Caspian Deal Highlights Shift in Azerbaijan

TOM LUONGO

As the US/Turkish relationship deteriorates it is having spillover effects around the region. Turkish President Recep Tayyip Erdogan’s continued defiance of US’s demands have placed Turkey in the cross-hairs of a vicious hybrid-war attack on the country’s fragile economic foundation.

So, I find it very interesting that during the week of the greatest turmoil in Turkish markets, notably a panic in the Turkish Lira, the five nations bordering the Caspian Sea reach an historic agreement which remained elusive for over 20 years.

And at the heart of that disagreement has been Azerbaijan’s claims over oil and gas rights in the Caspian which rankled both Turkmenistan to the north and Iran to the south.

For the past few years, as US/Russian relations have cratered, Russian/Azeri relations have improved. And it has been the diligent work of both Russian President Vladimir Putin and his Foreign Minister Sergei Lavrov which laid the groundwork for this agreement.

Putin first organized a trilateral summit between himself, Azeri President Aliyev and Iranian President Rouhani two years ago this month.

But, more importantly, it has been Putin and Lavrov’s steady and consistent diplomatic efforts to improve relations between Russia and all the former Soviet states which the US has worked diligently since the early 1990’s to harm.

Azerbaijan has always fallen on the US side of the geopolitical chess board.

On top of this is Russia’s very successful campaign in countering the US/Saudi/Israeli-led civil war in Syria which resulted in a very significant turn in Russian/Turkish relations. And this, to me, is the key to understanding why these long-frozen conflicts around the region are changing, sometimes, like this weekend’s summit, dramatically.

To this point Russia has taken everything the US has thrown at it and survived. And if you don’t think smaller players like Azerbaijan aren’t taking notice, then you are hopelessly naïve. A Russia capable of standing up to the US is a Russia capable of being a valuable regional partner.

And that partnership extends around the entire region.

Take the frozen conflict of Nagorno-Karabakh, for example. For the past twenty-plus years Turkey has backed Azeri claims and Russia, tacitly, Armenia’s. But, despite a flare-up a couple of years ago, just hours after US Secretary of State John Kerry left Baku, settling Nagorno-Karabakh is on everyone’s mind.

Over the weekend Nagorno-Karabakh was on the diplomatic menu in the meeting between Lavrov and his Turkish counterpart, Movlut Çavuşoğlu.

Even the new Armenian Prime Minister, Nikol Pashinyan, is ready to discuss the conflict.

“We have expressed political willingness to continue talks on Nagorno-Karabakh in a constructive way, in line with our political obligations and in the context of Armenia’s interests. However, a preparatory stage is required to revive negotiations, especially in the current political situation,” he stressed.

Pashinyan added that Yerevan “is ready for any scenario on Nagorno-Karabakh.”

I expect that a deal over Nagorno-Karabakh will be brokered by Russia with Turkey’s support now that Turkey will be dependent on Russia for its financial survival as it pursues a painful and necessary de-dollarization process, the beginnings of which have already begun.

With reports that the US is in peace talks with moderate factions within the Taliban out there, the possibility of a withdrawal becomes greater. Moreover, the Caspian Sea agreement precludes any third-party military presence, another sign of Azerbaijan’s shift away from the US’s orbit.

The regional change doesn’t stop there, however. The recent election of Imran Khan in Pakistan changes that country’s role again in the direction of Russian and Chinese integration plans, especially in brokering a long-term stabilization plan for Afghanistan.

The message is becoming very clear to all the smaller regional players, the board is changing. And you can be a part of it or you can be left behind. The US’s plans for permanent chaos in central Asia has harmed all of these places and now is the beginning of the transition period.

I’ve held from the moment it began that Russia’s intervention in Syria would mark the peak of the US’s ability to project power around the world, this is certainly now true in central Asia and the Middle East.

The current defiance by Turkey is another aftershock of that intervention which revealed the lies which everyone on the ground in Syria knew about but felt powerless to change.

That’s why Russia’s intervention and success was so significant. It created an Axis of Resistance that was credible and would pay the kinds of dividends we are seeing today.

This is not to downgrade the contributions of Russia’s partners in Syria, the Syrians themselves, Iran and Hezbollah, but it was Russia that tipped the balance of power in Syria. Because under no circumstances were the Obama or Trump administrations willing to risk a direct conflict with Russia over Syria.

Hillary Clinton was a different story, but, thankfully, one we never had to experience.

So, for Azerbaijan its relationships with its neighbors are about to undergo a sea change, which should see meat put on the bones of this weekend’s agreement about oil and gas rights.

Note, also that while Trump is adamant about there being no exemptions to trading with Iran after November, that the US State Department issued a waiver for Azerbaijan’s Southern Gas Corridor project which it partners with none other than British Petroleum.

The Southern Gas Corridor is one of those ridiculously expensive work-arounds created by US geopolitical meddling to free Europe from the yoke of Russia’s cheap and abundant gas supplies.

Royal Dutch Shell and France’s Total were not given such waivers over the former’s involvement with Nordstream 2 or the latter’s deal with NIOC, which China’s CNPC took over at a discount.

As I’ve said before, never go nuclear in your negotiations, if your bluff is called you are left standing naked as the tide recedes. And the US’s real strength in central Asia has been for many years a weak and disjointed Russia allowing the chaos sowed to flourish.

That condition is no longer in effect and all that’s left for the US is unsustainable military deployments, both financially and logistically, and growing discontent at an international system of trade and finance which is abusive.

Viewed in that context, this weekend’s surprise agreement shouldn’t be much surprise at all.

Source: https://www.strategic-culture.org/news/2018/08/17/caspian-deal-highlights-shift-in-azerbaijan.html

Eurasia torn between war and peace

Iran’s top trading partner is China, while Tehran and Moscow have been improving ties as the three countries move closer to cementing a solid alliance

Two summits – the cross-border handshake that shook the world between Kim and Moon in Panmunjom and Xi and Modi’s cordial walk by the lake in Wuhan – may have provided the impression Eurasia integration is entering a smoother path.

Not really. It’s all back to confrontation: predictably the actual, working Iran nuclear deal, known by the ungainly acronym JCPOA, is at the heart of it.

And faithful to the slowly evolving Eurasia integration road-map, Russia and China are at the forefront of supporting Iran.

China is Iran’s top trading partner – especially because of its energy imports. Iran for its part is a major food importer. Russia aims to cover this front.

Chinese companies are developing massive oil fields in Yadavaran and North Azadegan. China National Petroleum Corporation (CNPC) took a significant 30% stake in a project to develop South Pars – the largest natural gas field in the world. A $3 billion deal is upgrading Iran’s oil refineries, including a contract between Sinopec and the National Iranian Oil Company (NIOC) to expand the decades-old Abadan oil refinery.

In a notorious trip to Iran right after the signing of the JCPOA in 2015, President Xi Jinping backed up an ambitious plan to increase bilateral trade by over tenfold to US$600 billion in the next decade.

For Beijing, Iran is an absolutely key hub of the New Silk Roads, or the Belt and Road Initiative (BRI). A key BRI project is the $2.5 billion, 926 kilometer high-speed railway from Tehran to Mashhad; for that China came up with a $1.6 billion loan – the first foreign-backed project in Iran after the signing of the JCPOA.

There’s wild chatter in Brussels concerning the impossibility of European banks financing deals in Iran – due to the ferocious, wildly oscillating Washington sanctions obsession. That opened the way for China’s CITIC to come up with up to $15 billion in credit lines.

The Export-Import Bank of China so far has financed 26 projects in Iran – everything from highway building and mining to steel producing – totaling roughly $8.5 billion in loans. China Export and Credit Insurance Corp – Sinosure – signed a memorandum of understanding to help Chinese companies invest in Iranian projects.

China’s National Machinery Industry Corp signed an $845 million contract to build a 410km railway in western Iran connecting Tehran, Hamedan and Sanandaj. And insistent rumors persist that China in the long run may even replace cash-strapped India in developing the strategic port of Chabahar on the Arabian Sea – the proposed starting point of India’s mini-Silk Road to Afghanistan, bypassing Pakistan.

So amid the business blitz, Beijing is not exactly thrilled with the US Department of Justice setting its sights on Huawei, essentially because of hefty sales of value-for-money smart phones in the Iranian market.

Have Sukhoi will travel

Russia mirrors, and more than matches, the Chinese business offensive in Iran.

With snail pace progress when it comes to buying American or European passenger jets, Aseman Airlines decided to buy 20 Sukhoi SuperJet 100s while Iran Air Tours – a subsidiary of Iran Air –  has also ordered another 20. The deals, worth more than $2 billion, were clinched at the 2018 Eurasia Airshow at Antalya International Airport in Turkey last week, supervised by Russia’s deputy minister of industry and trade Oleg Bocharov.

Both Iran and Russia are fighting US sanctions. Despite historical frictions, Iran and Russia are getting closer and closer. Tehran provides crucial strategic depth to Moscow’s Southwest Asia presence. And Moscow unequivocally supports the JCPOA. Moscow-Tehran is heading the same way of the strategic partnership in all but name between Moscow and Beijing.

According to Russian energy minister Alexander Novak, the 2014  Moscow-Tehran oil-for-goods deal, bypassing the US dollar, is finally in effect, with Russia initially buying 100,000 barrels of Iranian crude a day.

Russia and Iran are closely coordinating their energy policy. They have signed six agreements to collaborate on strategic energy deals worth up to $30 billion. According to President Putin’s aide Yuri Ushakov, Russian investment in developing Iran’s oil and gas fields could reach more than $50 billion.

Iran will become a formal member of the Russia-led Eurasia Economic Union (EAEU) before the end of the year. And with solid Russian backing, Iran will be accepted as a full member of the Shanghai Cooperation Organization (SCO) by 2019.

Iran is guilty because we say so

Now compare it with the Trump administration’s Iran policy.

Barely certified as the new US Secretary of State, Mike Pompeo’s first foreign trip to Saudi Arabia and Israel amounts in practice to briefing both allies on the imminent Trump withdrawal of the JCPOA on May 12. Subsequently, this will imply a heavy new batch of US sanctions.

Riyadh – via Beltway darling Crown Prince Mohammad bin Salman, (MBS) – will be all in on the anti-Iran front. In parallel, the Trump administration may demand it, but MBS won’t relinquish the failed blockade of Qatar or the humanitarian disaster that is the war on Yemen.

What’s certain is there won’t be a concerted Gulf Cooperation Council (GCC) front against Iran. Qatar, Oman and Kuwait see it as counterproductive. That leaves only Saudi Arabia and the Emirates plus irrelevant, barely disguised Saudi vassal Bahrain.

On the European front, French president Emmanuel Macron has stepped up as a sort of unofficial King of Europe, leveraging himself to Trump as the likely enforcer of restrictions on Iran’s ballistic missile program, as well as dictating Iran to stay out of Syria, Iraq and Yemen.

Macron has made a direct – and patently absurd connection between Tehran abandoning its nuclear enrichment program, including the destruction of uranium stockpiles enriched to less that 20%, and being the guilty party helping Baghdad and Damascus to defeat Daesh and other Salafi-jihadi outfits.

No wonder Tehran – as well as Moscow and Beijing – is connecting recent, massive US weapons deals with Riyadh as well as MBS’s hefty investments in the West to the Washington-Paris attempt to renegotiate the JCPOA.

Putin’s spokesman Dmitry Peskov has been adamant; the JCPOA  was the product of a strenuous seven-country negotiation over many years: “The question is, will it be possible to repeat such successful work in the current situation?”

Certainly not

Thus the suspicion widely floated in Moscow, Beijing and even Brussels that the JCPOA irks Trump because it’s essentially a multilateral, no “America First” deal directly involving the Obama administration.

The Obama administration’s pivot to Asia – which depended on settling the Iranian nuclear dossier – ended up setting off a formidable, unintended chain of geopolitical events.

Neocon factions in Washington would never admit to normalized Iranian relations with the West; and yet Iran not only is doing business with Europe but got closer to its Eurasian partners.

Artificially inflating the North Korea crisis to try to trap Beijing has led to the Kim-Moon summit defusing the “bomb the DPRK” crowd.

Not to mention that the DPRK, ahead of the Kim-Trump summit, is carefully monitoring what happens to the JCPOA.

The bottom line is that the Russia-China partnership won’t allow for a JCPOA renegotiation, for a number of serious reasons.

On the ballistic missile front, Moscow’s priority will be to sell S-300 and S-400 missile systems to Tehran, sanctions-free.

Russia-China might eventually agree with the JCPOA 10-year sunset provisions to be extended, although they won’t force Tehran to accept it.

On the Syrian front, Damascus is regarded as an indispensable ally of both Moscow and Beijing. China will invest in the reconstruction of Syria and its revamping as a key Southwest Asia node of the BRI. “Assad must go” is a non-starter; Russia-China see Damascus as essential in the fight against Salafi-jihadis of all stripes who may be tempted to return and wreak havoc in Chechnya and Xinjiang.

A week ago, at an SCO ministerial meeting, Russia-China issued a joint communiqué supporting the JCPOA. The Trump administration is picking yet another fight against the very pillars of Eurasia integration.

 

 

Why Europe is afraid of the New Silk Roads

Many EU countries are concerned about one-way traffic along the new trade routes Beijing is trying to set up to Europe

It came out as a sort of minor scandal – considering the ’24/7 post-truth news cycle.’ Of the 28 EU ambassadors in Beijing, 27, with the exception of Hungary’s, signed an internal report criticizing the New Silk Roads as a non-transparent threat to free trade, allegedly favoring unfair competition by Chinese conglomerates.

The report was first leaked to respected German business newspaper Handelsblatt. EU diplomats in Brussels confirmed its existence to Asia Times. Then the Chinese Foreign Ministry calmed the turbulence, saying that Brussels had explained what this was all about.

In fact, it’s all about nuances. Anyone familiar with how dysfunctional Eurocrat Brussels is knows there’s no EU common policy towards China – or Russia for that matter.

The internal report does mention how China, via the New Silk Roads, or Belt and Road Initiative (BRI), is “pursuing domestic political goals like the reduction of surplus capacity, the creation of new export markets and safeguarding access to raw materials.”

That’s a self-evident Chinese rationale inbuilt in BRI from the start – and Beijing never denied it. After all, the concept itself was first floated inside the Ministry of Commerce, way before the official announcements by President Xi Jinping in Astana and Jakarta in 2013.

Perceptions of the BRI vary across myriad latitudes. Central and Eastern Europe are mostly enthusiastic – as BRI is synonymous with badly needed infrastructure projects. So are Greece and Italy, as Asia Times reported. Northern ports such as Hamburg and Rotterdam are actually configured as BRI terminals. Spain is very much interested in the days when the Yiwu to Madrid cargo train will move to high-speed rail.

Essentially, it all boils down to companies from specific EU nations deciding their degree of integration with what Raymond Yeung, ANZ’s chief economist for greater China, describes as “the biggest economic experiment in modern history.”

Watch those Chinese engineers

The case of France is emblematic. President Emmanuel Macron – now on a massive geopolitical PR offensive to crown himself the unofficial King of Europe – actually praised the BRI when he visited China earlier this year.

But nuance, once again, applies: “After all, the ancient Silk Roads were never only Chinese,” Macron said in Xian at the Daming Palace, the residence of the Ancient Silk Road stalwart Tang dynasty for more than two centuries. “These roads”, added Macron, “cannot be those of a new hegemony, which would transform those that they cross into vassals.”

So Macron was already prepositioning himself to steer EU-China relations away and beyond the number one EU grievance; how the Chinese play the foreign trade/investment game.

Macron has been very vocal in prodding the European Commission bureaucracy to toughen anti-dumping rules against Chinese steel imports and forcing EU-wide screening of takeovers in strategic sectors, especially from China.

In parallel, virtually every EU nation – not only France – wants more access to the Chinese market. As much as Macron has touted an optimistic mantra – “Europe is back” – in terms of EU competitiveness, that barely masks the primordial European fear; the fact that it’s China that may be getting too competitive.

The BRI, for Beijing, is all about geopolitical but most of all geo-economic projection – including the promotion of new global standards and norms that may not be exactly those practiced by the EU. And that brings us to the heart of the matter, not enounced by the leaked internal report; the intersection between BRI and Made in China: 2025.

Beijing is aiming to become a global high-tech leader in less than seven years. Made in China: 2025 identified 10 sectors – including AI, robotics, aerospace, green cars and shipping and shipbuilding – as priorities.

China-Germany bilateral trade, at 187 billion euros last year, is way bigger than China-France and China-UK, at 70 billion euros each. And yes, Berlin is worried. Made in China: 2025 represents a significant “threat” to top quality German companies producing high-end manufacturing goods.

Those days may be over when China bought astonishing amounts of German machinery – plus the inevitable BMWs and Audis. The new normal points to an army of Chinese companies moving up the value-added chain at breakneck speed.

As Bauer CEO Thomas Bauer told Reuters: “(Rivalry with China) will not be a contest against copiers. It will be one against innovative engineers.”

Navigating the blue economy

The report Blue China; Navigating the Maritime Silk Road to Europe usefully expands the scope of the debate, pointing to how the development of the Maritime Silk Road may be even more crucial than overland connectivity corridors.

The report acknowledges how the Maritime Silk Road already affects the EU in terms of maritime trade and shipbuilding, and asks some questions about the increasing global presence of the PLA Navy. It recommends that the EU “should emulate China’s blue economy as an engine of growth and wealth, and encourage innovation to respond to well-funded Chinese industrial and R&D policies.”

The “blue economy” features heavily in Made in China: 2025 – especially in terms of innovation in port infrastructure and shipping. The rationale, from Beijing’s point of view, is always about maritime trade cost cutting – but that, of course, will always depend on whether oil prices will keep going up, as OPEC and Russia are keen.

As it stands, the EU bureaucracy has to be fearful, sensing the possibility of being squeezed between high-tech China and Trump’s America First. And that does not even factor in the inevitable geo-strategic clash between the BRI and the “free and open Indo-Pacific” to be managed, in theory, by the US, Japan, India and Australia; more of a glamorized South China Sea patrol than a vast project of Eurasian economic integration.

There will be an EU-China summit in July and then a German-China summit later in the year. Non-transparent sparks are bound to fly.

 

China will not fall into the ‘Thucydides Trap’ with India

President Xi Jinping projects China as a ‘benevolent power’ but at the Raisina Dialogue in Delhi the ‘Quad’ nations lined up against him

The West’s notions of history and geography between Europe and Asia, are drenched in myriad cultural implications and can be traced back to ‘The Romance of Alexander’.

This is a collection of essays mixing truth, epic drama and mythology, composed between the death of Alexander The Great in 323 B.C., and the fourth century A.D, and attributed either to Callisthenes, Aristotle’s nephew or to Alexander’s tutor.

During a 10-year period, Alexander forged an empire encompassing Asia Minor and what the West later defined as the Middle East, annexing the current lands of Turkey, Syria, Israel and Palestine, Egypt, Lebanon, Jordan, Iraq, Iran, a slice of Pakistan and northwest India.

For more than two millennia, Alexander best embodied in the West the clash of these two lofty paradigms: East and West. Alexander’s conquests also helped India to enter the Western frame of mind in terms of geography and civilization.

We eventually learned that India was actually close to the Arab world – overland via Iran, and in naval terms via its direct connection to the Persian Gulf.

The exchange of goods, traditions and culture was always inbuilt in the Big Picture. Overland or seaborne, the ancient Silk Road – before arriving in China – went through India. Rome was already trading with India before learning about the Middle Kingdom, and vice-versa as the Chinese barely knew the Mediterranean existed.

Closer to the West

So, India was always closer to the Western mind than China.

In parallel, when Vasco da Gama reached southwest India in 1498, those ports for more than a millennium had been trading with China, Southeast Asia, the Arab world and the Mediterranean.

The historical case can be made that India’s royals, after trading for so long with Arab, Jewish and Chinese merchants, were fooled by the “peaceful” intention of the first European incursions, which eventually led to British domination of the subcontinent.

This background should be taken into account when we look at what happened during the latest international Raisina Dialogue in New Delhi. This was sponsored by the Indian Ministry of External Affairs and the Observer Research Foundation (ORF), an Indian think tank.

The theme of the Raisina Dialogue was “Managing Disruptive Transitions.” And the number one “disruptive transition” was identified as no less than China’s New Silk Road, otherwise known as the Belt and Road Initiative.

More than 200 million Indians are Muslims, which makes it the third largest Muslim nation in the world after Indonesia and Pakistan. So, it is no wonder that Premier Narendra Modi’s right-wing pro-Hindu BJP acts as the self-proclaimed defender of a multi-millennium civilization.

But when we dig deeper we find that modern Hindu nationalism – instead of worrying about the destiny of the Mahabharata – was actually born in the 1920s, infused with the theories of Mazzini, d’Annunzio and even one Benito Mussolini. Still, that was all about fear of the Hindu identity being swamped by Islam and Christendom.

Now, it is all about fear of China.

Belt and Road versus ‘Quad’

NATO was in full voice at the Raisina Dialogue in New Delhi via Admiral Harry Harris, commander of US Pacific Command and named recently as US Ambassador to Australia. According to Harris, “the reality is that China is a disruptive transitional force in the Indo-Pacific, they are the owner of the trust deficit in the region.”

Significantly, the navy chiefs from the Quad nations – US, India, Japan, Australia – all agree on it. So does retired General David Petraeus, the former CIA director and mastermind of the surges in Iraq and Afghanistan.

Neocon ideologue Zalmay Khalilzad, a former US Ambassador to Iraq and Afghanistan, also attended, and duly agreed that by trying to connect all of Eurasia via the Belt and Road, China would “change the international order.”

The Raisina Dialogue fully illustrated the scope of Washington’s terminological pivot from “Asia-Pacific” to “Indo-Pacific”, while detailing the prescription inbuilt in the new Pentagon Defense Strategy.

China – along with Russia – are “revisionist powers” bent on undermining the “international, rules-based order”, especially China with its “predatory economics” which will be fully developed through the Belt and Road program.

So, it was up to Quad to implement a new China containment strategy.

Geopolitically, in Beijing, China-India relations are regarded very seriously, second only in importance to China’s relations with the US. Lately, China-Russia relations have been in the ascendant – mutually exhorted as a “strategic partnership”.

China-Japan relations, meanwhile, may qualify as a distant fourth although vast swathes of the Chinese public appear to consider it the second biggest threat to President Xi Jinping’s “Chinese Dream”.

Yet once Beijing consolidates its influence over key maritime trade routes across East Asia, Japan will cease to be a problem. The real problem is if India ever decides to try to cut or at least interfere with China’s Belt and Road Initiative naval routes – and complex supply lines – across the Indian Ocean.

The key geopolitical question of the 21st century is how the ascension of China will “disrupt” American hegemony and arguably enable a Chinese – actually Eurasian – century.

China and India would have all it takes to be complementary. Both are members of BRICS, the group also comprising Brazil, Russia and South Africa. They are also part of the Shanghai Cooperation Organization (SCO), as well as top nations in the G-20. And yet New Delhi persists on treating Beijing not as a partner but as a threat.

Fear of the rising power

Xi Jinping, for his part, seems to take the Thucydides Trap seriously: when a rising power causes fear in an established power which escalates toward war. Xi has referred to it many times in his speeches.

So, closing the historical circle that started with Alexander, we now have an informed reader from the Middle Kingdom showing respect toward the most eminent historian of Ancient Greece

Xi is, in fact, warning the US, and by proxy, India, not to fall into the mistake that generated the Peloponnesian War, where every player lost.

The fear instilled in Sparta by the ascent of Athens rendered the war inevitable (replace Sparta by Washington/Delhi and Athens by Beijing). Athens was defeated as well as its model of democracy. In fact, the whole of Greece was defeated, its decline acting as a prelude for being conquered by Philip of Macedonia.

Inspired by the maritime expeditions of Admiral Zheng He, Xi’s point is that China is a benevolent power, with the New Silk Road – a massive trade route and a potential multiplier of wealth – developed as the archetypal globalization 2.0 “win-win”.

But, don’t count on India and the Quad to play along.

Source: http://www.atimes.com/article/china-will-not-fall-thucydides-trap-india/?utm_source=The+Daily+Report&utm_campaign=ec0ab36231-EMAIL_CAMPAIGN_2018_02_12&utm_medium=email&utm_term=0_1f8bca137f-ec0ab36231-21552319

Polar Silk Road: Why Russia’s Northern Sea Route is the Best Option for China

Russia’s Northern Sea Route emerges as the best option for Beijing’s “Polar Silk Road” project, RIA Novosti contributor Dmitry Lekukh underscores. Besides developing the secure transit routes along the Russian Arctic and Far East, Moscow and Beijing are likely to bolster the exploration of natural reserves in the region, he noted.

China’s newly announced “Polar Silk Road” evokes the memory of President Vladimir Putin’s remark about the possibility to link the Beijing-led One Belt One Road project with Russia’s Northern Sea Route, which is likely to become one of major trade routes connecting Asia and Europe, RIA Novosti contributor Dmitry Lekukh writes.

“The Chinese government hereby issues this white paper, to expound its basic positions on Arctic affairs, to elaborate on its policy goals, basic principles and major policies and positions regarding its engagement in Arctic affairs, to guide relevant Chinese government departments and institutions in Arctic-related activities and cooperation, to encourage relevant parties to get better involved in Arctic governance, and to work with the international community to safeguard and promote peace and stability in, and the sustainable development of, the Arctic,” China’s Arctic Policy white paper, which was released on January 26, reads.

The journalist argued that Russia’s northern route, which goes along Russia’s Arctic and Far East regions, corresponds best to Beijing’s geopolitical interests and security.

Lekukh drew attention to the fact that the trade route through the Suez Canal and the Mediterranean is overburdened. Moreover, the Middle East still remains a hotbed of instability. Another potential route running through Central America — either the existing Panama or the hypothetical Nicaraguan canal — doesn’t meet Beijing’s need to bolster ties between Europe and Asia, the journalist noted.

According to Lekukh, only two polar routes could be of a truly strategic, long-term interest for China: the Northwest Passage, which runs along the northern coast of North America; and Russia’s Northern Sea Route, which appears to be “far more attractive” for the Chinese, as the first lane goes through the territorial waters of Beijing’s geopolitical competitors, the US and its ally, Canada.

“For [Russia], China’s active participation in the development of the Northern Sea Route is attractive not only because of potential investments [into Russia’s economy on the part of Beijing],” the journalist explained, “For us, the Chinese could be of particular interest as constant ‘purchasers of services’… And it’s absolutely logical because the Japanese, Koreans, Vietnamese and the countries of the European Union will be also interested in [Russia’s] Northern Sea Route ‘services’.”

However, it’s beyond doubt that China will become the “transit wholesaler” on the NSR, Lekukh highlighted.

Meanwhile, China’s sphere of interest in the Arctic also includes the joint exploration of the region’s natural resources with the Russian Federation; while Moscow, for its part, is vitally interested in Beijing’s helping hand developing the Arctic infrastructure, the RIA Novosti contributor assumed.

Apparently, therefore, the two countries are boosting cooperation in the field of new Arctic technologies for ocean research, modeling of ice loads and ship structural analysis, Lekukh wrote, adding that in December 2017 the St. Petersburg State Maritime Technical University and the China Shipbuilding Research Center struck an agreement to jointly develop these technologies.

“It is a very good sign that the authorities of the Russian Federation and the People’s Republic of China have approximately the same vision for the need to cooperate on the development of this [Arctic] region. Neighborliness and common interests are the best way to establish cooperation, and not only in the ‘Arctic areas’,” the journalist underscored, admitting, however, that it will take time and effort to implement the mutually beneficial Sino-Russian project.

Source: https://sputniknews.com/analysis/201801301061169398-china-polar-silk-road/

ALEKSANDR DUGIN – ECONOMY AND MULTIPOLARITY

From the book “Theory of the Multi-polar World”, Chapter “Theoretical basis of the Multi polar World” – Economy

 

According to the rules of modern discourse, no theory or project is exempt from an economic program and to follow its calculations and estimates. It is natural to ask the following question: on what economic model will multipolarism be based?

In the case of the unipolar or global world, we have a clear answer: the current world economy is based on the capitalist system and any future project will be developed on the basis of it. Here, it becomes almost axiomatic that capitalism has now entered its third stage of development (post-industrial economy, information society, knowledge economy, E. Luttwak’s turbo-capitalism , etc.) and is characterized by :

• The qualitative domain of the financial sector on the industrial and agrarian;

• The disproportionate increase in the stock market, hedge funds and other strictly financial instruments;

• Extremely volatile markets;

• The development of transnational networks;

• Absorption of the secondary sector (production) and primary (agricultural) by the tertiary sector (services);

• Displacement of industry from the rich north to the poor south ;

• The global division of labor and the increased influence of transnational corporations;

• The rapid progress of state-of-the-art technologies (guided by precision and information);

• Increase the relevance of virtual space for the development of economic and financial processes (electronic stock markets, etc.).

This is the current panorama of the world economy and, if everything moves from a scenario of inertia, that of the immediate future. However, such an economic model is not compatible with multipolarism , since it is rooted in the implementation of Western economic codes on a planetary scale; In the homogenisation of the economic practices of all societies; In the vanishing of civilisation differences and, consequently, in the abolition of civilisations before a single cosmopolitan system, subjecting them to the universal rules and protocols formulated and applied for the first time by the West for its own benefit.

The modern global economy is a hegemonic phenomenon . This is clearly demonstrated by the neo-Marxists in International Relations, but is also generally recognized by realists and liberals – otherwise, in general, post-positivist theories are posed (critical theory and Postmodernism).

The preservation of this economic system is not compatible with the implementation of the multipolar project. Thus, the TMM [Multipolar World Theory] has to stick to alternative economic theories. As such, a close examination of the Marxist and neo-Marxist critique of the capitalist system and the analysis of its foundational contradictions, as well as the identification and prediction of the nature of its inevitable crises, will be useful.

Marxists usually talk about the collapse of capitalism and see their manifestation in the waves of economic crises that have shocked the world since 2008, since the collapse of the American mortgage system. Although Marxists themselves believe that the final crisis of capitalism should only occur after the internationalization and final advent of the two global classes (the world bourgeoisie and the world proletariat), their interpretation and prediction of the crises are quite realistic. Unlike Marxists, TMM apologists should not postpone multipolarism, awaiting the last trump of globalization. The next crisis is likely to inflict a deadly blow on the world capitalist system without globalization and cosmopolitanization of classes. (This may give rise to World War III). In any case, the current global economic model, in the near future, will most likely be tied to a structural and irreversible crisis. It will probably cease to exist – at least in its current form. Already witnessing the latest limitations of the new economy and the post-industrial model today, it is easy to see that a few more steps and the system is likely to collapse.

What can TMM propose in place of post-industrialism in the economic sphere? The guidelines should be:

• Overthrow the capitalist hegemony of the West;

• To reject the idea of ​​the liberal economy and the market model as something universal and as a self-evident global norm and, therefore,

• Economic pluralism.

 

The multipolar economy must be based on the recognition of the various poles and, likewise, on the economic map of the world.

The search for economic alternatives must be carried out in the philosophical field, rejecting, or at least relativizing, the importance and value of the material and hedonistic factor. Recognizing the material world as the most important or the only, as well as material well-being as the highest spiritual, social and cultural value, will necessarily lead to capitalism and liberalism, that is, acceptance of the legitimacy of economic hegemony of the West. Even if non-Western countries want to turn economic processes in their favor, as well as undermine the Western monopoly in the sphere of the market economy on a global scale, sooner or later the logic of Capital will import into these countries and their civilizations. Same standards today. In this the Marxists are right: Capital has its own logic, which, once accepted, will lead to the bourgeois-type political and social system, in everything identical to that of the West. Thus, opposing the hegemony of the “rich North” expressing loyalty to the capitalist system is an absolute contradiction and a fundamental obstacle to the construction of true multipolarism.

The American sociologist P. Sorokin clearly saw the limitations of Western materialistic civilization, which he called the “sensual” sociocultural system. In his point of view, economic-centric society, based on hedonism, individualism, consumerism and comfort, is destined for imminent extinction. It will be replaced by ideational [society]: the society that gives primacy to radically spiritual and anti-material values. This prognosis may well be a clue to TMM as to its relation to the economy in general. We see in multipolarism the way of the future and not the continuation of the [world] today. We must then follow the intuition of this great sociologist.

Today, most economists in both the West and the rest of the world are convinced that there are no alternatives to the market economy. Such confidence amounts to believing that all societies are moved by their traction through material conformity and consumerism. Consequently, the idea of ​​multipolarism is not even considered. Once, however, we recognize that the economy is the final destination, we automatically recognize that the liberal economy is the final destination, and thus the economic hegemony of the “rich North” becomes natural, justified, and legitimate. The other countries merely have to conform: what, in structuring the world system, will lead to globalization, class stratification and the dilapidation of civilizational frontiers (I. Wallerstein is right here).

In this sense, we come to the most logical conclusion: the economic model of the multipolar world must be based on the rejection of economic-centrism and the reduction of economic factors to a lower level than social, cultural, religious and political factors. Destiny is not matter, but the ideal , therefore, is not the economy that must dictate the political sphere, but the political sphere is the one that must dominate about the economic motivations and structuring. Without the relativization of the economy, without the subordination of the material to the spiritual, without the transformation of the economic sphere into subordinate and secondary to the dimension of civilization in general, multipolarism is impossible. Therefore, the TMM has to reject all kinds of economic-centric concepts – both liberal and Marxist (considering that the Marxist economy is also structured as having a historical destiny). Anti-capitalism, and especially anti-liberalism, should be the main vectors in the development of MMR.

Given the need to adopt positive guidelines, we have to take into account a variety of alternative concepts, hitherto kept on the margins of classical economic schools (for purely hegemonic reasons, of course).

As a first step towards the destruction of the global economic system, we must, to some degree, refer to the theory of the “autarchy of large spaces” (Friedrich List), which includes the creation of economic zones circumscribed in territories belonging to the same civilization. Within the perimeter of these territories must be aligned customs barriers, configured in order to promote within the said civilization the minimum of goods and services required to meet the needs of the population and the development of domestic productive capacity. Foreign trade is maintained with other “large spaces” organized so that no “large space” becomes dependent on foreign supplies, ensuring the restructuring of the entire economic system within each civilization, according to regional characteristics And the needs of the internal market. Since, by definition, civilizations are demographically relevant areas, the prospects for the internal market are more than sufficient for intensive development.

At the same time, we must raise the question of the creation of a system of regional currencies as well as the rejection of the dollar as the world reserve currency. Each civilization must create its own currency, guaranteed by the economic potential of its “big space”. The polycentrism of the issuing entities, in this case, would be a direct expression of economic multipolarism. Here we must also reject any kind of universal pattern of intercivilizational payments: exchange rates must be determined by the qualitative structures of foreign affairs between two or more civilizations. Above all, one should place the real economy , which specifically concerns the quantity of goods and services.

Acceptance of such rules will create the prerequisites for further diversification of the economic models of each civilization. Abandoning the terrain of global liberal capitalism and having organized the “great spaces” in line with its civilizational characteristics (still at the bottom of the market), civilizations will eventually be able to build an economic model in accordance with their cultural and historical traditions.

In Islamic civilization, a moratorium on bank money growth is likely to be imposed. In other civilizations, it will be possible to construct socialist practices of the redistribution of surpluses by any scheme (through tax control – by French economist Jean C. Sismondi’s theory or others – until the introduction of methods of planned economy and dirigisme ).

The economic pluralism of civilizations must be developed step by step without any universalistic prescriptions. Different societies can create different economic models – both market-based and mixed, planned, based on traditional society’s economic practices as well as new post-industrial technologies. The main task is the destruction of liberal dogmatism, the hegemony of capitalist orthodoxy and the weakening of the global function of the “rich North” as the main beneficiary of the organization of the planetary division of labor. The division of the labor force must be employed only within the “great spaces”, otherwise civilizations will be dependent on each other, which would cause the emergence of new hegemonies.

 

It’s not a gas – time for Europe to stand up to US hawks on Russia

Neil Clark is a journalist, writer, broadcaster and blogger. He has written for many newspapers and magazines in the UK and other countries including The Guardian, Morning Star, Daily and Sunday Express, Mail on Sunday, Daily Mail, Daily Telegraph, New Statesman, The Spectator, The Week, and The American Conservative. He is a regular pundit on RT and has also appeared on BBC TV and radio, Sky News, Press TV and the Voice of Russia. He is the co-founder of the Campaign For Public Ownership @PublicOwnership. His award winning blog can be found at http://www.neilclark66.blogspot.com. He tweets on politics and world affairs @NeilClark66

Will the new tough sanctions package on Russia passed almost unanimously by Congress and awaiting the signature of President Trump be the straw that broke the camel’s back for the European Union?

The bill, which also targets Iran and North Korea, not only expands sanctions against Russia and potentially throws a massive spanner in the works of the Nord Stream-2 gas pipeline between Germany and Russia, but also seeks to limit the president’s ability to ease, or lift the sanctions in the future. The message from the neocon dominated Congress is clear: Russia must be kept in the ’sin-bin’(until of course a nice ‘liberal’ who will do everything the hawks in Washington demand comes to power), and economic/business links between Europe and Russia must be broken.

European leaders, many of whom would like to see sanctions on Russia eased have been quick to voice their disapproval. They know the huge cost to their economies the sanctions and Russian countermeasures have had, €4 billion to Italy alone, and further escalation of financial warfare with the Kremlin would be utterly disastrous.

Why should European companies and workers suffer because of the anti-Russian obsession of the American elites? Do we honestly think the US would impose sanctions on a country to its great economic detriment if European countries demanded it? You can literally bet your bottom dollar that they wouldn’t.

“I think the US sanctions are absolutely unacceptable. You can’t mix up political and economic interests, at the expense of European jobs,” was the angry verdict of Austria’s Chancellor Christian Kern.

‘‘Sanctions against Russia should not become a tool of industrial policy in US interests,” said Martin Schaefer, spokesman for the German Foreign Ministry.

“America First cannot mean that Europe’s interests come last,”declared EU President, Jean-Claude Juncker.

Alas, that’s what’s been happening for some time now – and Donald Trump has nothing to do with it.

The sad truth is that since the era of strong, independently-minded leaders such as Charles de Gaulle, Olof Palme, and Bruno Kreisky, Europe HAS subordinated its interests to that of the US and lobbies operating in the US.

Take the 2012 EU sanctions on Iran. At first, Europe resisted pressure from the US (and the pro-Israel lobby), to impose an oil embargo on Tehran over an unproven nuclear weapons program. They eventually succumbed – to great cost to EU member states such as Greece, Spain, and Italy who benefited from the importation of cheaper Iranian oil.

So often in recent years, Europeans have been left picking up the tab for neocon policies.

Consider the refugee crisis. This has been caused in large part due to US-led ‘wars of intervention’ in the Middle East and elsewhere. The vast majority of refugees heading to Europe are coming from countries like Afghanistan, Iraq, Libya, Somalia, and Syria, which have either been attacked or invaded by the US or where Washington has backed proxy forces to topple the governments. Of course, imperialistic European countries, under craven ’Atlanticist’ leadership, have played a key role in these conflicts too, with Britain particularly culpable and France too, in regards to the destruction of Libya.

While some European countries, like Germany, have opened their doors quite widely to refugees fleeing the war zones the US has lagged some way behind.

“The US accepts far fewer Syrian refugees than other Western countries,” notes the Guardian.

Now lawmakers on Capitol Hill want to hit European pockets even harder. Congress is clearly out to sabotage the Nord Stream-2 pipeline, with its proposal the US would be able to sanction any company which was involved in the maintenance or development of Russia’s energy export pipelines.

“This bill, if it comes into force, would allow measures against European natural or juridical persons for situations that have no connection with the United States,” declared a statement from the French Foreign Ministry.

Of course, that’s utterly outrageous. But again it’s not without precedent. In 1996 Congress passed the Iran and Libyan Sanctions Act, giving the US the right to impose economic sanctions on firms doing business with those two countries. The Helms-Burton Act of 1996 also penalized foreign companies that did business in Cuba, by preventing them doing business in the US.

It’s not enough the US sanctions countries it doesn’t like, everyone else has to join in too. Or else.

Apologists for 21st-century imperialism would call this “fighting for democracy and human rights.” Straight-talkers would call it what it is: bullying.

We only have to follow the money trail to see who benefits from all of this. If European-Russian energy projects are scuppered, US gas companies, offering more expensive liquefied natural gas, would be the big winners.

Back in June, the first US natural gas was shipped to Poland. “The United States is in a position to start aggressively marketing gas exports to Europe because of its “”fracking revolution,”…After decades of consuming nearly all of the energy it produced, the United States is now expected to become the world’s third-largest exporter of gas by 2020,”enthuses the CIA-seed funded, RFE/RL.

This desire, to dominate Europe’s energy market, and the childish desire of hawks in Congress to get Donald Trump to ‘prove’ he is not a ‘Russian agent’ by signing a bill that will kill off any hopes of better relations between Washington and Moscow, is the background to the new sanctions legislation.

If Europe doesn’t oppose it forcefully, then it’s effectively signing up to its own assisted suicide. Moscow has already said it doesn’t rule out any measures ‘to bring the US to its senses’- and as a first step has ordered the US to reduce its embassy staff in Moscow to 455 people (from about 1,100) and to stop using storage facilities.

Do EU leaders want to join in with foaming-at-the-mouth US neocons and ’liberal hawks’ in their fanatical crusade against Russia? Again, if war does break out, as some seem to want, it’ll be Europe that takes the biggest hit, and not the US.

It’s not hard to find historical parallels. The subservient EU relationship to Washington in recent decades can be compared to the ’Dual Monarchy’ of Austria-Hungary which officially came into being in 1867. While Vienna and Budapest had ’equal’ status, it was clear who called the shots – literally. When Archduke Franz Ferdinand was assassinated in Sarajevo in June 1914, it was the Hungarians who urged caution. Hungarian Prime Minister, Count Istvan Tisza, was opposed to any military assault on Serbia without prior diplomatic action and opposed giving Belgrade a list of demands that would be impossible to fulfill. In the end, he capitulated – and the Great War started.

“Tisza resisted for a fortnight,” notes historian Peter Hanak. “In spite of this though, Austrian and German politicians, together with the military, finally convinced him that the time was now ripe for the Central Powers to go to war. Any delay would only serve the interests of the Entente-made up of the ‘enemies’: France, Britain, and Russia.”

The result was a catastrophe not just for Hungary, which lost around two-thirds of its territory, but the whole of Europe. And, in October 1918, Tisza, the man who had caved-in to external pressure, against his own country’s best interests, was shot dead after angry soldiers and workers broke into his house.

As in 1914, Europe is now at a critical point in its history. Will its leaders ‘do a Tisza’ and surrender to the war-hawks, or will they resist the pressure to agree- or acquiesce- to an anti-Russian, anti-European policy which they know is not in their countries’ interests? The next few weeks will tell us all.

Twitter @NeilClark66