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Week 21: When economic arguments end, the arms race begins
31.05.15 10:32 Global Security
May 29, 2015

Natalya Laval for "War and Peace"

Translated by Kristina Rus (Fort Russ )

We will begin this new weekly feature with a recap of weekly news as of May 22, 2015. Zooming out of daily news, at least to a scale of a week helps shape the contours of global trends just a little better. I am sure you will find something that escaped your attention, and isnt it fun to compare to Western MSM headlines!

(please use Yandex translate to translate any of the links)

The latest one will follow shortly. 

Week 21: When economic arguments end, the arms race begins

The week began with the Pentagon allocating $5 billion for the space wars. Although hotheads assume that these funds will be used for sabotage, but it seems to me that there was a reason why the fourth very secret satellite X37B was launched from Cape Canaveral. It didnt receive much attention, but still let me remind you that Russia has long sought a moratorium on the placement of weapons in outer space. Our "partners" once again went for escalation, in particular, advancing towards the cessation of funding for the New START Treaty, as well as brushing off the dust from the missile defense project in Europe. It is not surprising that Moscow will not join the International Treaty on the arms trade.

A week ago, NATO solemnly declared that it has no plans to resume cooperation with Russia, however, NATO Secretary General and Lavrov discussed something behind closed doors in Brussels. They had nothing to say to the press. In Latvia NATO began operating a new radar, presidential candidate of Poland proposed to establish a NATO base in the country, and Russia has indicated that it will continue to increase its military presence in Crimea, the construction of the bridge has already begun.

The process of deglobalization of the Russian economy is taking its course. Ignoring the advice of the IMF, Russia is preparing to become self-sufficient in rare earth metals, refuses Ukrainian components, halts the transit of weapons and military equipment to Afghanistan, stockpiles gold and accumulates gold reserves, files claims for unjust sanctions, tries to suppress the growth of the ruble and starts laying pipes for the "Turkish stream". The budget is expecting the receipt of advance payment and penalties for "Mistral".

Things are going so well that the Georgian Euro-lobby is nervous, and the official Tbilisi is committed to normalizing relations with Russia. In Moldova, Euro-integrators have organized a march in Chisinau, the World Bank gave Moldovan farmers $14 million for agribusiness. Belarus indulged in smuggling and took advantage of cheaper labor, to launch production of Opel in the country. What can I say, if specializing in Eastern Europe Raiffeisen Bank only made profit on its Russian subsidiary!

Although the weekly inflation in Russia remains at the level of 0.1%, from the point of view of modern economic science it is not so good, but the IMF is optimistic about the growth of the countrys GDP in the following years.

And the worst part: the Duma adopted the law on "undesirable" foreign organizations in Russian Federation. Well what can I say? Better late than never. Even the Indians have realized last year that "a significant number of Indian NGOs, funded by donors from USA, UK, Netherlands and Scandinavian countries use humanitarian issues to create an atmosphere conducive to inhibiting the development of the country."

It seems that this insight is the basis of enthusiasm of Narendra Modi about the BRICS, SCO and Indian-Chinese relations. I already wrote in my previous review about a breakthrough in the settlement of the border conflict, this week it became known that the two countries signed economic agreements worth more than $22 billion (incidentally, India also saves gold).

The triangle Beijing-Delhi-Moscow strongly irritates the Big Brother. Analysts fell into despair and fear that Obama will not be able to "restrain" China with the help of TTP, that is to say, by economic means. Therefore he must resort to military tools. Secretary Kerry traveled to Beijing, where differences in the approaches to the relationship of China and America was revealed. China, of course, still  lends to the Big Brother, but I believe that according to the Eastern tradition, China is waiting for the American  economic corpse to float by.

Two unpleasant incidents occurred in the South China sea with the participation of warships and American reconnaissance aircraft, during which Washington lightly flexed its muscles. In response, information surfaced about nuclear modernization of China, and after the North Korea revealed a breakthrough in the miniaturization of nuclear weapons. Something tells me that XI Jinping will look at the  Russian soldiers marching in a parade in Beijing with no less pleasure than at the Chinese marching on the Red Square. Soros summed up the situation well, predicting a new world war.

A quiet Japanese rebellion, highlighted by a high-profile visit to the country of Mr. Naryshkin also caused a sharp reaction of the State Department. It is unlikely to be just about Naryshkin, its just that Tokyo Gas had estimated the cost of a gas pipeline from Sakhalin to Japan, and this is much worse than the hypothetical visit of President Putin to Tokyo. Japanese authorities are getting deeper into the quagmire of contradictions: inoperative nuclear industry, a ban on economic interaction with Russia, the discontent of the citizens about the military presence of the USA and other "pleasures" of too deep dependence on the Big Brother.

Equally unenviable is the fate of the European Union, trying to honestly fulfill its vassal dependence, but stumbling on economic difficulties. The agony of Greece which no longer has the money for debt service, continues, there is no chance to leave the Eurozone, there are no means to dodge the pressure of the Pentagon. The situation in Macedonia, where protesters are pitching tents in the capital, painfully recalls the Ukrainian scenario. Albania with its Islamists and drug traffickers is getting closer to joining the EU. Portugal doesnt see the light at the end of the tunnel after 4 years with tightened belts. Because of sanctions against Russia, container turnover of the port of Hamburg had decreased, and I mentioned above about a subsidiary of an Austrian Bank.

Negotiations on the Transatlantic treaty stalled not only because of GMOs, but also because of the ban on exporting American oil. The ECB continues to pump up the Eurozone with liquidity, the European Commission continues the attack on business by requiring countries to establish registries with data about the owners, Latvia unexpectedly found that Russian pipeline gas is cheaper than LNG.

Britain, where deflation was recorded for the first time, again demanded a "special status" as a condition of EU membership. Special status means, as always, the use of the privileges of being a member of the EU along with a waiver of obligations, in particular, the evasion of the sanctions regime.

The EU countries could not even agree on a new plan of returning the refugees to their homeland, not everyone is satisfied with the quotas for migrants. Some seriously proposed the EU to buy from France the abandoned "Mistral" to catch migrants in the Mediterranean sea. And really, the ship is roomy. Weekly shift, unloading somewhere in Benghazi right into the hands of Islamic State recruiters and a weeks rest, while the second carrier works. Beauty!

The apotheosis of European turmoil was the summit of "Eastern partnership", which was ignored by Aliyev and Lukashenko, and Armenia along with Belarus criticized the final draft of Declaration of the summit. Dreams of Ukraine about a visa-free regime were qualitatively buried at the summit. As was noted by the observers, Europe has nothing to offer to the countries of the former USSR in exchange for breaking ties with Russia. Amen.

Mrs. Nuland has entered in the fiddling of the Ukrainian situation. According to her, in Moscow she had a very constructive conversation. In parallel with her Ukrainian Rada worked very constructively, cancelling military-technical cooperation with Russia and a number of other cooperation agreements with the Russian Federation. To add to the pile, Kiev cancelled its commitments to respect human rights in Donbass, and also allowed itself to freeze the repayment of external debt. And all this for some billion of credit guarantees from Washington. However, another 1.8 billion euros of EU aid was promised.

But its a drop in the bucket of Ukrainian debts. Foreign investors demanded $8.2 billion from Ukraine in courts. Those investors with whom Kiev is trying to negotiate the restructuring, refused concessions. Ex-Minister of Finance of the USA and just a serious financial shark Lawrence Summers threatened uncompromising investors that Ukraine may declare a default.

There is a "positive" — Russia ceased to insist on the postponement of the agreement between Ukraine and the EU, but does not forget to remind about the debt. "Naftogaz" still transfers to "Gazprom" $32 million pre-payment and cherishes dreams of European gas. Under the guise of Ukrainian sale campaign, foreign corporations took over Ukrainian land, but to write about this and many other things is more and more dangerous in Ukraine.

Such is the price of Imperial arrogance of Washington, which failed to properly estimate its resources and calculate its actions in Europe. There are rumors that bankers no longer believe in American economic growth, but most likely, they have already grown tired of the "cuts" in fines, conducted by the Obama administration. The American police acknowledged the decline of morale among employees, which also was aggravated after a ban on military weapons.

At once, Obama remembered the "backyard" of the USA, sarcastically commented by one observer: "in my memory, every American President announced the beginning of a new era in relations with Latin America". And nothing has changed. Currency reserves of Venezuela are melting at a record pace, Washington made a decision on the target in Caracas, it is the head of the Parliament. Indeed, when Chavez chose a successor, he chose the unquestionable Bolivarian loyalty of Maduro over the prudent and profound mind of Diosdado Cabello. Colombia continues negotiations with FARC and carries out rotation, transferring the Defense Minister into the chair of Ambassador to the United States, and the Ambassador to the United States to the post of Defense Minister. An unexpected friendship with Havana has found a rational explanation: recently, Cuba refused to host the ships of the Chinese Navy, it appears earlier there was such an agreement. As a response courtesy the U.S. resumed banking cooperation with the old enemy. But the Chinese dont sleep, biting the delicious pieces. Before the visit to Brazil of the Chinese Premier, Chinese ICBC and Brazilian Caixa created a Fund of $50 billion.

American lobbying firms are making money on the promotion of interests of the Kremlin, but in fact, lobbying for big oil corporations, which today cut expenses to $100 billion due to cheap oil and suspect the Obama administration in the unkind coincidence in timing of anti-Russian sanctions and low oil prices. Although the number of drilling rigs in the U.S. continues to fall, the export of cheap Saudi oil to the U.S. fell to the lowest level in 6 years, and the intermediaries from the petroleum industry cannot achieve high profits. High profits can only be found in speculation on the obscenely bloated equity markets. A new bubble is shaping.

The failed policy in the Middle East does not add Washington any love from oil companies. Pulling oil out of the hands of unsympathetic satraps, the strategists were unable to keep it in a growing chaos. Growing on the ruins of Iraq and Syria, the Islamic state has carried out a successful attack last week. After an intense battle Palmyra was captured, and thus the Syrian-Iraqi border was completely taken under control. In this situation the intrigues of the French secret service look like a possible assistance to the Islamists, in contrast to the actions of U.S. special forces which conducted the operation to eliminate the militant, who was responsible for smuggling oil.

Turkey whose air force shot down a Syrian fighter jet, strongly and consistently does not like Assad, but ISIS does not bring it much joy either. Accurate analysis of personnel of the troops of the Islamic state ("ISIS is no different from organized disciplined military force. In their ranks are former officers and strategists of the army of Saddam. They have modern weapons — from tanks to missiles. In addition, they are zealously committed to their cause. So much so that take the path of Shahid and commit suicidal attacks."), reiterated, in particular, by the recent report of the death of a nephew of Saddam Hussein — Islamist (!), pushes Ankara to support the militarization of the Kurdish militia without regard to the position of Baghdad, which is insisted by the UN.

In a week of fighting in Iraq at the background of never coming reinforcements from Baghdad, ISIS militants captured the town of Ramadi, thereby burying hopes for the quick liberation of Mosul. Looks like the US will have to come to the aid of the infamous and poorly motivated Iraqi militia. The voyage of the Iraqi Prime Minister to Iran, and then to Russia clearly demonstrated the mood in Baghdad about the U.S. aid.

And finally - the mysterious details of an energy partnership of the USA and Azerbaijan. It turns out that Azerbaijani SOCAR sought easing of economic sanctions against Iran to implement the gas pipeline project in the Caspian sea. The origin and destination of a pipeline is unclear from the text,  but when you consider that Turkmenistan still has not finished construction of a gas pipeline to the Caspian sea and with evident pleasure every year discusses the TAPI gas pipeline, it is likely that Baku cherishes ambitions to become a transit country for Iranian gas.

Beyond my review remained: trading assets on the basis of bitcoin in Stockholm, all the events on the Black continent, the budget of the World Health Organization, the debates at the Conference on the NPT, the cancelled visit of Ban Ki-moon to North Korea, the bombing of Yemen and border conflicts on the Saudi-Yemeni border, SSJ-100 on Chinese market, the Taliban near the borders of Tajikistan, Kerrys visit to South Korea, and a belated start of the economic dialogue between the EU and Turkey.

 
 Orphus: ORPS

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