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By Peter Koenig

For almost as long as the West supplies Ukraine with weapons to kill Russians, it is known that most of these weapons – billions of dollars and euros-worth of weapons, would never reach the front, but would instead be sold on the black-market.

The West knew that from the very beginning. BBC and CNN were reporting on this calamity already in 2022. At one point BBC was reporting that up to 70% of the weaponry supplied by the West would disappear on the black market.

Of course, in the meantime all such references have been either deleted from the internet, or “fact-checked” away. The mainstream of the mainstream may not be seen or heard to say the truth. They are paid to lie or be silent.

However, there are some who speak up, who do not mind risking their reputation – but dare bringing the truth to the people. Pulitzer Prize winner Seymour Hersh is one of them. He recently spoke to Afshin Rattansi, a British broadcaster, journalist and author who presents Going Underground which is broadcast around the world, except in the UK and EU, on television stations including the RT network.

According to his data, Hersh said, shortly after the conflict started between Kiev and Moscow in February 2022, “Poland, Romania, other countries on the border were being flooded with US and allies supplied weapons which were shipped to Ukraine to support the war against Russia.”

Hersh noted that there was concern in the West, especially about Stinger shoulder-launched missiles, as they could be used to “shoot down an airplane at considerable height.”

In other words, the West was concerned that these shoulder launchers could shoot down Western civilian planes, either by accident or, of course, also on purpose, depending in who’s hands they landed.

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So the West knew from the very beginning that most of their weaponry – paid for with US, European, UK and other so-called Western allies’ taxpayer’s money – ended up on the black market, often through what is called the “Dark Net”.

Journalist Hersh also said that “CBS wrote a story about it that they were forced to retract.” When asked why the story was withdrawn, the CBS journalists said, “We are on the side of Ukraine. We all hate Russia.”

This referred most likely to a CBS documentary, “Arming Ukraine”, aired in August 2022, in which CBS claimed that only about 30% of military aid actually reached the frontline. This part was removed, as it was taken out of similar reports by BBC and CNN.

People must not know that 70% of the weapons they paid for Ukraine to kill Russians, are going to the black market, most probably ending up in hands of terrorist groups. They would be so disappointed and risked no longer supporting their governments’ anti-Russia stance.

On many occasions, Russian official warned about Western supplied arms being smuggled outside Ukraine, causing a severe security risk. Russia’s Foreign Ministry spokeswoman Maria Zakharova estimated in October 2022, the black market at $1billion per month. See this for the full interview and this 6-min video clip (below) by “CRUX” Finland, confirming Russia’s concern of western weapons via black-market feeding world terrorist gangs.

Putin Vindicated? Western Arms For Ukraine Feeding Black Market I Finland Confirms Russia’s Claim

There is logic behind the fact that up to 70% of Western weaponry ends up on the Dark Net or directly on the black market being sold to all sorts of potential organizations, no questions asked. Amazing, isn’t it?

And the logic is that the Ukrainian army is far from being equipped to absorb and handle these masses of weaponry, some of them highly sophisticated, for which no Ukrainian soldiers were trained. But the West knows all that.

Ms. Donatella Rovera, a senior crisis adviser with Amnesty International, told CBS,

“There is really no information as to where they’re [the weapons] going at all. What is really worrying is that some countries that are sending weapons do not seem to think that it is their responsibility to put in place a very robust oversight mechanism.”

Likewise, a US intelligence source told CNN already in April 2022 that Washington has “almost zero” idea what happens to these arms, describing the shipments as dropping “into a big black hole” once they enter Ukraine.

Also, Canadian sources said that they have “no idea” where their weapons deliveries end up.

And so does Europol; they believe that some of these weapons have ended up in the hands of organized crime groups in the EU.

Russian government officials are afraid that many of these weapons are ending up in the Middle East.

According to Transparency International, Ukraine is consistently ranked as one of the most corrupt countries, if not the most corrupt country, in the world.

See this.

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Let’s jump to another dimension. If the West knew that most of their weaponry supposedly destined for Ukraine’s war against Russia will end up on the black market and find its way eventually to terrorist groups, why did they not stop it, police it, at the borders, make sure that no weapon reaches the Dark Net or the black market?

Putting in place a rigorous security apparatus would have been worth the money to avoid more terror groups roaming the world and attacking “randomly” Western civilization.

The West did not put such a security system in place. Could it be – just hypothetically — that there was and is a special agenda behind this reckless and thoughtless behavior of the Western anti-Russian alliance?

Is this perhaps a plan to arm existing or new Western-founded terrorist groups, à la al-Qaeda, ISIS, the Islamic State and others – mind you, to be repeated, ALL created and funded by the West, mostly by the CIA, NATO and other US/UK/EU secret service organizations – so as to be ready to use these terror organization when needed by the West?

For example, to intimidate an ever-more “awakening” populace, to the terror and wars waged against people by the US/Western quest towards full hegemony?

Armed with Ukraine weaponry, commanded by CIA, NATO, or even the unelected European Commission, in accordance with “rules-based orders”, such old and new terror groups could carry out random or not so random mass killings, thereby keeping the populace worldwide in check, afraid, submissive.

This could be a new tentacle of the failing octopus, reaching around the globe for full spectrum dominance, trying to keep the illusion of US Western hegemony alive as long as possible, continuing killing and maiming people by the millions, and destroying economies – as per the Great Reset and Agenda 2030 playbook.

Like mentioned earlier, it is just a hypothesis but a real one. Nothing is beyond the intent and reach of this diabolical dark Deep State Death Cult, currently engulfing Mother Earth, her sentient beings and perhaps foremost her generous supply of natural resources.

Remember the Club of Rome’s doctrine of “Limits to Growth”, a blueprint still underpinning the agenda of the billionaires’ elite, the Cult that wants to reduce the current world population by 90%, and produces highly sophisticated man-made ENMOD-type “climate changes”, severe droughts, floods, cold and hot spells, and even earthquakes, to bring about famine, destruction of infrastructure, of economies, shifting resources from the bottom to the top and killing masses of people, genocide-style.

When we dare staring the enemy – the Antichrist roaming among us – in the eye, stepping out of the circle of fear, we may also find the way to another conscience where Light and Love reigns, leading us out of and away from the digital gulag – into FREEDOM.

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Peter Koenig is a geopolitical analyst and a former Senior Economist at the World Bank and the World Health Organization (WHO), where he worked for over 30 years around the world.

18 May 2023

Source: www.globalresearch.ca

By Shane Quinn

Under president Barack Obama (2009–17) covert operations and raids by American military special forces intensified. Organisations like the US Special Operations Forces (SOF), Navy SEALs and CIA were infiltrating different states, violating their national sovereignty in kill/capture offensives aimed ostensibly at Islamic insurgents.

The countries targeted were those such as Afghanistan, Pakistan, Iraq, Yemen, Sudan, etc. The kill/capture targets highlighted by Washington comprised part of a Joint Prioritized Effects List (JPEL), which even included some American citizens abroad deemed as enemies, and which was based on legal or extralegal assumptions according to classified information from president Obama.

The Pentagon chose to wage “unconventional war” through elite military units, through proxy forces and sabotage groups.

In executing night raids and other activities, the US special forces were often focused on countries outside of Washington’s influence, in efforts to align them with the Western liberal order. For example president George W. Bush, Obama’s predecessor, had sent special forces such as the Green Berets, along with US Marine Corps troops, to the Caucasus state of Georgia where they trained Georgian military personnel (1). The goal was to turn Georgia, which borders Russia to the north, into a permanent US client nation.

John Nagl, a US lieutenant-colonel, described the kill/capture campaign as “an almost industrial-scale counterterrorism killing machine”. Nagl said that, in a 3 month period in 2010, US forces from the Special Operations Command (SOCOM) carried out 3,000 military operations in Afghanistan (2). This involved entering villages in the middle of the night, in order to kill or take prisoner Islamic militants.

From mid-2010 to mid-2011, US special forces liquidated or captured 12,000 Islamic fighters according to the US military (3). Many of the night raids were executed through faulty intelligence or recklessness, and as the months went by hundreds of innocent people and civilians were also killed. Under the leadership of General Stanley McChrystal, appointed by Obama as the top commander in Afghanistan in summer 2009, the US special forces killed or took prisoner 700 insurgent officers. In another 3 month period, from July to September 2010, US-led NATO forces executed 3,279 operations, resulting in the deaths of 293 insurgent commanders and the capture of 2,169 Islamic fighters. (4)

In July 2010, General David Petraeus succeeded McChrystal as overall commander of US-led forces in Afghanistan, as McChrystal had irreconcilable differences with the Obama administration. In a 1 year period, from 25 April 2010 to 25 April 2011, the US Special Operations Forces killed 3,200 insurgents and captured 800. Between February to May 2011, NATO purported it had carried out 1,400 operations in Afghanistan, which they said resulted in the deaths or capture of 500 “insurgent leaders” and 2,700 “lower-level insurgents” (5). These attacks, because of their often indiscriminate nature, would have again resulted in significant loss of life to non-combatants.

In 2011 president Obama authorised the construction of a network of US military bases on the Arabian Peninsula, and in the Horn of Africa (east Africa), with another base on the island of Seychelles in the Indian Ocean.

More US bases were established in central and east Africa, such as in South Sudan, Ethiopia and the Central African Republic. Obama dispatched special forces soldiers to central areas of Africa, apparently to assist in hunting down Joseph Kony, the Ugandan-born rebel commander (6). Kony was often described as “the world’s most wanted warlord” in Western media and he was never found. The US commandos have been operating in the Democratic Republic of Congo (formerly Zaire), the Central African Republic and South Sudan.

The likelihood is that, rather than the main focus being the capture of people like Kony, the US has attempted to increase its presence in Africa for strategic purposes. Hundreds of American soldiers from the Special Operations Forces have been stationed at the US military base in Djibouti, east Africa, called Camp Lemonnier, where they work under concealed identities and have co-ordinated the flight path for American aircraft and drones. About 3,200 people, including some civilians, were stationed at Camp Lemonnier where US troops have provided training to foreign militants.

 

The Camp Lemonnier base is of importance, due to its location between east Africa and the Arabian Peninsula. The Port of Djibouti offers access to the Indian Ocean and Red Sea, and from Camp Lemonnier the US military can hit targets in nearby Somalia and Yemen within minutes. Washington continued to launch strikes over Pakistan, Somalia and Yemen, countries which the Americans were not officially at war with. (7)

Washington was implementing a kill/capture offensive inside Pakistan, traditionally a pro-American country. An independent research organisation based in Pakistan, the Conflict Monitoring Center, estimated that the kill/capture raids in Pakistan during the 5 years up to June 2011 resulted in the deaths of 2,052 people, the majority of whom were civilians. From July 2008 to June 2011, the CIA carried out 220 attacks within Pakistan, and in doing so the CIA claimed to have killed 1,400 “suspects” along with 30 civilians. (8)

The American raids and drone strikes inside Pakistan swelled the ranks of armed radical groups, like the Taliban and Lashkar-e-Jhangvi. The Pakistani author Ahmed Rashid believed that, around 2011, the Taliban within Pakistan was more formidable than the Taliban in Afghanistan. The US military attacks on Pakistan and Afghanistan also boosted the legitimacy of Al Qaeda, whose members could rely on numerous safehouses in which to plan their operations.

Mistrust between the US and Pakistan increased on 26 November 2011, when NATO helicopters and aircraft bombed an outpost in northern Pakistan in an unprovoked attack, killing at least 24 Pakistani soldiers, in the Mohmand District (9). Pakistan’s government quickly retaliated, by cutting supply routes for US-NATO troops into Afghanistan, and demanded that Washington shut down its drone launch base. The Americans, despite these actions, did not want to lose Pakistan as an ally; because Pakistan, a strategically important country and nuclear power, shares borders with Afghanistan, India, Iran and China, and has a lengthy coastline which provides the Pakistanis with access to lucrative sea routes.

The US was pursuing two kill/capture campaigns inside Yemen (10). One was overseen by the CIA and the other was executed by the US Joint Special Operations Command (JSOC). General James Jones, of the US Marine Corps, said Yemen was “an embryonic theater that we weren’t really familiar with”. The Americans, however, were aware that Yemen like Pakistan is strategically placed, beside crucial sea lanes and the Persian Gulf’s oil reserves.

The CIA was operating as a de facto paramilitary force. On top of the CIA’s intelligence activities, it was partaking in many of the tasks assigned to the special forces. On 17 September 2001, Bush had authorised a secret presidential finding, which enabled the CIA to develop teams with the goal of catching, killing or apprehending designated insurgents in different countries.

Obama greatly surpassed Bush in the deployment of elite units, such as from the Joint Special Operations Command. In the middle of 2010, the US Special Operations Forces were present in 75 countries at that time (11). Colonel Tim Nye, a Pentagon spokesman, said the Special Operations Forces would probably be operating in 120 countries by late 2011. Unsurprisingly then, Obama had requested a 5.7% increase in the Special Operations Forces budget for 2011, amounting to $6.3 billion with a contingency fund of another $3.5 billion. By 2015 it was reported the Special Operations Forces were active in 135 countries that year, clearly a mind-boggling number. (12)

The combined population, of the US and its allies, is much lower than that of the states of Eurasia and the Global South, many of whom increasingly desire a multipolar world rather than a unipolar world governed by the US. European nations like Britain, in decline for generations and losing its sovereignty, has hung on to the coat-tails of the US empire. The American-led NATO continues expanding but this is not, as the liberal media insists, a strategic defeat for Russia or China. NATO enlargement endangers the world, including the US, which would suffer a total defeat in a nuclear war as is known.

When Obama assumed the presidency in January 2009, he was faced with the upheaval that Bush left behind. There was the very high cost and failure of the war in Iraq, and ongoing uncertainty with the conflict in Afghanistan, another distant country which most Americans had a limited understanding of.

A survey conducted by the American media in March 2012, over a decade after the US invasion of Afghanistan was launched, revealed that 69% of American adults who partook in the survey did not want their nation involved in the war in Afghanistan. Only 23% of respondents felt America was “doing the right thing” by participating in the war. Twenty-seven per cent of Americans believed the conflict “has been mostly a success for the US”, just 25% felt the fighting was progressing well, and 59% stated that it had not been a successful war. (13)

Obama decided to pursue more cost-effective methods, and which he felt would not risk as many American lives. Obama, advised by intelligence expert and CIA director John Brennan, changed the “war on terror” to a “high-tech war”. The conflicts created more jobs in the US arms industry, and shored up the tax revenues of the states where the weapons firms are based, such as in Texas, California, Virginia, Massachusetts and Maryland.

Between 2001 and 2007, the US arms companies Lockheed Martin, Northrop Grumman and Boeing Defense, Space & Security recorded over $30 billion in yearly sales, and Raytheon and General Dynamics posted annual revenues of more than $20 billion during the same period (14). In June 2015 Obama sanctioned the National Military Strategy which outlined that Iran, Russia, China and North Korea are the countries most challenging to US interests in various regions. Yet the Pentagon’s Military Strategy conceded that none of the above countries was seeking a direct armed conflict, against the US or its allies. (15)

With Obama as president, US foreign policy continued to be focused on expansionist doctrines. In announcing a “pivot” to Asia, Obama tried to encircle and contain China with the construction of large numbers of bases in the Asia-Pacific areas, while he maintained the Pentagon military budget at over $600 billion per year. Contingency plans have been made for a US military attack on China, which is a nuclear state.

The American commander, Douglas MacArthur, had wanted to pursue a US-backed invasion of China in the early 1950s. General MacArthur, who at the time was commanding US-led forces in the Korean War, wished to extend the conflict to China in order to overthrow the communist government in Beijing. MacArthur supported the use of atomic bombs during the Korean War, but he had fallen out with president Harry Truman, and he was removed from his position as overall commander in April 1951. (16)

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Shane Quinn obtained an honors journalism degree and he writes primarily on foreign affairs and historical subjects.

Notes

1 Luiz Alberto Moniz Bandeira, The Second Cold War: Geopolitics and the Strategic Dimensions of the USA (Springer; 1st ed., 23 June 2017) p. 48

2 Ibid., p. 130

3 “What is the secretive U.S. ‘Kill/Capture’ Campaign?’, PBS, 17 June 2011

4 Bandeira, The Second Cold War, p. 130

5 “Daily brief: U.S. prepared for fights with Pakistanis during bin Laden raid: report”, Foreign Policy Magazine, 10 May 2011

6 “Obama sends U.S. military advisers to central Africa”, Reuters, 14 October 2011

7 Bandeira, The Second Cold War, p. 136

8 Ibid., p. 138

9 “Pakistan outrage after ‘NATO attack kills soldiers’”, BBC News, 26 November 2011

10 Bandeira, The Second Cold War, p. 213

11 “A Secret War in 120 Countries: The Pentagon’s New Power Elite”, Commondreams.org, 4 August 2011

12 “American special operations forces have been deployed to 135 countries this year alone”, The Independent, 25 September 2015

13 “Poll: Support for war in Afghanistan hits all-time low”, CBS News, 26 March 2012

14 Bandeira, The Second Cold War, p. 132

15 “Pentagon releases National Military Strategy”, Defense News, 1 July 2015

16 “Douglas MacArthur”, Spartacus Educational, September 199 (updated November 2021)

18 May 2023

Source: www.globalresearch.ca

By Prof Rodrigue Tremblay

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex… Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.” Dwight D. Eisenhower (1890-1969), 34th President of the United States, (1953-1961), (in his ‘Farewell Address’, Jan. 17, 1961)

“Were the Soviet Union to sink tomorrow under the waters of the ocean, the American military-industrial complex would have to remain, substantially unchanged, until some other adversary could be invented. Anything else would be an unacceptable shock to the American economy.” George F. Kennan (1904-2005), American diplomat and historian, (in his preface to Norman Cousins’ 1987 book ‘The Pathology of Power’)

“A nation cannot become free and at the same time continue to oppress other nations.” Fredrich Engels (1820-1895), German social scientist and father of Marxist theory, (in “Speech on Poland’, 1847)

Sometimes politicians like to sprinkle their speeches and statements with words like “diplomacy” and “peace“. This does not insure, in so doing, that they really mean what they say. In fact, such grandiloquent talk could be a cover-up for their real intentions, which may be the very opposite to diplomatic solutions and peaceful coexistence to solving world problems. In the realm of politics, actions count more than words.

A good point in this case could be what U.S. President Joe Biden meant when he said, during a talk at the State Department on February 4, 2021: “diplomacy is back at the center of our Foreign Policy.”

He repeated the same message a few months later, in a speech at the United Nations, on September 21, 2021, saying that “we’re opening a new era of relentless diplomacy“, and pledging that “we are not seeking a new Cold War or a world divided into rigid blocs.”

And to be well understood, Mr. Biden made the following commitment: “We must redouble our diplomacy and commit to political negotiations, not violence, as the tool of first resort to manage tensions around the world.” He even went on quoting the opening words of the 1948 Universal Declaration of Human Rights: “The equal and inalienable rights of all members of the human family is the foundation of freedom justice, and peace in the world.”

These were noble pledges.

The reality: The U.S. Government has largely abandoned multilateralism for a unilateral foreign policy mainly concentrated on NATO

However, what has really happened during the first three years of the Biden administration?

Following in the footsteps of a few preceding administrations, the Joe Biden administration has de facto abandoned the search for the common good of all countries within a multilateral approach. Indeed, far from actively leading the world with diplomacy in the hope of reducing military conflicts around the world, the Biden administration has embarked upon a bellicose foreign policy.

This is a policy inspired by neoconservative advisers, and it calls for increased military U.S. interventions abroad, on a permanent basis, outside of the framework of the U.N. Charter, which, it should be emphasized, was signed by all member nations. It has instead chosen to mainly pursue its foreign policy within the narrow framework of an increasingly offensive NATO.

Presently, there are two mainly U.S.-NATO-led proxy wars that are of immediate concern: a hot one in Ukraine directed at Russia, and one brewing in Taiwan and aimed at China.

In Ukraine, this has taken the form of the U.S. and other NATO countries shipping huge amounts of arms and equipment, and even some covert operations personnel, to that country neighboring Russia, including illegal depleted uranium weapons.

Even if public opinion in Western countries is still strongly behind the Russian-Ukrainian war, especially among the young and less among older generations, one of the consequences of the war, according to some polls, has been to isolate somewhat the United States and its NATO allies in certain parts of the world. In some countries, for example, notably in Asia, Africa and South America, the position seems to be “none of our business“.

Fall-outs from the American-NATO-led proxy wars against Russian and China

According to official propaganda, Russian embarked upon an ‘unprovoked’ war against Ukraine, on February 24, 2022. However, things are a bit more complicated, because the United States and NATO have been heavily involved in that unnecessary war since at least 2014, and credibly since 1991, as far as the U.S. government is concerned.

First of all, after the collapse of the Soviet Union, in 1991, it is widely established through declassified documents that U.S. Secretary of State James Baker, and the representatives of important European nations, made a solemn commitment to Russia, on February 9, 1990, that NATO would not be expanded “one inch” into Eastern Europe—conditional to Russia’s acceptance of the reunification of the two Germanys.

Secondly, as professor John Mearsheimer of the University of Chicago has often said (and I agree), there would not have been a Ukraine War if Joe Biden had not been in the White House. It was, indeed, President Biden’s insistence on having NATO expand to the very doorsteps of Russia, with missiles pointed toward Moscow, that was the main reason why Russia felt directly threatened and why it invaded Ukraine.

Even Pope Francis arrived at the same conclusion, that the main trigger of the Ukraine War was “NATO barking at Putin’s door.”

Thirdly, let us remember that it was the Obama administration (2009-2017), with then Vice-President Joe Biden involved, that bankrolled, to a large extent, the overthrow of the elected pro-Russia Ukrainian government of Viktor Yanukovych, in February 2014.

This was clearly established by then U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland (a well-known neocon), who confirmed publicly, on December 13, 2013, that the U.S. government had invested $5 billion in Ukraine, under the pretext of ‘promoting democracy’, One may ask if it an accepted practice by democracies to overthrow elected governments?

Fourthly, published documents indicate that the policy of encircling Russia militarily, an act of war implicitly not allowed under the U.N. Charter, is a neoconservative idea originating from the Rand Corporation—a think-tank heavily financed by the military-industrial complex (MIC) and deeply involved in framing U.S. foreign policy.

Indeed, the policy of an aggressive military stand against Russia is well outlined in a 2019 report, entitled “Overextending and Unbalancing Russia“. Therefore, when Defense Secretary Gen. Lloyd Austin said publicly, on April 25, 2022, that the Biden administration’s objective in Eastern Europe was to “see Russia weakened“, it was a clear indication that the Rand Corporation’s strategy of militarily encircling Russia had become the official foreign policy of the Biden administration, even at the risk of turning such a localized conflict into a global one.

That may be a reason why people in the know do not swallow the propaganda line that the U.S. and NATO are in Ukraine to “save democracy“. In fact, there is no democracy in Ukraine, since the Ukrainian government of Volodymyr Zelensky has abolished eleven political parties.

Failed attempts by third parties to bring peace to Ukraine

The above could explain why the Biden administration has been quick to turn down any attempt to prevent or to end the Ukraine War.

For example, even when it was still possible to avoid a conflict, on December 7, 2021, during a Biden-Putin direct phone talk, President Biden undiplomatically turned down demands to consider Russian security considerations and stop pushing NATO right to Russia’s border. [N.B.: It is relevant to remember that when the shoe was on the other foot, in October 1962, and the USSR wanted to place missiles in Cuba, at 90 miles from the USA, it was seen by the John F. Kennedy administration in Washington D.C. as an unacceptable breach of American security.]

The Israeli government and the government of Turkey both have attempted to mediate a peace between Russia and Ukraine, but without any success.

First, in the beginning days of the conflict, in early March 2022, then Israeli Prime Minister (June 2021-June 2022) Naftali Bennett attempted to mediate a speedy end to the Russia-Ukraine confrontation. He came very close to succeeding when Russian President Vladimir Putin dropped his demand to seek Ukraine’s disarmament and Ukrainian President Voldymyr Zelensky promised not to join NATO. A bilateral peace deal was ready to be signed in April 2022.

Secondly, in March 2022, the Turkish government also tried to bring a peace agreement closer between Russia and Ukraine. After successful talks were held in Istanbul, between officials of both countries, the two sides agreed on the framework for a tentative deal.

Considering that both Russia and Ukraine were willing to make concessions and with peace deals close at hand, why did the Israeli and the Turkish attempts at mediation fail?

Former Israeli Prime Minister Bennett gave an answer: the Biden administration commissioned then-British Prime Minister Boris Johnson to go to Kyiv and sabotage any peace deal. Some Western powers saw it to their advantage that the war in Ukraine continue.

Not too surprisingly, the latest attempt to end the Ukraine War—China‘s 12-point peace proposal for a “Political Settlement for the Ukraine Crisis“, made on February 24, 2023—has so far also been derailed.

It would seem that those who planned for and ‘invested’ much in such a war do not wish to lose face. For one, President Biden has branded the Chinese plan (which calls for de-escalation toward a cease-fire in Ukraine, respect for national sovereignty, establishment of humanitarian corridors, resumption of peace talks and a stop to unilateral sanctions), as “not rational“.

While President Joe Biden has concentrated his efforts on fueling the fire of war in Ukraine, Chinese President Xi Jinping seems to have filled the void and has developed the stature of a peace broker around the world.

In the end, considering the many parties involved in the conflict (Russia, Ukraine, United States, NATO, European Union), and their intransigence, the UN Secretary General, Antonio Guterres, threw in the towel and confessed, on May 9, 2023, that peace negotiations in Ukraine were “not possible at this time”. Warmongers are in charge in many nations, and no ceasefire can be expected at this time in Eastern Europe.

Flight from the U.S. dollar as a consequence of financial and economic sanctions

Holding financial assets denominated in U.S. dollars has recently become a risky proposition. Any government imprudent enough to do so exposes itself to political pressures from the U.S. government and, if it does not abide, its dollar assets could be arbitrarily frozen, unilaterally seized or simply confiscated. The list of countries so punitively ‘sanctioned‘ has been getting longer and longer each month.

One would think that an international currency should not be ‘weaponized’ in that way, unless one really wishes to destabilize the entire international monetary and financial system and create chaos in the world economy.

On April 16, 2023, even the U.S. Treasury Secretary Janet Yellen (1946-) mused aloud about the possibility of the U.S. dollar loosing its dominance in international finance and as a reserve currency.

Indeed, even if it is not easy, some countries have stopped settling their cross-border trade in U.S. dollars and are either using the Chinese Yuan, the Indian Rupee (INR), bilateral barter or their local currencies to do so. There are calls on the part of the BRICS nations (Brazil, Russia, India, China and South Africa) to avoid using the U.S. dollar, as a response to unilateral U.S.-led financial and economic sanctions.

Such a movement to dedollarize global trade is an ominous development for international monetary and financial markets, with potentially enormous consequences, both monetary and economic.

In fact, the entire international monetary framework of the Bretton Woods System of payments, established in 1944 around the U.S. dollar (linked at the time to gold at a fixed rate of $35 per ounce), could be in jeopardy. Indeed, if the international payment system were to become more fragmented, the volume of international trade and the flows of capital movements could decline, and this could have a disastrous impact on the growth of the world economy.

Conclusions

As things stand now, despite efforts, hopes do not look promising for a quick resolution to the proxy war in Ukraine, and for lowering the escalating tensions over Taiwan.

First, if Great Powers hiding behind their veto at the U.N. Security council cannot contribute to peace in the world, they should at least not actively contribute to war. Unfortunately, in the 21st Century, the United Nations has become the carpet on which Great Powers wipe their feet.

Secondly, with its proxy wars, the U.S. government should realize that it is losing its moral ascendency and influence in the world. And it is evident why this is the case: the Biden administrations’s current neocon-inspired foreign policy of using NATO as its main instrument of intervention around the world, especially with its proxy conflicts with Russia and China, while snubbing the United Nations and its Charter, is shrouded with risks and may be a very bad idea.

Indeed, such a policy is isolating the United States and its NATO allies from the rest of the world. In the future, this could undermine their legitimacy, efficiency and influence outside North America and Western Europe. Pushed to the limit, such a development could result in unraveling the very international framework of global institutions that was established in the aftermath of World War II.

Thirdly, if one adds the persistent and threatening danger of a nuclear war to the equation, it would seem obvious to clear minds that a negotiated peace in Ukraine, in particular, should be preferable to a murderous and disastrous war, without ends, with few possible winners, other than arms dealers, and many losers all around.

Prof. Rodrigue Tremblay is a Research Associate of the Centre for Research on Globalization (CRG)

17 May 2023

Source: www.globalresearch.ca

By Medea Benjamin and Nicolas J. S. Davies

On May 16, 2023, The New York Times published a full-page advertisement signed by 15 U.S. national security experts about the war in Ukraine. It was headed “The U.S. Should Be a Force for Peace in the World,” and was drafted by the Eisenhower Media Network.

While condemning Russia’s invasion, the statement provides a more objective account of the crisis in Ukraine than the U.S. government or The New York Times has previously presented to the public, including the disastrous U.S. role in NATO expansion, the warnings ignored by successive U.S. administrations and the escalating tensions that ultimately led to war.

The statement calls the war an “unmitigated disaster,” and urges President Biden and Congress “to end the war speedily through diplomacy, especially given the dangers of military escalation that could spiral out of control.”

This call for diplomacy by wise, experienced former insiders—U.S. diplomats, military officers and civilian officials—would have been a welcome intervention on any one of the past 442 days of this war. Yet their appeal now comes at an especially critical moment in the war.

On May 10th, President Zelenskyy announced that he is delaying Ukraine’s long-awaited “spring offensive” to avoid “unacceptable” losses to Ukrainian forces. Western policy has repeatedly put Zelenskyy in near-impossible positions, caught between the need to show signs of progress on the battlefield to justify further Western support and arms deliveries and, on the other hand, the shocking human cost of continued war represented by the fresh graveyards where tens of thousands of Ukrainians now lie buried.

It is not clear how a delay in the planned Ukrainian counter-attack would prevent it leading to unacceptable Ukrainian losses when it finally occurs, unless the delay in fact leads to scaling back and calling off many of the operations that have been planned. Zelenskyy appears to be reaching a limit in terms of how many more of his people he is willing to sacrifice to satisfy Western demands for signs of military progress to hold together the Western alliance and maintain the flow of weapons and money to Ukraine.

Zelenskyy’s predicament is certainly the fault of Russia’s invasion, but also of his April 2022 deal with the devil in the shape of then-U.K. Prime Minister Boris Johnson. Johnson promised Zelenskyy that the U.K. and the “collective West” were “in it for the long run” and would back him to recover all of Ukraine’s former territory, just as long as Ukraine stopped negotiating with Russia.

Johnson was never in a position to fulfill that promise and, since he was forced to resign as prime minister, he has endorsed a Russian withdrawal only from the territory it invaded since February 2022, not a return to pre-2014 borders. Yet that compromise was exactly what he talked Zelenskyy out of agreeing to in April 2022, when most of the war’s dead were still alive and the framework of a peace agreement was on the table at diplomatic talks in Turkey.

Zelenskyy has tried desperately to hold his Western backers to Johnson’s overblown promise. But short of direct U.S. and NATO military intervention, it seems that no quantity of Western weapons can decisively break the stalemate in what has degenerated into a brutal war of attrition, fought mainly by artillery and trench and urban warfare.

An American general bragged that the West has supplied Ukraine with 600 different weapons systems, but this itself creates problems. For example, the different 105 mm guns sent by the U.K., France, Germany and the U.S. all use different shells. And each time heavy losses force Ukraine to re-form survivors into new units, many of them have to be retrained on weapons and equipment they’ve never used before.

Despite U.S. deliveries of at least six types of anti-aircraft missiles—Stinger, NASAMS, Hawk, Rim-7, Avenger and at least one Patriot missile battery—a leaked Pentagon document revealed that Ukraine’s Russian-built S-300 and Buk anti-aircraft systems still make up almost 90 percent of its main air defenses. NATO countries have searched their weapons stockpiles for all the missiles they can provide for those systems, but Ukraine has nearly exhausted those supplies, leaving its forces newly vulnerable to Russian air strikes just as it prepares to launch its new counter-attack.

Since at least June 2022, President Biden and other U.S. officials have acknowledged that the war must end in a diplomatic settlement, and have insisted that they are arming Ukraine to put it “in the strongest possible position at the negotiating table.” Until now, they have claimed that each new weapons system they have sent and each Ukrainian counter-offensive have contributed to that goal and left Ukraine in a stronger position.

But the leaked Pentagon documents and recent statements by U.S. and Ukrainian officials make it clear that Ukraine’s planned spring offensive, already delayed into summer, would lack the previous element of surprise and encounter stronger Russian defenses than the offensives that recovered some of its lost territory last fall.

One leaked Pentagon document warned that “enduring Ukrainian deficiencies in training and munitions supplies probably will strain progress and exacerbate casualties during the offensive,” concluding that it would probably make smaller territorial gains than the fall offensives did.

How can a new offensive with mixed results and higher casualties put Ukraine in a stronger position at a currently non-existent negotiating table? If the offensive reveals that even huge quantities of Western military aid have failed to give Ukraine military superiority or reduce its casualties to a sustainable level, it could very well leave Ukraine in a weaker negotiating position, instead of a stronger one.

Meanwhile, offers to mediate peace talks have been pouring in from countries all over the world, from the Vatican to China to Brazil. It has been six months since the U.S. Chairman of the Joint Chiefs of Staff, General Mark Milley, suggested publicly, after Ukraine’s military gains last fall, that the moment had come to negotiate from a position of strength. “When there’s an opportunity to negotiate, when peace can be achieved, seize it,” he said.

It would be doubly or triply tragic if, on top of the diplomatic failures that led to the war in the first place and the U.S. and U.K. undermining peace negotiations in April 2022, the chance for diplomacy that General Milley wanted to seize is lost in the forlorn hope of attaining an even stronger negotiating position that is not really achievable.

If the United States persists in backing the plan for a Ukrainian offensive, instead of encouraging Zelenskyy to seize the moment for diplomacy, it will share considerable responsibility for the failure to seize the chance for peace, and for the appalling and ever-rising human costs of this war.

The experts who signed The New York Times statement recalled that, in 1997, 50 senior U.S. foreign policy experts warned President Clinton that expanding NATO was a “policy error of historic proportions” and that, unfortunately, Clinton chose to ignore the warning. President Biden, who is now pursuing his own policy error of historic proportions by prolonging this war, would do well to take the advice of today’s policy experts by helping to forge a diplomatic settlement and making the United States a force for peace in the world.

Medea Benjamin and Nicolas J. S. Davies are the authors of War in Ukraine: Making Sense of a Senseless Conflict, published by OR Books in November 2022.

16 May 2023

Source: countercurrents.org

By Javed Iqbal Wani

The result of the 2023 Karnataka assembly elections has surprised those who, directly or indirectly, had already read its obituary. Congress has secured 136 seats out of 224, and the BJP has managed to retain only 64.  However, contrary to the observation of most commentators, Congress was successful not merely because of its local focus. In this article, I argue that at least three factors solidified Congress’s campaign against the currently dominant Bharatiya Janata Party. Therefore, there are some lessons to be learnt from its political campaign.

The first factor is the politics of courage. In an atmosphere of political gloom where an alternative to the aggressive posturing of the BJP seemed distant, the disposition of courage by Congress leadership in the Karnataka elections refreshed the practice of politics. Compassion and reason were the much-needed antidotes to rescue politics from authoritarian hyperbole. Courage as a political practice, thus, infused politics with almost a redemptive heroic quality to confront cruelty and fear in the service of humanity. It is no secret that, to some extent, the BJP had successfully exhausted Congress’s energies by dragging its leaders into legal and extra-legal political battles. At a time when Congress did not have sufficient support and was being bullied by all means, its leadership has shown exemplary leadership qualities by practising unflinching defiance of fear and intimidation and demonstrating the much-needed courage and energy to amass popular support. Fortunately, it did not go unnoticed by the electorate. One can argue that the momentum of the mass-contact Bharat Jodo Yatra consolidated the party’s presence in Karnataka too. Its people-oriented campaign did not resort to vague promises but categorically emphasised the significance of peace, harmony, and brotherhood. It seems to have clicked with the electorate in Karnataka and hence made a case for a renewed political responsibility based on conscientious citizenship.

The second factor is the disciplined, clear, and consistent election campaign and political messaging run by the Congress party. Its campaign focused on relatable notions of civic virtue and liberal ideals such as rights and human dignity. Thus, puncturing the juggernaut of discursive violence of a communal narrative that is self-sustaining and self-serving. From grassroots workers to its top leadership, the party exhibited commendable discipline and astute engagement with popular issues. During this campaign, Congress did not fall prey to the BJP’s trap of communal rhetoric and carefully manoeuvred a few instances where it was cornered in the name of religion and community. The people-oriented campaign raised issues like inflation and unemployment and, unlike BJP, did not invoke abstract fears and inconsequential sectarianism. The clarity and consistency of political messaging provided a shot in the arm for Congress’s campaign. The electorate responded to the political messaging of the Congress party and realised the dangers of zero-sum game politics. The form of politics has triumphed over the force of politics. Reason and dialogue emerge as significant medium to restore political hope.

The last but the most potent was the politics of love, inclusion, and humanity. Toleration and civility were the central pillars of the Congress campaign. The ideological thrust of such ideas creates meaningful coordination between various aspects of public and private life, thus offering a radical configuration of political engagement. It emerged as a formula that redefines obscure junctures where commonalities overtake differences. As the famous French Philosopher Alain Badiou has observed in his work In Praise of Love that love is an existential project and, therefore, a constant unravelling quest for truth. Badiou’s analysis proposes that the moment or point of engagement is a moment of encounter. This encounter transforms the relationship between two parties by challenging them “to see the world from the point of view of two rather than one.” Badiou understands it as love’s most concrete transfiguration. Thus, the politics of love is a magnificent quest to explore and celebrate differences and dilutes our obsession with ourselves.

As they say, with great power comes great responsibility. Congress faces a challenging task that ranges from diffusing any party infightings, posing as a unified organisation and meeting the expectations of the state’s people, keeping in mind the impact their governance model can have on potentially reviving their fortune in the upcoming 2024 Lok Sabha elections. The Karnataka results must not be seen as momentary but as the symptom of a legitimacy deficit of the BJP government and its policies.

Javed Iqbal Wani, Senior Assistant Professor,School of Law, Governance and Citizenship, Ambedkar University Delhi, New Delhi

15 May 2023

Source: countercurrents.org

By Dr Ramzy Baroud

All Israeli wars on the Palestinians throughout the years have been promoted and justified by Tel Aviv in the name of ‘security’ and ‘fighting terrorism’.

Israel’s biggest challenge throughout many of these wars was hardly the Palestinian Resistance, however steadfast and resilient. The challenge has always been Tel Aviv’s ability to kill many Palestinians, including civilians, without tarnishing its image internationally as an oasis of democracy and civilization.

Israel has been losing the public relations battle and rapidly so and, now, it is losing a different kind of battle as well.

Throughout its 75-year-old history, from its violent birth on the ruins of historic Palestine in May 1948, up to its latest war on besieged Gaza on May 9, Israel’s history has been associated with violence.

Pro-Israel western propaganda, along with masterful Israeli manipulation of facts and rewriting of history, allowed Israel to blame the violence on others: first, the Arabs who, supposedly, attacked Israel, unprovoked, time and again; then the Palestinian ‘terrorists’ from all ideological colors, the socialists, the secularists and, as of late, the ‘Islamic fundamentalists’.

Alas, the Israeli hasbara worked, not because of its sheer genius, but because of the near-total embargo on the Palestinian voice in all aspects of life. This embargo continues to this day, and has extended to reach dominant social media platforms, leading amongst them, Facebook.

But the fight for the truth, intellectual integrity and freedom of speech continues, and Palestinian successes are now far greater than all attempts by Israel, its benefactors and supporters to censor, sideline or muffle the Palestinian voice.

The days of hiding Israeli crimes or blaming them on someone else seem to be over.

There are reasons why Israel’s propaganda is living its worst days. Aside from the power and influence commanded by Palestinian intellectuals, social media activists and the numerous platforms made available to them through innumerable solidarity networks around the world, Israeli hasbara has itself grown weak and unconvincing.

Israel is a fragmented society. While it is true that Israelis often unite during times of war, this time around, their unity is stale and unimpressive.

The rise of a far-right, even fascist government under the leadership of embattled Prime Minister Benjamin Netanyahu last December, generated mass protests that have rocked Israeli cities since then. Trapped, Netanyahu needed an outlet, to unify angry Israelis behind him, and to keep his far-right ministers satisfied. He opted to attack Gaza.

The choice of exporting Israel’s political crises to Palestine is an old tactic. However, since stiff and increasingly strong Palestinian resistance in recent years, a Gaza war is no longer an easy option. The May 2021 war, dubbed “Guardian of the Walls” by Israel and “Sword of Jerusalem” by Palestinians, for example, was a painful reminder of how such foolish miscalculations on the part of Tel Aviv can backfire, and badly.

So, Netanyahu resorted to a different model: a mini war that targets one Palestinian group in an isolated area, at a time, for example, the Lions’ Den in Nablus, the Islamic Jihad in Gaza.

Netanyahu’s choice of attacking Gaza and assassinating top leaders in the Islamic Jihad’s military arm, Al-Quds Brigades, was not a haphazard one. The group is strong enough that such a decisive and bloody military operation can be marketed by Netanyahu and his supporters as a restoration of ‘deterrence’, but without involving Israel in a prolonged and costly war with all Palestinian Resistance groups, all at once.

This tactic worked in the past, at least according to Israel’s own calculations. In November 2019, Israel launched a war on the Islamic Jihad in Gaza. It was dubbed “Black Belt”. Though other Resistance groups declared support for the Islamic Jihad then, they did not engage in the fight directly. Why?

For years, the Resistance in Gaza wanted to change the rules of engagement with Israel. Instead of allowing Israel to determine the time and place for war, based on Tel Aviv’s own agenda and degree of readiness, Resistance factions in Gaza wanted to have a say over the timing of such battles.

Israel completely failed to understand the Palestinian strategy and assumed that the “Black Belt” operation reflected Palestinian weakness, indecisiveness and, more dangerously, disunity.

The May 2021 war and Unity Intifada should have alerted Israel to the fact that Palestinian Resistance groups remained united, and that the Resistance Joint Operations Room, which includes Hamas, the Islamic Jihad, the socialist PFLP, among others, continues to operate in unison.

Netanyahu wished to ignore the clear messaging transmitted by Palestinians, not only in Gaza, but also through the unified Resistance in the West Bank, perhaps out of his own desperation to divert attention from his multiple political crises and corruption trials at home. For whatever reason, Netanyahu thought that he would be able to successfully copy the “Black Belt” experience, divide the Resistance and restore ‘deterrence’.

Soon after the assassination of top Islamic Jihad commanders – Jihad al-Ghannam, Khalil al-Bahtini and Tariq Ezz al-Deen. – on February 9, Netanyahu appeared at a press conference along with his archenemy, Defense Minister, Yoav Gallant, to prematurely detail Israel’s supposed victory. The victory lap did not last for long, however. After 35 hours of perplexing silence, and as nearly two million Israelis hid in shelters as if awaiting their punishment, the Resistance responded.

Then, the rockets of the Resistance came raining in, creating panic, from Sderot, Ashkelon and Netivot all the way to Rehovot or Gush Etzion.

Suddenly, the ‘deterrence’ war, named “Shield and Arrow” by the Israeli military, became Netanyahu’s nightmare. And, yet, all of this was done by the Islamic Jihad alone, in coordination and support from the rest of the Resistance factions.

Though Hamas, the PFLP and others have fully supported the Islamic Jihad in its ongoing fight, Israeli officials still refrained from resorting to their usual threats of assassinating all Palestinian Resistance leaders. The only exception was comments made by Israel’s Minister of Energy of Infrastructure, Israel Katz, who threatened, in an interview with Israel’s Kan 11 News, to ‘eliminate’ top Hamas leaders in Gaza, Yahya Sinwar and Mohammed Deif.

Now that, as of Saturday evening, May 13, a tentative ceasefire has been reached, pro-Netanyahu propagandists will spend many hours speaking of the splendid victory over ‘terror’, and pro-Israeli spin doctors will labor to twist facts and blame Palestinians, including children, for their own misery.

But the uncontested truth is that the Palestinian Resistance has managed to challenge, if not to reverse, the rules of engagements like never before.

More importantly, Palestinians on the ground have shown us that unity is not expressed through cliched language, empty slogans and press conferences in luxury hotels. It is the unity of those resisting on the ground, from Gaza to Nablus, and from Jenin to Sheikh Jarrah, that matters most.

Dr. Ramzy Baroud is a journalist, author and the Editor of The Palestine Chronicle.

15 May 2023

Source: countercurrents.org

By Countercurrents Collective

A bipartisan group of U.S. lawmakers has introduced a bill to oppose the normalization of relations between Syria and other nations. The Arab League reinstated the country this month, while Saudi Arabia announced the reopening of diplomatic channels with Damascus after ten years.

Media reports said:

The Assad Anti-Normalization Act threatens “governments considering normalization with the Assad regime” with severe consequences, according to a press release by the office of U.S. Representative Joe Wilson, the primary sponsor of the bill.

The government of Syrian President Bashar Assad faced mass protests and an armed uprising over a decade ago. The U.S. and its allies accused Damascus of crimes against its people and backed anti-government forces by sending weapons to militant groups, among other measures. Some of the arms ended up in the hands of outright jihadists.

The Syrian government turned the tide of the conflict against the militant groups – which had taken over large parts of Syrian territory – with the help of Russia and Iran, and is now in control of most parts of the country. The U.S. now has a military base in the east, in spite of objections from Damascus, and supports the Kurdish forces which hold fertile and oil-rich regions of the country.

After the opposition’s failure to topple Assad, Washington introduced severe economic sanctions, which critics say significantly undermine Syria’s attempts at reconstruction. The new legislation seeks to bolster the sanctions. Among other things, it targets foreign airports receiving Syrian planes, seeks to crack down on first lady Asma Assad’s charity, and subjects grants of $50,000 or more to Syria from nations in the region to sanctions review.

“The United States must use all of our leverage to stop normalization with Assad,” U.S. Foreign Affairs Committee Chairman Michael McCaul said of the new bill, which he co-sponsored. It mandates “further sanctions against any form of investment in territory under control of the Assad regime, as we remain committed to ensuring the Syrian people receive justice.”

The bill also reacts to the Arab League’s reengagement with Syria by instructing the U.S. Department of State to monitor and report to the Congress all diplomatic contacts between Damascus and certain states. The list includes Türkiye, the UAE, Egypt, Jordan, Iraq, Saudi Arabia, and others. The U.S. government would be required to implement a strategy to counter Syria rapprochement for at least five years under the proposed law.

The lawmakers also want to be updated on what they have termed the “manipulation of the UN” by Damascus, referring to conditions under which UN humanitarian aid programs helping Syrians operate.

A Reuters report said:

A bipartisan group of U.S. lawmakers introduced a bill on Thursday intended to bar the U.S. government from recognizing Bashar al-Assad as Syria’s president and enhance Washington’s ability to impose sanctions in a warning to other countries normalizing relations with Assad.

The bill, first reported by Reuters, would prohibit the U.S. federal government from recognizing or normalizing relations with any government in Syria led by Assad, who is under U.S. sanctions, and expands on the Caesar Act, a U.S. law that imposed a tough round of sanctions on Syria in 2020.

The bill comes after Arab states turned the page on years of confrontation with Assad on Sunday by letting Syria back into the Arab League, a milestone in his regional rehabilitation even as the West continues to shun him after years of civil war.

Regional countries, including Saudi Arabia, Qatar and others, had for years supported anti-Assad rebels, but Syria’s army – backed by Iran, Russia and allied paramilitary groups – regained most of the country. The icy ties with Assad began to thaw more quickly after devastating earthquakes in Syria and Turkey in February.

The U.S. has said it will not normalize ties with Assad, and its sanctions remain in full effect.

“Countries choosing to normalize with (the) unrepentant mass murderer and drug trafficker, Bashar al-Assad, are headed down the wrong path,” U.S. Representative Joe Wilson, the chair of the Subcommittee on the Middle East, North Africa, and Central Asia, said in a statement.

The bill was introduced by Wilson alongside House of Representatives Foreign Affairs Committee Chairman Michael McCaul and co-chairs of the Free, Democratic and Stable Syria Caucus, Republican French Hill and Democrat Brendan Boyle; among others.

The legislation is a warning to Turkey and Arab countries that if they engage with Assad’s government, they could face severe consequences, a senior congressional staffer who worked on the bill told Reuters.

“The readmission of Syria to the Arab League really infuriated members and made clear the need to quickly act to send a signal,” the staffer said.

The staffer said the State Department was consulted in the drafting of the bill. The State Department did not immediately respond to a request for comment.

The bill’s provisions include a requirement for an annual strategy from the secretary of state for five years on countering normalization with Assad’s government, including a list of diplomatic meetings held between Syria’s government and Turkey, the United Arab Emirates, Egypt and others.

The bill would also clarify the applicability of U.S. sanctions on Syrian Arab Airlines and another carrier, Cham Wings. Under the proposed bill, countries that allow the airlines to land would face sanctions against that airport, the staffer said.

If passed, the bill would also require a review of transactions, including donations over $50,000 in areas of Syria held by Assad’s government by anyone in Turkey, the UAE, Egypt and several other countries.

U.S., UK Oppose Syria’s Re-admission To Arab League

An AP report said on May 10, 2023:

The U.S. and Britain voiced dissatisfaction Tuesday with the weekend decision by the Arab League to re-instate Syria as a member.

U.S. Secretary of State Antony Blinken and British Foreign Secretary James Cleverly said they opposed the move. But they also allowed it was up to the Arab League to determine its membership.

At the same time they said their countries would not normalized relations with Syrian President Bashar Assad’s government unless it accepts and complies with a U.N. plan to restore peace to the country after a brutal 13-year civil war.

“We do not believe that Syria merits re-admission to the Arab League,” Blinken told reporters at a joint news conference with Cleverly at the State Department.

“It is a point we have made to all of our regional partners, but they have to make their own decisions,” Blinken said. “Our position is clear: We are not going to be in the business of normalizing relations with Assad and with that regime.”

Cleverly said the British government agreed with the U.S. stance.

“This is an occasion where the U.S. and the U.K. share very, very similar views,” he said. ”The U.K. is very uncomfortable with the re-admission of Syria in the Arab League, but as Secretary Blinken said, ultimately it is a decision for the membership of the Arab League.”

“The point that I have made is that there needs to be conditionality if they choose to take this course of action,” he said. “It needs to be conditional on some fundamental changes from Damascus and the Assad regime.”

Blinken and Cleverly said any solution to the crisis in Syria must be based on U.N. Security Council Resolution 2254, which was adopted in 2015 and lays out steps, including a permanent cease-fire, humanitarian assistance and progress toward free and fair elections, measures the Arab League also backs.

“I think the Arab perspective as articulated through the Arab League is that they believe they can pursue these objectives through more direct engagement,” Blinken said. “We may have a different perspective when it comes to that, but the objectives that we have I think are the same.”

Both men said it was critical for Syria to never again become a haven for the Islamic State group, which occupied large portions of the country and neighboring Iraq before being largely driven out.

Syria was reinstated in the 22-nation Arab League on Sunday after a 12-year suspension. It was a symbolic victory for Assad, who can join the group’s May 19 summit, though Western sanctions will continue to block reconstruction funds to the war-battered country.

Türkiye And Syria Planning Roadmap To Rebuild Ties

Another media report said:

Türkiye, Syria, Iran and Russia have agreed to develop a roadmap for rebuilding ties between Ankara and Damascus, which deteriorated during the Syrian conflict, the Russian Foreign Ministry has said.

The announcement was made after talks between the top diplomats of the four countries – Türkiye’s Mevlut Cavusoglu, Syria’s Faisal Mekdad, Iran’s Hossein Amir-Abdollahian and Russia’s Sergey Lavrov – which concluded in Moscow on Wednesday.

During the negotiations, the foreign ministers “discussed the issues of restoring Syrian-Turkish interstate relations in various aspects in a substantive and frank manner,” the ministry said in a statement.

“The participants also agreed to instruct their deputy foreign ministers to prepare a roadmap for advancing relations between Turkiye and Syria in coordination with the defense ministries and special services of the four countries,” it added.

All sides stressed their commitment to preserving the sovereignty and territorial integrity of Syria and agreed to continue contacts in bilateral and quadruple formats, according to Moscow.

The Syrian Foreign Ministry confirmed the accounts by Moscow and Ankara in its statement. Damascus added that the sides also stressed the need to increase international assistance to Syria for the reconstruction of the country after a battle against international terrorism that lasted over a decade.

In December, Moscow hosted the first talks in 11 years between the defense ministers of Türkiye and Syria.

According to a report from Syrian newspaper Al-Watan, during that meeting Ankara agreed to withdraw its troops from northern Syria.

However, Turkish forces still remain in Idlib Province – the last area remaining under control of militants in the country, with Cavusoglu saying last month they are needed there “to prevent threats against [Türkiye], but also to block efforts to break up Syria.”

Relations between Ankara and Damascus deteriorated after the outbreak of the conflict in Syria in 2011, and saw Türkiye join Western calls for President Bashar Assad to be removed from power, supported by the Syrian National Army and some other anti-government groups.

However, over the past few years the Syrian authorities, helped by their Russian and Iranian allies, were able to restore control over most of the country’s territory, defeating, among others, Islamic State (IS, formerly ISIS/ISIL) and other terrorist groups. Ankara’s stance towards Damascus has also shifted recently as it started looking for ways to rebuild ties with its neighbor. Turkish President Recep Tayyip Erdogan said in January that he was ready to meet with Assad after their respective diplomats do the preparatory work, in order “to establish peace and stability in the region.”

Last week, Syria was reinstated as a member of the Arab League.

Syria has also agreed to resume diplomatic relations with another major regional player, Saudi Arabia.

Earlier media reports said:

The Arab League agreed Sunday to reinstate Syria, ending a 12-year suspension and taking another step toward bringing Syrian President Bashar Assad, a long-time regional pariah, back into the fold.

Some influential league members remain opposed to reinstating Syria, chief among them Qatar, which did not send its foreign minister to Sunday’s gathering. Thirteen out of the league’s 22 member states sent their foreign ministers to the meeting in Cairo.

The decision represented a victory for Damascus, albeit a largely symbolic one. Given that Western sanctions against Assad’s government remain in place, the return to the Arab League is not expected to lead to a quick release of reconstruction funds in the war-battered country.

Syria’s membership in the Arab League was suspended early on during the country’s 2011 uprising against Assad’s rule that was met by a violent crackdown and quickly turned into a civil war. The conflict has killed nearly a half million people since March 2011 and displaced half of the country’s pre-war population of 23 million.

Arab League Secretary-General Ahmed Aboul Gheit said in a televised statement that the decision to return Syria to the organization, which will allow Assad to take part in the group’s upcoming May 19 summit, is part of a gradual process of resolving the conflict.

Aboul Gheit also said restoring Syria’s membership in the organization does not mean all Arab countries have normalized with Damascus.

“These are sovereign decisions for each state individually,” he said.

Syrian Prime Minister Hussein Arnous claimed Sunday that Syria had been the victim of “misinformation and distortion campaigns launched by our enemies” for 12 years. He said Sunday’s consultations reflected the “prestigious position” Syria holds regionally and internationally.

Qatar

A spokesperson for Qatar’s Ministry of Foreign Affairs said in a statement published by state media that normalization with Syria should be tied to a political solution to the conflict but that it “always seeks to support what will achieve an Arab consensus and will not be an obstacle to that.”

Arab rapprochement with Damascus accelerated after a deadly Feb. 6 earthquake that shattered parts of the war-torn country. One of the countries pushing normalization is Saudi Arabia, which once backed opposition groups trying to overthrow Assad.

Egypt

Egyptian Foreign Minister Samer Shoukry said before Sunday’s meeting that only an Arab-led “political solution without foreign dictates” can end the ongoing conflict. “The different stages of the Syrian crisis proved that it has no military solution, and that there is no victor nor defeated in this conflict,” he said.

Neighbors of Syria that hosted large refugee populations took steps towards reopening diplomatic links with Damascus. Meanwhile, two Gulf monarchies, the United Arab Emirates and Bahrain, reestablished ties.

The Feb. 6 earthquake that rocked Turkey and Syria was a catalyst for further normalization across the Arab world. China helped to broker a recent rapprochement between arch-rivals Saudi Arabia and Iran, which had backed opposing sides in the Syrian conflict.

Jordan last week hosted regional talks that included envoys from Saudi Arabia, Iraq, Egypt, and Syria. They agreed on a framework, dubbed the “Jordanian initiative,” that would slowly bring Damascus back into the Arab fold. Amman’s top diplomat said the meeting was the “beginning of an Arab-led political path” for a solution to the crisis.

Saudi King Invites Assad To Attend Arab League Summit

Saudi Arabia’s King Salman bin Abdulaziz has invited Syria’s President Bashar al-Assad to attend an Arab League summit in the Gulf country on May 19, Syrian state media reported on Wednesday.

The invitation is a powerful signal that the regional isolation of Assad and his war-battered country is ending.

Regional countries – including Saudi Arabia, Qatar and others – had for years supported anti-Assad rebels but Syria’s army, backed by Iran, Russia and allied paramilitary groups, regained most of the country.

Bashar al-Assad received an invitation to next week’s Arab summit in Saudi Arabia.

Assad received an invitation from Saudi King Salman “to participate in the 32nd Arab League summit which will be held in Jeddah on May 19”, the Syrian presidency said.

Assad said the summit “will enhance joint Arab action to achieve the aspirations of the Arab peoples,” it said in a statement.

Saudi Arabia’s ambassador to Jordan, Nayef bin Bandar al-Sudairi, delivered the invitation, according to Saudi state news agency SPA.

He conveyed the King and his son Crown Prince Mohammed bin Salman’s “wishes to the brotherly government and people of Syria for security and stability,” SPA said.

The last Arab League summit Assad attended was in 2010 in Libya.

The invitation comes a day after Riyadh and Damascus announced that work would resume at their respective diplomatic missions in Syria and Saudi Arabia, after more than a decade of severed relations.

A decision in March by former arch-rivals Saudi Arabia and Iran, a close ally of Damascus, to resume ties also shifted the political landscape.

In April, Saudi Foreign Minister Prince Faisal bin Farhan met with Assad in Damascus on the first such visit since the war broke out.

Regional capitals have gradually been warming to Assad as he has held onto power and clawed back lost territory with crucial support from Iran and Russia.

In 2018, the United Arab Emirates re-established ties with Syria and has been leading the recent charge to reintegrate Damascus into the Arab fold.

The fate of millions of Syrian refugees — many of them living in neighboring Turkey, Jordan and Lebanon — are among some states’ main concerns.

Several Arab countries are also seeking increased security co-operation with Syria.

Assad hopes normalization with wealthy Gulf states can bring economic relief and money for reconstruction.

Analysts say Western sanctions on Syria are likely to continue to deter investment.

15 May 2023

Source: countercurrents.org

By Prof Michel Chossudovsky

We bring to the attention of our readers the analysis of George F. Kennan (1948) which constitutes the foreign policy cornerstone of the “‘Truman doctrine.”

These documents have set the groundwork. They have a direct bearing on US foreign policy and military doctrine under the Biden Administration, specifically with regard to Germany and the European Union which are currently the object of a U.S. sponsored Act of “Economic Warfare”. 

What is of significance is that the threats directed against Germany and the EU, emanating from the Biden White House, were formulated under the “Truman Doctrine” at the very outset of the post-war era. According to George Kennan: 

“To achieve such a federation [EU] would be much easier if Germany were partitioned, or drastically decentralized, and if the component parts could be brought separately into the European union.”

The military occupation of western Germany may have to go on for a long time. We may even have to be prepared to see it become a quasi-permanent feature of the European scene

In the long run there can be only three possibilities for the future of western and central Europe. One is German domination. Another is Russian domination. The third is a federated Europe, into which the parts of Germany are absorbed but in which the influence of the other countries is sufficient to hold Germany in her place.

The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better”  (George Kennan, emphasis added)

“Straight power concepts” are now designated by the U.S State Department and the media as “the rules-based order”.

Introduction

Today’s US-NATO sponsored wars are part of a military and foreign policy agenda extending over a period of more than half a century.

In this regard, the NeoCons’ Project for the New American Century’s blueprint formulated in 2000  should be viewed as the culmination of a post-war agenda of military hegemony and global economic domination as initially formulated by the State Department in 1948 at the outset of the Cold War.

What these 1948 State department documents reveal (see below in Annex) is continuity in US foreign policy from “Containment” during the Cold War to today’s doctrine of “Pre-emptive War”.

The Project for the New American Century (PNAC) is in many regards a continuation of the Truman Doctrine, namely a hegemonic “long war” waged by US-NATO at a global level. Military actions are to be implemented simultaneously in different regions of the world (as outlined in the PNAC): 

“Fight and decisively win multiple, simultaneous major theater wars” 

 

Needless to say, successive Democratic and Republican administrations, from Harry Truman to George W. Bush, Barack Obama [and now Joe Biden] have been involved in carrying out this hegemonic blueprint for global domination, which the Pentagon  calls the “Long War”.

Kennan’s writings point to the importance of building a dominant Anglo-American alliance based on “good relations between our country and [the] British Empire”. In today’s world, this alliance largely characterizes the military axis between Washington and London, which plays a dominant role inside NATO to the detriment of Washington’s  European allies. Kennan also pointed to the inclusion of Canada in the Anglo-American alliance, a policy which today has largely been implemented (under NAFTA and the integration of military command structures).  Canada was viewed as a go between the US and Britain, as a means for the US to also exert its influence in Britain’s colones, which later became part of the Commonwealth.

Of significance, Kennan underscores the importance of preventing the development of continental European powers (e.g. Germany and France)  which could compete with the Anglo-American axis:

Today, standing at the end rather than the beginning of this half-century, some of us see certain fundamental elements on which we suspect that American security has rested. We can see that our security has been dependent throughout much of our history on the position of Britain; that Canada, in particular, has been a useful and indispensable hostage to good relations between our country and British Empire; and that Britain’s position, in turn, has depended on the maintenance of a balance of power on the European Continent.

Thus it was essential to us, as it was to Britain, that no single Continental land power should come to dominate the entire Eurasian land mass. Our interest has lain rather in the maintenance of some sort of stable balance among the powers of the interior, in order that none of them should effect the subjugation of the others, conquer the seafaring fringes of the land mass, become a great sea power as well as land power, shatter the position of England, and enter—as in these circumstances it certainly would—on an overseas expansion hostile to ourselves and supported by the immense resources of the interior of Europe and Asia. Seeing these things, we can understand that we have had a stake in the prosperity and independence of the peripheral powers of Europe and Asia: those countries whose gazes were oriented outward, across the seas, rather than inward to the conquest of power on land. (George F. Kennan, American Diplomacy. University of Chicago Press, Chicago, 1951)

Today the World is at crossroads of the most serious crisis in World history. The US and its allies have launched a military adventure which threatens the future of humanity. This roadmap of global warfare has its historical roots in the 1948 Truman doctrine.

Of relevance in relation to recent developments in Ukraine and Eastern Europe, Kennan explicitly pointed in his 1948 State Department brief, to “a policy of containment of Germany, within Western Europe”. What Kennan’s observations suggest is that the US should be  supportive of  a European Project only inasmuch as it supports US hegemonic interests.

In this regard, we recall that the Franco -German alliance largely prevailed prior to the onslaught of the March 2003 US-UK invasion of Iraq, to which both France and Germany were opposed.

The 2003 invasion of Iraq was a turning point. The election of pro-US political leaders (President Sarkozy in France and Chancellor Angela Merkel in Germany) was conducive to a weakening of national sovereignty, leading to the demise of the Franco-German alliance.

Today both Francois Hollande and Angela Merkel are taking their orders directly from Washington.

Moreover, in today’s context, the US is committed to preventing Germany and France from developing political and economic relations with Russia, which in the eyes of Washington would undermine America’s hegemonic ambitions in the European Union.

“Federated Europe”

It would appear that a blueprint of  a European Union predicated on “a weakened Germany” had been envisaged by the US State Department in the late 1940s.

Writing in 1948, Kennan had envisaged the formation of a “Federated Europe” which would based on the strengthening of the dominant Anglo-American alliance between Britain and the US , the weakening of Germany as a European power and the exclusion of Russia.

According to Kennan:

In the long run there can be only three possibilities for the future of western and central Europe. One is German domination. Another is Russian domination. The third is a federated Europe, into which the parts of Germany are absorbed but in which the influence of the other countries is sufficient to hold Germany in her place.

If there is no real European federation and if Germany is restored as a strong and independent country, we must expect another attempt at German domination. If there is no real European federation and if Germany is not restored as a strong and independent country, we invite Russian domination, for an unorganized Western Europe cannot indefinitely oppose an organized Eastern Europe. The only reasonably hopeful possibility for avoiding one of these two evils is some form of federation in western and central Europe.

Moreover, it is worth noting that the US at the outset of the Cold did not favor the reunification of Germany. Quite the opposite: Germany was to remain partitioned:

Our dilemma today lies in the fact that whereas a European federation would be by all odds the best solution from the standpoint of U.S. interests, the Germans are poorly prepared for it. To achieve such a federation would be much easier if Germany were partitioned, or drastically decentralized, and if the component parts could be brought separately into the European union. To bring a unified Germany, or even a unified western Germany, into such a union would be much more difficult: for it would still over-weigh the other components, in many respects.

With regard to Asia including China and India, Kennan hints to to the importance of not only articulating a military solution but in maintaining the people of Asia in a state of poverty. What is also put forth is a strategy of creating divisions as well as ensuring that Asian countries do not establish a relationship with the Soviet Union which would hinder US hegemonic interests.

“The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better”:

Furthermore, we have about 50% of the world’s wealth but only 6.3% of its population. This disparity is particularly great as between ourselves and the peoples of Asia. In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world-benefaction.

For these reasons, we must observe great restraint in our attitude toward the Far Eastern areas. The peoples of Asia and of the Pacific area are going to go ahead, whatever we do, with the development of their political forms and mutual interrelationships in their own way. This process cannot be a liberal or peaceful one. The greatest of the Asiatic peoples—the Chinese and the Indians—have not yet even made a beginning at the solution of the basic demographic problem involved in the relationship between their food supply and their birth rate. Until they find some solution to this problem, further hunger, distress, and violence are inevitable. All of the Asiatic peoples are faced with the necessity for evolving new forms of life to conform to the impact of modern technology. This process of adaptation will also be long and violent. It is not only possible, but probable, that in the course of this process many peoples will fall, for varying periods, under the influence of Moscow, whose ideology has a greater lure for such peoples, and probably greater reality, than anything we could oppose to it. All this, too, is probably unavoidable; and we could not hope to combat it without the diversion of a far greater portion of our national effort than our people would ever willingly concede to such a purpose.

In the face of this situation we would be better off to dispense now with a number of the concepts which have underlined our thinking with regard to the Far East. We should dispense with the aspiration to “be liked” or to be regarded as the repository of a high-minded international altruism. We should stop putting ourselves in the position of being our brothers’ keeper and refrain from offering moral and ideological advice. We should cease to talk about vague and—for the Far East—unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better. (emphasis added)

From the outset of the Cold War era, Washington was also intent upon weakening the United Nations. According to Kennan:

The initial build-up of the UN in U.S. public opinion was so tremendous that it is possibly true, as is frequently alleged, that we have no choice but to make it the cornerstone of our policy in this post-hostilities period. Occasionally, it has served a useful purpose. But by and large it has created more problems than it has solved, and has led to a considerable dispersal of our diplomatic effort. And in our efforts to use the UN majority for major political purposes we are playing with a dangerous weapon which may some day turn against us. This is a situation which warrants most careful study and foresight on our part. (emphasis added)

Michel Chossudovsky, September 7, 2014, May 17, 2023  [updated from December 2003)

ANNEX

Further references including original archives:

FOREIGN RELATIONS OF THE UNITED STATES 1945-1950 Emergence of the Intelligence Establishment

at http://www.state.gov/www/about_state/history/intel/

Foreign Relations Series   (Kennedy through Nixon)

at http://www.state.gov/www/about_state/history/frus.html

For a list of Kennan’s writings at Princeton University library:

http://infoshare1.princeton.edu/libraries/firestone/rbsc/finding_aids/kennan/index.html

See also The United States’ Global Military Crusade (1945-2003) by Eric Waddell, Global Outlook, Issue 6, Winter 2003

17 May 2023

Source: www.globalresearch.ca

 

By F. William Engdahl

Over the past two decades since China was admitted into the WTO, its national industrial base has made unprecedented strides to emerge as the world’s leading economic producer in many major areas. The academic debates over whether China’s GDP is larger than that of the USA are misplaced. GDP is largely worthless as a measure of a real economy. When measured in real physical economic production, China has left the USA and everyone else in the dust. Therefore, the future course of industrial production in China is vital to the future of the world economy. Globalization of the world economy made it so.

Steel production is still the single best indicator of a growing real economy. In 2021, China produced more that twelve times the tonnage steel as the USA, over one billion tons. The USA, once world leader, managed a piddly 86 million tons. In tons of coal, China produces some 50% of world total coal. She controls 70% of world rare earth mining and over 90% of its processing, thanks to bizarre US policy actions going back several decades. China today is far the world’s largest motor vehicle producer, almost three times the size of the US at 27 million units annually, one third of world total in 2022. China is by far the largest producer of the essential cement for construction, and is the world’s leading aluminum  producer.  At 40 million tons in 2022, this compares to not even one million tons in the USA. It is also the world’s largest copper consumer. The list goes on.

This is merely to suggest  how essential the economy of China has been to world economic growth over the past two decades. A mere four decades ago China was insignificant in world real economic terms. So, if China goes into deep economic contraction, the effect this time will be global. And this is just what is now underway. Important to note, the contraction began well before the severe three-years of China’s zero covid lockdown. Simply put, China since the so-called Great Financial Crisis of 2008 managed to create a financial bubble the size of which the world has never before experienced. That bubble began to deflate, beginning in real estate, around 2019. The scale is systemic and is only beginning.

Colossal Deleveraging and Hidden Debt

A huge problem with China’s economic model over the past two decades has been the fact that it has been a debt-based finance model massively concentrated on real estate speculation beyond what the economy can digest.

Fully 25 to 30% of the total Chinese GDP is from real estate investment in homes, apartments, offices. That’s significant. The problem is that real estate, especially apartments in China, for more than two decades, appeared to be a guaranteed money maker for owners as well as builders and banks and above all, local government officials. Prices rose annually in the double digits, sometimes by 20%. Millions of middle-class Chinese bought not just one, but two or more apartments, using the second as investment for future retirement. China’s land is owned by the Communist Party, at the local level. It is leased long-term to construction firms who then borrow to build.

Here it gets murky. For CP local government officials, revenue from local real estate land leasing and their infrastructure projects is their major revenue source. Until now municipal property taxes are forbidden despite a huge pressure from local officials.

In the months of 2018 and 2019 China real estate prices peaked. Since then they have been in a prolonged decline. China has a unique and very abuse-prone real estate model. Typically a buyer must pre-pay the full purchase price when a developer has merely begun the construction. “Buy today as the price will be even more tomorrow” was the mantra. He takes a mortgage, usually from local banks, to do that. If the builder does not complete on time, the buyer must still pay their mortgage. Even if the developer goes bankrupt as is now happening, leaving abandoned unfinished housing behind. No other country uses that model. Typically in Western countries a small deposit on a home to reserve until completion is enough. The mortgage comes when the property is finished. Not in China.

So long as China home prices were constantly rising, it seemingly worked and the home market expanded. When that price inflation stopped, for a variety of reasons, and exacerbated by the ultra-severe covid lockdowns, what was then a colossal real estate bubble began to implode. According to economist Robert Pettis at Beijing University, “Since the beginning of the property crisis in September and October 2021, property prices have declined in more than two-thirds of China’s seventy largest cities (and probably all of the smaller ones), while, more importantly, sales of new apartments this year (2022) have collapsed.”

The major turn took place in 2021 with the default of China Evergrande Group on its dollar bonds. It was then the world’s most indebted real estate conglomerate with debts of well over $300 billion. In 2018 Evergrande was deemed, “the most valuable real estate group in the world,” according to Wikipedia. That was on paper. By time of default it also owned theme parks, an EV auto company, resorts and enough land to house 10 million people. Until Beijing refused to bailout Evergrande, in a belated bid to cool the bubble,  Chinese lenders had made loans based on the assumption that large borrowers would be bailed out—Too Big To Fail. Beijing learned all the wrong lessons from US banks after Lehman Bros.

It came out that Evergrande had created a colossal Ponzi fraud over the years. They were not unique. Following a speculative property boom after 2010, poorly-regulated local governments across China turned increasingly to real estate to boost income and fulfill the Beijing GDP growth targets, a de facto monetary version of Soviet central planning. Inflating local real estate values was a way of meeting local GDP targets. Local officials were given their share of annual GDP contribution to be met. Real estate became the ideal vehicle to meet GDP targets and generate local revenues. As long as prices were rising, banks and increasingly unregulated local “shadow banks” joined in the “win-win” bonanza.  According to the South China Morning Post, by 2020 and the start of covid severe lockdowns, land sales and real estate taxes’ contribution to local government fiscal revenue reached a peak of 37.6 per cent.

The Evergrande partial default set off a panic in China real estate that officials desperately, and unsuccessfully, have tried to control. It was merely the first major casualty in what is a systemic meltdown. Beijing authorities imposed sharp limits on real estate lending in a vain attempt to contain the implosion, the so-called Three Red Lines. That made the implosion of the property bubble worse. In 2022 China new home sales plunged 22% over 2021. As of February 2023, China home prices had fallen for 16 straight months. Sales by the country’s top 100 developers last year were only 60% of 2021 levels. Land sales, which typically account for more than 40% of local government revenue, have collapsed.

Empty Houses and unemployment rising

Until the bubble began to burst in 2022 with the Evergrande default, Chinese real estate prices had risen several times higher, relative to household income, than in the USA. More alarming, two decades of rampant price inflation had created literal ghost cities and millions of empty apartments. As of 2021 an estimated 65 million apartments in China were empty, enough to house the French nation. This was a result of two decades or more of municipalities and developers building beyond actual demand, as citizens bought for investment, not living. One estimate is that between one-fifth and one-quarter of the total China housing stock, especially in more desirable cities, was owned by speculative buyers who had no intention of living in them or renting them out. In Chinese culture, a used apartment is considered unattractive. With falling prices, these homes become unpayable.

The unprecedented 3-year covid lockdowns that ended abruptly last December did not help matters. Thousands of foreign manufacturers including Apple, Foxconn, Samsung and Sony, have begun to leave China for other locations in Asia or even Mexico, fueling a growing unemployment crisis which feeds the housing crisis in a self-feeding cycle.

As a result of this slow-motion implosion across China, for the first time since the great expansion unemployment is becoming very serious. This March, youth unemployment officially was over 20%. Millions of recent university graduates are unable to find work and Beijing has begun to send them to work in the rural countryside, reminiscent of the Mao era. This bodes ill for future home sales. A contracting bubble has a vicious dynamic.

Until about the time of the 2008 Beijing Olympics, real estate investment was largely productive. It filled a huge deficit in quality housing as a new middle class grew more affluent. After about 2010 that began to shift to bubble status as millions of middle-class and rich Chinese began to buy second and even third homes for pure speculation as prices were rising in double digits. The degree of central supervision of local government finances was loose.

Over recent years, to avoid central clampdown by Beijing authorities fearful of a new debt bubble imploding, local governments, often with hidden collusion from the giant state banks, created a non-bank economy, “shadow banks,” all off-balance sheet. As one result, despite actions by Beijing regulators to control the property meltdown and prevent contagion, total debt, public and private, in China by February 2023 according to Bloomberg reached an alarming 280% of GDP.

Commodity.com reports total state debt of China in 2023 is more than $9.4 trillion. But that excluded local government financing vehicles (LGFVs). Chinese local governments rely on off-balance sheet LGFVs to raise funds for local public construction—housing, high-speed rails, ports, airports. The debts of all these LGFVs are estimated to be roughly $27 trillion more. The official figure for total state debt also excluded debt of state banks and state companies, which is also clearly considerable, but unpublished. That total debt is also without the unknown size of local shadow banks which China’s National Institute of Finance and Development in 2018 estimated at some $6 trillion more. The result of all these omissions is a headline figure meant to reassure Western financial markets that China has manageable public and private debt. It doesn’t. All told, very roughly we can calculate a mammoth debt accumulation of well more than $42 trillion, a staggering sum for an economy which only three decades ago was at a level of an underdeveloped economy.

A major vehicle used to finance local budgets is unguaranteed and largely unregulated municipal investment bonds. Unlike traditional municipal debt in western countries, the Chinese local LGFVs are not able to use tax revenues to fund their bond interest or principal payments. So, local governments would tap into a growing housing market by leasing their long-term land to developers to fund their bond payments.  This created a system where a sustained fall in housing construction, sales and prices now creates a systemic threat. This is now underway across China. In just two decades China has created the world’s second largest corporate debt market behind the USA, and far the most of that is in unregulated municipal bond debt.

As a result of this unique mixing of local governmental fiscal policies with local housing markets, a substantial drop in housing or land prices has greatly increased the risk level of local government  default on its debts. In July 2022 Zunyi City in Guizhou defaulted on a major bond, leading to a collapse of the entire unregulated local bond market, as local bond issuance collapsed by 85% after that. The bonds were a way to refinance local debt and that channel now is all but closed, despite   Beijing liquidity injections early 2023. Investors were mostly local ordinary Chinese seeking to earn on savings. This past April officials of Guiyang, also in Guizhou, told Beijing it was unable to finance its debts accumulated over a decade in construction projects including housing. [viii] This opens the next phase of debt implosion. Several China municipalities reportedly have been slashing wages, cutting transportation services and reducing fuel subsidies in a desperate bid to avoid default.

National Security redefined

Transparency of financial data has always been a problem in China. Thirty years ago the country had no developed financial markets. So long as the economy was expanding however, it was not a priority. Now it is, but too late.

A signal of how severe the situation is becoming, the Beijing authorities have begun to limit release of local and corporate financial data to foreign firms, calling it a “national security” issue.

On May 9 Bloomberg reported, “China’s crackdown on data access to overseas firms is adding to concerns about how Beijing controls the flow of information in the country, making it difficult for investors to assess the state of the economy.” Information such as academic papers, court judgments, official biographies of politicians, and bond market transactions are affected, they report. US consultancy Bain &Co. had their China offices raided recently as part of the national data security campaign. Such measures may keep reality from the pages of the Wall Street Journal or CNBC for a while, but the underlying reality of the collapse of the world’s largest financial edifice will be more difficult to hide.

This May, Dalian Wanda Group, another major Chinese real estate conglomerate with investments in US cinema chains, Australian real estate and beyond, revealed talks with its major bankers to restructure huge debts amid a liquidity crisis. The UK Financial Times on May 9 reported that hopes of a post-covid China recovery are vanishing: “Chinese iron ore prices dropped to their lowest levels in five months, as weak demand adds to evidence that the country’s economic rebound from tough coronavirus lockdowns may be faltering… the optimism and activity that followed the end of lockdown have waned, leading to a ‘collapse’ in the steel market.”

This all means the prospect of the Chinese economy being a growth locomotive to lift the rest of the world from looming depression is virtually nil at this point. The massive Belt and Road Initiative is mired in hundreds of billions of dollars in loans to countries unable to service the debt, as world interest rates rise and growth stalls. Attempts to boost domestic China growth by relying on a consumer boom are doomed presently for obvious reasons noted, as is the call by Xi Jinping to make 5G, AI and such technologies the basis of a new boom, as US sanctions greatly hamper China IT advances.

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F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics.

16 May 2023

Source: www.globalresearch.ca