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Massive new debt hides years of negative GDP growth in EU and USA

By Jon Hellevig | Oriental Review | September 29, 2014

Finland – In a groundbreaking study Awara Group reveals that the real GDP growth of Western countries has been in negative territory for years. Only by massively loading up debt have they been able to hide the true picture and delay the onset of an inevitable collapse of their respective economies. The study shows that the real GDP of those countries hides hefty losses after netting the debt figures, which gives the Real-GDP-net-of-debt.

The moral of the study is that GDP growth figures as such reveal very little about the underlying dynamics of an economy if one does not simultaneously attempt to analyze what part of the growth is credited to simply artificially fueling the economy with new loans.

The study has found that the Western countries have lost the capacity to grow their economies. All they have left is a capacity to pile up debts. By massively accumulating new debt, they are able to keep up a semblance of at least sluggish growth, or of hovering around the zero growth mark.

If this massive debt would go towards investments, then there would be nothing wrong with it. But, it is not. The debt is going towards financing the losses in the national economies and essentially it all is wasted on consumption that the countries in reality cannot afford. The Western countries act like a 19th century heir to aristocratic wealth, borrowing from year to year to keep up the former lifestyle, while the estate is relentlessly dwindling. Sooner or later the prodigal heir would be forced to face reality and sell the remaining property to stave off the creditors, downgrade his dwellings, and rein in spending. Inevitably, the European countries and the USA will have to curb their excessive consumption, too, but for the time being they are putting off the final reckoning with new debt rather the way a drunkard reaches for the morning after drink to put off sobering up. In the case of the EU and the USA, we are speaking about a debt binge that has been going on for a decade.

While the situation has been generally bad for the last decade or so, it took a dramatic turn for the worse, or should we say for the catastrophic, following the onset of the global financial crisis in 2008. The shocking figures depicting the virtual crippling of the Western economies from 2009 to 2013 are illustrated in Chart 1. It depicts the development of real-GDP-growth per country in years 2005 to 2013. The chart shows that during this period Russia has been able to deliver real non-debt fueled GDP growth, whereas the Western countries are running huge deficits. The accumulated growth of the Russian economy from 2005 to 2013 was 147% while the Western countries accumulated losses from 16.5% (Germany) to 58% (USA). In the case of Russia, the real-GDP-net-of-debt figure is also corrected to adjust for the calculation error caused by an erroneous GDP deflator that Russian Statistics Agency (Rosstat) has used. We have discussed the persistent problem of Russia’s GDP growth having been underestimated due to the use of a wrong GDP deflator in the study Awara Group Research on the Effects of Putin’s Tax Reforms 2000-2012 on State Tax Revenue and GDP

Chart1

Chart 2 shows the real GDP growth net-of-debt after deducting the growth of public debt from the GDP figure. Net of debt we see the scale of the Western economies, for example the Spanish economy, which amounts to the staggering figure of minus 56.3%. This while the conventional official method of crediting GDP growth with growth of debt would give only minus 6.7%.

Chart2

The analysis shows that by these measures Russian economic growth, unlike that of the Western countries, has been comparatively healthy and not debt-driven. Russia has in fact a resoundingly positive ratio by these measures, where GDP growth has exceeded growth of debt by a staggering 14 times (1400%). The figure is astonishing when compared with the Western countries that have been flooded with new debt.

Chart3

Chart 3 shows how much the accumulation of debt in the Western countries exceeds the official GDP growth. The USA is leading the pack with an increase in the debt load in years 2004 to 2013 of USD 9.8 trillion (in the chart in euros, EUR 7 trillion). In those years, the growth of the USA public debt exceeded the GDP growth 9 times (900%), which is illustrated by Chart 4, comparing the proportion of growth of debt to that of growth of GDP.

The comparison of growth of debt to growth of GDP reveals the UK, as the country that has amassed the most amount of new debt relative to GDP growth, having a new-debt-to-GDP-growth ratio of 9 to 1; in other words UK has taken on 900% new debt relative to the GDP growth. But the picture is grim for all the Western countries surveyed, less so for Germany, while Russia’s debt increase amounts to only a fraction of the GDP growth.

Chart4

The analysis shows that by these measures Russian economic growth, unlike that of the Western countries, has been comparatively healthy and not debt-driven. Russia has in fact a resoundingly positive ratio by these measures, where GDP growth has exceeded growth of debt by a staggering 14 times (1400%). The figure is astonishing when compared with the Western countries that have been flooded with new debt.

The above figures are adjusted taking into account public debt (general government debt), but the situation is even worse when we consider the effect of private debt on the GDP. New debt of corporations and households have at least doubled private debt of most of the Western countries since year 1996 (Chart 5).

Chart5

Reviewing these figures, it becomes evident that in reality Western economies have not grown in the past decade, rather the countries have massively inflated their debt load. With these levels of debt reached this cannot continue for long. There is a real risk that the bluff will be called sooner rather than later dropping the Western economies to GDP levels that they can carry without debt leverage. But in that situation they will not be able to serve the accumulated debts leading to catastrophe scenarios.

We have not included Japan and China in the analysis due to the difficulties attributed to finding consistent data for all the input variables. For those countries we have come across problems of fractured data that do not capture all the relevant years; inconsistent data across the samples we looked at; and uncertainties about conversion of the input data into euros. (We are sure that major research houses could overcome such problems, having greater and more sophisticated resources than ours). This exclusion of Japan and China is regrettable as Japan is the country worst affected by the problem of debt-fueled GDP growth, having a public debt to GDP ratio of well above 200%, and would therefore have been very instructive for our purposes.

Japan has been essentially living on debt since the early 1990’s. However, some of the more irrational Western analysts want to take Japan as a prime example to follow, arguing that since Japan has been able to pile up debt for some 25 years now, all the Western countries would be able to do it as well for the foreseeable future. In this they fail to grasp that Japan earlier had the luxury of being the sole country living on such exorbitant levels of debt. Japan has enjoyed great support from the Western countries to be able to continue that practice, not least for political reasons. Another important consideration against the idea that Western countries could continue to accumulate debt is that they have, since the early 1990’s, rapidly lost their economic hegemony in terms of share of world trade and global GDP. I have written about this in a recent article entitled Why the West is Destined to Decline.

The West is fast shrinking in economic significance relative to the rest of the world. This is demonstrated by comparing the GDP of the Western powers as represented by the G7 countries (USA, Japan, Germany, France, UK, Italy and Canada) with the GDP of emerging powers. As recently as 1990, the combined GDP of the G7 was overwhelming in relation to that of today’s 7 emerging powers: China, India, Russia, Brazil, Indonesia, Mexico and South Korea (not necessarily constituting one political block). In 1990, the G7 countries had a combined GDP of USD 14.4 trillion and the emerging 7 had a GDP of USD 2.3, but by 2013 the tables had been turned, as the G7 had USD 32 trillion and the emerging 7 had USD 35 trillion. (Chart 6).

Chart6

With the challenge of the ever increasing share of world economy belonging to the emerging countries, it becomes clear that the Western countries will not be able to profit sufficiently from world trade to service their debt loads.

For the time being the Western countries benefit from the privilege of having currencies that the rest of the world still largely trusts as reserve currencies. In essence, the USD and the euro enjoy a kind of monopoly status. This is what allows Western countries to gain access to cheap debt and fuel their economies with central bank financing (quantitative easing or “printing of money”). But the risk is that, with the deteriorating debt situation and diminishing share of the global economy, they will forfeit this privilege, perhaps even in the near future. What would follow from this is sharply more expensive financing and inflation, with hyperinflation as the eventual outcome. In this scenario – which I consider inevitable over the next 5 to 10 years – the economies of Western countries would essentially collapse.

The problem is that there is no way of averting this scenario, because the Western powers have lost their competitive advantages as economic powers. Eventually, their economies must shrink to match their resource and population bases. (I have written about this in the article referred to above). But it seems that the ruling Western elites have no intention of facing up to these realities. They will try to keep up a semblance of prosperity with ever new debt, as long as they can. The political parties of the West have been essentially converted into voting machines with one singular concern – that of winning the next elections. To do that they will continue to engage in what amounts to bribing of the electorate – creating new debt that fuels the national economy.

But there is no way to turn back this historical tide. Just as the aristocrat of the old regime eventually squandered his legacy, so will the Western powers. This inevitability of the process is what makes it really scary, because I am afraid that the Western elite might be tempted to bail itself out from this doomsday scenario with a war of epic proportions. We are now truly approaching the Armageddon between the West, with its desperate economic circumstances, and the emerging world powers.

Jon Hellevig is a business consultant and economic and political observer. He is the co-editor and co-author of Putin’s New Russia and several books on philosophy and political and social sciences.

September 30, 2014 Posted by | Deception, Economics | , , , , , , , , | Leave a comment

High Cost of Bad Journalism on Ukraine

By Robert Parry | Consortium News | September 22, 2014

The costs of the mainstream U.S. media’s wildly anti-Moscow bias in the Ukraine crisis are adding up, as the Obama administration has decided to react to alleged “Russian aggression” by investing as much as $1 trillion in modernizing the U.S. nuclear weapons arsenal.

On Monday, a typically slanted New York Times article justified these modernization plans by describing “Russia on the warpath” and adding: “Congress has expressed less interest in atomic reductions than looking tough in Washington’s escalating confrontation with Moscow.”

But the Ukraine crisis has been a textbook case of the U.S. mainstream media misreporting the facts of a foreign confrontation and then misinterpreting the meaning of the events, a classic case of “garbage in, garbage out.” The core of the false mainstream narrative is that Russian President Vladimir Putin instigated the crisis as an excuse to reclaim territory for the Russian Empire.

While that interpretation of events has been the cornerstone of Official Washington’s “group think,” the reality always was that Putin favored maintaining the status quo in Ukraine. He had no plans to “invade” Ukraine and was satisfied with the elected government of President Viktor Yanukovych. Indeed, when the crisis heated up last February, Putin was distracted by the Sochi Winter Olympics.

Rather than Putin’s “warmongering” – as the Times said in the lead-in to another Monday article – the evidence is clear that it was the United States and the European Union that initiated this confrontation in a bid to pull Ukraine out of Russia’s sphere of influence and into the West’s orbit.

This was a scheme long in the making, but the immediate framework for the crisis took shape a year ago when influential U.S. neocons set their sights on Ukraine and Putin after Putin helped defuse a crisis in Syria by persuading President Barack Obama to set aside plans to bomb Syrian government targets over a disputed Sarin gas attack and instead accept Syria’s willingness to surrender its entire chemical weapons arsenal.

But the neocons and their “liberal interventionist” allies had their hearts set on another “shock and awe” campaign with the goal of precipitating another “regime change” against a Middle East government disfavored by Israel. Putin also worked with Obama to resolve the dispute over Iran’s nuclear program, averting another neocon dream to “bomb, bomb, bomb Iran.”

The Despised Putin

So, Putin suddenly rose to the top of the neocons’ “enemies list” and some prominent neocons quickly detected his vulnerability in Ukraine, a historical route for western invasions of Russia and the scene of extraordinarily bloody fighting during World War II.

National Endowment for Democracy president Carl Gershman, one of the top neocon paymasters spreading around $100 million a year in U.S. taxpayers’ money, declared in late September 2013 that Ukraine represented “the biggest prize” but beyond that was an opportunity to put Putin “on the losing end not just in the near abroad but within Russia itself.”

The context for Gershman’s excitement was a European Union offer of an association agreement to Ukraine’s elected President Viktor Yanukovych, but it came with some nasty strings attached, an austerity plan demanded by the International Monetary Fund that would have made the hard lives of the average Ukrainian even harder.

That prompted Yanukovych to seek a better deal from Putin who offered $15 billion in aid without the IMF’s harsh terms. Yet, once Yanukovych rebuffed the EU plan, his government was targeted by a destabilization campaign that involved scores of political and media projects funded by Gershman’s NED and other U.S. agencies.

Assistant Secretary of State for European Affairs Victoria Nuland, a neocon holdover who had been an adviser to Vice President Dick Cheney, reminded a group of Ukrainian business leaders that the United States had invested $5 billion in their “European aspirations.” Nuland, wife of prominent neocon Robert Kagan, also showed up at the Maidan square in Kiev passing out cookies to protesters.

The Maidan protests, reflecting western Ukraine’s desire for closer ties to Europe, also were cheered on by neocon Sen. John McCain, who appeared on a podium with leaders of the far-right Svoboda party under a banner honoring Nazi collaborator Stepan Bandera. A year earlier, the European Parliament had identified Svoboda as professing “racist, anti-Semitic and xenophobic views [that] go against the EU’s fundamental values and principles.”

Yet, militants from Svoboda and the even more extreme Right Sektor were emerging as the muscle of the Maidan protests, seizing government buildings and hurling firebombs at police. A well-known Ukrainian neo-Nazi leader, Andriy Parubiy, became the commandant of the Maidan’s “self-defense” forces.

Behind the scenes, Assistant Secretary Nuland was deciding who would take over the Ukrainian government once Yanukovych was ousted. In an intercepted phone call with U.S. Ambassador Geoffrey Pyatt, Nuland crossed off some potential leaders and announced that “Yats” – or Arseniy Yatsenyuk – was her guy.

The Coup

On Feb. 20, as the neo-Nazi militias stepped up their attacks on police, a mysterious sniper opened fire on both protesters and police killing scores and bringing the political crisis to a boil. The U.S. news media blamed Yanukovych for the killings though he denied giving such an order and some evidence pointed toward a provocation from the far-right extremists.

As Estonia’s Foreign Minister Urmas Paet said in another intercepted phone call with EU foreign affairs chief Catherine Asthon, “there is a stronger and stronger understanding that behind snipers it was not Yanukovych, it was somebody from the new coalition.”

But the sniper shootings led Yanukovych to agree on Feb. 21 to a deal guaranteed by three European countries – France, Germany and Poland – that he would surrender much of his power and move up elections so he could be voted out of office. He also assented to U.S. demands that he pull back his police.

That last move, however, prompted the neo-Nazi militias to overrun the presidential buildings on Feb. 22 and force Yanukovych’s officials to flee for their lives. Then, rather than seeking to enforce the Feb. 21 agreement, the U.S. State Department promptly declared the coup regime “legitimate” and blamed everything on Yanukovych and Putin.

Nuland’s choice, Yatsenyuk, was made prime minister and the neo-Nazis were rewarded for their crucial role by receiving several ministries, including national security headed by Parubiy. The parliament also voted to ban Russian as an official language (though that was later rescinded), and the IMF austerity demands were pushed through by Yatsenyuk. Not surprisingly, ethnic Russians in the south and east, the base of Yanukovych’s support, began resisting what they regarded as the illegitimate coup regime.

To blame this crisis on Putin simply ignores the facts and defies logic. To presume that Putin instigated the ouster of Yanukovych in some convoluted scheme to seize territory requires you to believe that Putin got the EU to make its reckless association offer, organized the mass protests at the Maidan, convinced neo-Nazis from western Ukraine to throw firebombs at police, and manipulated Gershman, Nuland and McCain to coordinate with the coup-makers – all while appearing to support Yanukovych’s idea for new elections within Ukraine’s constitutional structure.

Though such a crazy conspiracy theory would make people in tinfoil hats blush, this certainly is at the heart of what every “smart” person in Official Washington believes. If you dared to suggest that Putin was actually distracted by the Sochi Olympics last February, was caught off guard by the events in Ukraine, and reacted to a Western-inspired crisis on his border (including his acceptance of Crimea’s request to be readmitted to Russia), you would be immediately dismissed as “a stooge of Moscow.”

Such is how mindless “group think” works in Washington. All the people who matter jump on the bandwagon and smirk at anyone who questions how wise it is to be rolling downhill in some disastrous direction.

But the pols and pundits who appear on U.S. television spouting the conventional wisdom are always the winners in this scenario. They get to look tough, standing up to villains like Yanukovych and Putin and siding with the saintly Maidan protesters. The neo-Nazi brown shirts are whited out of the picture and any Ukrainian who objected to the U.S.-backed coup regime finds a black hat firmly glued on his or her head.

For the neocons, there are both financial and ideological benefits. By shattering the fragile alliance that had evolved between Putin and Obama over Syria and Iran, the neocons seized greater control over U.S. policies in the Middle East and revived the prospects for violent “regime change.”

On a more mundane level – by stirring up a new Cold War – the neocons generate more U.S. government money for military contractors who bestow a portion on Washington think tanks that provide cushy jobs for neocons when they are out of government.

The Losers

The worst losers are the people of Ukraine, most tragically the ethnic Russians in eastern Ukraine, thousands of whom have died from a combination of heavy artillery fire by the Ukrainian army on residential areas followed by street fighting led by brutal neo-Nazi militias who were incorporated into Kiev’s battle plans. [See Consortiumnews.com’s “Ukraine’s ‘Romantic’ Neo-Nazi Storm Troopers.”]

The devastation of eastern Ukraine, which has driven an estimated one million Ukrainians out of their homes, has left parts of this industrial region in ruins. Of course, in the U.S. media version, it’s all Putin’s fault for deceiving these ethnic Russians with “propaganda” about neo-Nazis and then inducing these deluded individuals to resist the “legitimate” authorities in Kiev.

Notably, America’s righteous “responsibility to protect” crowd, which demanded that Obama begin airstrikes in Syria a year ago, swallowed its moral whistles when it came to the U.S.-backed Kiev regime butchering ethnic Russians in eastern Ukraine (or for that matter, when Israeli forces slaughtered Palestinians in Gaza).

However, beyond the death and destruction in eastern Ukraine, the meddling by Nuland, Gershman and others has pushed all of Ukraine toward financial catastrophe. As “The Business Insider” reported on Sept. 21, “Ukraine Is on the Brink of Total Economic Collapse.”

Author Walter Kurtz wrote:

“Those who have spent any time in Ukraine during the winter know how harsh the weather can get. And at these [current] valuations, hryvnia [Ukraine’s currency] isn’t going to buy much heating fuel from abroad. …

“Inflation rate is running above 14% and will spike sharply from here in the next few months if the currency weakness persists. Real wages are collapsing. … Finally, Ukraine’s fiscal situation is unraveling.”

In other words, the already suffering Ukrainians from the west, east and center of the country can expect to suffer a great deal more. They have been made expendable pawns in a geopolitical chess game played by neocon masters and serving interests far from Lvov, Donetsk and Kiev.

But other victims from these latest machinations by the U.S. political/media elite will include the American taxpayers who will be expected to foot the bill for the new Cold War launched in reaction to Putin’s imaginary scheme to instigate the Ukraine crisis so he could reclaim territory of the Russian Empire.

As nutty as that conspiracy theory is, it is now one of the key reasons why the American people have to spend $1 trillion to modernize the nation’s nuclear arsenal, rather than scaling back the thousands of U.S. atomic weapons to around 900, as had been planned.

Or as one supposed expert, Gary Samore at Harvard, explained to the New York Times : “The most fundamental game changer is Putin’s invasion of Ukraine. That has made any measure to reduce the stockpile unilaterally politically impossible.”

Thus, you can see how hyperbolic journalism and self-interested punditry can end up costing the American taxpayers vast sums of money and contributing to a more dangerous world.

~

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

September 23, 2014 Posted by | Corruption, Economics, Mainstream Media, Warmongering, Militarism, Timeless or most popular, Wars for Israel | , , , , , | Leave a comment

‘China won’t support sanctions against Moscow’

RT | September 23, 2014

ByMbXK2CMAEzpWoChina will never support any sanctions against Russia and will never join them, Valentina Matviyenko, speaker of the Russian parliament’s upper house said, citing Chinese President Xi Jinping, with whom she met on Tuesday.

Both Russia and China believe the sanctions are illegal, ineffective and counterproductive, according to Matviyenko. They are nothing but an attempt “to exert pressure on sovereign states to change their position and to weaken them and suppress their development,” she stressed.

Matviyenko thanked Beijing for its public position towards Western sanctions imposed on Russia over the Ukrainian conflict. China has offered an “absolutely objective” assessment of what is now going on in Ukraine. Moreover, no sanctions will affect the long-term strategic partnership between Moscow and Beijing, which reflects the interests of both peoples, she noted.

Cooperation of Russia and China remains a serious factor in international politics, Matviyenko said, adding that the two states have no disputable issues. Their positions are either close or coincide on major problems, including how to settle international and regional conflicts or deal with new challenges and threats.

September 23, 2014 Posted by | Economics | , , | Leave a comment

‘Sanctions war’ has nothing to do with Ukraine; it’s just a pretext – Rusal CEO

RT | September 19, 2014

The Ukrainian conflict was just a trigger for the sanctions, which demonstrated the failure of all previous efforts to set up healthy relations between Russia and the West, Russian tycoon and head of Rusal, Oleg Deripaska, told RT in Sochi.

“I think the sanctions have nothing to do with Ukraine. Ukraine was just a reason. [The sanctions] were a failure of any attempt which was taken in the past to build normal relations between Europe and Russia – from both sides,” Deripaska told RT at the Investment Forum in Sochi.

Oleg Deripaska said the West started pressing Russia before the first sanctions were imposed – just ahead of the Sochi Olympics.

“We should give a lot of credit to Sochi, [as it showed] a different world, [despite] whatever appeared in the Western press,” he said.

Asked if people across the globe are more anti-Russia than ever, Deripaska answered that “it’s not people, it’s [about] various lobbying groups and various interests.”

“You remember all the complaints before the Olympics. They’ve been intentionally stopping any efforts from the Russian side to be normal, to look normal in the West. My view is we should go down as deep as possible, as quick as possible, and then touch the bottom and go up, and think what’s actually common between us, if there is any chance to have this Portugal-Vladivostok trade zone and opportunities to live together.”

September 19, 2014 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , , , , | Leave a comment

Japan puts on hold Russian sanctions in view of possible FM talks

RT | September 19, 2014

The Japanese government has pushed back imposing new sanctions on Russia, which it planned to impose on Friday, in expectation of a possible meeting of foreign ministers next week.

The Japanese media reported Thursday of Tokyo’s intention to issue additional sanctions against Russia. The move was discussed on Tuesday at a National Security Council meeting and was expected to be announced on Friday, but according to The Japan Times the government is yet to make a final decision.

The implementation could be postponed until at least next week, when Japanese Foreign Minister Fumio Kishida may meet his Russian counterpart Sergey Lavrov on the sidelines of the UN General Assembly in New York. Tokyo wants to give Moscow more time to respond to the reports of the looming sanctions, the newspaper said.

Japan imposed sanctions on Russia in March as a gesture of solidarity with the US and the EU, which are championing a policy of punishing Russia for its stance on the crisis in Ukraine. Tokyo suspended talks with Moscow over visa restrictions, investment, space cooperation and military tension prevention. It also targeted 40 individuals from Russia and Ukraine with asset freezes and travel bans.

The new round of sanctions was expected to be individual rather than sectorial.

September 19, 2014 Posted by | Economics | , , | Leave a comment

Russia, China to sign new 30 year gas deal via 2nd route

The BRICS Post | September 18, 2014

Russia plans to sign a 30-year gas supply contract with China via the western route, Russian energy giant Gazprom’s CEO Alexei Miller told President Vladimir Putin on Wednesday. The route to supply gas to China via western Siberia may be implemented faster than the eastern route, through which Moscow has agreed to ship the fuel to its Asian neighbor in May.

“Gazprom plans to sign a contract to supply China with 30 billion cubic meters of natural gas via western route over thirty years,” Miller said.

The China-Russia West Route natural gas pipeline project connects gas deposits in Western Siberia and the northwestern part of China via Russia’s Altai region, securing the world’s top energy user a major source of cleaner fuel.

The potential of this route is “enormous”, the Gazprom CEO told the Russian President.

“It is even greater than in Eastern Siberia and, without a doubt, we can increase the volume of gas supplies very quickly via the western route, depending on the growth in demand in the Chinese market,” said Miller.

Gazprom is to sign the 30-year contract with China National Petroleum Corporation (CNPC) in November. The deal will directly link Russia’s huge gas fields to Asia’s booming market for the first time.

Miller also said Gazprom might consider more than doubling the volume of supply.

“We plan to sign a contract for a volume of 30 billion cubic metres for 30 years, though the talks have also looked at other figures for new contracts concluded for the western route. We are looking at the possibilities for supplying 60 billion cubic metres or up to 100 billion cubic metres of gas to China,” Miller told Putin in Moscow.

China and Russia signed a $400-billion gas supply deal in May this year, opening up a new market for Moscow as it risks losing European customers over the Ukraine crisis.

The Russian part of the joint venture pipeline, officially dubbed “Power of Siberia”, will be built by Gazprom with a total investment of $55 billion.

Construction of the China- Russia East Route natural gas pipeline started this month in this eastern Siberian city of Yakutsk.

TBP and Agencies

September 18, 2014 Posted by | Economics | , | Leave a comment

Sanctions against Russia ‘violate’ core principles of WTO – Putin

RT | September 18, 2014

President Vladimir Putin has said that sanctions against Russia directly violate World Trade Organization (WTO) principles, and that Russia will continue to defend its economy with protective measures.

The sanctions violate the main principles of equal access for all WTO members to economic activity and access to goods and services in the market, Putin said at a meeting with advisers in the Kremlin on Thursday.

“The limitations introduced against our country are nothing but a violation by some of our partners of the basic principles of the WTO,” the President said, adding that sanctions “undermine free enterprise competition.”

On September 12, the US and EU expanded sanctions against Russia aimed at hurting Russia’s main industry – oil. The US and EU have led sanctions against Russia, along with Japan, Australia, Switzerland, and others over Moscow’s alleged meddling in the Ukraine conflict.

The best way for Russia to counter these unfair advantages is to develop its domestic market, the President said.

“In response, we took protective measures, and I would like to stress that they are protective; they are not the result of our desire to punish any of our partners or influence their decision in any way.”

Russia introduced protective measures over food supplies on August 7 in response to Western sanctions. The Kremlin and White House sanctions tit-for-tat has been escalating since March, when Crimea voted to rejoin Russia.

The food ban is due to only last a year, but at today’s meeting the President said that Russia needs to focus on increasing its market competitiveness over the next eighteen months to two years.

One of Russia’s main competitive advantages is its huge domestic market, and it should be filled with more Russian-made products, Putin said.

The President said that Russia’s decision to join the WTO in 2012 was a difficult transition for the country, but that it raised economic standards.

At the meeting President Putin laid out a list of economic priorities for the Russian state. At the top are developing the infrastructure, boosting lending, continuing to develop the agricultural and technology sectors, and increasing overall competition.

Russia joined the WTO in 2012 after nearly two decades of back and forth negotiations on the conditions for entry.

READ MORE: Russia to appeal against US, EU sanctions to WTO

September 18, 2014 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , , , , , , , | Leave a comment

Stop Postulating the Clash of Civilizations

By Dr. Mahathir Mohamid | CounterPunch | September 17, 2014

The British are mystified by their Muslim citizens becoming “jihadists” and joining the so-called Islamic State. They are horrified by the beheading of an American journalist by “John” a British citizen and member of the IS.

I must admit that I, too am horrified. It is not Islamic at all. Islam does not advocate violence and terror. The people who were defeated by the Prophet were not even converted to Islam, much less executed. The Quran says, “There is no compulsion in Islam.”

But we are seeing more and more violence and atrocities committed by Muslims. And now we have the Islamic State “Jihadists”, some of whom come from countries where they had migrated to because life is good there. Having enjoyed the good life, why are these people opting to join revolutionary movements and live dangerous lives, fighting against the very people who are their hosts. Could it be, as some people suggest, that they have been reading books such as “Islam for Dummies?”

Why? Recently we saw the mass killings of Muslims and destruction of their homes and towns by Israelis in Gaza. More than 2000 Muslims have been killed. They include little children and old people, non-combatants all. Thousands more have been seriously wounded, many losing arms and legs.

No concern or sympathy has been shown by the Europeans and Americans. In fact the Americans gave money and arms for Israelis to kill more Muslims and destroy their homes and towns.

If the beheading of a European Journalist is evidence of the barbarity of Muslims, cannot there be the same perception of Israeli killings of Muslims in Gaza? No. They are all terrorists, babies included, and a democratic country like Israel has every right to kill them and destroy their homes, towns and cities.

If we care to look back, we cannot but acknowledge that the so-called Middle Eastern Muslims were very hospitable to the Europeans before. But, the European nations played their great games there. They created the states of Iraq, Syria, Lebanon and Palestine out of one single entity called Sham by the Arabs. Muslims then had no nation-states. They only regard themselves as the Muslim community, the Ummah.

The Europeans expelled the Turks and proceeded to divide Sham between them, although they had promised the Arabs that Sham would be liberated and handed over to the Arabs.

Following the European great games Iraq went to the British while Syria and Lebanon to the French. Palestine was made a British mandated territory to be returned to the Palestinians later. Palestine for centuries had been inhabited by Muslim and Christian Arabs and a small number of Jews. Under Muslim rule they lived in peace despite their different religions.

Then the British decided to make a Jewish state out of Palestine in order to solve the Jewish problem in Europe. Balfour, in 1917, promised to give land belonging to the Palestinian to the Zionist. It was so easy. Take other people’s land to give to the Jews without any regard for the majority Arabs living there. And the Jews celebrated the creation of Israel with massacres of Arabs and expulsion from Palestine. This was apparently sanctioned by the UN in 1948 when Israel was recognised as a state. Arab resentment was ignored.

Since then the Middle East has experienced no peace. Every time the Palestine Arabs tried to regain their homeland, they were prevented by the massive help and support of Israel by the European nations, in particular by America.

With every failure the Arabs became even more angry and determined to regain their homeland. The Arab countries stopped helping the Palestinians. Undeterred, they set up Al-Fatah to throw stones at Israeli soldiers in armoured cars. The stone-throwing children were shot at by the soldiers with rubber coated and then live bullets.

Fatah acquired some ineffective weapons to fight in defence. They were shot and killed and thousands were captured and thrown into Israeli jails for indefinite periods without trial. Palestine lands were seized and settlements for Jews built. It was against all laws and practices which the Europeans pride in saying they uphold.

And so instead of stopping Israel, the Europeans continued their support with funds and arms. The Israelis actually occupied Palestine land and set up road blocks to control movements of the Palestinian and visitors. Roads were built through Palestinian land for the exclusive use of the Israelis. High walls were constructed in Palestine territory for Israeli security. Gaza is put under siege by Israel. Ships in international waters were seized by the Israeli navy.

Aid workers on high seas were shot and killed; their ships boarded and forced to go to Israeli ports. The aid goods were confiscated. All these are against international laws but the big powers did nothing. But these were not all. Anti-Islam and anti-Muslim sentiments and acts were exhibited by Europeans elsewhere also. Having predicted a clash of civilisations they seem bent on making it a reality.

In Bosnia Herzegovina 12,000 Muslim men and boys were murdered with axes and bludgeons after Dutch NATO troops who were supposed to protect them simply moved away to allow Serbs to carry out their murderous work.

Then came the invasions of Afghanistan and Iraq after blaming the Muslims for the destruction of the twin towers of the world trade centre in New York. The Iraqis were not responsible for this. But Iraq was accused of having weapons of mass destruction capable of being launched against Britain within 45 minutes. Later it was admitted by the Brits that this was a lie. Unashamedly the British Prime Minister Tony Blair, who ordered the collaboration with the United States in the invasion of Iraq claimed that the attack, the massive destruction of Iraqi cities and towns and the killings of hundreds of thousands of Iraqis was in order to liberate them from Saddam Hussein. Saddam Hussein was caught and hanged. But the occupation and war continued. When finally the Americans and Europeans left Iraq, this once stable and progressive Arab country descended into anarchy and civil war with Iraqis killing Iraqis.

Afghanistan was invaded to overthrow the Taliban and to kill Osama bin Ladin. Osama is dead but there is no peace in Afghanistan. The Iraqi and Afghan invasion was supposed to be over in three months. But after ten years and the almost total destruction of the two countries, meaningful democracy and peace have not come to these two unfortunate nations. They have been rendered totally unstable and fratricidal wars are tearing them apart.

The CIA has drawn up a list of Muslims to be killed. The West condemns the practices of detention without trial. Now we see in the West death sentences being passed on Muslims without trial. The intended victims are not even told about their death sentence. No attempt is made to arrest even. Drones are simply dispatched to kill these Muslims. In the case of Osama bin Ladin killer squads were dropped into Pakistan without even informing that country. And Osama’s body was thrown into the sea, a practice worthy of barbarians.

Through all these, the U.S., Britain and other European countries express no regret and certainly no sympathy for the Muslim victims of their war on terror. Thousands of them, men, women, children, babies, old and sick people have been and are being killed without evoking the slightest concern or regret among the Europeans.

I don’t for one moment regard the beheading of the American journalist as Islamic, despite the claim of ISIL. I think it is disgraceful for Muslims to do such thing. It is against the teachings of Islam. But can any young and impressionable Muslim be blamed if they are so easily mislead into committing heinous crimes to avenge the injustice and oppression of their brothers and sisters in religion.

It is not the religion of Islam that led the Muslims to committing heinous acts. It is simply anger, hate and rage over not being able to do anything to stop the Europeans or West from oppressing people who profess the same religion as themselves. And Europeans, most of whom are not practicing Christians, react in the same way when Christians are faced with any threat.

Look at the record of the Europeans, especially after they created Israel. Now, although they will not admit it, they are carrying out a crusade against Islam and the Muslims. Call it a war on terror or the clash of civilizations. But factually it is still a continuation of the crusade of the past centuries.

Against this modern Crusade the Muslims have no answer. They don’t have a Saladin (Salah El Din) to lead them. And over the centuries they have allowed themselves to become weak. They have ignored the injunctions of Allah in the Quran that they must be prepared to defend the ummah and Islam.

Their religious teachers tell them to pray to Allah for help. But they neglect to inform that in the Quran Allah enjoins upon Muslims to help themselves first if they want Allah to answer their prayers. Quite obviously the Muslims have not followed this injunction. In fact many believe that it has been preordained that they should suffer European oppression.

Today not a single Government of a Muslim country has dared to challenge the Europeans. Indeed many believe that the Europeans are a superior race that they should look up to; that it is futile to defend themselves against European aggression and oppression. Not a single Muslim country dares to stand up to the Europeans.

Expecting no help from the Governments of Muslim countries, many angry and frustrated Muslims took upon themselves to take revenge against the hated Europeans. For this purpose they preach their version of the teachings of Islam so as to influence young Muslim to be prepared to sacrifice their lives in a holy war.

All Muslims truly believe that to die in the defence of Islam and the Muslims results in martyrdom and heaven in the afterlife. It is not too difficult to convince young Muslims in the face of the injustice and oppression of Muslims that the war against the Europeans is a holy war.

But a war against the European promises no easy victory. Seeking revenge through acts of terror is much easier. And so the so-called jihadists are prepared to commit atrocities like beheading a European and recording it for the world to see. I would like to say it again, it is not Islamic this beheading. Certainly it is not Islamic for Sunnis to massacre captured Shiahs or Shiahs to murder Sunnis.

The two sects had always fought each other in their mutual belief that the other is not Muslim. But what is happening today is bloodlust which started with the fight against Jewish Zionism and the creation of the state of Israel. Unable to defeat the Jews and their nominally Christian Europeans backers, the Muslims have now turned against each other. And occasionally when they manage to capture a European, they vent their spite on him.

This will go on for decades and even centuries, waxing and waning, for as long as there is the state of Israel and the Palestinians are denied their right to a homeland.

It is the seizure of Palestinian land to form the state of Israel which triggered the violent reaction of the Muslims in the last 70 over years. The Jewish reaction to the violent struggle of the Palestinians is to out terrorise them. That in turn resulted in other Muslims joining the Palestinian struggle. Unable to wage war they resort to acts of terror. And Israeli state terror escalated.

Directly and indirectly the Europeans back Israeli state terrorism. And so it goes on. So what is the solution? It is certainly not more suppression and oppression of the Muslims, and in particular the Palestinian.

The solution lies in fairness and justice for the Palestinians.

I am writing this in Chechnya, a republic in the Russian Federation. The Chechens fought a war of independence against the Russians. It was a futile war. Three million ill-equipped Chechens against 200 million Russians with one of the most powerful military forces in the world. Chechnya and Grozny its capital were razed to the ground before they were forced to stop fighting.

After the war the Russians allocated a trillion dollars to rebuild Chechnya and Grozny. Today, eight years after war ended, there is not a trace of the massive destruction caused by Russian missiles and bombs. Instead the whole country, and in particular Grozny has been completely rebuilt.

And today the Chechens can once again believe and practice the Muslim religion. Beautiful mosques and religious school abound. There is no more communist sanction against Islam. Chechnya remains a republic in the Russian Federation but in religion and in many ways it is independent. The relation with Russia is friendly.

Maybe there is something to learn from the Chechen saga. Stop the oppression of Palestine. Stop the Crusade. Stop postulating the clash of civilizations. Stop regime change. Stop supplying arms for Muslims to fight Muslims. It may take time but slowly the jihadists, will have no incentive to fight.

Allah has ordained that the enemy of the Muslims are those who fight and oppress them. Muslims must not war against those who have not attacked them (in any way). That is the way of Islam – peace unless you declare war against Islam.

Muslims who adhere strictly to these tenets and wish to live at peace with non-Muslims can only have credibility and be listened to if the oppression of the Muslims ceases.

Dr. Mahathir Mohamad was the fourth Prime Minister of Malaysia from 1981 to 2003.

September 18, 2014 Posted by | Ethnic Cleansing, Racism, Zionism, Timeless or most popular | , , , , , , | Leave a comment

Reported US-Syrian Accord on Air Strikes

By Robert Parry | Consortium News | September 17, 2014

The Obama administration, working through the Russian government, has secured an agreement from the Syrian regime of Bashar al-Assad to permit U.S. airstrikes against Islamic State targets in parts of Syria, according to a source briefed on the secret arrangements.

The reported agreement would clear away one of the chief obstacles to President Barack Obama’s plan to authorize U.S. warplanes to cross into Syria to attack Islamic State forces – the concern that entering Syrian territory might prompt anti-aircraft fire from the Syrian government’s missile batteries.

The usual protocol for the U.S. military – when operating in territory without a government’s permission – is to destroy the air defenses prior to conducting airstrikes so as to protect American pilots and aircraft, as was done with Libya in 2011. However, in other cases, U.S. intelligence agencies have arranged for secret permission from governments for such attacks, creating a public ambiguity usually for the benefit of the foreign leaders while gaining the necessary U.S. military assurances.

In essence, that appears to be what is happening behind the scenes in Syria despite the hostility between the Obama administration and the Assad government. Obama has called for the removal of Assad but the two leaders find themselves on the same side in the fight against the Islamic State terrorists who have battled Assad’s forces while also attacking the U.S.-supported Iraqi government and beheading two American journalists.

In a national address last week, Obama vowed to order U.S. air attacks across Syria’s border without any coordination with the Syrian government, a proposition that Damascus denounced as a violation of its sovereignty. So, in this case, Syria’s behind-the-scenes acquiescence also might provide some politically useful ambiguity for Obama as well as Assad.

Yet, this secret collaboration may go even further and include Syrian government assistance in the targeting of the U.S. attacks, according to the source who spoke on condition of anonymity. That is another feature of U.S. military protocol in conducting air strikes – to have some on-the-ground help in pinpointing the attacks.

As part of its public pronouncements about the future Syrian attacks, the Obama administration sought $500 million to train “vetted” Syrian rebels to handle the targeting tasks inside Syria as well as to carry out military ground attacks. But that approach – while popular on Capitol Hill – could delay any U.S. airstrikes into Syria for months and could possibly negate Assad’s quiet acceptance of the U.S. attacks, since the U.S.-backed rebels share one key goal of the Islamic State, the overthrow of Assad’s relatively secular regime.

Just last month, Obama himself termed the strategy of arming supposedly “moderate” Syrian rebels “a fantasy.” He told the New York Times’ Thomas L. Friedman: “This idea that we could provide some light arms or even more sophisticated arms to what was essentially an opposition made up of former doctors, farmers, pharmacists and so forth, and that they were going to be able to battle not only a well-armed state but also a well-armed state backed by Russia, backed by Iran, a battle-hardened Hezbollah, that was never in the cards.”

Obama’s point would seem to apply at least as much to having the “moderate” rebels face down the ruthless Islamic State jihadists who engage in suicide bombings and slaughter their captives without mercy. But this “fantasy” of the “moderate” rebels has a big following in Congress and on the major U.S. op-ed pages, so Obama has included the $500 million in his war plan despite the risk it poses to Assad’s acquiescence to American air attacks.

Neocon Wish List

Without Assad’s consent, the U.S. airstrikes might require a much wider U.S. bombing campaign to first target Syrian government defenses, a development long sought by Official Washington’s influential neoconservatives who have kept “regime change” in Syria near the top of their international wish list.

For the past several years, the Israeli government also has sought the overthrow of Assad, even at the risk of Islamic extremists gaining power. The Israeli thinking had been that Assad, as an ally of Iran, represented a greater threat to Israel because his government was at the center of the so-called Shiite crescent reaching from Tehran through Damascus to Beirut and southern Lebanon, the base for Hezbollah.

The thinking was that if Assad’s government could be pulled down, Iran and Hezbollah – two of Israel’s principal “enemies” – would be badly damaged. A year ago, then-Israeli Ambassador to the United States Michael Oren articulated this geopolitical position in an interview with the Jerusalem Post.

“The greatest danger to Israel is by the strategic arc that extends from Tehran, to Damascus to Beirut. And we saw the Assad regime as the keystone in that arc,” Oren said. “We always wanted Bashar Assad to go, we always preferred the bad guys who weren’t backed by Iran to the bad guys who were backed by Iran.” He said this was the case even if the other “bad guys” were affiliated with al-Qaeda.

More recently, however, with the al-Qaeda-connected Nusra Front having seized Syrian territory adjacent to the Israeli-occupied Golan Heights – forcing the withdrawal of UN peacekeepers – the balance of Israeli interests may be tipping in favor of preferring Assad to having Islamic extremists possibly penetrating directly into Israeli territory.

Direct attacks on Israel would be a temptation to al-Nusra Front, which is competing for the allegiance of young jihadists with the Islamic State. While the Islamic State, known by the acronyms ISIS or ISIL, has captured the imaginations of many youthful extremists by declaring the creation of a “caliphate” with the goal of driving Western interests from the Middle East, al-Nusra could trump that appeal by actually going on the offensive against one of the jihadists’ principal targets, Israel.

Yet, despite Israel’s apparent rethinking of its priorities, America’s neocons appear focused still on their long-held strategy of using violent “regime change” in the Middle East to eliminate governments that have been major supporters of Lebanon’s Hezbollah and Palestine’s Hamas, i.e. Syria and Iran.

One reason why Obama may have opted for a secretive overture to the Assad regime, using intelligence channels with the Russians as the middlemen, is that otherwise the U.S. neocons and their “liberal interventionist” allies would have howled in protest.

The Russian Hand

Besides the tactical significance of U.S. intelligence agencies arranging Assad’s tacit acceptance of U.S. airstrikes over Syrian territory, the reported arrangement is also significant because of the role of Russian intelligence serving as the intermediary.

That suggests that despite the U.S.-Russian estrangement over the Ukraine crisis, the cooperation between President Obama and Russian President Vladimir Putin has not been extinguished; it has instead just gone further underground.

Last year, this growing behind-the-scenes collaboration between Obama and Putin represented a potential tectonic geopolitical shift in the Middle East. In the short term, their teamwork produced agreements that averted a U.S. military strike against Syria last September (by getting Assad to surrender his chemical weapons arsenal) and struck a tentative deal with Iran to constrain but not eliminate its nuclear program.

In the longer term, by working together to create political solutions to various Mideast crises, the Obama-Putin cooperation threatened to destroy the neocons’ preferred strategy of escalating U.S. military involvement in the region. There was the prospect, too, that the U.S.-Russian tag team might strong-arm Israel into a peace agreement with the Palestinians.

So, starting last September – almost immediately after Putin helped avert a U.S. air war against Syria – key neocons began taking aim at Ukraine as a potential sore point for Putin. A leading neocon, Carl Gershman, president of the U.S.-government-funded National Endowment for Democracy, took to the op-ed pages of the neocon Washington Post to identify Ukraine as “the biggest prize” and explaining how its targeting could undermine Putin’s political standing inside Russia.

“Ukraine’s choice to join Europe will accelerate the demise of the ideology of Russian imperialism that Putin represents,” Gershman wrote. “Russians, too, face a choice, and Putin may find himself on the losing end not just in the near abroad but within Russia itself.” At the time, Gershman’s NED was funding scores of political and media projects inside Ukraine.

By early 2014, American neocons and their “liberal interventionist” pals were conspiring “to midwife” a coup to overthrow Ukraine’s elected President Viktor Yanukovych, according to a phrase used by U.S. Ambassador Geoffrey Pyatt in an intercepted phone conversation with Assistant Secretary of State for European Affairs Victoria Nuland, who was busy handpicking leaders to replace Yanukovych.

A neocon holdover from George W. Bush’s administration, Nuland had been a top aide to Vice President Dick Cheney and is married to prominent neocon Robert Kagan, a co-founder of the Project for a New American Century which prepared the blueprint for the neocon strategy of “regime change” starting with the 2003 U.S.-led invasion of Iraq.

The U.S.-backed coup ousted Yanukovych on Feb. 22 and sparked a bloody civil war, leaving thousands dead, mostly ethnic Russians in eastern Ukraine. But the Gershman-Nuland strategy also drove a deep wedge between Obama and Putin, seeming to destroy the possibility that their peace-seeking collaboration would continue in the Middle East. [See Consortiumnews.com’s “Neocons’ Ukraine-Syria-Iran Gambit.”]

New Hope for ‘Regime Change’

The surprise success of Islamic State terrorists in striking deep inside Iraq during the summer revived neocon hopes that their “regime change” strategy in Syria might also be resurrected. By baiting Obama to react with military force not only in Iraq but across the border in Syria, neocons like Sens. John McCain and Lindsey Graham put the ouster of Assad back in play.

In a New York Times op-ed on Aug. 29, McCain and Graham used vague language about resolving the Syrian civil war, but clearly implied that Assad must go. They wrote that thwarting ISIS “requires an end to the [civil] conflict in Syria, and a political transition there, because the regime of President Bashar al-Assad will never be a reliable partner against ISIS; in fact, it has abetted the rise of ISIS, just as it facilitated the terrorism of ISIS’ predecessor, Al Qaeda in Iraq.”

Though the McCain-Graham depiction of Assad’s relationship to ISIS and al-Qaeda was a distortion at best – in fact, Assad’s army has been the most effective force in pushing back against the Sunni terrorist groups that have come to dominate the Western-backed rebel movement – the op-ed’s underlying point is obvious: a necessary step in the U.S. military operation against ISIS must be “regime change” in Damascus.

That would get the neocons back on their original track of forcing “regime change” in countries seen as hostile to Israel. The first target was Iraq with Syria and Iran always meant to follow. The idea was to deprive Israel’s close-in enemies, Lebanon’s Hezbollah and Palestine’s Hamas, of crucial support. But the neocon vision got knocked off track when Bush’s Iraq War derailed and the American people balked at extending the conflict to Syria and Iran.

Still, the neocons retained their vision even after Bush and Cheney departed. They also remained influential by holding onto key positions inside Official Washington – at think tanks, within major news outlets and even inside the Obama administration. They also built a crucial alliance with “liberal interventionists” who had Obama’s ear. [See Consortiumnews.com’s “The Dangerous Neocon-R2P Alliance.”]

The neocons’ new hope arrived with the public outrage over ISIS’s atrocities. Yet, while pushing to get this new war going, the neocons have downplayed their “regime change” agenda, getting Obama to agree only to extend his anti-ISIS bombing campaign from Iraq into Syria. But it was hard to envision expanding the war into Syria without ousting Assad.

Now, however, if the source’s account is correct regarding Assad’s quiet assent to U.S. airstrikes, Obama may have devised a way around the need to bomb Assad’s military, an maneuver that might again frustrate the neocons’ beloved goal of “regime change.”

~

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

September 17, 2014 Posted by | Wars for Israel | , , , , , , | Leave a comment

Ukraine and EU ratify landmark Association Agreement

RT | September 16, 2014

​Ukraine and the EU parliaments simultaneously ratified the economic and political parts of the Association Agreement that will strengthen ties between Kiev and Brussels. Economic integration is postponed until the end of 2015.

The document was approved at 1:00pm in Kiev and there was a synchronous signing session in the European Parliament in Strasbourg.

Ukraine’s Rada voted 355 votes in favor out of 381 total, and the European Parliament supported the ratification with 535 ‘yes’ votes and 127 against, with 26 abstaining.

“From tomorrow I task the government with approving the implementation of the agreement and immediately implementing it into the force of law,” President Petro Poroshenko said at the ratification in Kiev. Poroshenko said he hopes the agreement will help Ukraine reform its economy and fight corruption, and that someday Ukraine hopes to apply for EU membership.

Ukraine “has embarked on the European path and nobody will are to shut the door to the EU membership for Ukraine,” the President said, as quoted by ITAR-ITASS.

Free trade with Europe’s $13 trillion economy will be postponed until January 2016, due to the weak state of Ukraine’s economy which would make it vulnerable to a sudden influx of European goods. Ukraine will continue duty-free trade with Russia and other CIS states until December 31, 2015, and on January 1, 2016 will begin economic integration with the EU.

Ukraine will still have the benefit of sending exports to Europe under a preferential trade code, but duty- free trade will not come into effect until 2016, protecting both Kiev and Moscow from economic risk.

In 2013, Ukraine exported goods worth $16 billion to Russia, nearly 25 percent of all total exports. In comparison, Ukraine exported $17 billion to Europe in the same 12-month period.

Since the political tension has intensified between the two, both have been cutting back on imports. In the first seven months of 2014, Russia reduced Ukrainian imports by 23.7 percent down to $6.7 billion, according to Russia’s Statistics Bureau. At the same time, Ukraine has been decreasing goods bought from Russia, which have fallen 20.7 percent to $9 billion. The lack of cooperative trade between the two has left a negative balance of trade of $2.3 billion.

Russian President Vladimir Putin has estimated that nixing duty-free trade with Russia and switching over to the European system will cost Ukraine €165 billion over the next 10 years.

During trilateral talks in Brussels on Friday, Ukraine, Russia, and the EU agreed Ukraine’s integration into Europe’s trade orbit will begin on January 1, 2016.

Ukrainian President Petro Poroshenko signed the economic (the Deep and Comprehensive Free Trade Area, or DCFTA) part of the Association Agreement with the EU along with ex-Soviet nations Georgia and Moldova on June 27.

Ukraine signed the political part of the agreement on March 21, shortly after Crimea rejoined Russia.

The Association Agreement and Deep and Comprehensive Free Trade Area (DCFTA) will replace the current Partnership and Cooperation Agreement Ukraine signed with the EU in 1998.

September 16, 2014 Posted by | Economics | , , | Leave a comment

Say ‘no’ to war and media propaganda

By Mairead Maguire | Inter Press Service | September 12, 2014

While the United States, United Kingdom and NATO are pushing for war with Russia, it behooves people and their governments around the world to take a clear stand for peace and against violence and war, no matter where it comes from. We are at a dangerous point in our history of the human family and it would be the greatest of tragedies for ourselves and our children if we simply allowed the war profiteers to take us into a third world war, resulting in the death of untold millions of people.

NATO’s decision at its summit in Wales (September 4-5) to create a new 4,000 strong rapid reaction force for initial deployment in the Baltics is a dangerous path for us all to be forced down, and could well lead to a third world war if not stopped. What is needed now are cool heads and people of wisdom and not more guns, more weapons, more war.

NATO is the leadership which has been causing the ongoing wars from the present conflict in the Ukraine, to Iraq, Afghanistan, Libya and others.

NATO’s latest move commits its 28 member states to spend two percent of their gross domestic product on the military, and to establish a series of three to five bases in Eastern Europe where equipment and supplies will be pre-positioned to help speed deployments, among other measures.

This decision by the United States/NATO to create a high readiness force with the alleged purpose of countering an alleged Russian threat reminds me of the war propaganda of lies, half-truths, insinuations and rumors to which we were all subjected in order to try to soften us all up for the Iraq war and subsequent horrific wars of terror which were carried out by NATO allied forces.

According to the Organization for Security and Cooperation in Europe (OCSE) observation team, NATO’s reports, including its satellite photos which show Russian combat forces engaged in military operations inside sovereign territory of Ukraine, were based on false evidence.

While NATO is busy announcing a counter-invasion to the non-existent Russian invasion of Ukraine, people in Ukraine are calling out for peace and negotiations, for political leadership which will bring them peace, not weapons and war.

This spearhead military force will be provided by allies in rotation and will involve also air, sea and special forces. We are also informed by a NATO spokesperson that this force will be trained to deal with unconventional actions, from the funding of separatist groups to the use of social media, intimidation and black propaganda.

No doubt the current Western media’s demonization of President Vladimir Putin and the Russian people, by trying to inculcate fear and hatred of them, is part of the black propaganda campaign.

NATO’s latest proposals of 4,000 soldiers, and a separate force of 10,000 strong British-led joint expeditionary force also proposed, is a highly aggressive and totally irresponsible move by the United States, United Kingdom and NATO. It is breaches the 1997 agreement with Moscow under which NATO pledged not to base substantial numbers of soldiers in Eastern Europe on a permanent basis.

NATO should have been disbanded when the Warsaw Pact disintegrated but it was not and is now controlled by the United States for its own agenda. When speaking of NATO, one of President Bill Clinton’s officials said “America is NATO”. Today NATO, instead of being abolished, is re-inventing itself in re-arming and militarizing European states and justifying its new role by creating enemy images – be they Russians, IS (the Islamic State), and so on.

In an interdependent, interconnected world, struggling to build fraternity, economic cooperation and human security, there is no place for the Cold War policies of killing and threats to kill and policies of exceptionalism and superiority. The world has changed. People do not want to be divided and they want to see an end to violence, militarism and war.

The old consciousness is dysfunctional and a new consciousness based on an ethic of non-killing and respect and cooperation is spreading. It is time for NATO to recognize that its violent policies are counterproductive. The Ukraine crisis, groups such as the Islamic State, etc., will not be solved with guns, but with justice and through dialogue.

Above all, the world needs hope. It needs inspirational political leadership and this could be given if President Barack Obama and President Putin sat down together to solve the Ukraine conflict through dialogue and negotiation and in a non-violent way.

We live in dangerous times, but all things are possible, all things are changing … and peace is possible.

September 14, 2014 Posted by | Deception, Mainstream Media, Warmongering, Militarism, Progressive Hypocrite | , , , , , , | Leave a comment

‘Deterrence not arms race’: Russia hints it may develop rival to US Prompt Global Strike

RT | September 11, 2014

Russia could use ballistic missiles, such as the Yars , with conventional warheads to counter CPGS.(RIA Novosti / Vadim Savitskii)

Russia could use ballistic missiles, such as the Yars , with conventional warheads to counter CPGS. (RIA Novosti / Vadim Savitskii)

A highly-placed Defense Ministry official says that Russia may be forced to match the US Conventional Prompt Global Strike (CPGS) doctrine, which prescribes that a non-nuclear US missile must be able to hit any target on Earth within one hour.

“Russia is capable of and will have to develop a similar system,” Deputy Defense Minister Yuri Borisov said during a public discussion of the Russian rearmament program for the decade of 2016 through 2025.

“But mostly we will concentrate on countering CPGS, as our military doctrine is a defensive one.”

But the official denied that the Kremlin was setting off for another Cold War-style arms race with the West.

“This is not in these plans, and I hope will never happen,” said Borisov. “We simply want to protect our civilian population from outside threats.”

While Prompt Global Strike is often treated as a futuristic super-weapon, it is simply a system that ensures that strike areas of existing technologies cover the entirety of the planet. The concept of CPGS was first explicitly stated in official US documents during the first George W. Bush administration, and in more than a decade on, it has gone through various iterations, from ones that would see kinetic weapons fired at targets on the ground from space, to hypersonic missiles, to conventional solutions of placing short and medium range missiles around the world. There is no deadline for the program’s official completion, which is just as much subject to budget constraints as other articles of the defense budget, or consistent status updates on whether its aims may have already been achieved through existing armaments.

Despite its vague remit and gradual implementation, the program has caused considerable consternation in Moscow and Beijing. A previous US study showed that up to 30 percent of enemy nuclear launchers could be taken out with conventional weapons that would form part of the CPGS. Russian officials have said that together with the missile defense system the US is deploying around the world, this could mean that the current nuclear balance could be undermined.

This was clearly on Vladimir Putin’s mind when he spoke of creating new “assault capabilities, including maintaining a guaranteed solution to the task of nuclear deterrence” at the same Wednesday meeting.

But most experts agreed that Russia’s current abilities are already sufficient to withstand CPGS, even if it lacks the same attack capabilities.

“We already have a system of swift retaliation,” said Yuri Baluyevsky, former Chief of the General Staff of the Russian Armed Forces. The retired general is helping to develop the Kremlin to develop a new military doctrine by the end of the year, in the face of geopolitical changes in Ukraine, NATO’s increased presence in Eastern Europe, and the NATO missile shield.

“Russia has missiles, such as the long-range, air-based X-101 strategic cruise missile, which is able to strike at distances of 5,000 kilometers (about 3,100 miles),” the president of the Academy of Geopolitical Problems, Konstantin Sivkov, told RIA news agency.

“It also has high-precision ballistic missiles that could strike ground targets, providing they had normal warheads. These are the two main elements of a rapid long-range strike, That is, it can be done now. Basically, existing long-range aviation would be sufficient.”

S-400 Triumf.(RIA Novosti / Valeriy Melnikov)

Another expert suggested that Russia’s air defense systems – which cost considerably less than launches of ballistic missiles to operate – should form the backbone of the country’s response to CPGS.

“To create an adequate aerospace defense system it is important to develop interceptor systems, such as the S-500. It is capable of hitting targets not only in the air but also in near space at an altitude of 200 kilometers above the Earth, which are moving at a speed of up to 8 kilometers per second,” said Igor Korotchenko, editor-in-chief of National Defense magazine.

The unveiling of CPGS has not only bred stiff resistance around the world, but also doubts at home in the US itself. A Carnegie Center study from last year said that the system held some of the same risks as a nuclear attack, and was much more likely to be used. Within the allocated 60-minute time frame, incoming conventional missiles could be mistaken for nuclear warheads, their trajectory could be misunderstood, or they could simply hit the wrong target – all situations that may unleash a rapid response, which Russia and China, at the very least, appear to be very capable of already.

September 12, 2014 Posted by | Aletho News | , , , | Leave a comment

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