The question is inevitable: what’s the point of this phone call? Very simple: just business.
The Beijing leadership is fully aware the NATO proxy war against Russia in Ukraine is the un-dissociable double of an American direct war against the Belt and Road Initiative (BRI).
Until recently, and since 2019, Beijing was the top trade partner for Kiev (14.4% of imports, 15.3% of exports). China essentially exported machinery, equipment, cars and chemical products, importing food products, metals and also some machinery.
Very few in the West know that Ukraine joined BRI way back in 2014, and a BRI trade and investment center was operating in Kiev since 2018. BRI projects include a 2017 drive to build the fourth line of the Kiev metro system as well as 4G installed by Huawei. Everything is stalled since 2022.
Noble Agri, a subsidiary of COFCO (China National Cereals, Oils and Foodstuffs Corporation), invested in a sunflower seed processing complex in Mariupol and the recently built Mykolaiv grain port terminal. The next step will necessarily feature cooperation between Donbass authorities and the Chinese when it comes to rebuilding their assets that may have been damaged during the war.
Beijing also tried to become heavily involved in the Ukraine defense sector and even buy Motor Sich; that was blocked by Kiev.
Watch that neon
So what we have in Ukraine, from the Chinese point of view, is a trade/investment cocktail of BRI, railways, military supplies, 4G and construction jobs. And then, the key vector: neon.
Roughly half of neon used in the production of semiconductors was supplied, until recently, by two Ukrainian companies; Ingas in Mariupol, and Cryoin, in Odessa. There’s no business going on since the start of the Special Military Operation (SMO). That directly affects the Chinese production of semiconductors. Bets can be made that the Hegemon is not exactly losing sleep over this predicament.
Ukraine does represent value for China as a BRI crossroads. The war is interrupting not only business but, in the bigger picture, one of the trade and connectivity corridors linking Western China to Eastern Europe. BRI conditions all key decisions in Beijing – as it is the overarching concept of Chinese foreign policy way into mid-century.
And that explains Xi’s phone call, debunking any NATOstan nonsense on China finally paying attention to the warmongering actor.
As relevant as BRI is the overarching bilateral relationship dictating Beijing’s geopolitics: the Russia-China comprehensive strategic partnership.
So let’s transition to the meeting of Defense Ministers of the Shanghai Cooperation Organization (SCO) earlier this week in Delhi.
The key meeting in India was between Russian Defense Minister Sergei Shoigu and his Chinese colleague Li Shangfu. Li was recently in Moscow, and was received by Putin in person for a special conversation. This time he invited Shoigu to visit Beijing, and that was promptly accepted.
Needless to add that every single player in the SCO and beyond, including nations that are for the moment just observers or dialogue partners as well as others itching to become full members, such as Saudi Arabia, paid very close attention to the Shoigu-Shangfu camaraderie.
When it comes to the profoundly strategic Central Asian “stans”, that represents the six feet under treatment for the Hegemon wishful thinking of using them in a Divide and Rule scheme pitting Russia against China.
Shoigu-Shangfu also sent a subtle message to SCO members India and Pakistan – stop bickering and in the case of Delhi, hedging your bets – and to full member (in 2023) Iran and near future member Saudi Arabia: here’s where’s it at, this the table that matters.
All of the above also points to the increasing interconnection between BRI and SCO, both under Russia-China leadership.
BRICS is essentially an economic club – complete with its own bank, the NDB – and focused on trade. It’s mostly about soft power. The SCO is focused on security. It’s about hard power. Together, these are the two key organizations that will be paving the multilateral way.
As for what will be left of Ukraine, it is already being bought by Western mega-players such as BlackRock, Cargill and Monsanto. Yet Beijing certainly does not count on being left high and dry. Stranger things have happened than a future rump Ukraine positioned as a functioning trade and connectivity BRI partner.
US imports of Saudi oil are at historic lows, Chinese purchases of Saudi oil continue to grow, and Russian-Saudi energy interests have fully converged. If it’s ‘all about the economy,’ then Saudi-US ties may never quite recover.
“Our allies in the Gulf no longer honor the deal that was made decades ago even though we still have a big physical military presence in the Gulf, bigger than ever before, and we keep giving Gulf nations a pass on human rights violations. Too often our Middle East allies act in conflict with our security interests.”
– Chairman of the Subcommittee on Near East, South Asia, Central Asia, and Counterterrorism of Committee on Foreign Relations in the US Senate, Senator Chris Murphy, July 2022.
The war in Ukraine and the intensification of Great Power competition have cast a shadow over global markets and prompted some surprising changes in the foreign policies of states. The Kingdom of Saudi Arabia is among those countries, and its relationship with the US is currently passing through a very critical period. Today, Riyadh seeks a more conditional relationship with Washington, one that takes into account converging Saudi interests with non-western states.
There are many reasons why the kingdom is adopting a more pragmatic foreign policy. One of the key factors is energy relations, particularly as Riyadh seeks to preserve and grow its mutual interests with other major powers, such as China and Russia.
The birth of the petrodollar
The “Nixon Shock” in 1971 marked a shift in economic policy for the US, which sought to prioritize its own economic growth and stability over that of other states. This led to the end of the Bretton Woods Agreement and the convertibility of US dollars into gold. Washington moved instead to establish a new system in which the US dollar was pegged to a commodity with global demand in order to maintain its position as the world’s dominant reserve currency.
In 1974, the petrodollar agreement was struck, in which Saudi Arabia agreed to sell oil exclusively in US dollars in exchange for US military, security, and economic development assistance. The deal effectively tied the value of the US dollar to global demand for oil and ensured its continued dominance as the world’s primary reserve currency.
US dependence on Saudi oil
After the petrodollar agreement, Saudi oil exports to the US surged, making Saudi Arabia’s security all the more critical for Washington. By 1991, the US imported 1.7 million barrels per day (bpd) of Saudi oil, a sharp increase from 438,000 bpd in 1974.
This represented 29.5 percent of the total US oil imports in 1991, and 26.4 percent of the total Saudi oil exports – further emphasizing for Washington the importance of maintaining Saudi Arabia’s security and stability. But the staggering dependence on foreign – and Saudi – oil imports also created political blowback in the US, which launched plans to reduce its imports and ramp up domestic oil production.
This was motivated by several factors, including the potential negative impact of any energy market shocks – such as the decline in Iranian oil exports after the 1979 Islamic Revolution – on the US economy, the potential impact of geopolitical disputes on West Asian oil exports, and technological advances that facilitated increased oil production in the US.
Over the following decades, Washington was able to successfully reduce its oil imports from Saudi Arabia: In 2020, the US only imported 356,000 bpd of Saudi oil, which accounted for just 6 percent of all US oil imports and 4.8 percent of all Saudi oil exports.
Changing oil market dynamics
In this process, Saudi Arabia lost much of its value as a market for the Americans, and the US is no longer dependent on Saudi Arabia as a significant oil source. Furthermore, the US’ significant increase in shale oil production created a major new competitor in the energy market, which raised concerns in Riyadh about its declining influence as a strategic supplier of oil to the world.
To diversify its oil export options, Saudi Arabia began turning eastward to China, the world’s largest oil importer. Over the past two decades, Saudi Arabia has gradually become China’s primary source of oil, with Chinese oil imports from Saudi Arabia increasing by 16.3 percent between 1994 and 2005, reaching 1.75 million bpd in 2022.
Strengthening economic and diplomatic relations with Beijing has become a necessity for Riyadh, which derives 70 percent of its export revenues from oil. The same applies to China, a global power that actively seeks to diversify its oil sources to prevent reliance on a single country.
In recent years, Russia has also emerged as an essential oil industry partner for the Saudis. The creation of OPEC+ was a response to falling crude oil prices caused partly by the substantial increase in US shale oil production since 2011.
Russia and Saudi Arabia are the world’s top oil exporters, and their cooperation has proven vital for controlling prices by coordinating the quantities of oil pumped into the markets. This led to the 2016 expansion of OPEC – which is controlled by Saudi Arabia – and the establishment of OPEC+ to include Russia.
OPEC+ cooperation after price war
After the negative consequences of the 2020 price war among key oil producers, both Riyadh and Moscow recognized the importance of cooperation to safeguard their energy interests.
In March of that year, OPEC+ had convened in Vienna to address the decline in oil demand caused by the COVID-19 pandemic. At the meeting, Saudi Arabia, the organization’s largest producer, proposed reducing production to stabilize prices at a reasonable, higher level, while Russia, the largest non-OPEC producer in OPEC +, opposed the cuts and moved to increase its oil production.
In response to Moscow’s move, the Saudis increased their own production and announced unexpected cuts in oil prices ranging from $6 and $8 per barrel for importers in Europe, Asia, and the US. This announcement triggered a sharp drop in oil prices, with Brent crude plummeting by 30 percent – marking the biggest decline since the 1991 Gulf War – while the WTI benchmark fell by 20 percent.
On 9 March, global stock markets experienced significant losses, and the Russian ruble declined by 7 percent against the US dollar, reaching its lowest level in four years.
The oil price war lasted for approximately a month before OPEC+ members reached a new agreement in April that included historic oil production cuts of 10 million bpd. This experience marked the beginning of uninterrupted energy cooperation between Moscow and Riyadh.
Saudi Arabia: prioritizing its interests
Since the outbreak of the Ukraine war in February 2022, the US has pressured its allies to comply with western sanctions against Russia. Washington has sought to persuade OPEC leader Riyadh to increase oil production to curb the price hike caused by the conflict, but so far, the Saudis have refused these demands.
This has led to heightened US-Saudi tensions, which prompted US President Joe Biden’s unsuccessful visit to Jeddah in July 2022 to try to convince Crown Prince Mohammed bin Salman (MbS) to raise oil production levels.
Furthermore, western attempts to establish a price ceiling on Russian oil served only to alarm Saudi Arabia, as it would open the door for customers to impose oil prices on sellers. Despite aggressive attempts to undermine Russia’s energy sector, the US-European western alliance has been unable to do so, and in fact, led to an increase in Russian energy exports to Europe, China, and India last year.
A number of countries, including Saudi Arabia, have helped buoy Russian energy exports by purchasing Russian oil and re-exporting it to needy European markets – or using it locally to boost their export revenues. As Russia is the second-largest exporter of oil worldwide, its isolation from the markets would otherwise have significant repercussions, especially for oil-exporting states.
The war in Ukraine demonstrated that Riyadh is prepared to confront Washington when it feels its energy interests are under threat. Today, the US is no longer an energy partner for Saudi Arabia, but rather a competitor. In its stead, Beijing and Moscow have risen to become essential partners for Riyadh, and the mutual energy interests are a major factor behind MbS’ efforts to diversify his country’s foreign policy options.
The US and Saudi Arabia: No longer energy allies
Since the Cold War era began, oil has been a key pillar of the Russian (and former Soviet) economy. It has long been a US priority to be able to influence prices as a pressure tool against Moscow. Since Saudi Arabia is considered an oil superpower, Washington’s cooperation with Riyadh – despite its own dramatically reduced Saudi oil imports – is at the heart of US economic strategies to counter Russia.
For example, in the mid-eighties, during the Soviet invasion of Afghanistan, the US asked the Saudis to flood oil markets in order to lower prices and undermine the oil revenue-reliant USSR. In 1986, oil prices dropped by two-thirds, from $30 per barrel to nearly $10 per barrel, ultimately crippling the Soviet economy and its geopolitical reach.
But attitudes have sharply altered during the intervening 37 years. Saudi Arabia now views the US as an energy market competitor due to Washington’s increased shale oil production and disinterest in boosting oil imports.
Between 2010 and 2021, US shale oil production grew from approximately 0.59 million bpd to 9.06 million bpd. Riyadh’s response to this new geo-economic development was to raise oil production in 2016, with the aim of lowering prices to undercut the US shale industry, which operates at significantly higher costs.
The Saudis indeed fear a declining role as a strategic supplier of global oil, in large part due to expanded US shale production and energy self-sufficiency. This has driven the Saudis to try and reimpose their oil superiority by lowering prices to undercut competitors with higher production costs – despite the short-term domestic damage caused by increased Saudi oil production.
To this day, Saudi Arabia continues to present an obstacle to US energy interests, and has instead found most common ground with Washington’s main adversaries – Russia, China, Iran – with whom Riyadh’s energy interests intersect.
Contrary to expectations since the outbreak of the Ukraine war in February 2022, all US efforts to persuade Riyadh to flood global oil markets have failed, and the Russians have managed to maintain both their exports and their economy. It has become manifestly clear to Washington’s decision-makers that Saudi Arabia today is not the Saudi Arabia of 1985, willing to undermine its own revenues and energy interests in order to serve a US geopolitical agenda.
Discussions in Washington today have likewise turned to the feasibility of maintaining the US commitment to Saudi Arabia’s security, particularly since Riyadh neither provides Americans with energy nor follows its political diktats.
Some believe that the US’ role of acting as a security guarantor in the Persian Gulf merely serves Beijing’s interests by securing China’s main energy sources. Yet others argue that a US military withdrawal from the Persian Gulf will create a vacuum filled by Beijing, which will keenly seek to ensure its own energy security.
The one point of clarity, however, is that US-Saudi energy interests are no longer synergistic and that Riyadh’s interests line up far more closely with those of Beijing and Moscow. This remains a key factor driving Saudi Arabia’s foreign policy and economic diversification today.
What remains to be seen is how far the Saudis – deeply and historically bound to western interests – will be willing to challenge the US’ regional hegemony as their goals diverge and Riyadh finds common cause with Washington’s rivals.
The views expressed in this article do not necessarily reflect those of The Cradle.
Chinese allies control 40 percent of OPEC+ oil reserves, and the GCC controls another 40 percent. With this China-UAE gas trade settled in yuan, the petrodollar today is under serious threat.
On 28 March, the Shanghai Petroleum and Natural Gas Exchange (SHPGX) made history by announcing the first-ever deal on importing 65,000 tons of liquefied natural gas (LNG) from the UAE, settled in the Chinese yuan currency. China National Offshore Oil Company (CNOOC) and French TotalEnergies finalized the transaction, and TotalEnergies confirmed that the LNG imported was from the Persian Gulf state.
China’s Global Times in a report the following day, cited the chairman of the SHPGX, Guo Xu as saying that the deal is:
“A meaningful attempt to promote multi-currency pricing, settlement and cross-border payment in international LNG trading. It also provides a new channel for international players to participate in the Chinese market, helping to build a new pattern of dual circulation in China.”
Beijing pushes yuan for energy trade
The yuan settlement of international LNG trading is a “major event in China’s market-oriented oil and gas reform, which will help promote the docking of international and domestic markets,” the report quoted experts as saying.
The development comes after Chinese President Xi Jinping announced in December 2022, during a landmark visit to Riyadh, that his country should make “full use” of the SHPGX as a platform to carry out yuan settlement of oil and gas trade.
This deal represents a departure from the decades-long practice of conducting global oil sales exclusively in US dollars. A prominent economist, who spoke to The Cradle, speculated that “the French either resorted to the yuan due to the acute shortage of Russian gas supplies to the European continent, or they have reserves in the Chinese currency that they want to use.”
The deal came as a surprise, as French President Emmanuel Macron typically does not take such steps without the approval of the US. As for the UAE, the move is part of a larger trend of Persian Gulf countries opening up to China in the aftermath of the US withdrawal from Afghanistan and the Biden administration’s shift in regional policies.
The yuan payment also follows the global polarization taking place over the Ukraine war and further demonstrates the reluctance of Persian Gulf states to align with western hostility toward Russia, China, and other US adversaries. According to the same economist, “The Emirati move cannot be separated from the changes taking place in the world. Abu Dhabi and Riyadh sense the global imbalance of power, and decided to expand the margins of their international relations.”
Yuan’s growing acceptance
Given the current global geopolitical shifts, the yuan is gaining increased acceptance as an international currency. Since President Xi Jinping assumed office, China has settled agreements with several countries in its local currency in an attempt to challenge the dominance of the US dollar in global trade.
As a result, the yuan has become the world’s fifth-largest payment currency, the third-largest currency in trade settlement, and the fifth-largest reserve currency. According to the Global Times, the yuan today accounts for 7 percent of all foreign exchange trades worldwide and has experienced the most significant expansion in currency market share over the past three years.
Experts have noted that “with the recovery of the momentum of China’s economic growth and the further opening of the financial market, the investment and hedging function of the yuan has gradually increased.”
In an article earlier this year for The Cradle, Pakistani analyst F. M. Shakil cited the Currency Composition of Official Foreign Exchange Reserves (COFER) report by the International Monetary Fund (IMF), which shows that:
“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.”
Shakil also noted that the “cumulative cross-border yuan settlement handled in Xinjiang (western China), the financial hub between China and Central Asia, exceeded 100 billion yuan ($14 billion) as early as 2013 and reached 260 billion yuan in 2018.”
He concluded that “dollar reserves are dwindling and the influence of the United States of America is receding in the global economy, which represents an opportunity for regional powers’ currencies and alternative payment systems.”
Rise of the petroyuan
Since 2009, Beijing has implemented a policy to reduce its reliance on the US dollar in commercial transactions. This policy includes settling the majority of its goods in foreign markets in its local currency, establishing mutual lines of credit with several central banks worldwide, and negotiating with West Asian and North African countries to conduct trade using the yuan. These efforts have started to show results recently, with a number of Asian governments partially adopting the Chinese currency.
Iraq is one of the countries that have partially adopted the yuan in trade. In February, the Iraqi Central Bank announced plans to allow direct settlement of trade from China in yuan to improve access to foreign currency and compensate for the dollar shortage in local markets, largely due to measures imposed by the Federal Reserve on money transfers leaving Iraq to prevent them from reaching Tehran and Damascus. Egypt also announced its intention to issue yuan bonds last August.
Russia has played a significant role in changing the course of the yuan by signing the Eastern Natural Gas Pipeline Agreement from Russia to China and converting the currencies of gas payments from the US dollar to the Chinese yuan and the Russian ruble.
According to the latest data from the Russian Central Bank, the yuan has become a major player in Russia’s foreign trade, with its share of import settlements increasing from just 4 percent in January 2022 to 23 percent by the end of the year. The yuan’s share of exports rose from 0.5 percent to 16 percent in the same period.
During his trip to Saudi Arabia, the Chinese president encouraged Gulf Cooperation Council (GCC) countries to use the SHPGX for yuan-based energy deals. The visit also saw China and Saudi Arabia sign over $30 billion in trade deals, which some analysts believe marks the rise of the petroyuan.
According to US-based Credit Suisse analyst Zoltan Pozsar, Russia, Iran, and Venezuela – all allies of China – account for 40 percent of OPEC+’s proven oil reserves, with the GCC making up another 40 percent. If these three states alone settle their energy exports in yuan, the petroyuan is here to stay.
A response to US policy
In a January interview with Bloomberg, during the World Economic Forum in Davos, Saudi Finance Minister Mohammed al-Jadaan said that “the kingdom is open to trading in currencies other than the US dollar in order to improve trade.”
Interestingly, despite being a stalwart US ally for decades, Riyadh is deepening its ties with key trading partners, including Beijing, as China imported over 500 million tons of crude oil and over 100 million tons of natural gas, including 63.44 million tons of LNG, in 2022.
Middle East Briefing suggests that this shift towards national currencies in global trade “is partly due to Washington’s sanctions policy against Russia.” Riyadh is now “following an increasing trend of hedging against US dollar use in trade” amid concerns that the US may use its currency as a weapon for trade and sanctions.
The trend towards using national currencies in global trade chains has continued to mature, with recent developments, including the announcement of two large-scale investment plans in China by Saudi oil giant Aramco.
The first plan involves building an integrated refining and chemicals plant in Liaoning Province, while the second plan involves Aramco’s acquisition of 10 percent of the shares of Rongsheng Petrochemical Company.
Meanwhile, the emirate of Dubai has opened its door to dealing in the Chinese currency in its global financial center, and Brazil and China have agreed to ditch the dollar and use their local currencies in their commercial dealings. In addition, Brazil and Argentina have announced the start of work on launching a common currency in their commercial dealings, dubbed “Sur.”
The petrodollar under threat
Petrodollars refer to US dollars used to purchase crude oil following a 1974 deal struck between Washington and Riyadh. The agreement not only ensured the military defense of the kingdom through US guarantees but also secured a steady stream of foreign purchases of US Treasury bonds and debt, which is a strategy of recycling the petrodollars back to Washington through Saudi Arabia’s reserves.
This transformed the ability of oil-rich Arab states to weaponize their vast energy resources against malign western policies – into a powerful economic weapon for the Americans, who, overnight, became the masters of the oil market. Today, however, with China’s rapid steps to challenge this entrenched system, there is a global spotlight on the rise of the Petroyuan versus the decline of the Petrodollar.
Asia Financial describes China’s deal with TotalEnergies as a “step forward in China’s long-term battle to reduce the power and reach of US dollar hegemony,” adding that “further such moves appear to be in the winds.” Importantly, according to Viktor Katona, lead crude analyst at Kpler:
“While the dollar will likely remain the dominant global currency in the near future, the rise of a so-called petroyuan will gain momentum as China leverages its status as the world’s largest oil importer.”
Saudi Arabia is reportedly considering accepting payment for its oil exports to China in yuan. However, any such shift is likely to be marginal, as most West Asian currencies are pegged to the US dollar, and accepting payments in other currencies increases foreign exchange risk.
Researcher P.S. Srinivas opined last year that oil deals with countries in West Asia “do not constitute a threat to the US dollar,” and the likelihood of the yuan replacing the US dollar as the benchmark currency for pricing is even more remote due to China’s capital controls and the yuan’s lack of convertibility.
While the possibility of the yuan gaining greater prominence in the global oil trade cannot be ruled out, it is unlikely to replace the US dollar as the primary currency for pricing in the oil and gas industry in the short term.
Most West Asian nations continue to maintain a vested interest in preserving the strength of the dollar, and any shift towards accepting payments in other currencies is likely to be minimal, at first. In the next few years, it will be important to keep an eye on China’s slow but steady ascent to global economic dominance and the growing usage of the yuan in international trade.
The views expressed in this article do not necessarily reflect those of The Cradle.
The single Iranian-Saudi handshake buried trillions of dollars of western divide-and-rule investments across West Asia, and has global leaders rushing to Beijing for global solutions.
Photo Credit: The Cradle
Pepe Escobar is a columnist at The Cradle, editor-at-large at Asia Times and an independent geopolitical analyst focused on Eurasia. Since the mid-1980s he has lived and worked as a foreign correspondent in London, Paris, Milan, Los Angeles, Singapore and Bangkok. He is the author of countless books; his latest one is Raging Twenties.
The idea that History has an endpoint, as promoted by clueless neoconservatives in the unipolar 1990s, is flawed, as it is in an endless process of renewal. The recent official meeting between Saudi Foreign Minister Faisal bin Farhan al-Saud and Iranian Foreign Minister Hossein Amir-Abdollahian in Beijing marks a territory that was previously deemed unthinkable and which has undoubtedly caused grief for the War Inc. machine.
This single handshake signifies the burial of trillions of dollars that were spent on dividing and ruling West Asia for over four decades. Additionally, the Global War on Terror (GWOT), the fabricated reality of the new millennium, featured as prime collateral damage in Beijing.
Beijing’s optics as the capital of peace have been imprinted throughout the Global South, as evidenced by a subsequent sideshow where a couple of European leaders, a president, and a Eurocrat, arrived as supplicants to Xi Jinping, asking him to join the NATO line on the war in Ukraine. They were politely dismissed.
Still, the optics were sealed: Beijing had presented a 12-point peace plan for Ukraine that was branded “irrational” by the Washington beltway neocons. The Europeans – hostages of a proxy war imposed by Washington – at least understood that anyone remotely interested in peace needs to go through the ritual of bowing to the new boss in Beijing.
The irrelevance of the JCPOA
Tehran-Riyadh relations, of course, will have a long, rocky way ahead – from activating previous cooperation deals signed in 1998 and 2001 to respecting, in practice, their mutual sovereignty and non-interference in each other’s internal affairs.
Everything is far from solved – from the Saudi-led war on Yemen to the frontal clash of Persian Gulf Arab monarchies with Hezbollah and other resistance movements in the Levant. Yet that handshake is the first step leading, for instance, to the Saudi foreign minister’s upcoming trip to Damascus to formally invite President Bashar al-Assad to the Arab League summit in Riyadh next month.
It’s crucial to stress that this Chinese diplomatic coup started way back with Moscow brokering negotiations in Baghdad and Oman; that was a natural development of Russia stepping in to help Iran save Syria from a crossover NATO-Gulf Cooperation Council (GCC) coalition of vultures.
Then the baton was passed to Beijing, in total diplomatic sync. The drive to permanently bury GWOT and the myriad, nasty ramifications of the US war of terror was an essential part of the calculation; but even more pressing was the necessity to demonstrate how the Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal, had become irrelevant.
Both Russia and China have experienced, inside and out, how the US always manages to torpedo a return to the JCPOA, as it was conceived and signed in 2015. Their task became to convince Riyadh and GCC states that Tehran has no interest in weaponizing nuclear power – and will remain a signatory of the Non-Proliferation Treaty (NPT).
Then it was up to Chinese diplomatic finesse to make it quite clear that the Persian Gulf monarchies’ fear of revolutionary Shi’ism is now as counter-productive as Tehran’s dread of being harassed and/or encircled by Salafi-jihadis. It’s as if Beijing had coined a motto: drop these hazy ideologies, and let’s do business.
And business it is, and will be: better yet, mediated by Beijing and implicitly guaranteed by both nuclear superpowers Russia and China.
Hop on the de-dollarization train
Saudi Crown Prince Mohammed bin Salman (MbS) may exhibit some Soprano-like traits, but he’s no fool: he instantly saw how this Chinese offer morphed beautifully into his domestic modernization plans. A Gulf source in Moscow, familiar with MbS’ rise and consolidation of power, details the crown prince’s drive to appeal to the younger Saudi generation who idolize him. Let girls drive their SUVs, go dancing, let their hair down, work hard, and be part of the “new” Saudi Arabia of Vision 2030: a global tourism and services hub, a sort of Dubai on steroids.
And, crucially, this will also be a Eurasia-integrated Saudi Arabia; future, inevitable member of both the Shanghai Cooperation Organization (SCO) and BRICS+ – just like Iran, which will also be sitting at the same communal tables.
From Beijing’s point of view, this is all about its ambitious, multi-trillion-dollar Belt and Road Initiative (BRI). A key BRI connectivity corridor runs from Central Asia to Iran and then beyond, to the Caucasus and/or Turkey. Another one – in search of investment opportunities – runs through the Arabian Sea, the Sea of Oman, and the Persian Gulf, part of the Maritime Silk Road.
Beijing wants to develop BRI projects in both corridors: call it “peaceful modernization” applied to sustainable development. The Chinese always remember how the Ancient Silk Roads plied Persia and parts of Arabia: in this case, we have History Repeating Itself.
A geopolitical revolution
And then comes the Holy Grail: energy. Iran is a prime gas supplier to China, a matter of national security, inextricably linked to their $400 billion-plus strategic partnership deal. And Saudi Arabia is a prime oil supplier. Closer Sino-Saudi relations and interaction in key multipolar organizations such as the SCO and BRICS+ advance the fateful day when the petroyuan will be definitely enshrined.
China and the UAE have already clinched their first gas deal in yuan. The high-speed de-dollarization train has already left the station. ASEAN is already actively discussing how to bypass the dollar to privilege settlements in local currencies – something unthinkable even a few months ago. The US dollar has already been thrown into a death by a thousand cuts spiral.
And that will be the day when the game reaches a whole new unpredictable level.
The destructive agenda of the neocon leaders in charge of US foreign policy should never be underestimated. They exploited the 9/11 “new Pearl Harbor” pretext to launch a crusade against the lands of Islam in 2001, followed by a NATO proxy war against Russia in 2014. Their ultimate ambition is to wage war against China before 2025.
However, they are now facing a swift geopolitical and geoeconomic revolt of the World’s Heartland – from Russia and China to West Asia, and extrapolating to South Asia, Southeast Asia, Africa and selected latitudes in Latin America.
The turning point came on 26 February, 2022, when Washington’s neocons – in a glaring display of their shallow intellects – decided to freeze and/or steal the reserves of the only nation on the planet equipped with all the commodities that really matter, and with the necessary nous to unleash a momentous shift to a monetary system not anchored in fiat money.
That was the fateful day when the cabal, identified by journalist Seymour Hersh as responsible for blowing up the Nord Stream pipelines, actually blew the whistle for the high-speed de-dollarization train to leave the station, led by Russia, China, and now – welcome on board – Iran and Saudi Arabia.
The views expressed in this article do not necessarily reflect those of The Cradle.
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How sharp was good ol’ Lenin, prime modernist, when he mused, “there are decades where nothing happens; and there are weeks where decades happen”. This global nomad now addressing you has enjoyed the privilege of spending four astonishing weeks in Moscow at the heart of an historical crossroads – culminating with the Putin-Xi geopolitical game-changing summit at the Kremlin.
To quote Xi, “changes that haven’t been seen in 100 years” do have a knack of affecting us all in more ways than one.
James Joyce, another modernity icon, wrote that we spend our lives meeting average and/or extraordinary people, on and on and on, but in the end we’re always meeting ourselves. I have had the privilege of meeting an array of extraordinary people in Moscow, guided by trusted friends or by auspicious coincidence: in the end your soul tells you they enrich you and the overarching historical moment in ways you can’t even begin to fathom.
Here are some of them. The grandson of Boris Pasternak, a gifted young man who teaches Ancient Greek at Moscow State University. A historian with unmatched knowledge of Russian history and culture. The Tajik working class huddling together in a chaikhana with the proper ambience of Dushanbe.
Chechens and Tuvans in awe doing the loop in the Big Central Line. A lovely messenger sent by friends extremely careful about security matters to discuss issues of common interest. Exceptionally accomplished musicians performing underground in Mayakovskaya. A stunning Siberian princess vibrant with unbounded energy, taking that motto previously applied to the energy industry – Power of Siberia – to a whole new level.
A dear friend took me to Sunday service at the Devyati Muchenikov Kizicheskikh church, the favorite of Peter the Great: the quintessential purity of Eastern Orthodoxy. Afterwards the priests invited us for lunch in their communal table, displaying not only their natural wisdom but also an uproarious sense of humor.
At a classic Russian apartment crammed with 10,000 books and with a view to the Ministry of Defense – plenty of jokes included – Father Michael, in charge if Orthodox Christianity relations with the Kremlin, sang the Russian imperial anthem after an indelible night of religious and cultural discussions.
I had the honor to meet some of those who were particularly targeted by the imperial machine of lies. Maria Butina – vilified by the proverbial “spy who came in from the cold” shtick – now a deputy at the Duma. Viktor Bout – which pop culture metastasized into the “Lord of War”, complete with Nic Cage movie: I was speechless when he told me he was reading me in maximum security prison in the USA, via pen drives sent by his friends (he had no internet access). The indefatigable, iron-willed Mira Terada – tortured when she was in a U.S. prison, now heading a foundation protecting children caught in hard times.
I spent much treasured quality time and engaged in invaluable discussions with Alexander Dugin – the crucial Russian of these post-everything times, a man of pure inner beauty, exposed to unimaginable suffering after the terrorist assassination of Darya Dugina, and still able to muster a depth and reach when it comes to drawing connections across the philosophy, history and history of civilizations spectrum that is virtually unmatched in the West.
And then there were the diplomatic, academic and business meetings. From the head of international investor relations of Norilsk Nickel to Rosneft executives, not to mention the EAEU’s Sergey Glazyev himself, side by side with his top economic adviser Dmitry Mityaev, I was given a crash course on the current A to Z of Russian economy – including serious problems to be addressed.
At the Valdai Club, what really mattered were the meetings on the sidelines, much more than the actual panels: that’s when Iranians, Pakistanis, Turks, Syrians, Kurds, Palestinians, Chinese tell you what is really in their hearts and minds.
The official launch of the International Movement of Russophiles was a special highlight of these four weeks. A special message written by President Putin was read by Foreign Minister Lavrov, who then delivered his own speech. Later, at the House of Receptions of the Ministry of Foreign Affairs, four of us were received by Lavrov at a private audience. Future cultural projects were discussed. Lavrov was extremely relaxed, displaying his matchless sense of humor.
This is a cultural as much as a political movement, designed to fight Russophobia and to tell the Russian story, in all its immensely rich aspects, especially to the Global South.
I am a founding member and my name is on the charter. In my nearly four decades as a foreign correspondent, I have never been part of any political/cultural movement anywhere in the world; nomad independents are a fierce breed. But this is extremely serious: the current, irredeemably mediocre self-described “elites” of the collective West want no less than cancel Russia all across the spectrum. No pasarán.
Spirituality, compassion, mercy
Decades happening in only four weeks imply precious time needed to put it all in perspective.
The initial gut feeling the day I arrived, after a seven-hour walk under snow flurries, was confirmed: this is the capital of the multipolar world. I saw it among the West Asians at the Valdai. I saw it talking to visiting Iranians, Turks and Chinese. I saw it when over 40 African delegations took over the whole area around the Duma – the day Xi arrived in town. I saw it throughout the reception across the Global South to what Xi and Putin are proposing to the overwhelming majority of the planet.
In Moscow you feel no crisis. No effects of sanctions. No unemployment. No homeless people in the streets. Minimal inflation. Import substitution in all areas, especially agriculture, has been a resounding success. Supermarkets have everything – and more – compared to the West. There’s an abundance of first-rate restaurants. You can buy a Bentley or a Loro Pianna cashmere coat you can’t even find in Italy. We laughed about it chatting with managers at the TSUM department store. At the BiblioGlobus bookstore, one of them told me, “We are the Resistance.”
By the way, I had the honor to deliver a talk on the war in Ukraine at the coolest bookshop in town, Bunker, mediated by my dear friend, immensely knowledgeable Dima Babich. A huge responsibility. Especially because Vladimir L. was in the audience. He’s Ukrainian, and spent 8 years, up to 2022, telling it like it really was to Russian radio, until he managed to leave – after being held at gunpoint – using an internal Ukrainian passport. Later we went to a Czech beer hall where he detailed his extraordinary story.
In Moscow, their toxic ghosts are always lurking in the background. Yet one cannot but feel sorry for the psycho Straussian neocons and neoliberal-cons who now barely qualify as Zbig “Grand Chessboard” Brzezinski’s puny orphans.
In the late 1990s, Brzezinski pontificated that, “Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical center because its very existence as an independent state helps transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire.”
With or without a demilitarized and denazified Ukraine, Russia has already changed the narrative. This is not about becoming a Eurasian empire again. This is about leading the long, complex process of Eurasia integration – already in effect – in parallel to supporting true, sovereign independence across the Global South.
I left Moscow – the Third Rome – towards Constantinople – the Second Rome – one day before Secretary of the Security Council Nikolai Patrushev gave a devastating interview to Rossiyskaya Gazeta once again outlining all the essentialities inherent to the NATO vs. Russia war.
This is what particularly struck me: “Our centuries-old culture is based on spirituality, compassion and mercy. Russia is a historical defender of sovereignty and statehood of any peoples who turned to it for help. She saved the U.S. itself at least twice, during the Revolutionary War and the Civil War. But I believe that this time it is impractical to help the United States maintain its integrity.”
In my last night, before hitting a Georgian restaurant, I was guided by the perfect companion off Pyatnitskaya to a promenade along the Moscow River, beautiful rococo buildings gloriously lighted, the scent of Spring – finally – in the air. It’s one of those “Wild Strawberry” moments out of Bergman’s masterpiece that hits the bottom of our soul. Like mastering the Tao in practice. Or the perfect meditative insight at the top of the Himalayas, the Pamirs or the Hindu Kush.
So the conclusion is inevitable. I’ll be back. Soon.
*
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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.
The new foreign strategy says Russia is responsible for defending cultural and spiritual values against “pseudo-humanistic” and other “neoliberal ideologies”.
Russian President Vladimir Putin in Moscow, Russia in February 2022. (Reuters)
Russia adopted a new foreign policy doctrine on Friday that prioritizes reforming world politics away from the hegemony of the United States and its Western allies and supporting countries that choose to fight neocolonialists and foreign interference.
The new foreign strategy went into effect after being signed by Russian President Vladimir Putin.
“The Russian Federation intends to give priority to the elimination of vestiges of the dominance of the United States and other unfriendly countries in world politics,” the document said.
Russia would aim to “create the conditions for any state to reject neo-colonialist and hegemonic aims,” the 42-page policy read.
“Radical changes” in the world prompted the new policies, Putin said during a security council meeting, stressing that Russia’s engagement in the international arena must reflect its view on these changes.
Defender against neo-liberal ideologies
Russia views China and India as key allies in its new foreign doctrine and stresses the strategic importance of deepening relations and “coordination with friendly sovereign global centers of power and development located on the Eurasian continent.”
The war in Ukraine led to severe sanctions by the US and EU who lobbied countries around the world to join in on the unilateral sanctions, but many countries, including China and India, increased economic and bilateral relations with Moscow, reaching historic levels.
Chinese President Xi Jinping made a three-day official trip to Moscow earlier this month where he met with Putin and held what was described by the media as historic talks. The two presidents signed during Xi’s trip two joint strategic documents aiming to boost the two global powers’ economic and diplomatic partnership.
Russia, as per the document, is a “state civilization” and is responsible for protecting the “Russian world” – in reference to cultures that align with that of the country within Eurasia. Russia will be tasked with protecting “traditional spiritual and moral values” against “pseudo-humanistic and other neo-liberal ideological attitudes.”
Russia’s Foreign Minister Sergey Lavrov stated that the new foreign policy doctrine identified “the existential nature of threats to the security and development of our country, driven by the actions of unfriendly states.”
“The United States of America is directly named as the main instigator and driver of anti-Russian sentiment,” he added.
“The West’s policy of trying to weaken Russia in every possible way is characterized as a hybrid war of a new type.”
Chinese President Xi Jinping with Russian President Vladimir Putin. (Photo: Presidential Executive Office of Russia, via Wikimedia Commons)
– Ramzy Baroud is a journalist and the Editor of The Palestine Chronicle. He is the author of six books. His latest book, co-edited with Ilan Pappé, is “Our Vision for Liberation: Engaged Palestinian Leaders and Intellectuals Speak out”. Dr. Baroud is a Non-resident Senior Research Fellow at the Center for Islam and Global Affairs (CIGA). His website iswww.ramzybaroud.net
The final exchange, caught on camera between visiting Chinese President Xi Jinping and his Russian host and counterpart, Vladimir Putin, sums up the current geopolitical conflict, still in its nascent stages, between the United States and its Western allies on the one hand, and Russia, China and their allies, on the other.
Xi was leaving the Kremlin following a three-day visit that can only be described as historic. “Change is coming that hasn’t happened in 100 years and we are driving this change together,” Xi said while clasping Putin’s hand.
“I agree,” Putin replied while holding Xi’s arm. ‘Please take care, dear friend,” he added.
In no time, social media exploded by sharing that scene repeatedly. Corporate western media analysts went into overdrive, trying to understand what these few words meant.
“Is that part of the change that is coming, that they will drive together?” Ian Williamson raised the question in the Spectator. Though he did not offer a straight answer, he alluded to one: “It is a chilling prospect, for which the west needs to be prepared.”
Xi’s statement was, of course, uttered by design. It means that the Chinese-Russian strong ties, and possible future unity, are not an outcome of immediate geopolitical interests resulting from the Ukraine war, or a response to US provocations in Taiwan. Even before the Ukraine war commenced in February 2022, much evidence pointed to the fact that Russia and China’s goal was hardly temporary or impulsive. Indeed, it runs deep.
The very language of multipolarity has defined both countries’ discourse for years, a discourse that was mostly inspired by the two countries’ displeasure with US militarism from the Middle East to Southeast Asia; their frustration with Washington’s bullying tactics whenever a disagreement arises, be it in trade or border demarcations; the punitive language; the constant threats; the military expansion of NATO and much more.
One month before the war, I argued with my co-writer, Romana Rubeo, that both Russia and China might be at the cusp of some kind of unity. That conclusion was drawn based on a simple discourse analysis of the official language emanating from both capitals and the actual deepening of relations.
At the time, we wrote,
“Some kind of an alliance is already forming between China and Russia. The fact that the Chinese people are taking note of this and are supporting their government’s drive towards greater integration – political, economic and geostrategic – between Beijing and Moscow, indicates that the informal and potentially formal alliance is a long-term strategy for both nations”.
Even then, like other analysts, we did not expect that such a possibility could be realized so quickly. The Ukraine war, in itself, was not indicative that Moscow and Beijing will grow closer. Instead, it was Washington’s response, threatening and humiliating China, that did most of the work. The visit by then-US House Speaker, Nancy Pelosi, to Taiwan in August 2022 was a diplomatic disaster. It left Beijing with no alternative but to escalate and strengthen its ties with Russia, with the hope that the latter would fortify its naval presence in the Sea of Japan. In fact, this was the case.
But the “100 years” reference by Xi tells of a much bigger geopolitical story than any of us had expected. As Washington continues to pursue aggressive policies – with US President Joe Biden prioritizing Russia and his Republican foes prioritizing China as the main enemy of the US – the two Asian giants are now forced to merge into one unified political unit, with a common political discourse.
“We signed a statement on deepening the strategic partnership and bilateral ties which are entering a new era,” Xi said in his final statement.
This ‘no-limits friendship’ is more possible now than ever before, as neither country is constrained by ideological confines or competition. Moreover, they are both keen on ending the US global hegemony, not only in the Asia and Pacific region, but in Africa, the Middle East and, eventually, worldwide as well.
On the first day of Xi’s visit to Moscow, Russia’s President Putin issued a decree in which he has written off debts of African countries worth more than $20 billion. Moreover, he promised that Russia is “ready to supply the whole volume sent during the past time to African countries particularly requiring it, from Russia free of charge ..,” should Moscow decide “not to extend the (grain) deal in sixty days”.
For both countries, Africa is a major ally in the upcoming global conflict. The Middle East, too, is vital. The latest agreement, which normalized ties between Iran and Saudi Arabia is earth-shattering, not only because it ends seven years of animosity and conflict, but because the arbitrator was no other than China itself. Beijing is now a peace broker in the very Middle East which was dominated by failed US diplomacy for decades.
What this means for the Palestinians remains to be seen, as too many variables are still at work. But for these global shifts to serve Palestinian interests in any way, the current leadership, or a new leadership, would have to slowly break away from its reliance on western handouts and validation, and, with the support of Arab and African allies, adopt a different political strategy.
The US government, however, continues to read the situation entirely within the Russia-Ukraine war context. US Secretary of State Antony Blinken responded to Xi’s trip to Moscow by saying that “the world should not be fooled by any tactical move by Russia, supported by China or any other country, to freeze the war (in Ukraine) on its own terms.” It is rather strange, but also telling that the outright rejection of the potential call for a ceasefire was made by Washington, not Kyiv.
Xi’s visit, however, is truly historic from a geopolitical sense. It is comparable in scope and possible consequences to former US President Richard Nixon’s visit to Beijing, which contributed to the deterioration of ties between the Soviet Union and China under Chairman Mao Zedong.
The improved relationship between China and the US back then helped Washington further extend its global dominance, while putting the USSR on the defensive. The rest is history, one that was rife with geostrategic rivalry and divisions in Asia, thus, ultimately, the rise of the US as the uncontested power in that region.
Nixon’s visit to Beijing was described by then-Ambassador Nicholas Platt as “the week that changed the world”. Judging that statement from an American-centric view of the world, Platt was, in fact, correct in his assessment. The world, however, seems to be changing back. Though it took 51 years for that reversal to take place, the consequences are likely to be earth-shattering, to say the least.
Regions that have long been dominated by the US and its western allies, like the Middle East and Africa, are processing all of these changes and potential opportunities. If this geopolitical shift continues, the world will, once again, find itself divided into camps. While it is too early to determine, with any degree of certainty, the winners and losers of this new configuration, it is most certain that a US-western-dominated world is no longer possible.
The Beijing-brokered rapprochement between Tehran and Riyadh is expected to have significant implications for peace and prosperity in and around West Asia, given the considerable influence the two nations wield in the region.
The China-mediated Saudi-Iran peace agreement, inked on 10 March in Beijing, marks a significant geopolitical shift with far-reaching implications for the Persian Gulf and Iran’s neighboring countries. For decades, Saudi Arabia and Iran have been engaged in ideological and economic competition on the territories of their neighbors, causing regional tensions to escalate.
If the agreement is successful and relations between Riyadh and Tehran improve as envisioned, tensions will likely begin to significantly subside in the Persian Gulf, Levant, and further afield in neighboring Pakistan and Afghanistan. The former, long concerned about its security and energy supply vulnerabilities, will potentially benefit from improved relations between Saudi Arabia and Iran, which could help address its oil and gas crises.
Similarly, Afghanistan, whose Taliban-led government is still struggling to gain international recognition and is in dire need of reconstruction and investment initiatives, may also benefit from the kingdom’s rapprochement with the Islamic Republic.
Persian Gulf States
An early litmus test for the Saudi-Iranian reconciliation will be its impact on Lebanon, Iraq, Syria, and Yemen, where a perceived proxy war has wreaked havoc on their respective economies and in their public spheres.
One of the most critical areas where the impact of the peace agreement will be tested is Yemen, where Iran and Saudi Arabia have backed opposing sides in the country’s eight-year war. The conflict has resulted in one of the world’s worst humanitarian crises after a Saudi-UAE-led coalition in 2015 launched military attacks against Yemen’s pro-Iran Ansarallah movement, which had seized control of the capital, Sanaa.
Iran’s permanent mission to the UN said in a statement that the Iran-Saudi deal will “accelerate the ceasefire, help start a national dialogue, and form an inclusive national government in Yemen.”
Meanwhile, in the Levant, Lebanon is deeply mired in an unprecedented economic crisis, exacerbated by the deterioration of ties between Riyadh and Beirut. This divide has been fueled by the expansion of Iran-backed Lebanese resistance group Hezbollah’s power in Lebanon. The World Bank has reported that Lebanon’s economic crisis is among the worst globally in a century, and the situation continues to deteriorate as quickly as the country’s free-falling lira.
Tensions came to a head in 2017 when then-Prime Minister Saad Hariri, who had previously been Saudi Arabia’s closest ally in Lebanon, announced his resignation in a televised statement from Riyadh. Lebanese lawmakers charged that he was forced to step down after being detained and roughed up by his Saudi hosts.
The rivalry between Iran and Saudi Arabia has also impacted Iraq, which has suffered greatly since the illegal US-led invasion in 2003. Despite various domestic and foreign initiatives to stabilize matters and reach a consensus on vital issues of governance, the Iraq arena remains volatile, with ongoing violence and political instability.
The crisis in Syria is often viewed as a collection of proxy wars between regional and international powers. The 12-year conflict has been fueled by the involvement of various foreign actors, including the US, UK, Russia, Iran, Turkey, Qatar, France, and Saudi Arabia. These powers have politically and militarily backed different sides in the conflict – and in the case of the west, imposed oppressive economic sanctions – leading to a complex and ongoing crisis that has caused significant suffering for the Syrian people.
Relief for Pakistan?
Pakistan’s top policymakers are optimistic about the resumption of work on the “Peace Gas Pipeline” following the restoration of diplomatic ties between Iran and Saudi Arabia. A source in the Pakistani Foreign Office informs The Cradle that Riyadh’s opposition was the main reason the project stalled.
Geopolitical analyst Andrew Korybko goes a step further, predicting that the reconciliation between Tehran and Riyadh will unlock the full potential of a Russia-Iran-India led trade route project – the International North-South Transport Corridor (INSTC) – by connecting the Gulf Cooperation Council (GCC) to a series of promising Eurasian megaprojects. These projects will run through Pakistan and connect Russia and India by road, making it a significant development for the region’s transportation infrastructure.
Authorities in Islamabad also believe that the Saudi-Iran agreement will help reduce the activities of Saudi-sponsored sectarian militant groups, such as Lashkar-e-Jhangvi and Sippa-e-Sahaba (later renamed Ahle Sunnat Wal Jamaat), as well as the Sunni militia Jundallah, based in Iran’s Sistan and Baluchistan province, which has claimed to have killed hundreds of Iranian security personnel. These organizations have been involved in terrorist activities in Pakistan, particularly targeting the Shia community. According to Korybko:
“Inadvertently, the Baloch element of Pakistan’s security issues may worsen soon. After being cut off by Riyadh and losing their jobs, these militants may join other extremist groups like the Tehrik-e-Taliban Pakistan (TTP) or sub-nationalist groups like the Balochistan Liberation Army (BLA), unless Islamabad detains them or initiates their disarmament, demobilization, and reintegration.”
Afghanistan
For years, Riyadh went head-to-head with Iran to shape Afghanistan’s internal governance and politics and limit Tehran’s influence in its bordering state. Following the 1979 Soviet occupation of Afghanistan and the establishment of a communist government under the six-year leadership of Babrak Karmal, the Saudis used Afghan ethnic and religious groups to spread their Salafist, jihadi ideology.
Meanwhile, Iran supported several Shia groups that took over parts of Hazarajat in central Afghanistan near the western periphery of the Hindu Kush range, leading to the formation of Hezb-e Wahdat after Iranian Supreme Leader Ayatollah Ruhollah Khomeini’s death in 1989.
The US, Saudi Arabia, and Pakistan formed a Pashtun jihadi fighter – or mujahidin resistance force – to fight the Soviet troops, with groups such as Gulbuddin Hikmatyar’s Hizb-i Islami and Abdul Rasul Sayyaf’s Ittihad-i Islami joining the US-backed war against the communist Afghan government.
Saudi Arabia’s rivalry with Iran led to the funding of an Islamic complex in Kabul in 2012, with the intention of competing against Iran’s Khatam al-Nabyeen mosque and Islamic University, built in 2006.
With diplomatic relations set to resume between Iran and Saudi Arabia in two months, it remains to be seen whether Afghanistan will benefit from this detente. While some experts are skeptical that Afghanistan will see any immediate relief from this rivalry, they note that the country is likely to benefit from the progress made in Iran’s Chabahar Port – co-developed with India – which is expected to accelerate in the near future.
Nonetheless, the Taliban’s international and especially regional recognition will likely be a key factor in determining whether Afghanistan can benefit from the resumption of diplomatic ties between Iran and Saudi Arabia.
The ‘Asian Century’
On 17 March, Pakistan announced that it facilitated communication between Saudi Arabia and Iran during the Organisation of Islamic Cooperation (OIC) meeting in Islamabad in March last year. During a recent weekly briefing, a Foreign Office spokesperson stated: “We applaud this advancement. Together with various other countries and supporters of both Iran and Saudi Arabia, Pakistan encouraged the talks.”
Mushahid Hussain Syed, Chairman of Pakistan’s Senate Defense Standing Committee, tells The Cradle that the Iran-Saudi peace deal is a clear setback for the US and Israel, noting that there is little they can now do about the trend of declining US influence in West Asia and the concurrent rise of China in what is now being termed the “Asian Century.”
“The world has rejected the notion of a new cold war, which some hawkish elements in the west are peddling. The time has come when Asian hands must shape the Asian future, a process on which the region has already embarked,” emphasizes Syed.
He also adds that for Islamabad, this is excellent news, as China, Saudi Arabia, and Iran are close friends and partners.
China, Syed says, has achieved a major diplomatic victory in midwifing this agreement, which is a major step forward toward peace, stability, and harmony in the Muslim world and could bring proxy wars to an end in the volatile region.
China-led security paradigms
What motivated Beijing to take on the role of mediator in the Iran-Saudi peace talks and engage directly in Persian Gulf security matters?
In recent years, China’s foreign policy has become more assertive, particularly since Xi Jinping became president in 2012. Analysts believe that Beijing’s decision to broker peace talks between Iran and Saudi Arabia is in line with its growing involvement in West Asia, which today extends beyond satisfying its energy needs, and includes conflict resolution, regional security, and domestic politics.
Another factor is China’s substantial investments in its Belt and Road Initiative (BRI) projects across the region, with agreements and understandings signed by twenty Arab states.
Xi Jinping’s Global Security Initiative (GSI) and “the Middle Eastern security architecture” have driven China to become more deeply involved in Persian Gulf politics and address the region’s security concerns. At the Communist Party’s annual congress in Hong Kong in 2022, President Xi stated that the GSI’s security parameters could effectively handle geopolitical conflicts, the food crisis, and the COVID-19 epidemic.
Tuvia Gering, a nonresident fellow at the Atlantic Council’s Global China Hub, explains to The Cradle that as China strives towards “national rejuvenation” and grows its vested interests in the Global South, top Chinese experts are debating whether to increase their involvement in political and security issues in West Asia and North Africa.
“Yang Cheng, a former diplomat and expert on Sino-Russian relations, thinks that China might eventually be able to work with [West Asian] countries on security issues and may become a major provider of security-related public goods,” Gering says, adding that the majority of China’s intelligentsia is in favor of getting more involved in regional issues.
The normalization of relations between Iran and Saudi Arabia clearly has the potential to greatly impact West Asia and the wider region as a whole. By reducing political and sectarian rivalry, the deal could effectively neuter the tendency toward proxy wars and the spread of extremist ideologies.
Importantly, the rapid advancement of economic cooperation between the two countries and their regional neighbors could provide an excellent testing ground for Xi’s grand vision of replacing western-sponsored “endless war” with his “peaceful modernization” alternative for the Global South. While it is still too early to determine the extent of the deal’s impact, it is clear that this Iran-Saudi rapprochement is a positive step towards stability in West Asia.
The views expressed in this article do not necessarily reflect those of The Cradle.
The Persian Gulf Cooperation Council (GCC) foreign ministers held the 155th ministerial meeting at the headquarters of the General Secretariat of the GCC in Riyadh, Saudi Arabia, on March 22, 2023.
The Persian Gulf Cooperation Council (GCC) has hailed a recent agreement signed between Iran and Saudi Arabia to restore diplomatic relations after seven years of estrangement, saying the accord will mark a positive step in resolving differences and ending regional conflicts through dialogue and diplomacy.
In a statement issued by the GCC Ministerial Council at the end of its 155th session, the body said the agreement, signed in Beijing at the initiative of Chinese President Xi Jinping, includes resumption of diplomatic relations, reopening of embassies, and activation of security and economic cooperation accords between Tehran and Riyadh.
The GCC is a union of six countries in the Persian Gulf region including Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait, Oman, and Bahrain.
It expressed hope that the agreement would establish relations among countries on the basis of understanding, mutual respect, good neighborliness, respect for sovereignty, non-interference in internal affairs, and adherence to the United Nations Charter and the Organization of Islamic Cooperation, and international laws and norms.
Iran and Saudi Arabia have supported opposite sides in several conflict zones across the Middle East, including in Yemen and Syria.
After several days of intensive negotiations hosted by China, the two countries finally clinched a deal on March 10 to restore diplomatic relations and re-open embassies and missions within two months.
According to a joint statement, Iran and Saudi Arabia underscored the need to respect each other’s national sovereignty and refrain from interfering in the internal affairs of one another.
Iran, Saudi Arabia and China also expressed their firm determination to make their utmost efforts to promote regional and international peace and security.
Iranian Foreign Minister Hossein Amir-Abdollahian said on Sunday that he will meet his Saudi Arabian counterpart Prince Faisal bin Farhan “in the near future,” and that Iran has proposed three locations for the meeting.
The GCC Ministerial Council also appreciated the efforts of Oman and Iraq for hosting numerous rounds of negotiations between Iran and Saudi Arabia during 2021 and 2022.
It also commended China’s efforts to sponsor and host the talks that resulted in the agreement and to help enhance security and peace in the region.
Press TV’s website can also be accessed at the following alternate addresses:
In Moscow this week, the Chinese and Russian leaders revealed their joint commitment to redesign the global order, an undertaking that has ‘not been seen in 100 years.’
What has just taken place in Moscow is nothing less than a new Yalta, which, incidentally, is in Crimea. But unlike the momentous meeting of US President Franklin Roosevelt, Soviet Leader Joseph Stalin, and British Prime Minister Winston Churchill in USSR-run Crimea in 1945, this is the first time in arguably five centuries that no political leader from the west is setting the global agenda.
It’s Chinese President Xi Jinping and Russian President Vladimir Putin that are now running the multilateral, multipolar show. Western exceptionalists may deploy their crybaby routines as much as they want: nothing will change the spectacular optics, and the underlying substance of this developing world order, especially for the Global South.
What Xi and Putin are setting out to do was explained in detail before their summit, in two Op-Eds penned by the presidents themselves. Like a highly-synchronized Russian ballet, Putin’s vision was laid out in the People’s Daily in China, focusing on a “future-bound partnership,” while Xi’s was published in the Russian Gazette and the RIA Novosti website, focusing on a new chapter in cooperation and common development.
Right from the start of the summit, the speeches by both Xi and Putin drove the NATO crowd into a hysterical frenzy of anger and envy: Russian Foreign Ministry Spokeswoman Maria Zakharova perfectly captured the mood when she remarked that the west was “foaming at the mouth.”
The front page of the Russian Gazette on Monday was iconic: Putin touring Nazi-free Mariupol, chatting with residents, side by side with Xi’s Op-Ed. That was, in a nutshell, Moscow’s terse response to Washington’s MQ-9 Reaper stunt and the International Criminal Court (ICC) kangaroo court shenanigans. “Foam at the mouth” as much as you like; NATO is in the process of being thoroughly humiliated in Ukraine.
During their first “informal” meeting, Xi and Putin talked for no less than four and a half hours. At the end, Putin personally escorted Xi to his limo. This conversation was the real deal: mapping out the lineaments of multipolarity – which starts with a solution for Ukraine.
Predictably, there were very few leaks from the sherpas, but there was quite a significant one on their “in-depth exchange” on Ukraine. Putin politely stressed he respects China’s position – expressed in Beijing’s 12-point conflict resolution plan, which has been completely rejected by Washington. But the Russian position remains ironclad: demilitarization, Ukrainian neutrality, and enshrining the new facts on the ground.
In parallel, the Russian Foreign Ministry completely ruled out a role for the US, UK, France, and Germany in future Ukraine negotiations: they are not considered neutral mediators.
A multipolar patchwork quilt
The next day was all about business: everything from energy and “military-technical” cooperation to improving the efficacy of trade and economic corridors running through Eurasia.
Russia already ranks first as a natural gas supplier to China – surpassing Turkmenistan and Qatar – most of it via the 3,000 km Power of Siberia pipeline that runs from Siberia to China’s northeastern Heilongjiang province, launched in December 2019. Negotiations on the Power of Siberia II pipeline via Mongolia are advancing fast.
Sino-Russian cooperation in high-tech will go through the roof: 79 projects at over $165 billion. Everything from liquified natural gas (LNG) to aircraft construction, machine tool construction, space research, agro-industry, and upgraded economic corridors.
The Chinese president explicitly said he wants to link the New Silk Road projects to the Eurasia Economic Union (EAEU). This BRI-EAEU interpolation is a natural evolution. China has already signed an economic cooperation deal with the EAEU. Russian macroeconomic uber-strategist Sergey Glazyev’s ideas are finally bearing fruit.
And last but not least, there will be a new drive towards mutual settlements in national currencies – and between Asia and Africa, and Latin America. For all practical purposes, Putin endorsed the role of the Chinese yuan as the new trade currency of choice while the complex discussions on a new reserve currency backed by gold and/or commodities proceed.
This joint economic/business offensive ties in with the concerted Russia-China diplomatic offensive to remake vast swathes of West Asia and Africa.
Chinese diplomacy works like the matryoshka (Russian stacking dolls) in terms of delivering subtle messages. It’s far from coincidental that Xi’s trip to Moscow exactly coincides with the 20th anniversary of American ‘Shock and Awe’ and the illegal invasion, occupation, and destruction of Iraq.
In parallel, over 40 delegations from Africa arrived in Moscow a day before Xi to take part in a “Russia-Africa in the Multipolar World” parliamentary conference – a run-up to the second Russia-Africa summit next July.
The area surrounding the Duma looked just like the old Non-Aligned Movement (NAM) days when most of Africa kept very close anti-imperialist relations with the USSR.
Putin chose this exact moment to write off more than $20 billion in African debt.
In West Asia, Russia-China are acting totally in synch. West Asia. The Saudi-Iran rapprochement was actually jump-started by Russia in Baghdad and Oman: it was these negotiations that led to the signing of the deal in Beijing. Moscow is also coordinating the Syria-Turkiye rapprochement discussions. Russian diplomacy with Iran – now under strategic partnership status – is kept on a separate track.
Diplomatic sources confirm that Chinese intelligence, via its own investigations, is now fully assured of Putin’s vast popularity across Russia, and even within the country’s political elites. That means conspiracies of the regime-change variety are out of the question. This was fundamental for Xi and the Zhongnanhai’s (China’s central HQ for party and state officials) decision to “bet” on Putin as a trusted partner in the coming years, considering he may run and win the next presidential elections. China is always about continuity.
So the Xi-Putin summit definitively sealed China-Russia as comprehensive strategic partners for the long haul, committed to developing serious geopolitical and geoeconomic competition with declining western hegemons.
This is the new world born in Moscow this week. Putin previously defined it as a new anti-colonial policy. It’s now laid out as a multipolar patchwork quilt. There’s no turning back on the demolition of the remnants of Pax Americana.
‘Changes that haven’t happened in 100 years’
In Before European Hegemony: The World System A.D. 1250-1350, Janet Abu-Lughod built a carefully constructed narrative showing the prevailing multipolar order when the West “lagged behind the ‘Orient.’” Later, the West only “pulled ahead because the ‘Orient’ was temporarily in disarray.”
We may be witnessing a similarly historic shift in the making, trespassed by a revival of Confucianism (respect for authority, emphasis on social harmony), the equilibrium inherent to the Tao, and the spiritual power of Eastern Orthodoxy. This is, indeed, a civilizational fight.
Moscow, finally welcoming the first sunny days of Spring, provided this week a larger-than-life illustration of “weeks where decades happen” compared to “decades where nothing happens.”
The two presidents bid farewell in a poignant manner.
Xi: “Now, there are changes that haven’t happened in 100 years. When we are together, we drive these changes.”
Putin: “I agree.”
Xi: “Take care, dear friend.”
Putin: “Have a safe trip.”
Here’s to a new day dawning, from the lands of the Rising Sun to the Eurasian steppes.
The views expressed in this article do not necessarily reflect those of The Cradle.
Russia and China: a summit of important international agreements and messages
As global power dynamics continue to shift, Israel’s close western alignment could limit its ability to engage with emerging powers in the east. Arch-rival Iran, which has established ties with Russia and China, will be better positioned to gain from the shifting geopolitical landscape.
Great-power competition has the potential to significantly impact the future of Israel. As a key player in West Asia, Israel is likely to be affected by the actions and strategies of major powers such as the US, China, and Russia.
The US has historically been a strong ally of Israel, providing significant military and economic aid. However, Washington’s current strategy of thwarting growing Chinese and Russian political and economic influence around the world may lead to increased pressure on Israel, a western-creation, to align with US interests in the region.
At the same time, China and Russia are rapidly expanding their stakes in West Asia, which may set back Israel’s recent rapprochement progress with neighboring states. In the past few years, Tel Aviv has offered itself to Arab states as a strong regional replacement for waning US presence, and a buffer against Iran’s rise.
But Beijing’s key role in brokering an agreement between Saudi Arabia and Iran is likely to impact Israel’s dealings with both of those countries – and other Arab states. Will they need that Israeli military buffer if global power China – or Russia – can troubleshoot conflict and usher in peace?
Furthermore, as great-power competition intensifies, Israel, like other small states, will come under pressure to align with one side. This could impact Israel’s ability to maintain its independence and pursue its own interests in the region.
Great Power competition: a heavy burden on Israel
In recent years, Israel has developed multifaceted relationships with both China and Russia, which have reaped both economic and political benefits for Tel Aviv. China has been one of the top global investors in West Asia and North Africa, with Israel ranking eighth on the list of beneficiary states since 2005 and receiving just over $12 billion in Chinese investments since 2010. In the past, Washington has given Israel some leeway in its foreign policy initiatives, but since the Ukraine conflict, US flexibility has been abruptly halted
Senior analyst on Israeli affairs at Al-Akhbar newspaper, Ali Haidar, told The Cradle that “Israel has a specific margin to preserve its interests. This is something that the United States understands and considers.”
“At the same time, there are red lines that Israel cannot cross, but it can, through its relations and contacts with the US administration and influential parties, contribute to adapting and circumventing them to some extent.”
As the competition between the US, on the one hand, and Moscow and Beijing on the other, intensifies, Israel’s ability to maneuver is becoming increasingly limited, and Washington’s pressure is mounting. This pressure demands that Tel Aviv take positions more aligned with US interests, which in turn constrain cooperation between Israel and Russia, and China.
“The increasing pressure on Israel to pivot in this context presents it with weighty dilemmas, and a policy change in the wake of that could significantly reduce its space for political-security maneuvering.”
This was exemplified by Israel’s attempts to mediate the conflict in Ukraine, which were quickly abandoned under coercion from Washington to take a clear position in support of the west and against Moscow.
This US pressure was also reflected in Israel’s military aggressions against Syria. In March 2022, the number of Israeli strikes targeting Syria decreased to only one strike from four the month before, suggesting that Tel Aviv was apprehensive of a Russian reaction. As a result, any imbalance in the relationship between Israel and Russia may have direct consequences for Israel’s interests – if Moscow decides to take action.
China’s presence in West Asia and North Africa
In the early 2010s, China began to expand its presence in the West Asia-North Africa (WANA) regions. One of the major milestones of China’s modern foreign policy was the announcement of its ambitious, multi-continent Belt and Road Initiative (BRI) in 2013. To date, at least 17 countries from the region have joined the initiative:
WANA states that have joined China’s BRI
China also signed bilateral partnership agreements with 13 countries in the region between 2014 and 2022. Notably, Israel has not entered into any association agreement with China and has not joined the BRI.
WANA states with bilateral strategic partnerships with China
By brokering the Iran-Saudi deal in the aftermath of high-profile visits to Tehran and Riyadh by Chinese President Xi Jinping, Beijing has now signaled that it intends to play a more active role in resolving conflicts and disputes in the region, much to Washington’s alarm. US reaction to this game-changing agreement has been hyper-focused on the geopolitical ramifications of China bringing the two parties to the table, rather than discussion about the agreement itself.
As China’s influence in the region continues to grow, Israel remains constrained by “American concerns,” preventing it from deepening its relations with China, while other regional states are lining up to strike deals with Beijing.
Analyst Haidar has noted that “the US’s obstruction of Israeli engagement with China will limit Tel Aviv’s ability to forge strong economic and political ties with Beijing,” adding, “This is a practical example of Israel’s commitment to what the United States regards as its vital interests, which Israel is prohibited from crossing.”
In 2019, in order to protect Washington’s interests, the Israeli government established a committee to evaluate the national security implications of foreign investments – with a specific focus on China.
Furthermore, the US and Israel have agreed to tighten control over the export of advanced technologies to China. That noose will further tighten as the economic competition between Washington and Beijing intensifies, and Israel – a major recipient of US technologies – may well be forced into this confrontation with China.
Iranian cooperation with Russia and China
One significant consequence of the intensifying competition between great powers is China and Russia’s efforts to strengthen their cooperation with key states, particularly those that oppose aggressive western hegemony.
Their alignment of interests has led to a palpable warming in relations between Iran, Russia, and China, and some concrete steps forward. The three states are more frequently engaging in joint military exercises, and military cooperation between Moscow and Tehran has thrived over the broader Eurasian-Atlanticist conflict in Ukraine.
Hostile US policies aimed at Russia and China have encouraged them to seek out and establish supportive multilateral institutions such as the BRICS and Shanghai Cooperation Organization (SCO). Tehran has, in turn, applied for membership in both organizations, which led to Iran’s formal ascension to the SCO last year – making it the organization’s ninth member state and its first West Asian participant.
In this context, Haidar points out that “One of the most important concepts that resonate on the tongues of officials and experts in Israel is the seriousness of the repercussions of the intensification of the international conflict on the region and Israel.” This, he argued, is “centered on Iran’s openness to Asian powers and the implications of that.”
He also contends that “rapid international changes” could present new opportunities for Iran, which is currently facing an economic assault from the west. These changes, Haidar explains, may enable Iran to counter the sanctions pressures, which undermines Israel’s multi-pronged strategy for confronting Iran.
Today, Israel’s position in the western axis limits its ability to keep up with Iran’s geopolitical expansion eastward. As the Global Power conflict intensifies and the opposing poles become more defined, Israel’s maneuvering room will shrink, while the Islamic Republic – never reliant on the west – will have a wider range of options available to it.
Last month, Israeli Prime Minister Benjamin Netanyahu’s former national security adviser, Meir Ben-Shabbat, argued that Iran occupies an important place in the process of reshaping the axis of countries hostile to the US and the west:
“The Iranian regime is positioning itself as an active player in the confrontation with the liberal democratic camp led by the US. It identifies the West’s weakness and is exploiting it as far as possible.”
Israel’s shrinking geopolitics
According to the latest annual intelligence estimate of the Israeli military’s Intelligence Directorate, global trends, the Iranian and Palestinian theaters form Tel Aviv’s 2023 threat triangle.
“At the center of this triangle will be the international tendencies that affect Israel and its security; the global instability that stems mainly from the conflict between the United States and China will continue and intensify.”
Today, Israel faces some momentous challenges to its future, not only from extreme domestic polarization but particularly from the intensification of global conflict and the decline of western hegemony. Iran’s growing international engagement, and the solidification of its relations with Asian powers, are unfolding as Tel Aviv’s options are shrinking.
There is also a correlation between the strength of US deterrence and influence in the region and Israel’s ability to exercise its own deterrence capabilities. As US power weakens, it is likely to have a negative impact on Israel’s ability to deter its enemies.
Moreover, the growing number of states “oscillating” between east and west, and maneuvering to take advantage of great-power competition, is another challenge for Israel. Even staunch US allies in the Persian Gulf – once scrambling to normalize relations with Israel – are looking for room to maneuver with the rising east, as seen with Riyadh’s readiness for Chinese mediation in negotiations with Iran.
While Israel may have some margin to distance itself from direct confrontation with China and Russia, the repercussions of the Great Power conflict are likely to buoy the fortunes of the region’s Axis of Resistance – in Iran, Syria, Yemen, Lebanon, and Iraq – with any balance of power shift away from US and Israeli hegemony.
In short, Israel’s ability to leverage its western connections for geopolitical gain has shrunk considerably while its rivals race ahead to establish themselves comfortably in West Asia’s new multipolarity.
The views expressed in this article do not necessarily reflect those of The Cradle.
تعيش الصين في بيئة دولية غير مستقرة، فالنظام الدولي يشهد مرحلة انتقالية هي الأخطر ربما، بانتظار ولادة نظام عالمي جديد.
الصين.. كل السهام أصابت أهدافها
انطلاقاً من المثل الصيني القائل: “لو أردت أن تلعب، فعليك أن تعرف قواعد اللعبة وزمنها”. لم يكن الإعلان عن الاتفاق لاستعادة العلاقات الدبلوماسية بين إيران والمملكة العربية السعودية حدثاً مفاجئاً، وخاصة على صعيد مراكز الدراسات والأبحاث الصينية.
لقد جرى الحديث عن ذلك عند زيارة الرئيس الصيني شي جين بينغ إلى المملكة العربية السعودية في كانون الأول/ديسمبر الماضي، وكانت التوقعات بأن ينضم الرئيس الإيراني إبراهيم رئيسي إلى تلك القمة.
جاء الإعلان عن التوصل إلى هذا الاتفاق برعاية صينية، ليكون إعلاناً لانخراط بكين وبشكل أكبر في قضايا الشرق الأوسط، بل سعيها للعب دور الوساطة في حل العديد من المشكلات الدولية وأهمها الحرب في أوكرانيا.
لم تكن بكين لتنخرط في ذلك لو لم تكن لديها فرص كبيرة للنجاح، خاصة أنها بغنى عن أي فشل قد يحسب عليها، ولا سيما على صعيد سياستها الخارجية، الهادئة والثابتة والمتوازنة، والقادرة على الفعل والابتعاد عن ردود الأفعال والصخب الإعلامي ما أمكن.
جاء ذلك الإعلان بعد انتهاء الصين من ترتيب ملفاتها الداخلية، ابتداء من إغلاق ملف كوفيد-19، وبدء عجلة الإنتاج في البلاد، مروراً بإعادة فتح حدودها مع العالم، وانتهاء بالتوصل إلى انتخاب الرئيس شي جين بينغ لولاية رئاسية ثالثة تكرسه قائداً استثنائياً في الصين.
تكريسه قائداً استثنائياً يتطلب منه تحقيق إنجازات استثنائية تنتظرها البلاد، ويتشوّق الشعب الصيني لتحقيقها. ولعل ثقتهم بالرئيس شي نابعة من نهجه الثابت في وضع برنامج زمني دقيق لتحقيق كل خطوة تعهد أمام الشعب بتحقيقها. وهو ما تجلى في تحقيقه القضاء على الفقر وفقاً للبرنامج الزمني المحدد، والذي لم يستطع انتشار الوباء في البلاد إيقافه أو تأجيله.
لقد وضع الرئيس شي عنواناً لولايته الثالثة وهو “استكمال بناء الدولة” لتكون دولة عصرية بكل ما تعنيه الكلمة من معنى. فرغم التطور والنجاح اللذين حققتهما الصين، لكنه لا يزال يرى أن الصين دولة من دول العالم الثالث، تعاني ما تعانيه من مشكلات كثيرة على الصعيد الداخلي. كما تواجه تحديات كبيرة على الصعيد الخارجي.
فالصين دولة ليست محظوظة على صعيد الجغرافيا السياسية، فهي تعيش في بيئة إقليمية مضطربة، ولها حدود طويلة مع 14 بلداً، وما يزيد من تلك المخاطر أن هذه البلدان تعيش أوضاعاً أمنية غير مستقرة، وتنذر بمشكلات قابلة للانتقال عبر الحدود في حال حدوثها.
كما تعيش الصين في بيئة دولية غير مستقرة، فالنظام الدولي يشهد مرحلة انتقالية هي الأخطر ربما، بانتظار ولادة نظام عالمي جديد. ولم تجر العادة أن يولد نظام عالمي جديد من دون مخاض عسير، وحرب طاحنة تكرس المنتصرين قادة لذلك النظام.
لقد استطاعت بكين ولعقود مضت النجاح في ما يسمى “التفكير بإيجابية” في تعاطيها مع المعطيات الدولية، بمعنى أنها لم تسع لمزاحمة الحضور الأميركي في المناطق الاستراتيجية من العالم، بل فكرت في كيفية الربح من اللعب في الهوامش على الساحة الدولية.
فذهبت للاستثمار في أفريقيا حين كان الغرب والولايات المتحدة غير مهتمين بتلك القارة، وحققت نجاحات كبيرة فيها، جعلت من القارة هدفاً للتنافس الأميركي والغربي عليها في ما بعد.
كما استثمرت في الوجود العسكري الأميركي في العالم، من خلال افتراضها أن هذا الوجود يحقق نوعاً من الاستقرار في تلك المناطق، وبالتالي يضمن لها استمرار مصالحها الاقتصادية فيها.
ولم تكن بكين في عجلة من أمرها للانخراط في التصدي للمشكلات الدولية، ولعب دور الوساطة فيها، طالما أن هناك من يقوم بهذا الدور، ويوفر عليها تبعات القيام بذلك.
وكان السؤال الأهم بالنسبة إلى دول العالم جميعاً، ودول العالم الثالث على وجه التحديد هو: متى ستكون بكين قادرة وراغبة في تحمل نفقات قيادة العالم؟ وكانت الإجابة الصينية من وجهة نظري، أن الصين ليست في عجلة من أمرها طالما أن هناك قيادة للعالم تضمن لبكين مصالحها وتحقق لها غاياتها، خاصة وأن الصين قد أصبحت دولة كبرى في ظل هذا النظام الدولي القائم، بمعنى أنها نجحت في التعامل بإيجابية معه، ولا مصلحة لها في تغييره إذا ما استمر ذلك.
لكن الصعود الكبير للصين، وصل حد تهديد القائد الدولي لهذا النظام، فلم يعد من الممكن بالنسبة إليه التغاضي عن هذا الصعود الصيني، والعمل على إيقافه، أو على الأقل عرقلته.
لكن ذلك لم يكن يسيراً، فبكين استطاعت نسج علاقاتها الاقتصادية وتشبيكها بشكل كبير مع الأعداء قبل الأصدقاء، فلم يعد بمقدور الولايات المتحدة أو الغرب عموماً، الاستغناء عن تلك العلاقة مع الصين، أو حتى إيجاد سبل لتفكيكها.
وفي العقدين الأخيرين، أصبح التخلص من الصين بالنسبة إلى الولايات المتحدة “كمن يطلق النار على قدميه”. أما اليوم، فقد أصبح “كمن يطلق النار على صدره” ربما.
كما أصبح لزاماً على بكين أن تتقدم حفاظاً على مصالحها المتنامية، فمن ترد أن تصبح الدولة الأكبر في العالم لا يمكنها الاستمرار في البقاء خارج دائرة الصراع، وجني المكاسب الاقتصادية فقط.
من هنا، بدأت الصين بالتصدي لهذا الدور، والانطلاق نحو التدخل في المشكلات الدولية، والبحث عن حلول لها، من زاوية أنها دولة تحظى باحترام جميع الأطراف، ولا تقدم نفسها كدولة تقف مع طرف ضد آخر، ولا تفكر في استخدام القوة أو التلويح بها. بمعنى أنها تقدم نموذجاً جديداً للدولة العظمى التي تمتلك رؤية استراتيجية قوامها “الربح المشترك” لجميع الأطراف.
بمعنى أن بكين ستعمل على التخلص من “النظرية الواقعية” في العلاقات الدولية، التي كرستها الولايات المتحدة ولعقود مضت، تلك النظرية التي تؤمن بمبدأ القوة، القوة وحدها ولا شيء سواها، لتكرس “النظرية الاعتمادية” في العلاقات الدولية كبديل منها. هذه النظرية ترى أن جميع الدول تحتاج إلى بعضها بعضاً، ودور كل منها هو مكمل لباقي الأدوار وليس بديلاً منه، أو منافساً له. وبالتالي، فإن التعاون هو الطريق لتحقيق الكسب المشترك.
من هنا، فقد أطلقت بكين مجموعة من المبادرات، أولها مبادرتها للأمن العالمي والتي تضم 6 بنود، وهي مبادرة هامة ومفيدة بالنسبة إلى منطقتنا على وجه التحديد، كونها لم تغفل القضية الفلسطينية. وهي القضية التي كان لبكين موقف تاريخي مشرف منها، لجهة وقوفها مع الحق العربي، ورفضها إقامة علاقات دبلوماسية مع “دولة” الاحتلال حتى العام 1992، وبعد أن ذهب العرب إلى مؤتمر مدريد للسلام بدعوة أميركية، ومن دون أن يشترطوا حضور الصين كراع لهذه العملية، وهو ما جعل الصين تعيد حساباتها وتتجه للبحث عن مصالحها أولاً، مع الاحتفاظ بموقفها المبدئي من فلسطين.
كما عملت بكين على تجهيز حزمة من المبادرات لحل العديد من المشكلات والقضايا الدولية، وكانت أولى هذه المبادرات التي توّجت بالنجاح مبدئياً، هي الوساطة الصينية بين كل من إيران والسعودية.
تدرك بكين حجم التعقيدات التي تعترض هذا الملف، لكنها في الوقت نفسه، تجد فيه فرصة كبيرة لتحسين سمعتها لدى العالم الإسلامي عبر نجاحها في تحقيق الوفاق بين أكبر دولتين إسلاميتين في المنطقة.
ففي السنوات الأخيرة، تعرضت بكين لحملة دعائية غربية روّجت لما يسمّى بـ “اضطهاد الحكومة الصينية للإيغور” المسلمين في الصين، بهدف اللعب على عواطف الشعوب الإسلامية وتحريضها ضد الصين.
ولتكذيب تلك الادعاءات، تكفي الإشارة إلى وجود 10 قوميات مسلمة في الصين، فلماذا لم يسمع أحد عن اضطهاد الحكومة الصينية سوى للإيغور؟! إن نجاح بكين في تلك الوساطة يشكل خطوة أولى في الاتجاه الصحيح لإيجاد حل للمشكلات العالقة بين البلدين.
لقد جاءت هذه المبادرة انطلاقاً من تفهم بكين لحجم هاتين الدولتين ومكانتهما، وتأثيرهما الكبير في الساحتين الإقليمية والدولية، وانطلاقاً من أن التقارب بينهما هو الطريق لحل معظم المشكلات القائمة في المنطقة. وما يعزز من فرص النجاح لهذه المبادرة، هو الرغبة المشتركة لطرفيها في تحقيق ذلك، انطلاقاً من رؤية عقلانية تحكم كلا الموقفين. وما يعزز من تلك الفرص، غياب العامل الأميركي المعطل لها، في ظل الفتور في العلاقات بين المملكة والولايات المتحدة. وفي ظل انسداد الأفق أمام طهران في استعادة تنفيذ برنامجها النووي.
إن تبادل العلاقات الدبلوماسية بين بلدين لا يشكل حلاً للخلافات القائمة بينهما، لكنه يشكل خطوة في الاتجاه الصحيح نحو مد جسور للحوار والبحث عن قواسم مشتركة يمكن البناء عليها. فالصين والولايات المتحدة، ورغم وجود تبادل دبلوماسي بينهما، فإن البلدين يعيشان حالة من العداء المتصاعد، لكن العقلانية تفرض عليهما بقاء القنوات مفتوحة للتواصل ونزع فتيل التوترات. فالتبادل الدبلوماسي وسيلة بكل تأكيد، وليس غاية.
إن الآراء المذكورة في هذه المقالة لا تعبّر بالضرورة عن رأي الميادين وإنما تعبّر عن رأي صاحبها حصراً
In an exclusive interview with The Cradle, Russia’s top macroeconomics strategist criticizes Moscow’s slow pace of financial reform and warns there will be no new global currency without Beijing.
The headquarters of the Eurasian Economic Commission (EEC) in Moscow, linked to the Eurasia Economic Union (EAEU) is arguably one of the most crucial nodes of the emerging multipolar world.
That’s where I was received by Minister of Integration and Macroeconomics Sergey Glazyev – who was previously interviewed in detail by The Cradle – for an exclusive, expanded discussion on the geoeconomics of multipolarity.
Glazyev was joined by his top economic advisor Dmitry Mityaev, who is also the secretary of the Eurasian Economic Commission’s (EEC) science and technology council. The EAEU and EEC are formed by Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia. The group is currently engaged in establishing a series of free trade agreements with nations from West Asia to Southeast Asia.
Our conversation was unscripted, free flowing and straight to the point. I had initially proposed some talking points revolving around discussions between the EAEU and China on designing a new gold/commodities-based currency bypassing the US dollar, and how it would be realistically possible to have the EAEU, the Shanghai Cooperation Organization (SCO), and BRICS+ to adopt the same currency design.
Glazyev and Mityaev were completely frank and also asked questions on the Global South. As much as extremely sensitive political issues should remain off the record, what they said about the road towards multipolarity was quite sobering – in fact realpolitik-based.
Glazyev stressed that the EEC cannot ask for member states to adopt specific economic policies. There are indeed serious proposals on the design of a new currency, but the ultimate decision rests on the leaders of the five permanent members. That implies political will – ultimately to be engineered by Russia, which is responsible for over 80 percent of EAEU trade.
It’s quite possible that a renewed impetus may come after the visit of Chinese President Xi Jinping to Moscow on March 21, where he will hold in-depth strategic talks with Russian President Vladimir Putin.
On the war in Ukraine, Glazyev stressed that as it stands, China is profiting handsomely, as its economy has not been sanctioned – at least not yet – by US/EU and Beijing is buying Russian oil and gas at heavily discounted prices. The funds Russians are losing in terms of selling energy to the EU will have to be compensated by the proposed Power of Siberia II pipeline that will run from Russia to China, via Mongolia – but that will take a few more years.
Glazyev sketched the possibility of a similar debate on a new currency taking place inside the Shanghai Cooperation Organization (SCO) – yet the obstacles could be even stronger. Once again, that will depend on political will, in this case by Russia-China: a joint decision by Xi and Putin, with crucial input by India – and as Iran becomes a full member, also energy-rich Tehran.
What is realistic so far is increasing bilateral trade in their own currencies, as in the Russia-China, Russia-India, Iran-India, Russia-Iran, and China-Iran cases.
Essentially, Glazyev does not see heavily sanctioned Russia taking a leadership role in setting up a new global financial system. That may fall to China’s Global Security Initiative. The division into two blocs seems inevitable: the dollarized zone – with its inbuilt eurozone – in contrast with the Global South majority with a new financial system and new trading currency for international trade. Domestically, individual nations will keep doing business in their own national currencies.
The road to ‘de-offshorization’
Glazyev has always been a fierce critic of the Russian Central Bank, and he did voice his misgivings – echoing his book The Last World War. He never ceases to stress that the American rationale is to damage the Russian economy on every front, while the motives of the Russian Central Bank usually raise “serious questions.”
He said that quite a few detailed proposals to reorient the Central Bank have been sent to Putin, but there has been no follow-up. He also evoked the extremely delicate theme of corruption involving key oligarchs who, for inscrutable reasons, have not been sidelined by the Kremlin.
Glazyev had warned for years that it was imperative for Moscow to sell out foreign exchange assets placed in the US, Britain, France, Germany, and others which later ended up unleashing sanctions against Russia.
These assets should have been replaced by investments in gold and other precious metals; stocks of highly liquid commodity values; in securities of the EAEU, SCO, and BRICS member states; and in the capital of international organizations with Russian participation, such as the Eurasian Development Bank, the CIS Interstate Bank, and the BRICS Development Bank.
It seems that the Kremlin at least is now fully aware of the importance of expanding infrastructure for supporting Russian exports. That includes creating international exchange trading marketplaces for trade in Russian primary goods within Russian jurisdiction, and in rubles; and creating international sales and service networks for Russian goods with high added value.
For Russia, says Glazyev, the key challenge ahead in monetary policy is to modernize credit. And to prevent negative impact by foreign financial sources, the key is domestic monetization – “including expansion of long and medium-term refinancing of commercial banks against obligations of manufacturing enterprises and authorized government bodies. It is also advisable to consistently replace foreign borrowings of state- controlled banks and corporations with domestic sources of credit.”
So the imperative way to Russia, now in effect, is “de-offshorization.” Which essentially means getting rid of a “super-critical dependence of its reproduction contours on Anglo-Saxon legal and financial institutions,” something that entails “systematic losses of the Russian financial system merely on the difference in profitability between the borrowed and the placed capital.”
What Glazyev repeatedly emphasized is that as long as there’s no reform of the Russian Central Bank, any serious discussion about a new Global South-adopted currency faces insurmountable odds. The Chinese, heavily interlinked with the global financial system, may start having new ideas now that Xi Jinping, on the record, and unprecedentedly, has defined the US-provoked Hybrid War against China for what it is, and has named names: it’s an American operation.
What seems to be crystal clear is that the path toward a new financial system designed essentially by Russia-China, and adopted by vast swathes of the Global South, will remain long, rocky, and extremely challenging. The discussions inside the EAEU and with the Chinese may extrapolate to the SCO and even towards BRICS+. But all will depend on political will and political capital jointly deployed by the Russia-China strategic partnership.
That’s why Xi’s visit to Moscow next week is so crucial. The leadership of both Moscow and Beijing, in sync, now seems to be fully aware of the two-front Hybrid War deployed by Washington.
This means their peer competitor strategic partnership – the ultimate anathema for the US-led Empire – can only prosper if they jointly deploy a complete set of measures: from instances of soft power to deepening trade and commerce in their own currencies, a basket of currencies, and a new reserve currency that is not hostage to the Bretton Woods system legitimizing western finance capitalism.
The views expressed in this article do not necessarily reflect those of The Cradle.
Under Chinese auspices, on 10 March in Beijing, longtime regional competitors Iran and Saudi Arabia reached an agreement to restore diplomatic relations, after a break of seven years.
In its most optimistic reading, the deal can be seen as a historic strategic agreement, reflecting major changes underway in West Asia and the world. At worst, it can be characterized as an “armistice agreement” between two important rivals, that will provide a valuable space for direct, regular communications.
The Sino-Saudi-Iranian joint statement on Friday carried strong implications beyond the announcement of the restoration of diplomatic relations between Tehran and Riyadh, severed since 2016.
The statement is very clear:
The embassies of Saudi Arabia and the Islamic Republic Iran will reopen in less than two months.
Respect for the sovereignty of States.
Activating the security cooperation agreement between Saudi Arabia and Iran signed in 2001.
Activating the cooperation agreement in the economic, trade, investment, technology, science, culture, sports and youth sectors signed between the parties in 1998.
Urging the three countries to exert all efforts to promote regional and international peace and security.
At first glance, the first four clauses suggest that the Chinese-brokered deal is essentially a mending of diplomatic relations between the two longtime adversaries. But in fact, the fifth clause is far from the standard text inserted into joint statements between states.
It appears to establish a new reference for conflicts in West Asia, in which China plays the role of “peacemaker” — in partnership with Iran and Saudi Arabia — in which Beijing assumes a role in various regional conflicts or influences the relevant parties.
Sources familiar with the negotiations have revealed to The Cradle that Chinese President Xi Jinping did not merely coat-tail a deal already underway between Tehran and Riyadh. Xi has, in fact, personally paved the way for this agreement to materialize. The Chinese head of state delved deep into its details since his visit to Saudi Arabia in December 2022, and then later, during Iranian President Ebrahim Raisi’s visit to Beijing in mid-February 2023.
More than one round of negotiations was held under Chinese auspices, during which the Iranians and Saudis finalized details negotiated between them in Iraq and Oman, during earlier rounds of talks.
It was by no means a given that the two sides would arrive at an agreement in their last round of discussions (6-10 March, 2023). But the Chinese representative managed to overcome all obstacles between the two delegations, after which the parties obtained approval from their respective leaderships to announce the deal on Friday.
China as regional guarantor
In the past couple of days, much has been written about the strategic implications of a Chinese-brokered Saudi-Iranian agreement and its impact on China’s global role vis-à-vis the United States. The Persian Gulf is a strategic region for both powers, and the main source of China’s energy supply. It is likely why Beijing intervened to stem tensions between its two strategic allies. It is also something Washington, long viewed as the region’s “security guarantor,” could never have achieved.
Undoubtedly, much will be said about Saudi Crown Prince Mohammed bin Salman’s (MbS) “strategic adventurism” and his exploitation of global changes to offset the decline of US regional influence. The rise of a multipolar, post-American order allows traditional US allies some space to explore their international options away from Washington, and in service of their immediate national interests.
Saudi Arabia’s current interests are related to the ambitious political, economic, financial, and cultural targets that MbS has set out for his country, and are based on two pillars:
Diversifying regional and global partnerships in order to adapt to global systemic changes that will help realize Riyadh’s grand plans.
Establishing security and political stability to allow Saudi Arabia to implement its major projects, especially those outlines in MbS’ “Vision 2030,” through which Riyadh envisions itself transforming into a regional incubator for finance, business, media, and the entertainment industry – similar to the role played by the UAE in decades past, or by Beirut before the Lebanese civil war in 1975.
In short, regional and domestic security and stability are vital for Riyadh to be able to implement its strategic goals. As such, confidential clauses were inserted into the Beijing Agreement to assure Iran and Saudi Arabia that their security imperatives would be met. Some of these details were provided to The Cradle, courtesy of a source involved in the negotiations:
Both Saudi Arabia and the Islamic Republic of Iran undertake not to engage in any activity that destabilizes either state, at the security, military or media levels.
Saudi Arabia pledges not to fund media outlets that seek to destabilize Iran, such as Iran International.
Saudi Arabia pledges not to fund organizations designated as terrorists by Iran, such as the People’s Mojahedin Organization (MEK), Kurdish groups based in Iraq, or militants operating out of Pakistan.
Iran pledges to ensure that its allied organizations do not violate Saudi territory from inside Iraqi territory. During negotiations, there were discussions about the targeting of Aramco facilities in Saudi Arabia in September 2019, and Iran’s guarantee that an allied organization would not carry out a similar strike from Iraqi lands.
Saudi Arabia and Iran will seek to exert all possible efforts to resolve conflicts in the region, particularly the conflict in Yemen, in order to secure a political solution that secures lasting peace in that country.
According to sources involved in the Beijing negotiations, no details on Yemen’s conflict were agreed upon as there has already been significant progress achieved in direct talks between Riyadh and Yemen’s Ansarallah resistance movement in January. These have led to major understandings between the two warring states, which the US and UAE have furiously sought to undermine in order to prevent a resolution of the Yemen war.
In Beijing however, the Iranian and Saudis agreed to help advance the decisions already reached between Riyadh and Sanaa, and build upon these to end the seven-year war.
Hence, although the Beijing statement primarily addresses issues related to diplomatic rapprochement, Iranian-Saudi understandings appear to have been brokered mainly around security imperatives. Supporters of each side will likely claim their country fared better in the agreement, but a deeper look shows a healthy balance in the deal terms, with each party receiving assurances that the other will not tamper with its security.
While Iran has never declared a desire to undermine Saudi Arabia’s security, some of its regional allies have made no secret of their intentions in this regard. In addition, MbS has publicly declared his intention to take the fight inside Iran, which Saudi intelligence services have been doing in recent years, specifically by supporting and financing armed dissident and separatist organizations that Iran classifies as terrorist groups.
The security priorities of this agreement should have been easy to spot in Beijing last week. After all, the deal was struck between the National Security Councils of Saudi Arabia and Iran, and included the participation of intelligence services from both countries. Present in the Iranian delegation were officers from Iran’s Ministry of Intelligence and from the intelligence arms of the Islamic Revolutionary Guard Corps (IRGC).
On a slightly separate note related to regional security — but not part of the Beijing Agreement — sources involved in negotiations confirmed to The Cradle that, during talks, the Saudi delegation stressed Riyadh’s commitment to the 2002 Arab peace initiative; refusing normalization with Tel Aviv before the establishment of an independent Palestinian state, with Jerusalem as its capital.
What is perhaps most remarkable, and illustrates the determination by the parties to strike a deal without the influence of spoilers, is that Iranian and Saudi intelligence delegations met in the Chinese capital for five days without Israeli intel being aware of the fact. It is perhaps yet another testament that China — unlike the US — understands how to get a deal done in these shifting times.
The views expressed in this article do not necessarily reflect those of The Cradle.
Raisi’s visit to Beijing, the first for an Iranian president in 20 years, represents Tehran’s wholesale ‘Pivot to the East’ and China’s recognition of Iran’s centrality to its BRI plans.
The visit of Iranian President Ebrahim Raisi to Beijing and his face-to- face meeting with counterpart Xi Jinping is a groundbreaking affair in more ways than one.
Raisi, the first Iranian president to officially visit China in 20 years, led an ultra high-level political and economic delegation, which included the new Central Bank governor and the Ministers of Economy, Oil, Foreign Affairs, and Trade.
The fact that Raisi and Xi jointly supervised the signing of 20 bilateral cooperation agreements ranging from agriculture, trade, tourism and environmental protection to health, disaster relief, culture and sports, is not even the major take away.
This week’s ceremonial sealing of the Iran-China comprehensive strategic partnership marks a key evolution in the multipolarity sphere: two Sovereigns – both also linked by strategic partnerships with Russia – imprinting to their domestic audiences and also to the Global South their vision of a more equitable, fair and sustainable 21st century which completely bypasses western dictates.
Beijing and Tehran first established their comprehensive strategic partnership when Xi visited Iran in 2016 – only one year after the signing of the Joint Comprehensive Plan of Action (JCPOA), or Iranian nuclear deal.
In 2021, Beijing and Tehran signed a 25-year cooperation deal which translated the comprehensive partnership into practical economic and cultural developments in several fields, especially energy, trade and infrastructure. By then, not only Iran (for decades) but also China were being targeted by unilateral US sanctions.
Here is a relatively independent analysis of the challenges and prospects of the 25-year deal. And here is an enlightening perspective from neighboring Pakistan, also a strategic partner of China.
Iran: gotta modernize everything
Beijing and Tehran are already actively cooperating in the construction of selected lines of Tehran’s subway, the Tehran-Isfahan high-speed railway, and of course joint energy projects. Chinese tech giant Huawei is set to help Tehran to build a framework for a 5G telecom network.
Raisi and Xi, predictably, stressed increased joint coordination at the UN and the Shanghai Cooperation Organization (SCO), of which Iran is the newest member, as well as a new drive along the Belt and Road Initiative (BRI).
While there was no explicit mention of it, underlying all these initiatives is the de-dollarization of trade – in the framework of the SCO but also the multipolar BRICS group of states. Iran is set to become one of the new members of BRICS+, a giant step to be decided in their upcoming summit in South Africa next August.
There are estimates in Tehran that Iran-China annual trade may reach over $70 billion in the mid-term, which will amount to triple the current figures.
When it comes to infrastructure building, Iran is a key BRI partner. The geostrategy of course is hard to match: a 2,250 km coastline encompassing the Persian Gulf, Strait of Hormuz, Sea of Oman and the Caspian Sea – and huge land borders with Iraq, Turkey, Armenia, Azerbaijan, Turkmenistan, Afghanistan and Pakistan. Every think tank in China sees how Iran is irreplaceable, not only in terms of BRI land corridors, but also the Maritime Silk Road.
Chabahar Port may be a prime Iran-India affair, as part of the International North South Transportation Corridor (INSTC) – thus directly linked to the Indian vision of a Silk Road, extending to Central Asia.
But Chinese port developers do have other ideas, focused on alternative ports along the Persian Gulf and in the Caspian Sea. That will boost shipping connections to Central Asia (Turkmenistan and Kazakhstan), Russia and the Caucasus (Azerbaijan).
And that makes perfect sense when one combines port terminal development with the modernization of Iran’s railways – all the way to high-speed rail.
An even more revolutionary development would be China coordinating the BRI connection of an Iranian corridor with the already in progress 3,200 km-long China-Pakistan Economic Corridor (CPEC), from Kashgar in Xinjiang to Gwadar port in the Indian Ocean.
That seemed perfectly plausible when Pakistani Prime Minister Imran Khan was still in power, before being ousted by a lawfare coup. The key of the whole enterprise is to build badly needed infrastructure in Balochistan, on both sides of the border. On the Pakistani side, that would go a long way to smash CIA-fed “insurgents” of the Balochistan Liberation Army kind, get rid of unemployment, and put trade in charge of economic development.
Afghanistan of course enters the equation – in the form of a China-Afghan-Iran corridor linked to CPEC. Since September 2021, Beijing has explained to the Taliban, in detail, how they may profit from an infrastructure corridor – complete with railway, highway and pipeline – from Xinjiang, across the Wakhan corridor in eastern Afghanistan, through the Hindu Kush, all the way to Iran.
The core of multipolarity
Iran is perfectly positioned for a Chinese-propelled boom in high-speed cargo rail, connecting Iran to most of Central Asia (Kazakhstan, Turkmenistan, Tajikistan, Kyrgyzstan).
That means, in practice, cool connectivity with a major logistics cluster: the Special Economic Zone (SEZ) of Khorgos, only 330 km from Almaty on the Kazakh-China border, and only four hours from Urumqi, Xinjiang’s capital.
If China pulls that off, it would be a sort of BRI Holy Grail, interconnecting China and Iran via Kazakhstan, Turkmenistan, Afghanistan, and Pakistan. Nothing less than several corridors in one.
All that is about to happen as the Islamic Revolution in Iran celebrates its 44th year.
What is already happening now, geopolitically, and fully recognized by China, might be defined as the full rejection of an absurdity: the collective west treating Iran as a pariah or at best a subjugated neo-colony.
With the diverse strands of the Resistance embedded in the Islamic Revolution finally consolidated, it looks like history is finally propelling Iran as one of the key poles of the most complex process at work in the 21st century: Eurasia integration.
So 44 years after the Islamic Revolution, Iran enjoys strategic partnerships with the three top BRICS: China, Russia and India.
Likely to become one of the first new members of BRICS+, Iran is the first West Asian state to become a full member of the SCO, and is clinching a Free Trade Agreement (FTA) with the Eurasian Economic Union (EAEU).
Iran is a major strategic partner of both BRI, led by China, and the INSTC, alongside Russia and India.
With the JCPOA all but dead, and all western “promises” lying in the dust, Tehran is consolidating its pivot back to the East at breakneck speed.
What Raisi and Xi sealed in Beijing heralds Chinese pre-eminence all across West Asia – keenly perceived in Beijing as a natural consequence of recognizing and honoring Iran’s regional centrality.
Iran’s “Look East” strategy could not be more compatible with BRI – as an array of BRI projects will accelerate Iran’s economic development and consolidate its inescapable role when it comes to trade corridors and as an energy provider.
During the 1980s Tehran was ruled by a “Neither East nor West” strategy – faithful to the tenets of the Islamic Revolution. That has now evolved, pragmatically, into “Look East.” Tehran did try to “Look West” in good faith, but what the US government did with the JCPOA – from its murder to “maximum pressure” to its aborted resuscitation – was quite a historical lesson.
What Raisi and Xi have just demonstrated in Beijing is the Sovereign way forward. The three leaders of Eurasia integration – China, Russia and Iran – are fast on their way to consolidate the core of multipolarity.
The views expressed in this article do not necessarily reflect those of The Cradle.
The national flags of China and Iran fly in Tiananmen Square during Iranian President Ebrahim Raeisi’s visit to Beijing, China, February 14, 2023. (Photo by Reuters)
The key takeaway of President Ebrahim Raeisi’s state visit to Beijing goes way beyond the signing of 20 bilateral cooperation agreements.
This is a crucial inflexion point in an absorbing, complex, decades-long, ongoing historical process: Eurasia integration.
Little wonder that President Raeisi, welcomed by a standing ovation at Peking University before receiving an honorary academic title, stressed “a new world order is forming and taking the place of the older one”, characterized by “real multilateralism, maximum synergy, solidarity and dissociation from unilateralisms”.
And the epicenter of the new world order, he asserted, is Asia.
It was quite heartening to see the Iranian president eulogizing the Ancient Silk Road, not only in terms of trade but also as a “cultural bond” and “connecting different societies together throughout history”.
Raeisi could have been talking about Sassanid Persia, whose empire ranged from Mesopotamia to Central Asia, and was the great intermediary Silk Road trading power for centuries between China and Europe.
It’s as if he was corroborating Chinese President Xi Jinping’s famed notion of “people to people exchanges” applied to the New Silk Roads.
And then President Raeisi jump cut to the inescapable historical connection: he addressed the Belt and Road Initiative (BRI), of which Iran is a key partner.
All that spells out Iran’s full reconnection with Asia – after those arguably wasted years of trying an entente cordiale with the collective West. That was symbolized by the fate of the JCPOA, or Iran nuclear deal: negotiated, unilaterally buried and then, last year, all but condemned all over gain.
A case can be made that after the Islamic Revolution 44 years ago, a budding “pivot to the East” always lurked behind the official government strategy of “Neither East nor West”.
Starting in the 1990s that happened to progressively enter in full synch with China’s official “Open Door” policy.
After the start of the millennium, Beijing and Tehran have been getting even deeper in synch. BRI, the major geopolitical and geoeconomic breakthrough, was proposed in 2013, in Central Asia and Southeast Asia.
Then, in 2016, President Xi visited Iran, in West Asia, leading to the signing of several memoranda of understanding (MOU), and recently the wide-ranging 25-year comprehensive strategic agreement – consolidating Iran as a key BRI actor.
Accelerating all key vectors
In practice, Raeisi’s visit to Beijing was framed to accelerate all manner of vectors in Iran-China economic cooperation – from crucial investments in the energy sector (oil, gas, petrochemical industry, pipelines) to banking, with Beijing engaged in advancing modernizing reforms in Iran’s banking sector and Chinese banks opening branches across Iran.
Chinese companies may be about to enter the emerging Iranian commercial and private real estate markets, and will be investing in advanced technology, robotics and AI across the industrial spectrum.
Sophisticated strategies to bypass harsh, unilateral US sanctions will be a major focus every step of the way in Iran-China relations. Barter is certainly part of the picture when it comes to trading Iranian oil/gas contracts for Chinese industrial and infrastructure deals.
It’s quite possible that Iran’s sovereign wealth fund – the National Development Fund of Iran – with holdings at estimated $90 billion, may be able to finance strategic industrial and infrastructure projects.
Other international financial partners may come in the form of the Asian Infrastructure Development Bank (AIIB) and the NDB – the BRICS bank, as soon as Iran is accepted as a member of BRICS+: that may be decided this coming August at the summit in South Africa.
The heart of the matter of the strategic partnership is energy. The China National Petroleum Corporation (CNPC) pulled out of a deal to develop Phase 11 of Iran’s South Pars gas field, adjacent to Qatar’s section.
Yet CNPC can always come back for other projects. Phase 11 is currently being developed by the Iranian energy company Petropars.
Energy deals – oil, gas, petrochemical industry, renewables – will boom across what I dubbed Pipelineistan in the early 2000s.
Chinese companies will certainly be part of new oil and gas pipelines connecting to the existing Iranian pipeline networks and configuring new pipeline corridors.
Already established Pipelineistan includes the Central Asia-China pipeline, which connects to China’s West-East pipeline grid, nearly 7,000 km from Turkmenistan to the eastern China seaboard; and the Tabriz-Ankara pipeline (2,577 km, from northwest Iran to the Turkish capital).
Then there’s one of the great sagas of Pipelineistan: the IP (Iran-Pakistan) gas pipeline, previously known as the Peace Pipeline, from South Pars to Karachi.
The Americans did everything in the book – and off the books – to stall it, delay it or even kill it. But IP refused to die; and the China-Iran strategic partnership could finally make it happen.
A new geostrategic architecture
Arguably, the central node of the China-Iran strategic partnership is the configuration of a complex geostrategic economic architecture: connecting the China-Pakistan Economic Corridor (CPEC), the flagship of BRI, to a two-pronged Iran-centered corridor.
This will take the form of a China-Afghanistan-Iran corridor and a China-Central Asia-Iran corridor, thus forming what we may call a geostrategic China-Iran Economic Corridor.
Beijing and Tehran, now on overdrive and with no time to lose, may face all manner of challenges – and threats – from the Hegemon; but their 25-year strategic deal does honor historically powerful trading/ merchant civilizations now equipped with substantial manufacturing/ industrial bases and with a serious tradition in advanced scientific innovation.
The serious possibility of China-Iran finally configuring what will be a brand new, expanded strategic economic space, from East Asia to West Asia, central to 21st century multipolarity, is a geopolitical tour de force.
Not only that will completely nullify the US sanction obsession; it will direct Iran’s next stages of much needed economic development to the East, and it will boost the whole geoeconomic space from China to Iran and everyone in between.
This whole process – already happening – is in many aspects a direct consequence of the Empire’s “until the last Ukrainian” proxy war against Russia.
Ukraine as cannon fodder is rooted in Mackinder’s heartland theory: world control belongs to the nation that controls the Eurasian land mass.
This was behind World War I, where Germany knocking out Russia created fear among the Anglo-Saxons that should Germany knock out France it would control the Eurasian land mass.
WWII was conceived against Germany and Japan forming an axis to control Europe, Russia and China.
The present, potential WWIII was conceived by the Hegemon to break a friendly alliance between Germany, Russia and China – with Iran as a privileged West Asia partner.
Everything we are witnessing at this stage spells out the US trying to break up Eurasia integration.
So it’s no wonder that the three top existential “threats” to the American oligarchy which dictates the “rules-based international order” are The Three Sovereigns: China, Russia and Iran.
Does that matter? Not really. We have just seen that while the dogs (of war) bark, the Iran-China strategic caravan rolls on.
Pepe Escobar is a Eurasia-wide geopolitical analyst and author. His latest book is Raging Twenties.
(The views expressed in this article are the author’s own and do not necessarily reflect those of Press TV)
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The leaders of China and Iran agreed to boost bilateral cooperation in the service of their mutual interests.
In this photo released by the official website of the office of the Iranian Presidency, President Ebrahim Raisi, left, shakes hands with his Chinese counterpart Xi Jinping in an official welcoming ceremony in Beijing, Tuesday, Feb. 14, 2023 (Iranian Presidency Office via AP)
The Sino-Iranian meeting sought to discuss the implementation of a comprehensive strategic partnership between Tehran and Beijing. The bilateral cooperation agreements covered, according to Tasnim, fields namely economy, information technology, crisis management, tourism, fields, environment, international trade, intellectual property, agriculture, exports, health and medical sector, media activities, as well as sports and cultural heritage.
Tasnim also reported that according to the head of the Iran-China chamber of commerce in Tehran, Iran will establish a commercial office in China to promote economic dealings with Chinese businessmen.
Sovereignty, integrity, cooperation
Jinping and Raisi, in a joint statement, held that they stand against foreign interference in the domestic affairs of sovereign states. In that regard, the two leaders vowed mutual efforts to protect the territorial integrity of both countries, China and Iran.
Raisi, according to China Central Television, said “Both Iran and China are strongly against the policy of unilateral actions, hegemony, and bullying as well as foreign interference in domestic affairs.”
In turn, Xi explained that Beijing will boost cooperation with Tehran in the service of mutual interests.
“China supports Iran in its effort to protect state sovereignty, independence, territorial integrity, and national dignity. It supports Iran in confronting the policy of unilateral actions and intimidation. China is also against the interference of foreign powers in Iran’s domestic affairs,” Xi stated.
Raisi, during his visit, also thanked China for its support throughout the Covid-19 pandemic as well as acknowledged Chinese efforts in the international arena, specifically, on matters pertaining to the Vienna talks.
News of Russian banks connecting to Iran’s financial messaging system strengthens the resistance against US-imposed sanctions on both countries and accelerates global de-dollarization.
The agreement between the Central Banks of Russia and Iran formally signed on 29 January connecting their interbank transfer systems is a game-changer in more ways than one.
Technically, from now on 52 Iranian banks already using SEPAM, Iran’s interbank telecom system, are connecting with 106 banks using SPFS, Russia’s equivalent to the western banking messaging system SWIFT.
Less than a week before the deal, State Duma Chairman Vyachslav Volodin was in Tehran overseeing the last-minute details, part of a meeting of the Russia-Iran Inter-Parliamentary Commission on Cooperation: he was adamant both nations should quickly increase trade in their own currencies.
Ruble-rial trade
Confirming that the share of ruble and rial in mutual settlements already exceeds 60 percent, Volodin ratified the success of “joint use of the Mir and Shetab national payment systems.” Not only does this bypass western sanctions, but it is able to “solve issues related to mutually beneficial cooperation, and increasing trade.”
It is quite possible that the ruble will eventually become the main currency in bilateral trade, according to Iran’s ambassador in Moscow, Kazem Jalali: “Now more than 40 percent of trade between our countries is in rubles.”
Jalali also confirmed, crucially, that Tehran is in favor of the ruble as the main currency in all regional integration mechanisms. He was referring particularly to the Russian-led Eurasian Economic Union (EAEU), with which Iran is clinching a free trade deal.
The SEPAM-SPFS agreement starts with a pilot program supervised by Iran’s Shahr Bank and Russia’s VTB Bank. Other lenders will step in once the pilot program gets rid of any possible bugs.
The key advantage is that SEPAM and SPFS are immune to the US and western sanctions ruthlessly imposed on Tehran and Moscow. Once the full deal is up and running, all Iranian and Russian banks can be interconnected.
It is no wonder the Global South is paying very close attention. This is likely to become a landmark case in bypassing Belgium-based SWIFT – which is essentially controlled by Washington, and on a minor scale, the EU. The success of SEPAM-SPFS will certainly encourage other bilateral or even multilateral deals between states.
It’s all about the INSTC
The Central Banks of Iran and Russia are also working to establish a stable coin for foreign trade, replacing the US dollar, the ruble, and the rial. This would be a digital currency backed by gold, to be used mostly in the Special Economic Zone (SEZ) of Astrakhan, in the Caspian Sea, already very busy moving plenty of Iranian cargo.
Astrakhan happens to be the key Russian hub of the International North-South Transportation Corridor (INSTC), a vast network of ship, rail, and road routes which will drastically increase trade from Russia – but also parts of Europe – across Iran to West Asia and South Asia, and vice-versa.
And that reflects the full geoconomic dimension of the SEPAM-SPFS deal. The Russian Central Bank moved early to set up SPFS in 2014, when Washington began threatening Moscow with expulsion from SWIFT. Merging it with the Iranian SEPAM opens up a whole new horizon, especially given Iran’s ratification as a full member of the Shanghai Cooperation Organization (SCO), and now a leading candidate to join the extended BRICS+ club.
Already three months before the SEPAM-SPFS agreement, the Russian Trade Representative in Iran, Rustam Zhiganshin, was hinting that the decision “to create an analog of the SWIFT system” was a done deal.
Tehran had been preparing the infrastructure to join Russia’s Mir payment system since last summer. But after Moscow was hit with extremely harsh western sanctions and Russian banks were cut off from SWIFT, Tehran and Moscow decided, strategically, to focus on creating their own non-SWIFT for cross-border payments.
All that relates to the immensely strategic geoeconomic role of the INSTC, which is a much cheaper and faster trade corridor than the old Suez Canal route.
Russia is Iran’s largest foreign investor
Moreover, Russia has become Iran’s largest foreign investor, according to Iranian Deputy Finance Minister Ali Fekri: this includes “$2.7 billion worth of investment to two petroleum projects in Iran’s western province of Ilam in the past 15 months.” That’s about 45 percent of the total foreign investment in Iran over the October 2021 – January 2023 period.
Of course the whole process is in its initial stages – as Russia-Iran bilateral trade amounts to only US$3 billion annually. But a boom is inevitable, due to the accumulated effect of SEPAM-SPFS, INSTC, and EAEU interactions, and especially further moves to develop Iran’s energy capacity, logistics, and transport networks, via the INSTC.
Russian projects in Iran are multi-faceted: energy, railways, auto manufacturing, and agriculture. In parallel, Iran supplies Russia with food and automotive products.
Ali Shamkhani, the secretary of Iran’s Supreme National Security Council, is fond of reminding anyone that Russia and Iran “play complementary roles in global energy and cargo transit.” The Iran-EAEU free agreement (FTA) is nearly finalized – including zero tariffs for over 7,500 commodities.
In 2022, the EAEU traded more than $800 billion worth of goods. Iran’s full access to the EAEU will be inestimable in terms of providing a market gateway to large swathes of Eurasia – and bypassing US sanctions as a sweet perk. A realistic projection is that Tehran can expect $15 billion annual trade with the five members of the EAEU in five years, as soon as Iran becomes the sixth member.
The legacy of Samarkand
Everything we are tracking now is in many ways a direct consequence of the SCO summit in Samarkand last September, when Russian President Vladimir Putin and his Chinese counterpart Xi Jinping, in person, placed their bet on strengthening the multipolar world as Iran signed a memorandum to join the SCO.
Putin’s private talks with Iranian President Ebrahim Raisi in Samarkand were all about deep strategy.
The INSTC is absolutely crucial in this overall equation. Both Russia and Iran are investing at least $25 billion to boost its capabilities.
Ships sailing the Don and Volga Rivers have always traded energy and agricultural commodities. Now Iran’s Maritime News Agency has confirmed that Russia will grant their ships the right of passage along the inland waterways on the Don and Volga.
Meanwhile, Iran is already established as the third largest importer of Russian grain. From now on, trade on turbines, polymers, medical supplies, and automotive parts will be on a roll.
Tehran and Moscow have signed a contract to build a large cargo vessel for Iran to be used at the Caspian port of Solyanka. And RZD logistics, a subsidiary of Russian railway RZD, operates container cargo trains regularly from Moscow to Iran. The Russian Journal for Economics predicts that just the freight traffic on INTSC could reach 25 million tons by 2030 – no less than a 20-fold increase compared to 2022.
Inside Iran, new terminals are nearly ready for cargo to be rolled off ships to railroads crisscrossing the country from the Caspian to the Persian Gulf. Sergey Katrin, head of Russia’s Chamber of Commerce and Industry, is confident that once the FTA with the EAEU is on, bilateral trade can soon reach $40 billion a year.
Tehran’s plans are extremely ambitious, inserted in an “Eastern Axis” framework that privileges regional states Russia, China, India, and Central Asia.
Geostrategically and geoeconomically, that implies a seamless interconnection of INSTC, EAEU, SCO, and BRICS+. And all of this is coordinated by the one Quad that really matters: Russia, China, India, and Iran.
Of course there will be problems. The intractable Armenia-Azerbaijan conflict might be able to derail the INSTC: but note that Russia-Iran connections via the Caspian can easily bypass Baku if the need arises.
BRICS+ will cement the dollar’s descent
Apart from Russia and Iran, Russia and China have also been trying to interface their banking messaging systems for years now. The Chinese CBIBPS (Cross-Border Inter-Bank Payments System) is considered top class. The problem is that Washington has directly threatened to expel Chinese banks from SWIFT if they interconnect with Russian banks.
The success of SEPAM-SPFS may allow Beijing to go for broke – especially now, after the extremely harsh semiconductor war and the appalling balloon farce. In terms of sovereignty, it is clear that China will not accept US restrictions on how to move its own funds.
In parallel, the BRICS in 2023 will delve deeper into developing their mutual financial payments system and their own reserve currency. There are no less than 13 confirmed candidates eager to join BRICS+ – including Asian middle powers like Iran, Saudi Arabia, and Indonesia.
All eyes will be on whether – and how – the $30 trillion-plus indebted US will threaten to expel BRICS+ from SWIFT.
It’s enlightening to remember that Russia’s debt to GDP ratio stands at only 17 percent. China’s is 77 percent. The current BRICS without Russia are at 78 percent. BRICS+ including Russia may average only 55 percent. Strong productivity ahead will come from a BRICS+ supported by a gold and/or commodities-backed currency and a different payment system that bypasses the US dollar. Strong productivity definitely will not come from the collective west whose economies are entering recessionary times.
Amid so many intertwined developments, and so many challenges, one thing is certain. The SEPAM-SPFS deal between Russia and Iran may be just the first sign of the tectonic plates movement in global banking and payment systems.
Welcome to one, two, one thousand payment messaging systems. And welcome to their unification in a global network. Of course that will take time. But this high-speed financial train has already left the station.
The views expressed in this article do not necessarily reflect those of The Cradle.
There is no doubt that were Israel threatened with the forced implementation of even something as fundamentally just and decent as a two-state solution they would resort to using nuclear bombs. They are dead-set on waging war until they get all the Palestinians’ lands, and they have made it clear that there is no place for non-Jews (non-White Jews, actually) inside this land they have stolen as if human mores had not changed since the 19th century.
In the blink of a post-corona eye, Russia has become something quite similar.
As former Russian ex-president Dmitry Medvedev just reiterated, if the Russian nation is seriously threatened with defeat nuclear weapons will be used in self-defence. Other than North Korea, only Israel feels the need to use such language.
Russia and North Korea are genuine nations, ones whose existence was not entirely contrived by and for Western imperialism, but in many ways Russia has become a new Israel. To be more accurate – Russia is now the counterpoint and antithesis of Israel.
Just as Israel, the poisoned blade of Western capitalism and imperialism, faces and constantly thrusts east and south, now Russia is the South and East’s defensive rampart facing West.
Russia has gone from post-1991 kowtowing to Western liberal democracy – earnestly trying to join them – to realising that the West has declared total war against them. How can there be a reconciliation? War in the Donbass has been going on for nearly a decade – that’s not the blink of an eye. Anyway, the West simply does not remove sanctions once in place – look at decades of Western policy towards Iran, Cuba, North Korea, etc. – barring total capitulation. The West only removed sanctions on China because they absurdly thought that China had gone capitalist and that it had all just been Mao’s doing. Sanctions are now back in force, as Xi has reflected the broad persistence of socialism in China.
The alleged end of history was based on the idea that only one type of civilisation existed any more, but it’s clear that there is a false idolatry of a West which exists in only in theoretical words and not in practical deeds, and there is a tolerant and truly diverse non-West which insists on national sovereignty and the right to cultural differences.
The West’s outpost in Asia is well-known – Israel – and it is not just a rich colonialist’s whim and folly. Israel serves as an imperialist foothold to destabilise the entire Muslim world and Africa – training, funding and supporting all types of awful monarchies and puppet governments – and for these crimes they suffer internally from the awful, unstable Apartheid they have created.
The surprising development is that non-Western bloc’s frontier has shifted West: from 1979 onwards it was clearly Iran. Forty years of war on and around Iran failed to topple the revolution, and drained the West of vital tangible and moral resources. The non-Western frontier has now been pushed back to Russia.
Russia is the country that – for reasons which are diametrically and morally the opposite for the reasons of Israel’s existence – will now serve as the non-Western bloc’s frontier, a frontier which will be in long-term combat and instability.
This top Russian talk show just discussed this same idea, essentially: without a Cuban Missile Crisis 2.0 – something that scares the West into backing down – this war has no end in sight. Russia will not be allowed to sue for peace – they are looking at a much longer war than in the Muslim World, as Russia is on the true frontier of the West and not merely surrounding a colonial outpost.
But it’s a new type of world: Russia is the frontier in a war which will accelerate the legal and practical formation of a new world order – that of West versus non-West; of NATO versus BRICS; of corporate domination versus the sovereignty of a nation united, and more.
This war is total – not in terms of forces used but in what it encompasses:
Economically, Russians – with all their history of state control of assets to direct them towards the people’s good – simply could not accept the idea that corporate CEOs should be above the people’s elected representatives. This, of course, is what Western liberal democracy is based upon: markets, prices, supplies, wages, jobs and stocks are exclusively controlled by billionaire elite – and they insist that this is the only political advance needed following the end of bloodline monarchy.
Politically, whereas the West looks at itself and sees the victory of liberal democracy, Russia and others look at places like the European Union and see a continent which has been roiled by constant turmoil since that project went fully online in 2009. And the EU is supposed to be the sophisticated one in the Western bloc! Russia has ended the one claim the EU could plausibly make – that the EU prevents war: Brussels did all it could to subvert the 2014 Minsk Accords and to reject peace efforts over the past year.
Monetarily, the idea that the dollar is as good as gold is no longer tenable, and this was true before record inflation. That the daily users of the once-mighty euro don’t grasp this only shows their lack of intelligence and the obvious subversion of their own leaders. Petroyuans, gold-backed rubles, Iranian state-backed cryptocurrency – these are the answers and the certain future.
Culturally, the West is fighting for things which the majority of their own people do not even want – some sort of open-air Amsterdam brothel or dreadful, drug-ravaged San Francisco commune. It has been written that this non-West/West debate is actually anthropological because the West is redefining what “man”, “woman” and “family” is. I prefer not to waste time on this, as it is so absurd and so obviously led by and for a tiny minority, but certainly for many Westerners upending “conservative” definitions seems to be their raison d’être – the class struggle, anti-imperialism, internationalism, the mass deaths of the Western war machine all apparently bore them. It’s also clear that the average Westerner is greatly shocked and often affected by this useless “war” and worries over its effects for future generations, but in the West such persons are silenced or self-censor.
Just as Israel is on the wrong side of all these issues, so Russia has become – justified or not – the standard-bearer of the other side. It is a good thing, because the West could never follow or accept a Muslim to carry this standard, like Iran has done. Unlike with Iran, when Western propagandists criticise the allegedly “arch-conservative” Russia they can’t resort to “anti-Brown” scaremongering, stereotypes and absurdities, because Westerners are far more familiar with and similar to Russian Slavs.
It is now a two-world world, and the frontier is the Eurasian borderlands – i.e. the definition of “Ukraine”.
There is no chance that Russia can be defeated and dismembered – not only do they have nukes of course, but their friends (China, Iran probably India and maybe even Turkey and Egypt) wouldn’t allow it. The same probably goes for Israel – their Western allies would force their own peoples to suffer anything to keep Israelis from sharing one olive farm, much less dividing the land in two. Anyway, as that talk show discussed, there’s just no way the West would personally engage in the WWII-sized conflict which it would take to achieve their desire of a dismembered Russia.
The conscience of Israelis surely allows them no true peace – they are always in an unwinnable settler war (the Anglosphere has combined genocide with isolation (reservations) for their indigenous peoples, but the isolation tactic cannot work long-term on Palestinians) – but Russians must grapple with the fact that they will be much like the Muslim World for the past 20 years: the focus of Western imperialist aggression, monstrosities and lies.
In this sense the world today is very much like it was from WWII until 1991, when Russians led the only empire where the center was bled for the benefit of the periphery.
Despite the fighting going on in eastern Ukraine it’s not World War III but clearly Cold War II, with Israel and Russia the unstable frontiers facing each other in ideological, philosophical, political and economic war.
Posted on January 14, 2023 by uprootedpalestinians
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.
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.
UPROOTED PALESTINIANS: SALAM ALQUDS ALAYKUM 