Updates on the Grand Chessboard

Putin's Ruthless Gambit
The Bush Administration Falters in a Geopolitical Chess Match

By Michael T. Klare

"TomDispatch" -- - Many Western analysts have chosen to interpret the recent fighting in the Caucasus as the onset of a new Cold War, with a small pro-Western democracy bravely resisting a brutal reincarnation of Stalin's jack-booted Soviet Union. Others have viewed it a throwback to the age-old ethnic politics of southeastern Europe, with assorted minorities using contemporary border disputes to settle ancient scores.

Neither of these explanations is accurate. To fully grasp the recent upheavals in the Caucasus, it is necessary to view the conflict as but a minor skirmish in a far more significant geopolitical struggle between Moscow and Washington over the energy riches of the Caspian Sea basin -- with former Russian President (now Prime Minister) Vladimir Putin emerging as the reigning Grand Master of geostrategic chess and the Bush team turning out to be middling amateurs, at best.

The ultimate prize in this contest is control over the flow of oil and natural gas from the energy-rich Caspian basin to eager markets in Europe and Asia. According to the most recent tally by oil giant BP, the Caspian's leading energy producers, all former "socialist republics" of the Soviet Union -- notably Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan -- together possess approximately 48 billion barrels in proven oil reserves (roughly equivalent to those left in the U.S. and Canada) and 268 trillion cubic feet of natural gas (essentially equivalent to what Saudi Arabia possesses).

During the Soviet era, the oil and gas output of these nations was, of course, controlled by officials in Moscow and largely allocated to Russia and other Soviet republics. After the breakup of the USSR in 1991, however, Western oil companies began to participate in the hydrocarbon equivalent of a gold rush to exploit Caspian energy reservoirs, while plans were being made to channel the region's oil and gas to markets across the world.


Rush to the Caspian
In the 1990s, the Caspian Sea basin was viewed as the world's most promising new source of oil and gas, and so the major Western energy firms -- Chevron, BP, Shell, and Exxon Mobil, among others -- rushed into the region to take advantage of what seemed a golden opportunity. For these firms, persuading the governments of the newly independent Caspian states to sign deals proved to be no great hassle. They were eager to attract Western investment -- and the bribes that often came with it -- and to free themselves from Moscow's economic domination.


But there turned out to be a major catch: It was neither obvious nor easy to figure out how to move all the new oil and gas to markets in the West. After all, the Caspian is landlocked, so tankers cannot get near it, while all existing pipelines passed through Russia and were hooked into Soviet-era supply systems. While many in Washington were eager to assist U.S. firms in their drive to gain access to Caspian energy, they did not want to see the resulting oil and gas flow through Russia -- until recently, the country's leading adversary -- before reaching Western markets.

What, then, to do? Looking at the Caspian chessboard in the mid-1990s, President Bill Clinton conceived the striking notion of converting the newly independent, energy-poor Republic of Georgia into an "energy corridor" for the export of Caspian basin oil and gas to the West, thereby bypassing Russia altogether. An initial, "early-oil" pipeline was built to carry petroleum from newly-developed fields in Azerbaijan's sector of the Caspian Sea to Supsa on Georgia's Black Sea coast, where it was loaded onto tankers for delivery to international markets. This would be followed by a far more audacious scheme: the construction of the 1,000-mile BTC pipeline from Baku in Azerbaijan to Tbilisi in Georgia and then on to Ceyhan on Turkey's Mediterranean coast. Again, the idea was to exclude Russia -- which had, in the intervening years, been transformed into a struggling, increasingly impoverished former superpower -- from the Caspian Sea energy rush.

Clinton presided over every stage of the BTC line's initial development, from its early conception to the formal arrangements imposed by Washington on the three nations involved in its corporate structuring. (Final work on the pipeline was not completed until 2006, two years into George W. Bush's second term.) For Clinton and his advisors, this was geopolitics, pure and simple -- a calculated effort to enhance Western energy security while diminishing Moscow's control over the global flow of oil and gas. The administration's efforts to promote the construction of new pipelines through Azerbaijan and Georgia were intended "to break Russia's monopoly of control over the transportation of oil from the region," Sheila Heslin of the National Security Council bluntly told a Senate investigating committee in 1997.
Clinton understood that this strategy entailed significant risks, particularly because Washington's favored "energy corridor" passed through or near several major conflict zones -- including the Russian-backed breakaway enclaves of Abkhazia and South Ossetia. With this in mind, Clinton made a secondary decision -- to convert the new Georgian army into a military proxy of the United States, quipped and trained by the Department of Defense. From 1998 to 2000 alone, Georgia was awarded $302 million in U.S. military and economic aid -- more than any other Caspian country -- and top U.S. military officials started making regular trips to its capital, Tbilisi, to demonstrate support for then-president Eduard Shevardnadze.

In those years, Clinton was the top chess player in the Caspian region, while his Russian presidential counterpart, Boris Yeltsin, was far too preoccupied with domestic troubles and a bitter, costly, ongoing guerrilla war in Chechnya to match his moves. It was clear, however, that senior Russian officials were deeply concerned by the growing U.S. presence in their southern backyard -- what they called their "near abroad" -- and had already had begun planning for an eventual comeback. "It hasn't been left unnoticed in Russia that certain outside interests are trying to weaken our position in the Caspian basin," Andrei Y. Urnov of the Russian Ministry of Foreign Affairs declared in May 2000. "No one should be perplexed that Russia is determined to resist the attempts to encroach on her interests."


Russia Resurgent

At this critical moment, a far more capable player took over on Russia's side of the geopolitical chessboard. On December 31, 1999, Vladimir V. Putin was appointed president by Yeltsin and then, on March 26, 2000, elected to a full four-year term in office. Politics in the Caucasus and the Caspian region have never been the same.

Even before assuming the presidency, Putin indicated that he believed state control over energy resources should be the basis for Russia's return to great-power status. In his doctoral dissertation, a summary of which was published in 1999, he had written that "[t]he state has the right to regulate the process of the acquisition and the use of natural resources, and particularly mineral resources [including oil and natural gas], independent of on whose property they are located." On this basis, Putin presided over the re-nationalization of many of the energy companies that had been privatized by Yeltsin and the virtual confiscation of Yukos -- once Russia's richest private energy firm -- by Russian state authorities. He also brought Gazprom, the world's largest natural gas supplier, back under state control and placed a protégé, Dmitri Medvedev -- now president of Russia -- at its helm.
Once he had restored state control over the lion's share of Russia's oil and gas resources, Putin turned his attention to the next obvious place -- the Caspian Sea basin. Here, his intent was not so much to gain ownership of its energy resources -- although Russian firms have in recent years acquired an equity share in some Caspian oil and gas fields -- but rather to dominate the export conduits used to transport its energy to Europe and Asia.

Russia already enjoyed a considerable advantage since much of Kazakhstan's oil already flowed to the West via the Caspian Pipeline Consortium (CPC), which passes through Russia before terminating on the Black Sea; moreover, much of Central Asia's natural gas continued to flow to Russia through pipelines built during the Soviet era. But Putin's gambit in the Caspian region evidently was meant to capture a far more ambitious prize. He wanted to ensure that most oil and gas from newly developed fields in the Caspian basin would travel west via Russia.

The first part of this drive entailed frenzied diplomacy by Putin and Medvedev (still in his role as board chairman of Gazprom) to persuade the presidents of Kazakhstan, Turkmenistan, and Uzbekistan to ship their future output of gas through Russia. Success was achieved when, in December 2007, Putin signed an agreement with the leaders of these countries to supply 20 billion cubic meters of gas per year through a new conduit along the Caspian's eastern shore to southern Russia -- for ultimate delivery to Europe via Gazprom's existing pipeline network.


Meanwhile, Putin moved to undermine international confidence in Georgia as a reliable future corridor for energy delivery. This became a strategic priority for Moscow because the European Union announced plans to build a $10 billion natural-gas pipeline from the Caspian, dubbed Nabucco" after the opera by Verdi. It would run from Turkey to Austria, while linking up to an expanded South Caucasus gas pipeline that now extends from Azerbaijan through Georgia to Erzurum in Turkey. The Nabucco pipeline was intended as a dramatic move to reduce Europe's reliance on Russian natural gas -- and so has enjoyed strong support from the Bush administration.
It is against this backdrop that the recent events in Georgia unfolded.


Checkmate in Georgia
Obviously, the more oil and gas passing through Georgia on its way to the West, the greater that country's geostrategic significance in the U.S.-Russian struggle over the distribution of Caspian energy. Certainly, the Bush administration recognized this and responded by providing hundreds of millions of dollars in military aid to the Georgian military and helping to train specialized forces for protection of the new pipelines. But the administration's partner in Tbilisi, President Mikheil Saakashvili, was not content to play the relatively modest role of pipeline protector. Instead, he sought to pursue a megalomaniacal fantasy of recapturing the breakaway regions of Abhkazia and South Ossetia with American help. As it happened, the Bush team -- blindsided by their own neoconservative fantasies -- saw in Saakashvili a useful pawn in their pursuit of a long smoldering anti-Russian agenda. Together, they walked into a trap cleverly set by Putin.

It is hard not to conclude that Russian prime minister goaded the rash Saakashvili into invading South Ossetia by encouraging Abkhazian and South Ossetian irregulars to attack Georgian outposts and villages on the peripheries of the two enclaves. Secretary of State Condoleezza Rice reportedly told Saakashvili not to respond to such provocations when she met with him in July. Apparently her advice fell on deaf ears. Far more enticing, it seems, was her promise of strong U.S. backing for Georgia's rapid entry into NATO. Other American leaders, including Senator John McCain, assured Saakashvili of unwavering U.S. support. Whatever was said in these private conversations, the Georgian president seems to have interpreted them as a green light for his adventuristic impulses. On August 7th, by all accounts, his forces invaded South Ossetia and attacked its capital city of Tskhinvali, giving Putin what he long craved -- a seemingly legitimate excuse to invade Georgia and demonstrate the complete vulnerability of Clinton's (and now Bush's) vaunted energy corridor.

Today, the Georgian army is in shambles, the BTC and South Caucasus gas pipelines are within range of Russian firepower, and Abkhazia and South Ossetia have declared their independence, quickly receiving Russian recognition. In response to these developments, the Bush administration has, along with some friendly leaders in Europe, mounted a media and diplomatic counterattack, accusing Moscow of barbaric behavior and assorted violations of international law. Threats have also been made to exclude Russia from various international forums and institutions, such as the G-8 club of governments and the World Trade Organization. It is possible, then, that Moscow will suffer some isolation and inconvenience as a result of its incursion into Georgia.

None of this, so far as can be determined, will alter the picture in the Caucasus: Putin has moved his most powerful pieces onto this corner of the chessboard, America's pawn has been decisively defeated, and there's not much of a practical nature that Washington (or London or Paris or Berlin) can do to alter the outcome.


There will, of course, be more rounds to come, and it is impossible to predict how they will play out. Putin prevailed this time around because he focused on geopolitical objectives, while his opponents were blindly driven by fantasy and ideology; so long as this pattern persists, he or his successors are likely to come out on top. Only if American leaders assume a more realistic approach to Russia's resurgent power or, alternatively, choose to collaborate with Moscow in the exploitation of Caspian energy, will the risk of further strategic setbacks in the region disappear.

Michael T. Klare is professor of peace and world security studies at Hampshire College and the author, most recently, of Rising Powers, Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books).

Original article posted here.

While Washington bitches about secessionist elements in Georgia, they seem to be promoting the same in Bolivia

Bolivia: Is Evo in Danger after the August 10 referendum ? The US prepares a civil war by Michel Collon

Global Research, August 10, 2008

Bolivia has certainly changed. In La Paz, I attended a large reception given by the Cuban ambassador. Mojitos, buffet, dances... Where was it held? In the ceremonial hall of... the Bolivian army. Yes, the one that killed Ché. Bolivia has certainly changed, but not everyone wishes it well. We had come to get an idea first hand with some progressive intellectuals from about 15 countries. Frei Betto, Ernesto Cardenal, Ramsey Clark, François Houtart, Luis Britto Garcia, Pascual Serrano... A few days of meetings and exchanges with Bolivian intellectuals, representatives of the Indian communities, artists... It's a sensitive moment. The rightwing is trying to split away the wealthy regions of the country's East. To frustrate this operation, President Evo Morales, in the middle of his mandate, has called for a revocatory referendum, this Aug. 10. It's a sort of vote of confidence. It puts his legitimacy in play, but also that of the prefects of departments, including those who belong to his opposition. The rightwing is trying to sabotage the referendum and people fear incidents... We will see who is behind these incidents, which role the United States plays, and the CIA, and a really strange ambassador, and also Europe... Strong impressions Strong impressions. Physically, first of all. La Paz is at an altitude of 11,800 feet. Its airport at 13,100. We arrived in the night, short of oxygen, at the brink of passing out. Very attentive, the young people who welcome us have us sit down calmly, while they deal with our luggage and let us catch our breath. The first day will be devoted to rest and acclimatization. With Luis, a Venezuelan friend, we take a small tour, taking small steps from one bench to the next, in one of the most beautiful capitals of the world. Imagine an immense basin, bordered by the imposing mountains Huayna Potosí (20,000 ft.) and Nevado Illimani (21,200 ft.), not far from the lake Titicaca, the highest navigable lake of the world. Here, water boils at 176° F instead of 212° F at sea level. And no street is flat. What is striking about La Paz, in winter in any case, is the gentle climate, sunny and fresh. And the gentle people. Everywhere, you are welcomed with kindness, with a kind of quiet serenity. Indians wear heavy clothing with superb multi-coloured shawls. And of curious small "bolo" hats, black, brown or gray. Sometimes, they also carry impressive loads. Two-thirds of the population are Indians. The importance of the Indian communities "An Indian president? The white racist oligarchy still won't accept it," Evo confides to us. I began to understand all the wealth of this Indian heritage while visiting with Bolivian friends in Tiwanaku, the capital of an old Incan empire... We are on the very high plateau of the Altiplano, bordered by mountains. Here, Indians live under difficult conditions, from farming and raising animals. Not a cloud in the sky, an incredibly pure air, you can still feel the nighttime chill. Tiwanaku was an immense city, whose excavations have hardly begun. A hundred local Indians are busy restoring the temple, an enormous pyramid in terraces. It was a very advanced civilization, which constructed its buildings based on a thorough knowledge of astronomy. It had created a metallurgical and textile industry. It cultivated more than 200 different kinds of corn and 400 kinds of potatoes, of which one species could be frozen and remain edible for ten years. The system of irrigation was very sophisticated with a very precise slope so that the stones would heat the water enough to prevent it from freezing. This system was so sophisticated that today the Agriculture Ministry will revive it to develop agriculture on the terraces. Water is rare here, a treasure. An Indian elder carries out a ritual ceremony with our group, a sort of sacrifice of small symbolic objects, to celebrate the unity with the cosmos and to gather the wishes that we form. Emotion. It is no about glorifying the past for its own sake, but to preserve the common memories and values and integrate them into the new society. A Bolivian journalist explains the importance of community here: "It is a strong element of Bolivia. Look here, according to international statistics, a Bolivian peasant has an average income of 50 dollars per year. You may as well say that he is dead! Except if one understands that the communal economy is the basis of our life here. " In short, it's an invaluable heritage that must not be lost. One Bolivian in four must emigrate Strong impressions also regarding social realities in this country. In La Paz, the upper classes live at the lower end of the city, below 10,000 feet, where one breathes more easily. Lower classes, on the other hand, in El Alto: at over 13,000 feet. Small trade, small craft industries, a little animal husbandry in the high plateaus... Life is hard. The second poorest country of Latin America, Bolivia has seen one of four of its children emigrate. Why? For centuries, this land was colonized by Spain. And all the benefit of its mining wealth, extracted at the cost of a murderous labor in semi-slavery, were carried to Europe. For decades, its gas and its oil benefited only a handful of rich people, but most of all some transnational corporations, especially European-based. The North bled the South thoroughly, leaving behind only misery. And conflicts. Evo Morales, president for two-and-a-half years, did not fall from the sky. His presidency is the fruit of long years of worker and peasant resistance. The Indian communities have always been exploited, excluded and scorned by a white racist elite, dependent on the United States and Europe. That's where poverty and underdevelopment arise. But when the Bolivians, to survive, take care of housework in Europe, they are treated like criminals and thrown into prison. Even children! Evo Morales courageously denounced the recent "Directive of Shame" which will make it possible all European countries to imprison the criminals, sorry, the immigrants, for up to 18 months. Precisely, before leaving, I met with immigrant workers in Brussels, in particular the Latinos and Latinas. In struggle for months to obtain papers, i.e., their rights, their dignity. Confronting ministers who completely ignored them, they had to risk their lives: hunger strike, climbing cranes... Since they greatly appreciated Evo's letter to the E.U., they asked me to give a small message of gratitude to the Bolivian president. I did. It brought a smile to his face. In fact, when you see the poverty here, the very low wages, the lack of industry, one understands why so many Bolivians must emigrate. But, when investigating further, one also understands that Europe is a dirty hypocrite who bears a heavy responsibility for this emigration. We will return to this later... What has Evo accomplished? But first of all let us take a look at what Evo accomplished in two-and-a-half years ... He nationalized oil and gas. Would you like to know why the corporate media calls the Colombian President Uribe "good" and Evo Morales "bad"? Very simple. The former cut the taxes of the transnational corporations from 14 percent to... 0.4 percent. To help these transnationals get installed locally under optimum conditions, the Colombian paramilitaries drove four million peasants off their land. The latter, Morales, in order to combat poverty, dared to return to the Bolivian nation the wealth it owned. By nationalizing its hydrocarbon resources, Evo multiplied the public revenues by five and gave himself the means for relieving the most urgent evils: illiteracy has dropped by 80 percent, a part of the children working in the streets have returned to school, schools teaching in the Indian languages Aymara and Quechua have been established (20,000 graduates), free health care is already available for half of the Bolivians, a "Dignity" pension for those over 60, credit with zero-percent interest for products like corn, wheat, soy and rice. Thanks to Venezuelan aid, 6,000 computers were made available, especially at schools. Thanks to Cuban aid, 260,000 people had eye operations. Elsewhere in Latin America, they would be condemned to be blind, because they are poor. Moreover, the public investments to develop the economy increased greatly. Bolivia eliminated its fiscal deficit, repaid half of its foreign debt (now down from $5.0 to 2.2 billion), reconstituted a small financial reserve, multiplied employment in the mines and the metal industries by four, and doubled the production and the incomes of these industries. The industrial GDP passed from $4.1 to $7.1 billion in three years. A thousand tractors were distributed to peasants. New roads were built. In short, Bolivia advances. Not quick enough, some say. For these people, Evo is not moving hard enough against the rightwing and the big landowners. It is a debate that must be carried out among those who live on the spot and can appreciate the situation, with all its possibilities and dangers. And by understanding that it is not enough to say "Do it" to bring a country out of poverty and dependence. By knowing that it is necessary to take account of the relationship of forces with the rightwing, which is agitating and sabotaging. By taking account of the army (Will all its generals be loyal to the government under all conditions?). Another negative factor: "The legal system remains completely corrupted," was confided to me by... the highest ranking magistrate in La Paz. "It is an old caste that protects itself and the interests of the rich. It's a business, truly. However, we have threatened the immediate recall of any judge caught in an obvious crime. But it is a difficult battle." And precisely, when I was there, the courts came rushing to help the rightwing by trying to prevent by a legal battle the holding of the referendum. But there is danger much greater than the legal system... Behind the rightwing, the United States prepares a civil war It is the new tactic of the United States. Finding themselves unable to win a war of occupation, Washington is resorting to indirect war, war by proxies. Currently, strategy of Washington is to try to foment a civil war in Bolivia. For that, the provinces controlled by the rightwing and which contain the greater part of the oil and gas reserves along with the large agricultural properties tied to the transnationals, these provincial regimes are multiplying their provocations to prepare to secede. Having personally studied the secret actions of the great powers to break up Yugoslavia (1), I made a point of drawing the attention of the Bolivians, during some interviews: today, Washington will try to transform their country into a new Yugoslavia. Here are the ingredients needed for this deed: 1. Massive CIA investments. 2. An ambassador specialized in destabilization. 3. Experienced fascists. With these ingredients, you can prepare a coup d'etat or a civil war. Or both. First ingredient. As in Venezuela, the CIA is investing a lot in Bolivia. Through its usual covers: USAID, National Endowment for Democracy, Republican International Institute, etc. The right-wing separatist organizations are abundantly subsidized. USAID, for example, financed Juan Carlos Orenda, adviser of the extreme right Civic Committee of Santa Cruz and author of a plan envisaging the secession of this province. But they also support the more discreet organizations charged to sow confusion and to prepare an anti-Evo propaganda. At the University of San Simon of Cochabamba, the Thousand-year Foundation received $155,000 to criticize the nationalization of gas and defend neoliberalism. Thirteen young Bolivian right-wing leaders were invited for training in Washington: $110,000. In the popular districts of El Alto, USAID launched programs "to reduce the tensions in the zones prone to social conflicts." Read: to discredit the left. In all, millions of dollars have been handed out to all kinds of organizations, student groups, journalists, politicians, judges, intellectuals, businesspeople. The Spanish Popular Party, around Jose Maria Aznar, takes part in these operations. Second ingredient. Where does Philip Goldberg, the current ambassador of the United States to Bolivia, come from? From Yugoslavia. Where he accumulated a rich personal experience in how to split a country apart. From 1994 to 1996, he worked in Bosnia for Ambassador Richard Holbrooke, one of the strategists of disintegration. Then, he stirred up conflict in Kosovo and fomented the split between Serbia and Montenegro. An expert, you could say. And not inactive. As the Argentinian journalist Roberto Bardini tells it: "On June 28, 2007, a 20-year-old U.S. citizen, Donna Thi of Miami, was held at the airport of La Paz for trying to bring into the country 500 45-caliber bullets that she had declared to customs were 'cheese.' Waiting for her at the terminal was the wife of Colonel James Campbell, the chief of the military mission of the U.S. Embassy in Bolivia. U.S. Ambassador Philip Goldberg immediately intervened to obtain her release, saying that it was only an 'innocent error.' The ammunition, he declared, was to be used only for sport and show. In March 2006, another U.S. citizen, Triston Jay Amero, alias Lestat Claudius, a 25-year-old Californian, carrying 15 different identity documents, set off 660 pounds of dynamite in two La Paz hotels." (2) Why did the U.S. export Goldberg from the Balkans to Bolivia? To transform, I am sure, this country into a new Yugoslavia. Washington favors the method of promoting separatism to retake control of natural resources or strategic areas when governments act too independent, too resistant to the transnationals. Third ingredient. Experienced fascists. In Bolivia, Goldberg openly supported and collaborated with Croatian-origin businesspeople in the leadership of the secessionist movement. Particularly with Branko Marinkovic, member of Federation of Free Entrepreneurs of Santa Cruz (the secessionist province). A very big landowner, Marinkovic also pulls the strings of the Transporte de Hidrocarbures Transredes (which works for Shell). He manages the 3,750 miles of oil and gas pipelines that feed out to Chile, Brazil and Argentina. And when did these people come from Croatia? It should be recalled that, during World War II, the German leader, Nazi Adolf Hitler established fascist Greater Croatia where his collaborators, the Ustashis, set up death camps (including one especially for children!) that carried out a terrible genocide aimed at Serbs, Jews and Roma ("gypsy") people. (3) After the Nazi defeat, the Croatian Catholic Church and the Vatican organized "ratlines," paths for the Croatian fascist criminals (and for German Nazi Klaus Barbie) to escape. From Croatia in Austria, then onto Rome. And from there towards Argentina, Bolivia or the United States. (4) When it became known that Franjo Tudjman and the leaders of the "new" Croatia born in 1991 had rehabilitated the former Croatian World War II criminals, one would like to know if Mr. Marinkovic disavows all this past or if, quite simply, he employs the same methods where he is now. As for the United States, one knows that it rehabilitated and recycled a large quantity of Nazi criminals and spies of World War II. The networks are always useful. What hides behind separatism There. All the ingredients are ready to blow Bolivia apart... The dollars of the CIA, plus the experts in provoking civil wars, plus the fascists recycled as businesspeople. A civil war that would serve the interests of the multinationals, but that international public opinion must absolutely prevent. The Bolivians have the right to decide their fate themselves. Without the CIA. Because a secession would benefit only the elite. The Brazilian writer Emir Sader has just written very precisely: "Today, one of the methods that includes racism is separatism, the attempt to delimit the lands controlled by the white race, by adapting and privatizing the wealth that belongs to the nation and its people. We already knew these intentions in the form of the rich districts that sought to be defined as municipalities, with the goal that a share of the taxes taken by law from their immense richnesses remains under their control to increase the revenue to their split-off districts, behind which they sought to insulate and to use a privately controlled security apparatus to guard their privileged life styles.(...) The separatist referendum is an oligarchic, racist and economic device used because they want to keep the greatest part of the wealth of Santa Cruz for their own benefit and because the oligarchs want, moreover, to prevent the government of Evo Morales from continuing the process of land reform and extending all over the country." (5) This autonomy, indeed, that means that the rich white people who have always controlled Bolivia refuse to listen to the non-white majority in its West. When one speaks about autonomy, Evo Morales answers: "Let us speak about autonomy, not for the oligarchy, but for the people with whom we struggle. These separatist groups which have just lost their privileges were for a long time in the palace, they controlled the country and allowed the plundering of our country, our natural resources, including its natural resources, and the same with the privatization of our companies, and now they once again want to reestablish this system which exposes their true interest: economic control." But it's not only the United States that intervenes in Bolivia... The hypocrisy of Europe : who thereby caused, "all the misery of the world"? While hunting down undocumented workers, Europe slips into a sigh from the genteel nobility: "We cannot after all give succor to all the suffering of the world." Ah, well? But, actually, this misery, it is you who created it! Your Charles the Fifth, your Louis XIV, your Elisabeth I and your Léopold II happily massacred the "savages" to steal their wealth! This plundering was the basis of European capitalism's rapid economic growth. And today still your mining, agricultural and other corporations have not ceased to plunder the raw materials without paying for them, have not ceased dominating and deforming the local economies and blocking their development! Isn't it you who have the debt--to repay the South? Would this be dredging up the past? In the media, the Europeans in charge like to say that today, they want only the best for Latin America and the Third World... "Completely false," confided to me with indignation Pablo Solon, who represents Bolivia in the trade negociations between Latin America and the E.U: "Bolivia exp-lained it to the E.U. Before the negotiations, we had said that we would not negotiate a Free-Trade-style treaty. And we had communicated our points of divergence regarding services, investments, intellectual property and public property. The commission promised us that these points would be on the table during the negotiations. That in contrast with the "others," they would not try to impose a unique format on us. But, when we met with Peter Mandelson, European commerce official, he told us in a categorical and imperative way: 'This is a Free Trade Agreement. Accept it or you're out of the talks.' I answered personally that we were not going to exclude ourselves and that we were going to defend our points of view until the end. Because Bolivia has many industries which it must defend: steel, plastic, paper, which need mechanisms to protect themselves, as was done for the emergent European industries in the past." Indeed, Europe showed that it is hyper-dominating and arrogant. It claims it will impose on all of Latin America and the Caribbean the end of subsidies that help to develop the local products, the suppression of the import duties (but it refuses to do the same at home!), suppression of every limit for European exports (refusing the reverse), the transfer without limits of the qualified European labor, and the modification of all laws protecting the local economies. And moreover, the E.U. wants to impose the privatization of all state services, goods and enterprises. Although already in 2000, out of the 500 largest companies of Latin America and of the Caribbean, 46 percent already belonged to foreign corporations. And moreover, the E.U. wants to impose patents on living things (Bolivia has a very rich biodiversity coveted by the chemical and pharmaceutical transnationals). But aren't living things, and water also, goods essential for survival, an innate property that should remain with those who always protected them and used them with care? Ultimately, the E.U. wants to impose completely unbalanced treaties which will wipe out the Bolivian companies. All that it seeks is that the European companies can invade the markets freely. Thus they will ruin these countries. Thus they will provoke emigration. An absurd system, no? Who chooses immigration and why? I wrote that Europe drove out the Latino immigrants. That is less than accurate. Europe does not treat them all the same way. On the one hand, European bosses import the best brains of the Third World, and also the very qualified technicians. They are under-paid to increase company profits. It is what Sarkozy and others call "selected immigration". The boss selects those who will be likely to work for him. But this brain-drain deprives the Third World of people whom it taught (at great cost) and who would be necessary to its development. A new form of plundering. On the other hand, Europe also welcomes a part of the non-qualified workers. By leaving them without papers, therefore without rights, it forces them to live in fear, to accept wages and working conditions that constitute social reverses. It's an effective way to divide the working class and pressure the other workers. That's how the "competitiveness" of this virtuous Europe is manufactured. How Europe treats undocumented workers is no aberration, but an essential moving part of an economic system. To sum up: Europe stole from Latin America. Europe continues to steal from Latin America. It stops the continent from nourishing its children. But when those children are forced to emigrate, it imprisons them. Then, it offers lessons of democracy and morality to the whole world. The time has come I could not remain in Bolivia a long time, but these people deeply impressed me. I remember the thousands of demonstrators who went down, this Sunday, towards the center of La Paz, crammed into their minibuses, cars or taxis, Indians and whites, from the fairest to the darkest. With astonishing calm and much less noise than in any demonstration in any other part of the world. With a simple and noble determination. And in their eyes you could read a determination: the time has come to put an end to centuries of humiliations, the time has come for dignity for all, the time has come to make misery disappear. And I thought once again of those undocumented friends in Brussels, who also demonstrated for their future and their dignity. The problem is obviously the same one, in Brussels and La Paz: for whom must the wealth of a country be used? And if this problem is not resolved in La Paz, the millions of undocumented workers will continue to knock on Europe's doors. And tomorrow? How will this evolve? For August 10, an pro-U.S. polling institute, like the majority of my contacts in La Paz, predicted a victory of Evo with 60 percent. On the other hand, some feared the influence of the problem of the inflation and the increase in the cost of living. Still others fear that the rightwing will launch violent provocations. Whatever happens, the referendum itself will resolve nothing, neither in one direction, nor the other. Evo Morales will still face the same problem: the government is on the left, but it does not control the country's economy, nor its media (which is in the hands of the big landowners and the Spanish multinational Prisa), nor its universities, nor the Church, which is on the side of the rich as usual on this continent. One cannot do everything in two-and-a-half years. But, to advance, Evo will have to succeed more than even in mobilizing the popular masses. His only strength. In any event, after the referendum, the question will remain the same: will the wealth of the country be used to enrich the wealthy and the transnational corporations or to develop the country and overcome poverty? To resolve this question in its favor, Washington is ready to do anything. And the international progressive movement? How will it react against disinformation and the preparation of a civil war? The answer depends on all of us. Translation from French: John Catalinotto If you want to send to your friends, French and Spanish versions available at : [1] Test-media Yugoslavia y Kosovo, http://www.michelcollon.info/archives_testm.php [2] Roberto Bardini, el embajador de la secesión, traducción francesa vuelta a ver B.I., nº 133, junio de 2008. [3] Michel Collon, Liars' Poker, IAC, New York, 2002, p. 78 [4] Operación Ratlines, documental de David Young amargo Chanel 4 TVES, 1991. Citado en El Juego de la mentira, p. 83. [5] CEPRID, la CIA allí la oligarquía en contubernio contradijo a Bolivia, ww.nodo50.org/ceprid/spip.php?article169

Michel Collon is a frequent contributor to Global Research. Global Research Articles by Michel Collon

Original article posted here.

Paul Craig Roberts has REALLY come a long way towards brilliance from his days as a Reagonite

From Off-Shore Drilling to the Georgian War

The Moronic Party

By PAUL CRAIG ROBERTS

“Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservative.”

-- John Stuart Mill

Many years ago, during the 1970s if memory serves, neoconservative Irving Kristol, echoing John Stuart Mill, called his conservative party, the Republican Party, “the stupid party.”

Kristol was referring to the Republican’s inability to compete on the policy front. Jack Kemp and Ronald Reagan led the Republicans out of the wilderness, but now Republicans have reverted to the stupid party, or more precisely the moronic party.

Take a minute to examine the presidential campaign propaganda that Republicans send around the Internet, and you will see what I mean. For example, recently while Obama was traveling abroad, showing himself to the remnant of our allies, Republican political operatives blitzed the Internet with the suggestion that Obama might not be an American citizen. Doubt was cast on either of his parents being American citizens. The message went on to suggest that Obama refused to produce his birth certificate. All the while, Obama was traveling abroad on a US passport, a document that cannot be obtained without a US birth certificate.

Considering that the Republican candidate, John McCain, was born in the Panama Canal Zone, only the GOP would be dumb enough to make an issue over whether the Democrats’ candidate was born in one of the 50 states.

The innuendo and negativism with which the Republicans are conducting their presidential campaign are unprecedented. There is no sign of issues in McCain’s Karl Rovian campaign. Issues have been superseded by hate, lies, and war.

Republicans stand for war without end, a police state to make us “safe,” and “energy independence,” which means drilling for oil in the Arctic National Wildlife Preserve and offshore of Florida’s Gulf Coast beaches.

What Republicans really mean by “energy independence” is prevailing over environmentalists. Republicans lump environmentalists in the same category with abortionists, gays, feminists, food stamp recipients, trade unionists and terrorists. To a Republican, saving America means prevailing over these people.

The notion that Americans can achieve energy independence by drilling offshore wells and in the arctic is absurd. A number of experts have pointed out that the best data do not support any such possibility.

For example, Robert Kaufman at Boston University, citing US government data, reports that the US might have 40 billion barrels of oil in undeveloped reserves which are not off limits. Another 19 billion might be in off limit offshore sites and in the Arctic National Wildlife preserve.

All of this oil cannot be brought up at once, and apparently none before 2017. Bringing it all into production would, experts think, increase US oil production by 1-4 percent. In other words, nothing. Currently the US uses 21 million barrels a day, and the entire world uses 86 million barrels a day. At best, the Arctic Wildlife Refuge could by 2017 produce 1 million barrels a day, about one-twentieth of current US use and one-eighty-sixth of current world use.

This is not energy independence, and it would have no material effect on price. Indeed, the offshoring by US corporations of US jobs has a much greater effect on the dollar price of oil by inflating the US trade deficit and driving down the exchange value of the US dollar. But, of course, here we are talking about facts, and facts are of no interest to Republicans.

Republicans are interested in prevailing over the “bad guys.” The fact that the bad guys are Bush, Cheney, Rice, Wolfowitz, Perle, Billy Kristol, and other such is beyond the Republicans’ imagination. Bad guys are “towel heads” with beards and robes and are “over there” where they must be killed before the come “over here.” The extent of the Republican intellect boils down to “over here” vs. “over there.”

The other great bugaboo of Republicans is “the liberal media.” Fox “News” has Republicans convinced that “the liberal media” is endangering America by siding with terrorists.

Clearly, Republicans never look at “the liberal media.” It was Judith Miller at the “liberal” New York Times who served up as fact all the neocon disinformation about Saddam Hussein and his weapons of mass destruction and al Qaeda connections. Without the New York Times leading the way, the neocons could never have pulled off their illegal invasions.

On July 18, 2008, the New York Times allowed the Israeli historian Benny Morris to spew lies about Iran that he used to justify an attack on that country possibly even involving nuclear weapons. This is the same New York Times that the idiot conservatives believe is part of “the liberal media.”

It was ABC News that served up the neocon disinformation that the anthrax had been traced to Saddam Hussein. And, today, August 9, 2008, as I write, it is the “liberal” Washington Post that has written an editorial urging the US to go to war with Russia.

With its editorial, “Stopping Russia: the US and its allies must unite against Moscow’s war on Georgia,” the Washington Post has established a world record for the maximum number of lies in the minimum number of words.

Except for the Washington Post, the entire world knows that Georgia (the birthplace of Joseph Stalin, not Georgia USA) initiated the aggression that killed Russian peacekeepers and hundreds of civilians in South Ossetia, peacekeepers who were there with the blessing of Georgia and international agreements.

The true facts are available all over the world press. But the “liberal” Washington Post serves up the lie that Russia has attacked Georgia and conceivably plans to conquer all of Georgia. “This is a grave challenge to the United States and Europe,” thunders the Bush Regime’s mouthpiece, aka, “the liberal media.”

Thirsting for blood, the “liberal media” declares: “The United States and its NATO allies must together impose a price on Russia.”

Here we see the combination of idiocy and delusion in one sentence. The United States has proved that it is incapable of occupying Iraq, much less Afghanistan. Russia has a large trade surplus. America’s NATO allies are dependent on Russian natural gas. Yet the “liberal” Washington Post wants a bankrupt US and “its NATO allies” who are dependent on Russian energy “to impose a price on Russia” for defending its peacekeepers!

Seldom has the world seen such total insanity as the neoconservative Washington Post, a propaganda sheet as far from “liberal media” is it is possible to be.

Georgia was part of Old Russia and the Soviet Union for two centuries. After Soviet communism collapsed, the US taxpayer funded neoconservative National Endowment for Democracy broke every agreement that President Reagan had made with Gorbachev and began using US taxpayers’ money to rig and purchase elections in former constituent parts of the Russian/Soviet empire.

The Endowment for Democracy purchased Georgia as a US colony. The affront to Russia was extreme, but at the time Russia was weak. Oligarchs with outside money had grabbed control over Russian resources, and Russia was in dire straits and could not resist American imperialism.

Putin corrected the situation for Russia.

Now using American weapons Georgia for reasons yet to be revealed has violated its own agreement with Russia and attacked South Ossetia, killing in the process Russian peacekeepers. Vladimir Vasilyev, chairman of the Russian State Duma Committee for Security told the press: “The things that were happening in Kosovo, the things that were happening in Iraq – we are now following the same path. The further the situation unfolds, the more the world will understand that Georgia would never be able to do all this without America.”

Yes, without America there would be no war in Ossetia and no war between Russia and its former constituent part.

Without America there would be no war in Afghanistan. No war in Iraq.

Without America there would not be 1.2 million dead Iraqis and 4 million displaced Iraqis. We have no idea of the toll on Afghan civilians, although women and children appear to be the prime targets of the US/NATO forces that are “bringing peace and freedom to Afghanistan.”

Recently, US Secretary of State Condi Rice said that the US government could not prevent an Israeli attack on Iran. Israel is an independent country, said the American Secretary of State. What an extraordinary lie.

Israel cannot exist without American weapons and money. Israel cannot attack Iran without overflying Iraq, which the US air force can easily prevent. It is clear as day that the Bush Regime has given the green light to Israel to attack Iran so that the Bush Regime can rush to “Israel’s defense.”

Meanwhile the “liberal” media is urging the US to get involved in a war between Russia and Georgia. The insanity will lead to the unloosening of nuclear weapons.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions. He can be reached at: paulcraigroberts@yahoo.com

Original article posted here.

Iran and its uranium

To Prevent War With Iran, a Paradigm Shift Is Needed

by Muhammad Sahimi

The latest report on Iran's uranium enrichment program by the International Atomic Energy Agency, made public in early June, provides strong evidence that the facts on the ground are changing. According to the report, Iran has been making progress in mastering uranium enrichment technology. It has managed to increase the efficiency of the enrichment process by assembling a relatively large number of cascaded centrifuges. It has also been able to manufacture (although not yet in significant numbers) the more advanced IR-2 and IR-3 centrifuges that spin several times faster than the primitive P-1 centrifuges that it has installed in its uranium enrichment facility (UEF) at Natanz. The faster centrifuges, when cascaded and operated for an extended period of time, would enable Iran to produce enriched uranium more rapidly. However, Iran's progress, while significant, is not alarming. The fact is, there is no direct connection between Iran's UEF in Natanz, which produces low-enriched uranium (LEU), and what would be needed for producing high-enriched uranium (HEU) for a nuclear weapon. The Natanz facility is also safeguarded by the IAEA. To advance to the point where it can produce HEU, Iran must take many steps that would need several years of work, all progressing according to schedule without any hitches. More specifically, to go from LEU to HEU, Iran must have the following: High-quality LEU to be converted to HEU. Although Iran has produced a significant amount of LEU, its quality is, at least at this stage, dubious. A large number of cascaded centrifuges that can work for a long time, without interruption. High explosives for triggering a nuclear explosion. Complete designs for a nuclear bomb and warhead. Missiles or aircraft to deliver the nuclear warheads to their intended targets. Iran must also do the following: Leave the Nuclear Non-Proliferation Treaty, expel the IAEA inspectors (à la North Korea), and start a crash program to convert the UEF at Natanz to produce HEU. The breakout time – the time that it would take to transform the Natanz facility – is, at the minimum, six to nine months. Carry out tests – of the type that other nuclear powers perform – to make sure that its nuclear weapon works properly. Iran must do all of these while even its most minor moves are being closely monitored and scrutinized by the international community. There is no evidence that Iran has the necessary materials or is in a position to successfully make them and take all the above steps in a short time, even if it has every intention of doing so. The 2007 National Intelligence Estimate on Iran's nuclear program stated that Iran is unlikely to be able to make a nuclear weapon before 2013. But this has not stopped the neoconservatives and their allies in the Israel lobby, as well as the government of Israel, from issuing dire warnings about how close Iran is to making a nuclear weapon. John R. Bolton, former U.S. ambassador to the United Nations, and Michael Rubin of the American Enterprise Institute both published articles in the Wall Street Journal urging military attacks on Iran. Benny Morris, the supposedly moderate Israeli historian, published an op-ed in the New York Times about the possibility of Israel attacking Iran with nuclear warheads (neither newspaper has published an op-ed that refutes the claims made in those articles). Patrick Clawson and Michael Eisenstadt of the Washington Institute for Near East Policy published a "manifesto" claiming that Iran will not be able to respond effectively to any military attacks, hence encouraging such attacks. Israeli Defense Minister Ehud Barak and Israeli Defense Force Chief of Staff Lt. Gen. Gaby Ashkenazi also visited Washington. But while Tehran is making progress in its nuclear program, it has also significantly increased its cooperation with the IAEA. All of Iran's six original breaches of its Safeguards Agreement with the IAEA have now been explained to the IAEA's satisfaction. Iran has allowed the IAEA inspectors to visit the site where it manufactures its more advanced centrifuges. The IAEA has carried out 14 unannounced visits to Iran's nuclear sites within the last year, resulting in de facto compliance with some of the most important provisions of resolutions of the United Nations Security Council against Iran, as well as the Additional Protocol that Iran has not ratified. Iran's progress in mastering the uranium enrichment technology for making LEU means that the present approach of the P5+1 group – Britain, China, France, Germany, and Russia, plus the United States – for dealing with Iran's nuclear program is obsolete. They have been insisting that Iran must first freeze its enrichment activities before any meaningful negotiations can take place between them and Iran. Their rationale is that, by freezing enrichment activities, they will prevent Iran from advancing its nuclear program. But placing a red line on acquiring the knowledge that could be used for making nuclear weapons has not prevented Iran from making progress. In fact, not only has Iran already crossed that red line, it has also become more resolute in defending its fundamental rights under the NPT. Practically speaking, a nation cannot be told to forget what it already knows. Therefore, if the P5+1 group is interested in keeping Iran's nuclear capability latent, and would like to accomplish this goal peacefully, it needs a paradigm shift in its approach to Iran and its nuclear program, as all other efforts have failed. The prudent starting point for the new paradigm is transforming the P5+1 group to a P5+2 group, not by adding another nation to the group, but by having the U.S. play a dual role. The U.S. cannot continue its present course, namely, making the toughest demands on Iran while not negotiating directly with Iran. Secretary of State Condoleezza Rice has expressed a desire to establish a formal U.S. interest section in Tehran by stationing American diplomats there. Iran has responded positively. Thus, by establishing the interest section the U.S. will be in direct contact with Iran, while also being part of the P5+1 group, making it a P5+2 group. The second step of the paradigm shift should be returning Iran's nuclear dossier to the IAEA. Many legal scholars believe that the sending of Iran's dossier to the UNSC and the ensuing sanctions have been based on questionable legal arguments, in violation of many provisions of the NPT and the UN Charter. I have discussed these in detail elsewhere. Briefly, the Board of Governors of the IAEA exceeded its authority when it demanded that Iran suspend its uranium enrichment program, and it again violated its bylaws when it sent Iran's nuclear dossier to the UNSC, because the IAEA has not found Iran in violation of the NPT agreement nor in breach of its Safeguards Agreement about "further[ing] a military purpose," nor does the Board have the legal authority to demand a suspension. The UNSC resolutions against Iran have been filed under Chapter VII of the UN Charter, which is, however, exclusively for "Actions with respect to a threat to the peace, breach of the peace, or acts of aggression." The UNSC must first identify the threat that Iran's program poses against peace and international security. According to Article 41 of the UN Charter, without such findings, the UNSC cannot issue any resolution under Chapter VII and impose any sanctions. However, the UNSC referred merely to the demand of the IAEA as its justification. In legal jargon, this is an ultra vires act, in excess of the UNSC's power. Thus, it is necessary to return Iran's dossier to its rightful place, the IAEA. Legal issues aside, the return will help serious negotiations begin. The Iranian leaders correctly recognize that if they suspend their nuclear program on the order of the UNSC, ending the suspension will also require UNSC authorization, which will never come, because the U.S., France, and Britain will veto any such attempt. Iran would effectively give up its right to the enrichment technology if it were to give in to such a demand now. Thus, realistically, so long as its dossier is before the UNSC, Iran will not suspend its uranium enrichment program. On the other hand, Iran has indicated that, if its nuclear dossier is returned to the IAEA, it will officially ratify and implement the Additional Protocol that allows for intrusive, unannounced visits to anywhere in Iran by the IAEA. That will also allow the IAEA to visit Iran's conventional military sites in its quest for establishing or refuting a link between them and Iran's nuclear program. The third part of the new paradigm would be the implementation of the "freeze for freeze" proposal, according to which no further sanctions against Iran will be brought before the UNSC if Iran does not increase the number of its centrifuges at Natanz (which currently stands at about 3,500). The temporary freeze is supposed to be implemented for six weeks, during which negotiations are supposed to commence. Various reports indicate that Iran has accepted the proposal, made by the European Union, but the U.S. opposes it. The fourth step is to develop a new framework for defining what constitutes a freeze, for implementation of a possible longer-term suspension of Iran's enrichment activity, if the two sides can agree on it. For example, Iran's uranium conversion facility (UCF) at Isfahan, which makes uranium hexafluoride, the feedstock for uranium enrichment, is not even covered by the Safeguards Agreement so long as the product is simply stored (or exported). Therefore, insisting that the Isfahan UCF must be shut down is counterproductive, as well as illegal. Moreover, one cannot simply shut down a large number of cascaded centrifuges, as it would damage the UEF through severe corrosion and other factors. So a possible new definition of freezing would be to stop feeding the centrifuges with nuclear feedstock, injecting instead an inert gas, rather than to shut them down completely. Finally, the U.S. keeps demanding that Iran suspend all of its "reprocessing activities." But Iran does not have any such facility or activities. One either reprocesses the spent fuel of a nuclear reactor or the products of a heavy water nuclear reactor, both of which produce plutonium. Iran has neither. Demonstrating such flexibility will have two major benefits. One is that it would elevate Iran to a respected negotiation partner, from its present position of being treated like a servant, constantly threatened and ordered to carry out the demands made on it. The second benefit would be that it would obligate Iran to respond in kind. Many times in the past Iran has expressed such willingness, provided that it is treated with the respect that a major regional power deserves. With the paradigm shift in place, the negotiations can begin in earnest on the scope of Iran's enrichment program and its strict control by the IAEA. Given Iran's advancements in the enrichment technology, it is no longer realistic to demand that it give up its rights to uranium enrichment. Therefore, alternative solutions must be considered, including the establishment of a multinational consortium on Iran's soil for uranium enrichment. Peaceful resolution of the conflict will go a long way toward creating a more stable and less volatile Middle East, which would be beneficial to all sides. Original article posted here.

The gravy train rolls on while the economy and the world suffer

Exxon Mobil has biggest profit ever at $11.68B

HOUSTON - Exxon Mobil reported second-quarter earnings of $11.68 billion Thursday, the biggest quarterly profit ever by any U.S. corporation, but the results fell well short of Wall Street expectations and shares fell in premarket trading.

The world's largest publicly traded oil company said its net income for the April-June period came to $2.22 a share, up from $10.26 billion, or $1.83 a share, a year ago.

Revenue rose 40 percent to $138.1 billion from $98.4 billion in the year-earlier quarter.

Excluding an aftertax charge of $290 million related to an Exxon Valdez court settlement, earnings amounted to $11.97 billion, or $2.27 per share.

Analyst on average expected Exxon Mobil to earn $2.52 a share on revenue of $144 billion, according to a survey by Thomson Financial. The estimates typically exclude one-time items.

Exxon shares fell more than 2 percent, or $1.88, to $82.50 in premarket trading.

Original article posted here.

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Russia continues to outmanuever the US in the global grand chessboard

Russia's energy drive leaves US reeling

By M K Bhadrakumar

Last week, the gloves finally came off the Dmitry Medvedev presidency in Russia. It had to happen sooner or later, but few would have expected this soon. It was crystal clear US President George W Bush administered a diplomatic snub to Medvedev on the sidelines of the Group of Eight (G-8) summit meeting at Hokkaido, Japan.

Bush characterized him patronizingly as a "sharp guy" soon after they met in Hokkaido on July 9, but that was after making sure Secretary of State Condoleezza Rice proceeded to Prague and signed a deal just the previous day to install a US radar system as part of its missile defense system in Central Europe.

If Medvedev's core mission in Hokkaido was to underscore Russia's growing role in the world arena as a power with which the West has to contend, Bush acted as if he couldn't care. The US was also plainly dismissive of Medvedev's proposal at the G-8 for a pan-European security system that would include Russia. Medvedev expressed his "dismay" on hearing about the Prague deal. As if to rub in the snub, Rice proceeded from Prague to Bulgaria, where the US has for the first time established a military base, and then on to Georgia to discuss its plans of joining the North Atlantic Treaty Organization (NATO).

While in Tbilisi, she called for international mediation to stop violence spilling over in Georgia's beakaway regions of South Ossetia and Abhkazia, which have been sources of rising tensions, with Georgia accusing Russia of trying to annex the regions. To carry matters further, the US began a joint military exercise with Georgia codenamed Immediate Response 2008, near Tbilisi, which will continue through the month of July.

The exercise, financed by the Pentagon and planned by the US Armed Forces Eastern Command, is intended as a warning to Russia that Georgia is America's project and Washington wouldn't hesitate to do some heavy lifting to safeguard the "Rose Revolution".

On the face of it, such hubris is illogical and unnecessary since the West should have every reason not to embarrass Medvedev. The West has been propagating in recent months that the youthful Russian president is a potential independent decision-maker in the Kremlin with whom it could do business - unlike his predecessor, Vladimir Putin.

Reflecting US thinking, Carnegie Moscow Center scholar Dmitri Trenin wrote recently that the West noted "Medvedev's quick-wittedness, his calm style of conducting talks, and his clear desire to show that he is the one who is the real master of Russian diplomacy ... There are much greater grounds for expecting that Dmitry Medvedev ... will slowly but steadily concentrate powers in his own hands."

Clearly, what has been going on for the past few months on the East-West stage is one of those pantomimes that the West and Russia are equally adept at playing. But the US seems to have concluded that all the Western flattery about him hasn't really gone to Medvedev's head and he has merely been demonstrating his own skill in dramatics. Actually, nothing much has changed in Russia. The polls show Putin, now premier, is still seen by Russians as their "supreme leader", with a popularity rating coasting above 70% - with Medvedev stuck at 47% - and the truth might be somewhere near what a Moscow commentator recently sized up, namely, that Medvedev is a co-pilot in the cockpit in which Putin remains the captain.

Besides, Medvedev would know that even if he wished to be the European modernizer and G-8 club member that the West wanted him to be, he would find himself hopelessly at odds with his country. According to a poll last week by a Russian television network, the symbol of renewal of present-day Russia turns out to be none other than Josef Stalin. By a substantial margin, Stalin left behind two colorful Vladimirs - the singer Vladimir Vysotsky and the revolutionary Vladimir Lenin - and a host of other perennial Russian heroes like Ivan the Terrible and Alexander Pushkin.

Indeed, when Medvedev signed last Saturday a new foreign policy strategy for Russia, it came to light that for the first time the prime minister has been put in the driving seat to implement foreign policy measures - hitherto a presidential prerogative - which also shows that the Kremlin will pursue the line set by Putin in his eight-year presidency. The vague and somewhat incomprehensible expectations that there might be of some kind of "liberalization" in Medvedev's foreign policy have proved to be unfounded.

But Moscow hasn't taken lightly the US snub. In an address to Russian envoys in Moscow on Tuesday, Medvedev unambiguously stated his intention to continue Putin's foreign policy course, criticizing the US moves on missile defense deployment, the West's failure to ratify the revised Treaty on Conventional Armed Forces in Europe, Kosovo's independence, etc. He said, "We strongly affirm that the deployment of elements of the global missile defense in Eastern Europe only exacerbates the situation ... we will be forced to respond to it in kind ...

"This is linked to Russian-American agreements on strategic stability. Obviously, this common heritage will not be able to survive if one party is permitted to selectively destroy individual elements of this strategic regime. We cannot agree to that."

According to the noted German expert on Russia, Alexander Rahr, last week's Russian veto on the United Nations Security Council draft resolution on Zimbabwe was also a response to the US move on missile defense. "China's opposition is easy to understand as it has many economic interests in Zimbabwe. Russia has none. Russia's veto is a response to the missile shield, to Abkhazia and to many other things ... Russia is trying to show that America cannot decide everything," Rahr said.

The Russian veto generated a new American theme song that Medvedev isn't calling the shots in the Kremlin and might have got slapped down on Zimbabwe. But Moscow brushed aside the suggestion. The Foreign Ministry issued a statement calling the draft resolution on Zimbabwe "a dangerous precedent ... illegitimate and dangerous, leading towards unbalancing the whole UN system". The statement rebuked Washington and London, saying, "Russia took into account the fact that the situation in Zimbabwe does not pose a threat to regional, let alone international peace and security and does not warrant adoption of sanctions against that country."

Again, on Monday, Moscow announced that for the first time since the breakup of the Soviet Union in 1991, Russian warships were resuming patrol of the Arctic waters. In effect, Medvedev signaled he was maintaining the course of expanded military patrols begun by Putin. Why such a sudden quickening of the tempo in US-Russian relations? The answer might be found on an entirely different plane - energy security.

What emerges is that if anything, Medvedev is pursuing Russia's energy diplomacy more robustly than Putin. Soon after taking over in the Kremlin in May, Medvedev ordered the expeditious completion of the first stage of the Eastern Siberia Pacific Oil Pipeline (ESPO) by end-2009. The ESPO has a vital role in Moscow's efforts to balance its oil export strategy between Europe and Asia-Pacific. Moscow hopes to target Asia-Pacific as the export destination for one-third of its oil exports by 2020, as compared to 3% currently.

In early July, Medvedev undertook a diplomatic tour of the Caspian region, covering Azerbaijan, Turkmenistan and Kazakhstan. In Azerbaijan's capital Baku, he made a stunning offer that Russia was prepared to buy Azerbaijan's entire gas output at market prices. In Ashgabat, he shored up Turkmenistan's commitment to the modernization of the Central Asia-Center Pipeline and the construction of a new littoral Caspian pipeline.

Medvedev succeeded in prevailing over competing European and US rivals in the struggle for Turkmen gas. He further ensured that oil and gas from Turkmenistan and Kazakhstan will not bypass Russia. But what has truly incensed the Bush administration are Gazprom's dramatic inroads into Africa.

Russian giant Gazprom, the largest extractor of natural gas in the world, has announced plans to build a pipeline across the Mediterranean to pump Libyan gas to Europe. This is the final lap of a Kremlin strategy that involves Gazprom handling the entire output of Libya's gas, oil and liquefied natural gas (LNG) designated for export to Europe and the US.

Look at Gazprom's terse announcement in Moscow on July 9, "The Libyan side positively evaluated Gazprom's proposal to buy all future volumes of gas, oil and liquefied natural gas assigned for export at competitive prices." Now, Washington gingerly allowed the re-entry into the "international community" by Muammar Gaddafi, Brotherly Leader and Guide of the Revolution in Libya, on the basis of clear understanding. Western statesmen from British Prime Minister Gordon Brown to French President Nikolas Sarkozy and former Italian premier Romano Prodi queued up to climb the window of business opportunity opened by the Bush administration. And then Putin visits Tripoli in April, less than a



month before he left office, and the two erstwhile colonels decided to jointly handle all of Libya's energy resources.

And Gazprom seeks to buy exploration licenses in Nigeria and proposes to build a pipeline from there to Algeria, and with Algeria, Gazprom is developing a proposal on "joint" marketing of gas in Europe. US officials have gone ballistic. "The monopolistic Gazprom is behaving like a monopolist does. It tries to gain control of the market as much as possible and to stifle competition. And that's clearly what is going on," thundered Matthew Bryza, US deputy assistant secretary of state for Eurasian affairs. "The Kremlin wants Gazprom to be a dominant force in global energy, and the dominant force in global gas. Tying up gas resources in Central Asia and Africa is part of that," he added. The plan is for Gazprom to dominate "in every corner of the planet", he alleged.

Bryza's outburst is understandable. The good work he did lies now in ruins. Washington was relieved to see the back of Putin's presidency, but it now transpires that Gazprom may have only stepped up the pace of overtures under Medvedev's astute guidance. Besides, with its new assets in Africa, Gazprom will soon be knocking for access to the US market through supplies of LNG. The European and international companies which have been traditionally present in the African market will be compelled to play a role alongside Gazprom.

Washington hit back by ensuring that Russian companies are left out in the cold from the 30 contracts for lucrative oil deals that Baghdad is awarding. It is a big blow for Russia. In February, Moscow had written off US$12 billion or 93% of Iraq's debt to Russia in a move that was widely seen as aimed to help Russian oil company LUKoil regain the Saddam Hussein-era rights to develop Iraq's giant West Qurna-2 oil field. But under US pressure, the Iraqi government is now awarding West Qurna-2 to the US's Chevron.

The Kremlin didn't show any anger, but coincidence or not, Gazprom chief executive Alexei Miller suddenly arrived in Tehran on Monday and discussed with Iranian President Mahmud Ahmadinejad the setting up of an organization of gas-producing countries. No doubt, with the Russian foothold in Libya (which has estimated natural gas reserves of 1.47 trillion cubic meters), in coordination with Algeria (which currently supplies over 10% of Europe's gas supplies), Qatar (with proven natural gas reserves of 25.8 trillion cubic meters) and Iran (which has the world's second-largest reserves after Russia), the time for a "Gas OPEC" is approaching.

The Iranian leader also suggested to Miller a market-sharing arrangement so that Russia and Iran could "collectively meet the demands of Europe, India and China in the gas sector". During the visit, an agreement was signed on the development of Iran's oil and gas fields by Russian companies; on Russian participation in the transfer of Iran's Caspian Sea crude oil to the Oman Sea; cooperation in the development of Iran's fabulous North Azadegan oil field; and, possible participation of Gazprom in the planned Iran-Pakistan-India gas pipeline project. Evidently, Moscow took a deliberate decision to press ahead with Iran in energy cooperation in the full glare of world publicity in complete disregard of US displeasure. Tehran loved it.

To quote a US expert, "Russia's strategic interest in Iran implicitly underscores the futility of hopes that Moscow would cooperate with Washington in imposing meaningful sanctions on Iran. While Western European companies are moving out of Iran or suspending agreements for fear of US sanctions (which penalize investments of more than $20 million a year in Iran's oil and gas sector), Gazprom is enlarging the already existing foothold."

Conceivably, the danger of losing out on the last energy frontier to Russia (and China) could be a factor in Washington's policy shift on Iran talks. Washington calls the u-turn "a strong signal to the Iranian government that the United States is committed to diplomacy". But according to The New York Times, Rice has decided to "test Iran's willingness to consider an international package of incentives meant to coax Iran into making concessions on its nuclear program". What we do not know is how close the Bush administration may be for involvement in Iran's energy sector, which is an element in the so-called "international package of incentives". (Halliburton, which Vice President Dick Cheney headed, was a very active player in Iran.)

By now it must be obvious to the Bush administration that the youthful-looking, post-communist lawyer-president who took over from Putin has lost no time drilling a hole through the entire US strategy to weaken Gazprom's grip over the supply of gas to Europe. The sense of fury is imaginable. But then Washington has only itself to blame. Medvedev's career as an energy czar is an open book like Cheney's - or Rice's. From 2000, he headed Gazprom. Now he controls Gazprom from the Kremlin.

Few took note that when he formally bid farewell to the Gazprom board of directors at a ceremony in Moscow on May 27, Medvedev took immense personal pride in pointing out that during his eight-year stewardship, Gazprom's capitalization skyrocketed by a factor of 46, and one fifth of Russia's budget is today derived from Gazprom's activities. He concluded, "I want to say in my turn that we will have the chance to see each other and discuss things in working meetings. So, nothing is coming to an end. It's only the beginning."

In sum, the past week's flow of events in places as far apart as Prague, Hokkaido, Tbilisi, Harare, Tehran and the Arctic underscored that after a brief respite, the rivalries over energy security have revived with a ferocity that can rock the equilibrium of overall US-Russia relations. The situation will likely be exacerbated in the coming period. The geopolitics of energy security are a highly sensitive subject for the Bush administration, whose profound links with Big Oil are legion. It is a tremendous loss of face for the Bush-Cheney-Rice combine that Moscow is outwitting the US on the energy front.

The strong possibility is that the Bush administration will press the pedal on multiple fronts on the Eurasian geopolitical landscape and create a fait accompli of US-Russian mutual antagonism for Senator Barack Obama, should he become president. The haste behind the Prague deal on missile defense smacks of such thinking. Almost certainly, Rice will press for a decision on the plan of action in respect of Georgia's and Ukraine's membership of NATO at the meeting of the alliance's foreign ministers in December. The question, "Who is the boss in Russia?" doesn't really seem to matter anymore.

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

Original article posted here.

A quick oil review

History of oil in the Middle East from WWI to the present: Iran eliminates the US Petrodollar and kills the American Empire

Reposting updated articles for the wrap-up of politics and economics. Originally posted on 2008-02-26 as “The Implications of the opening of Iran’s Oil Bourse: The Final Nail in the Coffin for the American Empire.”

On Sunday 17 February 2008 the first phase of Iran's oil and petrochemical bourse on Kish Island was inaugurated, paving the way for “all major currencies of the world” to be used in future oil transactions. Two months later, on April 30, Iran announced that they had “totally removed U.S. dollars in the country's oil transactions.”

To understand the significance of these events let’s take a look back at our history, starting with World War I. The following short video (2:08) recaps the events that resulted in Britain landing troops in Iran in 1914, and consequently occupying Iraq. A more detailed and glorified recollection of this part of our history can be witnessed through one of the greatest epic movies of all time, ‘Lawrence of Arabia’.

We fast-forward to the first attempt of Middle Eastern countries to free themselves of Western control of their resources with Iran in 1951, when the democratically elected president, Dr. Mohammed Mosaddeq, nationalizated Iran's oil industry. Unfortunately however, Western powers would not stand idly by while Iranians took control of their own resources, which is why in 1953 the CIA, following instructions from Britain, organized a coup against Dr. Mosaddeq and overthrew the government. This was a well documented event and general knowledge among all those who lived in the Middle East and Asia for decades, but was not well known in the West until the year 2000 when the United States government released documents on the operation, and apologized to Iran and its people for the devastation that it unleashed. The following short video (4:39) is a good introduction to this topic.

Let’s now discuss the purchasing power of the US dollar.

Since the end of the Second World War, the US dollar has become the international reserve currency. The need for countries to maintain US dollar reserves was solidified in 1974 during the Nixon administration, when negotiations with Saudi Arabia assured that the oil would only be sold in US dollars, and surpluses from oil proceeds would be invested in U.S. Treasury Bills. In return the US would militarily and economically protect the Saudi regime. Since that time, US dollars have dominated world markets - until the year 2000 that is.

The following article, “The Real Reasons for the Upcoming War With Iraq”, which was written before the US invasion of Iraq, lays forth an argument that the war in Iraq was not just about oil but about the currency in which oil is traded. It is mandatory reading for anyone who wants to understand the basic concepts of American foreign policy, economics, and its military operations around the world. This article states that the principle reason why the United States invaded Iraq was because Saddam Hussein in the year 2000 went ahead with his plans to stop using the US dollar in its oil business and start using the Euro.

The trading of oil for the Euro instead of US dollars is an extremely important historical precedent set by Iraq that must be understood to fully grasp the implications of Iran's announcement in December of 2006 that they would “use Euro instead of US dollar in (their) next year's budget.” If the United states was willing to invade Iraq to prevent oil from being traded in any other currency than the dollar, then it would be logical to assume that they will also confront Iran regarding their plans to permanently and absolutely phase out the US dollar.

This now brings us full circle to the opening of Iran’s Oil Bourse and their announcement that they have “totally removed U.S. dollars in the country's oil transactions.” Since Saddam Hussein’s declaration that Iraq would begin to sell oil in other currencies, a few very significant events have taken place. Iran’s announcement that it would follow suit is just the tip of the iceberg. Many other countries have already started to sell the US dollar and to convert to other currencies. Some of these countries include: Sweden, Cuba, U.A.E., China, Russia, India, Indonesia, North Korea, Venezuela, and many more.

It is a fact that oil is the only reason the US dollar has maintained its value and acceptance as the world currency. Once countries can buy oil in non-US dollars then the complete collapse of the American Empire will occur.

All countries are aware that the US has been printing absurd amounts of their fiat currency, and they are no longer willing to hold reserves that continue to devalue. This devaluing has become accelerated since the discontinuance of the M3 report. “On March 23, 2006, the Board of Governors of the Federal Reserve System” ceased publishing the M3 monetary aggregate. The M numbers (M1, M2, and M3) are “components of the United States money supply”, which “show the amount of dollars in circulation”.

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“M1 is the most volatile, equivalent to cash on the loose. M2 is less volatile, equivalent to savings account deposits. M3 is least volatile, equivalent to Rich Folks Money which they park.” Clearly, the data indicates that “there has been substantial money growth since 2000”. If there is more money in circulation then it becomes devalued.

Not knowing how much money the Banks are printing means that there is no longer an accurate indication of how much currency is in circulation. This basically means that we are playing Monopoly with people who can take money out of the bank anytime they want, because they are the bank. This should be raising alarm bells across the United States the way it has done across the world, as the dumping of the US dollar by most countries indicates. After all, why would anyone want to hold on to a currency that has lost more than 67 percent in five-years relative to its peers? This is one of the main reasons why Iran and other OPEC countries have been so adamant on switching from the US dollar to other currencies (which is what the Oil Bourse will accomplish).

The United states now finds itself between a rock and a hard place, because they will either need to invade, bomb, or enforce sanctions against Iran along with any other OPEC country that decides to stop using US dollars, or they will have to watch the complete collapse of their economy and the devaluing of the Federal Reserve currency known as the US dollar.

Corporate conglomerates are well aware of what is happening. The following short video (10:07) is from a Senate hearing about Halliburton’s dealings with Iran. Keep in mind that if US companies are doing business in Iran then they are making their profits in non-US dollars. On the bright side, private individuals and small companies are becoming wise to this. In the last few months ‘Euros accepted’ signs have popped up in New York City which tells us that the “US dollar just ain't what it used to be”.

This escalation in hostilities between the US and Iran is reaching its climax approximately a year after news sources reported that Vice President Dick Cheney wanted to bomb Iran instead of negotiating for a peaceful resolution, while Bush approved CIA plans to destabilize Iran, hoping to achieve the same result as in the 1950s when the CIA overthrew Dr. Mohammed Mosaddeq’s democratically elected government.

In addition, in recent months a few major events have unfolded that should give rise to concern. These events include:

• Nuclear Weapons going for a ride over the United States
• Israel bombing Syria
• US declaring Iran's Islamic Revolutionary Guard a terrorist group
• Iran declaring the CIA and the US army as terrorist organisations, and
• Major underwater Internet cables being cut, sending large portions of the Middle East into communication blackout

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source

This unparalleled build-up of military forces by both the United States and Iran is dangerously close to a full confrontation. Unfortunately for the world, the predicted casualties for any military escalation in the Middle East are astronomical.

Are you pissed yet? You should be, especially considering that well over one million innocent civilians have been killed in Iraq.

NOTE: The significance of CIA’s meddling in the affairs of sovereign countries can not be overemphasized. It was the ‘success’ of this Iranian coup that paved the way for US covert intervention across the globe that has brought us to the present crisis, to the brink of Nuclear World War III.

Original article posted here.