Natylie Baldwin's Blog, page 128

Wagner CEO Yevgeny Prigozhin Dies in Plane Crash in Russia

Link here.

Prigozhin’s Plane Crash: Conspiracies & Consequences

By Andrew Korybko, Substack, 8/24/23

Wagner chief Yevgeny Prigozhin and elite members of his group’s leadership were killed in a plane crash Wednesday evening outside Moscow in circumstances that have yet to be fully determined. Before debunking the popular conspiracy theory that President Putin was responsible and discussing the possible consequences of this incident, it’s important to clarify the deceased’s relationship to the Russian state. Here are a few relevant analyses that will then be summarized for the reader’s convenience:

* “Prigozhin Blinked After Putin Mercifully Gave Him A Final Chance To Save His Life”

* “Prigozhin Was The West’s ‘Useful Idiot’”

* “How Putin Averted A Civil War In Russia After Wagner’s Coup Attempt”

* “Lukashenko’s Suggestion To Learn From Wagner Doesn’t Mean That The Coup Was ‘Maskirovka’”

* “There’s Nothing Conspiratorial About Putin Meeting With Wagner Leaders After The Failed Coup”

In brief, Wagner’s long-running rivalry with the Defense Ministry finally spiraled out of control in late June, but President Putin peacefully resolved the crisis by de facto pardoning those involved. Some then went to Belarus while others traveled to Africa. This outcome aligned with Russia’s national interests but was spun by some members of the Alt-Media Community (AMC) as proof of a “false flag coup”. What’s indisputable, however, is that Wagner continued functioning as an instrument of the Russian state.

Prigozhin had just published a video from the Sahel in the days before he died where he declared that he was “making Russia even greater on all continents! And Africa even more free.” The regional context concerned the spate of anti-French revolts there in recent years that took the form of patriotic military coups, with the most recent one being in Niger, which is now threatened by a French-backed Nigerian-led ECOWAS invasion. Here are some analyses about Russia’s growing role in that part of the world:

* “Africa’s Role In The New Cold War”

* “Axios Exposed France’s Infowar Against Russia In Africa”

* “Analyzing President Putin’s Vision Of Russian-African Relations”

* “Russia’s Newfound Appeal To African Countries Is Actually Quite Easy To Explain”

* “American Officials Told Politico Their Plan For Waging Hybrid War Against Wagner In Africa”

And here are a couple pieces about the new West African Crisis:

* “The Nigerien Coup Could Be A Game-Changer In The New Cold War”

* “West Africa Is Gearing Up For A Regional War”

* “The Mainstream Media’s New Narrative Is That Niger Is Now A Global Epicenter Of Terrorism”

* “France Reportedly Thinks That The US Backstabbed It During Nuland’s Trip To Niger”

* “Why’s US Media Talking About Nigerien General Moussa Barmou All Of A Sudden?”

These last ten analyses are relevant to Wednesday’s incident since Wagner’s growing role in helping Sahelian states safeguard their sovereignty was speculated by some to be the reason why the West allegedly assassinated that group’s leader. While no evidence has yet to emerge in support of that theory, the previously shared analysis from early July regarding President Putin’s meeting with Wagner leaders explains why their African operations would still continue even without Prigozhin at the helm.

Having detailed the most relevant developments leading up to Prigozhin’s plane crash, it’s now time to draw attention to the AMC’s and their putative Mainstream Media (MSM) rivals’ conspiracy theory implying that President Putin had a hand in his death. The first has been pushing an old video on social media where the Russian leader says that he can’t forgive betrayal while the second has reminded everyone of US officials’ prior warnings that Prigozhin’s life was in danger.

Each camp strongly suggests that the Russian leader was responsible for Wednesday’s incident, with the AMC hinting that this was due to personal reasons while the MSM wants their targeted audience to believe that it was yet another “political killing” in a long line of many. Each requires accepting that President Putin supposedly lied when he said on national television that “I will keep my promise” to let those involved in late June’s events decide their own futures without fear of state retribution.

Not only that, but this conspiracy theory’s adherents also think that he then ordered Prigozhin’s death in one of the most dramatic ways possible, which irresponsibly risked harming innocent civilians on the ground. There are compelling reasons to doubt this version of events. For starters, the outcome of what happened and the optics connected with it are both disadvantageous to Russia’s national interests, and it’s absurd to imagine that President Putin plotted to undermine his own country like this.

Eliminating Prigozhin and elite members of this group’s leadership would be a blatant violation of the promise that he gave them on national television, and this could incite Wagner’s rank-and-file along with their supporters in the armed forces and civil society to consider anti-state actions in response. Those who are influenced by this conspiracy theory might convince themselves that they could be next, hence why they have to “act first out of self-defense”, thus setting into motion a self-fulfilling prophecy.  

It’s therefore in the West’s interests to weaponize this false perception for the purpose of manipulating highly trained forces and their sympathizers into functioning as “useful idiots” for destabilizing Russia through either another coup/mutiny attempt, terrorism, and/or a Color Revolution. Even if these scenarios don’t come to pass, the optics are still very damaging to Russia’s reputation at the leadership and state levels.

The MSM can maximally amplify speculation that President Putin signed Prigozhin’s death warrant to sow suspicions about his sincerity in signaling earlier this summer that he’s still interested in politically resolving the NATO-Russian proxy war in Ukraine. Likewise, this can also be done to mislead the international community about Russia’s political stability by making them falsely think that there’s a bloody power struggle taking place behind the scenes among competing military-intelligence factions.

On that note, it’s time to segue into the consequences of Prigozhin’s plane crash, beginning with what’s unlikely to happen before sharing a few words about what could soon follow. As was earlier written, Wagner’s African operations probably won’t be affected since it was always unrealistic to imagine that he and a few elite members were micromanaging dozens of tactical teams on the ground across various countries in real time. Morale might take a temporary hit, but the rank-and-file will eventually recover.

The West’s Hybrid War plot that was described in the preceding paragraphs isn’t expected to transpire, but even if some movement is made in that direction, then the threat to Russia’s security and stability would be manageable so nobody should prepare for “Balkanization”, civil war, or regime change. That said, the ongoing investigation will surely explore whether Wednesday’s incident was due to foul play, including scenarios of Kiev’s involvement but also possibly a rogue military-intelligence faction.

It’s premature to jump to conclusions in order to avoid functioning as the West’s “useful idiots” by either giving Kiev credit for kills that it wasn’t responsible for or sowing seeds of suspicion about Russian stability respectively, but both also can’t confidently be ruled out at this time either. After all, if there was a bomb on board like some speculate, then that would represent a major security lapse. Even if a rogue military-intelligence faction was involved, however, there’s no chance that they’ll destabilize Russia.

All told, while it remains unclear exactly what caused Prigozhin’s plane crash, President Putin certainly didn’t have a hand in it, but some in the AMC and especially the MSM will still imply otherwise. In the event that foul play was responsible, then Russia’s security services will definitely get to the bottom of it, though the state might decide that its interests are best served by not acknowledging this if it happened. In any case, this incident won’t destabilize Russia nor hinder its African activities or special operation.

Petr Levrenin: Back in 1991, the US tried to prevent the USSR from collapsing – why did Washington want its Cold War rival to survive?

By Petr Levrenin, RT, 8/14/23

If you Google “the end of the Cold War,” the search engine will instantly tell you that this event occurred on December 26, 1991, the day when the Soviet Union ceased to exist. However, this isn’t really true. Two years prior to that, the leaders of the US and the USSR officially declared the end of the confrontation that had lasted for over 40 years.

The tension that grew between the two superpowers in the 1980s was eventually eased through joint diplomatic efforts. The trust established between the Kremlin and the White House in those years not only inspired the United States to consider integrating the USSR into the new system of international relations in the early ‘90s, but also moved it to prevent the collapse of the ‘Red Empire’. 

But why did Washington suddenly become a friend of its sworn enemy? And at what point did this friendliness give way to uncompromising statements about winning the Cold War and the United States’ triumphant ‘dance’ on the ashes of its deceased enemy?

A thorny path

In the last decade of the Cold War, the situation on the global chessboard did not play out in favor of the USSR. The Soviet economy was considerably weakened by a protracted arms race, which the US only accelerated. At the end of 1983, Washington placed the first battery of Pershing II missiles in Europe. These could reach targets in the western part of the USSR in only six to eight minutes. 

At the same time, the US started talking about a new type of nuclear strike against the USSR – a ‘decapitation’ (or ‘blinding’) attack that would remove the country’s leadership before the decision to conduct a retaliatory strike could be made. In 1984, then-president Ronald Reagan launched the ‘Star Wars program’, which threatened to expand the Soviet-American conflict into outer space.

But even before these events, the Soviet leadership feverishly sought a compromise with the United States. Yury Andropov, the then general secretary, tried to reach an agreement with Washington, but his initiative was scuppered by the tragic downing of a Korean Air Lines Boeing 747, after which Reagan made his famous speech, calling the USSR an “evil empire.”

Hopes of ending the conflict instantly disappeared. Tension only increased and reached a record, 30-year high. At that point, the USSR decided continuing negotiations would be a sign of weakness on its part. The dialogue came to naught, and left both parties fearing a nuclear strike.

Everything changed when Mikhail Gorbachev came to power. Contrary to the military’s advice and without any pressure from the United States, he decided to take the first step and make concessions. First, in 1985, the leadership of the Soviet Union unilaterally imposed a moratorium on the deployment of ‘Oka’ operational-tactical missile complexes in Czechoslovakia and the German Democratic Republic (GDR). This was followed in January 1986 with the announcement by the USSR of a step-by-step worldwide nuclear disarmament campaign.

Gorbachev said at the time.

This put the ball in Washington’s court. Whether the gesture by the Soviet leader would initiate the end of the lengthy conflict depended only on the US. Ronald Reagan took the ball and ran with it. 

Long-awaited detente

A special relationship soon developed between the two leaders, and the USSR and US quickly moved from strategic arms restrictions to a more radical disarmament policy. The first joint document was the Intermediate-Range Nuclear Forces Treaty (INF), signed in December 1987, which banned short and medium-range and intermediate-range missiles. The parties pledged to destroy all complexes of ballistic and ground-launched cruise missiles of intermediate (1000-5500 kilometers) and short-medium (500-1000 kilometers) range, and not to produce, test, or deploy such missiles in the future.

At the Malta Summit in late November/early December 1989, Gorbachev and Reagan’s successor George H.W. Bush announced the end of the Cold War. The representative of the USSR’s Ministry of Foreign Affairs, Gennady Gerasimov, stated that the Yalta Agreements of 1945 (i.e., the post-war division of Europe into areas of influence) had been replaced by what he called the ‘Sinatra Doctrine’, giving the former Eastern European satellite nations the freedom to do things “their way.” The Yalta Agreements were officially buried. 

In 1990, the USSR agreed on the reunification of Germany within the framework of NATO – which essentially meant that the socialist East was swallowed up by the capitalist West. The USSR promised to withdraw its troops from the East German territories within four years, and from other countries of the Warsaw Pact even sooner. 

In the same year, Gorbachev also signed the Treaty on Conventional Armed Forces in Europe (CFE), which drastically reduced the number of Soviet troops in other parts of Europe and eliminated the possibility of a large-scale surprise attack. Within the framework of the CFE Treaty, the Soviet side had to drastically reduce its military presence and obey strict restrictions on the movement of troops. The USSR also had to carry out a large-scale redeployment of its military contingents. The new non-hostile relations between the countries of the Euro-Atlantic region were enshrined in the declaration signed in November 1990 – ‘The Charter of Paris for a New Europe’.

Gorbachev’s policy was inspired not only by altruism and a desire for peace. The main reason he revised the USSR’s foreign policy course was because he wanted to slow down the arms race, which had placed an unbearable burden on the Soviet economy.

The latter, however, does not diminish the Soviet leader’s courage. Behaving in a restrained manner and not allowing the United States – which was economically and technically superior to the USSR – to drag the country into another round of an intensifying arms race was a policy that past generations of Soviet leaders could not even imagine.

Hungry hawks

Gorbachev’s calculations seemed to be right. In May 1991, George H.W. Bush declared that the United States wanted to move away from the policy of containment and “integrate the Soviet Union into the commonwealth of the peoples.” At the time, he had a series of meetings with Gorbachev that largely determined the further actions of both sides.

The process of stabilizing international relations continued, and in the summer of the same year, the START-I treaty was signed, which significantly limited the nuclear arsenals of both powers.

Not everyone, however, was happy with how things were going. Despite the fact that many positive changes occurred and the threat of a global nuclear war was resolved, Bush was criticized in the United States for treating the USSR too favorably. For example, before the August Coup [an attempt by Soviet reactionaries to carry out a coup d’état and remove Gorbachev from power – RT], the White House had been reluctant to contact president of the Russian Soviet Federative Socialist Republic (RSFSR) Boris Yeltsin and his entourage, and, in July 1991, Mikhail Gorbachev was even invited to London for the G7 summit. 

All this greatly displeased the ‘hawks’ in the US (for example, then-secretary of defense Dick Cheney and former president Richard Nixon), who believed that with the technology and loans provided to it, the USSR could pose an even greater threat than before. These circles of the American establishment wanted to take advantage of the internal problems that came up during democratic reforms in the Soviet Union and thereby secure its collapse.

However, Bush preferred negotiations with the socialist regime over its imminent collapse. The White House feared that, if civil war were to break out in the USSR, its nuclear arsenal could be dispersed all over the world.

The US president’s position was clearly stated in his August 1, 1991 speech in Ukraine, which journalists dubbed the ‘Chicken Kiev speech’.

Supporters of an independent state eagerly anticipated the US leader’s arrival in the capital and hoped that he would support democratic trends in the republic. But the White House decided otherwise. Bush declared that the separation of the Ukrainian SSR or other Union republics from the USSR was inadmissible. “Americans will not support those who seek independence in order to replace a far-off tyranny with a local despotism. They will not aid those who promote a suicidal nationalism based upon ethnic hatred,” Bush said during a solemn meeting of the Supreme Soviet of the Ukrainian SSR.

Nevertheless, the USSR collapsed a few months after Bush’s Kiev visit. Some 23 days after his speech, Kiev adopted the ‘The Act of Declaration of Independence of Ukraine’ and, four months later, it was confirmed by referendum. Soon enough, the other republics also left the Soviet Union.

A world without peacemakers

The events of 1991 took not only the USSR, but also the US by surprise. For over 40 years, American elites wanted to win the Cold War, but it turned out that they were completely unprepared for victory. The Bush administration was even forced to support Gorbachev in his struggle against Yeltsin and other Republican leaders who wanted to dissolve the Soviet Union. 

Except for some fierce ‘hawks’, no one in the USA really wanted the USSR to collapse. The US goal was to dismantle the socialist system outside of the Soviet Union. Americans were interested in dissolving the Warsaw Pact and the Council for Mutual Economic Assistance (COMECON). They wanted Soviet troops to withdraw from the socialist countries in Eastern Europe and for the USSR to stop providing military and economic assistance to regimes in Africa, Asia, and Latin America.

In fact, all the key issues of the Soviet-US confrontation were resolved in favor of the United States even before 1991, and prior to the collapse of the USSR. In the last years of the ‘80s, arms limitation treaties were signed, the Warsaw Pact and COMECON were dissolved, and the USSR began gradually withdrawing its troops from Europe. In 1990, the article of the USSR Constitution on the leadership role of the CPSU was abolished – the ‘Red Empire’ was no longer the ‘moral authority’ for socialist regimes worldwide. 

The collapse of the USSR, however, brought a risk of political instability to Europe (considering not only the nuclear, but also the conventional weapons remaining in Soviet arsenals) and would deprive the United States of a 300 million-strong sales market united by common economic chains and a joint customs space. If the Soviet Union had not collapsed, American corporations would have had access to its huge reserves of oil, gas, and other minerals. Moreover, preserving the USSR in a weakened state was also beneficial for the US foreign policy model. The Soviet Union was no longer strong enough to challenge the United States, but it could have become a convenient partner for solving global security problems.

In the first years after the Cold War, the United States was in no hurry to attribute victory to itself and adopted the stance of an equal partner towards the Russian state.

According to the director General and member of the Presidium of the Russian Council for International Affairs, Andrey Kortunov, the victory of the US wasn’t as important as the defeat of the USSR for the Bush administration. However, under the administration of his successor, Bill Clinton, Americans adopted the concept of a ‘unipolar world’. Declaring that they had defeated the Soviet Union, they attempted to instill ‘democratic’ doctrines in the Middle East and Central Asia.

In 1992, the Clinton administration embarked on a much more aggressive course in the post-Soviet space, consolidating its position as the winner of the Cold War and establishing US dominance. Under Clinton, the policy of containing Russia became more systematic and intense. The United States tried not only to make the most of the collapse of the USSR, but also attempted to prevent the emergence of a Russian-centric economic and political space in of the former Soviet empire.

By Petr Lavrenin, Odessa-born political journalist and expert on Ukraine and the former Soviet Union

BRICS Summit 2023

Below are a few different articles and sources regarding the BRICS Summit taking place from 8/22 to 8/24. – Natylie

BRICS summit aims to challenge Western hegemony

The BRICS summit will attempt to create a new play in the world order amongst the members of the Global South that can challenge the Western hegemony

By Ben Aris, Intellinews, 8/21/23

On the eve of the BRICS summit, which got underway in South Africa on Tuesday (August 22), Russian Foreign Minister Sergey Lavrov wrote in an article for the local magazine Ubuntu that the meeting would begin the process of expansion of the bloc in order to create “a just world”.

Many outsiders have scoffed at the idea of the BRICS bloc (Brazil, Russia, India, China and South Africa) becoming a potent political force in the world as its member countries have little in common, other than they are big and underdeveloped.

Jim O’Neill, the legendary Goldman Sachs analyst who coined the term in 2001, called the idea of a political bloc “ridiculous” in a recent interview with the Financial Times. BRIC as a political entity was founded in 2006 in an inaugural summit in Russia’s Yekaterinburg. O’Neill pointed out that his original criteria for being a “BRIC” included being a big country, have a big GDP and have a lot of people.

By this measure, he says that South Africa, which joined in 2010, should never have qualified, as it is dwarfed by its peers, but an expanded BRICS would make more sense if the Kingdom of Saudi Arabia (KSA) is included.

However, the one thing that does unite all the countries is they are developing fast and feel that the emerging world is under-represented in the global architecture, which remains dominated by the developed world, led by the United States.

In other words, they agree with Russian President Vladimir Putin’s complaints about the “unipolar” world run by Washington and want a “multipolar” world where they have their proper say in how the world is run, given the EMs now collectively are richer than the West (in PPP terms) and have more people.

The salient point here is that increasingly the EMs are not “emerging” anymore. Countries such as Russia and China have already emerged, albeit with a lot of work left to do before they can be called “mature”.

In this context, this BRICS summit is extremely important as its members are just starting to work on how they will cooperate to counter the West. And “counter” is what they are going to do as the West has made it clear it is not willing to “cooperate”; the West feels it’s entitled to rule the world rather than embrace the new world on equal terms.

Several things point to these rising tensions. US Secretary of State Antony Blinken’s first policy speech naming Russia a “threat” and China a “rival”. French President Emmanuel Macron’s attempt to mediate in Ukraine, by suggesting not that the European Union embrace East and West but emerge as a “third superpower” – in other words, the EU joins the US as a co-hegemon.

What Putin has been arguing for (rhetorically at least) is a truly global community of cooperation and mutually beneficial trade and investment that is governed by something like the UN. The political models are also very different, which is another source of tension. Russia and China have rejected the so-called Washington consensus, where individual freedoms lie as a foundation, and are pushing a Moscow consensus alternative which emphasises the state over the individual, among other things.

However, Putin is the only one that has crystallised this rivalry to the point where he was prepared to go to war with the West and break off relations completely. Putin assumes that he can build a future by doing business with the non-aligned countries of the world. And while there is plenty of business to be done in the Global South, he has also reduced Russia’s growth potential as a result of sanctions and many economists believe the Russian economy will stagnate in the long-term as a result.

Building blocs

The desire of the emerging Global South to have a seat at the world’s top table and Russia’s clash with the West have catalysed some frenetic global diplomacy as Western and Russian diplomats are travelling the world trying to shore up support.

China is playing a major role in promoting the BRICS, as bne IntelliNews reported. Although it is Russia that is in direct conflict with the West, China openly challenged the US role as leader of the world with a three-day trip to Moscow in March, when Beijing openly backed Russia in its conflict with the West. China also released a 12-point peace plan for Ukraine on the anniversary of the start of the war, seeking to position itself as an impartial mediator in the dispute.

Together with Russia, China is actively promoting the idea of a BRICS bloc that can be extended to a BRICS+ group that can stand up to the existing US-led Western hegemony.

Africa has become an important part of this way and is relevant in a way that it was never before, as bne IntelliNews described in a deep dive titled “Russia in Africa”.

The confrontational nature of what the BRICS summit is intended to achieve has also been highlighted by the fact that both France and the US, amongst other Western powers, applied for accreditation to attend the BRICS summit and were refused.

Against that South Africa bent over backwards to allow Putin to attend in person, but an International Criminal Court (ICC) warrant for his arrest for kidnapping children from Ukraine meant that Pretoria would have been forced to arrest him if he did attend. In the end, he will join by video link.

None of the other countries in the Global South are prepared to follow Russia into open conflict with the West and would prefer to maintain their good relations with the West. South African President Cyril Ramaphosa was explicit the day before the summit started, saying Pretoria “will not choose sides in a fractured world.”

The Global South agrees with Putin that the West needs to be challenged but at the same time they concede they are still behind the West on many counts, so they want to continue to cooperate. The upshot is at the BRICS summit the Global South members need to work out how they can better work together to improve their collective bargaining position in future negotiations, as well as to make the basic decision on what sort of organisation BRICS wants to be: a trade club or a political challenger to the existing world order.

It’s not for nothing that the main debate at the meeting will be on who else to let in and what are the criteria for admitting new members.

On August 21, Nelson Kgwete, a spokesman for the agency, told TASS that leaders from over 40 countries would take part in the BRICS summit from August 22-24 and a decision may be made to expand this club from its original five members. Some 23 countries have submitted official applications for joining BRICS, according to the South African foreign ministry.

Who gets in and what the criteria will be to judge applicants remains the main item on the summit’s agenda. There is currently no consensus on how to admit new members, nor even what sort of organisation they are trying to build.

The frontrunners for membership are Argentina, Saudi Arabia and Indonesia. Iran’s application is also making headway, Iran’s deputy foreign minister for economic diplomacy, Mehdi Safari, said on August 1.

Iran is suffering from the same pariah status as Russia and even if it doesn’t become a full member of the BRICS, Tehran will continue to actively expand its relations with the group which have already begun, Iranian Foreign Minister Hossein Amir Abdollahian said on August 8.

Algeria is currently doubling its efforts to join the BRICS group of emerging markets as the North African country’s President Abdelmadjid Tebboune pushed for the move during a four-day visit to China in July. Morocco formally submitted an application to join in August, and Brazilian President Luiz Inácio Lula da Silva has been championing membership for Venezuela, another victim of US sanctions.

Yaroslav Lisovolik, a well-known Russian analyst and founder of BRICS + Analytics, says that the inclusion of Indonesia and the KSA are the most compelling, as of all the candidate regions of the Global South, only the Middle East and Southeast Asia are not represented in the BRICS core group.

Ramaphosa said on the eve of the summit that his country supports the expansion of the alliance. “An expanded BRICS will represent a diverse group of countries with different political systems that share a common desire for a more balanced world order,” he said. According to Ramaphosa, “the value of BRICS goes beyond the interests of its current members.”

But Ramaphosa added a common caveat, saying that his country “will not be embroiled in rivalry between world powers”, and adding that South Africa remains committed to a policy of non-alignment.

While all the BRICS members are open to expanding the group, very basic questions on how to go about this remain unanswered. India and China, in particular, have very different visions of what the bloc should look like.

The key question is: should BRICS be a club that protects only the economic interests of developing countries, or should it become a real political force that openly challenges the West?

China, which has openly supported BRICS expansion, along with Russia, wants the bloc to be political and to challenge the West directly. India, like South Africa, prefers the first option of mutual respect and improved commerce, and will work to avoid conflict with the West. Brazil has real qualms about an expansion, arguing that adding too many members would dilute the power and authority of the group.

Amongst the ideas being discussed include strengthening economic cooperation through the New Development Bank (NDB), TASS sources reported: countries admitted to membership of the development bank will be able to participate in various formats of the BRICS group without formally joining the group. Another concept involves the direct acceptance of new countries as permanent members of the association based on sponsorship by existing members.

And even if the political model is not adopted, the economic argument is compelling in its own right. In 2023 the BRICS countries will provide a greater contribution to global economic growth than the G7 countries – 32.1% versus 29.9%, reports Bloomberg. According to forecasts, by 2040 the BRICS countries will account for half of world industrial production – twice as much as the G7 countries. The global centre of gravity is already moving inexorably eastwards.

BRICS currency

The process of building an alternative to the Western hegemony amongst the members of the Global South is right at the start and it will face many practical problems. None highlights the challenges better than the problem of setting up an alternative currency to the dollar for international trade.

Russia and China want to de-dollarise their economies and have already gone a long way towards switching their mutual trade to national currencies. But the BRICS members have called for a new “BRICS currency” to be introduced similar to the euro.

The idea is popular with many countries, particularly those that have found themselves under US sanctions. Russia and China are already settling increasing amounts of their mutual trade in their own currencies. And the Iranian government has backed the creation of a gold-backed currency to compete with the US dollar, IRNA reported on July 9.

One of the unintended consequences of the SWIFT sanctions that were imposed only days after Russia’s invasion of Ukraine in February is the rest of the world has been unsettled by the realisation that the US can arbitrarily freeze their international reserves as so many countries have invested these reserves in US treasury bills that were considered to be the safest investment in the world. That is no longer true, and while the dollar remains the dominate currency for settling international trade deals, its share in sovereign international reserves has already started to fall.

However, the issue of introducing a single currency is not on the agenda of the upcoming summit. As bne IntelliNews reported, introducing a BRICS currency still faces many major hurdles and won’t appear anytime soon. What will happen at the summit is that many BRICS+ countries will agree in principle to the more active use of national currencies in trade settlements among themselves.

*****

Putin’s BRICS Speech

Link here. Written transcript here.

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Putin’s Speech At The BRICS Business Forum Was Fair & Balanced

By Andrew Korybko, Substack, 8/23/23

President Putin delivered a fair and balanced speech at the BRICS Business Forum on Tuesday that can be read in full at the official Kremlin website here. It defied the Mainstream Media’s expectations by only mildly criticizing the West but not haranguing it, while some multipolar supporters might have been dissatisfied with his moderate vision of the alternative economic-financial system that BRICS is building, which avoided the hype that many have pushed. The present piece will elaborate on this and more.

The Russian leader’s criticisms of the West concerned its irresponsible fiscal policies during the pandemic, illegal sanctions, and other unilateral violations of “norms and rules that not so long ago seemed immutable.” As for his observations about the emerging order, he focused mostly on BRICS’ growing use of national currencies in intra-organizational trade and investments, its role in facilitating the Global South’s development, and Russia’s two new logistics corridors across Eurasia.

Before going any further, some clarifications are in order regarding the impressive statistics about BRICS that President Putin shared in his speech, which are republished below for the reader’s convenience:

“The figures speak for themselves. Over the last decade, mutual investments among the BRICS countries have increased six-fold. Their overall investments in global economy have doubled, and their total exports have reached 20 percent of the world exports.

As for Russia, the trade volume with our BRICS partners has increased by 40.5 percent, reaching a record of over 230 billion US dollars. In the first half of this year, it grew by 35.6 percent compared with the same period in 2022 and constituted 134.7 billion US dollars.

I would also like to point out that the share of the BRICS countries, with their population totaling more than three billion people, now accounts for nearly 26 percent of the global GDP; our five countries are ahead of the G7 in terms of purchasing power parity (the forecast for 2023 is 31.5 percent against 30 percent).

The objective and irreversible process of the de-dollarization of our economic ties is gaining pace. We are working to fine-tune effective mechanisms for mutual settlements and monetary and financial control. As a result, the share of US dollar in export and import operations within BRICS is declining: last year it stood at only 28.7 percent.”

All of this is true, but left unsaid is that it’s largely attributable to China’s outsized economic-financial role in each of the other four BRICS economies.

The six-fold increase in mutual investments among the BRICS countries and their doubling of global investments isn’t due to Brazil, Russia, India, or South Africa. Rather, it’s the direct result of China’s Belt & Road Initiative (BRI) investments in BRICS (except India) and the rest of the world in the decade since this series of global megaprojects was unveiled in 2013. The same can be said about de-dollarization, which is mostly driven by the growing use of the yuan in bilateral trade with China.  

To be sure, the ruble is also being used more frequently nowadays in the 18 months since the start of Russia’s special operation and the West’s imposition of sanctions, as is the rupee when it comes to India’s unprecedented imports of its decades-long strategic partner’s newly discounted energy. Nevertheless, this recent trend alone doesn’t suffice for explaining the impressive de-dollarization statistic that President Putin referenced in his speech.

The reader should also bear in mind that BRICS’ 20% share of global exports, more than three billion people, 26% of global GDP, and high purchasing power parity is largely due to China and to a lesser extent India, which is now the world’s fifth-largest economy and the fast-growing major one worldwide. If China was removed from these calculations, not to mention India as well, then BRICS’ statistics would be a lot less impressive.

These clarifications aren’t to suggest that BRICS is dominated by China nor that it’s doomed to fail in its noble goal of gradually reforming the global financial system, but simply to point out the leading role that the People’s Republic has thus far played in leading the aforesaid process. The other members and the rest of the Global South are eager to do more since they have a shared interest in equally shaping the emerging Multipolar World Order at this unique historical moment.

Unipolarity has indisputably ended after the West failed to coerce the Global South into complying with its demands to sanction Russia and arm Ukraine, but multipolarity has yet to fully form. It’s in the midst of this global systemic transition that BRICS is holding its 15th summit, hence why many have such high expectations about this event, some of which are unrealistic and were clarified by Russian officials here and here. President Putin’s speech shed more light on how Russia envisages everything unfolding.

From the Kremlin’s perspective, it’s imperative to expand logistics cooperation with China and India via the Northern Sea Route and the North-South Transport Corridor (NSTC) respectively since these three Great Powers’ RIC format serves as the de facto core of BRICS. The latter initiative is especially significant since President Putin also foresees it “providing opportunities to increase cargo transportation between Eurasian and African countries.”

On that topic, the Russian leader also reaffirmed that his country will remain a reliable provider of agricultural products, fertilizer, and energy to Africa, with this of course being facilitated by the NSTC and future logistics projects on that continent itself. Altogether, President Putin’s approach to BRICS can be summarized as prioritizing logistics cooperation with the group’s RIC core, diversifying Russia’s commodities-driven role in Africa’s development, and supporting more de-dollarized South-South trade.

The last part is where BRICS as a whole can help the most if its other members begin scaling their multidimensional engagement with the Global South (primarily Africa) in parallel with giving these same countries a greater say in the emerging financial system by formalizing the group’s relations with them. India and Russia are leading efforts to gently diversify from BRICS’ present Sino-centricity in all respects while Russian geo-economic guru Yaroslav Lissovolik’s BRICS+ concept satisfies the second objective.

All told, President Putin’s fair and balanced speech at the BRICS Business Forum went a long way towards correcting the slew of false perceptions that many have of this group and Russia’s vision of its future. He essentially conceptualizes it as RIC+ in the sense that Russia, India, and China are coordinating their efforts to accelerate financial multipolarity processes with a view towards creating an inclusive South-South integration platform. It’ll take time to complete, but everything’s moving in the right direction.

John Michael Greer: Stormtrooper Syndrome has seduced the West

By John Michael Greer, UnHerd, 8/14/23

Do you remember the Imperial Stormtroopers from the Star Wars movies, lurching around in their white plastic armour? When Obi-Wan Kenobi in the original movie said that no one else was as precise as Imperial Stormtroopers, he was clearly making a joke that Luke Skywalker was too wet behind the ears to catch. The one thing those movies make plain about Imperial Stormtroopers is that they couldn’t hit the broad side of a Death Star even if they were standing the length of one womp-rat away from it. Their job is to fill the air with blaster fire and miss. They do that job very effectively.

Anyone who knows anything about actual firefights involving professional soldiers will know that this isn’t what happens. (First-timers in combat, sure, but Stormtroopers are supposed to be competent.) In other words, Stormtroopers aren’t there to do anything useful. They’re there to provide the illusion of deadly peril so that the fake heroics of the protagonists look a little less unconvincing to movie audiences.

There’s a reason for this kind of absurdity, of course. Popular entertainment in Western industrial nations today is as thickly larded with moral posturing of this sort as anything Victorian parents inflicted on their children. In most popular genres, the basic premise is that the Good People always win, and the Bad People always lose.

That colossus of the modern imagination, J.R.R. Tolkien, has some responsibility for all this. In his programmatic essay “On Fairy-Stories”, he discussed one of the central plot schemes of fairy tales, which he called “eucatastrophe”: in plainer English, a sudden improbable turn for the better that saves the day when all is lost. As you’d expect from a devout conservative Christian like Tolkien, this theme is ultimately religious in nature — he described the resurrection of Jesus as the ultimate eucatastrophe — and it provided the frame for his two gargantuan fairy tales, The Hobbit and The Lord of the Rings.

To give him due credit, Tolkien went out of his way to make his eucatastrophes as plausible as he could. Most of the ninth-rate Tolkien imitators whose fetid output bathes the brains of today’s mass-media consumers stopped worrying about such petty concerns a long time ago. It doesn’t matter how much stronger and smarter and better armed the Bad People are; they have to lose because they’re the Bad People. Nor does it matter how idiotic the plan the Good People decide on, the Bad People are required to make the mistakes that will enable it to succeed. When the chips are down, you know that Harry Potter will always manage to drop the One Ring from his X-wing into the cooling port of Mount Doom.

This sort of silliness makes for dreary storytelling, but I’m convinced that it can also cause serious cognitive disabilities. Children who are raised on a steady diet of this kind of schlock are apt to end up thinking that this is how the world works. If they get out into the real world and bloody their noses a few times, they generally learn better, but if they live in a society that doesn’t let them fail, they may well reach adulthood without ever encountering that salutary lesson. Instead, they are seduced by Stormtrooper Syndrome: the conviction that no matter what, you’ll inevitably win because you think you’re morally superior to your enemies.

There’s no shortage of examples of Stormtrooper Syndrome these days, but I’m going to focus on the most important of the lot, the one that bids fair to transform the world’s political and economic landscape in the years immediately ahead. Yes, we need to talk about Ukraine. Now, this emphatically does not mean that we need to talk about who gets to claim the roles of Good People and Bad People. The unwelcome truth is that the outcome of this war does not depend on which side is morally better than the other. In the real world, in terms of military victory and defeat, who’s right and who’s wrong don’t matter once the cannon start to roar.

The roots of the Russo-Ukrainian war go back a very long time, but for present purposes we can begin in 2014 — when a coup overthrew Ukraine’s pro-Russian government and replaced it with a pro-Nato one. With the new regime in place, and following the Russian military incursion into eastern Ukraine, the US and its allies began funding a build-up that gave Ukraine the second-largest army in Europe. That army was armed and trained with an eye toward a massive shift in military affairs that was then underway.

In 2006, the Israelis launched one of their periodic incursions into Lebanon. To the surprise of many, the Hezbollah militia dealt the Israelis a bloody nose and forced them to withdraw with their main goals unachieved. The Israelis, like every other modern army at that time, used the tactics that had been pioneered by the Wehrmacht in 1939 and 1940, and perfected by Soviet and US militaries in the years immediately following: massive assaults by tanks and mobile infantry supported by air superiority, driving deep into enemy territory to get behind the defenders’ lines.

What Hezbollah demonstrated is that those tactics had passed their sell-by date. Having built a network of underground shelters and urban strongholds, they lay low while the Israeli vanguard moved past, then popped up and started clobbering Israeli units with sudden ambushes using state-of-the-art weapons. A decade later, the Ukrainian military imitated these tactics, building a massive network of defensive works just west of the Russian-held areas of the Donbas.

These defences were useful when the full-scale invasion came, denying Russia a swift victory and tying them into a gruelling stalemate. As strategies go, this was fairly good, but it had two serious weak points. The first was that it needed to be twinned with an economic sanctions package from the West that would succeed in breaking Russia’s domestic economy and forcing them to withdraw. The second was that it assumed the Russians would stick to pre-2006 military doctrine no matter how badly things went. That’s where Stormtrooper Syndrome first showed up. The decision-makers in Washington, Brussels, and Kyiv had convinced themselves that those weak points didn’t matter because the Ukrainians were the Good People and the Russians were the Bad People.

Then, last February, war broke out. At first, events seemed to play into the West’s hands. The Russians launched a classic Blitzkrieg operation, driving deep into Ukrainian territory, only to find that the Ukrainians fell back on prepared defences and urban strongholds. Some Russian units suffered embarrassing defeats; others found themselves overextended in hostile territory and retreated. Meanwhile, the US and the EU slapped sanctions on the Russian economy.

But that’s when the plan ran straight off the rails. The first difficulty was that most of the world’s nations didn’t cooperate with the sanctions. Some, such as Iran and China, that are hostile to the US saw the situation as an opportunity to extend a middle finger to their enemies. Others, such as India and Brazil that are non-aligned powers, saw the situation as a chance to demonstrate their independence. Still other nations wanted Russian oil and grain and weren’t willing to forgo them, so they acted in accordance with their interests rather than ours.

Yet there was another difficulty with the sanctions’ efficacy. Do you remember all those big corporations that loudly announced that they were leaving the Russian market? They couldn’t take their outlets and infrastructure with them, and so the Russians simply rebranded those and kept going. A soft-drink bottling company partially owned by Coca-Cola, for example, now produces something called Dobry-Cola in Russia. It tastes very similar to Coca-Cola, and it’s in a very slightly different red can. The crucial point is that the profits from sales of Dobry-Cola and similar products and services aren’t flowing out to stockholders in the US, they’re staying in Russia, where they’ve given a timely boost to the Russian economy. This presumably wasn’t what US and Nato elites had in mind.

But the worst news for Nato came from the battlefields. What happened there has an odd personal dimension for me. Some years ago I wrote an essay, “Asymmetric tactical shock: a first reconnaissance”, about what happens when an army becomes too dependent on complex technologies and its enemies figure out how to monkey-wrench those. The example I used came from the end of the Bronze Age, but the lesson applies more broadly: the monkey-wrenched army faces total disaster unless it does something most people these days can’t even conceive of doing. My essay circulated quietly among people interested in such things, and I have no reason to think that anybody in the Russian General Staff pays the least attention to obscure American fringe intellectuals like me. Yet the fact remains that when the Ukrainians monkey-wrenched the Russian version of Blitzkrieg, the Russians did exactly what I suggested an army in that situation should do: they fell back on an older form of warfare that wasn’t vulnerable to the monkey-wrenching tactics.

This is why the Russians abandoned their deep thrusts into Ukrainian territory, retreated from vulnerable areas around Kharkiv and Kherson, launched a mass-mobilisation of troops and a major expansion of their already large munitions industry, and got to work building entrenched defensive lines to guard the territory they had seized. Meanwhile, the Russian government strengthened ties with Iran and North Korea — two nations that have large munitions industries autonomous from Western technology and capital.

That is to say, since the new Ukrainian tactics made it impossible for the Russians to refight the Second World War, the Russians switched to First World War tactics. The defensive lines and urban strongholds on which the Ukrainians relied to defeat Russian tank columns didn’t provide anything like the same defence against massed Russian artillery bombardment. While the Russian Army was retooling for the new (or rather old) mode of war, mercenary units — Wagner PMC most famously, but there were others — took over the brunt of the fighting, tested out First World War tactics against entrenched Ukrainian forces in Bakhmut, and won.

This put Ukraine and its Nato backers into a very difficult position. In First World War-style combat, the winner is the side with the largest munitions industry and the biggest pool of recruits to draw on. Russia has a huge advantage on both counts. First, Nato countries no longer have a political consensus supporting mass military conscription, while Russia does. Second, while the US and its allies dismantled most of their munitions factories at the end of the Cold War, Russia did not, and it also has those good friends in Tehran and Pyongyang. All these give the Russians an edge the Nato nations can’t match in the near term.

This wasn’t a message that Nato was willing to hear. To a very real extent, it was a message they weren’t capable of hearing. It’s been 70 years — since the end of the Korean War — since the United States and its allies last fought a land war against a major power. The entire Nato officer corps got its training and experience in an era when they had overwhelming superiority over their enemies, and they have no idea how to fight without it. (Even then — Afghanistan comes to mind — they aren’t too good at winning.) That’s when Stormtrooper Syndrome really came into play, because it never occurred to Nato that Ukraine could lose — defined as they were as the war’s Good People.

And so the elites in Washington, Brussels, and Kyiv convinced themselves that the Russians couldn’t possibly ramp up their munitions industry to a pitch that would permit them to carry on trench warfare for years at a time. (Remember all those confident reports that insisted the Russians were about to run out of shells and rockets?) They told themselves that the Russians were using mercenaries because their army was too demoralised and brittle to stand up to the rigours of combat. They drew up plans for a grand Ukrainian offensive to turn the tide of the war, and funnelled more arms to Ukraine..

The counteroffensive began on 4 June. Two months on, it is clear that it has failed. A successful assault against fortified positions in modern war requires a three-to-one advantage in soldiers on that region of the battlefield, a large advantage in artillery, and air superiority. Ukraine has none of these things, and somehow or other no eucatastrophe showed up to save the day.

The Russo-Ukraine war isn’t over yet, and the fortunes of war may yet favour the Ukrainian side — though this looks very improbable just now. Meanwhile, history is not waiting around for the details to be settled. Towards the end of last month, the heads of state of 40 African nations gathered in St. Petersburg to sign agreements giving Russia a leading position in the economic and military affairs of the world’s second largest continent, while Russia’s defence minister was in North Korea negotiating further arms deals. It seems the Russians know better than to wait for miracles to save them from the consequences of their own actions.

None of this is to say that the mess in Ukraine is the only way that Stormtrooper Syndrome has shaped recent history; it’s just the most obvious example right now. It was because of Stormtrooper Syndrome, for instance, that so many people suffered nervous breakdowns when Donald Trump won the presidency in 2016, their reaction amounting to: “He’s a Bad Person, he’s not supposed to win!”. Afterwards, the same factor also kept them from wondering why so many disillusioned voters were willing to settle for Trump, of all people, as an alternative. Nor, to be fair, is Stormtrooper Syndrome in short supply on the Right, where shrill moral dualism is far more common than thoughtful discussion about how to deal constructively with the cascading crises overwhelming America today.

Really, it’s hard to name anything in contemporary Western life that hasn’t been twisted bizarrely out of shape by the efforts of our privileged classes to pretend to be the heroes of their own Star Wars sequels. Yet the lesson being whispered by the winds from Ukraine is that nobody and nothing else is required to play along. That lesson may end up costing a great many people bitterly in the not too distant future.

Glenn Greenwald: PROPAGANDA: How the CIA Covertly Took Hollywood, w/ Roger Stahl

Link here.

Ben Aris: Oil sanctions have failed after budget revenues surge as Russia completes the switch from European to Asian markets

By Ben Aris, Intellinews, 8/4/23

Everyone got very excited when the budget numbers for December and January came out and showed huge deficits. New oil sanctions came into effect in both those months and were hailed as a big success, reducing the Kremlin’s income and that this was what sanctions were supposed to do to help end the war soonest.

It hasn’t worked. Revenues did fall heavily in January as Western companies cancelled their Russian oil products orders ahead of the February 5 oil product sanctions. But federal budget revenues surged in June to post a surplus of RUB815bn ($8.6bn) that shaves a trillion rubles off the deficit year to date and puts the overall deficit back under the Ministry of Finance (MinFin) target of 2% of GDP. (chart)

As Chris Weafer and Christof Ruehl, two of the very best experts on Russian oil, told bne IntelliNews in an podcast on oil (worth watching again), the January results were a one off and they expected revenues to pick up again in the rest of the year. Russian Finance Minister Anton Siluanov has said the same thing and is sticking to his forecast for a modest 2% of GDP deficit at the end of the year.

The budget debate is all about numbers so let me give you a brief roundup of the main numbers you need to know.

A 2% of GDP deficit is equivalent to RUB2.9 trillion.

The government already blew past that in the middle of March when the federal budget deficit hit its full year target after the first ten days of March.

There was then a big debate at the end of the first quarter on what the end of year number would actually be with analysts predicting everything from RUB3.3 trillion (Alexander Isakov, head of Russia and CIS macroeconomics at Bloomberg) to RUB12 trillion (Kyiv School of Economics).

More recently Siluanov has become a little more pessimistic and said the deficit could be 2.5% of GDP, or RUB3.6 trillion.

Note that as Russia has some RUB6.8 trillion in the liquid part of the National Welfare Fund (NWF) it can afford to cover the deficit for at least two years just from its rainy-day fund, and that is before it taps the RUB17 trillion of liquidity in the banking sector or simply raises taxes. In an extreme it can also tap the international reserves of $580bn or print money, like the National Bank of Ukraine (NBU) has been doing.

These deficit numbers are all cumulative results, adding up each month’s budget receipts to get the total year to date deficit numbers. However, drilling into the month-on-month numbers a different picture begins to emerge.

The chart shows there was a big fall in January but in the subsequent months the monthly deficit rapidly began to contract (although April was an exception). By May the budget was back in profit, albeit with a tiny RUB13bn surplus for that month.

The big change is that in June the revenues jumped to RUB815bn.

Adding all that up, the budget deficit passed its full year target to top RUB3.3 trillion in May, but since then rising revenues have shaved about RUB1 trillion off the cumulative deficit, bring it back down to RUB2.5 trillion – ie it is now less than 2% of GDP.

And the June revenues of RUB815bn are very big. To put that into context, in good years with high oil prices the budget can make as much as RUB1 trillion in a month (and lose that much in bad months in bad years) but in 2021, the last “normal” year, the budget earned an average of RUB250bn a month and in 2022 the average monthly income was around RUB400bn a month.

So why did revenues jump in June? And will that continue?

The core of Weafer and Ruehl’s argument is that the sanctions did not stop Russia selling oil, just forced it to be sold somewhere else.

Pre-war most of Russia’s oil was sold in Europe. It takes about a week to sail a tanker from the Russian oil ports in the Gulf of Finland to Rotterdam in the Netherlands where the oil goes into the EU’s pipeline system. However, as you must know, now all Russia’s oil goes to Asia instead – mostly China and India. That journey takes about two months.

In January Russia’s oil distribution route was abruptly changed. Revenues stopped as there were no sales after tankers switched from Rotterdam to Asia and it took two months for them to get there before they could unload and get paid. Then they have to steam all the way home again – another two months – before they can pick up more oil and start the journey back.

But once this first cycle has been completed the constant conveyor belt of tankers in Russia’s “ghost fleet” making this round trip means that the oil exports will start to flow again like before. Individual tankers might take a lot longer to get to their destinations (and it costs more) but the overall flow of exported oil volumes becomes the same as before, provided there are enough tankers to carry it, which there are.

And that is exactly what the budget results show us. Revenues collapsed in January as all the tankers set off for Asia, but four months later, when the loop was established, suddenly oil revenues jumped up again as the new customers’ money came pouring in. Moreover, note that last week the discount on Urals to Brent shrank to its lowest level since the war started of about $10, still high compared to the $2 norm pre-war. That is because China and India are paying market rates, minus a bit more than usual for transport.

In other words, Russia has successfully switched its oil trade from Europe to Asia and it now has a smoothly functioning market that can’t be sanctioned and will earn very similar revenues to those it was earning before sanctions. And it did this in only four months – just like Siluanov predicted.

The bottom line is that the oil sanctions have not permanently reduced or capped the Kremlin’s income (other than reducing it a bit thanks to higher transport costs). All sanctions have done is introduce a massive distortion into the business.

What will happen to the budget over the rest of the year? Hard to say as a lot goes into this calculation and it depends heavily on what happens to the price of oil, but with the new OPEC voluntary production cuts prices are likely to stay at the current $85 per barrel and could even go higher.

If oil rises to $100, as the Kingdom of Saudi Arabia (KSA) wants, then the sanctions become more problematic for Russia. Another big hole in the regime is the fact that half of the oil export volumes are being carried by Greek tankers, an EU member, that can do this as technically the oil on board costs less than $60 a barrel and so is not sanctioned at all.

But there is a game to be played here as it depends on where you add in the cost of things like transport and services like insurance. Normally these are added at the start of the journey, where the sanctions cap price is assessed, but you can add them at the end too, where they are not part of the sanctions oil price cap price. As Russia now has its own fleet and insurance companies it can, and is, vigorously playing this game.

This is possible as the gap between the cost of a barrel and the cost of a barrel plus services is still narrow. If the price cap were reduced to say $35, as many have called for, that would create a new headache for the Kremlin, but it is clear that the West is extremely reluctant to strictly enforce the oil price cap sanctions as it fears a self-defeating spike in oil prices more than it wants to punish Russia.

Last thing to say is that June’s RUB815bn of revenues is high as it is due to the first revolution of the new oil transport loop. However, if revenues fall back to the 2022 average of RUB400bn per month Russia will have no deficit at all and even the 2021 level of RUB250bn per month means a deficit on the order of 1% of GDP. At this point it’s looking more likely that the Siluanov will manage to hold the deficit to 2% in total than not, and that the Kremlin will have all the money it wants to spend on the war. The oil sanctions have not worked.

Gas station posing as country becomes Europe’s biggest economy – report

Photo by Pixabay on Pexels.com

John McCain rolls over in his grave.

RT.com, 8/4/23

Russia was among the world’s five largest economies and the largest in Europe in terms of purchasing power parity (PPP) as of the end of 2022, despite Western sanctions, the latest World Economics report has revealed.

According to estimates based on official country data published by the World Bank and the IMF, Russia’s gross domestic product was $5.51 trillion in PPP terms at the end of last year. The figure is 38% larger than the official estimate of $3.993 trillion, the report noted.

It also showed that the Russian economy was ahead of Germany’s when measured in purchasing-power parity, with the latter’s GDP at $5 trillion.

China topped the list as the world’s biggest economy ($31 trillion), followed by the US, India, and Japan. The top 10 also included Indonesia, Brazil, and Türkiye.

The IMF and World Bank both recently raised their forecasts for the Russian economy, saying GDP would continue to grow despite sanctions, underpinned by strong trade and industrial production, as well as higher-than-expected energy revenues.

According to the World Bank, Russia’s growth is expected to turn positive in 2024, but will remain modest at 1.2%.

The Russian government has maintained a positive outlook for the economy. Prime Minister Mikhail Mishustin has predicted that, by 2024, the Russian economy will be able to overtake developed countries in terms of growth.

Note: the folks over at Russia Matters have taken issue with the main claim in this article. See here.

Kelly Vlahos: Most Americans don’t want Congress to approve more aid for Ukraine war

By Kelly Vlahos, Responsible Statecraft, 8/4/23

The majority of Americans polled do not want to supply more U.S. aid for the war in Ukraine, according to a new survey by CNN/SSRS released today.

According to the data, 55 percent of Americans do not think Congress “should authorize additional funding to support Ukraine in the war with Russia,” while 45 percent said Congress should approve more.

Another 51 percent say the U.S. has “done enough” to “stop Russian actions in Ukraine,” while 48 said Washington has not done enough.

For comparison, according to CNN, 62 percent of Americans polled just after Ukraine was invaded said the U.S. should be doing more.

Not surprisingly, the responses tracked heavily on partisan lines. On the question of Congressional funding, 71 percent of Republicans, 38 percent of Democrats, and 55 percent of independents said no more funding. On the promotion of more aid, it was flipped, with 62 percent of Democrats, 28 percent of Republicans, and 44 percent of independents saying Congress should authorize more. Whether one identified as a “liberal” or “conservative” dictated support for more or less aid respectively.

How this will play out in the expected vote for more Ukraine aid this fall is anyone’s guess, as it will depend on how much and through what kind of package the new funding will be proposed. A handful of Republican lawmakers have already promised a fight, either to stop the aid entirely or to put conditions on it before passing.

This doesn’t mean that Americans aren’t still in favor of assisting the Ukrainians, however. Solid majorities in the CNN/SSRS poll want to share intelligence with Ukraine (63 percent) and offer military training (53 percent). Less than 50 percent want to continue giving Kyiv weapons (43 percent). Only 17 percent want U.S. soldiers on the ground participating in combat with the Ukrainians. [Note: interesting that this poll reflects only about half of what the Newsweek-sponsored poll discussed in a post a few days ago reflected in terms of the number of respondents supporting the sending of US troops to Ukraine. – NB]

The poll also doesn’t bode well for Biden’s handling of major foreign policy issues. Some 53 percent disapprove of how he is handing the war in Ukraine; 56 percent disapprove of how he is handling Russia; and 57 percent disapprove of how he is handling the relationship with China.

Dominic Sansone: Washington Has No Interest in Pursuing Peace in Ukraine

Photo by Nati on Pexels.com

By Dominic Sansone, The National Interest, 8/4/23

Dominick Sansone is a Ph.D. student at the Hillsdale College Van Andel Graduate School of Statesmanship. Previously a Fulbright recipient to Bulgaria, his writing on politics in the Black Sea region has been published by The National Interest, the Euromaidan Press, The American Conservative, and RealClear Defense, among other publications. He also previously wrote as a contributing columnist focusing on Russia-China relations at The Epoch Times.

Foreign Affairs magazine published an insightful piece in its most recent issue, titled “An Unwinnable War: Washington Needs an Endgame in Ukraine.” Written by RAND Corporation senior political scientist Samuel Charap, it is well argued and presents a number of reasonable proposals that prioritize a diplomatic end to the Ukraine War. Three examples—the Korean armistice, U.S.-Israeli security arrangements, and the Bosnia Contact Group—are drawn upon in order to suggest a roadmap to ceasing hostilities. [https://www.foreignaffairs.com/ukraine/unwinnable-war-washington-endgame]

A number of responses were subsequently published in Foreign Affairs online. All take aim with Charap’s assessment that neither side currently holds the capabilities to achieve ultimate victory, defined in this context as establishing control over the disputed territory in Ukraine. Rather, they contend that Ukraine’s triumph is simply a matter of providing more—and deadlier—Western weaponry. Each argument also rests upon the assumption of a tottering Putin regime. They all cite the Prigozhin mutiny (it is mentioned a total of six separate times throughout the various responses) as irrefutable evidence of a latent contingent of discontented Russians that can and will eventually be mobilized to topple the current government. [https://www.foreignaffairs.com/responses/should-america-push-ukraine-negotiate-russia-end-war]

The most extreme perspective comes from Dmytro Natalukha, Chair of the Committee for Economic Affairs of the Parliament of Ukraine and a member of the Parliamentary Assembly of the Council of Europe. Natalukha claims that leaving any territory occupied by Russia will allow Moscow to subsequently use that land as a launch pad for future attacks to capture the rest of the country, as he claims it did after the Minsk agreements of 2014 and 2015—although he conveniently ignores the fact that it was both Moscow and Kiev who consistently failed to implement the terms of both the Minsk Protocol and Minsk II. Ukraine, Natalukha argues, must therefore wage war until all occupied land is seized back from Russia. What is more, the return of the eastern oblasts and Crimea must then be followed by forcible regime change in Moscow and the installation of a Western-approved leader. This will ensure that “post-Putin Russia will have the consent of Ukraine.”

“Ukraine and its allies must aim to make Russia less anti-Western. Regardless of what happens at the negotiating table, therefore, Putin cannot remain in power,” states Natalukha. He subsequently believes that the civilized world should reach a consensus on confronting Russian leadership, “as they did on Slobodan Milosevic in Yugoslavia, Saddam Hussein in Iraq, and Bashar al-Assad in Syria”—examples that should make any honest assessor of U.S. foreign policy in the past thirty years since. The final step after total Russian collapse and the installation of a puppet government would then be to demilitarize the country and destroy its state media i.e., its “propaganda machine.”

The ostensibly less severe proposals also support the contention that Russian armed forces will inevitably be crushed under the weight of well-armed Ukrainian resolve. Alina Polyakova and Daniel Fried are firm in the conviction that all that stands in the way of total victory is a lack of F-16s and long-range missiles. Early battlefield successes around Kiev, Kharkiv, and Kherson, are cited as proof of endemic Russian weakness. The authors also believe that, with the requested weaponry, Ukraine would be able to seize territory in the eastern oblasts. This will obstruct Moscow’s land bridge to Crimea, and “force Russia into an untenable position.” But the likelihood of Russian leadership abating rather than escalating its war effort once the naval base at Sevastopol is under threat of sustained artillery fire is a roll of the dice. The consequences of losing that bet could be catastrophic. Nonetheless, Angela Stent also reassures readers that the risks are worth it. She suggests that Moscow’s war machine is buckling under the weight of its own incompetence, while Kiev is on the cusp of turning a strategic corner. Ukrainian forces remain upbeat in a “battle for national survival”; meanwhile, “Russian troop morale is dwindling”—an assessment that by its nature is one of bias and unreliable speculation.

The eventual ouster of Putin is implicitly assumed in each of the arguments. Polyakova and Fried bring up Russian military losses going back nearly two centuries, all the way to the 1853 Crimean War. “Each defeat provoked domestic stress and upheaval,” the implication being that the same fate awaits the current regime upon its defeat in Ukraine. The Prigozhin mutiny is presented as evidence of pervasive “stress in the Russian ruling circles.” Stent also believes that “Putin’s grip on Russia” is weakening. The key to knocking down the Kremlin house of cards is thus “more and better Western weapons.” While any or all of these contentions may be true, no respondent addresses the very real possibility that an individual as equally committed—or perhaps more committed—to the objectives laid out at the beginning of the war might take power in Moscow upon Putin’s (potentially bloody) departure.

But most importantly, all of the responses fail to address the prospect that Kiev’s counteroffensive could fail to achieve its strategic aims even with Western arms. Ukrainian battlefield invincibility is assumed as an indisputable matter of historical necessity. They ignore the fact that Russian armed forces continue to secure important victories, inching their way westward while inflicting heavy Ukrainian casualties. Instead, all of Moscow’s strategic and tactical successes are handwaved away. Polyakova and Fried claim without explanation that the seizure of territory in the “Bahkmut [sic] offensive has deepened [Putin’s] costly mess.”

Nor do they address the fact that Russian armed forces have of late been very successful in destroying and capturing Western equipment, including the much-vaunted Leopard tank and Bradley fighting vehicle. Moscow also retains control of the skies, a situation that a limited number of F-16s without enough pilots who possess the requisite training will not change. Likewise, a longer war defined by increasing escalation favors both the military-industrial capacity of Russia as well as the much larger resource pool of human capital that it can draw from. The only way to counter this latter fact may eventually be for other nations’ military forces to begin engaging in the fight directly. Natalukha would undoubtedly be in favor of such a prospect, and it seems that the other commentators may be as well.

The hate for the Putin regime that seems to undergird the Western foreign policy establishment is very likely genuine and deep-seated; however, its authenticity does not make it a premise upon which to construct a realistic path for bringing the bloodshed in Ukraine to an end. Charap acknowledges this point and proposes that the U.S. form a governmental group to focus on exploring diplomatic pathways to peace. “There is not a single official in the U.S. government whose full-time job is conflict diplomacy,” he rightly laments. What is needed is a “regular channel of communication regarding the war that includes Ukraine, U.S. allies, and Russia.”

This is undoubtedly the correct approach. Negotiations for a sustainable peace are necessary not merely to de-escalate the situation and avoid a potentially larger conflagration, but perhaps most importantly to stop the wanton death and destruction currently befalling the citizens of Ukraine. As impolitic as it may be to currently say, it should also be our desire to stop Russian lives from needlessly being lost as well.

However, the responses to Charap form a litany of excuses for not engaging with Moscow. Something like the Korean armistice is discounted because North Korea does not occupy any of South Korea’s territory; the Israel situation is not feasible because Tel Aviv possesses nuclear weapons; the example of the Balkan Contact Group is inapplicable because one could do business with the Yeltsin administration.

But Charap presents these as cases to draw lessons from, not as exact models to copy. They illustrate how to adapt means in unique situations to reach the same end: a viable peace agreement amid hostile parties that is reached by way of a negotiated settlement.

The issue at the center of the disagreement is that the respondents do not believe that such an end can be reached unless it proceeds from total Ukrainian victory and the destruction of the current Russian regime. The reason for this is presented as a matter of fact: Russia can simply no longer be treated as a real nation-state. As articulated by Stent, any negotiation with Moscow is impossible because they are liars, and an armistice will inevitably be a “temporary solution while Russia regroups and plans its next attack.” Such a conclusion obviously leads the international community to an impasse in which the only way out is through.

Charap replies in kind to the various responses offered to his original piece. The central premise upon which he bases his rebuttal is straightforward: “My critics seem to see diplomacy as a synonym for surrender rather than as an important tool of statecraft.” This is correct, but understanding the argument behind why his critics view a peace settlement as capitulation is even more important. Russia (with Putin as anthropomorphized regression) has broken the rules-based order in a manner that undermines the end of history thesis. The implication of not rectifying this violation would be to implicitly acknowledge that the world is returning to balance of power geopolitics. This is a sin that cannot be forgiven. For that reason, nothing less than a total Russian collapse is an acceptable outcome to the war.

The Duran: NATO summit failure and further Biden escalation w/ Jeffrey Sachs

Link here.

Glad to hear Sachs address how Washington intentionally refused to allow the Soviet Union/Russia the same policies to stabilize its currency, cancel its debt and prevent hyperinflation as it did previously with post-Soviet Poland. My previous research was based on sources that demonized Sachs as a facilitator of the robbing of 90’s Russia by the west. According to his version of events, he strenuously tried to prevent that with his advice to Washington, only to be overruled. – Natylie