The two BRICS partners strike a deal to ditch USD with the aim of easing financial transactions between the two countries and reducing trade costs.
Industry representatives from China and Brazil in a panel discussion at the Brazil-China Business Seminar (CCIIP)
China and Brazil struck a deal to ditch the US dollar in their bilateral transactions, which is expected to reduce investment costs and develop economic ties between the two countries, the Brazilian government stated on Wednesday.
The agreement between the Asian superpower and Latin America’s largest economy – the mutual top trading partners – is a new financial and political strike against the green banknotes as more countries, with the growing geopolitical and economical influence of the East, are paving the way to distance themselves from the US politically-oriented currency.
Earlier in January, both nations reached a preliminary deal on the matter that was finalized in a Brazil-China Business Seminar in China on Wednesday, which Brazil’s President Luiz Inacio Lula da Silva was scheduled to take part in but failed to attend due to emergency health issues.
“The expectation is that this will reduce costs… promote even greater bilateral trade and facilitate investment,” Brazil’s Trade and Investment Promotion Agency (ApexBrasil) said.
In 2022, trade volume between the economic giants hit a historic record of over $150.5 billion in bilateral trade.
China’s Bank of Communications BBM (one of the country’s top five banks) and industrial and Commercial Bank of China will oversee the execution of the deal, officials stated.
Earlier this month, US Treasury Secretary Janet Yellen said if the US defaults on its debt, this would result in a massive loss of confidence in the US dollar, eventually leading to the loss of its status as the world’s global reserve currency – striking major market fears over the future of the world’s safe haven currency.
Ditching USD roadmap
China and Brazil are two of the five founders of the BRICS bloc, which accounts for around 30% of the global gross output.
Last January, South African Foreign Minister Naledi Pandor announced that the BRICS club of emerging economies seeks to discover a way of bypassing the dollar to create a fairer payment system that would not be skewed toward wealthy countries.
“We have always been concerned at the fact that there is a dominance of the dollar and that we do need to look at an alternative,” he said then.
Recently, a handful of medium-sized economies aimed to join the bloc: Argentina, Algeria, Iran, Indonesia, Turkey, Saudi Arabia, and Egypt.
The gigantic bloc announced a few days ago that it will establish a “geological platform” that aims to allow the BRICS member states to coordinate in regard to their mineral reserves and extraction methods in light of the increasing demand for natural resources.
Following years of political and economic crises, Lebanon’s population structure has changed, and not for the better. Experts believe that the structural inequality will only widen in future.
Lebanon’s capital Beirut has turned into a city of contrasts. Expensive cars park before popular restaurants and bars, while people of all ages rummage through bins for something edible.
“Also, more and more people are begging in the streets, mainly children but also elderly people,” Anna Fleischer, head of the German Heinrich Böll Foundation’s office in Beirut, told DW. While it is hard to tell the nationality, “it can be assumed that there are many Syrian refugees, but also Lebanese,” she added.
Years of political instability in combination with an ongoing economic crisis — exacerbated by the COVID-19 pandemic and the Port of Beirut blast in August 2020 — have brought the country close to collapse.
Lebanon ranks not only “among the most severe crises globally since the mid-19th century,” according to the World Bank, but it is also likely that “an unprecedented institutional vacuum will further delay any agreement on crisis resolution and critical reform ratification, deepening the woes of the Lebanese people,” the World Bank report says.
Vanishing middle class, rising hunger
Following years of massive economic contraction, in combination with a 95% devalution of its currency, the Lebanese middle class has practically vanished. In March 2020, the World Bank devalued Lebanon to a lower-middle income country.
“A person that is earning 1,500,000 Lebanese pounds used to have an equivalent of $1,000 before the crisis, and now it is equivalent to less than $200,” Hussein Cheaito, a development economist at The Policy Initiative, a Beirut-based research center, told DW.
In a recent publication on rising hunger and poverty in Lebanon by Human Rights Watch (HRW), Lena Simet stated that “millions of people in Lebanon have been pushed into poverty and have cut back on food.” The senior economic justice researcher at HRW pointed to worrying trends of food insecurity in the lowest bracket of earners.
Similarly, a September report on food insecurity in the Middle East by the indepedent research network Arab Barometer found that nearly half of all citizens in Lebanon stated that they ran out of food before they had money to buy more.
Extreme wealth inequality
Meanwhile, there are no indications for change, and the tax system is not helping the overall situation in Lebanon.
“The taxation system in Lebanon is highly regressive, which means that there is no wealth tax code, and corporate taxes are amongst the lowest in the world compared to all OECD averages,” Hussein Cheaito told DW.
The beneficiaries of the taxation system are those of the “political class and their business connections, because this 1% owns more than 70% of the national income,” Cheaito said. This, in turn, leaves a very small percentage of wealth to the rest of the society,” he claims.
Furthermore, those who earn their wages in Lebanese pounds, or receive support via charity organizations, suffer from another disadvantage. Banks only offer limited cash withdrawals in US dollars to those who have US dollars in their accounts.
Some Lebanese took to the streets in August 2022 to denounce the depreciation of the Lebanese currency due to the country’s political and economic crisis.Image: Dario Sabaghi/DW
Also, for the past 20 years, Lebanese banks have kept the pegged exchange rate of $1 to 1,500 Lebanese pounds. This, however, will be updated to $1 to 15,000 pounds on February 1. Even though this is 10 times more than before, it is still far from the actually used exchange rate on the black market. The current rate ist 50,000 pounds to the dollar.
On the other hand, for those, who work for international companies or have other means of accessing dollars, life has become relatively cheap, which also explains the thriving cocktail bars and fully booked restaurants.
Dollarization of the economy
“The reality today is that one of the most important sources of income for families are remittances from family members who live abroad,” Lynn Zovighian, the co-founder and managing director of The Zovighian Partnership, a family-owned social investment platform that develops research-led socio-economic interventions, told DW.
“The collapsed private sector, and expected contraction of the public sector, is driving rising unemployment numbers,” she said, adding that “Lebanon is also going through a de facto dollarization of its economy, but not by law or policy. This is happening with no price controls or penalties against financial abuse,” the Beirut-based Zovighian said.
Meanwhile, talks between the Lebanese government and the International Monetary Fund (IMF) have led to a staff-level agreement for a program worth about $3 billion over the next 46 months. However, a financial recovery plan to protect the most vulnerable in society, was not included.
“Three billion dollars will be barely enough to get the country back on its feet, given the size of the losses in the financial sector, which are at least $70 billion,” Chaeito said.
Moreover, the IMF agreement highlighted that, given the weak state of the Lebanese government and the public sector, Lebanon should focus on state-owned enterprises and the privatization of social and public services, Chaeito told DW.
Macro-economic stabilization
“What are the guarantees that private companies won’t actually engage in price hikes and further inflation, which we’ve seen in Latin America? This could mean that only the ultra-rich will be able to access services,” the analyst said.
He regards macroeconomic stabilization as the only solution to save the country from collapse and with it, the majority of the population.
“I refer to the redistribution of losses in the financial sector, ensuring that we have a clear financial recovery plan that primarily protects the smallest of depositors and people who have a middle or low income,” Hussein Chaeito said, adding that “their wealth has to be recapitalized, without this it will be impossible to really see the income gap being reduced.”
In the war between global finance and energy, one fact remains clear: You can print money but you can’t print oil
There is more to the current struggle between the oil-consuming west and the oil-producing nations than meets the eye and it runs far deeper than the war in Ukraine
On 6 October, when the European Union (EU) agreed to impose a Russian oil price cap as part of a new package of sanctions against Moscow, 23 oil ministers from the OPEC+ group of oil-producing countries spoke out in favor of a sharp cut in their joint production quota.
Their collective decision to decrease output by about two million barrels of oil per day elicited strong reactions in the US in particular, and there was even talk of “declarations of war.” The EU feels duped, as the OPEC+ production cuts could drive up fuel prices and dampen their eight sanctions packages. Despite the narrative of the world edging toward a “post-oil era,” it seems there’s life in the old dog yet, as OPEC remains the talk of the town.
OPEC is as relevant as ever
OPEC and ten non-OPEC energy producers – including Russia – have been coordinating their production policy since December 2016. At the time, analysts gave this “OPEC-plus” format little chance of having an impact.
Back then, I recall the mockery of many who scorned the announcement in the press room of the OPEC General Secretariat in Vienna. But OPEC has weathered the storm of the global oil market in recent years, and has emerged as a key player.
Recall the exceptional situation in the spring of 2020 during the global COVID-19 pandemic lockdown, when futures trading for US oil grades were even quoted at negative prices at times, only to rise again to new heights in April 2021.
In contrast to the escapades in the oil market between 1973 and 1985, when there was little consensus among OPEC’s members and many had already written the organization’s obituary – today, former rivals such as Saudi Arabia and Russia are managing to converge their interests into powerful cards.
In those days, it was normal practice for Riyadh to take into account and execute Washington’s interests within OPEC: A single phone call from the US capital was enough. When the US oil company ARAMCO – which acted like an extended arm of the US in the kingdom – was nationalized by Saudi Arabia in the early 1970s as part of the sweeping nationalization trends around the world, compensation was promised to the US on a mere handshake.
The era of the “Seven Sisters,” a cartel of oil companies that divided up the oil market, came to an end then. However, for US policymakers – at least, psychologically – this era still persists. “It’s our oil,” is an expression I often hear uttered in Washington. Those voices were particularly loud during the illegal US-led 2003 invasion of Iraq.
Financial market versus the energy market
To really understand the core of the conflict in Ukraine – where a proxy war rages – one must break down the confrontation thus: The US and its European allies, who represent and back the global financial sector, are essentially engaged in a battle against the world’s energy sector.
In the past 22 years, we have seen how easy it is for governments to print paper currency. In just 2022, the US dollar has printed more paper money than in its combined history. Energy, on the other hand, cannot be printed. And therein lies a fundamental problem for Washington: The commodity sector can outbid the financial industry.
When I wrote my book “The Energy Poker” in 2005, I also dealt with the currency question, i.e. whether oil will be traded in US dollars in the long term. At the time, my interlocutors from the Arab OPEC countries unanimously said that the US dollar would not be changed. Yet, 17 years later, that view has devolved starkly.
Riyadh is warming up to the idea of trading oil in other currencies, as indicated this year in discussions with the Chinese to trade in yuan. The Saudis also continue to purchase Russian like other West Asian and Global South states, they have opted to ignore western sanctions on Moscow, and are increasingly preparing for the new international condition of multipolarity.
Washington, thus, no longer maintains its ability to exert absolute leverage on OPEC, which is now repositioning itself geopolitically as the enlarged OPEC+.
US reacts: Between defiance and anger
The OPEC+ ministerial meeting on 6 October was a clear foreshadowing of these new circumstances. The inherent tensions between two world views unfolded immediately in the post-meeting press room where a Saudi oil minister put the western news agency Reuters in its place, and where US journalists fiercely attacked OPEC for “holding the world economy hostage.”
The next day, a tough policy was grudgingly announced by the White House. The OPEC+ production cuts has Washington vacillating between sulking and seeking revenge – against the once-compliant Saudis, in particular. In a few weeks US midterm elections will be held, and the ramifications of spiking fuel prices will no doubt unfold at the ballot box.
For almost a year, President Joe Biden has been expanding US fuel supply via the Strategic Petroleum Reserve, but has been unable to calibrate either the price of oil or runaway inflation. The US Congress is threatening to use the so-called “NOPEC” bill – under the legal pretext of banning cartels – to seize the assets of OPEC governments.
The concept has been floating around for decades on Capitol Hill, but this time new irrational emotions may own the momentum. But hostile or threatening US actions are likely to backfire and even accelerate the geopolitical shifts taking place in West Asia, which has been edging out of the US orbit in recent years. Many Arab capitals have not forgotten the unseating of Egyptian President Hosni Mubarak in 2011, and how quickly the US abandoned its longterm ally.
“It’s the economy, stupid”
The price of oil is a seismograph of the world economy and also of global geopolitics. With the production cuts, OPEC+ is simply planning in anticipation of upcoming recessionary consequences. Moreover, some producing countries are failing to create new capacities in view of the investment gap that has persisted since 2014: a low price of oil simply cannot be sustained if there is no major capital investment in its sector.
The energy supply situation is expected to further worsen as of 5 December, when the oil embargo imposed by the EU comes into force.
The fundamental laws of supply and demand will ultimately determine the many distortions in the commodity markets. The anti-Russian sanctions created by the EU and other states (a total of 42 states) have disrupted global supply, and that has man-made supply and pricing consequences.
The two major global financial crises – real estate and banks in 2008, and the pandemic in 2020 – led to the excessive printing of paper money. Ironically, it was China that moved the paralyzed global economy out of the first crisis: Beijing stabilized the entire commodity market in 2009/10 by serving as the global locomotive and bringing the yuan into the trading schemes.
China, the well-oiled machine
Until the early 1990s, China satisfied its domestic oil consumption with domestic oil production, ranging from 3-4 million barrels per day. But fifteen years and a rapidly-expanded economy later, China had turned into the world’s number one oil importer.
This status reveals the crucial role of Beijing in the global oil market. While Saudi Arabia and Angola are important oil providers, Russia is the main gas supplier for China. As former Premier Wen Jiabao once aptly observed: “any small problem multiplied by 1.3 billion will end up being a very big problem.”
For the past 20 years, I have argued that pipelines and airlines were moving east not west. Arguably, one of Russia’s biggest mistakes was to invest in infrastructure and contracts for a promising but ungrateful European market. The cancellation of the South Stream project in 2014 should have served as a lesson to Moscow not to enlarge Nord Stream as of 2017. Times, nerves, and money could have been better spent on expanding the grid heading east.
It’s never been about Ukraine
Ever since the start of Ukraine’s military conflict in February 2022, we have essentially been watching the western-led financial industry waging its war against the eastern-dominated energy economy. The momentum will always be with the latter, because as stated above, in contrast to money, energy cannot be printed.
The oil and gas volumes needed to replace Russian energy sources cannot be found on the world market within a year. And no commodity is more global than oil. Any changes in the oil market will always influence the world’s economy.
“Oil makes and breaks nations.” It is a quote that epitomizes the importance of oil in shaping global and regional orders, as was the case in West Asia in the post-World War I era: First came the pipelines, then came the borders.
The late former Saudi oil minister Zaki Yamani once described oil alliances as being stronger than Catholic marriages. If that is the case, then the old US-Saudi marriage is currently undergoing estrangement and Russia has filed for divorce from Europe.
The views expressed in this article do not necessarily reflect those of The Cradle.
The world rotated one more time since the last report on China.
So, what do we know?
China is rock-solid behind Russia in all of Russia’s objectives, and in some instances, up ahead.
It almost seems as if an agreement was, if not stated, then understood. Russia will do the shootin’ for now, and China will keep the economic boat afloat. We see consistent commenting such as China is a consistent stabilizing force in a changing world
Overall NATO is feeling the pressure and ‘resetting’ and trying to clone itself as Aukus in the east while trying to strengthen itself in the west. We have Stoltenberg announcing: “What we see now is a new reality, a new normal for European security. Therefore, we have now asked our military commanders to provide options for what we call a reset, a more longer-term adaptation of NATO.”. In this speech, he announced that plans are being worked up to transform NATO into a major force capable of taking on an invading army and states that NATO deepens partnerships in Asia in response to a rising “security challenge” from China.
Yet, in the east, the Quad is one less, given India’s refusal to follow the U.S. regarding Russia.
Japan has been asked to join Aukus as a Japan, US, Australia, UK alliance intending to project a strong regional balance of power against China, Russia (and maybe India then?) in Asia. This Aukus will then have synergy,, they say, with Japanese technologies in areas such as hypersonic weapons and electronic warfare. Somehow I don’t see Japan as a suitable switch out for India, but then again, we’re dealing with desperate last gyrations of a world hegemon here, trying to project that it still has many friends.
A quick look at India. These days, if you see a country being threatened, you know already that they have started decoupling from so-called western democracy and Blinken has just threatened India yet again. He says the US is “monitoring rise in rights abuses in India” So, suddenly the US cares about human rights abuses in India. This bellicose rhetoric is not effective and way beyond its sell-by date.
It is clear that Russia is decoupling from Europe, and this started before sanctions. But did you know that China is decoupling from Britain, Canada, and the US? This is a brand-new trend. China’s top offshore oil and gas producer CNOOC Ltd. is preparing to exit its operations in Britain, Canada, and the United States, because of concerns in Beijing that assets could become subject to Western sanctions. As it seeks to leave the West, CNOOC is looking to acquire new assets in Latin America and Africa, and also wants to prioritize the development of large, new prospects in Brazil, Guyana, and Uganda.
Apparently trying to deal with those three countries has become painful and CNOOC is seeking to sell “marginal and hard to manage” assets. Quoted are red tape and high operating costs in the western climes.
In the Asia region, we also saw the ease with which Imran Khan was relieved of his post as Prime Minister. I don’t believe this is the end of this story, because the citizens of Pakistan are truly unhappy. https://www.rt.com/news/553734-us-involved-imran-khan-departure/
So if you were thinking that while the Ukraine war is hot, the Pacific is cool, that would be a mis judgement.
The new cry going out is if we’ve censored all the Russian voices, how can we allow the Chinese voices to carry water for Russia. We have to cancel them too! (These people deserve to go and live underground in bunkers!)
Taiwan keeps the war propaganda at a fever pitch by releasing a China Invasion Survival Guide.
Taiwan’s All-out Defense Mobilization unit has released a guide for citizens in the event of a war with Beijing, complete with comic strips and tips for survival, locating bomb shelters, and preparing food and first aid provisions. The guide has been planned for some time, and comes as local officials look to extend military service beyond the current 4 months. https://t.me/rtnews/23455
Nancy Pelosi was planning to visit Taiwan. China made its displeasure known widely and loudly. And Pelosi immediately contracted Covid and had to suspend her trip.
From the Australian side, the propaganda is flowing strong. Here is a very fine video with Brian Berletic and Robbie Barwick, explaining exactly what happened with the contretemps in the Solomon Islands, as well as the overall trajectory and the speed thereof, of Australia’s belligerence against China. This video contains some interesting statements and supporting data. Seemingly, if Australia interacts with Island Nations like the Solomon’s the idea is to build infrastructure suitable for war, so, building a port must be suitable for US aircraft carriers, and building a road must be suitable for landing US airplanes. If China interacts with these very same Island Nations, the idea is to build infrastructure that can benefit their population and this is now clear among all.
I’ve come to enjoy China’s spokespeople. They are sharp and do not miss a trick. Acerbic and incisive commentary is the order of the day. This is a good example, and please note the tone of the Western journos .. If you have never spent time on one of these, it is an education. The western journos try and beat the spox to death with repeated questions loaded with innuendo. https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/202204/t20220411_10666750.html
It is quite clear that China is not leaving the issue of Biolabs behind. They have just about daily coverage in various media about it.
SEOUL, April 12 (Xinhua) — U.S. military biological facilities in South Korea are serious threats to local residents’ safety, said a South Korean expert, as the U.S. Forces Korea (USFK) continues with a scandalous program involving experiments with living toxic samples. #GLOBALink
China will never forget epithets like “China Virus” and “Wuhan Flu”. Take a good look at this image titled Poison Disseminator.
China had to evacuate +- 2,000 Chinese citizens from the Ukraine. From media, it was a successful evacuation. They have also repeatedly made their stance clear on the Ukraine.
The main focus is humanitarian. China released a five-point position statement supported by a six-point humanitarian plan
The position statement is:
First, we persevere in promoting peace talks in the right direction. We hold that dialogue and negotiation are the only way out, oppose adding fuel to the fire and intensifying confrontation, call for achieving a ceasefire and ending the conflict, and support Russia and Ukraine in carrying out direct dialogue.
Second, we persevere in upholding the basic norms governing international relations. We advocate respect for the purposes and principles of the UN Charter and for the sovereignty and territorial integrity of all countries, and oppose putting small and medium-sized countries on the front line of geopolitical games.
Third, we persevere in preventing the resurgence of the Cold War mentality. We do not agree with the “friend-or-foe” camp confrontation, firmly promote international solidarity, advocate the vision of common, cooperative, comprehensive and sustainable security, and respect and accommodate the legitimate and reasonable concerns of all parties.
Fourth, we persevere in upholding the legitimate rights and interests of all countries. We oppose unilateral sanctions that have no basis in international law and call for safeguarding the international industrial and supply chains to avoid harming normal economic and trade exchanges and people’s lives.
Fifth, we persevere in consolidating peace and stability in the Asia-Pacific region. We firmly uphold the principle of amity, sincerity, mutual benefit, and inclusiveness in our neighborhood diplomacy, guard against the introduction of bloc confrontation into the region by the United States through the “Indo-Pacific strategy”, accelerate the promotion of regional integration and cooperation, and guard the hard-won development momentum in the region.
Wang Ji describes the six-point humanitarian plan:
While China is doing its best to create a level playing field and do real humanitarian work, they are not hiding the fact that they hold the US/NATO fully responsible for what they see as an action that was forced onto Russia.
Inside China, it is all about economic miracles. Taking a huge bow now in their theater of urgent needs is seeds: Chinese Seeds, Chinese developed, and Chinese local seeds. The seed companies of the west are unwelcome with the IP registration of their seeds and China will hold its ownership over its seeds.
The Shanghai lockdown provided endless China-bashing opportunities for western commentators. Tucker Carlson jumped on this horse and did his part for the anti-China campaign with a litany of complaints, a bunch of pixellated videos that are propaganda material, never having spoken to anyone actually living in Shanghai, without an idea of China’s principled management of Covid and without understanding the levels of the lockdown – complete political projection of US so-called values. As we have seen so many times from the USA’ians, trying to fight his political battles on the back of the Chinese (or anyone else, for that matter). He also perceivably has no idea that the Chinese lockdown supports the people with food and medicines, and it is not like the west. So, he looks at this with western eyes and truly, he has no clue. It is exactly the same that the world complains about .. it is: “We are right and exceptional and we know better.” Because China makes its own rules, Carlson calls it wrong. He is totally committed to the idea of US manifest destiny and his way is the right way. Carlson is anti a war with Russia for political purposes but show him China as a possible war partner, and he blooms with bloodlust.
It is truly better to listen to those that are actually living there and can actually speak the language. It is so that people believe the MSM when that very same MSM says something that they like and rail against that very same MSM when they say something that they don’t like.
David Fishman tweets: So it’s CRAZY that we have to do this, it’s also incredibly fascinating from a supply chain/logistics/economics perspective. We are in the process of re-inventing the food distribution network in Shanghai. It’s all based on the newly prevalent concept of Group-Buying.
If you really want to know how people live through a 14 day lockdown, a 14 day lighter lockdown if no Covid presents itself, a closed and open-loop system, and then thereafter no lock down. I would recommend that you click on this tweet and read all the parts:
So it's CRAZY that we have to do this, it's also incredibly fascinating from a supply chain/logistics/economics perspective.
We are in the process of re-inventing the food distribution network in Shanghai.
It's all based on the newly prevalent concept of Group-Buying. Nerdy🧵
And Jeff Brown weighed in as well. Special explanation to address the many concerns global citizens have about China’s “Zero-Covid” policy, with Shanghai now in the headlines.
And so there are to my knowledge hundreds of people reporting that they get their food delivered, they take part in group buying, they mostly get what they want but sometimes not and we see things like this:
The lesson here is that if you want to know what is happening in China, listen to the people in China. Now, they are not brutally suppressed and silenced. Online media is bigger than ever. What is frowned upon and can get you into hot water, is if you are rude and rude to others. State your case, don’t be rude and you will be fine with social media communication. (Somewhat like the concept of Saving Face).
No, China is not killing 25 million people in Shanghai.
There are thousands of made-up and anti-China video clips breathlessly being passed around by the usual suspects. I saw one that purports that the Chinese are breaking down their 5G towers. It was a clip from the umbrella riots in Hong Kong where the rioters were breaking down public infrastructure.
Is everything perfect? Of course not. Are their people struggling? Of course. Was there food distribution problems initially? Of course. Is it easy? Of course not. Are most people content with the decision to do a phased lock-in of a city of 25 million people? Most of the ones that I’ve regularly followed are, if not content, they understand the reason and trust the Chinese Zero-Covid policy. Westerners need to start understanding that the Chinese people are part of their government and that they actually believe the government does what is best for the people and they have evidence and proof of this, because they are part of a very inclusive system.
Cyrus Janssen is a regular commentator on China. He does not like the Shanghai lockdown. This is his thread, and take a look at what the Chinese actually answered.
I'm very worried about Shanghai and the future of #China….what's happened in the past few weeks has changed the future of China. Some of you will agree with my analysis and some of you won't, but here is a thread 🧵 on the #COVID19 situation in #Shanghai:
The conversation in China is different from the conversation in the west. Their current concern is future management of Covid. They have concerns that their Zero-Covid strategy needs to be adjusted. They are in the process of refining its strategy. They do not have concerns about their strategy, because they have the numbers.
The last report that I have is as of Saturday. The Shanghai port STILL operating smoothly, with berthing efficiency better than 2021. The average waiting time for ships in Port is under 24 hours, and all the production units at the port maintain normal 24-hour operations, except in extreme weather. In 2021, the Port moved 47 million 20-foot equivalent units (TEUs), ranking first globally. Throughput of international containers exceeded 6 million TEUs for the first time.
Trade between Russia and China skyrocketed. Paul from the Sirius report states it as follows: “Western experts fail to grasp that the Global South is around 87% of the world’s population, is in its ascendancy and has a myriad of vertical growth markets now in play and is embracing the multipolar world. West meanwhile is in terminal decline.”
China and Russia trade in Q1 rose 28% to $38.2bn equivalent.
In 2021, trade turnover between Russia and China hit a record high of $146.88 billion, having surged 35.8%. In December, the Russian and Chinese presidents agreed on creating infrastructure to service trade operations between the two nations without third parties.
The ASEAN surpassed the EU to become China’s largest trading partner. China’s imports and exports with ASEAN jumped 8.4% yoy to 1.35tn yuan in Q1 accounting for 14.4% of the country’s foreign trade volume.
Beijing’s economic and trade cooperation with other countries including Russia and Ukraine remains normal.
Beijing has refused to join sanctions against Moscow over the conflict in Ukraine, saying cooperation between China and Russia “has no limits.” The two countries have been switching from the US dollar and the euro to local currencies in trade to avoid possible sanctions.
It’s all digital currency for the years ahead for China. Make a strong distinction in your mind between CBDC (Central Bank Digital Currency), Cryptocurrencies and China’s digital currency. They are not all the same.
Russia is increasing its holdings in Yuan. This is explained as underscoring the falling credibility of the US dollar, as the US has been weaponizing the dollar as a financial weapon instead of a trusted international payment currency. This via Xu Wenhong, a research fellow at the Institute of Russian, East European and Central Asian Studies under the Chinese Academy of Social Sciences
Cainiao, Alibaba’s logistics arm, rolled out a digital end-to-end e-commerce logistics service that includes pickup, warehousing, supply chain, customs clearance, and last-mile delivery. You may think this is for China internally and it might well be so, but China has now something like 3,000 warehouses across the world, supporting the products that the belt and road transport, to get to the last-mile delivery.
Earlier I referred to the Quad as well as to the fact that China is doing its own selective decoupling. The Power of Siberia 2 gas pipeline, which runs through Mongolia, is specifically aimed at reducing any Chinese dependence on Quad Members.
To conclude before we get to a lighter note, the west has no competitive edge any longer in trade, very little in war if we look at it as of today (they can still wipe us all out and turn us into glass), and have no honor left. They are not serious people and cannot be allowed to try and run our planet any longer, exclusively to their own benefit.
From Godfree’s newsletter about one of China’s minorities that I had actually never heard of. The Naxi, one of China’s 55 ethnic minorities, have long been popular with anthropologists, but its folk music is routinely overlooked. A new album hopes to change that. It might not be your style, but something different and away from war is always welcome.
Many of the data points here are courtesy of Godfree Roberts’ extensive weekly newsletter: Here Comes China. You can get it here: https://www.herecomeschina.com/#subscribe
The US and EU are over-reaching on Russian sanctions. The end result could be the de-dollarization of the global economy and massive commodity shortages worldwide.
So a congregation of NATO’s top brass ensconced in their echo chambers target the Russian Central Bank with sanctions and expect what? Cookies?
What they got instead was Russia’s deterrence forces bumped up to “a special regime of duty” – which means the Northern and Pacific fleets, the Long-Range Aviation Command, strategic bombers and the entire Russian nuclear apparatus on maximum alert.
One Pentagon general very quickly did the basic math on that, and mere minutes later, a Ukrainian delegation was dispatched to conduct negotiations with Russia in an undisclosed location in Gomel, Belarus.
Meanwhile, in the vassal realms, the German government was busy “setting limits to warmongers like Putin” – quite a rich undertaking considering that Berlin never set any such limits for western warmongers who bombed Yugoslavia, invaded Iraq, or destroyed Libya in complete violation of international law.
While openly proclaiming their desire to “stop the development of Russian industry,” damage its economy, and “ruin Russia” – echoing American edicts on Iraq, Iran, Syria, Libya, Cuba, Venezuela and others in the Global South – the Germans could not possibly recognize a new categorical imperative.
They were finally liberated from their WWII culpability complex by none other than Russian President Vladimir Putin. Germany is finally free to support and weaponize neo-Nazis out in the open all over again – now of the Ukrainian Azov battalion variety.
To get the hang of how these NATO sanctions will “ruin Russia,” I asked for the succinct analysis of one of the most competent economic minds on the planet, Michael Hudson, author, among others, of a revised edition of the must-read Super-Imperialism: The Economic Strategy of American Empire.
Hudson remarked how he is “simply numbed over the near-atomic escalation of the US.” On the confiscation of Russian foreign reserves and cut-off from SWIFT, the main point is “it will take some time for Russia to put in a new system, with China. The result will end dollarization for good, as countries threatened with ‘democracy’ or displaying diplomatic independence will be afraid to use US banks.”
This, Hudson says, leads us to “the great question: whether Europe and the Dollar Bloc can buy Russian raw materials – cobalt, palladium, etc, and whether China will join Russia in a minerals boycott.”
Hudson is adamant that “Russia’s Central Bank, of course, has foreign bank assets in order to intervene in exchange markets to defend its currency from fluctuations. The ruble has plunged. There will be new exchange rates. Yet it’s up to Russia to decide whether to sell its wheat to West Asia, that needs it; or to stop selling gas to Europe via Ukraine, now that the US can grab it.”
About the possible introduction of a new Russia-China payment system bypassing SWIFT, and combining the Russian SPFS (System for Transfer of Financial Messages) with the Chinese CIPS (Cross-Border Interbank Payment System), Hudson has no doubts “the Russian-China system will be implemented. The Global South will seek to join and at the same time keep SWIFT – moving their reserves into the new system.”
I’m going to de-dollarize myself
So the US itself, in another massive strategic blunder, will speed up de-dollarization. As the managing director of Bocom International Hong Hao told the Global Times, with energy trade between Europe and Russia de-dollarized, “that will be the beginning of the disintegration of dollar hegemony.”
It’s a refrain the US administration was quietly hearing last week from some of its own largest multinational banks, including notables like JPMorgan and Citigroup.
A Bloomberg article sums up their collective fears:
“Booting Russia from the critical global system – which handles 42 million messages a day and serves as a lifeline to some of the world’s biggest financial institutions – could backfire, sending inflation higher, pushing Russia closer to China, and shielding financial transactions from scrutiny by the west. It might also encourage the development of a SWIFT alternative that could eventually damage the supremacy of the US dollar.”
Those with IQs over 50 in the European Union (EU) must have understood that Russia simply could not be totally excluded from SWIFT, but maybe only a few of its banks: after all, European traders depend on Russian energy.
From Moscow’s point of view, that’s a minor issue. A number of Russian banks are already connected to China’s CIPS system. For instance, if someone wants to buy Russian oil and gas with CIPS, payment must be in the Chinese yuan currency. CIPS is independent of SWIFT.
Additionally, Moscow already linked its SPFS payment system not only to China but also to India and member nations of the Eurasia Economic Union (EAEU). SPFS already links to approximately 400 banks.
With more Russian companies using SPFS and CIPS, even before they merge, and other maneuvers to bypass SWIFT, such as barter trade – largely used by sanctioned Iran – and agent banks, Russia could make up for at least 50 percent in trade losses.
The key fact is that the flight from the US-dominated western financial system is now irreversible across Eurasia – and that will proceed in tandem with the internationalization of the yuan.
Russia has its own bag of tricks
Meanwhile, we’re not even talking yet about Russian retaliation for these sanctions. Former President Dmitry Medvedev already gave a hint: everything, from exiting all nuclear arms deals with the US to freezing the assets of western companies in Russia, is on the table.
So what does the “Empire of Lies” want? (Putin terminology, on Monday’s meeting in Moscow to discuss the response to sanctions.)
In an essay published this morning, deliciously titled America Defeats Germany for the Third Time in a Century: the MIC, OGAM and FIRE conquer NATO, Michael Hudson makes a series of crucial points, starting with how “NATO has become Europe’s foreign policy-making body, even to the point of dominating domestic economic interests.”
He outlines the three oligarchies in control of US foreign policy:
First is the military-industrial complex, which Ray McGovern memorably coined as MICIMATT (military industrial Congressional intelligence media academia think tank).
Hudson defines their economy base as “monopoly rent, obtained above all from its arms sales to NATO, to West Asian oil exporters and to other countries with a balance-of-payments surplus.”
Second is the oil and gas sector, joined by mining (OGAM). Their aim is “to maximize the price of energy and raw materials so as to maximize natural resource rent. Monopolizing the Dollar Area’s oil market and isolating it from Russian oil and gas has been a major US priority for over a year now, as the Nord Stream 2 pipeline from Russia to Germany threatened to link the western European and Russian economies together.”
Third is the “symbiotic” Finance, Insurance and Real Estate (FIRE) sector, which Hudson defines as “the counterpart to Europe’s old post-feudal landed aristocracy living by land rents.”
As he describes these three rentier sectors that completely dominate post-industrial finance capitalism at the heart of the western system, Hudson notes how “Wall Street always has been closely merged with the oil and gas industry (namely, the Citigroup and Chase Manhattan banking conglomerates).”
Hudson shows how “the most pressing US strategic aim of NATO confrontation with Russia is soaring oil and gas prices. In addition to creating profits and stock market gains for US companies, higher energy prices will take much of the steam out of the German economy.”
He warns how food prices will rise “headed by wheat.” (Russia and Ukraine account for 25 percent of world wheat exports.) From a Global South perspective, that’s a disaster: “This will squeeze many West Asian and Global South food-deficient countries, worsening their balance of payments and threatening foreign debt defaults.”
As for blocking Russian raw materials exports, “this threatens to cause breaks in supply chains for key materials, including cobalt, palladium, nickel, aluminum.”
And that leads us, once again, to the heart of the matter: “The long-term dream of the US new Cold Warriors is to break up Russia, or at least to restore its managerial kleptocracy seeking to cash in their privatizations in western stock markets.”
That’s not going to happen. Hudson clearly sees how “the most enormous unintended consequence of US foreign policy has been to drive Russia and China together, along with Iran, Central Asia and countries along the Belt and Road initiative.”
Let’s confiscate some technology
Now compare all of the above with the perspective of a central European business tycoon with vast interests, east and west, and who treasures his discretion.
In an email exchange, the business tycoon posed serious questions about the Russian Central Bank support for its national currency, the ruble, “which according to US planning is being destroyed by the west through sanctions and currency wolf packs who are exposing themselves by selling rubles short. There is really almost no amount of money that can beat the dollar manipulators against the ruble. A 20 percent interest rate will kill the Russian economy unnecessarily.”
The businessman argues that the chief effect of the rate hike “would be to support imports that should not be imported. The fall of the ruble is thus favorable to Russia in terms of self-sufficiency. As import prices rise, these goods should start to be produced domestically. I would just let the ruble fall to find its own level which will for a while be lower than natural forces would permit as the US will be driving it lower through sanctions and short selling manipulation in this form of economic war against Russia.”
But that seems to tell only part of the story. Arguably, the lethal weapon in Russia’s arsenal of responses has been identified by the head of the Center for Economic Research of the Institute of Globalization and Social Movements (IGSO), Vasily Koltashov: the key is to confiscate technology – as in Russia ceasing to recognize US rights to patents.
In what he qualifies as “liberating American intellectual property,” Koltashov calls for passing a Russian law on “friendly and unfriendly states. If a country turns out to be on the unfriendly list, then we can start copying its technologies in pharmaceuticals, industry, manufacturing, electronics, medicine. It can be anything – from simple details to chemical compositions.” This would require amendments to the Russian constitution.
Koltashov maintains that “one of the foundations of success of American industry was copying of foreign patents for inventions.” Now, Russia could use “China’s extensive know-how with its latest technological production processes for copying western products: the release of American intellectual property will cause damage to the United States to the amount of $10 trillion, only in the first stage. It will be a disaster for them.”
As it stands, the strategic stupidity of the EU beggars belief. China is ready to grab all Russian natural resources – with Europe left as a pitiful hostage of the oceans and of wild speculators. It looks like a total EU-Russia split is ahead – with little trade left and zero diplomacy.
Now listen to the sound of champagne popping all across the MICIMATT.
The views expressed in this article do not necessarily reflect those of The Cradle.
Koenig is a Research Associate of the Centre for Research on Globalization.Peter is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for online journals such as Global Research; ICH; New Eastern Outlook (NEO) and more. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. Peter is also co-author of Cynthia McKinney’s book “When China Sneezes: From the Coronavirus Lockdown to the Global Politico-Economic Crisis” (Clarity Press – November 1, 2020) Peter
The World Bank and the International Monetary Fund (IMF) work hand in glove – smoothly. Not only are they regularly lending huge sums of money to horror regimes around the world, but they blackmail poor nations into accepting draconian conditions imposed by the west.
In other words, the WB and the IMF are guilty of the most atrocious human rights abuses.
You couldn’t tell, when you read above the entrance of the World Bank the noble phrase, “Our Dream is World Free of Poverty”.
To this hypocrisy I can only add, ”…And we make sure it will just remain a dream.” This says both, the lie and the criminal nature of the two International Financial Institutions, created under the Charter of the United Nations, but instigated by the United States.
The front of these institutions is brilliant. What meets the eye, are investments in social infrastructure, in schools, health systems, basic needs like drinking water, sanitation – even environmental protection – over all “Poverty Alleviation”, i.e. A World Free of Poverty. But how fake this is today and was already in the 1970’s and 1980’s is astounding. Gradually people are opening their eyes to an abject reality, of exploitation and coercion and outright blackmail. And that, under the auspices of the United Nations. What does it tell you about the UN system? In what hands are the UN? – The world organization was created in San Francisco, California, on 24 October 1945, just after WWII, by 51 nations, committed to maintaining international peace and security, developing friendly relations among nations and promoting social progress, better living standards and human rights.
The UN replaced the League of Nations which was part of the Peace Agreement after WWI, the Treaty of Versailles. It became effective on 10 January 1920, was headquartered in Geneva Switzerland, with the purpose of disarmament, preventing war through collective security, settling disputes between countries, through negotiation diplomacy and improving global welfare. In hindsight it is easy to see that the entire UN system was set up as a hypocritical farce, making people believe that their mighty leaders only wanted peace. These might leaders were all westerners; the same that less than 20 years after the creation of the noble League of Nations, started World War II.
——- This little introduction provides the context for what was eventually to become the UN-backed outgrowth for global theft, for impoverishing nations, around the world, for exploitation of people, for human rights abuses and for shoveling huge amounts of assets from the bottom, from the people, to the oligarchy, the ever-smaller corporate elite – the so-called Bretton Woods Institutions.
In July 1944 more than 700 delegates of 44 Allied Nations (allied with the winners of WWII) met at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, United States, to regulate the international monetary and financial order after WWII. Let’s be sure, this conference was carried out under the auspices of the United States, the self-declared winner of WWII, and from now on forward the master over the financial order of the world – which was not immediately visible, an agenda hidden in plain sight.
The IMF was officially created to ‘regulate’ the wester, so-called convertible currencies, those that subscribed to apply the rules of the new gold standard, i.e. US$ 35 / Troy Ounce (about 31.1 grams). Note that the gold standard, although applicable equally to 44 allied nations was linked to the price of gold nominated in US dollars, not based on a basket of the value of the 44 national currencies. This already was enough reason to question the future system. And how it will play out. But nobody questioned the arrangement. Hard to believe though that of all these national economists, none dared question the treacherous nature of the gold-standard set-up.
The World Bank, or the Bank for Reconstruction and Development (IBRD), was officially set up to administer the Marshall Plan for the Reconstruction of war-destroyed Europe. The Marshall Plan was a donation by the United Stated and was named for U.S. Secretary of State George Marshall, who proposed it in 1947. The plan gave $13.2 billion in foreign aid to European countries that had been devastated physically and economically by World War II. It was to be implemented from 1948 to 1952 which of course was much too short a time, and stretched into the early 1960s. In today’s terms the Marshall plan would be worth about 10 time more, or some US$ 135 billion.
The Marshall Plan was and still is a Revolving Fund, paid back by the countries in question, so that it could be relent. The Marshall Plan money was lent out multiple times and was therefore very effective. The European counterpart to the World Bank-administered Marshall Fund was a newly to be created bank set up under the German Ministry of Finance, The German Bank for Reconstruction and Development (KfW – German acronym for Kreditanstalt für Wiederaufbau”).
KfW, as the World Bank’s European counterpart still exists and dedicates itself mostly to development projects in the Global South, often in cooperation with the World Bank. Today there is still a special Department within KfW that deals exclusively with Marshall Plan Fund money. These funds are used for lending to poor southern regions in Europe, and also to prop up Eastern European economies, and they were used especially to integrate former East-Germany into today’s “Grand Germany”.
Two elements of the Marshall Plan are particularly striking and noteworthy. First, the reconstruction plan created a bind, a dependence between the US and Europe, the very Europe that was largely destroyed by the western allied forces, while basically WWII was largely won by the Soviet Union, the huge sacrifices of the USSR – with an estimated 25 to 30 million deaths. So, the Marshall Plan was also designed as a shield against communist Russia, i.e. the USSR.
While officially the Soviet Union was an ally of the western powers, US, UK, and France, in reality the communist USSR was an arch-enemy of the west, especially the United States. With the Marshall Plan money, the US bought Europe’s alliance, a dependence that has not ended to this day. The ensuing Cold War against the Soviet Union – also all based on flagrant lies, was direct testimony for another western propaganda farce – which to this day, most Europeans haven’t grasped yet.
Second, The US imposition of a US-dollar based reconstruction fund, was not only creating a European dollar dependence, but was also laying the ground work for a singular currency, eventually to invade Europe – what we know today, has become the Euro. The Euro is nothing but the foster child of the dollar, as it was created under the same image as the US-dollar – it is a fiat currency, backed by nothing. The United Europe, or now called the European Union – was never really a union. It was never a European idea, but put forward by US Secret Services in disguise of a few treacherous European honchos. And every attempt to create a United Europe, a European Federation, with a European Constitution, similar to the United States, was bitterly sabotaged by the US, mostly through the US mole in the EU, namely the UK.
The US didn’t want a strong Europe, both economically and possibly over time also militarily (pop. EU 450 million, vs US pop. 330 million; 2019 EU GDP US$ 20.3 trillion equivalent, vs US GDP US$ 21.4 trillion. Most economists would agree that a common currency for a loose group of countries has no future, is not sustainable. In comes the European Central Bank (ECB), also a creation inspired by the FED. The ECB has really no Central Bank function. It is rater a watch dog. Because each EU member country has still her own Central Bank, though with a drastically reduced sovereignty.
Out of the currently 27 EU members only 19 are part of the Euro-zone. Those countries not part of the Eurozone, i.e. Czech Republic, Denmark, Hungary, Sweden – and more, have preserved their sovereign financial policy and do not depend on the ECB. This means, had Greece opted out of the Eurozone when they were hit with the 2008 / 2009 manufactured “crisis”, Greece would now be well on her way to full recovery. They would not have been subject to the whims and dictate of the IMF, the infamous troika, European Commission (EC), ECB and IMF, but could have chosen to arrange their debt internally, as most debt was internal debt, no need to borrow from abroad.
In a 2015 bailout referendum, the Greek population voted overwhelmingly against the bailout, meaning against the new gigantic debt. However, the then Greek President Tsipras, went ahead as if the referendum had never taken place and approved the huge bailout despite almost 70% of the popular vote against it.
This is a clear indication of fraud, that no fair play was going on. Tsipras and / or his families may have been coerced to accept the bailout – or else. We may never know, the true reason why Tsipras sold his people, the wellbeing of the Greek people to the oligarchs behind the IMF and World Bank – and put them into abject misery, with the highest unemployment in Europe, rampant poverty and skyrocketing suicide rates.
Greece may serve as an example on how other EU countries may fare if they don’t “behave” – meaning adhere to the unwritten golden rules of obedience to the international money masters.
This is scary.
——- And now, in these times of covid, it is relatively easy. Poor countries, particularly in the Global South, already indebted by the plandemic, are increasing their foreign debt in order to provide their populations with basic needs. Or so they make you believe. Much of the debt accumulated by developing countries is domestic or internal debt, like the debt of the Global North. It doesn’t really need foreign lending institutions to wipe out local debt. Or have you seen one of the rich Global North countries borrowing from the IMF or the World Bank to master their debt? – Hardly.
So why would the Global South fall for it? Part corruption, part coercion, and partly direct blackmail. – Yes, blackmail, one of the international biggest crimes imaginable, being committed by the foremost international UN-chartered financial institutions, the WB and the IMF.
For example, the whole world is wondering how come that an invisible enemy, a corona virus hit all 193 UN member countries at once, so that Dr. Tedros, Director General of WHO, declares on 11 March a pandemic – no reason whatsoever since there were only 4,617 cases globally – but the planned result was a total worldwide lockdown on 16 March 2020. No exceptions. There were some countries who didn’t take it so seriously, like Brazil, Sweden, Belarus, some African countries, like Madagascar and Tanzania – developed their own rules and realized that wearing masks did more harm than good, and social distancing would destroy the social fabric of their cultures and future generations.
But the satanic deep dark state didn’t want anything to do with “independent” countries. They all had to follow the dictate from way above, from the Gates, Rockefellers, Soroses, et al elite, soon to be reinforced by Klaus Schwab, serving as the chief henchman of the World Economic Forum (WEF). Suddenly, you see in Brazil, a drastic surge in new “cases”, no questions asked, massive testing, no matter that the infamous PCR tests are worthless according to most serious scientists (only sold and corrupted scientists, those paid by the national authorities, would still insist on the RT-PCR tests). Bolsonaro gets sick with the virus and the death count increases exponentially – as the Brazilian economy falls apart.
Coincidence?
In comes the World Bank and / or the IMF, offering massive help mostly debt relief, either as grant or as low interest loans. But with massive strings attached: you must follow the rules laid out by WHO, you must follow the rules on testing on vaccination, mandatary vaccination – if you conform to these and other country-specific rules, like letting western corporations tap your natural resources – you may receive, WB and IMF assistance.
Already in May 2020 the World Bank Group announced its emergency operations to fight COVID-19 had already reached 100 developing countries – home to 70% of the world’s population with lending of US$ 160 billion-plus. This means, by today, 6 months later and in the midst of the “Second Wave” the number of countries and the number of loans or “relief’ grants must have increased exponentially, having reached close to the 193 UN member countries. Which explains how all, literally all countries, even the most objecting African countries, like Madagascar and Tanzania, among the poorest of the poor, have succumbed to the coercion or blackmail of the infamous Bretton Woods Institutions.
These institutions have no quarrels in generating dollars, as the dollar is fiat money, not backed by any economy – but can be produced literally from hot air and lent to poor countries, either as debt or as grant. These countries, henceforth and for pressure of the international financial institutions will forever become dependent on the western masters of salvation. Covid-19 is the perfect tool for the financial markets to shovel assets from the bottom to the top.
In order to maximize the concentration of the riches on top, maybe one or two or even three new covid waves may be necessary. That’s all planned, The WEF has already foreseen the coming scenarios, by its tyrannical book “Covid-19 – The Great Reset”. It’s all laid out. And our western intellectuals read it, analyze it, criticize it, but we do not shred it apart – we let it stand, and watch how the word moves in the Reset direction. And the plan is dutifully executed by the World Bank and the IMF – all under the guise of doing good for the world.
What’s different from the World Bank and IMF’s role before the covid plandemic? – Nothing. Just the cause for exploitation, indebtment, enslavement. When covid came along it became easy. Before then and up to the end of 2019, developing countries, mostly rich in natural resources of the kind the west covets, oil, gold, copper and other minerals, such as rare earths, would be approached by the WB, the IMF or both.
They could receive debt relief, so-called structural adjustment loans, no matter whether or not they really needed such debt. Today these loans come in all forms, shapes and colors, literally like color-revolutions, for instance, often as budget support operations – I simply call then blank checks – nobody controls what’s happening with the money. However, the countries have to restructure their economies, rationalizing their public services, privatizing water, education, health services, electricity, highways, railroads – and granting foreign concessions for the exploitation of natural resources.
Most of this fraud – fraud on “robbing” national resources, passes unseen by the public at large, but countries become increasingly dependent on the western paymasters – peoples’ and institutional sovereignty is gone. There is always a corrupter and a corruptee. Unfortunately, they are still omni-present in the Global South. Often, for a chunk of money, the countries are forced to vote with the US for or against certain UN resolutions which are of interest to the US. Here we go – the corrupt system of the UN.
And of course, when the two Bretton Woods organizations were created in 1944, the voting system decided is not one country, one vote as in theory it is in the UN, but the US has an absolute veto right in both organizations. Their voting rights are calculated in function of their capital contribution which derives from a complex formula, based on GDP and other economic indicators. In both institutions the US voting right and also veto right is about 17%. Both institutions have 189 member countries. —–
Covid has laid bare, if it wasn’t already before, how these “official” international, UN-chartered Bretton Woods financial institutions are fully integrated in the UN system – in which most of the countries still trust, maybe for lack of anything better.
Question, however: What is better, a hypocritical corrupt system that provides the “appearance”, or the abolition of a dystopian system and the courage to create a new one, under new democratic circumstances and with sovereign rights by each participating country?
بالتأكيد يضيف قانون قيصر للعقوبات المفروضة منذ سنوات على سورية أميركياً وأوروبياً المزيد، لكن هذا المزيد المتصل بالاستهداف المباشر لسورية كدولة واقتصاد يكاد يكون مجرد غبار إعلامي، لأن المصرف المركزي السوري والمصارف التجارية تحت عقوبات سابقة تمنع فتح الاعتمادات لزوم الاستيراد، والدولة السورية ممنوع عليها بيع وشراء النفط منذ زمن، والاستهداف الجديد المباشر كناية عن دفعات من الأسماء التي تطالها العقوبات، أغلبهم ليست لديه حسابات مصرفية قابلة للعقاب، ومَن لديه سبق ونال نصيبه من العقوبات، كما يقول مجرد الاطلاع على اللائحة الأولى التي سوق لها الأميركيون وجماعاتهم الكثير، بصفتها، الإشارة لحجم العقوبات التي يمثلها القانون.
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قيمة القانون بالتأكيد لم تكن بتهديده للمتاجرين مع سورية، لأن الأوروبيين ممتنعون أصلاً، ومثلهم كثير من الدول والشركات العالمية، وبالتوازي ليست قيمة القانون بتهديد إيران وهي المعاقبة بما هو أشدّ من قانون قيصر. والقيمة الفعلية للقانون كانت يوم بدأت مناقشته قبل ثلاث سنوات، وهي اليوم كذلك، بكونه يستهدف الضغط على روسيا عبر التلويح بمعاقبة شركاتها التي تتعامل مع سورية، ومن ضمنها شركات تمثل عصب الاقتصاد الروسي سواء في مجال صناعات الأسلحة أو في قطاع النفط والغاز. ومثلما كان الأمر منذ ثلاث سنوات ويتجدد اليوم، ثمة ما تريده واشنطن من موسكو عبر التلويح بالعقوبات، كان في الماضي يوم صدر القانون الامتناع عن المشاركة في معركة حلب، وحسمت روسيا المشاركة وحسم النصر معها قبل أن يبصر القانون النور فتم صرف النظر عنه.
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العودة للعقوبات في مخاطبة روسيا هذه المرّة لها عنوان موجود في نص القانون، وفي فقراته الأخيرة، وهي متصلة بمسار الحل السياسي، رغم أن موضوع القانون لا يتصل بالحل السياسي، والواضح لمن يقرأ القانون أن ما يريده الأميركي إشارات على حل سياسي تراعي طلبات محددة، تتوزع بين محورين: الأول هو وضع خاص يقارب الفدرالية لمنطقة سيطرة الميليشيات الكردية في شمال شرق سورية، والثاني ترتيبات أمنية جنوب سورية توفر أعلى الممكن من ضمانات لأمن كيان الاحتلال المكشوف أمام قوى محور المقاومة، ولذلك كان المحللون الأميركيون منذ الإعلان عن قرب وضع القانون قيد التنفيذ يراقبون يوماً بيوم ردود الأفعال الروسية، ولذلك حتى أول أمس كانوا يعتبرون القانون فعالاً بداعي أن موقفاً روسياً لم يصدر أسوة بما صدر عن إيران، لكن الموقف الروسي صدر أمس، وكان متعمداً تأجيله ليوم دخول القانون حيز التنفيذ علامة استخفاف روسي، ظهر بالقول إن موسكو ستزيد دعمها للدولة السورية، وإنها لن تخضع للتهديد بالعقوبات التي يتضمنها قانون قيصر.
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على هامش تفاهة المحتفلين بالقانون من بعض اللبنانيين، وما يتحدثون عنه من انهيار سوري ينتظر بعض المدد من لبنان، تروى روايتان تطغيان على الإعلام، واحدة تقول إن حزب الله يشتري الدولارات من لبنان ويهربها إلى سورية، والثانية تقول إن تهريب المازوت والطحين من لبنان إلى سورية على قدم وساق، وإن هذين العاملين، شراء حزب الله للدولار وتهريبه ومثله تهريب الطحين والمازوت إلى سورية، سببا انهيار لبنان وصمود سورية، ورغم أن العاقل يعلم أن وراء هذا الكلام مجموعة مغفلين، لكن لا بدّ من كشف الخداع والغباء في الكلام. وهنا نسأل هل يشتري حزب الله الدولار من بيروت ويهربه إلى سورية بلا مقابل مالي أو تجاري؟ وهذا يعني كي يكون الرقم مؤثراً بالنسبة لسورية أن يكون حزب الله قادراً على بيع ليرات لبنانية وشراء دولارات مقابلها بمئات ملايين الدولارات، والأمران يجعلانه أهم من المصرف المركزي بمخزون لا ينضب من الليرات وقدرة لا تضاهى بالتخلي عن الدولار، بينما يفترض أن نصدّق أنه في أزمة أشدّ من سورية، أما إن كان حزب الله يحصل على المقابل للدولارات، فهل يُعقل أن يكون بالليرة السورية وماذا سيفعل بها؟ فإن كان يشتري بضائع لتباع في لبنان فهذا صار تجارة لاستيراد سلع يحتاجها السوق اللبناني بسعر أرخص حكماً من مصادر استيراد أخرى، يحتاج تمويلها لدولارات أكثر، وهذا يجعل العملية توفيراً للدولار لا استنزافاً له، بالنسبة للسوق اللبنانية، أما حكاية تهريب المازوت والطحين، فأولها الاقتناع أنها إن أخذت بالحساب فيجب التسليم بأنها لا تمثل إلا الجزء البسيط من حاجات سورية التي تعادل عشرة أضعاف استهلاك لبنان من المادتين، والحديث عن تهريب سقفه الأعلى 10% من استيراد لبنان، يعني 1% من استهلاك سورية، ورغم الحجم الهزيل نبدأ بالأسئلة، هل المقابل للطحين والمازوت هو ليرات سورية يتقاضاها المهربون، وماذا يفعلون بالليرات السورية، وإذا باعوها ليشتروا بها دولاراً، فيجب أن يكون المشتري بالنهاية في السوق السورية ليستعملها، ويصير الدولار المقابل دولاراً يخرج من سورية ليدخل إلى لبنان لا العكس، ويجب أن يكون سعر البيع للمواد المهربة أعلى من مبيعها في لبنان كي تكون العملية مجدية، أي أن دولارات أقل دفعت لشراء المواد ودولارات أكثر جاءت ببيعها، فكيف يكون لبنان مستنزفاً بالدولار. هذا رغم صحة أن التهريب يكلف الدولة فارق الدعم، ويجب وقفه، لكن المبالغات والأكاذيب آن لها أن تتوقف، لأنها لا تنشئ قضية ممكن الدفاع عنها أمام أي منطق.
Lebanon, the tiny Middle Eastern country on the Mediterranean Sea, is still recovering from a devastating civil war. Almost three decades had passed and Lebanon is still suffering from the consequences of that war which ended in 1990.
The economic situation in Lebanon is beyond repair; and the situation is getting even worse. Thanks to the dire economy, it is the third-highest indebted country in the world in terms of the ratio of debt-to-GDP.
Economist and Professor of Finance at the Lebanese University, Dr. Ali Awdeh, tackles the economic crisis in Lebanon in an interview with al-Ahed News.
“We are facing a real crisis which is being exaggerated by the complex political situation,” Dr. Awdeh said, adding that “this is not the first time Lebanon has faced such a crisis. Indeed, we have had more difficult times than what we are currently facing.”
He compared the economic situation in Lebanon prior and post 2000, “If we are talking about the budget deficit, the public debt, the trade deficit, or the Balance of Payments [BoP] deficit, sometime after the war between 2000 and 2002, then Lebanon has experienced worse times; though, there was no state of panic.”
“However, nowadays, the gravity of what makes people feel how bad the situation is, is that the political situation is worse and more complicated than before; the danger lies in the polarity of division among the parties and the depth of political differences; Not to mention, the problem posed by corruption, which has become more deeply rooted than it has been in the previous period,” Dr. Awdeh explained.
Meanwhile, the Lebanese economist explained that both the financial and monetary situations in the country are facing difficulties. Though, he clarified that the situation was not as bad as it seemed, “there is stability in the banking sector in general, and the monetary sector is also fairly stable.”
Conversely, the scarcity of US dollars is causing a crisis for Lebanese citizens and businesses. Yet, this scarcity is not “spontaneous”, as Dr. Awdeh puts it, explaining that the Central Bank was following “this policy of withdrawing US dollars from Lebanese markets to keep as much of the American currency in Lebanon. But at the same time, the Central Bank cannot control the circulation of dollars.”
Dr. Awdeh shed light on the crisis caused by the budget deficit, specifically the balance of payments and trade deficits. He said that “due to lack of sound financial decision, the financial policies set forth for the coming 20 or so years were not on the right track.”
According to Dr. Awdeh, the monetary policy was trying to fill in the gaps caused by the financial decision, though the former was unable to cover all of the latter’s aspects.
The economist stressed the need for a sound financial decision, which will pave the way for a less dependent economy. “It is a chain or a cycle, the first step being a sound financial decision-making and financial reforms; and thus, directing public finance into the right direction,” Dr. Awdeh clarified.
Furthermore, he tackled the policies of Bank of Lebanon [BDL] – the central bank of Lebanon – and its governor Riad Salameh, which had been in place since 1993, noting that financial and monetary policies should be “more pragmatic” – in other words, according to the economist, they should be more flexible – to change with the changing economic circumstances.
Dr. Awdeh focused on the positive and negative aspects of these policies. He spoke of currency exchange rates, interest rates and dollarization.
“The fixed currency exchange rate has had some positive aspects at first, as people had no confidence in the Lebanese pound,” he said, adding that this policy led to a state of stability in the exchange rate and a stability – to some extent – in inflation.
Regarding interests, Dr. Awdeh saw that it would have been much better if the Lebanese government followed a more flexible approach – one that would increase and decrease in accordance with economic developments.
The dollarization – according to Dr. Awdeh – was another failure in the policies of the BDL. He explained that the Lebanese economy “is very much dollarized and a large amount of deposits at the banks are in US dollars. As a result, a large part of the loans granted by banks are in US dollars.
He said that the BDL “could not solve this problem, so the economy remained dollarized while the exchange rate was constant.”
Nonetheless, the expert came to conclusion that many of the BDL’s policies and measures aimed to enhance the situation, but what happened was the opposite. He said the BDL should have paid attention to what he called “side effects”.
Though, Dr. Awdeh stressed the necessity on the part of the Lebanese government to take the necessary measures to deal with the crisis saying, “This is an extraordinary situation – a situation that required greater alert from the government”.
In a parallel notion, the economist related the economic situation in Lebanon to the regional and international arena. Dr. Awdeh believed that “it is no one’s interest – at home or abroad – that the economic situation in Lebanon collapses.”
He further added, “Regardless of whether they are [regional and international states] on our side or not, there are about 2 million Syrian refugees in Lebanon; and if the economy collapses, they will leave and become other countries’ burden.”
“So, no one has an interest in the significant deterioration of Lebanon’s economic situation,” Dr. Awdeh concluded.
UPROOTED PALESTINIANS: SALAM ALQUDS ALAYKUM 