Russian central bank reveals how it braced for Western dollar grab
RT | March 30, 2023
The Bank of Russia had been preparing for an escalation of Western sanctions since 2014 and was beefing up additional funds as a hedge against future restrictions on its foreign exchange reserves, the regulator revealed on Wednesday.
Amid “increasing geopolitical risks” the central bank ramped up investments in assets “that cannot be blocked by unfriendly nations” and transferred part of its reserves to gold, Chinese yuan and foreign currency in cash, the regulator announced in its annual report.
The central bank managed to stash billions of imported dollars “in volumes limited by logistics capabilities,” the report said without specifying the amount of accumulated funds. Alternative reserves in dollars and gold bars have been stockpiled in the vaults of the Bank of Russia.
“This safety cushion was created in the form of alternative reserves – less liquid and convenient in everyday life, but more reliable in the face of a tough geopolitical scenario,” the regulator explained.
It was impossible to abandon reserves in dollars and euros, as these currencies were used for settlements in international trade as well as in the domestic financial sector, the central bank added.
“Therefore the structure of foreign exchange reserves needed to take into account the needs of citizens and businesses,” the regulator concluded.
The central bank could have “unloaded” part of this money to banks during the first wave of Western sanctions to stabilize Russia’s banking system and offset the withdrawal of dollars and euros by “panicking depositors,” the chief analyst from Ingosstrakh-Investment, Viktor Tunyov, believes.
According to some estimates, last year almost $20 billion was withdrawn by depositors from the country’s second largest bank, VTB, alone.
In 2022, Russia was hit by sweeping Western economic sanctions, which included measures to cut the Russian central bank off from the international financial system, while around $300 billion of the bank’s foreign reserves were frozen. Moscow has criticized the seizure of its assets, saying it constitutes theft.
Serbia and Hungary form Strategic Council despite EU opposition
By Ahmed Adel | March 29, 2023
The idea of forming a Serbia-Hungary Strategic Council was announced by Serbian President Aleksandar Vučić after his meeting with Hungarian Prime Minister Viktor Orbán in Belgrade on March 25. Specifically, Vučić announced that the strategic council between the two countries would be established in May. As Serbia is a non-EU/NATO member, unlike Hungary, it is guaranteed that Brussels and Washington are not happy about the strengthening ties between the two neighbouring countries.
Accordingly, the council would deal with the issue of security, the fight against terrorism, and opens the possibility of cooperation between their armies and police in the military-technical sense. It is for this reason, despite the benefits that this strategic cooperation brings for both countries, Brussels and Washington are not happy with this emergence.
The issue of security is very important and is back at the forefront due to the crisis in Ukraine. More than ever, the spotlight has not just been placed on security in the traditional sense, but also in regards to energy. Serbia and Hungary are connected not only by good mutual relations, but also by their tense relationship with the European Union. Although Hungary is an EU member, it has a number of open issues with the bloc, such as the handling of the war in Ukraine. Fundamentally, Serbia’s and Hungary’s current interests are opposed to that of the EU, and it is also this factor which unites them.
Serbia has excellent economic relations with Russia and China, and Orbán as a Hungarian nationalist, broke from EU consensus and concluded that his country should not have confrontational ties with Moscow. Serbia and Hungary are looking towards a Eurasian future rather than an Atlanticist one, something which binds their commonalities and necessitates the need for a common strategic council.
In addition, Hungary is surrounded by countries with which it has a rather difficult historical (and sometimes current) relations, regardless of mutual NATO and EU membership, namely Romania and Slovakia. However, Hungary also never had great relations with Ukraine or Yugoslavia. With Serbia though, the successor of Yugoslavia, this has massively changed.
Both Belgrade and Budapest have invested a lot of energy into thawing relations in the last ten years. This developing relationship was epitomised with the Serbian Parliament in December ratifying the agreement on strategic cooperation between Serbia and Hungary.
Hungary is the only country neighbouring Serbia that Belgrade has concluded a strategic cooperation with, and it relates to more than twenty areas. This includes infrastructure and the economy, where Hungary is already among the first foreign trade partners of Serbia. This also extends to other sectors too, which is why Hungary is rapidly becoming one of Serbia’s closest partners.
When the future strategic council of Serbia and Hungary is viewed objectively, it is seen as purely political in nature and an effort to thrive under new global circumstances. That is why the council is essential. The current events in Ukraine, where there is a large Hungarian minority, and the remaining question over Kosovo, means that Serbia and Hungary will need to support each other more than ever as most of Europe is in favour of backing the Kiev regime and separatists in Kosovo.
Hungary has openly and repeatedly said that it does not want to be part of any adventure and war. Serbia also maintains a neutral position politically, although the majority of people are pro-Russian because of their own experience with NATO and the entire historical experience preceding and following it.
The fact that Budapest has good relations with not only Belgrade, but also the Republika Srpska (the Serbian entity of the Bosnia and Herzegovina Federation), is also important as it demonstrates again that Orbán’s Hungary is not only working based on values and principles, but also on the need for an ally in the region. Practically, with an interesting turn of historical circumstances, the Hungarians realised that their most reliable ally would be the Serbs, both in Serbia and Republika Srpska.
Hungarian Foreign Minister Péter Szijjártó commented on the meeting in a video on his Facebook page. He stressed that the strategic partnership and friendship between Belgrade and Budapest will greatly contribute to Hungary’s ability to better address the challenges it faces – primarily economic, security, and energy supply.
Szijjártó also recalled that under the long-term agreement with the Russian state-owned Gazprom, “natural gas for Hungary’s supply comes via Serbia, and Hungary stores hundreds of millions of cubic metres of gas for Serbia.”
European countries have destroyed their economies for sanctioning Russia and cutting gas supplies, something Budapest has done its best to avoid. For this reason, it is increasingly finding itself with more common interests with Belgrade and will not be hindered from jointly pursuing them just because Serbia is not an EU or NATO member.
Ahmed Adel is a Cairo-based geopolitics and political economy researcher.
Funding Ukraine ‘War Machine’ Against Russia Means Austerity in Europe
By James Tweedie – Sputnik – 28.03.2023
Western sanctions on Russia over its de-Nazification operation in Ukraine have ricocheted with disastrous results for European economies. Dr Linwood Tauheed, associate professor of Economics at the University of Missouri-Kansas City, linked them to civil unrest now wracking the continent.
The wave of strikes and protests sweeping Europe are in response to austerity policies prompted by sanctions on Russia, an academic has said.
Linwood Tauheed told Sputnik that Europeans are “not willing to be stoic about this any longer.”
The unrest was “an indication that some of the issues caused out there directly by the sanctions, which, of course, was caused by the war, are affecting them greatly,” he said.
The sanctions have been centrally co-ordinated by the European Commission, the unelected executive of the European Union (EU), which has also diverted billions of euros from the ironically-named European Peace Facility fund to buy arms for the Kiev regime.
“All of the EU countries are subject to round and round, and have been, of austerity that is a particular element of having this European Economic Union,” where countries have “given up their own sovereign currency and therefore their ability to solve their individual problems,” Tauheed noted.
EU nations must ask economic giant Germany’s approval before taking any measures to support their own people — as Greece and Italy have discovered. That has formed “a particular view of Germany and Brussels in terms of how those entities affect their individual economies,” Tauheed argued.
He said sanctions on Russia, reduced energy imports, de-industrialisation and falling living standards were “unifying” the public against austerity.
“Their leaders are willing to take limited euro resources and put them into a war machine and send them to Ukraine,” Tauheed stressed. “Austerity is looming and citizens are wondering ‘how we have money to send to Ukraine when we don’t have money to extend our pensions in France?’ Austerity is at the core of this. And it is European-wide, it’s not just country to country.”
The crisis is not limited to public spending and strikes over wages. German financial giant Deutsche Bank is now facing collapse after losing 11 per cent of its share value on Friday, and 29 per cent since the start of the month.
“Large banks in large countries in Europe” are facing “some crisis or another” but the US option of a central bank bail-out was not available to them, the academic said.
“So they’re going to be less able to quell bankruptcies and solvency among European banks than the US has been,” Tauheed said. “More dominoes” will likely fall in Europe, “but that’s also going to be contagious back to the US.”
Moscow waiting for Western leaders ‘to sober up’ – Lavrov
RT | March 27, 2023
Moscow will determine how its future relations with Western nations will develop only after they come to their senses, Russian Foreign Minister Sergey Lavrov said on Monday.
Speaking at the Gorchakov Public Diplomacy Fund, which provides support to Russian and foreign NGOs and think tanks, Lavrov accused the US and its allies of being “mired in cave Russophobia, while sacrificing the glaring problems in their own societies.”
“When and if they sober up, we will decide on our position regarding further relations with them. But we will make this decision, of course, on our own and based on our terms,” the foreign minister added.
Lavrov went on to point out that, despite the ongoing “dirty campaign to cancel everything linked to Russia,” it still had a lot of friends worldwide – including in the West – who like Russian culture and share the traditional family values it promotes.
At the same time, the minister warned that Russia would give a harsh response to all hostile actions. He claimed that Western countries wanted to stir unrest in Russia and undermine its stability. “They have found very capable agents of their will in the current Nazi regime in Ukraine, whose roots were laid a long time ago,” Lavrov said.
Against this backdrop, the top diplomat reiterated that Russia was fighting to protect not only the Russian-speaking population in the new territories that chose to join the country in public referendums last autumn, but also its own statehood.
Russia has repeatedly warned the West against supporting Ukraine, arguing that such policies make it a direct participant in the conflict. While Moscow maintains it is open to talks with Kiev, on Saturday, Kremlin spokesman Dmitry Peskov claimed that the US “had maniacally set itself up for not allowing Ukrainians to even think about” a potential peaceful settlement of the conflict.
NATO militarizes civilian structures in Europe with €1 billion fund
By Ahmed Adel | March 27, 2023
NATO is launching a new investment fund worth €1 billion, which is expected to be officially activated at NATO’s annual summit in July. The fund aims to militarize the civil sector by using the knowledge and skills of manufacturers, scientific institutions, and start-ups to develop technology with military and defence applications.
The fund, described by NATO as the “world’s first multi-sovereign venture capital fund”, will invest €1 billion into developing dual-use (civilian and military) emerging and disruptive technologies over a 15-year time frame. However, it demonstrates that NATO wants to permanently employ the European economy to the Russian border so they can collectively focus on the Ukrainian crisis.
It will also serve as preparation for any future war against Russia, something that is at great risk of eventuating considering Western efforts to deter Moscow from its special military operation in Ukraine have failed.
In the Ukrainian crisis, the material needs of the Ukrainian military are evident, and especially in preparation for any potential scenario of using NATO forces against Russia. This primarily refers to artillery, ammunition, rockets, bombs, air defence systems and drones. Due to these shortages, projects like this are being developed under the auspices of the NATO pact and are now becoming an investment fund for the economies of member states, depending on the ability of those countries to produce equipment needed for combat needs.
NATO approaches this project by effectively purchasing knowledge and engaging civil institutions, but also by opening various civil-military programs and projects. In addition, there are also investments in the so-called information war, which is part of the intelligence-reconnaissance activity, which is very important for modern warfare.
One NATO official told EURACTIV that the Alliance is looking to have a “competitive edge over strategic competitors”, an obvious reference to Russia.
The Netherlands already announced that it will house the fund. The country also announced that it will facilitate innovative startup companies by helping them find capital.
“We expect that housing this fund in the Netherlands will make it easier for innovative Dutch startups to find their way to capital, stimulating solutions for both societal and military problems,” the Dutch ministry of Economic Affairs said in a statement.
For this reason, the specific technologies invested will include artificial intelligence, big-data processing, biotechnology and human enhancement, novel materials, quantum-enabled technologies as well as propulsion and space. Although the headquarters will likely be in Amsterdam, regional offices will also be established “across the Alliance […] given the wide geographic remit of the Fund”, according to a NATO press release.
It is recalled that the new fund was first announced last year, meaning that the latest announcement made by the Dutch government is a demonstration of a laid-out plan by NATO to bring European civilian structures to operate as if it were in a war time economic climate. This could suggest that NATO is preparing Europe for a much larger conflict with Russia.
However, these provocative actions by the Dutch government comes as the country has been gripped by a wave of strikes in the public and private sectors since the beginning of 2023, something unseen in such a manner for many years. Every week since January, Dutch workers have protested for better wages and living conditions.
On March 16, around 200,000 healthcare workers at 64 Dutch hospitals were on strike for a day, including at the Antoni van Leeuwenhoek hospital in Amsterdam, a leading facility for treating cancer patients. Doctors and healthcare workers in 48 departments of the facility went on strike for the first time ever.
Although the Dutch economy will not shrink this year, its growth will slow down, according to ABN Amro. The bank expects the economy to grow 1.2% this year and 1.3% in 2024, a miniscule amount compared to the 4% growth the Dutch economy enjoyed in the previous years. Persistent inflation will ensure that growth will remain low this year, with ABN Amro expecting consumer prices to rise by 4.4% this year and 4% in 2024.
The higher interest rates, keeping in mind the central banks are trying to curb inflation, also slow the Dutch economy. It costs more to borrow money, which has repercussions for the housing market and investments, ABN Amro said.
Yet, with the Netherlands having no security issues to contend with given its geography, it is voluntarily deepening its involvement in NATO structures aimed against Russia, and all at a time when citizens are protesting weekly and suffering from the Western-wide economic crisis.
Ahmed Adel is an Cairo-based geopolitics and political economy researcher.
EU warns of response to Belarus nuclear move
RT | March 26, 2023
The EU will respond with further sanctions if Belarus presses ahead with hosting Russian nuclear weapons on its soil, the bloc’s top diplomat, Josep Borrell, has stated. Borrell called the decision to transfer tactical weapons to Belarus “an irresponsible escalation” by Moscow.
“Belarus hosting Russian nuclear weapons would mean an irresponsible escalation and threat to European security,” Borrell tweeted on Sunday. “Belarus can still stop it, it is their choice,” he continued, adding that “the EU stands ready to respond with further sanctions.”
Russian President Vladimir Putin revealed on Saturday that his country’s tactical nuclear weapons will arrive in Belarus as early as this summer. Putin said that he made the decision after the UK announced it would transfer toxic depleted uranium munitions to Ukraine, a move he described as a sign of London’s “absolute recklessness.”
Belarus has already been extensively sanctioned by the EU and US since the start of Russia’s military operation in Ukraine last February. Brussels has blacklisted more than 20 Belarusian officials, cut five of the nation’s banks off from the SWIFT system, and imposed numerous trade restrictions.
Prior to 2022, the EU banned Belarusian flights from operating in its airspace and imposed five separate sets of sanctions in response to President Alexander Lukashenko’s 2020 election victory, which the EU deemed fraudulent.
In his announcement on Saturday, Putin explained that any nuclear weapons transferred to Belarus would remain under Russian control.
“There is nothing unusual,” about this arrangement, Putin stated, explaining that “the United States has been doing this for decades” by keeping its own nuclear weapons in Belgium, Germany, Italy, the Netherlands, and Türkiye.
“They have long deployed their tactical nuclear weapons on the territory of their allies,” he said. “We agreed that we will do the same, without violating our international obligations on the non-proliferation of nuclear weapons.”
Climate-Neutral Already By 2030?… Berliners To Vote On Climate-Neutrality Referendum Today!
By P Gosselin | No Tricks Zone | March 26, 2023
Berliners are going to the polls today in a referendum on whether or not to make the city “climate-neutral” already by 2030 instead of 2045.
That’s quite a lofty goal for a chaotic, financially broken city that couldn’t even build an airport.
Polls showing slight lead for “klimaneutral ja”. And no campaign in Berlin has seen funding to this scale. Acc0rding to media reports, most funding has come from foreign countries, mainly from far left groups in the USA.
According to a report by online Bild, one wealthy New York couple (Albert Wenger und Susan Danziger) even donated half a million euros to fund a campaign to get the people to vote “ja”.
Should Berliners vote to make the German capital CO2 neutral by 2030, it would mean enacting an amendment that would force the city of Berlin to achieve climate neutrality by 2030 instead of 2045. This would affect almost every aspect of Berlin life, from transportation, to heating and widescale major building renovation.
Foreign funding
The amendment is being pushed by the Green Party and radical groups like Fridays for Future and Extinction Rebellion, who are largely financed by foreign funders like the Climate Emergency Fund, Abigail Disney and Hollywood film director Adam McKay.
If the amendment gets adopted, immense power will be transferred a small group of unelected people, a so-called Climate Protection Council of “experts”, appointed by the Berlin Senate. Climate targets for 2045 would turn into climate legal obligations for 2030.
Huge restrictions, astronomical costs, loss of private property
Critics warn this would mean many more restrictions on freedom, Berliners might even have to say goodbye to their cars completely. Under the amendment, the Berlin airport would be a part of the climate budget. thus posing the risk of reducing the number of flights.”
Moreover property owners would be forced to make largescale, costly renovations and have to install solar panels. No one knows where the money is magically supposed to come from.
Unachievable, pie-in-the-sky
Critics are speaking up, however, calling the radical climate project “factually impossible” and “out of the question”, noting that even the original 2045 target timetable was almost impossible to meet,” Bild reports.
Recent opinion polls show the results of today’s referendum are expected to be very close, slightly tipping in favor of the referendum.
We’ll report the results this evening as they become available.
This means there’s a good chance that the City of Berlin might well end up being an even greater basket-case than California. Somebody needs to lead the way to show the rest of the world what a folly rapid climate neutrality can be.
The US’ Rejection Of China’s Peace Plan For Ukraine Exposes Its Warmongering Intentions
By Andrew Korybko | March 24, 2023
Bloomberg cited an unnamed Biden Administration official on Thursday to report that “the US is worried about being backed into a corner over the Chinese proposal. Regardless of the US reservations, dismissing it outright could let China argue to other nations that are weary of the war — and of the economic damage it’s wreaking — that Washington isn’t interested in peace.” Alas, that’s precisely what America has done by acting as if China isn’t a serious mediator and that its peace plan is unrealistic.
By rejecting Beijing’s 12-step proposal, Washington exposed its warmongering intentions for the rest of the world to see and vindicated Moscow’s criticism that it wants to fight this proxy war “to the last Ukrainian”. The majority of the international community that resides in the Global South and which is most adversely affected by the systemic consequences of this conflict, particularly the food and fuel crises catalyzed by Western sanctions, had their perceptions of US soft power shattered once and for all.
Prior to the onset of Russia’s special operation last year that it was forced to commence in defense of its national security red lines in Ukraine after NATO clandestinely crossed them there, a significant share of folks in developing countries still generally had a favorable view of that declining unipolar hegemon. They might not have endorsed every one of its foreign policy moves, but these people still thought that its worldview had some redeeming factors that made it worthy of being listened to at the very least.
The allure of its soft power, particularly in the socio-cultural sphere as propagated by the mass media over the decades, still had a powerful hold over their hearts and minds. Now, however, these same people are directly suffering from the food and fuel crises catalyzed by the West’s unilateral sanctions. To make matters worse, the US signaled through its rejection of China’s peace plan for Ukraine that relief won’t be forthcoming, thus indefinitely perpetuating and thus exacerbating these problems.
It’s one thing for US-inclined folks in the Global South who’ve fallen under the sway of its soft power to oppose some part of its foreign policy regarding a faraway country and another entirely for that same foreign policy to directly affect them and their family. They might still enjoy consuming some of its socio-cultural products and perhaps still cling to believing in the so-called “American Dream” despite the odds of them ever benefiting from it, but their views of the US as a whole will certainly change.
This rapidly emerging outcome represents a latent crisis of the highest importance for the US’ grand strategic interests since the loss of such a critical mass of supporters will hamstring its goals across the Global South. These same people will be less susceptible to its information warfare products against their multipolar governments, thus reducing the chances that forthcoming Color Revolution plots will succeed, to say nothing of them tuning out the US’ fake news about the Sino-Russo Entente.
The combination of hunger pains and rising costs, which are the direct result of the food and fuel crises respectively that the US’ unilateral sanctions are responsible for, can turn anyone against anything even if they were previously the most fervent of believers. This is especially so when it worsens the living conditions of one’s own family, including their children. The arrogance of American policymakers, deluded by the supremacist belief in their system’s supposed “exceptionalism”, blinds them to this.
The aforesaid oversight, which could easily have been foreseen and thus avoided had groupthink not been in effect, is the proverbial straw that broke the camel’s back and turned the Global South against the US en masse. There’s now no credible possibility of America advancing its interests there by information warfare-driven attraction ever again, thus leading to it doubling down on subversion and force out of desperation instead of accepting the loss of its influence in those countries.
Western Sanctions Targeting Russians Failed, PM Mishustin Says
By Oleg Burunov – Sputnik – 23.03.2023
The US and its allies slapped packages of sanctions on Russia shortly after Moscow had launched its special military operation in Ukraine.
Russian Prime Minister Mishustin stated on Thursday that the US-led Western sanctions barrage targeting Russians has failed.
“At the very beginning, the West tried to assure that the sanctions were not directed against our citizens. And at the time, there were no illusions on this score. But now, even a person far removed from global politics understands that the main target was precisely the Russian people,” the prime minister emphasized during his speech at the State Duma, Russia’s lower house.
He said that the West “stopped at nothing”, even going as far as blowing up the Nord Stream gas pipeline network and seizing banking accounts.
Also, they “disconnected [Russia] from the international payment system, trying to block all banking and any other economic activity [of the country],” Mishustin pointed out.
The Russian PM emphasized that despite the sanctions, “goods and services-related payments as well as money transfers are being carried out just like before.”
“All bank cards in Russia that were previously in use are still working. The government also managed to reduce inflationary pressure and preserve the banking sector’s stability,” Mishustin stressed.
He recalled that last spring, “analysts were predicting a probable double-digit decline in Russia’s gross domestic product (GDP),” but he emphasized “we weathered the storm.” “It was a tricky task. The economic slowdown, [which was] inevitable under such conditions, was quite mild. Nevertheless, We’ve put the economy back on the growth track,” he added.
The Russian prime minister highlighted that in this regard the government had created “all the necessary work conditions for those companies that see their future in Russia, including firms from unfriendly states.”
“Despite all the restrictions, the negation of property rights, and the discriminatory measures that Russian businesses faced in the West, foreign companies feel comfortable when working in Russia,” Mushustin noted. He warned that “if foreign firms ditch their business operations in Russia and fail to take care of the future of their enterprises and employees, we will protect the interests of our people.”
The PM cautioned that “external pressure” on the Russian economy is unlikely to show signs of easing any time soon, and that “the period of [the economy’s] adaptation will end in 2024. Moreover, Russia will embark on the path of long-term progressive development.”
Last year, Western governments began to slap sweeping sanctions on the Russian economy over Moscow’s special military operation in Ukraine. However, these measures finally boomeranged on the economies of the US-led West as these restrictive measures sent inflation (especially in the energy sector) skyrocketing to record highs while simultaneously driving their societies into a cost of living crisis.
Russia’s economy recovers while dozens of US banks face collapse
By Ahmed Adel | March 23, 2023
Although Western media were boasting about Sberbank’s 78% plunge in profit in 2022 due to US-led sanctions, with CEO German Gref acknowledging a “most difficult year”, it appears that the US economic system is the one actually on the brink as four banks have already collapsed, with dozens more expected to follow.
CNN described the Russian bank’s drop in profit as a “collapse” in its headline, but then had to admit in the article that “Sberbank’s resilience in the face of sanctions helped Russia’s banking sector recover from a loss-making first half in 2022.”
This is in line with Gref’s belief that this year’s profits should be close to the record 1.25 trillion rubles ($16.5 billion) earned in the “pre-crisis year.” “Our business model passed another strength test,” he added.
It is recalled that Russian Presidential spokesperson Dmitry Peskov said on March 14 that there is “practically” no risk of Russia facing a fallout from the SVB collapse, adding that: “Our banking system has certain connections with some segments of the international financial system, but it is mostly under illegal restrictions.”
Despite alarmist headlines from US media and experts, Peskov was proven correct as no Russian bank has collapsed despite Western sanctions. Meanwhile, the full repercussions of SVB’s downfall are yet to be felt, with former Lehman Brothers executive Lawrence McDonald believing that up to another 50 American banks could collapse if structural problems are not fixed.
“So Lehman failed and then it forced this too-big-to-fail system, and then, now this interest rate shock to the regional banks is moving hundreds of billions of dollars out of regional banks into the big banks… So you could have another 50 bank failures… unless they fix the structural problem,” said McDonald on March 22.
“There’s going to be further damage. They have to cut rates and then they have to have a deposit guarantee, a larger one, that’s what they’re going to come up with… That’s a bailout. That’s basically the federal government taking on bank deposit risk,” he added.
By being cut-off from the Western banking system, Russia is effectively protected from the series of bank collapses that are expected to follow. Russia faced a credit crunch due to the fallout from the US subprime mortgage crisis in 2008, which ultimately led to the Global Financial Crisis, a demonstration of how it too was exposed to weaknesses in the US economy.
Although Russia was cut-off from SWIFT only two-days after the special military operation began, in addition to many other Western restrictions, including a $60 per barrel oil price cap, President Vladimir Putin boasted about the resilience of the Russian economy.
The IMF reported that Russia’s economy contracted by 2.2% in 2022 and will start growing again in 2023, expanding by 0.3%, and then 2.1% in 2024. This is impressive when considering that fellow European countries, which are not sanctioned, will be struggling immensely. The UK is expected to contract by 0.6% and Germany will have a growth of only 0.1%.
At the same time, the OECD forecasts that US economic growth would slow from 1.5% this year to 0.9% next year. This is due to higher interest rates slowing down demand. Bloomberg on March 21, citing sources, reported that the US Treasury Department is studying the possibility of guaranteeing all bank deposits in the event of a recession in the banking sector.
The current banking crisis has forced economists, including from the esteemed JPMorgan Chase, to make new recession forecasts after any hopes of recovery were snuffed away.
“The Fed is facing a difficult task on Wednesday, but it is likely already past the point of no return,” JPMorgan strategists wrote in a note to clients on March 22. “A soft landing now looks unlikely, with the airplane in a tailspin (lack of market confidence) and engines about to turn off (bank lending).”
Goldman Sachs also echoed JPMorgan and said in mid-March that the banking crisis could deliver a severe blow to economic growth.
For his part, former Treasury Secretary Larry Summers has warned multiple times, including as recently as March 9 but even from before the banking crisis, that the economy could be heading for a “Wile E. Coyote moment,” referencing a Looney Tunes character who was always blissfully unaware that he was about to hit the ground after running off the edge of a cliff.
However, the expected collapse of many banks in the US and the impending economic crisis has not deterred the determination of the Biden administration to fanatically arm, fund and train the Ukrainian military and regime. With millions of Americans on the verge of dropping out of the Middle Class, Washington continues to send tens of billions of dollars to Ukraine, and all the while Western sanctions are now beginning to have a minimum effect on the Russian economy, thus effectively rendering them nearly useless.
Ahmed Adel is a Cairo-based geopolitics and political economy researcher.
Sino-Russian technological and military cooperation exponentially strengthens both superpowers’ capabilities
By Drago Bosnic | March 22, 2023
After the end of the (First) Cold War and the start of what Francis Fukuyama dubbed the “End of History”, the world seemed firmly in the hands of the political West. For the next two to three decades, this resulted in one of the most disastrous and unstable periods in recent human history, with the political West ravaging much of the world, while most of the rest was held under near-constant self-defeating subservience.
The US-led power pole engaged in what can only be described as war hopping, starting one aggression after another, or worse yet, several consecutive invasions against countries on multiple continents, with its numerous vassals and satellite states sending auxiliary forces or at the very least providing support in logistics and financing. America’s superiority was both quantitative and qualitative, leaving nearly everyone else far behind. The only exception was Russia, whose only advantage was its massive strategic arsenal, the last vestige of the (First) Cold War that kept the US from exerting absolute dominance.
Moscow’s main trump card was also the world’s trump card, providing precious several decades of peace to other sovereign-minded powers, primarily China. Beijing’s meteoric rise to superpower status would have been all but impossible without it and the Asian giant’s leadership is well aware of this. It could be said that both Russia and China “have each other’s backs”, with the cooperation reaching unprecedented levels, not seen in approximately 60 years.
Not counting the purely ideological “cold war” in the aftermath of the Sino-Soviet split, the relationship between Moscow and Beijing has been cordial at worst. However, in the last 30 years, particularly since President Putin consolidated Russia’s geopolitical standing, this relationship has transformed into a fully-fledged strategic alliance in virtually every aspect, truly limitless, as Putin and Xi Jinping recently described. Since the early 1990s, Russia has transferred copious amounts of its massive technological know-how, particularly in military tech, helping push China’s defense capabilities nearly half a century ahead in less than a decade.
The result was quite positive for Beijing, but was seen with contempt in Washington DC, which loathes the idea of having to deal with “another Soviet Union”, especially after investing nearly half a century into dismantling the original and after the Clinton administration announced the US will “never let the rise of another superpower” with the equivalent or close to the power of the USSR. However, despite US attempts to prevent it, exactly this happened. Russia, at first a mere shadow of its former glory and essentially dismissed as a “done deal” by the political West, started regaining its strength, but this time not as a socialist empire, but perhaps the world’s premier realpolitik superpower. With such an approach, Moscow kept most of its historic geopolitical partnerships and was also able to expand them, including with China. President Xi Jinping’s latest visit, the first foreign trip he went on after being reelected for his third term, serves as a testament to this growing alliance.
The superpowers signed over a dozen key strategic agreements laying out the prospects of their unprecedented cooperation by the end of this decade and beyond. Apart from the growing trade exchange, which is racing towards $200 billion annually, one of the key aspects of this is a technological and military partnership. China and Russia will further expand their cooperation in areas such as information technologies and advanced AI, involving approximately 80 new projects assessed at over $165 billion. This includes aircraft and machine tools manufacturing, space research and strengthening of military cooperation, including further unification of Moscow’s and Beijing’s know-how.
In a joint statement, the (Eur)Asian giants reiterated their commitment to regularly conduct bilateral naval and aerial patrols, as well as regular military exercises, expand cooperation within and beyond the framework of existing bilateral agreements and deepen mutual trust and interoperability between their armed forces.
One particularly important segment of this growing alliance is the exchange of military technologies in which both countries excel. China’s impressive strides in microelectronics and semiconductors are of great interest to Russia, while Moscow’s traditionally world-class expertise in rocket/missile and space technologies is greatly appreciated in Beijing. This includes the latest Chinese developments in new network-centric capabilities, with drone swarms being of particular interest for Russia, which could provide key tactical advantages on the battlefield.
Moscow has certainly developed a plethora of its own similar capabilities, but getting Beijing to participate in these efforts will help expand the said capabilities even further. On the other hand, China is greatly interested in Russia’s unrivaled hypersonic technologies, especially naval, as the primary threat to its security and development comes from the belligerent thalassocratic powers of the political West and their regional vassals.
Russian military expert Andrei Martyanov outlined the virtually unknown (to the vast majority of mainstream media) aspects of this cooperation, including the immediate threat that the AUKUS represents for Beijing. With virtually all of China’s Tier 1 cities and provinces being exposed to naval aggression from the US, the Asian giant is seeking ways to nullify this possibility or at the very least push it to a minimum. Of particular concern is the US Navy’s AGM-158 JASSM (Joint Air-to-Surface Standoff Missile), a stealthy air-launched cruise missile deployed by American CBG (carrier battle groups), including the 2000-km range JASSM-XR variant. And while such missiles can hardly be considered comparable to the latest Chinese weapons, they are relatively cheap (by US standards) and numerous (at least 2000 procured by USAF and USN), providing a strong first-strike capability for Washington DC. According to Martyanov, precisely this was very likely one of the key topics of the behind-closed-doors talks between Russian and Chinese delegations.
Drago Bosnic is an independent geopolitical and military analyst.
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