Category Archives: Eurasia

Hitler’s supporters not coming for Victory Parade in Moscow on May 9

The ISIL is in Ukraine: America’s “Agents of Chaos” Unleashed in Eurasia

What Does Putin Want?

Eurasia As We (and the U.S.) Knew It Is Dead

Eurasian Emporium or Nuclear War?

Russia to Ratify BRICS “Foreign Currency Reserve Pool”

Russia’s new cosmodrome Vostochny to launch first spacecraft in late 2015

How Putin can win global economic war against Russia

Russia’s Remarkable Renaissance

Russia: Better prepare for war to establish world peace

Suspects arrested in Boris Nemtsov murder

Murder in Moscow: Why was Boris Nemtsov assassinated?

Russian opposition politician Boris Nemtsov assassinated in Moscow

Boris Nemtsov’s murder: Why so many versions?

The Boris Nemtsov Assassination: Russia’s “Non-system” Opposition Refuses to Blame the Kremlin

Moscow’s Problem: Dealing with Imbeciles and Vassals

That Didn’t Take Long: The First Lie about Moscow Meeting

Russia eyes new peace conference without USA to avoid WWIII

Most Russians believe Western countries fear and respect Russia

Russia Just Pulled Itself Out Of The Petrodollar

EU Energy Crisis: Russia Cuts Off Gas Supplies through Ukraine To Six European Countries

Peculiarities of Russian National Character

Russia’s Settlement Alternative to the Society for Worldwide Interbank Financial Telecommunication (SWIFT)

Putin approves new Russian military doctrine

Grandmaster Putin’s Trap: Russia is Selling Oil and Gas in Exchange for Physical Gold

Russian president downplays economic crisis

By Andrea Peters

19 December 2014

In a brief speech followed by a lengthy press conference on Thursday, Russian President Vladimir Putin attempted and failed to buoy confidence in the Russian economy, whose national currency has plummeted in value against the dollar in recent weeks.

Over the course of a three-hour marathon discussion with reporters, Putin elaborated no clear plans for how his government would address the currency collapse, but promised his audience that the situation would resolve itself within two years.

Putin’s evasive and contradictory responses during the event, at which reporters questioned him about the possibility of a “palace coup” and the role of Russia’s oligarchic caste in undermining the country’s economy, reveal the depth of the crisis confronting his regime as it faces an escalating geopolitical conflict with the United States.

On Saturday, the US Congress unanimously passed a bill authorizing military aid for Ukraine and new sanctions against Russia. Obama signed the legislation on Thursday, but stated that he would not impose the measures “at this time.”

On this front, Putin made overtures to his “Western partners,” even as he accused the United States of supporting terrorist separatism on Russian soil, the second time in the last week he has done so.

When asked by one reporter, “What’s happening now with our economy—is this payback for Crimea?” Putin responded, “No, this is not payback for Crimea. This is payback, or rather, this is payment for our natural desire to preserve ourselves as a nation, as a civilization, as a state … After the fall of the Berlin wall, after the collapse of the Soviet Union … we completely opened ourselves up to our partners. And what did we see? Direct, full-scale support for terrorism in the north Caucuses.”

Later on in the press conference, however, Putin appealed for collaboration with the very political forces he accuses of sponsoring terrorism on Russia’s soil and working for the country’s break-up.

“We want to develop normal relations in the sphere of security, in the struggle with terrorism. We will work together on the non-proliferation of nuclear weapons. We will work together on such threats as the spread of narcotics, organized crime, the spread of dangerous infectious diseases, including Ebola. We will do this all together, including in the economic sphere, if our partners want this.”

When asked by a reporter from Kaliningrad whether residents of the Russian region sandwiched in between Poland and Lithuania had cause for concern over the militarization taking place in the surrounding countries, Putin first noted Russia’s own military forces in the area and then added, “Relax … don’t develop a phobia, but develop collaboration.”

The Russian ruble hit historic lows earlier this week, following an emergency interest-rate hike by the country’s Central Bank that failed to stem the currency’s slide. After recovering late on Tuesday and early Wednesday, the ruble’s value fell again slightly in the aftermath of Putin’s press conference, finally settling at around 62.5 rubles to the dollar.

Analysts link the failure of Russia’s currency to appreciate on Thursday in part to the fact that Putin unveiled no clear measures to address the country’s economic crisis. Rather, he attempted to paint a positive portrait of the situation by noting a 0.7 percent uptick in the Gross Domestic Product in the first three quarters of the year (prior to the 2008 world economic downturn, Russia had posted annual growth rates of as high as 7 percent), as well as an increase in the country’s trade and budget surpluses.

Putin claimed that Russia would pull itself out of the crisis, meeting all its “social targets and plans” and “focus on assistance to those people who really need it.” However, he noted, “Clearly, we would have to adjust our plans in case of any unfavorable developments. We would certainly be forced to make some cuts. However, it is equally certain … that there will be what experts call a positive rebound. Further growth and a resolution of this situation are inevitable … the global economy will continue to grow, the rates may be lower, but the positive trend is sure to continue.”

That the Russian President would make such a claim as global markets tumble and there are spreading signs of a renewed world economic downturn, is a sign of the desperate situation facing his regime. Earlier this week, one government insider speaking to Forbes described the situation in the Kremlin as follows: “Everyone is in a tizzy, understanding that the depreciation of the ruble is affecting the population and threatens a social explosion.”

With food prices climbing by between 20 and 25 percent compared to last year, the Russian president promised that his government would “concern itself with … prices for gas, [and] prices for food stuffs.”

Acting as if the Kremlin did not just announce a 5 percent year-over-year cut in state expenditures through 2018—which includes massive scale-backs in spending on education, health care and social welfare—Putin attempted to build up the importance of miserly increases made to pensions and salaries for certain sectors of government employees over the course of 2014.

The contradictory character of Putin’s positions are rooted in the fact that his regime, borne out of the reintegration of the Soviet Union into the world capitalist economy and its subordination to global finance capital, cannot find a way out of the intensifying conflict with the US. The oligarchic elite, on whose behalf Putin works, is seeking to preserve its wealth first and foremost by finding a compromise with the West.

Immense social anger exists over the ill-gotten riches of this layer, and Putin’s ability to manage the internal and external pressures facing his regime is increasingly being called into question.

On several occasions reporters inquired about Putin’s use of the term a “fifth column,” referring to forces working inside Russia to undermine the government on behalf of foreign powers. A reporter from Znak.com eventually asked:

“Do you consider certain categories of people enemies of Russia, in particular the leaders of state corporations who from the get-go take trillions from the budget then spend millions on purchases of iPhones, then throw bonds onto the country’s markets, but don’t forget to pay themselves millions of dollars’ worth of bonuses; those bureaucrats, even those in your close circle, who live indeed in palaces, bearing in mind that our grandmothers are now pinching pennies for bread?”

“Pardon me, but such populism is out of place,” replied Putin, then adding, “But, of course, elements of social justice have to be preserved.”

Putin also had the following remarkable exchange with a Reuters reporter:

A. Anishchuk: You are frequently inclined to accuse various internal forces in everything that is unfolding, but I also know that some representatives of the elite, people from your circle, the most informed citizens of Russia, regardless of their public rhetoric, are frequently inclined to accuse you, as the person who over the course of 15 years has made all the key decisions in Russia.

Putin: Tell me their names.

A. Anishchuk: Unfortunately, I can’t. … Are you sure about your circle, that it unconditionally supports you? And to what degree do you see the risk of a government or even a palace coup? What will you do in the event of an “orange” or, god forbid, “red” revolution? You’ve said many times, but do you have any plan in the event of the betrayal of your circle or a palace coup?

Putin: In terms of palace coups, relax: we don’t have palaces, and thus there cannot be any palace coups.

http://www.wsws.org/en/articles/2014/12/19/rupr-d19.html

Vadim Gorshenin: The difference between Pravda and Pravda.Ru

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The legendary newspaper Pravda is now older than 110 years, and its multimedia successor Pravda.Ru is going to celebrate its 16th anniversary in January 2015. Chairman of the Board of Directors of Media Holding Pravda.Ru, Vadim Gorshenin, appeared in a studio  of the Higher School of Trading to speak about the history of the Pravda, the birth of Internet journalism and the influence of oligarchs on mass media.

“What happened to the newspaper Pravda after the collapse of the USSR? What is Pravda.Ru?”

“The Pravda is a well-known Soviet publication. I started working there when I was a student of the Department of Journalism at the Moscow State University. It was the time of perestroika. There was the youth desk arranged at the newspaper Pravda that we, students, were editing. We were given one column a week. After graduation, I continued working at the newspaper Pravda.

“We were interacting with the people, who were making history. Two years ago, the newspaper Pravda celebrated its 100th anniversary, and I invited the Pravda people to remember the history of the newspaper. In particular, we talked to Yevgeny Primakov, who remembers very well what was happening and how. He obtained all his ties during the time of his work as a staff reporter of the Pravda in the Middle East.

“The newspaper Pravda has had very difficult times. I think that the newspaper has been actually destroyed, to my great disappointment. The former editor in chief, who was elected immediately after the coup in the USSR, sold the controlling stake in the newspaper to some Greek businessmen, without informing the editorial staff of the newspaper. The paper became a supplement to their business. They could enter the government and make friends with Viktor Chernomyrdin, Yegor Gaidar, and so on. The government opened the doors for them, because they were the owners of the newspaper Pravda.

“In 1993, when October events took place, the newspaper personnel rebelled against those Greeks. Back in those days, the salary of a Pravda journalist was lower than the floor, as we say. Russian business was interested in the newspaper Pravda. This is a brand that is recognizable in the whole world. The rebellion did not happen, so we took the matter to courts. I had to retrain as a lawyer. Eventually, we won those cases and began publishing the newspaper. However, it continued for about a year or a year and a half.

“Some time after, I was told how it all happened. We did not know it then. As part of the agreement between the presidential administration and Gennady Zyuganov, the newspaper was handed over back to Communists under the ruling from the Supreme Arbitration Court. We did not feel like working with communists, especially with Gennady Zyuganov. During that dispute that we had with the Greeks, he came to us and said that he could always settle all conflicts, he assured us that the newspaper must be solely a Russian publication, with no Western capital involved and so on. After talking to us, he went directly to the Greeks and talked to them. He left their office holding two bottles of Metaxa in his hands, and we understood everything at once.

“As a result of this attitude, most of the staff of the newspaper Pravda and Gennady Zyuganov, the leader of the Communist Party, started going their separate ways. So, if we go back, the newspaper that we started publishing was then closed. In fact, that was the time when I faced the question of what to do next. At that time, RBC holding was becoming more and more popular. It was the first company, which, if I’m not mistaken, started publishing news for free. I looked at it, and in January 1999 we launched Pravda.Ru, the website.

From Pravda to Pravda.Ru

“Later, I learned that it was the first online publication not only in Russia, but, as it turned out, even in the world. I mean the first online publication that was produced by professional journalists on a professional basis. There were blogs and something else before, of course, but as an online publication, we were pioneers. We started developing quickly and then proceeded to versions in English and Portuguese. There was the time, when we were publishing the Italian version, but business did not go well there.

“As for English-speaking audiences, the English version of RIA Novosti, a news agency, had fewer visitors in comparison with the English version of Pravda.Ru. I attribute this, of course, to the Pravda brand that is still a good brand in the West, because the West has been more conservative than the Russian society in the last 20-25 years, when Russia has seen several revolutions during those years. It just so happened that it was me, who created Pravda.Ru, so I am the sole shareholder in this company, the only owner.”

“Who are the shareholders? On the Internet, people wrote that the major shareholder of Pravda.Ru is a well-known writer and blogger Marina Yudenich.”

“This is the first time when I hear it from you.”

“Is it not true?”

“Absolutely not.”

“How does your media holding develop? How profitable are online media?”

“This business is quite interesting. I can compare Pravda.Ru with other publications. We are probably the only company that was developing on the basis of the step by step technology. When Pravda.Ru was launched, our people, including myself, were working from home, uploading information on the website through modem connection. We had neither offices, nor money. We would gather together only once a week. Then some agreements appeared along with small advertising revenue. We rented an office, and later another one, and the company started growing.

“I’ve always been aware that one needs to protect the publication from economic turmoil. Once or twice, we had to send people on an unpaid leave for a month. We’ve had such times, of course. However, it gave us stability, in contrast to, let’s say, gazeta.ru or lenta.ru that were created with the help of money from the Kremlin administration.

“Disgraced oligarchs.”

“Yes. There is always money involved. I feel completely normal, because we work and earn. Nobody gives us money just like that. We do not have a wealthy man,  who can fund political activity or something else. Our revenues come from our agreements with regions and advertising. We also have separate projects. This allows us to determine the editorial policy.

Print media may disappear in 10-15 years

“He who pays the piper calls the tune. Understandably, any media is a tool influence that one needs to invest in. This is not always a bad thing. This is normal. This is a common situation, because those who have an opportunity to take to the streets and speak in front of large audiences, they use this opportunity. Those who do not have this opportunity, but have money, they can hire someone and open media resources to broadcast through them. This is global practice.”

“What is the difference between online media and traditional media? In your opinion, is there freedom of speech in Russia and in the West, on the web and in traditional media?”

“Virtual media and paper media are two different forms of journalism. At MGIMO (Moscow State Institute of International Relations), I teach a course of Internet journalism. Recently, we were analyzing differences and contradictions. When you write a text for a print newspaper, one needs to pick synonyms, use a variety of words and so on. In online journalism, a text will live for more than one day if it is a SEO-optimized text. One needs to put in keywords proceeding from the subject of the text – everything needs to be done on the basis of Internet laws. Of course, from a literary point of view, the text will be ruined, but we understand that we must take search engines into account.

“When you read a material in a print publication, one can often see notes that say: “See our previous material from this or that date.” Never in my entire life have I tried to look for an earlier issue of a newspaper to find out what was written there. On the Internet, you just click a link. A newspaper or a magazine is a product that we hold in our hands. On the Internet, there is a phenomenon of multimedia. We can immediately find the materials that we are looking for, read or watch a video.

“It is a pity that Internet journalism, just like newspaper journalism, has lost many genres that used to be the hallmark of Russian journalism. An essay is a rare form of journalism now. An essayist is like a small writer. I have not come across the genre of feuilleton lately either. I do not know how feuilletons or essays can be popular on the Internet now. I understand that time flies very fast, and in ten years all the current presentation of formats will most likely become obsolete, a lot will change.

“When the Internet appeared, it was seen as a source of professional news and e-mails. If you look at how the Internet is used now, will print media still be alive in 10-15 years or will they all go online?”

“I’m not sure if it is going to be all about the Internet. New technologies keep coming up, they develop quickly, and soon they will change everything yet again. I think that people will be able to live in a virtual environment. I have no doubt that after some time, a variety of virtual things will be created, and people will be able to plunge in there to live in the reality where they like to live and work. This is something completely different that we do not imagine yet.”

Interviewed by Alexander Razuvaev

Pravda.Ru 

http://english.pravda.ru/society/stories/16-12-2014/129319-pravda_vadim_gorshenin-0/

South Stream to split Europe

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Russia’s decision to cancel the South Stream project triggered strong reactions in Serbia and Bulgaria. The Serbian President accused Russia of betraying common interests. And the Bulgarian Prime Minister got offended that Russian Federation set him up. Grievance is a primitive way of education. And a completely different subject needs to be chosen. Let’s see what is happening behind the curtain of big time politics.

Current situation is more than just unpleasant for Europe. It has yet again been taken hostage of the Ukrainian pipeline, and if Ukraine suddenly decides to blackmail Europeans with it (for example, blowing up the pipeline and repairing it for a long time) then they will be expecting a cold winter. And Ukraine has things to bargain for, for example, credits being just promised but not granted, or weapons.

Europe’s reaction to South Stream closure

Europe’s reaction to the cancellation of the South Stream project can be figuratively divided into three blocs. The first are sure that it is Putin’s tactical move in the war of sanctions, and the day will come when it is possible to return to the South Stream project. For example, Austrian Minister for Economic Affairs Raynhold Mitterlener stated that Austria didn’t doubt that the South Stream would be constructed.The Minister pointed out that he learnt Gazprom plans from the media and asked Russia for explanations. The Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó said that “Russia had the right to make such decision on the South Stream project. Hungaryacknowledges this step”. Sure thing it acknowledged it, Gazprom has the controlling block of stock and legally everything is legitimate.

The second say that it is good that President Putin refused – this points to the fact that there is rule of law and competition in Europe, and it is excellent that it didn’t yield to Moscow’s pressure. That said they are trying to assure that losses are not that high. Especially Bulgarian experts and politicians are making the maximum effort. They are talking of the fact that if Moscow were constructing the South Stream pipeline in accordance with European legislation, namely the Third Energy Package (under which it has to give 50% of the pipeline’s capacity) then Bulgaria would have removed all barriers long ago.

Bulgarians not only defend but also attack. “Bulgaria’s revenue from the South Stream is not guaranteed since there was no agreement for revenues signed only expenses on the project, – the Bulgarian President Rosen Plevneliev said. – We want an agreement that will clearly fix percentage of profits. We do not know what Bulgaria will benefit from the South Stream project. If someone knows then let’s specify the numbers.”

“Someone” knows, Mr. President, for example, former Minister of Energy Rumen Ovcharov who was closely engaged in the project as part of the former Oresharski’s government. According to him, losses may reach 750 mln. USD per year as a result of refusing to implement the South Stream project.

The Bulgarian government is lying

“Let’s put it bluntly, the Bulgarian government is just lying, – research scientist at the Centre for the study of the Balkan crisis of the Slavic Institute of the Russian Academy of Sciences Anna Filimonova told Pravda.Ru. –Agreements on the South Stream were signed long before the Third Energy Package was adopted. The law has no retroactive effect. It is possible that Russia would not be planning the South Stream project if it had known of the Third Energy Package. There is a confusion of notions and chaos in heads. And now Russia has cornered them so much that they do not even have reasonable arguments to explain their actions which to be frank look more like an insane asylum.”

Serbia that accused Russia of betrayal stands apart among the countries that responded to the cancellation of the South Stream project. “Serbia has been investing in this project for seven years, we have done a big job and did not abandon the South Stream project even in the most difficult times,”Prime Minister Aleksandar Vučić said.

“We cannot be left without energy carriers. Russia owes us this much, because we are suffering a lot for Russia,” Serbian President Tomislav Nikolic said and demanded explanations from Russia.

“Tomislav Nikolic’s statement is very surprising since it was Vučić’s government (both represent the governing Serbian Progressive Party) to refuse to sign the final agreement on the South Stream in October 2014 when Vladimir Putin visited Belgrade, Anna Filimonova said. – Therefore, Nikolic’s statement is provocative and does not reflect the truth.” Serbians probably thought that having invited Putin to a special event and refused to impose sanctions (for their own good), they can enjoy an unlimited credit of trust on the Russia’s part and ask for any support under this pretext. But let’s see what is happening behind the curtain.

“Multiple claims, reproaches, threats on the issue of Serbian oil industry privatization are currently addressed to Gazprom, Anna Filimonova said. Vučić initiated reconsideration of Serbian oil industry privatization, the same claims are raised against Srbijagas that was supposed to have a big part in the South Stream project. In particular, today the newspaper “Courier” in Serbia was published with the heading that it was a thievish privatization and Russia owes Serbia some unbelievable money for this privatization, and in fact Serbia must take everything back.”

Brussels to suffer huge losses because of South Stream project

Yes, Brussels has not made Belgrade to cave in in terms of sanctions, but it was not because it could not, but because it did not try to. Bulgaria was the key entry point of the South Stream pipeline, so they confined themselves to putting pressure on Sofia. The result is sad. “With the South Stream project cancelled Serbia suffers huge losses from geopolitical ones to purely economic. It is thrown back to the far fringes of European development, it will not be able to become an energy hub and will never speak with Europe as equals,” Anna Filimonova said.

According to the expert, economic losses are more than impressive. “It is 500 million dollars for gas transit, and several thousand jobs, and 5 billion direct and indirect investments, in other words the South Stream project was essentially Serbia’s most successful project for the past 14 years.

There is no cheering people in the streets of Sofia today, but let’s remember how President Plevneliev cared about “liberation from dependence on Russia”. What Bulgarians achieved?

“There will be no Russia in Bulgaria. But now Turkey will be in Bulgaria – Bulgaria’s main adversary, Anna Filimonova noted. – Turkey has a rather aggressive foreign policy, aimed directly at expanding its influence in the Balkans. And the weak small Bulgaria that reduced itself to a position of a mere nobody in the European political arena, will have no leverage against Turkey. The Bulgarian elite does not know what national interests are and how to stand up for their sovereignty. For example, yesterday one Bulgarian high official clearly stated that they had no illusions – EU assigns Bulgaria to be a peripheral resort. In other words, it makes it clear that EU is depriving the country of any potential development. These are deadly words. In other words, he makes it clear that EU is depriving the country of any potential development”.

According to Anna Filimonova, it is possible to return to the South Stream project but on one condition: when there are clear agreements with the parties and guarantees that these agreements will be fulfilled. “Earlier we could afford the risk of construction prior to obtaining approvals from EU regarding the Third Energy Package,” the political analyst clarifies. It is quite another story now: sirs, if you want to get back to this issue, then go to Brussels and reach agreements yourselves. In terms of Brussels, Russia washes its hands and walks away.

Probably Serbians and Bulgarians need to understand that Russia needs allies but not temporary ones, not weathercocks that think of justice only when it is beneficial for them. Russia has its own interests and they may not coincide with interests of Serbia and Bulgaria. Aside from economic interest, there is a political one – to split Europe so that it rises against Brussels and Washington, why not – one good turn deserves another.

Lyuba Lulko

Pravda.Ru 

http://english.pravda.ru/world/europe/08-12-2014/129238-south_stream_europe-0/

President Putin’s 2014 Federal Assembly Address “Talking To Russia From A Position Of Force Is An Exercise In Futility”

Video and Transcript
Russian President Vladimir Putin is addressing the Federal Assembly – both houses of parliament, the cabinet and other dignitaries – outlining his stance on his policies for the coming year.

Posted December 04, 2014

Vladimir Putin delivered the annual Presidential Address to the Federal Assembly. The Address was traditionally delivered at the Kremlin’s St George Hall before an audience of over 1,000 people.

In his Address, the President set out his views on the situation in Ukraine and outlined Russia’s position with regard to events taking place there. In the foreign policy section of the Address, Mr Putin also spoke about international security issues and the integration processes taking place in the world.

On the subject of Russia’s economic strategy, the President said that Russia is open to the world, to investment and to carrying out projects together, but ultimately, Russia’s development depends above all on the country’s own efforts. Mr Putin named development of new technology and competitive goods, giving the country’s industry and financial sector a more solid foundation, and training the needed personnel as priority tasks.

The President also talked about relations between the state and business, in particular the need to free up the environment for doing business as much as possible and the concrete steps that can be taken to achieve this. Mr Putin proposed that no changes be made to the current tax rules for the next four years, and also proposed an amnesty for capital returning to Russia.

The President set the goal of reaching growth rates above the world average within the next 3-4 years.

Mr Putin also set objectives in the financial sector, agribusiness, and the banking sector, and declared the need to free Russia from dependence on foreign technology. Import substitution is a long term strategy, the President said, and is a goal for Russia regardless of the situation with sanctions. Mr Putin also gave the main target figures for Russian exports and investment levels.

The President proposed implementing a national technology initiative that will involve forecasting the technology needs required to guarantee Russia’s national security and ensure high living standards and economic development over the coming 10-15 years.

The President also spoke about demography, healthcare and education.

In his concluding section, Mr Putin focused on the dialogue between the state authorities and the public and the need to raise civic activeness and Russia’s civil society potential.

The ceremony was attended by members of the Federation Council, State Duma deputies, members of the Government, heads of the Constitutional and Supreme Courts, heads of the constituent entities, chairpersons of regional legislative assemblies, heads of Russia’s traditional faiths, public figures, including heads of regional civic chamber, and executives of Russia’s major media outlets.

* * *

PRESIDENT OF RUSSIA VLADIMIR PUTIN: Citizens of Russia, members of the Federation Council and deputies of the State Duma,

Today’s address will be related to the current situation and conditions, as well as the tasks we are facing. But before delivering it I’d like to thank all of you for the support, unity and solidarity you have shown during the landmark events that will seriously influence the future of our country.

This year we faced trials that only a mature and united nation and a truly sovereign and strong state can withstand. Russia has proved that it can protect its compatriots and defend truth and fairness.

Russia has done this thanks to its citizens, thanks to your work and the results we have achieved together, and thanks to our profound understanding of the essence and importance of national interests. We have become aware of the indivisibility and integrity of the thousand-year long history of our country. We have come to believe in ourselves, to believe that we can do much and achieve every goal.

Of course, we will talk about this year’s landmark events. You know that a referendum was held in Crimea in March, at which its residents clearly expressed their desire to join Russia. After that, the Crimean parliament – it should be stressed that it was a legitimate parliament that was elected back in 2010 – adopted a resolution on sovereignty. And then we saw the historical reunification of Crimea and Sevastopol with Russia.

It was an event of special significance for the country and the people, because Crimea is where our people live, and the peninsula is of strategic importance for Russia as the spiritual source of the development of a multifaceted but solid Russian nation and a centralised Russian state. It was in Crimea, in the ancient city of Chersonesus or Korsun, as ancient Russian chroniclers called it, that Grand Prince Vladimir was baptised before bringing Christianity to Rus.

In addition to ethnic similarity, a common language, common elements of their material culture, a common territory, even though its borders were not marked then, and a nascent common economy and government, Christianity was a powerful spiritual unifying force that helped involve various tribes and tribal unions of the vast Eastern Slavic world in the creation of a Russian nation and Russian state. It was thanks to this spiritual unity that our forefathers for the first time and forevermore saw themselves as a united nation. All of this allows us to say that Crimea, the ancient Korsun or Chersonesus, and Sevastopol have invaluable civilisational and even sacral importance for Russia, like the Temple Mount in Jerusalem for the followers of Islam and Judaism.

And this is how we will always consider it.

Dear friends,

We cannot fail to mention today our perspective on the developments in Ukraine and how we intend to work with our partners around the world.

It is well known that Russia not only supported Ukraine and other brotherly republics of the former Soviet Union in their aspirations to sovereignty, but also facilitated this process greatly in the 1990s. Since then, our position has remained unchanged.

Every nation has an inalienable sovereign right to determine its own development path, choose allies and political regimes, create an economy and ensure its security. Russia has always respected these rights and always will. This fully applies to Ukraine and the Ukrainian people.

It is true that we condemned the government coup and the forceful takeover of power in Kiev in February of this year. The developments we are currently witnessing in Ukraine and the tragedy unfolding in the country’s southeast prove that we were right to take such a stand.

How did it all begin? I will have to remind you what happened back then. It is hard to believe that it all started with a technical decision by President Yanukovych to postpone the signing of the Association Agreement between Ukraine and the European Union. Make no mistake, he did not refuse to sign the document, but only postponed it in order to make some adjustments.

As you recall, this move was fully in line with the constitutional authority vested upon an absolutely legitimate and internationally recognised head of state.

Against this background, there was no way we could support this armed coup, the violence and the killings. Just take the bloody events in Odessa, where people were burned alive. How can the subsequent attempts to suppress people in Ukraine’s southeast, who oppose this mayhem, be supported? I reiterate that there was no way we could endorse these developments. What’s more, they were followed by hypocritical statements on the protection of international law and human rights. This is just cynical. I strongly believe that the time will come when the Ukrainian people will deliver a just assessment of these developments.

How did the dialogue on this issue begin between Russia and its American and European partners? I mentioned our American friends for a reason, since they are always influencing Russia’s relations with its neighbours, either openly or behind the scenes. Sometimes it is even unclear whom to talk to: to the governments of certain countries or directly with their American patrons and sponsors.

As I mentioned, in the case of the Ukraine-EU Association Agreement, there was no dialogue at all. We were told that it was none of our business or, to put it simply, we were told where to go.

All the arguments that Russia and Ukraine are members of the CIS free-trade zone, that we have deep-rooted cooperation in industry and agriculture, and basically share the same infrastructure – no one wanted to hear these arguments, let alone take them into account.

Our response was to say: fine, if you do not want to have a dialogue with us, we will have to protect our legitimate interests unilaterally and will not pay for what we view as erroneous policy.

So what’s came out of it all? The agreement between Ukraine and the European Union has been signed and ratified, but the implementation of the provisions regarding trade and economy has been postponed until the end of next year. Doesn’t this mean that we were the ones who were actually right?

There is also a question of why all this was done in Ukraine? What was the purpose of the government coup? Why shoot and keep shooting and killing people? In fact, the economy, finance and the social sector were destroyed and the country ruined.

What Ukraine currently needs is economic assistance in carrying out reforms, not petty politics and pompous empty promises. However, our Western colleagues don’t seem eager to provide such assistance, while the Kiev authorities are not willing to address the challenges their people are facing.

By the way, Russia has already made a major contribution to helping Ukraine. Let me reiterate that Russian banks already invested some $25 billion in Ukraine. Last year, Russia’s Finance Ministry extended a loan worth another $3 billion. Gazprom provided another $5.5 billion to Ukraine and even offered a discount that no one promised, requiring the country to pay $4.5 billion. Add it all up and you get as much as $ 32.5-33.5 billion that were provided only recently.

Of course, we have the right to ask questions. What was this Ukrainian tragedy for? Wasn’t it possible to settle all the issues, even disputed issues, through dialogue, within a legal framework and legitimately?

But now we are being told that this was actually competent, balanced politics that we should comply with unquestionably and blindfolded.

This will never happen.

If for some European countries national pride is a long-forgotten concept and sovereignty is too much of a luxury, true sovereignty for Russia is absolutely necessary for survival.

Primarily, we should realise this as a nation. I would like to emphasise this: either we remain a sovereign nation, or we dissolve without a trace and lose our identity. Of course, other countries need to understand this, too. All participants in international life should be aware of this. And they should use this understanding to strengthen the role and the importance of international law, which we’ve talked about so much lately, rather than bend its standards to suit someone’s strategic interests contrary to its fundamental principles and common sense, considering everyone else to be poorly educated people who can’t read or write.

It is imperative to respect the legitimate interests of all the participants in international dialogue. Only then, not with guns, missiles or combat aircraft, but precisely with the rule of law will we reliably protect the world against bloody conflict. Only then, will there be no need to scare anyone with imaginary self-deceptive isolation, or sanctions, which are, of course, damaging, but damaging to everyone, including those who initiate them.

Speaking of the sanctions, they are not just a knee-jerk reaction on behalf of the United States or its allies to our position regarding the events and the coup in Ukraine, or even the so-called Crimean Spring. I’m sure that if these events had never happened – I want to point this out specifically for you as politicians sitting in this auditorium – if none of that had ever happened, they would have come up with some other excuse to try to contain Russia’s growing capabilities, affect our country in some way, or even take advantage of it.

The policy of containment was not invented yesterday. It has been carried out against our country for many years, always, for decades, if not centuries. In short, whenever someone thinks that Russia has become too strong or independent, these tools are quickly put into use.

However, talking to Russia from a position of force is an exercise in futility, even when it was faced with domestic hardships, as in the 1990s and early 2000s.

We remember well how and who, almost openly, supported separatism back then and even outright terrorism in Russia, referred to murderers, whose hands were stained with blood, none other than rebels and organised high-level receptions for them. These “rebels” showed up in Chechnya again. I’m sure the local guys, the local law enforcement authorities, will take proper care of them. They are now working to eliminate another terrorist raid. Let’s support them.

Let me reiterate, we remember high-level receptions for terrorists dubbed as fighters for freedom and democracy. Back then, we realised that the more ground we give and the more excuses we make, the more our opponents become brazen and the more cynical and aggressive their demeanour becomes.

Despite our unprecedented openness back then and our willingness to cooperate in all, even the most sensitive issues, despite the fact that we considered – and all of you are aware of this and remember it – our former adversaries as close friends and even allies, the support for separatism in Russia from across the pond, including information, political and financial support and support provided by the special services – was absolutely obvious and left no doubt that they would gladly let Russia follow the Yugoslav scenario of disintegration and dismemberment. With all the tragic fallout for the people of Russia.

It didn’t work. We didn’t allow that to happen.

Just as it did not work for Hitler with his people-hating ideas, who set out to destroy Russia and push us back beyond the Urals. Everyone should remember how it ended.

Next year, we will mark the 70th anniversary of Victory in the Great Patriotic War. Our Army crushed the enemy and liberated Europe. However, we should not forget about the bitter defeats in 1941 and 1942 so as not to repeat the mistakes in the future.

In this context, I will touch on an international security issue. There are many issues related to this. These include the fight against terrorism. We still encounter its manifestations, and of course, we will participate in the joint efforts to counter terrorism on the international level. Of course, we will work together to deal with other challenges, such as the spread of infectious diseases.

However, in this case I would like to speak about the most serious and sensitive issue: international security. Since 2002, after the US unilaterally pulled out of the ABM Treaty, which was absolutely a cornerstone of international security, a strategic balance of forces and stability, the US has been working relentlessly to create a global missile defence system, including in Europe. This poses a threat not only to Russia, but to the world as a whole – precisely due to the possible disruption of this strategic balance of forces.

I believe that this is bad for the US as well, because it creates the dangerous illusion of invulnerability. It strengthens the striving for unilateral, often, as we can see, ill-considered decisions and additional risks.

We have said much about this. I will not go into details now. I will only say this. Maybe I am repeating myself. We have no intention to become involved in a costly arms race, but at the same time we will reliably and dependably guarantee our country’s defence in the new conditions. There are absolutely no doubts about this. This will be done. Russia has both the capability and the innovative solutions for this.

No one will ever attain military superiority over Russia. We have a modern and combat ready army. As they now put it, a polite, but formidable army. We have the strength, will and courage to protect our freedom.

We will protect the diversity of the world. We will tell the truth to people abroad, so that everyone can see the real and not distorted and false image of Russia. We will actively promote business and humanitarian relations, as well as scientific, education and cultural relations. We will do this even if some governments attempt to create a new iron curtain around Russia.

We will never enter the path of self-isolation, xenophobia, suspicion and the search for enemies.

All this is evidence of weakness, while we are strong and confident.

Our goal is to have as many equal partners as possible, both in the West and in the East. We will expand our presence in those regions where integration is on the rise, where politics is not mixed with economy, and where obstacles to trade, to exchange of technology and investment and to the free movement of people are lifted.

Under no conditions will we curtail our relations with Europe or America. At the same time, we will restore and expand our traditional ties with South America. We will continue our cooperation with Africa and the Middle East.

We see how quickly Asia Pacific has been developing over the past few decades. As a Pacific power, Russia will use this huge potential comprehensively.

Everyone knows the leaders and the drivers of global economic development. Many of them are our sincere friends and strategic partners.

The Eurasian Economic Union will start working in full on January 1, 2015. I’d like to remind you about its fundamental principles. The topmost principles are equality, pragmatism and mutual respect, as well as the preservation of national identity and state sovereignty of its member countries. I am confident that strong cooperation will become a powerful source of development for all of the Eurasian Economic Union members.

To conclude this part of my address, I’d like to say once again that our priorities are healthy families and a healthy nation, the traditional values which we inherited from our forefathers, combined with a focus on the future, stability as a vital condition of development and progress, respect for other nations and states, and the guaranteed security of Russia and the protection of its legitimate interests.

Dear friends,

To be able to implement all our plans and to meet the basic social commitments set forth in the presidential executive orders of May 2012, we must decide what we will do in the economy, finance and social spheres. But most importantly, we must choose a strategy.

I repeat that Russia will be open to the world, cooperation, foreign investment and joint projects. But we must above all see that our development depends primarily on us.

We will only succeed if we work towards prosperity and affluence, rather than hope for an opening or a favourable situation on foreign markets.

We will succeed if we defeat disorder, irresponsibility and our habit of burying good decisions in red tape. I want everyone to understand that in today’s world this is not simply an obstacle to Russia’s development but a direct threat to its security.

The period ahead will be complex and difficult, when much will depend on what each one of us do at our workplaces. The so-called sanctions and foreign restrictions are an incentive for a more efficient and faster movement towards our goals.

There is much we need to do. We need to create new technologies, a competitive environment and an additional margin of strength in the industries, the financial system and in the training of personnel. We have a large domestic market and natural resources, capital and research projects for this. We also have talented, intelligent and diligent people who can learn very quickly.

The most important thing now is to give the people an opportunity for self-fulfilment. Freedom for development in the economic and social spheres, for public initiatives is the best possible response both to any external restrictions and to our domestic problems. The more actively people become involved in organising their own lives, the more independent they are, both economically and politically, and the greater Russia’s potential.

In this context, I will cite one quote: “He who loves Russia should wish freedom for it; above all, freedom for Russia as such, for its international independence and self-sufficiency; freedom for Russia as a unity of Russian and all other ethnic cultures; and finally, freedom for the Russian people, freedom for all of us: freedom of faith, of the search for truth, creativity, work, and property.” Ivan Ilyin. This makes a lot of sense and offers a good guideline for all of us today.

Ladies and gentlemen,

Conscientious work, private property, the freedom of enterprise – these are the same kind of fundamental conservative values as patriotism, and respect for the history, traditions, and culture of one’s country.

We all want the same thing: wellbeing for Russia. So the relations between business and the state should be built on the philosophy of a common cause, partnership, and equal dialogue.

Naturally, responsibility and compliance with the law and obligations are essential in the business world, as it is in other areas of life. And this is exactly how the overwhelming, absolute majority of our business people work. They value their business and social reputation. Like genuine patriots, they want to be a benefit to Russia. These are the kind of people to look to, providing conditions for their productive work.

This is not the first time we are speaking about the need for new approaches to the activities of oversight, supervisory, and law enforcement agencies. Nevertheless, things are changing very slowly here. The presumption of guilt is still very much alive. Instead of curbing individual violations, they close the path and create problems for thousands of law-abiding, self-motivated people.

It is essential to lift restrictions on business as much as possible, free it from intrusive supervision and control. I said intrusive supervision and control. I will consider this in more detail later. I propose the following measures in this regard.

Every inspection should become public. Next year, a special register will be launched, with information on what agency has initiated an inspection, for what purpose, and what results it has produced. This will make it possible to stop unwarranted and, worse still, ‘paid to order’ visits from oversight agencies. This problem is extremely relevant not only for business, but also for the public sector, municipal institutions and social NGOs.

Finally, it’s crucial to abandon the basic principle of total, endless control. The situation should be monitored where there are real risks or signs of transgression. You see, even when we have already done something with regard to restrictions, and these restrictions seem to be working well, there are so many inspection agencies that if every one of them comes at least once, then that’s it, the company would just fold. In 2015, the Government should make all the necessary decisions to switch to this system, a system of restrictions with regard to reviews and inspections.

Concerning small business, I propose establishing ‘holidays from inspections’. If a company has acquired a good reputation and if there have not been any serious charges against it for three years, then for the next three years it should be exempted from routine inspections by government or municipal supervisory agencies. Of course, this does not apply to emergencies, when there is a danger to people’s health and life.

Business people talk about the need for stable legislation and predictable rules, including taxes. I completely agree with this. I propose to freeze the existing tax parameters as they are for the next four years, not revisit the matter again, not change them.

Meanwhile, it is important to implement the decisions that have already been made to ease the tax burden. First of all, for those who are just setting up their operations. As we have agreed, two-year tax holidays will be provided to small businesses registering for the first time. Production facilities that are starting from scratch will be entitled to the same exemptions.

Another thing. I propose a full amnesty for capital returning to Russia. I stress, full amnesty.

Of course, it is essential to explain to the people who will make these decisions what full amnesty means. It means that if a person legalises his holdings and property in Russia, he will receive firm legal guarantees that he will not be summoned to various agencies, including law enforcement agencies, that they will not “put the squeeze” on him, that he will not be asked about the sources of his capital and methods of its acquisition, that he will not be prosecuted or face administrative liability, and that he will not be questioned by the tax service or law enforcement agencies. Let’s do this now, but only once. Everyone who wants to come to Russia should be given this opportunity.

We all understand that the sources of assets are different, that they were earned or acquired in various ways. However, I am confident that we should finally close, turn the “offshore page” in the history of our economy and our country. It is very important and necessary to do this.

I expect that after the well-known events in Cyprus and with the on-going sanctions campaign, our business has finally realised that its interests abroad are not reckoned with and that it can even be fleeced like a sheep.

And that the best possible guarantee is national jurisdiction, even with all of its problems. We will continue to deal with those problems with conviction, together with our business community, of course.

Russia has already made significant headway in improving its business climate. A new legislative framework has for the most part been developed on the federal level. Now the focus should be shifted to the quality of law enforcement, promoting so called best practices in the regions in partnership with business, using the national investment climate ratings to this end. From next year, the ratings system will be introduced in all the regions. We will review the progress at a State Council meeting without fail.

We need properly developed construction sites and transport infrastructure in order to be able to expand businesses and accommodate new production sites. Our regions must focus on fixing regional and local roads. To enable them to do so, we have introduced additional sources for regional road funds. Overall, we should seek to double the volume of road construction across Russia.

Of course, what I have just said has been verified by the relevant government agencies. They all confirmed that this is a feasible project. We’ll be expecting to see the results of your work, colleagues.

In 2015, we will launch a programme to reimburse the regions’ expenses involved in creating technology parks. I hope that the regions will make good use of this opportunity to develop their own industrial capacity. These additional measures are being taken in order to support economic and industrial growth in strategically important Russian regions.

The law on a special economic zone in Crimea has been adopted. Favourable conditions will be created here for businesses, agriculture and tourism, manufacturing industries and maritime transport, including taxation, customs and other procedures.

As you may be aware, customs preferences for Kaliningrad Region will expire in 2016. It is imperative that alternative measures to support this region, which have already been prepared, be implemented in order to maintain a comfortable entrepreneurial climate.

I’d like to ask the Government to complete this work as soon as possible. I’d also like to ask the deputies not to delay their review of the law on priority development areas (PDA).

In addition, I propose extending PDA regulations to new projects in a number of single-industry cities with the most difficult socioeconomic situations, rather than waiting three years, as provided by the draft law (I believe it has passed its first reading). Instead, we should amend it and start working on single-industry cities right away.

Of course, PDAs should play a key role in developing the Russian Far East. We have announced ambitious plans for developing this region, and we will, of course, implement them. I’d like to ask the Government to consider recapitalising the Far East Development Fund. We can allocate a portion of federal tax increments, which will be obtained from new businesses opening in the region, for these purposes.

As is often the case in such matters, we had a tough conversation on this issue with the Finance Ministry. We agree that initially this can be done with an exception for VAT. Then, we’ll see how well this system works.

I propose providing a free port status to Vladivostok, with an attractive and easy customs regime. As you may be aware, Sevastopol and other Crimean ports have already been given this status.

We also need a comprehensive project for modern and competitive development of the Northern Sea Route. It must operate not just as an effective transit route, but also promote business activity on the Russian Pacific coast and the development of Arctic territories.

Colleagues, the quality and the size of the Russian economy must be consistent with our geopolitical and historical role. We must escape the trap of zero-level growth and achieve an above-average global growth rate within the next three to four years. This is the only way to increase Russia’s share in the global economy, and thus strengthen our influence and economic independence.

The national economy should also be more effective. It’s imperative that labour productivity be increased by no less than five percent annually. The Government should find reserves for this and come up with a plan for the best way to use them. At the same time, it’s important to maintain a stable macroeconomic environment and reduce inflation in the medium term to four percent, but, importantly, not through suppressing business activity. We must at last learn to harmonise two goals: containing inflation and stimulating growth.

Today we are faced with reduced foreign exchange proceeds and, as a consequence, with a weaker national currency, the ruble. As you are aware, the Bank of Russia has switched to a floating exchange rate, but this does not mean that the Bank of Russia has withdrawn from controlling the exchange rate, and that the ruble may now be the object of unchecked financial speculation.

I’d like to ask the Bank of Russia and the Government to carry out tough and concerted actions to discourage the so-called speculators from playing on fluctuations of the Russian currency. In this regard, I’d like to point out that the authorities know who these speculators are. We have the proper instruments of influence, and the time is ripe to use them.

Of course, a weaker ruble increases the risk of a short-term surge in inflation. It’s imperative that we protect the interests of our people, first and foremost, those with low incomes, and the Government and the regions must ensure control over the situation on the food, medicine and other basic goods markets. I’m sure this can be done without any problem, and it must be done.

A weaker national currency also increases the pricing environment and the competitiveness of our companies. We take this factor into account in our policy of import substitution (at least, where it’s appropriate and necessary). Within three to five years, we must provide our customers with high-quality and affordable medicines and food that are produced mostly in Russia.

The grain crop in Russia in 2014 was one of the best in recent history. The overall output growth across our agro-industrial complex currently stands at about 6 percent. We now have efficient large agricultural enterprises and farms, and we will support them. Let’s thank our agricultural workers for their performance this year.

We must also lessen our critical dependence on foreign technology and industrial goods, including in the machine-tool building and instrument-making industries, power engineering, and the production of equipment for field development, including on the Arctic shelf. Our commodities and infrastructure companies can seriously help our producers in this sphere. When implementing large oil, energy and transport projects, they must rely above all on domestic producers and promote demand for their products.

At this point, it’s mostly the other way around: we buy everything abroad, leaving the domestic industries and science empty-handed. I suggest creating a special governmental coordination centre and giving the Government more authority in this sphere. This centre would dovetail the implementation of large projects with placement of contracts at Russian companies, with further development of the national production and research facilities, and production localisation.

As for imports, we must only buy distinctly unique equipment and technology abroad. I’d like to add that we must also cooperate with domestic producers when upgrading the housing and utility sector, public transport, agriculture and other industries.

I am instructing the Government to take the necessary decisions to expand small and medium-sized businesses’ access to purchases by state companies, and in particular to determine the volume of state-owned companies’ mandatory annual purchases from small and medium firms. This is tens and hundreds of billions of rubles that must be used to boost the development of national businesses.

It goes without saying that their products must satisfy the strictest quality and price conditions. Next, we must prevent internal monopolism. I want to stress that reasonable import substitution – reasonable is the key word here – is a long-term priority, irrespective of external conditions.

Moreover, import substitution programmes must encourage the creation of a large group of industrial companies that can be competitive not only domestically but also on foreign markets. These companies exist in Russia. They are highly efficient and have export potential – very good potential. But they are short of capital, technology, personnel and equipment. We must remove as many of these restrictions as possible. We must provide investment incentives so that these companies can increase growth, increase their capitalisation and production severalfold and become established on foreign markets.

I am instructing the Agency for Strategic Initiatives to join forces with Vnesheconombank, the Russian Direct Investment Fund and other development institutions to draft a relevant programme and system. The first pilot programme for the support for non-commodity companies must be launched already next year.

The integrated credit and insurance export support centre, which will start operating in 2015, will stimulate domestic exports. Its services will be available to all non-commodity companies, both big and small.

In the next three years the capitalisation of Roseximbank, which was created for this purpose, should reach approximately 30 billion rubles. In the next three years, the volume of Russian high value-added exports should grow by 50 percent.

Of course, considerable funds will be needed for the development of the non-commodity and other economic sectors. Russia has these funds. We have large domestic savings, which must be used for this.

Despite any external restrictions, we must increase our annual investment to 25 percent of GDP by 2018. What does this mean? I’ll explain it with just a few words.

It means that we must invest as much as we save. Our savings must work for the national economy and development, rather than the export of capital. To be able to do this, we must seriously strengthen the stability of our banking system – the Central Bank has been working towards this end quite persistently – and also reduce the dependence of the national financial market on external risks.

I propose using our reserves (above all, the National Welfare Fund) to implement a programme for recapitalisation of leading domestic banks, with funding to be provided under clearly specified conditions to be funnelled into the most significant projects in the real economy at affordable interest rates. Furthermore, banks will have to introduce project financing mechanisms.

Regarding budget spending, the key requirements here should be thrift and maximum return, the correct choice of priorities and factoring in the current economic situation. For the next three years, we should set the goal of cutting costs and ineffective budget spending by at least five percent of total spending in real terms.

A huge economic reserve is lying on the surface. It is enough to look at government-financed construction projects to see this. At a recent forum of the Russian Popular Front, examples were cited of funds being invested in grandiose buildings or the construction costs of same-type – I want to emphasise this point – facilities, differing several times over, even in neighbouring regions.

I believe that it is necessary to phase in a system of a single technical contracting authority, and centralise the preparation of standard projects, construction documentation and the choice of subcontractors. This will make it possible to overcome the existing disparity in construction costs and ensure significant saving of public funds spent on capital construction projects, between 10 percent and 20 percent. This practice should be extended to all civil construction projects financed from the federal budget. I instruct the Government to submit relevant proposals.

Yesterday, the Prime Minister and I discussed this topic. Of course, there are some pitfalls here, and knowing what they are, it is important to avoid them, move with caution, implement several pilot projects in several regions and see what happens.

However, leaving the situation as it is today is no longer an option. As I said earlier, construction costs of similar facilities in neighbouring regions differ many times over. What is this?

Diversion or embezzlement of budget funds allocated for federal defence contracts should be treated as a direct threat to national security and dealt with seriously and severely, as in the suppression of the financing of terrorism. I mention this for a reason.

I don’t think there is anything to hide or gloss over here. We have just held our regularl meeting in Sochi with the leadership of the Defence Ministry, combat arms and services commanders and leading defence company designers.

On certain positions, prices double, triple or quadruple, and in one case they grew 11 times. You realise that this has nothing to do with inflation or with anything, considering that practically 100 percent of funding is provided in advance.

I would like to reiterate, and I’m bringing this to the attention of law enforcement agencies. I instruct the Defence Ministry, the Federal Service for Financial Monitoring and other relevant agencies to develop a system of strict, effective oversight over the use of funding allocated for federal defence contracts. This system should operate along the entire supply chain. Tougher penalties should be imposed on those in charge of federal defence contract implementation for misspending every ruble from the budget.

It is also crucial to streamline state-owned company budgets. To this end, unified financial settlement centres should be established therein, something like the treasury, to ensure the transparency and optimisation of financial flows and their effective management. Parent companies should also clearly see how funds are used in their subsidiaries.

Key efficiency parameters should be introduced in all companies where the state holds over 50 percent of stock, including the requirement to reduce operating expenses by at least 2-3 percent a year. I should add that compensations to state company management should be directly related to performance and economic realities.

Colleagues,

I’m confident that Russia is capable not only of carrying out a large-scale effort to upgrade its industrial sector, but also of becoming a supplier of ideas and technology for the whole world, emerging as a leading producer of goods and services that would shape the global technology agenda. Russian companies will embody national success and pride, just as our nuclear and space projects once did.

We have already adopted legislative amendments to introduce strict environmental standards. Their purpose is to push companies to implement the so-called best available technology, so that the key industries benefit from continuous upgrades.

That said, we should also be mindful of future challenges. In this regard, I propose implementing a national technology initiative. Long-term forecasts should provide us with insight into the tasks Russia could face in the next 10-15 years, what state-of-the-art solutions will be needed to ensure national security, improve quality of life, and promote industries operating in a new technological environment.

Promoters of promising creative projects should join efforts with vibrant companies that are ready to implement cutting-edge solutions. The leading universities, research centres, the Russian Academy of Sciences and major business associations should also be involved in this effort. And of course, our compatriots working abroad as academics or in high-tech sectors should also be invited to join in, but only those of them who actually have something to contribute.

I propose that the Government make the necessary arrangements, with assistance from the Agency for Strategic Initiatives. It is important that business representatives, academics and developers tell us what barriers need to be removed and what additional assistance they require. The most advanced technologies will yield results only if there are people who are ready to develop and use them.

Unfortunately, engineers are still mostly educated at universities that are no longer linked to the actual producers, and lack access to the latest research and solutions. It is high time that we focus on the quality of education, not sheer enrolment numbers, and ensure that engineers are trained by top higher education institutions with strong industry connections, and preferably in the same regions where the future engineers will live.

This quality requirement should also be applied to regular labour force. By 2020, at least half of Russia’s vocational training colleges are expected to offer education in 50 of the most relevant and promising labour professions, in accordance with the highest international standards and using advanced technology. Contests among workers and engineers should also become an important indicator of the changes in vocational training. The system of professional contests is not new, and Russia has joined it and has become a proactive member. This is not just about enhancing the prestige of engineering and labour jobs, but also an opportunity to be guided by the best practices in the training of such professionals. Building on this experience, professional and educational standards can be devised.

As you know, Russia competes in various international professional contests. I don’t have the data on hand, so I’ll cite them by memory, since they are worth mentioning. Three teams have been created: one with experts from leading enterprises, one with students and a third with 14 to 17 year old school students. They have trained to perform various tasks of the same kind. The team of 14 to 17 year old school students was able to find the best solutions for the most complex tasks in the space industry, where they worked on spacecraft, as well in traditional industrial tasks, despite the fact that such tasks were designed for highly-skilled workers. School students beat university students, as well as workers from the leading companies, by a wide margin. What this means is that, first, we have great potential, a lot of young promising talent. It also means that a lot has to be done to change the professional training system. It’s what I spoke about. We just need to avoid acting formally here. There is now a clear understanding of what should be done, so now we must just start doing it. Once we engage in this effort, we must keep up the momentum, since despite the changes in labour professions and training, the key economic driver always was and will continue to be the availability of highly-skilled qualified workforce and engineers. A network of certification centres should be created so that workers can prove that they meet professional requirements.

Colleagues,

I’ll move on to the next topic, which is demographics. In the early 2000s, UN experts predicted further demographic decline in Russia. According to UN forecasts, the population of our country was supposed to shrink to 136 million people by the end of 2013. On January 1, 2014, the population of Russia was almost 144 million people, 8 million more than forecast by the United Nations.

In addition, as you know, Russia registered natural population growth for two years in a row in 2013 and 2014. It is expected that by late 2014, with Crimea and Sevastopol included, Russia’s population will exceed 146 million people. Our demographic programmes have proved their effectiveness, and we will continue to implement them, with full coverage for the people of Crimea and Sevastopol. Families in Crimea and Sevastopol that have had a second or subsequent child since 2007 will receive the full amount of maternity capital.

I would like to draw your attention to another important and meaningful fact. This year, Russia was for the first time recognised as a successful country in world health rankings. The average life expectancy in such countries exceeds 70 years. Currently, this indicator in Russia is over 71. I believe that we have every opportunity to increase average life expectancy to 74 years in the near future and achieve a drastic reduction in mortality. That’s why I propose declaring 2015 the National Year of Fighting Cardiovascular Diseases, which is the leading cause of death, and combining the efforts of healthcare workers, representatives of culture, education, media, civic and sports organisations in order to resolve this problem.

The 2014 Winter Olympics in Sochi played an enormous role in promoting a healthy lifestyle. Once again, I’d like to congratulate our Olympians on their success.

Of course, the kindest words go to the Paralympic athletes. Friends, you have become true heroes of Russia. Largely thanks to you, attitudes towards people with disabilities have undergone a dramatic change. I’m convinced that our society will become truly united when we provide equal opportunities to everyone.

Government programmes must include measures to provide vocational training and employment opportunities to people with disabilities and create a barrier-free environment in all spheres of life. I suggest extending the Accessible Environment programme to 2020. We also need to create a modern domestic industry to manufacture goods for people with disabilities, including devices for physical therapy and rehabilitation.

With regard to healthcare, it is imperative to complete the transition to an insurance-based system and to make sure all its mechanisms are working without a fault. We have been talking about it and working on it for quite a while now, but insurance-based medicine still isn’t working properly. Importantly, both patients and medical staff should have a clear understanding of how health insurance works. We must create a centralised system of public oversight over the quality of healthcare organisations with corresponding powers and levers. I’d like to ask the Government to amend the legislation accordingly.

I also propose providing a special training certificate to doctors. They will use it to choose the best educational programme for them in order to take advanced courses and improve their skills. The hours and methods of such training should be convenient for the doctors.

Even with the most advanced technological innovations in medicine, a doctor’s personal qualities remain important. That includes a focus on the patient, a noble attitude and commitment to their professional and moral duty. Such medical professionals are the backbone of our healthcare system. And we must create all the conditions for them to be able to do their job properly.

Colleagues, yesterday, for the first time in many years, students in Russian schools wrote graduation compositions. This is another step towards a more objective system of evaluating the academic progress, knowledge, perspective and intellect of the younger generation and, importantly, the quality of the teachers’ work.

I’d like to ask the Ministry of Education and Science in conjunction with the professional community to review the results of these compositions and the national final school exam and come up with solutions aimed at increasing teachers’ accountability and motivating children to learn new skills.

It should be noted that the national final school exam has allowed gifted children from remote towns and villages and low-income families to apply to the nation’s best universities.

Talented children are a valuable asset of the nation, and we need to provide additional support to young people who show an aptitude for technology, liberal arts or inventing at an early age, who have achieved success in national or international academic and professional contests, and have patents or publications in academic journals. We have many such young people.

I propose establishing 5,000 annual presidential grants for talented young people who study at higher education institutions. Each grant will be for 20,000 rubles a month.

Of course, certain conditions will apply for the duration of their studies at a higher education institution. First, such students must make a commitment to work for a certain time in Russia, as targeted training programmes currently require. Second, they would have to confirm their eligibility each year by demonstrating the necessary academic and personal achievements for the duration of their studies.

Every child and teenager in our country should be able to find something to do outside the classroom. Any curtailment of extracurricular, supplemental education is unacceptable. Art, technology and music centres help create well-rounded people.

I’d like to ask the Government and the regions to focus on this issue and come up with financial and organisational approaches to address it. Most importantly, children and their parents should have a choice between getting additional education at school, a municipal centre of creativity, or a non-governmental educational organisation. Importantly, all these options must be affordable and children must have access to classes taught by properly trained professionals.

Another important issue that I spoke about in last year’s address is overcrowded schools and classrooms. We have crunched the numbers and found that we need to create an additional 4.5 million spots at schools.

How did we arrive at this number? Today, nearly two million schoolchildren attend the second shift. There are schools with three shifts. In the coming years, with a growing birth rate (which we hope will continue), the number of pupils will increase by another 2.5 million.

Naturally, we also have to solve the issue highlighted in the executive orders signed in 2012, that of increasing the number of preschools, something we spoke about with our colleagues from the Government yesterday. This is the way it should be. We have to consider all our opportunities and remember that one problem will intensify – that of spots at schools. I ask the Government, together with the regional authorities, to develop a comprehensive approach to resolving these issues.

Colleagues,

Education, healthcare, and the social welfare system should become a true public benefit and serve all citizens of the country. Attention to the people cannot be faked. You cannot simulate teaching, medical assistance or social care. We have to learn to feel respect for ourselves and honour reputation. It’s the reputation of individual hospitals, schools, universities and social  institutions that form the country’s overall reputation.

Citizens don’t have to think about where to apply for a social service: at a state, municipal or private organisation. They have the right to come to those who can provide professional assistance, with full dedication, putting their soul in their work. All the other things – including technical, organisational and legal issues concerning the provision of services – is the responsibility of the state, the responsibility to properly organise the work.

We will continue to support socially oriented non-commercial organisations. Such NGOs, as a rule, bring together people who feel their civil duty and who are aware of how much mercy, attention, care and kindness mean. We should use their proposals and experience, especially when implementing social initiatives.

We must not allow discrimination of the non-governmental sector in the social sphere and eliminate all barriers to it: not only legal ones, which have been mostly abolished, but also those that persist, I mean organisational and administrative barriers. Equal access should be provided for the non-governmental sector to financial resources.

Competition is a crucial factor to boost the quality of services in the social sphere. Also, it is necessary to launch a mechanism of independent assessment of the quality of services and to ensure transparency of information on the work of agencies providing social services. I ask the Russian Popular Front, together with civic associations, to assist the reforms in the social sector.

Following next year’s results, I plan to meet with representatives of the non-governmental sector. We will discuss what changes we have succeeded in achieving lately. Overall, we should considerably expand the opportunities for dialogue, for exchange of ideas between the Government and the public, particularly the Civic Chamber and its regional branches.

These structures should be incorporated, both at the federal and regional level, into a comprehensive expert examination of draft laws and government decisions, including at the level of the so-called initial reading, which should serve as an efficient feedback mechanism.

We can see how active citizens are and what constructive efforts they are taking. Not only are they highlighting issues for the authorities to tackle, they also actively participate in settling issues and problems. They realise full well that much depends on their personal efforts. The will, deeds and generosity of these people make up the invaluable social potential of the nation.

Everyone who is prepared to take responsibility has to be involved in the implementation of the plans of developing the country, certain regions and municipalities. If the state and the public act as one, in an atmosphere of cooperation and mutual trust, success is guaranteed.

I would like to address representatives of all political parties and social forces. I am counting on our joint consolidated work. Russia’s interests demand this unity and this work.

Friends, citizens of Russia,

I will conclude my address where I began it. This year, as has been the case many times during crucial historical moments, our people have demonstrated national enthusiasm, vital endurance and patriotism. The difficulties we are facing today also create new opportunities for us. We are ready to take up any challenge and win.

Thank you.

http://www.informationclearinghouse.info/article40385.htm

Putin: Russia will never follow instructions from the West

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Vladimir Putin delivers annual address to the Federal Assembly

 Russian President Vladimir Putin delivered the annual address to the Federal Assembly in the St. George’s Hall of the Grand Kremlin Palace on Thursday, December 4th.

In the beginning of the speech, President Putin thanked citizens of the Russian Federation for showing their resilience in the face of tribulations that Russia had to experience this year. Putin called the Russians a “mature nation.” “Russia has proved that it was capable of protecting its compatriots, defending truth with honor and justice.” “Our country has done it thanks to you, citizens of Russia,” Putin said in the beginning of the Address to the Federal Assembly.

Afterwards, he proceeded to the topic of Crimea’s reunification with Russia. Putin called the reunification of the Crimea and Sevastopol with Russia a historic event and stated that Russia believed in itself. “Russia believes in itself, in the fact that it can do a lot and that it will achieve everything,” Putin said, Interfax reports. Putin also said that for Russia, the Crimea remains of great civilizational and sacred value. The president assured that the Russians would treat the Crimea this way now and forever.

Putin said that Russia’s position on the sovereignty of former Soviet republics, including Ukraine, had not changed. “It is well known that not only has Russia supported Ukraine and other fraternal republics of the former USSR in their quest for sovereignty, but Russia has also contributed significantly to this process at the turn of the 1990s,” the president said.

“Every nation has an inalienable right to their own path of development. Russia will always treat this with respect, and this applies to Ukraine too,” Putin said. However, the talks about human rights, to cover up the bloody revolution in Ukraine, are nothing but hypocrisy. Putin urged not to conduct political chatter and give empty promises, but to assist the Ukrainian economy. Russia has already credited the Ukrainian economy at 32,5-33,5 billion dollars, Putin reminded.

In his address to the Federal Assembly, Putinaccused the United States of putting direct pressure on Russia’s neighbors. According to him, Moscow was completely ignored in the discussion of Ukraine’s association with the EU. “It is no coincidence that I mention our American friends, as they either directly or from behind the scenes always affect our relations with our neighbors. One does not even know at times, who it is better to talk to – the governments of certain countries or their American patrons and sponsors.” Putin stressed out that “in the case of the association agreement between Ukraine and the EU, there was no dialogue conducted at all.” “We were told that it was none of our business. Putting it in plain language, we were told where to go,” said Putin.

Russia will not blindly follow instructions from the West as far as the Ukrainian crisis is concerned, Putin said. “What is this whole tragedy in Ukraine for? Wasn’t it possible to settle all the issues, even controversial ones, in the course of a dialogue, within legal framework and legitimate processes? Yet, they are doing their best now to convince us that it was competent and balanced policy, which we need to obey mindlessly and blindly. This will not happen,” said Putin.

Putin about sanctions

Speaking about the topic of Western sanctions against Russia, Putin said that the sanctions caused damage “to everyone, including those who imposed them.” Talking to Russia from a position of strength is pointless, Putin said. The Russian president assured that despite pressure, Russia would never go the way of self-isolation, nor would it look for enemies.

“This is not just a nervous reaction of the United States or its allies to our position in relation to the events and the coup d’etat in Ukraine; this is not even a reaction to the so-called Crimean spring,” Putin said.

If there had been no crisis in Ukraine, if Russia had not reunited with the Crimea, the West would have found other reasons for the isolation of Russia, the Russian president believes. The Russian Federation will be defending diversity of the world – it will be defending truth not to let others distort its image in the world, Putin said.

“We will never take the path of self-isolation, xenophobia, suspicion and search for enemies. This is a sign of weakness, but we are strong and united,” said the president.

“If, for European countries, national pride is a long-forgotten concept and if sovereignty is too much of a luxury for them, then for Russia, real state sovereignty is a mandatory condition of its existence. We can either be sovereign, or we can get lost in the world,” Putin stated.

About Russia’s attitude to new arms race

Russia will not get involved in an arms race, but it will find non-standard solutions to ensure its defensive capability, Putin said. “We do not intend to get involved in a costly arms race, but we will ensure and guarantee the defense of our country in a new environment,” Vladimir Putin said. “There are no doubts about it, it will be done. Russia has both opportunities and innovative solutions for that,” he said.

Vladimir Putin warned, however, that “no one will succeed in achieving military superiority over Russia.” “Our army is modern and combat-ready. As they say, it is polite, but formidable. We will have enough strength, will and courage to defend our freedom,” the Russian president said.

According to Vladimir Putin, USA’s efforts in the creation of the missile defense system is a threat to Russia’s security. “Since 2002, after the USA’s unilateral withdrawal from the ABM Treaty, which was an absolute cornerstone of international security and strategic balance of power and stability, the United States continues the persistent work to create a global missile defense system, including in Europe,” said Putin.

“This is not only a threat to Russia’s security, but also a threat to the whole world  just because of a possible violation of the strategic balance of forces. I think that it’s harmful for the USA itself, because it creates a dangerous illusion of invulnerability, strengthens the pursuit of one-sided and, as we can see, unthoughtful decisions and additional risks.”

About Russia’s future relations with Europe and the USA

According to the Russian president, even in light of current circumstances, Russia is not going to curtail relations with Europe and America. Russia will be open to the world, to foreign investment and joint projects.

“We, under no circumstances, are going to curtail our relationships with Europe and America, but we will restore and expand our traditional ties with the South American continent, we will continue cooperation with Africa, with the Middle East,” said Putin.

Russia will be expanding its presence in the regions, where integration processes are gaining momentum now, “where they do not mix politics and economy, but, vice versa, where they remove barriers for trade, technology exchange and investment for the free movement of people,” Putin said.

In particular, Putin pointed to the rapid development of the Asia-Pacific region. The Russian Federation has been strengthening cooperation with China lately. “Russia as a Pacific power will take full advantage of this huge potential. The leaders and engines of global economic development are well known. Many of them are our true friends or strategic partners,” said the Russian president.

Putin also said that January 1, 2015 will be the day when the Eurasian Economic Union starts working at full swing. According to the Russian president, basic principles of association are equality, pragmatism and mutual respect, preservation of national identity and national sovereignty of all member countries. “I am convinced that close cooperation will be a powerful source of development for all members of the Eurasian Union,” said the president.

About Russia’s development in the future

Speaking about the development of Russia in the future, Putin stated that one must escape from the trap of zero growth and reach the growth of economy higher than the average.

The Russian president also said that prosperity and well-being of Russia depended on its citizens. According to the president, one needs to get rid of indiscipline and irresponsibility, Russian President Vladimir Putin said.

“We must understand that our development depends primarily on us. We will succeed if we earn well-being and prosperity ourselves, without relying on good luck or external environment, if we cope with the lack of organization and irresponsibility, if we cope with the habit of “digging into papers,” Putin said.

“I want us all to understand that in the current environment, this is not just a brake on the development of Russia, but also a direct threat to its security,” said the Russian president. “Ahead of us, we have difficult, stressful times, and much depends on each of us and our actions,” he added.

About basic principles of Russian authorities

Vladimir Putin formulated basic principles of the Russian authorities: “Healthy family and healthy nation, traditional values inherited from our ancestors, combined with forward-looking and stability as a condition of development and progress, respect for other peoples and nations while guaranteeing the security of Russia and defending its legitimate interests – these are our priorities,” Vladimir Putin said.

About the plummeting Russian ruble

Vladimir Putin commented on the speedily devaluation of the Russian ruble. “Today, we face decreasing foreign currency earnings and, as a consequence, the weakening of the national currency – the ruble. You know that the Bank of Russia proceeded to the “floating” exchange rate, but it does not mean that the Bank of Russia removed itself from showing influence on the exchange rate. It does not mean that the ruble exchange rate may easily become an object of financial speculation,” said the Russian president.

“I ask the Bank of Russia and the government to carry out tough, coordinated action to discourage so-called speculators from playing on the fluctuations of the Russian currency,” he said.

“The authorities know who these speculators are and they have tools of showing influence on them. It is now time to take advantage of these tools,” Putin stated.

About small business

“One must remove restrictions from business to the uttermost and relieve business from obsessive supervision and control,” said Putin.

“Next year, a special register will open. It will contain information on what body and for what purpose initiated an inspection and which results were obtained. This will cut unmotivated visits of inspectors. I should add that this problem is relevant not urgent only for businesses, but also for budget, local institutions and social NGOs,” said the Russian president, adding that it was necessary to abandon the principle of total, infinite control.

“As for small business, I propose to establish “supervisory holidays” for it. If a company has earned a solid reputation and has not had significant complaints during three years of work, then during the following three years such a company shall be exempt from routine inspections of state and municipal control,” said Putin.

About state-run companies

According to the Russian president, the budgets of state-run companies must be put in order. There will be settlement centers established in such companies to ensure “transparency and optimization of cash flows, as well as their effective management.”

“Head companies should also clearly see, how the funds are used in their affiliated structures,” said Putin.

“I’d like to note that remuneration for management of state companies should be directly related to achieved results and economic realities,” said the president.

About demography and health care system

Vladimir Putin said that in the past two years, Russia has seen a natural increase of the population. “In the early 2000s, UN experts predicted a demographic decline in Russia. According to UN forecasts, the population of our country was to reduce to 136 million people by the end of 2013. As of 1 January 2014, the population of Russia amounted to almost 144 million people, which was 8 million more than the UN forecast,” Vladimir Putin said.

“In 2013 and 2014, Russia has seen the natural growth of the population. It is expected that by the end of 2014, taking into account the Crimea and Sevastopol, Russia’s population will exceed 146 million people,” said the Russian president.

In Putin’s view, population programs have proven effective. They will apply to residents of the Crimean peninsula. “Families of residents of the Crimea and Sevastopol, beginning from 2007, that had a second or subsequent child, will receive the maternity capital fully,” Putin said.

“This year, in the global ranking of healthcare, Russia was for the first time recognized a safe country. This is a state where average life expectancy exceeds 70 years. At the moment, this indicator in Russia exceeded 71 years. I believe that we have every reason to increase average life expectancy to 74 years in the near future,” said Putin.

“With regard to the health care system, during the next year, one should finish the  transition to insurance principles, set all mechanisms in order to avoid failures. We have long talked about it, we’ve been doing that, but in reality, medical insurance does not work. It is important the work of health insurance principles be understandable to both citizens and medical personnel,” said the president.

“Despite all technical innovations in medicine, personal qualities of a doctor have always been most valuable. It goes about attention to people, nobility and execution of professional and moral duty. Our health care system lives owing to such professionals. And we must create all conditions for their decent work,” concluded Putin.

In the Grand Kremlin Palace, about 1,100 people gathered to listen to Putin’s Address to the Federal Assembly: members of the Federation Council and the Cabinet of Ministers, State Duma deputies, heads of Constitutional and Supreme Courts, governors, speakers of regional legislatures, heads of traditional religions, public figures, heads of major media outlets.

Pravda.Ru

http://english.pravda.ru/russia/kremlin/04-12-2014/129214-putin_address_federal_assembly-0/

Putin halts South Stream pipeline

By Peter Schwarz

5 December 2014

At a press conference in Ankara, Turkey on Monday evening, Russian president Vladimir Putin announced that the South Stream gas pipeline would not be built. The head of Russian energy giant Gazprom, Alexei Miller, confirmed the news, “That’s it. The project is over.”

The €40 billion ($50 billion) pipeline was to have transported Russian gas from the Black Sea coast through Bulgaria, Serbia and Hungary to Austria, bypassing Ukraine en route. Another pipeline would have supplied Italy via Greece. It was to have had an annual capacity of 63 billion cubic metres, one-tenth of Europe’s total gas demand. Gazprom has already invested €8 billion ($9.4 billion) in the project.

south_stream

The South Stream project (CC BY-SA 3.0)

Putin blamed the European Union (EU) for the project’s abandonment. “If Europe doesn’t want this project, then it won’t be realised,” he said. “Instead we will supply our energy sources to other regions in the world.”

The European Commission has been working to torpedo the construction of South Stream for some time. They viewed the project as an attempt to increase Europe’s dependence on Russian energy supplies, and to bring Eastern European countries, particularly Bulgaria and Serbia, under Russian control.

To block South Stream, Brussels pursued the rival Nabucco project in close cooperation with Washington. This would have given Europe access to the large gas fields in Central Asia via Georgia and Turkey, while avoiding Russia as a transit country. Former German foreign minister Joschka Fischer worked for a time as a lobbyist for the project, but in 2013 Nabucco was abandoned due to the costs involved.

In 2009, the EU passed a regulation that banned the combination of gas extraction, transport and sale within one firm. This was directed principally at Gazprom and was repeatedly used to put obstacles in the way of South Stream’s construction.

The European Commission moved energetically against South Stream following the outbreak of the Ukraine crisis. It put considerable pressure on Serbia and Bulgaria to halt construction of the pipeline. In June, Bulgarian interim Prime Minister Plamen Oresharski called a halt to construction, and the current Prime Minister, Boyko Borisov, has maintained this stance following parliamentary elections. As a result, Putin accused Bulgaria, in Ankara, of being “incapable of behaving like a sovereign state.”

Along with the EU’s political pressure, economic factors led to the project’s abandonment which are, in part, connected with the Ukraine crisis. Due to the sanctions imposed on Russia, it is increasingly difficult for Gazprom to provide the funds for the level of investment required for the project.

The price for gas, which is linked to that of oil, has dropped sharply over recent months, calling into question the viability of the project. The demand for gas in Europe is also much less than previously assumed due to the sustained recession. The London-based Oxford Institute of Energy Studies predicted that demand would decline from 594 billion cubic metres in 2010 to 564 billion in 2020, and that by 2030, it would increase only slightly to 618 billion cubic metres.

Most of the Western media welcomed the end of South Stream. The New York Time s described it as a “diplomatic defeat” for Putin, the Frankfurter Allgemeine Zeitung (FAZ) headlined a piece, “Putin’s defeat,” and Bloombergremarked, “By successfully blocking South Stream, the EU has signaled political support for Ukraine and boosted its economic prospects.”

There were concerned comments, however, not only from countries that would have profited from transit fees and supply security like Serbia, Hungary, Bulgaria and Austria, or the firms involved in the project such as Italy’s Eni, France’s EDF, Austria’s OMV and Germany’s Wintershall. The possibility that Russia would combine the halting of South Stream with a new foreign policy orientation, striving for closer ties with NATO member Turkey, also caused alarm. In this respect German weekly Die Zeit wrote of a “geopolitical earthquake.”

Putin and Miller signed a declaration of intent with Turkey in Ankara for the expansion of the underwater Blue Stream gas pipeline, which links Russia directly with Turkey, as well as the building of an additional pipeline with the same capacity as the failed South Stream project. Just a quarter of the gas supplied will remain in Turkey, while the rest will flow through Greece and onwards to Europe.

Turkish newspapers celebrated this as a Turkish-Russian energy alliance. NATO member Turkey would thus become a centre for the export of Russian gas. This would in turn affect plans for the trans-Anatolian and trans-Adriatic pipelines (TANAP and TAP), which were built as replacements for the Nabucco project. Instead of reducing Europe’s dependence on Russian gas, they could now be used to transport Russian gas to Europe. “The partnership with [Turkish president Recep Tayyip] Erdogan is an opportunity for Putin to maintain his influence on supplying Europe with energy,” commented Die Zeit.

The energy agreement with Turkey is part of a broader strategic reorientation. Last summer, Russia signed a major deal to supply gas to China. Along with the supply of gas, Russia has also agreed to the building of Turkey’s first nuclear power plant and a vast expansion of trade in both directions. Turkey will thus benefit directly due to the sanctions imposed by the EU and United States.

Nonetheless, major tensions continue to persist between Russia and Turkey. In Syria, Russia has backed President Bashar al-Assad, while Turkey has sought his violent overthrow. In addition, the Turkish-speaking Tartars in Crimea have a strong lobby in Turkey that opposed Crimea’s annexation by Russia. It is to be expected that Brussels and Washington will deliberately stir up these tensions to prevent closer cooperation between Russia and Turkey.

Another consequence of the ending of South Stream is causing concern for European governments. They backed the coup in Ukraine and the signing of an association agreement with Kiev so as to bring Ukraine into NATO’s sphere of influence and isolate Russia. But they never intended to financially assist Ukraine. Now they will continue to be dependent on gas flowing through Ukraine’s decrepit pipelines. “The EU will have to put more effort, money and political capital into this country than they had ever planned prior to the Maidan uprising,” complained the FAZ.

http://www.wsws.org/en/articles/2014/12/05/sout-d05.html

Putin: Trade in Rubles & Yuan Will Weaken Dollar’s Influence

By Vladimir Putin

November 12, 2014 “ICH” – Vladimir Putin took part in a meeting of the Asia-Pacific Economic Cooperation (APEC) Forum’s CEO Summit on the Asia-Pacific region’s significance for Russia.

Mr Putin said, in particular, that Russia views cooperation with the Asia-Pacific region as a strategic priority. The President also told summit participants about Russia’s plans to expand its cooperation with Asia-Pacific region countries, including through increased trade and investment incentives.

Transcript of APEC CEO Summit meeting

PRESIDENT OF RUSSIA VLADIMIR PUTIN: Ladies and gentlemen,

The APEC CEO Summit is traditionally considered one of the most representative forums for broad discussions on economic issues. I am pleased to have this opportunity to speak on a subject of great importance for us – developing Russia’s cooperation with the Asia-Pacific region.

The twenty-first century has already been called ‘the Pacific century’. As part of the Asia-Pacific region, Russia must make use of the competitive advantages offered by this fast-growing economic, technology and innovation centre.

In turn, Russian regions such as Siberia and the Far East offer a unique chance for this vast region’s countries to effectively develop and make use of the opportunities there and further strengthen their potential.

Cooperation with the Asia-Pacific region is one of Russia’s strategic priorities. The overall constructive spirit that characterises our relations with the vast majority of countries in the region is very important. We value this spirit greatly and will do everything possible to develop bilateral and multilateral cooperation in a wide range of areas.

Many Asia-Pacific region countries offer successful examples of roads to follow in developing their competitive abilities. They have taken the lead in innovation sectors and have considerable financial and investment resources at their disposal. Even faced with the negative global trends of recent years, they have kept up a good pace and had only a slight slowdown in growth.

At the same time, in order not to end up caught in a more protracted slowdown, countries in the region will need to carry out significant structural reforms. It is not by chance that our Chinese friends, for example, have made this issue one of the priorities for the APEC presidency.

Russia is no exception here. Structural economic transformation is one of our top priorities. Trade with the Asia-Pacific region countries represents more than a quarter of Russia’s total trade today.

We want to increase this share to 40 percent and we are taking concrete steps to expand the geography of our exports and increase the share of non-raw materials and high-tech goods.

In the Far East, we plan to establish a network of fast-growth zones offering tax incentives and simplified administrative procedures. The plan is that the companies located here will focus on narrow exports of non-raw materials, above all to the Asia-Pacific region.

Ladies and gentlemen, let me take this occasion to invite you to make use of the opportunity opening up to organise production operations in Russia’s Far East. Let me say again that we are ready to offer you the best and most competitive conditions for your work. Direct foreign investment from Asia-Pacific region countries in the Russian economy has doubled since 2009 and now comes to nearly $10 billion.

Russian investment in the Asia-Pacific region countries is more modest and came to slightly more than $1 billion as of the end of last year. We will work actively to correct this imbalance. We hope in particular that the establishment of the National Coordination Centre for Developing Economic Relations with the Asia-Pacific Region Countries will make it possible to launch new projects with Russia’s involvement.

The People’s Republic of China is one of our key partners in the region. We will make greater use of settlements in our national currencies in our trade with China. We are already carrying out our first deals in rubles and yuan. Let me say that we are ready to extend such possibilities to trade in the energy sector too.

Our experts are currently studying these options. An intergovernmental Russian-Chinese commission on investment cooperation is also at work. Its main task is to promote investment projects in sectors other than energy on the basis of mutually advantageous cooperation.

We plan to use similar formats for developing our dialogue and practical cooperation in the investment sector with other partners too. Economic integration is clearly taking the fore on the APEC agenda today.

We believe that a major achievement of the Chinese presidency has been securing agreement on concrete steps towards establishing a future Asia-Pacific free trade zone. This plan should take into account the interests of all future participants, the unique features of our economies and the considerable differences in our development. Naturally, the future Asia-Pacific free trade zone should work together with other big regional economic associations.

Let me remind you in this respect that the Eurasian Economic Union will begin operation on January 1, 2015, and will bring together Russia, Belarus, Kazakhstan and Armenia, which is in the process of joining. This creates a large new regional market built on WTO principles. It offers free movement of capital, goods, services and labour and broad opportunities for coordination and exchange of technology and investment.

One of the Eurasian Economic Union’s strategic goals is to take part in the integration processes underway in the Asia-Pacific region. I am sure that this opens up prospects of interest to many of our colleagues in the region. The Union is already holding talks on a free trade zone with Vietnam and is open to substantive dialogue with other countries in the region.

Ladies and gentlemen, the region’s biggest companies are represented at today’s summit. Some of you already have a presence in Russia and some of you are studying the possibility. Let me therefore address in more detail some of the issues that are usually uppermost on investors’ minds.

Let me stress that our long-term development goals remain unchanged. Russia has retained its macroeconomic stability and we consider this one of our greatest achievements. We will continue to value this and will follow a carefully balanced budget policy.

We are not going to increase our sovereign debt. We plan to keep this debt at the safe and controllable level of less than 15 percent of GDP.

We are aware that our national currency, the ruble, is undergoing considerable fluctuation at the moment and we are working with our financial authorities to take the necessary measures. Our Central Bank is continuing its inflation target policy and will not change this.

Let me add that our Central Bank is also working actively on cleaning up banks’ balances. This was something that long needed doing. I think that investors would have no trouble understanding the need to take such of measures to clean up the credit and financial system in general.

What is important is that our basic indicators such as gold and currency reserves and our balance of payments are still at a good level. This makes it possible for us to control the situation without needing to resort to extraordinary measures. Let me say again too that we have no intention of introducing capital controls.

We place great importance on developing a favourable business environment and spreading best practice in working with investors at the regional and municipal level. The main thing is that businesspeople and investors, including our foreign friends, are noticing the positive changes themselves. The international experts have also recognised our efforts. Russia has had a two-fold rise in its ranking on the well-known Doing Business rating since 2010.

To attract investors, reduce risks, and co-finance projects, we will use development institutes and also some of the reserves we have built up in our sovereign funds – money from the federal National Welfare Fund and other resources. We will improve access to credit resources. We are completing work on a mechanism for project financing and we plan to support major long-term projects.

Starting next year, a new organisation, the Industrial Development Fund, will be responsible for pre-bank financing of companies. We plan to invest significant resources in modernising the Baikal-Amur and Trans-Siberian railways and see them as the base for a transcontinental bridge between Asia and Europe.

These railways’ reconstruction is linked in with development of port facilities in the Far East, introduction of a railway traffic management system based on the latest technology used by GLONASS, Russia’s global navigation system, and the creation of the so-called land ports – transport and logistics centres. All of this will make it possible to considerably speed up transit of goods.

Let me add too that we are actively at work on developing the Northern Sea Route’s infrastructure. It will become a modern, safe and economically competitive transport corridor with a particular focus on goods from the Asia-Pacific region countries.

We also offer our partners cooperation in developing energy and telecommunications infrastructure. These are priority areas for the entire Asia-Pacific region today. Friends and colleagues, by combining our efforts and capabilities we could achieve benefit all round.

Russia is showing an example of investment openness in the sensitive energy sector. Let me remind you in this respect of the big Sakhalin oil and gas projects (Japan has a 30-percent stake in the Sakhalin-1 project and a stake of more than 22 percent in the Sakhalin-2 project, for example) and our agreements with China on building infrastructure for natural gas supplies. We are also examining possibilities for our Chinese partners to acquire stakes in some of our biggest production assets.

Ladies and gentlemen, Russia’s location in Eurasia determines its role as a major factor for bringing Western and Eastern civilisation closer together, and we therefore want to strengthen our relations with all Asia-Pacific region countries and play an active part in building a free trade system and in economic and investment cooperation.

We are open for dialogue and discussion and for practical work too. We are ready to carry out joint programmes in the Asia-Pacific region and are sincerely interested in seeing businesspeople from this region come to Russia and achieve success there. We have huge, truly inexhaustible opportunities for work together.

In conclusion, let me invite you, ladies and gentlemen, to the next St Petersburg International Economic Forum, which will take place next year on June 18-20. I hope that we will continue the substantial dialogue on all issues of mutual interest and will open the way for new and interesting big projects.

Thank you for your attention.

QUESTION: Mr President, you mentioned the establishment of the Eurasian Economic Union, which will come into force on January 1, 2015. Could you talk in more detail about the concrete opportunities that will open in this regard to APEC businesspeople and APR nations?

VLADIMIR PUTIN: We have talked about this a great deal. It is one of our biggest integration projects in the post-Soviet space. I have already said that its participants are the Russian Federation, Belarus and Kazakhstan. Now, Armenia is in the final phase of joining this Union. This has essentially happened already: Armenia’s Accession Agreement has been signed.

For a nation like China, the numbers I provide may not seem impressive, but nevertheless, for example, for the European region, this is a market of 170 million people. What’s most important is that all these nations (at least, Russia and Kazakhstan) have large, not to say enormous, mineral resources and transport opportunities. Belarus brings us closer to the European market. The scientific potential is very high. But what’s most important is that the principles laid into the foundation of the Union’s work are built around the framework requirements of the World Trade Organisation, fully meeting them.

As I said in my address, we have transitioned to a higher phase of interaction and integration. We are removing customs regulation almost entirely between member states in this integration process. We are transitioning to the free movement of capital, services and labour. We are synchronising our tax and financial legislation and progressing to joint regulation of the financial markets.

In my view, all this creates excellent conditions for businesses to feel confident and secure working on this fairly large market. It gives them the opportunity to forecast their activities and receive good returns, to feel protected. I am referring (again, I repeat, this is a very important aspect) to the fact that the principles fully correspond with the requirements of the World Trade Organisation. We believe our partners from all regions of the world, including the Asia-Pacific region, will appreciate this very soon.

QUESTION: I would like to ask Mr President a question about improving Russian legislation.

We have business in Russia, and we would very much like to organise joint enterprises with Russia, but we have studied the Russian laws about foreign investments – in other words, investments by foreign states into Russia. It seems not everything is entirely clear, especially with regard to the fact that state authorities have very extensive powers with regard to foreign investors. Will there be any improvements in this area in Russia?

VLADIMIR PUTIN: I already said it in my address and I would like to stress this again: we feel, first, that this is one of our main objectives – namely, to create favourable conditions for investing and generally doing business in Russia. We have a whole programme of action that was developed not just by state officials, but in constant dialogue with our business community.

We have a roadmap for eliminating administrative barriers. And as I said earlier, overall, the situation is changing for the better. We have advanced significantly in the Doing Business ranking. But it’s not just about rankings. It is, of course, a matter of the practical reality.

We are talking about making it easier to register companies. We are talking about making it easier to get connected to infrastructure, first and foremost, energy infrastructure. We are talking about decreasing pressure from, to put it bluntly, the law enforcement system. All of this is constantly in our field of vision. An analysis of what is happening in the market, the feedback from the business community gives us the foundation to believe that the process is moving in the right direction.

There is not doubt that much remains to be done still, but we are fully aware of what to do, and how. I am talking about fundamental issues, which I already mentioned, first and foremost, the budget policy, maintaining macroeconomic indicators and the overall principles of macroeconomic policy. I am talking about our support for exports. Here, unfortunately, we are at the start of this path, but we understand what needs to be done in this direction as well.

I repeat, we are talking about supporting export. So if you come to Russia, the opportunities there extend beyond working in the Russian market. There are also options to work in third country markets through Russia. I want to stress, each of the segments of this plan is under our constant attention, jointly with Russia’s business community. We will continue to improve all these mechanisms.

QUESTION: Mr President, I am from the Beijing Chamber of Commerce. Our members include over 200 companies, particularly businesses engaged in the so-called upstream, in other words, oil exploration and extraction. We also accompanied the Chinese Prime Minister’s on his visit to Russia. We also plan to build production facilities and a research centre in Russia.

I have a question. You talked about direct transactions in rubles and yuan, the possibility of exchange. But the question is about liquidity – in other words, will it be possible to conduct such calculations more freely?

VLADIMIR PUTIN: You touched on a very important issue that concerns global finances and global energy. I believe that payments in national currencies, in any case, between such partners as China and Russia, are a very promising direction for our cooperation, which will help broaden our options for mutual trade and significantly influence global financial and energy markets.

We are currently examining a project for Chinese partners to join one of our major extraction companies with payments made in yuan. Of course, we must understand how we will use the extensive resources that the Russian partner will have when receiving Chinese national currency, but given that the Chinese economy is generating a great deal of goods that are in demand in the Russian goods market, we feel that such settlements are entirely possible.

Moreover, the Russian ruble has a number of advantages in that it is essentially a freely convertible currency, and as I said earlier, we are not going to restrict the movement of capital. Today, we are observing speculative jumps in the exchange rate, but I believe that this will end soon – I am referring to the actions that the Central Bank is taking in response to the actions of profiteers.

I must say that the events on the currency market that we are currently observing in Russia are absolutely unrelated to fundamental economic reasons and factors. All this will come into balance, but it is currently opportunistic in nature, and in the long-term, of course, calculations in rubles and yuan are very promising. This will mean that if we transition to such large-scale cooperation, the effect of the US dollar, say, on global energy, will decrease markedly.

In truth, this is not bad for the global economy, nor for global finances or global energy markets, nor for the dollar itself, because the more versatile payment options are available in this area, the more stable the situation will be in global finances and global energy. Ultimately, I think this can have a favourable effect on the dollar as a global reserve currency. Naturally, the dollar will later participate in exchange operations – this is true of the ruble and the yuan. So I think that this is a very good, entirely realistic perspective, and not a distant one; we will be able to see and hear this in the near future.

QUESTION: Mr President, my name is Yana, I represent a major Chinese investment project, the Greenwood Business Park in Moscow. We have already been working in Moscow, in Russia, for over 15 years. My question: how do you feel the successful experience of Chinese projects in Russia can be used to attract new Chinese investors?

VLADIMIR PUTIN: If you talk at forums like this one about your success in Russia, this will encourage others your partners and our friends to enter the Russian market and set up businesses there. What you just said is already an excellent advertisement for working in the Russian market. I would happily give you a hug. Thank you very much.

REMARK: Thank you. And in addition, I would like to say that currently, there are over 370 companies from 13 countries around the world working at the Greenwood Business Park. It would be our pleasure to invite you on an official visit to the Greenwood Business Park, a Chinese project.

VLADIMIR PUTIN: Thank you. I will certainly come visit.

QUESTION: Good afternoon, Mr President. I represent a Chinese company. I have two questions for you.

First, investment in Russia. All Chinese companies are still somewhat concerned, mainly over issues of law and order and safety in the streets. This is my first question.

The second question. Russia is a major producer of timber. There are still significant barriers in this area. How can Chinese companies gain access to the Russian timber market?

VLADIMIR PUTIN: First, regarding security, especially safety in the streets. I assure you that Russia is no more dangerous than any other country, including China, the United States or a number of European states.

Incidentally, today is November 10, and we are marking the professional holiday of employees of the Russian Interior Ministry. Therefore, this is a very timely question. Let us all congratulate them on their professional holiday, so they know that even here at the APEC Summit we are talking about the quality of their work. And let’s hope that their work continues to improve.

Thank you.

As for timber, the issue you are so interested in. I understand the subtext of your question. However, I am sure that you will also understand me when I say that any country (and Russia is no exception here) wants to have the raw materials produced on its territory to be processed there as well, so that the nation’s economy generates greater added value, new jobs are created and taxes are collected in Russia.

Therefore, our legislation has been making slow progress lately, considering our partners’ desire to buy round timber. However, the overall tendency is that we need to process timber on the territory of the Russian Federation, and we will continue working in this direction.

In response to your question regarding how to ensure the interests of foreign companies, including the interests of our friends in China, I would like to say that the answer is very simple: you can come to Russia and invest in timber processing facilities.

QUESTION (retranslated): Mr President, I head a company in China. We are involved in electronic trade, helping small and medium sized companies do business online. Therefore, regional cooperation is not an empty phrase for us, and my question has to do with it. We all know that regional cooperation is the focus of APEC’s efforts. How would you assess its current state and prospects?

Thank you.

VLADIMIR PUTIN: Are you referring to the state of online trade or our cooperation with China? I did not really understand your question.

REMARK: Since we help small and medium-size businesses, we would of course like to see regional cooperation within APEC develop. This would make our work easier, because electronic trade helps small and medium-size companies access world markets and receive funding.

VLADIMIR PUTIN: I see.

First, regarding regional cooperation. I believe this is a key area of our cooperation; moreover, cooperation between regions of the Russian Federation and regions of the People’s Republic of China is developing successfully. I won’t quote any numbers now regarding the growth of regional trade, but it is increasing day by day and year by year. We have established very good direct relations between the heads of Russian and the Chinese regions. This is a very good factor in favour of closer relations between companies.

Your professional question concerning online trade is also very important. We believe this is a significant segment of world trade, specifically for the development of small and medium-sized businesses. However, we proceed from the notion that in Russia taxation of this type of activity should not noticeably differ from the practices that exist in other countries.

True (I understand what you are hinting at), there is a discussion underway regarding the taxation that should be applied to electronic trade in the Russian Federation. The scope of electronic trade in Russia is large and keeps growing. The state should definitely maintain its interests and our fiscal policy should correspond to both the development of this segment of trade and its demands.

There is an issue we will have to resolve within the Customs Union and the Eurasian Union, which is to be launched on January 1, 2015. Your colleagues have already asked about it. We need to synchronise our tax rates, bearing in mind that if the tax rates in Kazakhstan, the Russian Federation and Belarus are different, all the businesses will move to the country with the lowest taxes.

We are working on this with our colleagues, but we must maintain a balanced approach to avoid any serious blows to business; moreover, we must retain favourable operating conditions for them, while protecting the state’s financial interests. We will make sure we make this known in advance. This will be a free, open discussion conducted, among other places, in the Parliaments of Russia, Belarus and Kazakhstan.

I know I should give my colleagues a chance to come to this stand. I would like to have a longer discussion with you on these and other issues; I know you have quite a few questions. I would like to thank you for your interest in this conversation with me as a representative of the Russian Federation. I invite you all to Russia and wish you all the best.

Thank you very much.

http://www.informationclearinghouse.info/article40201.htm

Russia’s Vulnerability to EU – US Sanctions and Military Encroachments

By Prof. James Petras

November 11, 2014 “ICH” –   Introduction: The US-EU sponsored coup in the Ukraine and its conversion from a stable Russian trading partner, to a devastated EU economic client and NATO launch pad, as well as the subsequent economic sanctions against Russia for supporting the Russian ethnic majority in the Donbas region and Crimea, illustrate the dangerousvulnerability of the Russian economy and state.

The current effort to increase Russia’s national security and economic viability in the face of these challenges requires a critical analysis of the policies and structures emerging in the post-Soviet era.

Pillage as Privatization

Over the past quarter century, several trillion dollars worth of public property in every sector of the Russian economy was illegally transferred or violently seized by gangster-oligarchs acting through armed gangs, especially during its ‘transition to capitalism’.

From 1990 to 1999, over 6 million Russian citizens died prematurely as a result of the catastrophic collapse of the economy; life expectancy for males declined from 67 years during the Soviet era to 55 year during the Yeltsin period. Russia’s GNP declined sixty percent – a historic first for a country not at war. Following Yeltsin’s violent seizure of power and his bombing of the Russian parliament, the regime proceeded to ‘prioritize’ the privatization of the economy, selling off the energy, natural resources, banking, transport and communication sectors at one-tenth or less of their real value to well-connected cronies and foreign entities. Armed thugs, organized by emerging oligarchs “completed” the program of privatization by assaulting, murdering and threatening rivals. Hundreds of thousands of elderly pensioners were tossed out of their homes and apartments in a vicious land-grab by violent property speculators. US and European academic financial consultants “advised” rival oligarchs and government ministers on the most “efficient” market techniques for pillaging the economy, while skimming off lucrative fees and commissions –fortunes were made for the well-connected. Meanwhile, living standards collapsed, impoverishing two thirds of Russian households, suicides quadrupled and deaths from alcoholism, drug addiction, HIV and venereal diseases became rampant. Syphilis and tuberculosis reached epidemic proportions – diseases fully controlled during the Soviet era remerged with the closure of clinics and hospitals.

Of course, the respectable western media celebrated the pillage of Russia as the transition to “free elections and a free market economy”. They wrote glowing articles describing the political power and dominance of gangster oligarchs as the reflection of a rising “liberal democracy”. The Russian state was thus converted from a global superpower into an abject client regime penetrated by western intelligence agencies and unable to govern and enforce its treaties and agreements with Western powers. The US and EU rapidly displaced Russian influence in Eastern Europe and quickly snapped up former state-owned industries, the mass media and financial institutions. Communist and leftist and even nationalist officials were ousted and replaced by pliant and subservient ‘free market’ pro-NATO politicians. The US and EU violated every single agreement signed by Gorbachev and the West: Eastern European regimes became NATO members; West Germany annexed the East and military bases were expanded right up to Russia’s borders. Pro-NATO “think tanks” were established and supplied intelligence and anti-Russian propaganda. Hundreds of NGOs, funded by the US, operated within Russia as propaganda and organizing instruments for “subservient” neo-liberal politicians. In the former Soviet Caucuses and Far East, the West fomented separatist sectarian movements and armed uprisings, especially in Chechnya; the US sponsored dictators in the Caucuses and corrupt neo-liberal puppets in Georgia. The Russian state was colonized and its putative ruler, Boris Yeltsin, often in a drunken stupor, was propped up and manipulated to scratch out executive fiats . . . further disintegrating the state and society.

The Yeltsin decade is observed and remembered by the Russian people as a disaster and by the US-EU, the Russian oligarchs and their followers as a ‘Golden Age’… of pillage. For the immense majority of Russians it was the Dark Ages when Russian science and culture were ravaged; world-class scientists, artists and engineers were starved of incomes and driven to despair, flight and poverty. For the US, the EU and the oligarchs it was the era of ‘easy pickings’: economic, cultural and intellectual pillage, billion dollar fortunes, political impunity, unbridled criminality and subservience to Western dictates. Agreements with the Russian state were violated even before the ink was dry. It was the era of the unipolar US-centered world, the ‘New World Order’ where Washington could influence and invade nationalist adversaries and Russian allies with impunity.

The Golden Era of unchallenged world domination became the Western ‘standard’ for judgingRussia after Yeltsin. Every domestic and foreign policy, adopted during the Putin years 2000 – 2014, has been judged by Washington according to whether it conformed or deviated from the Yeltsin decade of unchallenged pillage and manipulation.

The Putin Era: State and Economic Reconstruction and EU-US Belligerence

President Putin’s first and foremost task was to end Russia’s collapse into nothingness. Over time, the state and economy recovered some semblance of order and legality. The economy began to recover and grow; employment, wages and living standards, and mortality rates improved. Trade, investment and financial transactions with the West were normalized – unadulterated pillage was prosecuted. Russia’s recovery was viewed by the West withambiguity: Many legitimate business people and MNCs welcomed the re-establishment of law and order and the end of gangsterism; in contrast, policymakers in Washington and Brussels as well as the vulture capitalists of Wall Street and the City of London quickly condemned what they termed Putin’s ‘rising authoritarianism’ and ‘statism’, as Russian authorities began to investigate the oligarchs for tax evasion, large-scale money laundering, the corruption of public officials and even murder.

Putin’s rise to power coincided with the world-wide commodity boom. The spectacular rise in the price of Russian oil and gas and metals (2003-2013) allowed the Russian economy to grow at a rapid rate while the Russian state increased its regulation of the economy and began to restore its military. Putin’s success in ending the most egregious forms of pillage of the Russian economy and re-establishing Russian sovereignty made him popular with the electorate: he was repeatedly re-elected by a robust majority. As Russia distanced itself from the quasi-satellite policies, personnel and practices of the Yeltsin years, the US and EU launched a multi-prong hostile political strategy designed to undermine President Putin and restore pliant Yeltsin-like neo-liberal clones to power. Russian NGOs funded by US foundations and acting as CIA fronts, organized mass protests targeting the elected officials. Western-backed ultra-liberal political parties competed unsuccessfully for national and local offices. The US-funded Carnegie Center, a notorious propaganda mill, churned out virulent tracts purporting to describe Putin’s demonic ‘authoritarian’ policies, his ‘persecution’ of dissident oligarchs and his ‘return’ to a ‘Soviet style command economy’.

While the West sought to restore the ‘Golden Age of Pillage’ via internal political surrogates, it pursued an aggressive foreign policy designed to eliminate Russian allies and trading partners, especially in the Middle East. The US invaded Iraq, murdered Saddam Hussein and the Baath Party leadership, and established a sectarian puppet regime, eliminating Moscow’s key secular-nationalist ally in the region. The US decreed sanctions on Iran, a major lucrative trading partner with Russia. The US and the EU backed a large-scale armed insurgency to overthrow President Bashaar Assad in Syria, another Russian ally, and to deprive the Russian Navy of a friendly port on the Mediterranean. The US and the EU bombed Libya, a major oil and trade partner of Russia (and China) hoping to install a pro-Western client regime.

Goading Russia in the Caucasus and on the Black Sea, the US backed-Georgian regime invaded a Russian protectorate, South Ossetia, in 2008, killing scores of Russian peace keepers and hundreds of civilians, but was repelled by a furious Russian counter-attack.

In 2014, the Western offensive to isolate, encircle and eventually undermine any possibility of an independent Russian state went into high gear. The US financed a civil-military coup ousting the elected regime of President Viktor Yanukovytch, who had opposed EU annexation and NATO affiliation. Washington imposed a puppet regime deeply hostile to Russia and ethnic Russian-Ukrainian citizens in the southeast and Crimea. Russian opposition to the coup and support for pro-democracy federalists in the south-east and Crimea served as a pretext for Western sanctions in an effort to undermine Russia’s oil, banking and manufacturing sectors and to cripple its economy.

Imperial strategists in Washington and Brussels broke all previous agreements with the Putin Administration and tried to turn Putin’s oligarch allies against the Russian president by threatening their holdings in the West (especially laundered bank accounts and properties). Russian state oil companies, engaged in joint ventures with Chevron, Exxon, and Total, were suddenly cut off from Western capital markets.

The cumulative impact of this decade-long Western offensive culminating in the current wave of severe sanctions was to provoke a recession in Russia, to undermine the currency (the ruble declined 23% in 2014), drive up the cost of imports and hurt local consumers. Russian industries, dependent on foreign equipment and parts, as well as oil companies dependent on imported technology for exploiting the Arctic reserves were made to feel the pain of ‘Putin’s intransigence’.

Despite the short-term successes of the US-EU war against the Russian economy, the Putin Administration has remained extremely popular among the Russian electorate, with approval ratings exceeding 80%. This has relegated Putin’s pro-Western opposition to the dust bin of history. Nevertheless the Western sanctions policy and the aggressive political – NATO military encirclement of Russia, has exposed the vulnerabilities of Moscow.

Russian Vulnerabilities: The Limits of Putin’s Restoration of Russian Sovereignty

In the aftermath of the Western and Russian oligarch’s pillage of the Russian economy and the savage degradation of Russian society, President Putin pursued a complex strategy.

First, he sought to differentiate between ‘political’ and ‘economic’ oligarchs: the latter included oligarchs willing to co-operate with the government in rebuilding the economy and willing to confine their activity to the generous guidelines set forth by President Putin. They retained enormous economic power and profits, but not political power.
In exchange, Putin allowed the ‘economic’ oligarchs to maintain their dubiously-acquired business empires. In contrast, those oligarchs who sought political power and financed Yeltsin-era politicians were targeted – some were stripped of their fortunes and others were prosecuted for crimes, ranging from money laundering, tax evasion, swindles and illegal transfer of funds overseas up to financing the murder of their rivals.

The second focus of President Putin’s early political strategy was to deepen Russiancooperation with Western states and economies but on the basis of reciprocal market exchanges rather than one-sided, Western appropriation of Russian resources prevalent under Yeltsin. Putin sought to secure greater political-military integration with the US and EU to ensure Russian borders and spheres of influence. To that end, President Putin opened Russian military bases and supply lines for the US-EU military forces engaged in the invasion and occupation of Afghanistan and he did not oppose the EU-US sanctions against Iran. Putin acquiesced to the US invasion and occupation of Iraq, despite Russia’s long standing economic ties with Baghdad. He joined the five powers ‘overseeing” the Palestine – Israeli ‘peace’ talks and went along with Washington’s one-sided support of Israel. He even gave the ‘green light’ to the NATO bombing of Libya, naively assuming it would be a limited affair – a ‘humanitarian’ intervention.

As a result of Putin’s political and diplomatic collusion with the Washington-NATO military expansion, Russian trade, investment and finance with the West prospered. Russian firms raised loans in Western capital markets; foreign investors flocked to the Russian stock market and multi-nationals formed joint ventures. Major oil and gas ventures flourished. The Russian economy recovered the living standards of the Soviet era; consumer spending boomed; unemployment fell from double to single digit; salaries and back wages were paid and research centers, universities, schools and cultural institutions began to recover.

The third component of Putin’s strategy was the state recovery (re-nationalization) of the strategic oil and gas sector. By outright purchase and buy-outs, through financial audits and the confiscation of the assets of gangster oligarchs, the Russian state takeover of oil and gas was successful. These re-nationalized sectors formed joint ventures with Western oil giants and led Russian exports during a period of peak energy demand. With the rise in oil prices over the Putin decade, Russia experienced a consumer-driven import boom – from agricultural commodities to luxury jewelry and autos… Putin consolidated his electoral support and deepened Russia’s ‘integration’ in Western markets.

Putin’s expansion and growth strategy looked exclusively westward to the EU and US, and not east to Asia/China or south to Latin America.

With this focus on the West, Putin’s initial tactical success began to expose Russia’s strategic vulnerabilities. The first signs were evident in the Western support for the corrupt oligarchs’ anti-Putin campaign and the media’s demonization of the Russian judicial system which prosecuted and convicted gangster oligarchs, like Mikhail Khodorkovsky . The second sign was the West’s financial and political support of the Yeltsin-era neo-liberals competing against Putin’s United Russia Party and candidates…It became clear that Putin’s effort to restore Russian sovereignty conflicted with the West’s plans to maintain Russia as a vassal state. The West favorably counterpoised the Golden Years of unrestrained pillage and domination of the Yeltsin period to the Putin era of an independent and dynamic Russia – by constantly tying the Russian president to the defunct Soviet Union and the KGB.

In 2010, the US encouraged its client, President Saakashvili of Georgia to invade Russia’s protectorate in South Ossetia. This was the first major indication that Putin’s accommodation with the West was counter-productive. Russian territorial borders, its allies and spheres of influence became Western targets. The US and EU condemned Russia’s defensive response even as Moscow withdrew its troops from Georgia after applying a sound beating.

Georgia was a militarist dress rehearsal; one of several western planned and financed coups – some dubbed ‘color revolutions’ other’s NATO ‘humanitarian interventions’. Yugoslavia in the Balkans was fragmented by NATO bombing and Ukraine had several ‘color’ uprisings up to the present bloody ‘civil war’. Washington and Brussels interpreted Putin’s series of conciliatory measures as weakness and felt free to encroach further on Russia’s frontier and to knock off regimes friendly to Russia.

By the middle of the second decade of the new century, the US and EU made a major strategic decision to weaken Russia’s security and its economy sovereignty: to seize control over Ukraine, expel Russia from its Black Sea military base in Crimea, convert the Ukraine into an advanced NATO outpost and cut Eastern Ukraine’s economic ties with Russia – especially the Russian market for the strategic Ukrainian military weaponry. The coup was financed by the West, while far-right and neo-Nazi Ukraine gangs provided the shock troops .The Kiev junta organized a war of conquest directed at purging the anti-coup, pro-democracy forces in the southeast Donbas region with its Russian ethnic majority and heavy industrial ties to Russia.

When Putin finally recognized the clear danger to Russia’s national security, his government responded by annexing Crimea after a popular referendum and started to provide sanctuary and supply lines for the embattled anti-Kiev federalists in eastern Ukraine. The West exploited thevulnerabilities in the Russian economy, which had resulted from Putin’s development model, and imposed wide-reaching economic sanctions designed to cripple Russia’s economy.

Western Sanctions, Russian Weakness: Rethinking Putin’s Strategic Approach

Western aggressive militarism and the sanctions against Russia exposed several critical vulnerabilities of Putin’s economic and political strategy. These include (1) his dependence on Western-oriented ‘economic oligarchs’ to promote his strategy for Russian economic growth; (2) his acceptance of most of the privatizations of the Yeltsin era; (3) his decision to focus on trade with the West, ignoring the China market, (4) his embrace of a gas and oil export strategy instead of developing a diversified economy; (5) his dependence on his allied robber-baron oligarchs – with no real experience in developing industry, no true financial skills, scant technological expertise and no concept of marketing – to restore and run the peak manufacturing sector. In contrast to the Chinese, the Russian oligarchs have been totally dependent on Western markets, finance and technology and have done little to develop domestic markets, implement self-financing by re-investing their profits or upgrade productivity via Russian technology and research.

In the face of Western sanctions Putin’s leading oligarch-allies are his weakest link in formulating an effective response. They press Putin to give in to Washington as they plead with Western banks to have their properties and accounts exempt from the sanctions. They are desperate to protect their assets in London and New York. In a word, they are desperate for President Putin to abandon the freedom fighters in southeast Ukraine and cut a deal with the Kiev junta.

This highlights the contradiction within Putin’s strategy of working with the ‘economic’oligarchs, who have agreed not to oppose Putin within Russia, while transferring their massive wealth to Western banks, investing in luxury real estate in London, Paris and Manhattan and forming loyalties outside of Russia. In effect, they are closely tied to Russia’s current political enemies. Putin’s tactical success in harnessing oligarchs to his project of growth via stability has turned into a strategic weakness in defending the country from crippling economic reprisals.

Putin’s acceptance of the Yeltsin-era privatizations provided a certain stability in the short-run but it led to the massive flight of private capital overseas rather than remaining to be invested in projects to insure greater self-sufficiency. Today the capacity of the Russian government to mobilize and convert its economy into an engine of growth and to withstand imperial pressure is much weaker than the economy would have been if it was under greater state control. Putin will have a difficult time convincing private owners of major Russian industries to make sacrifices – they are too accustomed to receiving favors, subsidies and government contracts. Moreover, as their financial counterparts in the West press for payments on debts and deny new credits, the private elites are threatening to declare bankruptcy or to cut back production and discharge workers.

The rising tide of Western military encroachments on Russia’s borders, the string of broken promises regarding the incorporation of Eastern Europe into NATO and the bombing and destruction of Yugoslavia in the 1990’s, should have shown Putin that no amount of unilateral concessions was likely to win Western acceptance as a bona fide “partner”. Washington and Brussels were unwavering in their strategy to encircle and maintain Russia as a client.

Instead of turning west and offering support for US-NATO wars, Russia would have been in a far better position to resist sanctions and current military threats if it had diversified and oriented its economy and markets toward Asia, in particular China, with its dynamic economic growth and expanding domestic market, investment capacity and growing technical expertise. Clearly, China’s foreign policy has not been accompanied by wars and invasion of Russian allies and encroachment on Russia’s borders. While Russia has now turned to increase economic ties with Asia in the face of growing NATO threats, a great deal of time and space has been lost over the past 15 years. It will take another decade to reorient the Russian economy, with its major industries still controlled by the mediocre oligarchs and kleptocrats, holdovers from the Yeltsin period.

With the closure of Western markets, Putin has had to ‘pivot’ to China, other Asian nations and Latin America to find new markets and economic partners. But his growth strategy still depends on oil and gas exports and most of Russia’s private ‘business leaders’ are not real entrepreneurs capable of developing new competitive products, substituting Russian technology and inputs and identifying profitable markets. This generation of Russian ‘business leaders’ did not build their economic empires or conglomerates from the ‘bottom up’ – they seized and pillaged their assets from the public sector and they grew their wealth through state contracts and protection. Moscow now asks them to find alternative overseas markets, to innovate, compete and replace their dependence on German machinery.

The bulk of what passes for the Russian industrial capitalist class are not entrepreneurs, they are more like rent collectors and cronies – oriented to the West. Their origins are more often as gangsters and warlords who early on strong- armed their rivals out of the public giveaways of the 1990’s. While these oligarchs have sought to gain respectability after consolidating their economic empires and hired public relations agencies to polish their images and economic consultants to advise them on investments, they have never demonstrated any capacity to grow their firms into competitive enterprises. Instead they remained wholly dependent on capital, technology and intermediary imports from the West and subsidies from the Putin Administration.

The so-called Russian “capitalist” rentiers stand in sharp contrast to the dynamic Chinese public and private entrepreneurs – who borrowed overseas technology from the US, Japan, Taiwan and Germany, adapted and improved on the technology and are producing advanced highly competitive products. When the US-EU sanctions came into force, Russian industry found itself unprepared to substitute local production and President Putin had to arrange trade and import agreements with China and other sources for inputs.

The biggest strategic flaw in Putin’s economic strategy was his decision to concentrate on gas and oil exports to the West as his ‘engine of growth’. This resulted in Russia’s dependency on high prices for commodity exports and Western markets. With this in mind the US and EU exploited Russia’s vulnerability to any drop in the world price for energy and its dependence on Western oil extraction technology, equipment and joint ventures.

Putin’s policy has relied on a vision of economic integration with the West alongside greater co-operation and political connections with the NATO powers. These assumptions have been proven wrong by the march of events: US and EU cooperation was tactical and contingent on asymmetrical, indeed unilateral, concessions from Russia – especially its continued willingness to sacrifice its traditional allies in the Balkans, Middle East, North Africa and especially the Caucuses. Once Russia began to assert its own interests, the West turned hostile and confrontational. Ever since Russia opposed the coup regime in Kiev, the West’s goal has been the overthrow of Putin’s Russia. The ongoing Western offensive against Russia is not a passing phase: it is the beginning of a prolonged, intensified economic and political confrontation.

Though Russia is vulnerable, it is not without resources and capacity to resist, defend its national security and advance its economy.

Conclusion: What is to be Done?

First and foremost Russia must diversify its economy; it must industrialize its raw materials and invest heavily in substituting local production for Western imports. While shifting its trade to China is a positive step, it must not replicate the previous commodities (oil and gas) for manufactured goods trading pattern of the past.

Secondly, Russia must re-nationalize its banking, foreign trade and strategic industries, ending the dubious political and economic loyalties and rentier behavior of the current dysfunctional private ‘capitalist’ class. The Putin Administration must shift from oligarchs to technocrats, from rentiers to entrepreneurs, from speculators who earn in Russia and invest in the West to workers co-participation– in a word it must deepen the national, public, and productivecharacter of the economy. It is not enough to claim that oligarchs who remain in Russia and declare loyalty to the Putin Administration are legitimate economic agents. They have generally disinvested from Russia, transferred their wealth abroad and have questioned legitimate state authority under pressure from Western sanctions.

Russia needs a new economic and political revolution – in which the government recognizes the West as an imperial threat and in which it counts on the organized Russian working class and not on dubious oligarchs. The Putin Administration has pulled Russia from the abyss and has instilled dignity and self-respect among Russians at home and abroad by standing up to Western aggression in the Ukraine. >From this point on, President Putin needs to move forward and dismantle the entire Yeltsin klepto-state and economy and re-industrialize, diversify and develop its own high technology for a diversified economy. And above all Russia needs to create new democratic, popular forms of democracy to sustain the transition to a secure, anti-imperialist and sovereign state. President Putin has the backing of the vast majority of Russian people; he has the scientific and professional cadre; he has allies in China and among the BRICs; and he has the will and the power to “do the right thing”. The question remains whether Putin will succeed in this historical mission or whether, out of fear and indecision, he will capitulate before the threats of a dangerous and decaying West.

James Petras is a Bartle Professor (Emeritus) of Sociology at Binghamton University, New York.

http://www.informationclearinghouse.info/article40188.htm

Russia’s Vulnerability to EU – US Sanctions and Military Encroachments

Global Research, November 09, 2014

putin041The US-EU sponsored coup in the Ukraine and its conversion from a  stable Russian trading partner, to a devastated EU economic client and NATO launch pad, as well as the subsequent economic sanctions against Russia for supporting the Russian ethnic majority in the Donbas region and Crimea, illustrate the dangerous vulnerability of the Russian economy and state.  The current effort to increase Russia’s national security and economic viability in the face of these challenges requires a critical analysis of the policies and structures emerging in the post-Soviet era.

Pillage as Privatization

Over the past quarter century, several trillion dollars worth of public property in every sector of the Russian economy was illegally transferred or violently seized by gangster-oligarchs acting through armed gangs, especially during its ‘transition to capitalism’.

 From 1990 to 1999, over 6 million Russian citizens died prematurely as a result of the catastrophic collapse of the economy; life expectancy for males declined from 67 years during the Soviet era to 55 year during the Yeltsin period.  Russia’s GNP declined sixty percent – a historic first for a country not at war.  Following  Yeltsin’s violent seizure of power and his bombing of the Russian parliament, the regime proceeded to ‘prioritize’ the privatization of the economy, selling off the energy, natural resources, banking, transport and communication sectors at one-tenth or less of their real value to well-connected cronies and foreign entities.  Armed thugs, organized by emerging oligarchs “completed” the program of privatization by assaulting, murdering and threatening rivals.  Hundreds of thousands of elderly pensioners were tossed out of their homes and apartments in a vicious land-grab by violent property speculators.

US and European academic financial consultants “advised” rival oligarchs and government ministers on the most “efficient” market techniques for pillaging the economy, while skimming off lucrative fees and commissions –fortunes were made for the well-connected.  Meanwhile, living standards collapsed, impoverishing two thirds of Russian households, suicides quadrupled and deaths from alcoholism, drug addiction, HIV and venereal diseases became rampant.  Syphilis and tuberculosis reached epidemic proportions – diseases fully controlled during the Soviet era remerged with the closure of clinics and hospitals.

Of course, the respectable western media celebrated the pillage of Russia as the transition to “free elections and a free market economy”.  They wrote glowing articles describing the political power and dominance of gangster oligarchs as the reflection of a rising “liberal democracy”.  The Russian state was thus converted from a global superpower into an abject client regime penetrated by western intelligence agencies and unable to govern and enforce its treaties and agreements with Western powers.  The US and EU rapidly displaced Russian influence in Eastern Europe and quickly snapped up former state-owned industries, the  mass media and financial institutions.  Communist and leftist and even nationalist officials were ousted and replaced by pliant and subservient ‘free market’ pro-NATO politicians.

The US and EU violated every single agreement signed by Gorbachev and the West:  Eastern European regimes became NATO members; West Germany annexed the East and military bases were expanded right up to Russia’s borders.  Pro-NATO “think tanks” were established and supplied intelligence and anti-Russian propaganda. Hundreds of NGOs, funded by the US, operated within Russia as propaganda and organizing instruments for “subservient” neo-liberal politicians.  In the former Soviet Caucuses and Far East, the West fomented separatist sectarian movements and armed uprisings, especially in Chechnya; the US sponsored dictators in the Caucuses and corrupt neo-liberal puppets in Georgia.  The Russian state was colonized and its putative ruler, Boris Yeltsin, often in a drunken stupor, was propped up and manipulated to scratch out executive fiats . . . further disintegrating the state and society.

The Yeltsin decade is observed and remembered by the Russian people as a disaster and by the US-EU, the Russian oligarchs and their followers as a ‘Golden Age’… of pillage.  For the immense majority of Russians it was the Dark Ages when Russian science and culture were ravaged; world-class scientists, artists and engineers were starved of incomes and driven to despair, flight and poverty.  For the US, the EU and the oligarchs it was the era of ‘easy pickings’: economic, cultural and intellectual pillage, billion dollar fortunes, political impunity, unbridled criminality and subservience to Western dictates.  Agreements with the Russian state were violated even before the ink was dry.  It was the era of the unipolar US-centered world, the ‘New World Order’ where Washington could influence and invade nationalist adversaries and Russian allies with impunity.

The Golden Era of unchallenged world domination became the Western ‘standard’ for judging Russia after Yeltsin.  Every domestic and foreign policy, adopted during the Putin years 2000 – 2014, has been judged by Washington according to whether it conformed or deviated from the Yeltsin decade of unchallenged pillage and manipulation.

The Putin Era:  State and Economic Reconstruction and EU-US Belligerence

President Putin’s first and foremost task was to end Russia’s collapse into nothingness.  Over time, the state and economy recovered some semblance of order and legality.  The economy began to recover and grow; employment, wages and living standards, and mortality rates improved.  Trade, investment and financial transactions with the West were normalized – unadulterated pillage was prosecuted.  Russia’s recovery was viewed by the West with ambiguity:  Many legitimate business people and MNCs welcomed the re-establishment of law and order and the end of gangsterism; in contrast,  policymakers in Washington and Brussels as well as the vulture capitalists of Wall Street and the City of London quickly condemned what they termed Putin’s ‘rising authoritarianism’ and ‘statism’, as Russian authorities began to investigate the oligarchs for tax evasion, large-scale money laundering, the corruption of public officials and even murder.

Putin’s rise to power coincided with the world-wide commodity boom.  The spectacular rise in the price of Russian oil and gas and metals (2003-2013) allowed the Russian economy to grow at a rapid rate while the Russian state increased its regulation of the economy and began to restore its military.  Putin’s success in ending the most egregious forms of pillage of the Russian economy and re-establishing Russian sovereignty made him popular with the electorate: he was repeatedly re-elected by a robust majority.

As Russia distanced itself from the quasi-satellite policies, personnel and practices of the Yeltsin years, the US and EU launched a multi-prong hostile political strategy designed to undermine President Putin and restore pliant Yeltsin-like neo-liberal clones to power.  Russian NGOs funded by US foundations and acting as CIA fronts, organized mass protests targeting the elected officials.  Western-backed ultra-liberal political parties competed unsuccessfully for national and local offices.  The US-funded Carnegie Center, a notorious propaganda mill, churned out virulent tracts purporting to describe Putin’s demonic ‘authoritarian’ policies, his ‘persecution’ of dissident oligarchs and his ‘return’ to a ‘Soviet style command economy’.

While the West sought to restore the ‘Golden Age of Pillage’ via internal political surrogates, it pursued an aggressive foreign policy designed to eliminate Russian allies and trading partners, especially in the Middle East.  The US invaded Iraq, murdered Saddam Hussein and the Baath Party leadership, and established a sectarian puppet regime, eliminating Moscow’s key secular-nationalist ally in the region.  The US decreed sanctions on Iran, a major lucrative trading partner with Russia.  The US and the EU backed a large-scale armed insurgency to overthrow President Bashaar Assad in Syria, another Russian ally, and to deprive the Russian Navy of a friendly port on the Mediterranean.  The US and the EU bombed Libya, a major oil and trade partner of Russia (and China) hoping to install a pro-Western client regime.

Goading Russia in the Caucasus and on the Black Sea, the US backed-Georgian regime invaded a Russian protectorate, South Ossetia, in 2008, killing scores of Russian peace keepers and hundreds of civilians, but was repelled by a furious Russian counter-attack.

In 2014, the Western offensive to isolate, encircle and eventually undermine any possibility of an independent Russian state went into high gear.  The US financed a civil-military coup ousting the elected regime of President Viktor Yanukovytch, who had opposed EU annexation and NATO affiliation.  Washington imposed a puppet regime deeply hostile to Russia and ethnic Russian-Ukrainian citizens in the southeast and Crimea.  Russian opposition to the coup and support for  pro-democracy federalists in the south-east and Crimea served as a pretext for Western sanctions in an effort to undermine Russia’s oil, banking and manufacturing sectors and to cripple its economy.

Imperial strategists in Washington and Brussels broke all previous agreements with the Putin Administration and tried to turn Putin’s oligarch allies against the Russian president by threatening their holdings in the West (especially laundered bank accounts and properties).  Russian state oil companies, engaged in joint ventures with Chevron, Exxon, and Total, were suddenly cut off from Western capital markets.

The cumulative impact of this decade-long Western offensive culminating in the current wave of severe sanctions was to provoke a recession in Russia, to undermine the currency (the ruble declined 23% in 2014), drive up the cost of imports and hurt local consumers.  Russian industries, dependent on foreign equipment and parts, as well as oil companies dependent on imported technology for exploiting the Arctic reserves were made to feel the pain of ‘Putin’s intransigence’.

Despite the short-term successes of the US-EU war against the Russian economy, the Putin Administration has remained extremely popular among the Russian electorate, with approval ratings exceeding 80%.  This has relegated Putin’s pro-Western opposition to the dust bin of history.  Nevertheless the Western sanctions policy and the aggressive political – NATO military encirclement of Russia, has exposed the vulnerabilities of Moscow.

Russian Vulnerabilities:  The Limits of Putin’s Restoration of Russian Sovereignty

In the aftermath of the Western and Russian oligarch’s pillage of the Russian economy and the savage degradation of Russian society, President Putin pursued a complex strategy.

First, he sought to differentiate between ‘political’ and ‘economic’ oligarchs:  the latter included oligarchs willing to co-operate with the government in rebuilding the economy and willing to confine their activity to the generous guidelines set forth by President Putin.  They retained enormous economic power and profits, but not political power. In exchange, Putin allowed the ‘economic’ oligarchs to maintain their dubiously-acquired business empires.  In contrast, those oligarchs who sought political power and financed Yeltsin-era politicians were targeted – some were stripped of their fortunes and others were prosecuted for crimes, ranging from money laundering, tax evasion, swindles and illegal transfer of funds overseas up to financing the murder of their rivals.

The second focus of President Putin’s early political strategy was to deepen Russian cooperation with Western states and economies but on the basis of reciprocal market exchanges rather than one-sided, Western appropriation of Russian resources prevalent under Yeltsin.  Putin sought to secure greater political-military integration with the US and EU to ensure Russian borders and spheres of influence.  To that end, President Putin opened Russian military bases and supply lines for the US-EU military forces engaged in the invasion and occupation of Afghanistan and he did not oppose the EU-US sanctions against Iran.  Putin acquiesced to the US invasion and occupation of Iraq, despite Russia’s long standing economic ties with Baghdad.   He joined the five powers ‘overseeing” the Palestine – Israeli ‘peace’ talks and went along with Washington’s one-sided support of Israel.  He even gave the ‘green light’ to the NATO bombing of Libya, naively assuming it would be a limited affair – a ‘humanitarian’ intervention.

As a result of Putin’s political and diplomatic collusion with the Washington-NATO military expansion, Russian trade, investment and finance with the West prospered.  Russian firms raised loans in Western capital markets; foreign investors flocked to the Russian stock market and multi-nationals formed joint ventures.  Major oil and gas ventures flourished.  The Russian economy recovered the living standards of the Soviet era; consumer spending boomed; unemployment fell from double to single digit; salaries and back wages were paid and research centers, universities, schools and cultural institutions began to recover.

The third component of Putin’s strategy was the state recovery (re-nationalization) of the strategic oil and gas sector.  By outright purchase and buy-outs, through financial audits and the confiscation of the assets of gangster oligarchs, the Russian state takeover of oil and gas was successful.  These re-nationalized sectors formed joint ventures with Western oil giants and led Russian exports during a period of peak energy demand.  With the rise in oil prices over the Putin decade, Russia experienced a consumer-driven import boom – from agricultural commodities to luxury jewelry and autos… Putin consolidated his electoral support and deepened Russia’s ‘integration’ in Western markets.

Putin’s expansion and growth strategy looked exclusively westward to the EU and US, and not east to Asia/China or south to Latin America.

With this focus on the West, Putin’s initial tactical success began to expose Russia’s strategic vulnerabilities.  The first signs were evident in the Western support for the corrupt  oligarchs’ anti-Putin campaign and the media’s demonization of the Russian judicial system which prosecuted and convicted gangster oligarchs, like Mikhail Khodorkovsky .  The second sign was the West’s financial and political support of the Yeltsin-era neo-liberals competing against Putin’s United Russia Party and candidates…It became clear that Putin’s effort to restore Russian sovereignty conflicted with the West’s plans to maintain Russia as a vassal state.  The West favorably counterpoised the Golden Years of unrestrained pillage and domination of the Yeltsin period to the Putin era of an independent and dynamic Russia – by constantly tying the Russian president to the defunct Soviet Union and the KGB.

In 2010, the US encouraged its client, President Saakashvili of Georgia to invade Russia’s protectorate in South Ossetia.  This was the first major indication that Putin’s accommodation with the West was counter-productive.  Russian territorial borders, its allies and spheres of influence became Western targets.  The US and EU condemned Russia’s defensive response even as Moscow withdrew its troops from Georgia after applying a sound beating.

Georgia was a militarist dress rehearsal; one of several western planned and financed coups – some dubbed ‘color revolutions’ other’s NATO ‘humanitarian interventions’.  Yugoslavia in the Balkans was fragmented by NATO bombing and Ukraine had several ‘color’ uprisings up to the present bloody ‘civil war’.  Washington and Brussels interpreted Putin’s series of conciliatory measures as weakness and felt free to encroach further on Russia’s frontier and to knock off regimes friendly to Russia.

By the middle of the second decade of the new century, the US and EU made a major strategic decision to weaken Russia’s security and its economy sovereignty:  to seize control over Ukraine, expel Russia from its Black Sea military base in Crimea, convert the Ukraine into an advanced NATO outpost and cut Eastern Ukraine’s economic ties with Russia – especially the Russian market for the strategic Ukrainian military weaponry.  The coup was financed by the West, while far-right and neo-Nazi Ukraine gangs provided the shock troops .The Kiev junta organized  a war of conquest  directed at purging the anti-coup, pro-democracy forces in the southeast Donbas region with its Russian ethnic majority and heavy industrial ties to Russia.

When Putin finally recognized the clear danger to Russia’s national security, his government responded by annexing Crimea after a popular referendum and started to provide sanctuary and supply lines for the embattled anti-Kiev federalists in eastern Ukraine.  The West exploited the vulnerabilities in the Russian economy, which had resulted from Putin’s development model, and imposed wide-reaching economic sanctions designed to cripple Russia’s economy.

Western Sanctions, Russian Weakness: Rethinking Putin’s Strategic Approach

Western aggressive militarism and the sanctions against Russia exposed several critical vulnerabilities of Putin’s economic and political strategy.  These include (1) his dependence on Western-oriented ‘economic oligarchs’ to promote his strategy for Russian economic growth; (2) his acceptance of most of the privatizations of the Yeltsin era; (3) his decision to focus on trade with the West, ignoring the China market, (4) his embrace of a gas and oil export strategy instead of developing a diversified economy; (5) his dependence on his allied robber-baron oligarchs – with no real experience in developing industry, no true financial skills, scant technological expertise and no concept of marketing – to restore and run the peak manufacturing sector.  In contrast to the Chinese, the Russian oligarchs have been totally dependent on Western markets, finance and technology and have done little to develop domestic markets, implement self-financing by re-investing their profits or upgrade productivity via Russian technology and research.

In the face of Western sanctions Putin’s leading oligarch-allies are his weakest link in formulating an effective response.  They press Putin to give in to Washington as they plead with Western banks to have their properties and accounts exempt from the sanctions. They are desperate to protect their assets in London and New York.  In a word, they are desperate for President Putin to abandon the freedom fighters in southeast Ukraine and cut a deal with the Kiev junta.

This highlights the contradiction within Putin’s strategy of working with the ‘economic’ oligarchs, who have agreed not to oppose Putin within Russia, while transferring their massive wealth to Western banks, investing in luxury real estate in London, Paris and Manhattan and forming loyalties outside of Russia.  In effect, they are closely tied to Russia’s current political enemies.  Putin’s tactical success in harnessing oligarchs to his project of growth via stability has turned into a strategic weakness in defending the country from crippling economic reprisals.

Putin’s acceptance of the Yeltsin-era privatizations provided a certain stability in the short-run but it led to the massive flight of private  capital overseas rather than remaining to be invested in projects to insure greater self-sufficiency.  Today the capacity of the Russian government to mobilize and convert its economy into an engine of growth and to withstand imperial pressure is much weaker than the economy would have been if it was under greater state control. Putin will have a difficult time convincing private owners of major Russian industries to make sacrifices – they are too accustomed to receiving favors, subsidies and government contracts.  Moreover, as their financial counterparts in the West press for payments on debts and deny new credits, the private elites are threatening to declare bankruptcy or to cut back production and discharge workers.

The rising tide of Western military encroachments on Russia’s borders, the string of broken promises regarding the incorporation of Eastern Europe into NATO and the bombing and destruction of Yugoslavia in the 1990’s, should have shown Putin that no amount of unilateral concessions was likely to win Western acceptance as a bona fide “partner”.  Washington and Brussels were unwavering in their strategy to encircle and maintain Russia as a client.

Instead of turning west and offering support for US-NATO wars, Russia would have been in a far better position to resist sanctions and current military threats if it had diversified and oriented its economy and markets toward Asia, in particular China, with its dynamic economic growth and expanding domestic market, investment capacity and growing technical expertise.  Clearly, China’s foreign policy has not been accompanied by wars and invasion of Russian allies and encroachment on Russia’s borders.  While Russia has now turned to increase economic ties with Asia in the face of growing NATO threats, a great deal of time and space has been lost over the past 15 years.    It will take another decade to reorient the Russian economy, with its major industries still controlled by the mediocre oligarchs and kleptocrats, holdovers from the Yeltsin period.

With the closure of Western markets, Putin has had to ‘pivot’ to China, other Asian nations and Latin America to find new markets and economic partners.  But his growth strategy still depends on oil and gas exports and most of Russia’s private ‘business leaders’ are not real entrepreneurs capable of developing new competitive products, substituting Russian technology and inputs and identifying profitable markets.  This generation of Russian ‘business leaders’ did not build their economic empires or conglomerates from the ‘bottom up’ – they seized and pillaged their assets from the public sector and they grew their wealth through state contracts and protection.  Moscow now asks them to find alternative overseas markets, to innovate, compete and replace their dependence on German machinery.

The bulk of what passes for the Russian industrial capitalist class are not entrepreneurs, they are more like rent collectors and cronies – oriented to the West.  Their origins are more often as gangsters and warlords who early on strong- armed their rivals out of the public giveaways of the 1990’s.  While these oligarchs have sought to gain respectability after consolidating their economic empires and hired public relations agencies to polish their images and economic consultants to advise them on investments, they have never demonstrated any capacity to grow their firms into competitive enterprises.  Instead they remained wholly dependent on capital, technology and intermediary imports from the West and subsidies from the Putin Administration.

The so-called Russian “capitalist” rentiers stand in sharp contrast to the dynamic Chinese public and private entrepreneurs – who borrowed overseas technology from the US, Japan, Taiwan and Germany, adapted and improved on the technology and are producing advanced highly competitive products.  When the US-EU sanctions came into force, Russian industry found itself unprepared to substitute local production and President Putin had to arrange trade and import agreements with China and other sources for inputs.

The biggest strategic flaw in Putin’s economic strategy was his decision to concentrate on gas and oil exports to the West as his ‘engine of growth’.  This resulted in Russia’s dependency on high prices for commodity exports and Western markets.  With this in mind the US and EU exploited Russia’s vulnerability to any drop in the world price for energy and its dependence on Western oil extraction technology, equipment and joint ventures.

Putin’s policy has relied on a vision of economic integration with the West alongside greater co-operation and political connections with the NATO powers.  These assumptions have been proven wrong by the march of events:  US and EU cooperation was tactical and contingent on asymmetrical, indeed unilateral, concessions from Russia – especially its continued willingness to sacrifice its traditional allies in the Balkans, Middle East, North Africa and especially the Caucuses.  Once Russia began to assert its own interests, the West turned hostile and confrontational.  Ever since Russia opposed the coup regime in Kiev, the West’s goal has been the overthrow of Putin’s Russia.  The ongoing Western offensive against Russia is not a passing phase: it is the beginning of a prolonged, intensified economic and political confrontation.

Though Russia is vulnerable, it is not without resources and capacity to resist, defend its national security and advance its economy.

Conclusion:  What is to be Done?

First and foremost Russia must diversify its economy; it must industrialize its raw materials and invest heavily in substituting local production for Western imports.  While shifting its trade to China is a positive step, it must not replicate the previous commodities (oil and gas) for manufactured goods trading pattern of the past.

Secondly, Russia must re-nationalize its banking, foreign trade and strategic industries, ending the dubious political and economic loyalties and rentier behavior of the current dysfunctional private ‘capitalist’ class.  The Putin Administration must shift from oligarchs to technocrats, from rentiers to entrepreneurs, from speculators who earn in Russia and invest in the West to workers co-participation– in a word it must deepen the national, public, and productive character of the economy.  It is not enough to claim that oligarchs who remain in Russia and declare loyalty to the Putin Administration are legitimate economic agents. They have generally disinvested from Russia, transferred their wealth abroad and have questioned legitimate state authority under pressure from Western sanctions.

Russia needs a new economic and political revolution – in which the government recognizes the West as an imperial threat and in which it counts on the organized Russian working class and not on dubious oligarchs. The Putin Administration has pulled Russia from the abyss and has instilled dignity and self-respect among Russians at home and abroad by standing up to Western aggression in the Ukraine.  From this point on, President Putin needs to move forward and dismantle the entire Yeltsin klepto-state and economy and re-industrialize, diversify and develop its own high technology for a diversified economy.

And above all Russia needs to create new democratic, popular forms of democracy to sustain the transition to a secure, anti-imperialist and sovereign state.  President Putin has the backing of the vast majority of Russian people; he has the scientific and professional cadre; he has allies in China and among the BRICs; and he has the will and the power to “do the right thing”.

The question remains whether Putin will succeed in this historical mission or whether, out of fear and indecision, he will capitulate before the threats of a dangerous and decaying West.

http://www.globalresearch.ca/russias-vulnerability-to-eu-us-sanctions-and-military-encroachments/5412884

Does Russia want to be a European country?

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Russian President Vladimir Putin said during his speech at the Valdai Club in Sochi: “I am a European by conviction. I know that Europe and Russia share the same road and common future.” Nevertheless, it was Putin’s most anti-European of his recent speeches. What is Europe today? Does Russia want to be a European country? And most importantly – does Russia need it?

Homegrown liberals are pulling us to Europe claiming that Russians are “mentally incompatible” with Europeans. Europeans are pulling us to Europe too. For example, former Polish Ambassador to the USSR Stanislav Chosek said in an interview with Wirtualna Polska, that one must help Russia integrate into Europe, as she can not do it alone.”

Both Russian liberals and European officials are convinced that Russia is lagged behind the “progressive Europe” – from the point of view of both labor productivity and the ability to live and work honestly. The middle classes have showed their strength on Moscow’s Bolotnaya Square, so now the West only needs to put the pressure of sanction on Russia, before the middle classes will be able to topple Putin, the “tyrant” and the “aggressor.” When it happens, the West will intervene and help Russia become a European country with the Marshall Plan. “Russia has done a lot of harm, so standards require Russia is held accountable for that. However, bullying Russia is meaningless in a long-term perspective. She will grow more secluded. It seems to me that, as time goes by, Europe could appeal to Putin with an offer to help, offer something like a new Marshall Plan, so that he could reform the state from the ground up – build a democracy and a strong middle class,” said the former ambassador.

The above brings up a question – what is our primary “democratizer,” Europe, today? Today’s Europe is completely subordinated to Anglo-Saxons – the world, where large financial capital and US intelligence services play the first violin. Angela Merkel represents the country that, in fact, serves as a colony of the United States: there are US military bases, and 40 thousand troops in Germany. In case of “aggressive behavior,” America can give Germany the status of the occupation zone, according to the UN Charter.

“Europe risks losing Russia forever”

French President Francois Hollande has lost the mediating role between Russia and the West. In the Syrian conflict, he was an instigator of every kind of “friendship” against Russia. It appears that it is only his very low domestic rating that stops Hollande from acting similarly when it comes to the Ukrainian crisis. Other colonial powers – Spain, Italy, Portugal – fall apart economically and (or) territorially.

Today’s Europe is also the European Union. To become a member of the European Union, one needs to become a NATO member first. Afterwards, appointments of all key ministers must be coordinated with the USA.

The topic of Russia as an aggressor is not new at all. The subject starts from the era of Ivan the Terrible, although the number of his victims pales in comparison with the number of those, whom Catholics killed on St. Bartholomew’s Day Massacre. The Russian Empire was not at all aggressive, nor was the Soviet “empire.” It was based on the Byzantine Orthodox state model, which stipulated for the unification of peoples, based on principles of equality.

Alexander I, for example, gave Poland its Constitution and the Sejm, the Finns also had their own statehood; the Russians were reputed as liberators in two world wars, and the Soviet Union collapsed without bloodshed. If we speak about Stalin’s repressions and Holodomor, it was a consequence of godless communist rule, when faith was replaced with the clan pagan structure of the Caucasus. During Britain’s colonization of India, according to famous American historian Brooks Adams, famine killed one million people in 1803-1825; in 1825-1850 – 400,000; in 1850-1875 – five million; in 1875-1900 – 26 million. “Great famine” of 1876-1878 hit Bombay and Madras became. The number of victims varies from 2.5 to ten million, according to British and Indian sources, Adams wrote in his work “The Laws of Civilizations and Decay” (1898).

Now about mentality. Yes, our mentalities are different, because Orthodoxy, Catholicism and Protestantism have different civilizational roots. Orthodoxy puts emphasis on spiritual development, trying to answer the questions of how to live and what to do. The Western religious culture is based on a material principle: work well, and God will love you. The distance between our roads can be measured with absolutely opposite approaches to the victory of the “bearded woman” at a European song contest.

The two civilizations are flawed in their own way, but they both have Christian roots. Therefore, one can say that we, the Russians, are Europeans, i.e. Christians by conviction. The main thing in the life of a Christian is not spiritual or material beginning, but love, as Christ taught. However, religious institutions, both in Russia and in the West do not cope with the role of state ideology. Therefore, there is no equal cooperation and no union of opposites on the basis of respect. The West has achieved superiority through the strong material aspect, and imagines itself, as Putin said, the master of the world. Yet, the West has not been able to use its power  appropriately, because the West does not have what Russia has – morality. It would be perfect to connect these two aspects with the help of love, but alas, the world has been falling into the abyss of confrontation.

There is a big difference today between being a European by conviction and being a European country. European leaders do not listen to their people – they listen to their patrons from overseas instead.

“Europe is facing a challenge from Russia to its very existence. Neither the European leaders, nor their citizens are fully aware of this challenge or know how best to deal with it,” American financier George Soros said. “There is a general dissatisfaction with the EU as a result of the euro crisis, which has perverted the initial impetus for forming a union of like-minded democratic states. The euro crisis was mishandled and lasted a long time, and it turned a voluntary union of equals into something quite different,” he said. “The collapse of Ukraine would be a tremendous loss for NATO, the European Union and the United States. A victorious Russia would become much more influential within the EU and pose a potent threat to the Baltic states with large ethnic Russian populations,” Soros added.

Does Soros mean that Europe is waking up? Vladimir Putin has probably noticed that too. In his keynote speech at the forum in Sochi, Putin urged the Europeans to wake up and think. Either we build something together, or nouveau riche from the neighboring mansion will eat us both. Russia maintains respect for its partners (note that the Americans never call us like that), but the country will be showing resistance – this is a strong position. Russia, the president said, would not be guided by motives to establish dialogue with Europe and the West in the name of alien values, as Russia was doing during the 1990s. We have realized that we have our own values, our own history and our own ideology that will determine our future steps. As for Europe, its assessments obviously depend on the state of Europe itself, rather than on the state of those countries that are subject to these assessments.

Lyuba Lulko

Pravda.Ru

http://english.pravda.ru/russia/politics/28-10-2014/128911-russia_european_country-0/

New Rules or a Game without Rules: “We Need a New Global Consensus of Responsible Powers”. Vladimir Putin

Global Research, October 25, 2014

putin041We are publishing full text of today’s address of the Russian President Vladimir Putin to the members of Vaidai International Discussion Club. This year the main topic of the event was The World Order: New Rules or No Rules?

Colleagues, ladies and gentlemen, friends, it is a pleasure to welcome you to the XI meeting of the Valdai International Discussion Club.

It was mentioned already that the club has new co-organisers this year. They include Russian non-governmental organisations, expert groups and leading universities. The idea was also raised of broadening the discussions to include not just issues related to Russia itself but also global politics and the economy.

I hope that these changes in organisation and content will bolster the club’s influence as a leading discussion and expert forum. At the same time, I hope the ‘Valdai spirit’ will remain – this free and open atmosphere and chance to express all manner of very different and frank opinions.

Let me say in this respect that I will also not let you down and will speak directly and frankly. Some of what I say might seem a bit too harsh, but if we do not speak directly and honestly about what we really think, then there is little point in even meeting in this way. It would be better in that case just to keep to diplomatic get-togethers, where no one says anything of real sense and, recalling the words of one famous diplomat, you realise that diplomats have tongues so as not to speak the truth.

We get together for other reasons. We get together so as to talk frankly with each other. We need to be direct and blunt today not so as to trade barbs, but so as to attempt to get to the bottom of what is actually happening in the world, try to understand why the world is becoming less safe and more unpredictable, and why the risks are increasing everywhere around us.

Today’s discussion took place under the theme: New Rules or a Game without Rules. I think that this formula accurately describes the historic turning point we have reached today and the choice we all face. There is nothing new of course in the idea that the world is changing very fast. I know this is something you have spoken about at the discussions today. It is certainly hard not to notice the dramatic transformations in global politics and the economy, public life, and in industry, information and social technologies.

Let me ask you right now to forgive me if I end up repeating what some of the discussion’s participants have already said. It’s practically impossible to avoid. You have already held detailed discussions, but I will set out my point of view. It will coincide with other participants’ views on some points and differ on others.

41d51294b81530c6c8b4As we analyse today’s situation, let us not forget history’s lessons. First of all, changes in the world order – and what we are seeing today are events on this scale – have usually been accompanied by if not global war and conflict, then by chains of intensive local-level conflicts. Second, global politics is above all about economic leadership, issues of war and peace, and the humanitarian dimension, including human rights.

The world is full of contradictions today. We need to be frank in asking each other if we have a reliable safety net in place. Sadly, there is no guarantee and no certainty that the current system of global and regional security is able to protect us from upheavals. This system has become seriously weakened, fragmented and deformed. The international and regional political, economic, and cultural cooperation organisations are also going through difficult times.

Yes, many of the mechanisms we have for ensuring the world order were created quite a long time ago now, including and above all in the period immediately following World War II. Let me stress that the solidity of the system created back then rested not only on the balance of power and the rights of the victor countries, but on the fact that this system’s ‘founding fathers’ had respect for each other, did not try to put the squeeze on others, but attempted to reach agreements.

The main thing is that this system needs to develop, and despite its various shortcomings, needs to at least be capable of keeping the world’s current problems within certain limits and regulating the intensity of the natural competition between countries.

It is my conviction that we could not take this mechanism of checks and balances that we built over the last decades, sometimes with such effort and difficulty, and simply tear it apart without building anything in its place. Otherwise we would be left with no instruments other than brute force.

What we needed to do was to carry out a rational reconstruction and adapt it the new realities in the system of international relations.

But the United States, having declared itself the winner of the Cold War, saw no need for this. Instead of establishing a new balance of power, essential for maintaining order and stability, they took steps that threw the system into sharp and deep imbalance.

The Cold War ended, but it did not end with the signing of a peace treaty with clear and transparent agreements on respecting existing rules or creating new rules and standards. This created the impression that the so-called ‘victors’ in the Cold War had decided to pressure events and reshape the world to suit their own needs and interests. If the existing system of international relations, international law and the checks and balances in place got in the way of these aims, this system was declared worthless, outdated and in need of immediate demolition.

41d51293fadea744baafPardon the analogy, but this is the way nouveaux riches behave when they suddenly end up with a great fortune, in this case, in the shape of world leadership and domination. Instead of managing their wealth wisely, for their own benefit too of course, I think they have committed many follies.

We have entered a period of differing interpretations and deliberate silences in world politics. International law has been forced to retreat over and over by the onslaught of legal nihilism. Objectivity and justice have been sacrificed on the altar of political expediency. Arbitrary interpretations and biased assessments have replaced legal norms. At the same time, total control of the global mass media has made it possible when desired to portray white as black and black as white.

In a situation where you had domination by one country and its allies, or its satellites rather, the search for global solutions often turned into an attempt to impose their own universal recipes. This group’s ambitions grew so big that they started presenting the policies they put together in their corridors of power as the view of the entire international community. But this is not the case.

The very notion of ‘national sovereignty’ became a relative value for most countries. In essence, what was being proposed was the formula: the greater the loyalty towards the world’s sole power centre, the greater this or that ruling regime’s legitimacy.

We will have a free discussion afterwards and I will be happy to answer your questions and would also like to use my right to ask you questions. Let someone try to disprove the arguments that I just set out during the upcoming discussion.

The measures taken against those who refuse to submit are well-known and have been tried and tested many times. They include use of force, economic and propaganda pressure, meddling in domestic affairs, and appeals to a kind of ‘supra-legal’ legitimacy when they need to justify illegal intervention in this or that conflict or toppling inconvenient regimes. Of late, we have increasing evidence too that outright blackmail has been used with regard to a number of leaders. It is not for nothing that ‘big brother’ is spending billions of dollars on keeping the whole world, including its own closest allies, under surveillance.

Let’s ask ourselves, how comfortable are we with this, how safe are we, how happy living in this world, and how fair and rational has it become? Maybe, we have no real reasons to worry, argue and ask awkward questions? Maybe the United States’ exceptional position and the way they are carrying out their leadership really is a blessing for us all, and their meddling in events all around the world is bringing peace, prosperity, progress, growth and democracy, and we should maybe just relax and enjoy it all?

Let me say that this is not the case, absolutely not the case.

41d51293f810372eef87A unilateral diktat and imposing one’s own models produces the opposite result. Instead of settling conflicts it leads to their escalation, instead of sovereign and stable states we see the growing spread of chaos, and instead of democracy there is support for a very dubious public ranging from open neo-fascists to Islamic radicals.

Why do they support such people? They do this because they decide to use them as instruments along the way in achieving their goals but then burn their fingers and recoil. I never cease to be amazed by the way that our partners just keep stepping on the same rake, as we say here in Russia, that is to say, make the same mistake over and over.

They once sponsored Islamic extremist movements to fight the Soviet Union. Those groups got their battle experience in Afghanistan and later gave birth to the Taliban and Al-Qaeda. The West if not supported, at least closed its eyes, and, I would say, gave information, political and financial support to international terrorists’ invasion of Russia (we have not forgotten this) and the Central Asian region’s countries. Only after horrific terrorist attacks were committed on US soil itself did the United States wake up to the common threat of terrorism. Let me remind you that we were the first country to support the American people back then, the first to react as friends and partners to the terrible tragedy of September 11.

During my conversations with American and European leaders, I have always spoken of the need to fight terrorism together, as a challenge on a global scale. We cannot resign ourselves to and accept this threat, cannot cut it into separate pieces and use double standards. Our partners expressed agreement, but a little time passed and we ended up back where we started. First there was the military operation in Iraq, then in Libya, which got pushed to the brink of falling apart. Why was Libya pushed into this situation? Today it is a country in danger of breaking apart and has become a training ground for terrorists.

Only the current Egyptian leadership’s determination and wisdom saved this key Arab country from chaos and having extremists run rampant. In Syria, as in the past, the United States and its allies started directly financing and arming rebels and allowing them to fill their ranks with mercenaries from various countries. Let me ask where do these rebels get their money, arms and military specialists? Where does all this come from? How did the notorious ISIL manage to become such a powerful group, essentially a real armed force?

As for financing sources, today, the money is coming not just from drugs, production of which has increased not just by a few percentage points but many-fold, since the international coalition forces have been present in Afghanistan. You are aware of this. The terrorists are getting money from selling oil too. Oil is produced in territory controlled by the terrorists, who sell it at dumping prices, produce it and transport it. But someone buys this oil, resells it, and makes a profit from it, not thinking about the fact that they are thus financing terrorists who could come sooner or later to their own soil and sow destruction in their own countries.

ISIL-iraqWhere do they get new recruits? In Iraq, after Saddam Hussein was toppled, the state’s institutions, including the army, were left in ruins. We said back then, be very, very careful. You are driving people out into the street, and what will they do there? Don’t forget (rightfully or not) that they were in the leadership of a large regional power, and what are you now turning them into?

What was the result? Tens of thousands of soldiers, officers and former Baath Party activists were turned out into the streets and today have joined the rebels’ ranks. Perhaps this is what explains why the Islamic State group has turned out so effective? In military terms, it is acting very effectively and has some very professional people. Russia warned repeatedly about the dangers of unilateral military actions, intervening in sovereign states’ affairs, and flirting with extremists and radicals. We insisted on having the groups fighting the central Syrian government, above all the Islamic State, included on the lists of terrorist organisations. But did we see any results? We appealed in vain.

We sometimes get the impression that our colleagues and friends are constantly fighting the consequences of their own policies, throw all their effort into addressing the risks they themselves have created, and pay an ever-greater price.

Colleagues, this period of unipolar domination has convincingly demonstrated that having only one power centre does not make global processes more manageable. On the contrary, this kind of unstable construction has shown its inability to fight the real threats such as regional conflicts, terrorism, drug trafficking, religious fanaticism, chauvinism and neo-Nazism. At the same time, it has opened the road wide for inflated national pride, manipulating public opinion and letting the strong bully and suppress the weak.

Essentially, the unipolar world is simply a means of justifying dictatorship over people and countries. The unipolar world turned out too uncomfortable, heavy and unmanageable a burden even for the self-proclaimed leader. Comments along this line were made here just before and I fully agree with this. This is why we see attempts at this new historic stage to recreate a semblance of a quasi-bipolar world as a convenient model for perpetuating American leadership. It does not matter who takes the place of the “Evil Empire” in American propaganda, the USSR’s old place as the main adversary. It could be Iran, as a country seeking to acquire nuclear technology, China, as the world’s biggest economy, or Russia, as a nuclear superpower.

Today, we are seeing new efforts to fragment the world, draw new dividing lines, put together coalitions not built for something but directed against someone, anyone, create the image of an enemy as was the case during the Cold War years, and obtain the right to this leadership, or diktat if you wish. The situation was presented this way during the Cold War. We all understand this and know this. The United States always told its allies: “We have a common enemy, a terrible foe, an Evil Empire, and we are defending you, our allies, from this foe, and so we have the right to order you around, force you to sacrifice your political and economic interests and pay your share of the costs for this collective defence, but we will be the ones in charge of it all of course.” In short, we see today attempts in a new and changing world to reproduce the familiar models of global management, and all this so as to guarantee their [the US’] exceptional position and reap political and economic dividends.

41d51293f49e4ff0c77bBut these attempts are increasingly divorced from reality and are in contradiction with the world’s diversity. Steps of this kind inevitably create confrontation and countermeasures and have the opposite effect to the hoped-for goals. We see what happens when politics rashly starts meddling in the economy and the logic of rational decisions gives way to the logic of confrontation that only hurt one’s own economic positions and interests, including national business interests.

Joint economic projects and mutual investment objectively bring countries closer together and help to smooth out current problems in relations between states. But today, the global business community faces unprecedented pressure from Western governments. What business, economic expediency and pragmatism can we speak of when we hear slogans such as “the homeland is in danger”, “the free world is under threat”, and “democracy is in jeopardy”? And so everyone needs to mobilise. That is what a real mobilisation policy looks like.

Sanctions are already undermining the foundations of world trade, the WTO rules and the principle of inviolability of private property. They are dealing a blow to liberal model of globalisation based on markets, freedom and competition, which, let me note, is a model that has primarily benefited precisely the Western countries. And now they risk losing trust as the leaders of globalisation. We have to ask ourselves, why was this necessary? After all, the United States’ prosperity rests in large part on the trust of investors and foreign holders of dollars and US securities. This trust is clearly being undermined and signs of disappointment in the fruits of globalisation are visible now in many countries.

The well-known Cyprus precedent and the politically motivated sanctions have only strengthened the trend towards seeking to bolster economic and financial sovereignty and countries’ or their regional groups’ desire to find ways of protecting themselves from the risks of outside pressure.We already see that more and more countries are looking for ways to become less dependent on the dollar and are setting up alternative financial and payments systems and reserve currencies. I think that our American friends are quite simply cutting the branch they are sitting on.You cannot mix politics and the economy, but this is what is happening now. I have always thought and still think today that politically motivated sanctions were a mistake that will harm everyone, but I am sure that we will come back to this subject later.

We know how these decisions were taken and who was applying the pressure. But let me stress that Russia is not going to get all worked up, get offended or come begging at anyone’s door. Russia is a self-sufficient country. We will work within the foreign economic environment that has taken shape, develop domestic production and technology and act more decisively to carry out transformation. Pressure from outside, as has been the case on past occasions, will only consolidate our society, keep us alert and make us concentrate on our main development goals.

Of course the sanctions are a hindrance. They are trying to hurt us through these sanctions, block our development and push us into political, economic and cultural isolation, force us into backwardness in other words. But let me say yet again that the world is a very different place today. We have no intention of shutting ourselves off from anyone and choosing some kind of closed development road, trying to live in autarky. We are always open to dialogue, including on normalising our economic and political relations. We are counting here on the pragmatic approach and position of business communities in the leading countries.

41d51293ebd0f5e81f28Some are saying today that Russia is supposedly turning its back on Europe – such words were probably spoken already here too during the discussions – and is looking for new business partners, above all in Asia. Let me say that this is absolutely not the case. Our active policy in the Asian-Pacific region began not just yesterday and not in response to sanctions, but is a policy that we have been following for a good many years now. Like many other countries, including Western countries, we saw that Asia is playing an ever greater role in the world, in the economy and in politics, and there is simply no way we can afford to overlook these developments.

Let me say again that everyone is doing this, and we will do so to, all the more so as a large part of our country is geographically in Asia. Why should we not make use of our competitive advantages in this area? It would be extremely shortsighted not to do so.

Developing economic ties with these countries and carrying out joint integration projects also creates big incentives for our domestic development. Today’s demographic, economic and cultural trends all suggest that dependence on a sole superpower will objectively decrease. This is something that European and American experts have been talking and writing about too.

Perhaps developments in global politics will mirror the developments we are seeing in the global economy, namely, intensive competition for specific niches and frequent change of leaders in specific areas. This is entirely possible.

There is no doubt that humanitarian factors such as education, science, healthcare and culture are playing a greater role in global competition. This also has a big impact on international relations, including because this ‘soft power’ resource will depend to a great extent on real achievements in developing human capital rather than on sophisticated propaganda tricks.

http://www.globalresearch.ca/new-rules-or-a-game-without-rules-we-need-a-new-global-consensus-of-responsible-powers-vladimir-putin/5409854

Citizenfour’s Escape to Freedom in Russia

By Ray McGovern

October 24, 2014 “ICH” – “Consortium News” – In early September in Russia, National Security Agency whistleblower Edward Snowden told me about a documentary entitled Citizenfour, named after the alias he used when he asked filmmaker Laura Poitras to help him warn Americans about how deeply the NSA had carved away their freedoms.

When we spoke, Snowden seemed more accustomed to his current reality, i.e., still being alive albeit far from home, than he did in October 2013 when I met with him along with fellow whistleblowers Tom Drake, Coleen Rowley and Jesselyn Radack, as we presented him with the Sam Adams Award for Integrity in Intelligence.

A year ago, the four of us spent a long, relaxing evening with Snowden – and sensed his lingering wonderment at the irony-suffused skein of events that landed him in Russia, out of reach from the U.S. government’s long arm of “justice.”

Six days before we gave Snowden the award, former NSA and CIA director Michael Hayden and House Intelligence Committee chair Mike Rogers had openly expressed their view that Snowden deserved to be on the “list,” meaning the “capture or kill” list that could have made Snowden the target of a drone strike. When I asked him if he were aware of that recent indignity, he nodded yes – with a winsome wince of incredulity.

This September, there was no drone of Damocles hanging over the relaxed lunch that the two of us shared. There were, rather, happier things to discuss. For example, I asked if he were aware that one of his co-workers in Hawaii had volunteered to Andy Greenberg of Forbes Magazine that Snowden was admired by his peers as a man of principle, as well as a highly gifted geek.

The co-worker told Greenberg: “NSA is full of smart people, but Ed … was in a class of his own. … I’ve never seen anything like it. … He was given virtually unlimited access to NSA data [because] he could do things nobody else could.”

Equally important, the former colleague pointed out that Snowden kept on his desk a copy of the U. S. Constitution to cite when arguing with co-workers against NSA activities that he thought might be in violation of America’s founding document. Greenberg’s source conceded that he or she had slowly come to understand that Snowden was trying to do the right thing and that this was very much in character, adding, “I won’t call him a hero, but he’s sure as hell no traitor.”

Snowden spoke of his former co-workers with respect and affection, noting that most of them had family responsibilities, mortgages, etc. – burdens he lacked. He told me he was very aware that these realities would make it immeasurably more difficult for them to blow the whistle on NSA’s counter-Constitutional activities, even if they were to decide they should. “But somebody had to do it,” said Snowden in a decidedly non-heroic tone, “So I guess that would be me.”

Following the intelligence world’s axiom of “need-to-know,” Snowden had been careful to protect his family and Lindsay Mills, his girlfriend, by telling no one of his plans. I found myself thinking long and hard at how difficult that must have been – to simply get out of Dodge without a word to those you love.

Perhaps he felt Mills would eventually understand when he explained why it was absolutely necessary in order to achieve his mission and have some chance of staying alive and out of prison. But, not having discussed with her his plans, how could he be sure of that?

And so, learning recently of the interim “happy-ending” arrival of Mills in Russia was like a shot in the arm for me. I thought to myself, it is possible to do the right thing, survive and not end up having to live the life of a hermit. Equally important, that reality is now out there for the world to see. What an encouragement to future whistleblowers – and to current ones, as well, for that matter.

Snowden was delighted when I told him that Bill Binney, the long-time and highly respected former NSA technical director, had just accepted the Sam Adams Award, which will be presented in 2015. It was Snowden’s own revelations that finally freed up Binney and other courageous NSA alumni to let the American public know what they had been trying, through official channels, to tell the overly timid representatives in Washington.

Seeing Citizenfour

Snowden was happy to tell me about the documentary, Citizenfour, explaining that during his sessions in Hong Kong with Laura Poitras, Glenn Greenwald, and The Guardian’s Ewen MacAskill, Poitras seemed to have the camera always rolling during the eight days they shared in Hong Kong – including during the grand escape from the hotel. With a broad smile, Snowden said, “Ray, when people see my makeshift disguise, well, it is going to be really hard to argue that this thing was pre-planned!”

All I have seen so far is the trailer, but I have tickets for a showing Friday night when Citizenfouropens in Washington and other cities. With Snowden, I figured I could wait to witness the grand escape until I saw the film itself, so I avoided asking him for additional detail. Like: ”Don’t spoil it for me, Ed.”

I was encouraged to read, in one of the movie reviews, that the documentary does allude to the key role played by Julian Assange and WikiLeaks in enabling Snowden’s escape. I had long since concluded that WikiLeaks’s role – and that of Sarah Harrison, in particular, was the sine qua non for success. I hope Citizenfour gives this key part of the story the prominence it deserves.

I feel it is an equal honor to spend time with Julian Assange in the Ecuadorian embassy whenever I’m in London. In early September, Assange was a welcoming host and we had a long chat over dinner while I was en route to Russia via London and Berlin. (I had been invited to present at the U.S.-Russia Forum in Moscow later last month and stayed there an extra day in order to visit with Snowden.)

I had been unaware of Citizenfour before visiting Assange. The film came up spontaneously when I volunteered to him that the safe extrication of Snowden from Hong Kong sits atop my gratitude list of the many things he has accomplished. That drew a very broad smile and some words about the world’s most powerful country and intelligence service, “and we still got him out!”

Assange shared how important it was not only to rescue Snowden himself but, in so doing, to provide for potential whistleblowers some real-life proof that it is possible to do the right thing and avoid spending decades in prison where WikiLeaks’ most famous source Chelsea Manning now sits. This was among the main reasons why WikiLeaks cashed in so many chips in its successful effort to bring Snowden to safety. It was surely not because Assange expected Snowden to share reportable information with WikiLeaks. He gave none.

Assange was in good spirits and hoping for some break in the Kafkaesque situation in which he has found himself for several years now (receiving asylum in Ecuador’s Embassy to avoid arrest in Great Britain and extradition to Sweden for questioning regarding alleged sexual offenses).

A Stop in Berlin

I also planned to spend a few days in Berlin to coincide with the NATO summit in Wales (Sept. 4-5). On Aug. 30, the Veteran Intelligence Professionals for Sanity sent a Memorandum to German Chancellor Angela Merkel, warning her about the dubious “intelligence” adduced to blame Russia for the troubles in Ukraine. Our memo had some resonance in German and other European media, but I was saddened to find the media in the UK and Germany as co-opted and Putin-bashing as the U.S. media.

It was 25 years after the fall of the Berlin Wall. What I said in my various talks and interviews on NATO’s reneging on its promise to Soviet leader Mikhail Gorbachev not to move NATO one inch eastward, once Germany was reunited, seemed to come as a major revelation to most listeners.

“Really?” was the predominant reaction when I explained that 25 years ago there was a unique, realistic chance for a Europe “whole and free” (in words then used by President George H. W. Bush and Gorbachev) from Portugal to the Urals. Instead, even after the collapse of the Soviet Union in 1991, Russia was excluded. NATO crept steadily east toward Russia’s border.

And last February, the U.S. and EU orchestrated a coup d’état in Kiev to foster Ukraine’s “European aspirations” to cast its lot with the West and dislodge itself from Russia’s sphere of influence. [See Consortiumnews.com’s “The Whys Behind the Ukraine Crisis.”]

The squandering of a historic chance for lasting peace in Europe remains atop the list of severe disappointments encountered during my professional life. The fact that, to this day, so few seem aware of what happened, and who was – and is – to blame, is also a major frustration.

In Berlin, consolation and affirmation came in renewing friendships there and getting to know others – many of them expatriates. First and foremost among the latter is Sarah Harrison, the main figure in executing WikiLeaks’s plan to get Snowden out of Hong Kong and onward to Latin American via Moscow, where his planned journey has so far stalled.

Because the U.S. Justice Department charged Snowden with espionage and the U.S. State Department revoked his passport, his stay in Moscow ended up being quite a long one. But Harrison stayed on for as long as seemed necessary to accompany and support Snowden, as well as to be able to testify to the fact that the Russians were not using anything like “enhanced interrogation techniques” on him.

I had last seen Harrison in Moscow at the Sam Adams Award presentation to Snowden; it was great to have a chance to chat with her over a long lunch.

Flying home from Moscow, having had lunch there with Edward Snowden, lunch in Berlin with Sarah Harrison, and dinner with Julian Assange in that little piece of Ecuadorian territory in London, what came first to mind was Polonius’s advice to Laertes: “Those friends thou hast, and their adoption tried, grapple them to thy soul with hoops of steel.”

But then, above the din of the jet engines, came a more familiar and more insistent voice. It was that of Jane Fahey, my Irish grandmother, who for some reason seemed 33,000 feet closer than usual: “Show me your company, and I’ll tell you who you are!” she would say, often – very often. I think my grandmother would be as pleased with my “company” as I am – and as grateful.

Ray McGovern works with Tell the Word, the publishing arm of the ecumenical Church of the Saviour in inner-city Washington. Co-founder of Veteran Intelligence Professionals for Sanity (VIPS), he served as an Army infantry/intelligence officer and then as a CIA analyst from the administration of John Kennedy to that of George H. W. Bush. He is also co-founder of Sam Associates for Integrity in Intelligence.

http://www.informationclearinghouse.info/article40052.htm

Putin Lashes Out At US, West For Destabilizing World

Video

Vladimir Putin lashed out at the United States and the West for destabilizing the world order of checks and balances for its own gains. He also accused the West of inflaming the situation in Ukraine and said Russia is not interested in building an empire.

The Russian President delivered a fierce broadside aimed at the United States in a speech for the Valdai Club in Sochi, which is an informal group of scholars. He hit out at Washington for behaving without regard to the rest of the world’s interests

“The system of international relations needed some changes, but the USA, who believe they were the winners of the Cold War, have not seen the need for this.” He added that the US has been trying to create the world “for their own gains.” The Russian President added that because of this, regional and global security had been weakened.

During his speech, Putin used the Russian version of the Latin phrase, “Quod licet Iovi, non licet bovi” (what is allowed for god, is not allowed for cattle,) alluding to the double standards used by Washington.

President Putin Speaks at 4:30 seconds

US sponsoring Islamic extremism

Putin also touched on the issue of the growth of Islamic State in Syria and Iraq, and also accused the West of, “turning a blind eye,” to the encroachment of international terrorism into Russia and Central Asia. Putin believes the US has played a considerable role in sponsoring the growth of Islamic extremism, using the example of Washington’s funding of the Mujahidin in the Afghan-Soviet war in the 1980’s, which eventually gave birth to the Taliban and Al-Qaeda.

“It never ceases to amaze me how our partners have been guilty of making the same mistakes time and again. They have in the past sponsored Islamic extremists who were battling against the Soviet Union, which took place in Afghanistan. It was because of this the Taliban and Al-Qaeda was created,” the president added.

Islamic State (IS, formerly ISIS) is the latest terrorist organization, which is destabilizing the world and Putin was scathing of countries that have been helping to fund the Islamist militants by buying cut price oil they are selling.

“Terrorists have been selling oil at really low prices and those countries who have been buying it and then selling it on, are financing terrorism, which will eventually come back to bite them,” the Russian President said.

Putin all for Nuclear cuts

Relations between Russia and the US have been plummeting for months; however Vladimir Putin accused the US of using the EU to further its own gains against Russia. He hit out at the numeroussanctions that have been imposed on Moscow, saying, “This was a mistake, which has a knock-on effect on everyone.”

“The USA, which has implemented sanctions against Russia, is sawing at the branches, upon which they are sitting,” President Putin added.

The reduction of nuclear arsenals was another issue, which was high on the agenda for the Russian President and once again, he was not afraid of having a dig at Washington for their reluctance to cut the number of nuclear missiles. He mentioned that unfortunately many countries see the only way to preserve their sovereignty is, “To make a nuclear bomb.”

The reduction in nuclear arsenals was initially proposed by the Obama administration and Putin admitted it had potential, before talks about decreasing weapons stockpiles collapsed.

“Russia has been all for the continuation of talks about the reduction of nuclear arsenals,” and according to President Putin, “Moscow is ready for serious talks, but without “double standards.”

Genie out of the bottle

Perhaps Putin’s harshest criticism was reserved for the West’s creation of color revolutions and“controlled chaos,” which he a likened to “letting the genie out of the bottle,” with particular reference to Ukraine.

“We have been trying to discuss the Ukraine issue with the EU for a long time, but we were told this was none of our business. They then put two countries against each other, which has led to countless destruction of infrastructure. When I asked why did they do this, they just shrug their shoulders and don’t have an answer,” Putin added.

President Putin made reference to the ‘Bear’ defending its territory to take a swipe at the US for its continued encroachment towards Russia’s territory. “He is considered the owner of the Taiga, but he, I know for a fact, does not want to go to a different climatic zone, as it is uncomfortable for him there. However, he will not give it to anyone else; I think that this should be clear,” he said.

The Russian President said that there is no truth whatsoever in claims from the West that Russia is interested in empire building and that Moscow is looking to destabilize the world order. With relations between Russia and the West at a very low ebb, Putin also hinted Russia will look to develop allies further afield.

“Russia has made its choice – we want to develop our economy and develop democratic values. We work with our counterparts in the Shanghai Cooperation, the BRICS union for example. We want our opinions to be respected likewise. We all need to be cautious to not make hasty and dangerous steps. Some of the players on the global front have forgotten about the need for this,” he said in another barb directed at Washington.

http://www.informationclearinghouse.info/article40060.htm

Six mistakes the West makes in dealing with Putin

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The West estimated Vladimir Putin’s behavior at Europe-Asia Summit in Milan as challenging and negligent. Indeed, everyone was expecting a “breakthrough,” but Putin did not justify anyone’s expectations. Why is that? In dealing with the Russian  president, Western officials allow insults, put Russia into line with worst enemies and do not hide the wish to destroy Russian statehood and faith.

How could Putin be late for the meeting with Merkel, pretending that he had more important things in Belgrade, The New York Times resented in a long article devoted to the Milan summit. Afterwards, Putin defiantly went to Berlusconi “for truffles”, where he was partying till four a.m.. This  describes Putin as an irresponsible politician, because at six a.m., he had a scheduled “pivotal” meeting with Poroshenko, the newspaper wrote.

“For Mr. Putin, the helter-skelter blitz through Milan was only the latest demonstration of an unpredictable, often theatrical, diplomatic style that he has employed during the Ukraine crisis to throw his rivals off balance,” the article said.  Putin may “face a tougher reception when he travels next month to a Group of 20 summit meeting in Brisbane, Australia,” the authors of the article assumed.

Here is a more specific quote to the point of our article. “He didn’t say that progress was made,” said Valentino Valentini, a longtime aide to Mr. Berlusconi who was present for their meeting. “The impression was that their positions were still far apart.””

How so? Russian Foreign Minister Sergei Lavrov explained. “The goal of Western sanctions is not to resolve the crisis in Ukraine, but to make Russia change its stance on key and most fundamental questions and to accept the position of the West, – Sergei Lavrov said on Saturday in an interview with NTV. – In fact, the true purpose of their restrictions permeates through their statements and actions – to remake Russia,” Lavrov said. The Russian Foreign Minister said that even though Western politicians say nothing about the need to change the regime in Russia, but “some marginalized officials in Europe say such phrases,” he said.

Let’s brush aside Lavrov’s everlasting diplomatic comme il faut. In fact, the situation is much tougher. Samuel Phillips Huntington in his “Clash of Civilizations?” from 1993 wrote about the true purpose of the West. According to him, the West is determined to destroy Orthodoxy or subordinate Orthodoxy to Western principles. We can see how, for example, the British were doing it for centuries. They fought against Russia in the Crimean War (1852-1856), were opposed to Russia’s stronger positions in the Balkans and Central Asia, they got Russia involved in World War I, were active participants in the Entente during the struggle against the young Soviet power, they developed plans to seize oil fields of the Caucasus after Hitler’s possible victory, they were preparing for a preventive strike during the Cold War. Today, murderers and thieves, who escaped from Russia, find political asylum in the UK. British prime ministers have always been at the forefront of accusing Russia of “aggression” – David Cameron is no exception.

According to Huntington, it goes about the destruction of the Slavic culture and the Russian statehood, which is based on Orthodoxy. Even communism has Orthodox roots. Statehood came to Russia from Byzantium, and in this model, law will never be first priority, because for Orthodox believers, morality, friendship and justice is above law. Remember Russia’s reunion with the Crimea, and what Putin said in Belgrade: “Russia does not sell friendship.” The Byzantine model stipulates for the unification of equal peoples in one state with the help of love, rather than with the help of the Western melting pot model, which is governed by strict laws.

Given that the faith has been a reason for countless wars for centuries, the merger of two civilizations is impossible. This is not necessary due to the law of the dialectical development of the universe. Even Yeltsin, who sold everything he could to the West, warned: one should not expand NATO to the east, forgetting that Russia has a “nuclear briefcase.” Putin has recently reiterated this idea by saying that the current conflict was a conflict between nuclear powers.

A second conclusion from the clash of civilizations is Orthodoxy, and, consequently, Russia has her own ideal picture of the world order. The imposition of another project is perceived as an attack on the foundations of statehood.

President Putin – is not a “mini-Gorbachev,” as The New York Times wrote. He is not a huckster like Poroshenko, but a statesman, who will continue his efforts to make Russian, Orthodox model flourish. Putin’s prime goal for the time being is to make sure that the West sees Russia as a full partner. Russia lost this reputation during the time of Gorbachev and Yeltsin. For the time being, the West does not understand that and hopes that sanctions will break Russia.

Huntington does not say that unity is possible in the struggle of opposites. This is nonetheless possible, but only when one has skills in finding compromises. What do the Anglo-Saxons need to understand?

First. All types of “Eastern partnerships” are impossible without consulting Russia. One needs to understand that Putin will not allow NATO bases to appear on the territory of Ukraine. He will adequately respond to extra military threats – the deployment of the missile defense system and rapid response forces.

Second. Do not teach us how to live. Putin will pursue protectionist policies to protect the Orthodox civilization, restrict the activities of Western NGOs that undermine the constitutional structure of Russia and morality of its people. Russia is not strong for its economy, but it is strong for something that the West can not understand – it is strong for its soul.

Third. The Russian president will behave accordingly to your behavior. If you consistently topple Milosevic, Saddam Hussein, Gaddafi, Yanukovych, it is reasonable to guess who is next on your list. Noteworthy, each candidate for toppling would at first be demonized in Western media. The same is happening with regard to Putin. Suffice it to mention numerous offensive comparisons to Hitler and “shirt-fronting” threats, because this is the language the “aggressor” understands (we’re talking about Australian Prime Minister Abbott).

Fourth. If Obama puts Russia on the second place on the list of global threats, please expect an adequate reaction.

Fifth. Re-read memoirs of German, French and other conquerors of Russia. Sending you all sorts of “messages” is not Putin’s way – he will act on the basis of national interests. “Do not expect that once taken advantage of Russia’s weakness, you will receive dividends forever. Russians always come for their money. And when they come – they will not rely on the Jesuit agreement you signed, that supposedly justify your actions. They are not worth the paper it is written. Therefore, with the Russians you should use fair play or no play,” said Otto von Bismarck.

Sixth. Your approach to world affairs has a destructing effect that everyone sees. There is a large group of countries behind Russia that have not yet decided to take Russia’s side. If a moment comes, they will not doubt to do it.

Lyuba Lulko
Pravda.Ru

http://english.pravda.ru/world/europe/21-10-2014/128852-six_mistakes_west_putin-0/

Putin: World Economy Would Collapse If Oil Prices Stay At $80 Per Barrel

Video

President Putin held a presser on a close door meeting he had with Ukrainian President Petro Poroshenko.

Posted October 17, 2014

http://www.informationclearinghouse.info/article40002.htm

No One Has A Monopoly On Truth Sergey Lavrov’s U.N. Address:

Video and English Transcript

October 15, 2014 “ICH” – “Washington has openly declared its right to the unilateral use of military force anywhere to advance its own interests. Military interference has become a norm, even despite the dismal outcome of all operations of force that the US has carried out over recent years.

“Thank you very much Mr. President.”

“Ladies and gentlemen,   

There is growing evidence today of a contradiction for collective and purposive efforts in the interest of developing adequate responses to challenges common to all of us, and the aspiration of a number of states for domination and a revival of the archaic block thinking based on military drill discipline and the erroneous logic of friend or foe”.

“The US-led western alliance that portrays itself as a champion of democracy, the rule of law, and human rights within individual countries acts from a directly opposite position in the international arena, rejecting the democratic principles of sovereign equality of states, and trying to decide for everyone what is good and what is evil”.

“Washington has openly declared its right to the unilateral use of military force anywhere to advance its own interests. Military interference has become a norm, even despite the dismal outcome of all operations of force that the US has carried out over recent years. The sustainability of the international system has been severely shaken by the NATO bombardment of Yugoslavia, intervention in Iraq, the attack against Libya, and the failure in Afghanistan”.

“Only due to intensive diplomatic efforts was the aggression against Syria prevented in 2013. There was an involuntary impression that the goal of various color revolutions and other projects to change unsuitable regimes is to create chaos and instability. Today, Ukraine has fallen victim to this arrogant policy. The situation there has revealed the remaining deep-rooted systematic flaws of the existing architecture in the Euro-Atlantic area. The West has embarked on a course towards vertical structuring of humanity, tailored to its own far-from-inoffensive standards”.

“After they declared victory in the Cold War and the so-called End of History, the US and the EU have opted to expand the geopolitical area that is under their control without taking into account the balance of legitimate interests of all people of Europe. The western partners did not heed our numerous warnings of the inadmissibility of violating the principles of the UN Charter and the Helsinki Final Act. Time and again, they have avoided serious joint work to establish a common space of equal and indivisible security and cooperation, from the Atlantic to the Pacific Ocean”.

“The Russian proposal to draft the European Security Treaty was rejected. We were told directly that the legally binding guarantees of security are only meant for the members of the North Atlantic Alliance, and at this time they continue to expand to the East in spite of the promises that were given to the contrary. The instantaneous switch of NATO to hostile rhetoric, to the drawdown of its cooperation with Russia even to the detriment of the West’s own interests, and the buildup of military infrastructure on Russia’s borders reveal the inability of the alliance to change its genetic code which it created during the Cold War”.

“The US and the EU supported the coup d’état in Ukraine and reverted to outright justification of any acts by the self-proclaimed Kiev authorities that opted for suppression by force of the part of the Ukraine people which had rejected attempts to impose throughout the country an anti-constitutional order and wanted to defend its right to tis native language, culture, and history. It is precisely the aggressive assault on these rights that helped the population of Crimea to take its destiny in its own hands and make a choice in favor of self-determination”.

“This was an absolutely free choice, no matter what was invented by those who are primarily responsible for the internal conflict in Ukraine. General attempts to distort the truth and hide facts behind blanket accusations have been undertaken at all stages of the Ukrainian crisis. Nothing has been done to try to hold to account those responsible for the bloody February events at Maidan, and the massive loss of human life in Odessa, Mariupol, and other regions of Ukraine. The scale of appalling humanitarian disaster provoked by the acts of the Ukrainian army in Southeastern Ukraine has been deliberately underscored”.

“Recently, new horrifying facts have been brought to light, when mass graves were discovered in the suburbs of Donetsk. Despite UN Security Council Resolution 2166, a thorough and independent investigation of the circumstance of the loss of the Malaysian airliner over the territory of the Ukraine has been drawn out. The perpetrators of all these crimes must be identified and brought to justice, otherwise it will be difficult to count on national reconciliation occurring in Ukraine”.

“Russia is sincerely interested in the restoration of peace in this neighboring country, and this should be well understood by all who are slightly acquainted with the history of the deep-rooted and fraternal ties between these two peoples. The way towards political settlement is well known. Last April, Kiev already took upon itself an obligation in the Geneva Declaration of Russia, Ukraine, the US, and EU to immediately begin a broad national dialogue with the participation of all regions and political forces in Ukraine, with a view to carrying out constitutional reform. The implementation of this obligation would allow all Ukrainians to agree on how to live in accordance with their traditions and culture, and would enable Ukraine to restore its organic role as a binding link between the various parts of the European space, which naturally implies the preservation and respect by all of its neutral and non-block status”.

“We are convinced that with goodwill and the refusal to support the party of war in Kiev which is trying to push the Ukrainian people into the abyss of national catastrophe, a way out of the crisis is within our reach. The way to overcome a crisis has been opened with the achievement of the ceasefire agreement in Southeastern Ukraine on the basis of initiatives by Presidents Poroshenko and Putin. With the participation of their representatives of Kiev, Donetsk, Lugansk, as well as the OSCE and Russia, practical measures are being agreed upon for the successive implementation of those agreements, including the separation of the parties to the conflict, the removal of heavy weapons of Ukraine and militia forces, and the setting up of monitoring through the OSCE”.

“Russia is prepared to continue to actively promote the political settlement under the well known Minsk process as well as other formats. However, it should be crystal clear that we are doing this for the sake of peace, tranquility, and the well-being of the Ukrainian people – rather than to appease someone’s ambitions. Attempts to put pressure on Russia and to compel it to abandon its values, truth, and justice have no prospects whatsoever for success”.

—-

“Allow me to recall some history from not so long ago. As a condition for establishing diplomatic relations with the Soviet Union in 1933, the US government demanded of Moscow guarantees of non-interference into the domestic affairs of the United States and obligations not to take any actions with a view to changing the political or social order in America. At that time, Washington feared a revolutionary virus, and those guarantees were put on record. And this was the basis for, of course, reciprocity between the US and the Soviet Union. Perhaps it makes sense to return to this topic and reproduce the demands of that time of the US government – on a universal scale”.

“Why would the General Assembly not adopt a declaration on the inadmissibility of interference into the internal affairs of sovereign states and the non-recognition of a coup d’état as the method for the change of power? The time has come to completely exclude from international interactions attempts to exert illegitimate pressure by some states on others. The senselessness and counter-productive nature of unilateral sanctions is obvious if we look at the example of the US blockade on Cuba”.

“The policy of ultimatums and the philosophy of supremacy and domination do not meet the requirements of the 21st century, and run counter to the objective process of developing a polycentric and democratic world order”.

“Russia is promoting a positive and unifying agenda. We always were, and continue to be, open to discussion of the most complex issues no matter how unresolvable they may seem to be in the beginning. We will be prepared to search for compromises and a balance of interests, and even to exchange concessions, but only if the discussion will be truly respectful and equitable. The Minsk agreements of 5 and 19 September, on the way out of the Ukrainian crisis, and the compromise on the timeline of the agreement between Kiev and the EU are good examples to follow as is the declaration, finally, of the readiness of Brussels to begin negotiations on the establishment of a free-trade agreement between the European Union and the Customs Union of Russia, Belarus, Kazakhstan as had been proposed by President Putin back in January of this year”.

“Russia has consistently called for the harmonization of integration projects in Europe and Eurasia. The political on political benchmarks and timelines of such a convergence of integrations would make a real contribution to the work of the OSCE on the topic of Helsinki Plus 40″.

—-

“Another crucial area of this work would be to launch a pragmatic discussion, free from ideology, about the political and military architecture of the Euro-Atlantic region, so that not only members of NATO but all countries of the region including Ukraine, Moldova, and Georgia would experience equal and indivisible security, and would not have to make a false choice of ‘either with us, or against us’. New dividing lines in Europe must not be allowed, even more so because in the era of globalization those lines can turn into a watershed divide between the West and the rest of the world”.

“It should be stated honestly that no one has a monopoly on truth and no one is now capable of tailoring global and regional processes to their own needs. There is no alternative today to the development of consensus regarding the rules of sustainable governance and new historical circumstances with full respect of the cultural and civilizational diversity of the world, and a multiplicity of models of development. It will be a difficult and perhaps a tiresome task to achieve such a consensus on every issue, but the recognition of the fact that democracy in every state is the worst form of government except for all the others also took time to break its way through, until Churchill proclaimed his verdict”.

“The time has come to realize the inevitability of this fundamental truth in international affairs, where today there is a huge deficit of democracy. Of course, some will have to shatter centuries-old ideas and abandon claims to eternal uniqueness, but there is no other way forward. Joint efforts can only be built on the principle of mutual respect and taking into account one another’s interests, as is the case for example in the framers of the United Nations Security Council, the G20, BRICS, and the SCO”.

—-

“The theory of the value of collective work has been reaffirmed by practice, and this includes progress in the settlement of the situation around the Iranian nuclear program and the successful conclusion of the chemical de-militarization of Syria. On the point, speaking of chemical weapons, we would like to receive authentic information on the state of the chemical arsenals in Libya. We understand that our NATO colleagues, having bombed this country in contravention of UN Security Council resolutions, would not like to stir up the mayhem that they have created. However, the problem of uncontrolled Libyan chemical arsenals is too serious to turn a blind eye to”.

“We think that the UN Secretary General has an obligation to show proof of his responsibility on this issue as well. What is important at this point is to see the global priorities and to avoid holding them hostage to a unilateral agenda. There is an urgent need to refrain from double standards and approaches to conflict settlement. Generally, everyone agrees that the key issue is to resolutely counter terrorists who are attempting to bring under their control increasingly broader territories in Iraq, Syria, Afghanistan, the Sahara-Sahel area”.

“That being the case, this task should not be sacrificed to ideological schemes or the desire to settle personal scores. Terrorists, no matter what slogans they hide behind, should remain outside the law. Moreover, it goes without saying that the fight against terrorism should rely on a solid foundation of international law. An important phase in this matter was the unanimous adoption by a number of UN security resolutions, including those on the issue of foreign terrorist fighters, and, to the contrary, attempts to contravene the charter of our organization do not contribute to the success of joint efforts”.

“The struggle against terrorists on the territory of Syria should be organized in cooperation with the Syrian government, which has clearly stated its readiness to join it. Damascus has already shown its capability of cooperating with international programs when it participated in the destruction of its chemical arsenals. From the very beginning of the Arab Spring, Russia called for it not to be left to extremists and for the establishment of a united front to counter the growing terrorist threat. We went against the temptation to make allies of almost anyone who proclaimed himself an enemy of Bashar Al Assad, whether it be Al Qaeda, Al Nusra, or other fellow travelers seeking regime change, including ISIL, which today is the focus of our attention”.

“As the saying goes, better late than never. It is not for the first time that Russia is making a very real contribution to the fight against both ISIL and other terrorist factions in the region. We have sent large supplies of weapons and military equipment to the governments of Iraq, Syria, and other countries in the Middle East and North Africa, and we will continue to support their efforts to suppress terrorists. The terrorist threat requires a comprehensive approach; we want to eradicate its root cause rather than be condemned to react only to the symptoms. ISIL is only part of the problem”.

“We propose to launch, under the auspices of the United Nations Security Council, an in-depth and broad study on extremist and terrorist threats and aspects of their threat in the Middle East and North African region”.

“This integrated approach implies also the long-standing conflict should be considered primarily between the Arabs and Israel. The absence of a settlement of the Israel-Palestine issue over several decades remains and is widely recognized one of the main factors of instability in the region which is helping the extremists to recruit more and more jihadists”.

—-

“Another literally urgent area of our common work together is the joining of our efforts to implement decisions of the UN General Assembly and Security Council to combat the Ebola virus. Our doctors are already working in Africa. There are plans to send additional humanitarian assistance, equipment, medical instruments, medicines, and teams of experts to assist the UN programs in Guinea, Liberia, and Sierra Leone.

—-

The United Nations was established on the ruins of World War II, and it is entering the year of its 70th anniversary. It is an obligation for us all to celebrate in an appropriate manner the anniversary of the great victory, and to give tribute to the memory of all who perished for freedom and the right of each people to determine its own destiny”.

“The lessons of that terrible war, and the entire course of events in today’s world, require us to join efforts and forget about unilateral interests and national election cycles. When it comes to countering global threats to all humanity, it should not be allowed for national egoism to prevail over collective responsibility”. 

“Thank you”.

http://www.informationclearinghouse.info/article39972.htm

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