The Rise of the Russian Empire: Russo-Armenian Relations

[KarotheGreat]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

SCO could really become something very powerfull if its leaders want. It would be a good counterweight to the west.

It's trying to become but it seems the west doesn't want it.

[KarotheGreat]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

SCO summit shows there is no alternative to international cooperation

19:2216/06/2009

MOSCOW. (Alexei Vlasov, director of Moscow State University’s Center for the Study of Political Processes in the post-Soviet Space, a member of the RIA Novosti Expert Council) – A summit of the Shanghai Cooperation Organization, which has ended in Yekaterinburg, adopted decisions that can seriously influence the organization’s future.


The SCO was initially known as the Shanghai Five, a group set up by China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan in Shanghai in 1996 to promote trans-border cooperation. After Uzbekistan joined the group in 2001, the organization addressed regional security issues.


Since then, the SCO has become an influential international organization focusing on global issues, from energy security to educational, social and cultural cooperation.


This unique organization is guided by the so-called “Shanghai Spirit,” one of resistance to any form of confrontation, hostile competition and disregard of each other’s interests.


More and more countries are keen on joining it, above all Iran, whose president, Mahmoud Ahmadinejad, attended the extended meeting of the SCO leaders despite the complicated political situation in his homeland. Ahmadinejad spoke at the meeting about the SCO’s role in resolving economic problems and positive changes in all spheres of its operation.


Possible enlargement of the SCO’s sphere of responsibility entails the use of more complex mechanisms for attaining its goals. During the ongoing global financial and economic crisis, the SCO should determine its place in the system of international integration. While trying to deal with arising challenges and risks, the SCO is also working to strengthen its consolidation and to encourage more effective interaction between its member states.


These principles have been sealed in the Yekaterinburg Declaration, the main political document adopted at the summit. It also provides a clear assessment of the current geopolitical and geoeconomic realities.


The key idea of the declaration is that there is no alternative to international cooperation. The document also seals the member states’ commitment to the principles of peace based on equal security for all countries without exception.


“We regard this meeting as the focal point of Russia’s presidency of the SCO,” Russian President Dmitry Medvedev said in Yekaterinburg. “Active participation in the organization’s efforts, and the development of multifaceted cooperation within it, have long become the priorities of Russia’s foreign policy.”


The summit considered the proposals of the Russian and Kazakh leaders to develop cooperation in the financial sphere and create a common supranational currency for the SCO countries.


“Using a national currency as a regional and global reserve currency is an obsolete scheme that gives the country in question unilateral advantages,” said Kazakh President Nursultan Nazarbayev.


This seems like a very good idea, but are the SCO countries ready to implement it?


Arkady Dvorkovich, an economic aide to the Russian president, has said more than once that it would be premature to consider a common monetary unit for the SCO because of considerable structural and development differences between the economies of its member states.


However, the summit participants welcomed the proposal of the Kazakh president.


It was announced in Yekaterinburg that Belarus and Sri Lanka would be granted partner status, and that a package of documents would be adopted soon to regulate the admission of new members.


The SCO summit also discussed one of the most distressing problems, the Afghan conflict. Uzbek President Islam Karimov reaffirmed his country’s proposal on changing the format of peacekeeping efforts in Afghanistan.


In his view, the UN Contact Group for Afghanistan should include the six states bordering on Afghanistan, the United States, Russia and NATO. The Uzbek president said that the new contact group could become a major consultative body facilitating conciliation in Afghanistan and the surrounding region.


And so, the SCO summit in Yekaterinburg has strengthened the organization’s stance as a collective international player, and showed that the SCO leaders address all global problems. Time will show how much the possible expansion of the zone of their responsibility will benefit the organization.


Currently, the underlying principles of the SCO boil down to a mutually acceptable ideology of interaction, uniting the countries which are prepared for constructive and equal cooperation. In this sense, the Shanghai Cooperation Organization has no alternative.

source: http://en.rian.ru/analysis/20090616/155269503.html

[ZORAVAR]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

"YURI DOLGORUKY" ON SEA TRIALS

This photo of the new nuclear submarine on sea trials has become available today.

This is the first of a new class of Russian Nuclear powered submarines designed to carry 16 "BULAVA" intercontinental ballistic missiles. Little is known about this vesel. The Russians are keeping most of its aspects secret. It is believed that this monster displaces about 18 - 24000 metric tons.

The "YURI DOLGORUKY" is now completing its sea and state acceptance trials and will be accepted in service later on this year. 2 more submarines of this type are being built in Severodvinsk currently with construction on a fourth unit expected to start soon. A totla of 8 - 10 will eventualy be built forming the backbone of the Russian seaborn nuclear deterrent.

The new BULAVA missile which will arm this submarine is also undergoing tests. The next test launch will be during July 2009.

[ZORAVAR]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

RUSSIANS OUTFOX US IN LATEST GREAT GAME

BISHKEK, Kyrgyzstan -- One at a time the government's top critics seemed to go to jail, or simply disappear.
Syrgak Abdyldayev, a local journalist, began to investigate whether the attacks had anything to do with a team of Russian-speaking specialists who arrived last year to advise the Kyrgyz government. He published several scathing articles accusing the government of shunting aside its opponents and turning to Moscow for financial support, including one in February that likened Russian aid to "oxygen for a sinking submarine."
Then Mr. Abdyldayev became a victim. Three men attacked him with metal pipes as he left his newspaper one evening in March, broke both his arms, his ribs and a leg, and stabbed him 26 times in the buttocks.
Times are changing in Kyrgyzstan, a mountainous Central Asian republic that not long ago was a hoped-for springboard for Western-style democracy in the former Soviet Union.
The president, Kurmanbek Bakiyev, has steered Kyrgyzstan sharply back into the orbit of Moscow. In January, Mr. Bakiyev jolted Washington by announcing he was evicting the U.S. from an air base that has been crucial to the supply of troops fighting in Afghanistan. And political freedom here, as in Russia, is in decline. The Kyrgyz and Russian governments deny any link to the attacks on Kyrgyz critics.

In the West, hopes were high that the global financial crisis would rein in Vladimir Putin's assertive foreign policy. But here, as in other parts of the former Soviet Union, hard times have had the opposite effect: The Russians are coming back.
Russia has been hit by the crisis, but remains far richer than its former satellites, and it has used its largess to regain clout near its borders, in what President Dmitry Medvedev calls the "zone of privileged interests."
"Basically Russia sees the crisis as an opportunity to increase its influence in the post-Soviet space," said Nikolai Zlobin, analyst for the Center for Strategic Studies in Washington, D.C., who meets regularly with Russian officials. "They think this is the right time to act."
Moscow has already delivered more than $300 million of a $2.1 billion aid package to Kyrgyzstan it promised Mr. Bakiyev when he announced he was evicting U.S. troops from the base. That has helped the Kyrgyz government pay wages and pensions as Mr. Bakiyev competes in hastily called presidential elections in July.
Moscow lately considered extending a $5 billion loan to the cash-starved government in Ukraine, and has held talks on credits for Belarus and Armenia.
— Ellen Newton

This week Mr. Putin stunned Western officials by announcing that Russia would pull its long-standing application to join the World Trade Organization, and instead form a trade block with neighboring Kazakstan and Belarus. Western officials say the move appears to be a pressure tactic by the Kremlin, which has been frustrated by the lengthy WTO application process.
Moscow's assertiveness poses a challenge to President Barack Obama as he vows to "reset" relations with Russia in the run-up to his first presidential visit to Moscow in July. Both the U.S. and Russia are praising a new level of cooperation on arms control and other issues. But they remain at odds over how much influence the other should exert in Russia's traditional backyard.
Lately the Kyrgyz government has said it is open to talks on keeping the U.S. base on its soil. But even the threat of closure sends a clear message to Washington, analysts say, that the U.S. must show greater respect to Moscow in the region.
In Kyrgyzstan, opposition politicians fear the reset could mean a new era of American accommodation to the Kremlin. As the U.S. has grown preoccupied with its wars in Iraq and Afghanistan and its economic crisis at home, it has dialed back its support of Western-style democracy, they say.
"The American ambassadors used to be very outspoken about their opinions," said Medet Sadyrkulov, a former head of Mr. Bakiyev's administration. "Now they have gone quiet."
The U.S. ambassador, Tatiana C. Gfoeller, declined to be interviewed for this article. State Department officials in Washington likewise declined to comment.
In the fall, the Kyrgyz government cut off broadcasts of U.S-funded Radio Free Europe and Radio Liberty, which had hosted a talk show critical of regional elections that were swept by mostly pro-government parties. The U.S. issued a statement of protest, but the programming has remained off the air.
Russian state television, which is broadcast throughout the country, has beamed in a steady stream of reports critical of the U.S. presence, alleging the U.S. base here was a center of high-tech surveillance and drug dealing. The U.S. denies that.
The political climate in Kyrgyzstan chilled, too.
Days after Mr. Sadyrkulov shared his views in an interview with The Wall Street Journal in March, his body was found in his burned-out car outside Bishkek. Colleagues call his death a political killing. The government says he died in a car accident.
In the interview, he said he quit his job in the presidential administration largely because he worried that Mr. Bakiyev was taking the country too close to the Kremlin.
The history of the air base in Kyrgyzstan mirrors the trajectory of U.S. relations with Russia, from an era of burgeoning friendship to distrust.
After the 2001 attacks on New York and Washington, Mr. Putin called the then-president of Kyrgyzstan, Askar Akayev, and told him that "the U.S. is our ally in the war on terror and that we should let them in," one former senior Kremlin official recalled. Mr. Putin also lobbied the president of Uzbekistan, who allowed the U.S. to set up on another Soviet-era base, Khanabad.
The U.S. needed the bases to funnel soldiers and supplies to Afghanistan. At the time, the former Kremlin official said, the U.S. told the Russians they would only stay on the bases during the "active phase" of the war, for 12 to 18 months.
By 2003, the Kremlin was anxious about the prolonged U.S. presence. Late that year, Mr. Putin flew to Bishkek to mark the opening of Russia's own nearby airfield. He was angered by the U.S. invasion of Iraq, which he staunchly opposed. Then the Americans began to say the bases were "strategic" and that they were staying, the former Kremlin official said.
"The existence of these bases was viewed as a trick," the former Kremlin official said. "So we felt no moral obligation to keep them open."
U.S. officials deny they gave any timetable for withdrawing from the bases.
Moscow's suspicions were heightened by a wave of so-called color revolutions that swept the former USSR, beginning with Georgia in November 2003, followed by Ukraine in 2004 and Kyrgyzstan in 2005.
President George W. Bush praised the revolts, promising to spread democracy to the far corners of the world. Kremlin officials feared the U.S. was fomenting rebellion in Russia itself, and accused the U.S. of organizing the revolts through nongovernment organizations, something the U.S. denies.
The wave of unrest halted in repressive Uzbekistan, where in May 2005 troops fired on protesters, killing hundreds. Russia backed the crackdown; the U.S. called for an investigation.
Encouraged by Moscow and China, Uzbekistan kicked U.S. troops out. The U.S. was forced to shift resupply operations to the air base in Kyrgyzstan.
Relations with Mr. Bakiyev's government were cool from the outset. The Kyrgyz leader swept to power after chaotic protests over rigged parliamentary elections in 2005. He set about shuttering independent media outlets and founding a progovernment party that sidelined rivals.
Mr. Bakiyev soon began pressuring the U.S. to raise the rent it paid for the base. Talks nearly derailed in July 2006, when his government expelled two U.S. diplomats for allegedly spying. Mr. Bakiyev suspected they were funding the political opposition, says former Kyrgyz Foreign Minister Alikbek Dzhekshenkulov. "The Russians wound him up," he says. Other Kyrgyz officials say the expulsions were Mr. Dzhekshenkulov's idea.
In the end, Washington agreed to an eightfold rent increase, to $20 million a year.
In September 2006, a U.S. air tanker collided with Mr. Bakiyev's official plane on the runway of the airport, putting the Kyrgyz craft out of commission.
The U.S. paid to repair the plane, though an American probe blamed a Kyrgyz air traffic controller for the wreck. Before the investigation was even complete, though, Russia gave Mr. Bakiyev a new Tupolev airliner as a gift, said Mr. Sadyrkulov, the former head of administration, before his death.
Mr. Bakiyev "was very offended" with the U.S. over the incident, Mr. Sadyrkulov said. It was another case where "the Russians showed they were much easier to deal with," he said.
In December 2006, a U.S. guard at the base shot a Kyrgyz truck driver to death, after he said the driver brandished a knife at a base gate. Kyrgyz officials wanted to try him for murder inside the country, but the U.S. flew him back to the U.S.
Mr. Bakiyev "wanted some kind of meaningful support... signs of cooperation, partnership," said Sergei Masaulov, spokesman for the Kyrgyz presidential administration. Instead he got "signs of disdain," he said.
Mr. Masaulov said the Americans never engaged his government on a long-term plan for economic prosperity. A landlocked nation of five million, Kyrgyzstan lacks the vast natural resources of its neighbors, and officials had long hoped that its glacial lakes and snowcapped mountains could turn it into a hydroelectric supplier. But neither the Russians nor the Americans ever came up with the money to fund such a project.
Last summer, Russia began high-level talks about an aid package to Kyrgyzstan, including construction of a $1.7 billion hydroelectric power project that would employ thousands and turn the country into a major exporter for the region, Mr. Sadyrkulov said.
The two sides agreed in principle in December, Mr. Sadyrkulov, the former head of presidential administration said, when Mr. Medvedev and the Kyrgyz president met again, one on one, in the Kazakh capital of Astana. The Russians applied "very bad pressure" at the meeting, Mr. Sadyrkulov said. The Kremlin denies putting any pressure on the Kyrgyz over the U.S. base.
Mr. Masaulov, the presidential spokesman denied any "direct connection" between aid and the base closure. "But its obvious that when people meet on the diplomatic level, they talk about their interests, and what they want," he said.
In January, U.S. Central Command Chief Gen. David Petraeus visited Bishkek, but Mr. Bakiyev declined to meet him. Still, Mr. Petraeus called a news conference to report that other top Kyrgyz officials told him there were no plans to shut the base.
Shortly after he left town, a longtime ally of Mr. Putin, Russian Deputy Prime Minister Igor Sechin, flew into town and hammered out the details of an aid package to Kyrgyzstan.
Mr. Bakiyev then flew to Moscow, where the deal was signed, and the Kyrgyz president announced at a Kremlin press conference that he was kicking the American forces out of the country. U.S. officials were stunned. "Frankly, we thought it was a negotiating tactic, and we were ready to call their bluff," said a military official. "But it's becoming clearer that, no kidding, they want us out."
Mr. Sadyrkulov, who quit his job with the president in January, tried to rally Kyrgyzstan's fragmented opposition. He began traveling to neighboring Kazakhstan to meet U.S. officials, as they were afraid to meet with him inside the country, he said.
He drove to Almaty for meetings March 12, and shortly after midnight called his wife to say that he was driving back. He was held up at a border post for questioning, he told her, and would be home in a few hours.
Police say they found his body hours later, along with his driver and another passenger in the burned-out carcass of his car.
Write to Alan Cullison at [email protected]
Corrections & Amplifications
Kurmanbek Bakiyev is the president of Kyrgyzstan. An earlier version of this article incorrectly gave his first name as Murtanbek

Printed in the Wall Street Journal. http://online.wsj.com/article/SB1244...604353.html#CX

[ZORAVAR]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

BRIC COUNTRIES (Brazil, Russia, India and China) "READY TO RULE WORLD ECONOMY"?

The Ending of America's Financial-Military Empire

MICHAEL HUDSON

The city of Yekaterinburg, Russia’s largest east of the Urals, may become known not only as the end of the road for the tsars but of American hegemony too; as the place not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.

Challenging America is the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the so-called BRIC nations --Brazil, Russia, India and China.

The attendees have assured American diplomats that it is not their aim to dismantle the financial and military empire of the United States. They simply want to discuss mutual aid – but in a way that has no role for the United States, for NATO or for the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. After all, that is what a multipolar world means. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.

Yet the Yekaterinburg meeting has elicited only a collective yawn from the US and even European press despite its agenda -- nothing less than the replacement of the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry, suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”) built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a common ground when it comes to finding an alternative to the dollar and hence to the US ability to run balance-of-payments deficits ad infinitum.

What may prove to be the last rites of American hegemony began already in April at the G-20 conference, and became even more explicit at the St. Petersburg International Economic Forum on June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar world order.” What this means in plain English is: We have reached our limit in subsidizing the United States’ military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate in exchange for paper money of questionable worth.

The artificially maintained unipolar system,” Mr. Medvedev spelled out, is based on “one big center of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks.” At the root of the global financial crisis, he concluded, is the fact that the United States makes too little and spends too much, particularly its vast military outlays, such as the stepped-up US military aid to Georgia announced just last week, the NATO missile shield in Eastern Europe and the US buildup in the oil-rich Middle East and Central Asia.

The sticking point for all these countries is the ability of the United States to print unlimited amounts of dollars. Overspending by U.S. consumers on imports in excess of exports, U.S. buy-outs of foreign companies and real estate, and the dollars that the Pentagon spends abroad all end up in foreign central banks. These banks then face a hard choice: either to recycle these dollars back to the United States by purchasing US Treasury bills, or to let the “free market” force up their currency relative to the dollar – thereby pricing their exports out of world markets and hence creating domestic unemployment and business insolvency.

When China and other countries recycle their dollar inflows by buying US Treasury bills to “invest” in the United States, this buildup is not really voluntary. It does not reflect faith in the ability of the U.S. economy to enrich foreign central banks for their savings. Nor does it represent any calculated investment preference. It is simply a matter of a lack of alternatives. U.S.-style “free markets” hook countries into a system that forces them to accept dollars without limit. Now they want out.

This means creating a new alternative. Rather than making merely “cosmetic changes as some countries and perhaps the international financial organisations themselves might want,” said Mr. Medvedev at the end of his St. Petersburg speech, “what we need are financial institutions of a completely new type, where particular political issues and motives, and particular countries will not dominate.”

When foreign military spending forced the US balance of payments into deficit and drove the United States off gold in 1971, central banks were left without the traditional asset used to settle payments imbalances. The alternative was to invest their subsequent inflows of US dollars in US Treasury bonds, as if these still were “as good as gold.” Central banks now hold $4 trillion of these bonds in their international reserves. These loans have financed most of the US Government’s domestic budget deficits for over three decades now! Given the fact that about half of US Government discretionary spending is for military operations – including more than 750 foreign military bases and increasingly expensive operations in the oil-producing and transporting countries – the international financial system is organized in a way that finances the Pentagonand also US buyouts of foreign assets expected to yield much more than the Treasury bonds that foreign central banks hold.

The main political issue confronting the world’s central banks is therefore how to avoid adding yet more dollars to their reserves and thereby financing yet further US deficit spending – including military spending on their borders.

For starters, the six SCO countries and BRIC countries intend to trade in their own currencies so as to get the benefit of mutual credit that the United States until now has monopolized for itself. Toward this end, China has struck bilateral deals with Argentina and Brazil to denominate their trade in renminbi rather than the dollar, sterling or euros, and two weeks ago China reached an agreement with Malaysia to denominate trade between the two countries in renminbi. Former Prime Minister Tun Dr. Mahathir Mohamad explained to me in January that as a Muslim country, Malaysia wants to avoid doing anything that would facilitate US military action against Islamic countries, including Palestine. The nation has too many dollar assets as it is, his colleagues explained. Central bank governor Zhou Xiaochuan of the People's Bank of China put an official statement on the bank’s website, explaining that the goal is now to create a reserve currency “that is disconnected from individual nations.” This is the aim of the discussions in Yekaterinburg.

Aside from no longer financing the U.S. buyout of their own industries and the U.S. military encirclement of the globe, China, Russia and other countries would no doubt like to enjoy the same kind of free ride that America has been getting. As matters stand now, they see the United States as a lawless nation, financially as well as militarily. How else to characterize a nation that proclaims a set of laws for others – on war, debt repayment and treatment of prisoners – but flouts them itself? The United States is now the world’s largest debtor yet has avoided the pain of “structural adjustments” imposed on other debtor economies. U.S. interest-rate and tax reductions in the face of exploding trade and budget deficits are seen as the height of hypocrisy in view of the austerity programs that Washington forces on other countries via the IMF and other Washington vehicles.

The United States tells debtor economies to sell off their public utilities and natural resources, raise their interest rates and increase taxes while gutting their social safety nets to squeeze out money to pay creditors. And at home, Congress blocked, on grounds of national security, China’s CNOOK from buying Unocal, much as it blocked Dubai from buying US ports and blocked other sovereign wealth funds from buying into key infrastructure. Foreigners are invited to emulate the Japanese purchase of white elephant trophies such as Rockefeller Center, on which investors quickly lost a billion dollars and ended up walking away.

In this respect the US has given China and other payments-surplus nations no alternative but to find a way to avoid further dollar buildups. To date, China’s attempts to diversify its dollar holdings beyond Treasury bonds have not proved very successful. For starters, Hank Paulson of Goldman Sachs steered its central bank into higher-yielding Fannie Mae and Freddie Mac securities, explaining that these were de facto public obligations. They collapsed in 2008, but at least the U.S. Government took over these two mortgage-lending agencies, formally adding their $5.2 trillion in obligations to the national debt. In fact, it was largely foreign official investment that prompted the bailout. Imposing a loss for foreign official agencies would have broken the Treasury-bill standard then and there, not only by utterly destroying US credibility but because there simply are too few Government bonds to absorb the dollars being flooded into the world economy by the soaring US balance-of-payments deficits.

in late 2007, seeking more of an equity position to protect the value of their dollar holdings as the Federal Reserve’s credit bubble drove interest rates down, China’s sovereign wealth funds sought to diversify. China bought stakes in the well-connected Blackstone equity fund and Morgan Stanley on Wall Street, Barclays in Britain, South Africa’s Standard Bank (once affiliated with Chase Manhattan back in the apartheid 1960s) and in the soon-to-collapse Belgian financial conglomerate Fortis. But the US financial sector was collapsing under the weight of its debt pyramiding, and prices for shares plunged for banks and investment firms across the globe.

Foreigners see the IMF, World Bank and World Trade Organization as Washington surrogates in a financial system backed by American military bases and aircraft carriers encircling the globe. But this military domination is a vestige of an American empire no longer able to rule by economic strength. US military power is muscle-bound, based more on atomic weaponry and long-distance air strikes than on ground operations, which have become too politically unpopular to mount on any large scale.

On the economic front there is no foreseeable way in which the United States can work off the $4 trillion it owes foreign governments, their central banks and the sovereign wealth funds set up to dispose of the global dollar glut. America has become a deadbeat –a militarily aggressive one -- as it sruggles to hold onto the immense power it once earned by economic means. The problem for the rest of the world is how to constrain its behavior. Yu Yongding, a former Chinese central bank advisor now with China’s Academy of Sciences, suggested that US Treasury Secretary Tim Geithner be advised that the United States should “save” first and foremost by cutting back its military budget. “U.S. tax revenue,” he said, “is not likely to increase in the short term because of low economic growth, inflexible expenditures and the cost of ‘fighting two wars.’”

At present foreign savings are what finance the US budget deficit by buying most Treasury bonds. The consequence is taxation without representation for foreign voters as to how the US Government uses their forced savings. It therefore is necessary for the financial diplomats to broaden the scope of their policy-making beyond the private-sector marketplace. Exchange rates are determined by many factors besides “consumers wielding credit cards,” the usual euphemism that the US media cite for America’s balance-of-payments deficit.

Since the 13th century, war has been a dominating factor in the balance of payments of leading nations – and of their national debts. Government bond financing consists mainly of war debts, as normal peacetime budgets tend to be balanced. This links the war budget directly to the balance of payments and exchange rates.

Foreign nations see themselves stuck with unpayable IOUs under conditions where, if they move to stop the US free lunch, the dollar will plunge and their dollar holdings will fall in value relative to their own domestic currencies and other currencies. If China’s currency rises by 10 per cent against the dollar, its central bank will show the equivalent of a $200 million loss on its $2 trillion of dollar holdings as denominated in yuan. This explains why, when bond ratings agencies talk of the US Treasury securities losing their AAA rating, they don’t mean that the government cannot simply print the paper dollars to “make good” on these bonds. They mean that dollars will depreciate in international value. And that is just what is now occurring.

When U.S. Treasury Secretary Geithner assumed an earnest mien and told an audience at Peking University in early June that he believed in a “strong dollar” and China’s US investments therefore were safe and sound, he was greeted with derisive laughter.

Continued...

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Re: The Rise of the Russian Empire: Russo-Armenian Relations

Continued...

...

Anticipation of a rise in China’s exchange rate provides an incentive for speculators to seek to borrow in dollars to buy renminbi and benefit from the appreciation. For China, the problem is that this speculative inflow would become a self-fulfilling prophecy by forcing up its currency. So the problem of international reserves is inherently linked to that of capital controls. Why should China see its profitable companies sold for yet more freely-created US dollars, which the central bank must use to buy low-yielding US Treasury bills or lose yet further money on Wall Street?

To steer round this quandary it is necessary to reverse the philosophy of open capital markets that the world has held ever since Bretton Woods in 1944. On the occasion of Mr. Geithner’s visit to China, Zhou Xiaochuan, minister of the Peoples Bank of China, the country’s central bank, said pointedly that this was the first time since the semiannual talks began in 2006 that “China needed to learn from American mistakes as well as its successes” when it came to deregulating capital markets and dismantling controls.

So an era is winding to its end. In the face of continued US overspending, de-dollarization threatens to force countries to return to the kind of dual exchange rates common between World Wars I and II: one exchange rate for commodity trade, another for capital movements and investments, at least from dollar-area economies.

Even without capital controls, the nations meeting at Yekaterinburg are taking steps to avoid being the unwilling recipients of yet more dollars. Seeing that U.S. global hegemony cannot continue without the spending power that they themselves supply, governments are attempting to hasten what Chalmers Johnson has called “the sorrows of empire” in his book by that name – the bankruptcy of the US financial-military world order. If China, Russia and their non-aligned allies have their way, the United States will no longer live off the savings of others in the form of its own recycled dollars, nor have the money for unlimited military expenditures and adventures.

US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a word that Americans will hear much more in the future.

http://www.counterpunch.org/hudson06152009.html

Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City.

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Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russia suspends WTO entry talks

Russia, Kazakhstan and Belarus have been forced to suspend talks regarding adhesion to the World Trade Organization. The three countries were approaching the WTO from the viewpoint of joining as a customs union. However, the WTO raised problems because under their rules, customs unions must regulate goods and services and in the Union of these three countries, only goods are covered MosNews reports.



The delegations of Russia, Kazakhstan and Belarus, who have been working in Geneva, have suspended World Trade Organization entry talks, Russian website Gazeta.ru reports.


Russia and its ex-Soviet allies held consultations with World Trade Organization (WTO) members in Geneva on Wednesday about the possible format of accession negotiations between the Customs Union of Russia, Belarus, and Kazakhstan and the WTO, Maxim Medvedkov, the chief Russian negotiator for WTO accession, said.

"The Russian, Belarusian, and Kazakh delegations had an informal meeting with representatives of about 60 to 70 WTO member-states," Medvedkov said. The members of the emerging Customs Union informed the WTO member-states about the union and its intention to join the WTO, he said. "The discussion was quite tough," Medvedkov said.

A number of countries suggested that this move could "significantly slow down the accession process, as there have been no precedents of customs unions' joining the WTO," he said. In addition, a number of countries pointed out that, in line with WTO regulations, only customs unions mandated to regulate all trade relations falling under the WTO remit can negotiate their entry to the organization, he said. These relations must therefore concern both goods and services. The Customs Union being formed by Russia, Belarus, and Kazakhstan regulates only trade in goods.

"There was a proposal for putting together a task force to examine how much the Customs Union complies with the WTO regulations," Medvedkov said.

Russia and its ex-Soviet allies Kazakhstan and Belarus are exploring different options for joining the World Trade Organisation as a customs union, amid legal uncertainties, Medvedkov said Wednesday.

Russia would come up with proposals on how to proceed, while safeguarding what has been agreed in individual negotiations so far. It would take weeks rather than months, he told reporters after briefing WTO members on the proposal.

Kazakhstan's chief WTO negotiator Zhanar Aitzhanova said WTO accession remained a key economic priority for the three states.

"All three countries have suspended bilateral and multilateral WTO accession negotiations until we find a common decision with WTO members on how we can accede to the World Trade Organisation... as a customs union or single customs territory," she told reporters.

http://www.moscowtopnews.com/?area=postView&id=1220

[ZORAVAR]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russia and China to form formidable financial bloc

The summit of The Shanghai Cooperation Organization (SCO) takes place in Russia's Yekaterinburg on June 15-16. The leaders of Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan will arrive in the capital of Russia's Ural region for the summit. Official spokespeople for Turkmenistan, Iran, Pakistan, India and Mongolia will also participate in the summit Pravda.Ru reports.

Many question the effectiveness of the organization every time its member countries gather for a summit. The organization was established to create the free trade zone on the territories of its members, although there has been no progress achieved at this point yet. Russia offered to create the Energy Club within the SCO in 2006, but the suggestion has not been materialized either.


What is seen as logical and natural in other areas of the globe (for instance the European Union, the African Union and numerous other Unions and supra-national organizations) should also be the case for the SCO, which is basically the same thing. Watch this space however in the international press, as the SCO takes shape and builds its relations therefore suddenly being labelled a "threat". That is when the demonology begins.

The facts however point towards a common geographical region forming a common space in terms of resources and trading agreements and why not, form a financial hub as well? The point is that cultural links go hand-in-hand with geographical ones and since the former Soviet States in Central Asia have historical links with Moscow stretching back decades, if not centuries in some cases, it is only natural that sooner or later ties would become closer.

http://www.moscowtopnews.com/?area=postView&id=1210

[ZORAVAR]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Simply amazing: A Russian story...

http://www.youtube.com/watch?v=XvHX0bgoouc&eurl=http%3A%2F%2Fwww%2Emilitaryphotos%2Enet%2Fforums%2Fshowthread%2Ephp%3Ft%3D99988%26page%3D1296&feature=player_embedded

[ZORAVAR]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russia, the world’s critical ‘swing’ state

Brahma Chellaney

Russia, while remaining central to Indian foreign-policy interests, faces a tough challenge to engage a sceptical West more deeply.

Even if it is to prescheduled Brazil-Russia-India-China (BRIC) and Shanghai Cooperation Organisation (SCO) summit meetings, Prime Minister Manmohan Singh is making the symbolically significant first foreign visit of his second term in office to Russia, which he had once called a “tried and tested friend” of India. Russia, with its vantage location in Eurasia and matching strategic concerns, is a natural ally of India. A robust relationship with Moscow will help New Delhi to leverage its ties with both Washington and Beijing.
Which is the only power India can tap for critical military technologies? Which country today is willing to make a nuclear-powered submarine for India? Which state is ready to sell India a large aircraft carrier, even if an old one? Which power sells New Delhi major weapons without offering similar systems to India’s adversaries? The answer to all these questions is Russia. Little surprise Dr. Singh admitted in early 2007: “Although there has been a sea-change in the international situation during the last decade, Russia remains indispensable to the core of India’s foreign-policy interests.”

Three facts about Russia


Three important facts about Russia stand out. One, Russia has gradually become a more assertive power after stemming its precipitous decline and drift of the 1990s. Two, it now plays the Great Game on energy. Competition over control of hydrocarbon resources was a defining feature of the Cold War and remains an important driver of contemporary geopolitics, as manifest from the American occupation of Iraq and U.S. military bases or strategic tie-ups stretching across the Persian Gulf, the Caspian Sea basin and Central Asia.
Three, Russian democracy has moved toward greater centralised control to bring order and direction to the state. During Vladimir Putin’s presidency, government control was extended to large swaths of the economy and the political opposition was systematically emasculated.
Such centralisation, though, is no different than in, say, Singapore and Malaysia, including the domination of one political party, the absence of diversified media, limits on public demonstrations and the writ of security services. But in contrast to Russia, Singapore and Malaysia have insulated themselves from official U.S. criticism by willingly serving Western interests. When did you last hear American criticism of Singapore’s egregious political practices?
Yet Russia faces a rising tide of Western criticism for sliding toward autocracy. Indeed, ideological baggage, not dispassionate strategic deliberation, often colours U.S. and European discourse on Russia. Another reason is Russia’s geographical presence in Europe, the “mother” of both the Russian and U.S. civilisations. There is thus a greater propensity to hold Russia to European standards, unlike, say, China. Also, Russia was considered a more plausible candidate for democratic reform than China. Little surprise Russia’s greater centralisation evokes fervent Western reaction.
Today’s Russia, however, bears little resemblance to the Soviet Union. Life for the average Russian is freer and there is no Soviet-style shortage of consumer goods. There are also no online censors regulating Internet content. But what now looks like a resurgent power faces major demographic and economic challenges to build and sustain great-power capacity over the long run.
Demographically, Russia is even in danger of losing its Slavic identity and becoming a Muslim-majority state in the decades ahead, unless government incentives succeed in encouraging Russian women to have more children. The average age of death of a Russian male has fallen to 58.9 years — nearly two decades below an American. Economically, the oil-price crash has come as a warning against being a largely petro-state.
In fact, Moscow’s economic fortunes for long have been tied too heavily to oil — a commodity with volatile prices. In 1980, the Soviet Union overtook Saudi Arabia as the biggest oil producer. But oil prices began to decline, plummeting to $9 a barrel in mid-1986. U.S. intelligence, failing to read the significance of this, continued to claim Moscow was engaged in massive military modernisation. During the Putin presidency, rising oil prices played a key role in Russian economic revival. The higher the oil prices, the less the pressure there is on Russia to restructure and diversify its economy. The present low prices thus offer an opportunity to Moscow to reform.
Still, it should not be forgotten that Russia is the world’s wealthiest country in natural resources — from fertile farmlands and metals, to gold and timber. It sits on colossal hydrocarbon reserves. It also remains a nuclear and missile superpower. Indeed, to compensate for the erosion in its conventional-military capabilities, it has increasingly relied on its large nuclear arsenal, which it is ambitiously modernising.

Right international approach


Whatever its future, the big question is: What is the right international approach toward a resurgent Russia? Here two aspects need to be borne in mind.
First, Russia geopolitically is the most important “swing” state in the world today. Its geopolitical “swing” worth is greater than China’s or India’s. While China is inextricably tied to the U.S. economy, India’s geopolitical direction is clearly set — toward closer economic and political engagement with the West, even as New Delhi retains its strategic autonomy. But Russia is a wild card. A wrong policy course on Russia by the West would not only prove counterproductive to western interests, but also affect international peace and security. It would push Moscow inexorably in the wrong direction, creating a new East-West divide.
Second, there are some useful lessons applicable to Russia that the West can draw on how it has dealt with another rising power. China has come a long way since the Tiananmen Square episode. What it has achieved in the last generation in terms of economic modernisation and the opening of minds is extraordinary. That owes a lot to the West’s decision not to sustain trade sanctions after Tiananmen Square but instead to integrate China into global institutions.
That the choice made was wise can be seen from the baneful impact of the opposite decision that was taken on Burma after 1988 — to pursue a punitive approach relying on sanctions. Had the Burma-type approach been applied against China, the result would not only have been a less-prosperous and less-open China, but also a more-paranoid and possibly destabilising China. The lesson is that engagement and integration are better than sanctions and isolation.
Today, with a new chill setting in on relations between the West and Russia, that lesson is in danger of getting lost. Russia’s 16-year effort to join the World Trade Organisation has still to bear fruit, even as Moscow is said to be in the last phase of negotiations, and the U.S.-Russian nuclear deal remains on hold in Washington.
Little thought is being given to how the West lost Russia, which during its period of decline eagerly sought to cosy up to the U.S. and Europe, only to get the cold shoulder from Washington. Also, turning a blind eye to the way NATO is being expanded right up to Russia’s front-yard and the U.S.-led action in engineering Kosovo’s February 2008 self-proclamation of independence, attention has focused since last August on Moscow’s misguided but short-lived military intervention in Georgia and its recognition of the self-declaration of independence by South Ossetia and Abkhazia — actions that some portrayed as the 21st century’s first forcible changing of borders.
But having sponsored Kosovo’s self-proclamation of independence, the U.S. and some of its allies awkwardly opposed the same right of self-determination for the people of South Ossetia and Abkhazia. It is as if the legitimacy of a self-declaration of independence depends on which great power sponsors that action.
The world cannot afford a new Cold War, which is what constant bear-baiting will bring. Fortunately, there are some positive signs. Nuclear arms control is back on the U.S.-Russian agenda, and U.S. President Barack Obama is scheduled to be in Moscow for a July 6-7 summit meeting. The U.S. is going slow on missile-defence deployments in Eastern Europe and there is a de facto postponement of NATO expansion to Ukraine and Georgia. As part of what Mr. Obama has called a “reset” of the bilateral relationship, a U.S.-Russia joint commission headed by the two presidents is to be established, along with several sub-commissions. This is an improvement on the 1993 commission established at the level of No. 2s, Vice-President Al Gore and Prime Minister Viktor Chernomyrdin.
The key issue is whether the U.S. and Russia will be able to seize the new opportunity to redefine their relationship before it becomes too late. For Russia, the challenge is to engage the West more deeply. It also needs to increase its economic footprint in Asia. For the U.S., the challenge is to pursue new geopolitics of engagement with Moscow.
(Brahma Chellaney is professor of strategic studies at the Centre for Policy Research, New Delhi.)

http://www.hindu.com/2009/06/16/stories/2009061655360900.htm