State Bank of India – the nation’s top lender – is opening special rupee accounts for Russia-related trade.

Russian natural gas to Turkey will be paid 25 percent in rubles and Turkish lira, complete with a 25 percent discount Erdogan personally asked of Putin.

Russian bank VTB has launched money transfers to China in yuan, bypassing SWIFT, while Sberbank has started lending out money in yuan. Russian energy behemoth Gazprom agreed with China that gas supply payments should shift to rubles and yuan, split evenly.

Iran and Russia are unifying their banking systems for trade in rubles/rial.

Egypt’s Central Bank is moving to establish an index for the pound – through a group of currencies plus gold – to move the national currency away from the US dollar.

And then there’s the TurkStream saga.

That gas hub gift

Ankara for years has been trying to position itself as a privileged East-West gas hub. After the sabotage of the Nord Streams, Putin has handed it on a plate by offering Turkey the possibility to increase Russian gas supplies to the EU via such a hub. The Turkish Energy Ministry stated that Ankara and Moscow have already reached an agreement in principle.

This will mean in practice Turkey controlling the gas flow to Europe not only from Russia but also Azerbaijan and a great deal of West Asia, perhaps even including Iran, as well as Libya in northeast Africa. LNG terminals in Egypt, Greece and Turkiye itself may complete the network.

Russian gas travels via the TurkStream and Blue Stream pipelines. The total capacity of Russian pipelines is 39 billion cubic meters a year.

Photo Credit: The Cradle
Map of Russian gas route via Turkey

TurkStream was initially projected as a four-strand pipeline, with a nominal capacity of 63 million cubic meters a year. As it stands, only two strands – with a total capacity of 31,5 billion cubic meters – have been built.

So an extension in theory is more than feasible – with all the equipment made in Russia. The problem, once again, is laying the pipes. The necessary vessels belong to the Swiss Allseas Group – and Switzerland is part of the sanctions craze. In the Baltic Sea, Russian vessels were used to finish building Nord Stream 2. But for a TurkStream extension, they would need to operate much deeper in the ocean.

TurkStream would not be able to completely replace Nord Stream; it carries much smaller volumes. The upside for Russia is not being canceled from the EU market. Evidently Gazprom would only tackle the substantial investment on an extension if there are ironclad guarantees about its security. And there’s the additional drawback that the extension would also carry gas from Russia’s competitors.

Whatever happens, the fact remains that the US-UK combo still exerts a lot of influence in Turkey – and BP, Exxon Mobil, and Shell, for instance, are actors in virtually every oil extraction project across West Asia. So they would certainly interfere on the way the Turkish gas hub functions, as well on determining the gas price. Moscow has to weigh all these variables before committing to such a project.

NATO, of course, will be livid. But never underestimate hedging bet specialist Sultan Erdogan. His love story with both the BRICS and the SCO is just beginning.

The views expressed in this article do not necessarily reflect those of The Cradle.

‘Peaceful modernization’: China’s offering to the Global South

Xi Jinping just offered the Global South a stark alternative to decades of western diktats, war, and economic duress. ‘Peaceful modernization’ will establish sovereignty, economy, and independence for the world’s struggling states

October 20 2022

Photo Credit: The Cradle

By Pepe Escobar

President Xi Jinping’s work report at the start of the 20th Congress of the Communist Party of China (CPC) this past Sunday in Beijing contained not only a blueprint for the development of the civilization-state, but for the whole Global South. CPC (China Communist Party)

Xi’s 1h45min speech actually delivered a shorter version of the full work report – see attached PDF – which gets into way more detail on an array of socio-political themes.

This was the culmination of a complex collective effort that went on for months. When he received the final text, Xi commented, revised and edited it.

In a nutshell, the CPC master plan is twofold: finalize “socialist modernization” from 2020 to 2035; and build China – via peaceful modernization – as a modern socialist country that is “prosperous, strong, democratic, culturally advanced, and harmonious” all the way to 2049, signaling the centenary of the foundation of the People’s Republic of China (PRC).

The central concept in the work report is peaceful modernization – and how to accomplish it. As Xi summarized, “It contains elements that are common to the modernization processes of all countries, but it is more characterized by features that are unique to the Chinese context.”

Very much in tune with Confucian Chinese culture, “peaceful modernization” encapsulates a complete theoretical system. Of course there are multiple geoeconomic paths leading to modernization – according to the national conditions of any particular country. But for the Global South as a whole, what really matters is that the Chinese example completely breaks with the western TINA (“there is no alternative”) monopoly on modernization practice and theory.

Not to mention it breaks with the ideological straitjacket imposed on the Global South by the self-defined “golden billion” (of which the really “golden” barely reach 10 million). What the Chinese leadership is saying is that the Iranian model, the Ugandan model or the Bolivian model are all as valid as the Chinese experiment: what matters is pursuing an independent path towards development.

How to develop tech independence

The recent historical record shows how every nation trying to develop outside the Washington Consensus is terrorized at myriad hybrid war levels. This nation becomes a target of color revolutions, regime change, illegal sanctions, economic blockade, NATO sabotage or outright bombing and/invasion.

What China proposes echoes across the Global South because Beijing is the largest trade partner of no less than 140 nations, who can easily grasp concepts such as high-quality economic development and self-reliance in science and technology.

The report stressed the categorical imperative for China from now on: to speed up technology self-reliance as the Hegemon is going no holds barred to derail China tech, especially in the manufacturing of semiconductors.

In what amount to a sanctions package from Hell, the Hegemon is betting on crippling China’s drive to accelerate its tech independence in semiconductors and the equipment to produce them.

So China will need to engage in a national effort on semiconductor production. That necessity will be at the core of what the work report describes as a new development strategy, spurred by the tremendous challenge of achieving tech self-sufficiency. Essentially China will go for strengthening the public sector of the economy, with state companies forming the nucleus for a national system of tech innovation development.

‘Small fortresses with high walls’

On foreign policy, the work report is very clear: China is against any form of unilateralism as well as blocs and exclusive groups targeted against particular countries. Beijing refers to these blocs, such as NATO and AUKUS, as “small fortresses with high walls.”

This outlook is inscribed in the CPC’s emphasis on another categorical imperative: reforming the existing system of global governance, extremely unfair to the Global South. It’s always crucial to remember that China, as a civilization-state, considers itself simultaneously as a socialist country and the world’s leading developing nation.

The problem once again is Beijing’s belief in “safeguarding the international system with the UN at its core.” Most Global South players know how the Hegemon subjects the UN – and its voting mechanism – to all sorts of relentless pressure.

It’s enlightening to pay attention to the very few westerners that really know one or two things about China.

Martin Jacques, until recently a senior fellow at the Department of Politics and International Studies at Cambridge University, and author of arguably the best book in English on China’s development, is impressed by how China’s modernization happened in a context dominated by the west: “This was the key role of the CPC. It had to be planned. We can see how extraordinarily successful it has been.”

The implication is that by breaking the west-centric TINA model, Beijing has accumulated the tools to be able to assist Global South nations with their own models.

Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, is even more upbeat: “China will become a leader of innovation. I very much hope and count on China becoming a leader for innovation in sustainability.” That will contrast with a ‘dysfunctional’ American model turning protectionist even in business and investment.

Mikhail Delyagin, deputy chairman of the Russian State Duma Committee on Economic Policy, makes a crucial point, certainly noted by key Global South players: the CPC “was able to creatively adapt the Marxism of the 19th century and its experience of the 20th century to new requirements and implement eternal values with new methods. This is a very important and useful lesson for us.”

And that’s the added value of a model geared towards the national interest and not the exclusivist policies of Global Capital.

BRI or bust

Implied throughout the work report is the importance of the overarching concept of Chinese foreign policy: the Belt and Road Initiative (BRI) and its trade/connectivity corridors across Eurasia and Africa.

It was up to Chinese Foreign Ministry spokesperson Wang Wenbin to clarify where BRI is heading:

“BRI transcends the outdated mentality of geopolitical games, and created a new model of international cooperation. It is not an exclusive group that excludes other participants but an open and inclusive cooperation platform. It is not just China’s solo effort, but a symphony performed by all participating countries.”

BRI is inbuilt in the Chinese concept of “opening up.” It is also important to remember that BRI was launched by Xi nine years ago – in Central Asia (Astana) and then Southeast Asia (Jakarta). Beijing has earned from its mistakes, and keeps fine-tuning BRI in consultation with partners – from Pakistan, Sri Lanka and Malaysia to several African nations.

It is no wonder, that by August this year, China’s trade with countries participating in BRI had reached a whopping $12 trillion, and non-financial direct investment in those countries surpassed $140 billion.

Wang correctly points out that following BRI infrastructure investments, “East Africa and Cambodia have highways, Kazakhstan has [dry] ports for exports, the Maldives has its first cross-sea bridge and Laos has become a connected country from a landlocked one.”

Even under serious challenges, from zero-Covid to assorted sanctions and the breakdown of supply chains, the number of China-EU express cargo trains keeps going up; the China-Laos Railway and the Peljesac Bridge in Croatia are open for business; and work on the Jakarta-Bandung High-Speed Railway and the China-Thailand Railway is in progress.

Mackinder on crack

All over the extremely incandescent global chessboard, international relations are being completely reframed.

China – and key Eurasian players at the Shanghai Cooperation Organization (SCO), BRICS+, and Russian-led Eurasian Economic Union (EAEU) – are all proposing peaceful development.

In contrast, the Hegemon imposes an avalanche of sanctions – not by accident the top three recipients are Eurasian powers Russia, Iran and China; lethal proxy wars (Ukraine); and every possible strand of hybrid war to prevent the end of its supremacy, which lasted barely seven and a half decades, a blip in historical terms.

The current dysfunction – physical, political, financial, cognitive – is reaching a climax. As Europe plunges into the abyss of largely self-inflicted devastation and darkness  – a neo-medievalism in woke register – an internally ravaged Empire resorts to plundering even its wealthy “allies”.

It’s as if we are all witnessing a Mackinder-on-crack scenario.

Halford Mackinder, of course, was the British geographer who developed the ‘Heartland Theory’ of geopolitics, heavily influencing US foreign policy during the Cold War: “Who rules East Europe commands the Heartland; Who rules the Heartland commands the World Island; Who rules the World Island commands the World.”

Russia spans 11 time zones and sits atop as much as one third of the world’s natural resources. A natural symbiosis between Europe and Russia is like a fact of life. But the EU oligarchy blew it.

It’s no wonder the Chinese leadership views the process with horror, because one of BRI’s essential planks is to facilitate seamless trade between China and Europe. As Russia’s connectivity corridor has been blocked by sanctions, China will be privileging corridors via West Asia.

Meanwhile, Russia is completing its pivot to the east. Russia’s enormous resources, combined with the manufacturing capability of China and East Asia as a whole, project a trade/connectivity sphere that goes even beyond BRI. That’s at the heart of the Russian concept of Greater Eurasia Partnership.

In another one of History’s unpredictable twists, Mackinder a century ago may have been essentially right about those controlling the Heartland/world island controlling the world. It doesn’t look like the controller will be the Hegemon, and much less its European vassals/slaves.

When the Chinese say they are against blocs, Eurasia and The West are the facto two blocs. Though not yet formally at war with each other, in reality they already are knee deep into Hybrid War territory.

Russia and Iran are on the frontline – militarily and in terms of absorbing non-stop pressure. Other important Global South players, quietly, try to either keep a low profile or, even more quietly, assist China and the others to make the multipolar world prevail economically.

As China proposes peaceful modernization, the hidden message of the work report is even starker. The Global South is facing a serious choice: choose either sovereignty – embodied in a multipolar world, peacefully modernizing – or outright vassalage. 

The views expressed in this article do not necessarily reflect those of The Cradle.

Russia courts Muslim countries as strategic Eurasian partners

Thursday, 13 October 2022 7:10 PM  [ Last Update: Friday, 14 October 2022 9:14 AM ]

Iranian President Ebrahim Raeisi (L) and Russian President Vladimir Putin (R) attend the CICA summit in Astana, Kazakhstan on October 13, 2022.

By Pepe Escobar

Everything that matters in the complex process of Eurasia integration was once again at play in Astana, as the – renamed – Kazakh capital hosted the 6th Conference on Interaction and Confidence-Building Measures in Asia (CICA).

The roll call was a Eurasian thing of beauty – featuring the leaders of Russia and Belarus (EAEU), West Asia (Azerbaijan, Turkey, Iraq, Iran, Qatar, Palestine) and Central Asia (Tajikistan, Uzbekistan, Kyrgyzstan).

China and Vietnam (East and Southeast Asia) attended at the level of vice presidents.

CICA is a multinational forum focused on cooperation toward peace, security, and stability across Asia.,Kazakh President Tokayev revealed that CICA has just adopted a declaration to turn the forum into an international organization.  

CICA has already established a partnership with the Eurasia Economic Union (EAEU). So in practice, it will soon be working together side-by-side with the SCO, the EAEU and certainly BRICS+.

The Russia-Iran strategic partnership was prominently featured at CICA, especially after Iran being welcomed to the SCO as a full member.

President Raeisi, addressing the forum, stressed the crucial notion of an emerging  “new Asia”, where “convergence and security” are “not compatible with the interests of hegemonic countries and any attempt to destabilize independent nations has goals and consequences beyond national geographies, and in fact, aims to target the stability and prosperity of regional countries.”

For Tehran, being a partner in the integration of CICA, within a maze of pan-Asia institutions, is essential after all these decades of”maximum pressure” unleashed by the Hegemon.

Moreover, it opens an opportunity, as Raeisi noted, for Iran to profit from “Asia’s economic infrastructure.”

Russian President Vladimir Putin, predictably, was the star of the show in Astana. It’s essential to note that Putin is supported by “all”nations represented at CICA.

High-level bilaterals with Putin included the Emir of Qatar: everyone that matters in West Asia wants to talk to “isolated” Russia.      

Putin called for “compensation for the damage caused to the Afghans during the years of occupation” (we all know the Empire of Chaos, Lies and Plunder will refuse it), and emphasized the key role of the SCO to develop Afghanistan.

He stated that Asia, “where new centers of power are growing stronger, plays a big role in the transition to a multipolar world order”.

He warned, “there is a real threat of famine and large-scale shocks against the backdrop of volatility in energy and food prices in the world.”

Hefurther called for the end of a financial system that benefits the “Golden billion” – who “live at the expense of others” (there’s nothing “golden” about this “billion”: at best such definition of wealth applies to 10 million.)

And he stressed that Russia is doing everything to “form a system of equal and indivisible security”. Exactly what drives the hegemonic imperial elites completely berserk.

“Offer you can’t refuse” bites the dust

The imminent juxtaposition between CICA and the SCO and EAEU is yet another instance of how the pieces of the complex Eurasia jigsaw puzzle are coming together.

Turkey and Saudi Arabia – in theory, staunch imperial military allies – are itching to join the SCO, which has recently welcomed Iran as a full member. 

That spells out Ankara and Riyadh’s geopolitical choice of forcefully eschewing the imperial Russophobia cum Sinophobia offensive.  

Erdogan, as an observer at the recent SCO summit in Samarkand, sent out exactly this message. The SCO is fast reaching the point where we may have, sitting at the same table, and taking important consensual decisions, not only the “RICs” (Russia, India, China) in BRICS (soon to be expanded to BRICS+) but arguably the top players inMuslim countries: Iran, Pakistan, Turkey, Saudi Arabia, Egypt and Qatar.

This evolving process, not without its serious challenges, testifies to the concerted Russia-China drive to incorporate the lands of Islam as essential strategic partners in forging the post-Western multipolar world. Call it a soft Islamization of multipolarity.  

No wonder the Anglo-American axis is absolutely petrified.

Now cut to a graphic illustration of all of the above – the way it’s being played in the energy markets: the already legendary Opec+ meeting in Vienna a week ago.

A tectonic geopolitical shift was inbuilt in the – collective – decision to slash oil production by 2 million barrels a day.

The Saudi Foreign Ministry issued a very diplomatic note with a stunning piece of information for those equipped to read between the lines.

For all practical purposes, the combo behind the teleprompter reader in Washington had issued a trademark Mafia threat to stop “protection” to Riyadh if the decision on the oil cuts was taken before the US mid-term elections. 

Only this time the “offer you can’t refuse” didn’t bite. OPEC+ made a collective decision, led by Russia, Saudi Arabia and the UAE. 

Following Putin and MBS famously getting along, it was up to Putin to host UAE President Sheikh Zayed – or MBZ, MBS’s mentor – at the stunning Konstantinovsky Palace in St. Petersburg, which datesback to Peter the Great.

That was a sort of informal celebration of how OPEC+ had provoked, with a single move, a superpower strategic debacle when it comes to the geopolitics of oil, which the Empire had controlled for a century. 

Everyone remembers, after the bombing, invasion and occupation of Iraq in 2003, how US neo-cons bragged, “we are the new OPEC”.

Well, not anymore. And the move had to come from the Russians and US Persian Gulf “allies” when everyone expected that would happen the day a Chinese delegation lands in Riyadh and asks for payment of all the energy they need in yuan.

OPEC+ called the American bluff and left the superpower high’n dry. So what are they going to do to “punish” Riyadh and Abu Dhabi? Call CENTCOM in Qatar and Bahrain to mobilize their aircraft carriers and unleash regime change?

What’s certain is that the Straussian/neocon psychos in charge in Washington will double down on hybrid war.

The art of “spreading instability”

In St. Petersburg, as he addressed MBZ, Putin made it clear that it’s OPEC+ – led by Russia, Saudi Arabia and the UAE – that is now setting the pace to “stabilize global energy markets” so consumers and suppliers would “feel calm, stable and confident” and supply and demand “would be balanced”.

On the gas front, at Russian Energy Week, Gazprom CEO Alexey Miller made it clear that Russia may still “save” Europe from an energy black hole.

Nord Stream (NS) and Nord Stream 2 (NS2) may become operational: but all political roadblocks must be removed before any repairing work starts on the pipelines.

And on West Asia, Miller said additions to Turk Stream have already been planned, much to the delight of Ankara, keen to become a key energy hub. 

In a parallel track, it’s absolutely clear that the G7’s desperate gambit of imposing an oil price cap – which translates as the weaponization of sanctions extended to the global energy market – is a losing proposition.

Slightly over a month before hosting the G20 in Bali, Indonesian Finance Minister Sri Mulyani Indrawati could not make it clearer: “When the United States is imposing sanctions using economic instruments, that creates a precedent for everything”, spreading instability “not only for Indonesia but for all other countries.”

Meanwhile, allMuslim-majority countries are paying very close attention to Russia. The Russia-Iran strategic partnership is now advancing in parallel to the Russia-Saudi-UAE entente as crucial vectors of multipolarity.

In the near future, all these vectors are bound to unite in what ideally should be a supra-organization capable of managing the top story of the 21st century: Eurasia integration.    

Pepe Escobar is a veteran journalist, author and independent geopolitical analyst focused on Eurasia.

(The views expressed in this article are the author’s own and do not necessarily reflect those of Press TV.)


Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.ir

www.presstv.co.uk

‘Samarkand Spirit’ to be driven by ‘responsible powers’ Russia and China

The SCO summit of Asian power players delineated a road map for strengthening the multipolar world

September 16 2022

Photo Credit: The Cradle

By Pepe Escobar

Amidst serious tremors in the world of geopolitics, it is so fitting that this year’s Shanghai Cooperation Organization (SCO) heads of state summit should have taken place in Samarkand – the ultimate Silk Road crossroads for 2,500 years.

When in 329 BC Alexander the Great reached the then Sogdian city of Marakanda, part of the Achaemenid empire, he was stunned: “Everything I have heard about Samarkand it’s true, except it is even more beautiful than I had imagined.”

Fast forward to an Op-Ed by Uzbekistan’s President Shavkat Mirziyoyev published ahead of the SCO summit, where he stresses how Samarkand now “can become a platform that is able to unite and reconcile states with various foreign policy priorities.”

After all, historically, the world from the point of view of the Silk Road landmark has always been “perceived as one and indivisible, not divided. This is the essence of a unique phenomenon – the ‘Samarkand spirit’.”

And here Mirziyoyev ties the “Samarkand Spirit” to the original SCO “Shanghai Spirit” established in early 2001, a few months before the events of September 11, when the world was forced into strife and endless war, almost overnight.

All these years, the culture of the SCO has been evolving in a distinctive Chinese way. Initially, the Shanghai Five were focused on fighting terrorism – months before the US war of terror (italics mine) metastasized from Afghanistan to Iraq and beyond.

Over the years, the initial “three no’s” – no alliance, no confrontation, no targeting any third party – ended up equipping a fast, hybrid vehicle whose ‘four wheels’ are ‘politics, security, economy, and humanities,’ complete with a Global Development Initiative, all of which contrast sharply with the priorities of a hegemonic, confrontational west.

Arguably the biggest takeaway of this week’s Samarkand summit is that Chinese President Xi Jinping presented China and Russia, together, as “responsible global powers” bent on securing the emergence of multipolarity, and refusing the arbitrary “order” imposed by the United States and its unipolar worldview.

Russian Foreign Minister Sergey Lavrov pronounced Xi’s bilateral conversation with President Vladimir Putin as “excellent.” Xi Jinping, previous to their meeting, and addressing Putin directly, had already stressed the common Russia-China objectives:

“In the face of the colossal changes of our time on a global scale, unprecedented in history, we are ready with our Russian colleagues to set an example of a responsible world power and play a leading role in order to put such a rapidly changing world on the trajectory of sustainable and positive development.”

Later, in the preamble to the heads of state meeting, Xi went straight to the point: it is important to “prevent attempts by external forces to organize ‘color revolutions’ in the SCO countries.” Well, Europe wouldn’t be able to tell, because it has been color-revolutionized non-stop since 1945.

Putin, for his part, sent a message that will be ringing all across the Global South: “Fundamental transformations have been outlined in world politics and economics, and they are irreversible.” (italics mine)

Iran: it’s showtime

Iran was the guest star of the Samarkand show, officially embraced as the 9th member of the SCO. President Ebrahim Raisi, significantly, stressed before meeting Putin that “Iran does not recognize sanctions against Russia.” Their strategic partnership will be enhanced. On the business front, a hefty delegation comprising leaders of 80 large Russian companies will be visiting Tehran next week.

The increasing Russia-China-Iran interpolation – the three top drivers of Eurasia integration – scares the hell out of the usual suspects, who may be starting to grasp how the SCO represents, in the long run, a serious challenge to their geoeconomic game. So, as every grain of sand in every Heartland desert is already aware, the geopolitical pressure against the trio will increase exponentially.

And then there was the mega-crucial Samarkand trilateral: Russia-China-Mongolia. There were no official leaks, but this trio arguably discussed the Power of Siberia-2 gas pipeline – the interconnector to be built across Mongolia; and Mongolia’s enhanced role in a crucial Belt and Road Initiative (BRI) connectivity corridor, now that China is not using the Trans-Siberian route for exports to Europe because of sanctions.

Putin briefed Xi on all aspects of Russia’s Special Military Operation (SMO) in Ukraine, and arguably answered some really tough questions, many of them circulating wildly on the Chinese web for months now.

Which brings us to Putin’s presser at the end of the summit – with virtually all questions predictably revolving around the military theater in Ukraine.

The key takeaway from the Russian president: “There are no changes on the SMO plan. The main tasks are being implemented.” On peace prospects, it is Ukraine that “is not ready to talk to Russia.” And overall, “it is regrettable that the west had the idea to use Ukraine to try to collapse Russia.”

On the fertilizer soap opera, Putin remarked, “food supply, energy supply, they (the west) created these problems, and now are trying to resolve them at the expense of someone else” – meaning the poorest nations. “European countries are former colonial powers and they still have this paradigm of colonial philosophy. The time has come to change their behavior, to become more civilized.”

On his meeting with Xi Jinping: “It was just a regular meeting, it’s been quite some time we haven’t had a meeting face to face.” They talked about how to “expand trade turnover” and circumvent the “trade wars caused by our so-called partners,” with “expansion of settlements in national currencies not progressing as fast as we want.”

Strenghtening multipolarity

Putin’s bilateral with India’s Prime Minister Narendra Modi could not have been more cordial – on a “very special friendship” register – with Modi calling for serious solutions to the food and fuel crises, actually addressing the west. Meanwhile, the State Bank of India will be opening special rupee accounts to handle Russia-related trade.

This is Xi’s first foreign trip since the Covid pandemic. He could do it because he’s totally confident of being awarded a third term during the Communist Party Congress next month in Beijing. Xi now controls and/or has allies placed in at least 90 percent of the Politburo.

The other serious reason was to recharge the appeal of BRI in close connection to the SCO. China’s ambitious BRI project was officially launched by Xi in Astana (now Nur-Sultan) nine years ago. It will remain the overarching Chinese foreign policy concept for decades ahead.

BRI’s emphasis on trade and connectivity ties in with the SCO’s evolving multilateral cooperation mechanisms, congregating nations focusing on economic development independent from the hazy, hegemonic “rules-based order.” Even India under Modi is having second thoughts about relying on western blocs, where New Delhi is at best a neo-colonized “partner.”

So Xi and Putin, in Samarkand, for all practical purposes delineated a road map for strengthening multipolarity – as stressed by the final  Samarkand declaration  signed by all SCO members.

The Kazakh puzzle 

There will be bumps on the road aplenty. It’s no accident that Xi started his trip in Kazakhstan – China’s mega-strategic western rear, sharing a very long border with Xinjiang. The tri-border at the dry port of Khorgos – for lorries, buses and trains, separately – is quite something, an absolutely key BRI node.

The administration of President Kassym-Jomart Tokayev in Nur-Sultan (soon to be re-named Astana again) is quite tricky, swinging between eastern and western political orientations, and infiltrated by Americans as much as during the era of predecessor Nursultan Nazarbayev, Kazakhstan’s first post-USSR president.

Earlier this month, for instance, Nur-Sultan, in partnership with Ankara and British Petroleum (BP) – which virtually rules Azerbaijan – agreed to increase the volume of oil on the Baku-Tblisi-Ceyhan (BTC) pipeline to up to 4 million tons a month by the end of this year. Chevron and ExxonMobil, very active in Kazakhstan, are part of the deal.

The avowed agenda of the usual suspects is to “ultimately disconnect the economies of Central Asian countries from the Russian economy.” As Kazakhstan is a member not only of the Russian-led Eurasia Economic Union (EAEU), but also the BRI, it is fair to assume that Xi – as well as Putin – discussed some pretty serious issues with Tokayev, told him to grasp which way the wind is blowing, and advised him to keep the internal political situation under control (see the aborted coup in January, when Tokayev was de facto saved by the Russian-led Collective Security Treaty Organization [CSTO]).

There’s no question Central Asia, historically known as a “box of gems” at the center of the Heartland, striding the Ancient Silk Roads and blessed with immense natural wealth – fossil fuels, rare earth metals, fertile agrarian lands – will be used by the usual suspects as a Pandora’s box, releasing all manner of toxic tricks against legitimate Eurasian integration.

That’s in sharp contrast with West Asia, where Iran in the SCO will turbo-charge its key role of crossroads connectivity between Eurasia and Africa, in connection with the BRI and the International North-South Transportation Corridor (INSTC).

So it’s no wonder that the UAE, Bahrain and Kuwait, all in West Asia, do recognize which way the wind is blowing. The three Persian Gulf states received official SCO ‘partner status’ in Samarkand, alongside the Maldives and Myanmar.

A cohesion of goals

Samarkand also gave an extra impulse to integration along the Russian-conceptualized Greater Eurasia Partnership  – which includes the Eurasian Economic Union (EAEU) – and that, just two weeks after the game-changing Eastern Economic Forum (EEF) held in Vladivostok, on Russia’s strategic Pacific coast.

Moscow’s priority at the EAEU is to implement a union-state with Belarus (which looks bound to become a new SCO member before 2024), side-by-side with closer integration with the BRI. Serbia, Singapore and Iran have trade agreements with the EAEU too.

The Greater Eurasian Partnership was proposed by Putin in 2015 – and it’s getting sharper as the EAEU commission, led by Sergey Glazyev, actively designs a new financial system, based on gold and natural resources and counter-acting the Bretton Woods system. Once the new framework is ready to be tested, the key disseminator is likely to be the SCO.

So here we see in play the full cohesion of goals – and the interaction mechanisms – deployed by the Greater Eurasia Partnership, BRI, EAEU, SCO, BRICS+ and the INSTC. It’s a titanic struggle to unite all these organizations and take into account the geoeconomic priorities of each member and associate partner, but that’s exactly what’s happening, at breakneck speed.

In this connectivity feast, practical imperatives range from fighting local bottlenecks to setting up complex multi-party corridors – from the Caucasus to Central Asia, from Iran to India, everything discussed in multiple roundtables.

Successes are already notable: from Russia and Iran introducing direct settlements in rubles and rials, to Russia and China increasing their trade in rubles and yuan to 20 percent – and counting. An Eastern Commodity Exchange may be soon established in Vladivostok to facilitate trade in futures and derivatives with the Asia-Pacific.

China is the undisputed primary creditor/investor in infrastructure across Central Asia. Beijing’s priorities may be importing gas from Turkmenistan and Uzbekistan and oil from Kazakhstan, but connectivity is not far behind.

The $5 billion construction of the 600 km-long Pakistan-Afghanistan-Uzbekistan (Pakafuz) railway will deliver cargo from Central Asia to the Indian Ocean in only three days instead of 30. And that railway will be linked to Kazakhstan and the already in progress 4,380 km-long Chinese-built railway from Lanzhou to Tashkent, a BRI project.

Nur-Sultan is also interested in a Turkmenistan-Iran-Türkiye railway, which would connect its port of Aktau on the Caspian Sea with the Persian Gulf and the Mediterranean Sea.

Türkiye, meanwhile, still a SCO observer and constantly hedging its bets, slowly but surely is trying to strategically advance its own Pax Turcica, from technological development to defense cooperation, all that under a sort of politico-economic-security package. Turkish President Recep Tayyip Erdogan did discuss it in Samarkand with Putin, as the latter later announced that 25 percent of Russian gas bought by Ankara will be paid in rubles.    

Welcome to Great Game 2.0

Russia, even more than China, knows that the usual suspects are going for broke. In 2022 alone, there was a failed coup in Kazakhstan in January; troubles in Badakhshan, in Tajikistan, in May; troubles in Karakalpakstan in Uzbekistan in June; the non-stop border clashes between Tajikistan and Kyrgyzstan (both presidents, in Samarkand, at least agreed on a ceasefire and to remove troops from their borders).

And then there is recently-liberated Afghanistan – with no less than 11 provinces crisscrossed by ISIS-Khorasan and its Tajik and Uzbek associates. Thousands of would-be Heartland jihadis have made the trip to Idlib in Syria and then back to Afghanistan – ‘encouraged’ by the usual suspects, who will use every trick under the sun to harass and ‘isolate’ Russia from Central Asia.

So Russia and China should be ready to be involved in a sort of immensely complex, rolling Great Game 2.0 on steroids, with the US/NATO fighting united Eurasia and Turkiye in the middle.

On a brighter note, Samarkand proved that at least consensus exists among all the players at different institutional organizations that: technological sovereignty will determine sovereignty; and that regionalization – in this case Eurasian – is bound to replace US-ruled globalization.

These players also understand that the Mackinder and Spykman era is coming to a close – when Eurasia was ‘contained’ in a semi-disassembled shape so western maritime powers could exercise total domination, contrary to the national interests of Global South actors.

It’s now a completely different ball game. As much as the Greater Eurasia Partnership is fully supported by China, both favor the interconnection of BRI and EAEU projects, while the SCO shapes a common environment.

Yes, this is an Eurasian civilizational project for the 21st century and beyond. Under the aegis of the ‘Spirit of Samarkand.’

The views expressed in this article do not necessarily reflect those of The Cradle.

Geopolitical tectonic plates shifting, six months on

August 24, 2022

by Pepe Escobar, posted with the author’s permission and widely cross-posted

Six months after the start of the Special Military Operation (SMO) by Russia in Ukraine, the geopolitical tectonic plates of the 21st century have been dislocated at astonishing speed and depth – with immense historical repercussions already at hand. To paraphrase T.S. Eliot, this is the way the (new) world begins, not with a whimper but a bang.

The vile assassination of Darya Dugina – de facto terrorism at the gates of Moscow – may have fatefully coincided with the six-month intersection point, but that won’t change the dynamics of the current, work-in-progress historical drive.

The FSB may have cracked the case in a little over 24 hours, designating the perpetrator as a neo-Nazi Azov operative instrumentalized by the SBU, itself a mere tool of the CIA/MI6 combo de facto ruling Kiev.

The Azov operative is just a patsy. The FSB will never reveal in public the intel it has amassed on those that issued the orders – and how they will be dealt with.

One Ilya Ponomaryov, an anti-Kremlin minor character granted Ukrainian citizenship, boasted he was in contact with the outfit that prepared the hit on the Dugin family. No one took him seriously.

What’s manifestly serious is how oligarchy-connected organized crime factions in Russia would have a motive to eliminate Dugin as a Christian Orthodox nationalist philosopher who, according to them, may have influenced the Kremlin’s pivot to Asia (he didn’t).

But most of all, these organized crime factions blamed Dugin for a concerted Kremlin offensive against the disproportional power of Jewish oligarchs in Russia. So these actors would have the motive and the local base/intel to mount such a coup.

If that’s the case that spells out a Mossad operation – in many aspects a more solid proposition than CIA/MI6. What’s certain is that the FSB will keep their cards very close to their chest – and retribution will be swift, precise and invisible.

The straw that broke the camel’s back

Instead of delivering a serious blow to Russia in relation to the dynamics of the SMO, the assassination of Darya Dugina only exposed the perpetrators as tawdry operatives of a Moronic Murder Inc.

An IED cannot kill a philosopher – or his daughter. In an essential essay Dugin himself explained how the real war – Russia against the collective West led by the United States – is a war of ideas. And an existential war.

Dugin – correctly – defines the US as a “thalassocracy”, heir to “Britannia rules the waves”; yet now the geopolitical tectonic plates are spelling out a new order: The Return of the Heartland.

Putin himself first spelled it out at the Munich Security Conference in 2007. Xi Jinping started to make it happen when he launched the New Silk Roads in 2013. The Empire struck back with Maidan in 2014. Russia counter-attacked coming to the aid of Syria in 2015.

The Empire doubled down on Ukraine, with NATO weaponizing it non-stop for eight years. At the end of 2021, Moscow invited Washington for a serious dialogue on “indivisibility of security” in Europe. That was dismissed with a non-response response.

Moscow took no time to confirm a trifecta was in the works: an imminent Kiev blitzkrieg against Donbass; Ukraine flirting with acquiring nuclear weapons; and the work of US bioweapon labs. That was the straw that broke the New Silk Road camel’s back.

A consistent analysis of Putin’s public interventions these past few months reveals that the Kremlin – as well as Security Council Yoda Nikolai Patrushev – fully realize how the politico/media goons and shock troops of the collective West are dictated by the rulers of what Michael Hudson defines as the FIRE system (financialization, insurance, real estate), a de facto banking Mafia.

As a direct consequence, they also realize how collective West public opinion is absolutely clueless, Plato cave-style, of their total captivity by the FIRE rulers, who cannot possibly tolerate any alternative narrative.

So Putin, Patrushev, Medvedev will never presume that a senile teleprompter reader in the White House or a cokehead comedian in Kiev “rule” anything. The sinister Great Reset impersonator of a Bond villain, Klaus “Davos” Schwab, and his psychotic historian sidekick Yuval Harari at least spell out their “program”: global depopulation, with those that remain drugged to oblivion.

As the US rules global pop culture, it’s fitting to borrow from what Walter White/Heisenberg, an average American channeling his inner Scarface, states in Breaking Bad: “I’m in the Empire business”. And the Empire business is to exercise raw power – then maintained with ruthlessness by all means necessary.

Russia broke the spell. But Moscow’s strategy is way more sophisticated than leveling Kiev with hypersonic business cards, something that could have been done at any moment starting six months ago, in a flash.

What Moscow is doing is talking to virtually the whole Global South, bilaterally or to groups of actors, explaining how the world-system is changing right before our eyes, with the key actors of the future configured as BRI, SCO, EAEU, BRICS+, the Greater Eurasia Partnership.

And what we see is vast swathes of the Global South – or 85% of the world’s population – slowly but surely becoming ready to engage in expelling the FIRE Mafia from their national horizons, and ultimately taking them down: a long, tortuous battle that will imply multiple setbacks.

The facts on the ground

On the ground in soon-to-be rump Ukraine, Khinzal hypersonic business cards – launched from Tu-22M3 bombers or Mig-31 interceptors – will continue to be distributed.

Piles of HIMARS will continue to be captured. TOS 1A Heavy Flamethrowers will keep sending invitations to the Gates of Hell. Crimean Air Defense will continue to intercept all sorts of small drones with IEDs attached: terrorism by local SBU cells, which will be eventually smashed.

Using essentially a phenomenal artillery barrage – cheap and mass-produced – Russia will annex the full, very valuable Donbass, in terms of land, natural resources and industrial power. And then on to Nikolaev, Odessa, and Kharkov.

Geoeconomically, Russia can afford to sell its oil with fat discounts to any Global South customer, not to mention strategic partners China and India. Cost of extraction reaches a maximum of $15 per barrel, with a national budget based on $40-45 for a barrel of Urals.

A new Russian benchmark is imminent, as well as oil in rubles following the wildly successful gas for rubles.

The assassination of Darya Dugina provoked endless speculation on the Kremlin and the Ministry of Defense finally breaking their discipline. That’s not going to happen. The advances along the enormous 1,800-mile front are relentless, highly systematic and inserted in a Greater Strategic Picture.

A key vector is whether Russia stands a chance of winning the information war with the collective West. That will never happen inside NATOstan – even as success after success is ramping up across the Global South.

As Glenn Diesen has masterfully demonstrated, in detail, in his latest book, Russophobia , the collective West is viscerally, almost genetically impervious to admitting any social, cultural, historical merits by Russia.

And that will extrapolate to the irrationality stratosphere, as the grinding down and de facto demilitarization of the imperial proxy army in Ukraine is driving the Empire’s handlers and its vassals literally nuts.

The Global South though should never lose sight of the “Empire business”. The Empire of Lies excels in producing chaos and plunder, always supported by extortion, bribery of comprador elites, assassinations, and all that supervised by the humongous FIRE financial might. Every trick in the Divide and Rule book – and especially outside of the book – should be expected, at any moment. Never underestimate a bitter, wounded, deeply humiliated Declining Empire.

So fasten your seat belts: that will be the tense dynamic all the way to the 2030s. But before that, all along the watchtower, get ready for the arrival of General Winter, as his riders are fast approaching, the wind will begin to howl, and Europe will be freezing in the dead of a dark night as the FIRE Mafia puff their cigars.

The Second Coming of the Heartland

August 14, 2022

by Pepe Escobar, posted with the author’s permission and widely cross-posted

It’s tempting to visualize the overwhelming collective West debacle as a rocket, faster than free fall, plunging into the black void maelstrom of complete socio-political breakdown.

The End of (Their) History turns out to be a fast-forward historical process bearing staggering ramifications: way more profound than mere self-appointed “elites” – via their messenger boys/girls – dictating a Dystopia engineered by austerity and financialization: what they chose to brand as a Great Reset and then, major fail intervening, The Great Narrative.

Financialization of everything means total marketization of Life itself. In his latest book, No-Cosas: Quiebras del Mundo de Hoy (in Spanish, no English translation yet), the foremost German contemporary philosopher (Byung-Chul Han, who happens to be Korean), analyzes how Information Capitalism, unlike industrial capitalism, converts also the immaterial into merchandise: “Life itself acquires the form of merchandise (…) the difference between culture and commerce disappears. Institutions of culture are presented as profitable brands.”

The most toxic consequence is that “total commercialization and mercantilization of culture had the effect of destroying the community (…) Community as merchandise is the end of community.”

China’s foreign policy under Xi Jinping proposes the idea of a community of shared future for mankind, essentially a geopolitical and geoeconomic project. Yet China still has not amassed enough soft power to translate that culturally, and seduce vast swathes of the world into it: that especially concerns the West, for which Chinese culture, history and philosophies are virtually incomprehensible.

In Inner Asia, where I am now, a revived glorious past may offer other instances of “shared community”. A glittering example is the Shaki Zinda necropolis in Samarkand.

Afrasiab – the ancient settlement, pre-Samarkand – had been destroyed by the Genghis Khan hordes in 1221. The only building that was preserved was the city’s main shrine: Shaki Zinda.

Much later, in the mid-15th century, star astronomer Ulugh Beg, himself the grandson of Turkic-Mongol “Conqueror of the World” Timur, unleashed no less than a Cultural Renaissance: he summoned architects and craftsmen from all corners of the Timurid empire and the Islamic world to work into what became a de facto creative artistic lab.

The Avenue of 44 Tombs at Shaki Zinda represents the masters of different schools harmoniously creating a unique synthesis of styles in Islamic architecture.

The most remarkable décor at Shaki Zinda are stalactites, hung in clusters in the upper parts of portal niches. An early 18th century traveler described them as “magnificent stalactites, hanging like stars above the mausoleum, make it clear about the eternity of the sky and our frailty.” Stalactites in the 15th century were called “muqarnas”: that means, figuratively, “starry sky”.

The Sheltering (Community) Sky

The Shaki Zinda complex is now at the center of a willful push by the Uzbekistan government to restore Samarkand to its former glory. The centerpiece, trans-historical concepts are “harmony” and “community” – and that reaches way beyond Islam.

As a sharp contrast, the inestimable Alastair Crooke has illustrated the death of Eurocentrism alluding to Lewis Carroll and Yeats: only through the looking glass we can see the full contours of the tawdry spectacle of narcissistic self-obsession and self-justification offered by “the worst”, still so “full of passionate intensity”, as depicted by Yeats.

And yet, unlike Yeats, the best now do not “lack all conviction”. They may be few, ostracized by cancel culture, but they do see the “rough beast, its hour come out at last, slouching towards…” Brussels (not Jerusalem) “to be born”.

This unelected gaggle of insufferable mediocrities – from von der Leyden and Borrell to that piece of Norwegian wood Stoltenberg – may dream they live in the pre-1914 era, when Europe was at the political center. Yet now not only “the center cannot hold” (Yeats) but Eurocrat-infested Europe has been definitely engulfed by the maelstrom, an irrelevant political backwater seriously flirting with reversion to 12th century status.

The physical aspects of the Fall – austerity, inflation, no hot showers, freezing to death to support neo-Nazis in Kiev – has been preceded, and no Christianized imagery need apply, by the fires of sulphur and brimstone of a Spiritual Fall. The transatlantic masters of those parrots posing as “elites” could never come up with any idea to sell to the Global South centered on harmony and much less “community”.

What they sell, via their Unanimous Narrative, actually their take on “We Are the World”, is variations of “you will own nothing and be happy”. Worse: you will have to pay for it – dearly. And you have no right to dream of any transcendence – irrespective if you’re a follower of Rumi, the Tao, shamanism or Prophet Muhammad.

The most visible shock troops of this reductionist Western neo-nihilism – obscured by the fog of “equality”, “human rights” and “democracy” – are the thugs being swiftly denazified in Ukraine, sporting their tattoos and pentagrams.

The dawn of a new Enlightenment

The Collective West Self-Justification Show staged to obliterate its ritualized suicide offers no hint of transcending sacrifice implied in a ceremonial seppuku. All they do is to wallow in the adamant refusal to admit they could be seriously mistaken.

How would anyone dare to deride the set of “values” derived from the Enlightenment? If you don’t prostrate yourself in front of this glittering cultural altar, you’re just a barbarian set to be slandered, law-fared, canceled, persecuted, sanctioned and – HIMARS to the rescue – bombed.

We still do not have a post-Tik Tok Tintoretto to depict the collective West’s multi-wallowing in Dante-esque chambers of pop Hell. What we do have, and must endure, day after day, is the kinetic battle between their “Great Narrative”, or narratives, and pure and simple reality. Their obsession with the need for virtual reality to always “win” is pathological: after all the only activity they excel in is manufacturing fake reality. Such a pity that Baudrillard and Umberto Eco are not among us anymore to unmask their tawdry shenanigans.

Does that make any difference across vast swathes of Eurasia? Of course not. We just need to keep up with the dizzying succession of bilateral meetings, deals, and progressive interaction of BRI, SCO, EAEU, BRICS+ and other multilateral organizations to get a glimpse of how the new world-system is being configured.

In Samarkand, surrounded by mesmerizing instances of Timurid art coupled with a development boom that brings to mind the East Asian miracle of the early 1990s, it’s plain to see how the heart of the Heartland is back with a vengeance – and is bound to dispatch the pleonexia-afflicted West to the swamp of Irrelevancy.

I leave you with a psychedelic sunset facing the Registan, at the razor’s edge of a new sort of Enlightenment that is leading the Heartland towards a reality-based version of Shangri-La, privileging harmony, tolerance and most of all, the sense of community.

On the Future of Europe: A Proposition from 1 January 2023

July 24, 2022

By Batiushka for the Saker Blog

Almost one thousand years of Western Imperialism are coming to a shameful and self-inflicted death, one way or another

As schoolchildren will tell you, the names of the continents begin and end with the same letter, A: Asia, Africa, America, Australia, Antarctica. There is one exception: Europe, which though still beginning and ending with the same letter, the letter is not A, but E. Why the difference? Is it perhaps because Europe is not really a Continent? After all, it is not a vast landmass surrounded by an ocean (if it were a small one, it would be called an island). Its borders are arbitrary, having frequently changed, were only relatively recently pushed to the Urals, and are still much disputed. In reality, surely Europe is the artificially isolated north-western peninsula of Asia? It is not a geographical Continent at all, it is an ideological construct. That is why the slogan of so many EU-fanatics, like the former French President Chirac, was: ‘Faisons l’Europe’ – ‘Let’s Create Europe’.

We ask the above question because in this winter of 2022-2023 the old EU and Non-EU Europe has had to face a new reality following the war that the US/NATO lost in the ‘Ukraine’, as it used to be called. Europe-wide, indeed worldwide, food riots with looting of supermarkets and ‘bill boycotts’ (the wave of civil disobedience with the refusal/inability to pay soaring fuel bills) made this clear. Obviously, a worldwide reconfiguration is coming. Already the new world is becoming multipolar, with several main centres within the old BRICS, Russia, China, India, Brazil, South Africa, and now more to come, perhaps Iran, Türkiye, Argentina, Egypt, Saudi Arabia, Afghanistan, Mexico, Lebanon and Indonesia. In general, all Asia, Africa and Latin America now at last have their own future.

Not only are the old, thoroughly corrupted international organisations like the UN, WTO, WEF or IMF rightly disappearing into the sewers of history along with their discredited puppet-master, the US elite, but so too are pro-US regional groupings, like its European political and economic arm the EU and its European military arm, NATO. And here precisely, we ask where does the US/NATO defeat in the Ukraine leave the European peninsula, both the EU part of it and the rest of it, outside the EU? After World War I Europe had to be reconfigured, and again after World War II. Now, after whatever you call the 2022 Western rout in the Ukraine (World War III, or World War I, Part III), what is its destiny?

Surely the greatest revelation of the US proxy war in the Ukraine is Europe’s dependence on Russia. Without Russia, it simply cannot survive – though Russia can survive without it. The fact is that for the last few centuries, the largest European country has been Russia for surface area and, over the last century and a half, for population. The most common European language in Europe is Russian, the second German, the third French, the fourth English, the fifth Italian. As regards natural resources, whether agricultural or mineral, and as regards military power, the most important country, once again, is Russia.

Having said that, it must be admitted that part of Russia’s might, on which Europe depends, comes from Asia, which forms the majority of Russia’s territory. Thus, Russia is also Asia, specifically the northernmost third of the Asian landmass, whereas Europe is just the tiny north-western tip of that same landmass. As for Europe’s peoples, they too came from Asia, and mostly speak ‘Indo-European’, that is, Northern Indian, languages. As for Europe’s traditional religion, it too is Asian, for Christ, who appeared on earth as a coffee-coloured man who certainly never wore trousers, lived in Asia, specifically in the Middle East. It seems obvious to anyone with even the most basic geographical and historical knowledge that the destiny of Europe, now divorced from its former landgrab colonies in Africa, America and Australia, is with Russia, which is its link to Asia.

The territory of the four largely East Slav Union States, the Russian Federation, Belarus, Malorossiya and Carpatho-Russia (the last two formed from the old, ill-fated US vassal, the ‘Ukraine’), dwarves the rest of Europe. Similarly, with a population of 200 million, the Four Union States are far larger than any of the European Regions in population. The future European Regions are still independent, if integral, parts of Eurasia, within the Russian resource and security umbrella, on which they depend. Non-Russian Europe has its own personality and culture, which varies amongst its members. Geographically, historically and linguistically, the 450 million people of the old EU and non-EU Europe can be divided into eight European Regions. What are they, in order of population?

1. Germania (122 million):

Germany, Austria, the South Tyrol, the Netherlands, Flanders (Northern ‘Belgium’), German-speaking East ‘Belgium’, Luxembourg, German-speaking Switzerland and Liechtenstein. These countries, with about twice as many people as most of the other European Regions, have all been influenced by the same culture of Germanic organisation, order and productivity. This could provide direction to the way out of their present black hole.

2. Francia (74 million):

France, Wallonia and Brussels, French-speaking Switzerland and Monaco. All share in the same Catholic and post-Catholic French-speaking culture. A return to ancient roots and historic cultural heritage could give direction to this Region in the future.

3. The Anglo-Celtic Confederation (73 million):

England, Ireland, Scotland and Wales. Though geographically clearly one, these thousand islands and their four nations have in history been much perturbed by the centralising, unionist spirit imposed by force from alien ‘British’ London. (Between the Imperialist Romans and equally Imperialist Normans, the English Capital had been Winchester). If some equitable, confederal settlement can be reached between all four by the rejection of everything Britain and British, there is a future here. Could the acronym, IONA (Isles of the North Atlantic) provide clues to that future?

4. The Visegrad Group (66 million):

Poland, Lithuania, Hungary, the Czech Lands, Slovakia. Lithuania is not usually included in the ‘Visegrad Group’, but it has so much in common with Poland and national Catholicism, that it must belong to this group. All share in a common West Slav/Central and Eastern European, largely Catholic nationalist, culture.

5. South Eastern Europe (65 million):

Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Albania, North Macedonia, Romania, Moldova, Bulgaria, Greece and Cyprus. Although very varied in culture, mainly Orthodox, but also Catholic and Muslim, and spreading as far as the Romanian Carpathians as well as the Greek Islands and the island of Cyprus, the centre of this group is a common, though often so far tragic, South-East European history.

6. Italia (62 million):

Italy, San Marino, Ticino and Malta. All have a common Italian culture, which can provide the strength for political, economic, cultural and social renewal.

7. Iberia (57 million):

Spain, the Canaries, Catalonia, the Basque Country, Gibraltar, Andorra, Portugal, the Azores, Madeira. All share in a common Iberian culture. With decentralisation, they could work together to find a way out of the present crisis.

8. Nordica (30 million):

Iceland, Norway, Denmark, the Faeroes, Sweden, Finland, Estonia and Latvia. With a largely Lutheran and post-Lutheran common cultural heritage, these countries, with only about half the population of most of the other European regional groups, could work together to provide a direction away from the suicide to which they have come so perilously close in recent decades.

Many are at present profoundly pessimistic about the future of the European Peninsula. The EU is collapsing and has for some time been collapsing for all to see. However, we see no long-term reason for such pessimism. Once ‘Europe’ has reconnected with its geographical and historical roots in Asia, it will have a future again. In time, we are convinced that history will come to see Europe’s previous thousand years as in many ways a deviation from and a distortion of its historic destiny, which is as an integral, if idiosyncatic, part of the Asian landmass.

%d bloggers like this: