Does the Narcotics Trade Influence US Global Policy?

by Gordon Duff

New Eastern Outlook (January 01 2018)

Few who look at the US occupation of Afghanistan can do so without considering a few realities. When America entered Afghanistan in 2001, reality began to distort. America’s allies on the ground were called the “Northern Alliance”. In actuality, they were Uzbek and Tajik drug lords with private armies who had been financially gutted by the Taliban’s anti-drug policies.

There was virtually no opium production in Afghanistan in 2001 when America took on the Taliban seeking what Secretary of Defence Rumsfeld described as literally “dozens” of advanced underground bases that housed an army of up to 30,000 al Qaeda fighters.

These bases with supplied graphics, reminiscent of Netanyahu’s Iran bomb graphic, were shown on TV talk shows. America is still seeking these bases, none have yet to be found. Later it was learned that the Taliban had, in actuality, “hosted” up to twelve Saudi members of al Qaeda who had asked for religious asylum and that no Taliban force had ever existed in Afghanistan nor had anyone involved in the planning and execution of attacks on the United States been tied to Afghanistan or the Taliban.

What did transpire, however, was a massive program of opium production organized by USAID which provided shipments of fertilizer and funding for irrigation projects intended specifically for expanding opium production. According to the UN, by 2005, in four short years, a nation with no opium production now produced 95% of the world’s production.

Moreover, according to FBI whistleblower Sibel Edmonds, an America investment group, partnered with rogue groups within Pakistan’s Inter-Services Intelligence (“ISI”) agency and partnered with the family of then Afghan Prime Minister Karzai, began building heroin processing facilities across Helmand Province. Among the owners were two US Senators and one member of the House of Representatives. The venture operated under the cover of dry-cleaning plants that imported heroin processing chemicals through the Pakistani port of Karachi and transported same into Afghanistan paying royalties to the Taliban for undisturbed use of ground transit routes.

Behind this is the story of the handling of the funds, moved by US diplomats as letters of credit involving partnerships recently exposed in both the Panama and Paradise “papers” scandals.

Another rumoured source of drug capital for US officials involves accusations made against a former US presidential candidate, Mitt Romney. In late 2012, only weeks before the election, a retired FBI agent of some repute, delivered files outlining the relationship between nearly one-third of America’s elected officials and a series of drug cartels operating out of Colombia and Mexico.

Included were documents and photographs showing how billions of dollars were laundered through accounts held in the Cayman Islands by a well known American investment firm into personal accounts in the names of politicians including the leadership of America’s Congress, 1500 accounts in all.

America’s links to the drug trade are nothing new. Long after Britain stopped the slave trade, America continued to trade in Africans whose labour became far more valuable after the invention of the cotton gin by Eli Whitney. Though cotton was “king” the real fortunes were built in the opium trade after Britain also ended their perceived participation in the Chinese opium trade by outsourcing the transit of opium to American ship owners, creating the basis for some of the great fortunes of today and America’s “blue blood” East Coast elites.

Closer to home, America is being devastated by an illegal trade in two substances, the worst of which is pharmaceutical grade opiates. Life expectancy in America has, of recent years, lowered due to trade in opiates, the majority of which are legally manufactured in the United States and distributed through prescriptions written by physicians licensed by the US Drug Enforcement Agency.

Past that is the drug methamphetamine, which is manufactured informally and widely distributed across America, a trade featured in the award-winning television series Breaking Bad (2008~2013).

Of late, Hollywood and the internet have taken to a fictionalized retelling of the Reagan years and the trade in cocaine and weapons that led to the conviction of 47 members of the Executive Branch of government under what was called “Iran Contra”.

Under that program, President Reagan allowed advanced weapons to be sold, through Israeli and Saudi agents, to Iran while laundering the cash through Colombian drug lords. A fictional telling of the story involves Mena, Arkansas as the center of operations and rumors of Clinton family involvement.

The truth is a bit different, enough so as to bring to question why recent films like Tom Cruise’s American Made (2017), theoretically the story of accused CIA drug trafficker Barry Seal, are now in release.

Sources close to these real operations at the time describe a different scenario. They describe a program using pilots running drugs and weapons under the supervision of security contracting firms Kroll Group and Wackenhut with billions in cash laundered through what was then the offices of the Bush family-owned Bank of Venezuela, located in the 1400 block of Brickell Avenue in Miami.

CIA “old timers” describe how cartel heads like Escobar and others traveled around the US with Reagan officials, giving orders to FBI and CIA officials while the US Department of Defense provided advanced electronics and jamming equipment to allow cocaine to enter the US undetected, where it was dropped into the Florida Everglades and, eventually, flown directly into landing fields as far north as the Commonwealth of Pennsylvania.

Dozens of America banks, Wall Street investment houses along with military and political leaders of the time were all involved.

Thus, when conspiracy theorists, as they are conveniently referred to, allude to complicity on behalf of US officials, both military and civilian, in the 9/11 attacks, these same officials were, in fact, those who had also run the narcotics trade under Iran Contra or the later Nafta-related cartel trade with Mexico or even the suspected “Golden Triangle” trade of the Vietnam era.

Then again, immediately after 9/11, the massive opium/heroin trade from Afghanistan began. Is this coincidence?


Gordon Duff is a Marine combat veteran of the Vietnam War that has worked on veterans and POW issues for decades and consulted with governments challenged by security issues. He’s a senior editor and chairman of the board of Veterans Today, especially for the online magazine New Eastern Outlook.

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Trump’s National Security Speech.

by Paul Craig Roberts (December 19 2017)

What do we make of Trump’s national security speech? First of all, it is the military/security complex’s speech, and it is inconsistent with Trump’s intention of normalizing relations with Russia.

The military/security complex, using Trump’s position as President, has defined Russia and China as “revisionist powers”, Washington’s rivals who seek to put their own national interests ahead of Washington’s unilateralism. Russia and China are “revisionist powers” because their assertion of their national interests limits Washington’s hegemony.

In other words, Washington does not accept the validity of other countries’ interests if those interests are contrary to Washington’s interests. So, how does Trump expect to work with Russia and China when he reads a speech that Russia and China seek to “shape a world antithetical to our interests and values.”

“Our values” means, of course, Washington’s dominance.

Trump begins by honoring the military, police, Homeland Security, and the Chairman of the Joint Chiefs of Staff. In other words, “America first” means domination by Washington over the citizenry as well as over foreign countries.

Trump then cloaks himself in the American people who “voted to make America great again.”

Then Trump’s speech picks up the Israel Lobby’s line about a bad deal with Iran and asserts that previous administrations tolerated ISIS, when in fact they created it and set in upon Libya and Syria.

Then he attacks environmental protection and complains of illegal aliens while ignoring the refugees Washington’s wars imposed on Europe.

In an era of neoconservative celebration of US world hegemony, Trump accuses his predecessors of losing confidence in America. This is extraordinary. When a country’s entire foreign policy is based on the assumption that it is the “exceptional and indispensable country”, how is this a loss of confidence? It is massive arrogance and hubris. The problem is not a loss of confidence by the rulers but an overbearing hubris.

Then Trump claims that through him, Americans again rule their nation.

He says that now Washington is serving the citizens. Looking at the tax bill, he must mean that citizens consist of the One Percent.

He next associates making America first with more money for the military.

Then he blames Iran for terrorism, something that Iran lives in fear of, but he does not mention Saudi Arabia’s support for terrorism or that of the US military/security complex’s which encourages terrorism as a weapon against Iran and Russia and as an excuse for its massive budget and power.

Trump then claims credit for the Russian/Syrian defeat of ISIS. It has been proved that ISIS is supported and financed by Washington. Trump’s claim is even more ridiculous than the previous claims of the Obama regime that the US defeated National Socialist Germany. Russia, which did defeat Germany, was not invited to the anniversary celebration.

Trump next demands that the countries we defend pay for it. Who are these countries and who do we defend them from? He can only mean Europe, Canada, Australia, Israel, and Japan. Is Washington defending them from Russia, China, North Korea, and Iran or from the terrorists Washington creates, arms, and supplies to overthrow Libya, Syria, and whatever countries Washington is successful in inflicting terrorists on. Apparently, some of these CIA-created terrorist organizations break loose from their creator and conduct operations on their own. So, Washington is a government that creates its own enemies.

Trump next brags on the sanctions he has imposed on “the North Korean regime”. He doesn’t mention, and I would bet he does not know, that Washington has withheld a peace treaty since the 1950s from North Korea. Washington has kept the war status open for 64 years. Having seen the fate of Libya, Iraq, Afghanistan, Syria, Somalia, et al, little wonder North Korea wants nuclear weapons.

Trump, standing there threatening the world, says that Washington will take all necessary steps to prevent North Korea from threatening the world.

Trump then delivers the establishment’s propaganda that unemployment is at an all-time low and the stock market at an all-time high. So, what is Trump rescuing Middle America from if unemployment is at an all-time low? What happened to Trump’s case against jobs offshoring?

This is nothing but feel-good talk. Trump is repeating the lies because the lies make him look good. What Trump should be doing is pointing out the meaninglessness of the unemployment rate, because it doesn’t count the unemployed, only those few who looked for a job in the last four weeks. He should be pointing out that the stock market is not a sign of a growing economy but a sign of massive money creation by the central banks of the US, EU, UK, and Japan. The massive printing of money has flooded into paper assets, driving up their price and further enriching the One Percent.

Trump says that one leg of the strategy is to “preserve peace through strength”. What peace is he talking about? In the past two decades, Washington has destroyed in whole or part eight countries and overthrown democratic governments in others. Is Trump equating peace with Washington’s wars? No other country has initiated wars and invasions and bombings and aggressive military actions on other countries’ borders. Trump says that America is threatened by enemies and to protect us the military will be enlarged. He said he was overturning the “defence sequester”, something that clearly does not exist.

My conclusion is that Trump has surrendered to the real rulers of America – the powerful interest groups such as the military/security complex, the Israel Lobby, the environmental polluters, Wall Street, and the banks “too big to fail”.

America is a country in which despite the hopes flyover America had in Trump, an oligarchy rules. The American people, regardless of who they elect, have no voice, no input, no representation.

The governments of Ronald Reagan and George H W Bush were the last governments that were subject to any accountability. With the Clinton regime, the United States entered into the age of tyranny.

Copyright (c) 2016 All rights reserved.

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British University food banks are monuments to the obscene pay of vice-chancellors

The Guardian

December 7th. 2017

On the same day that news broke that staff at the University of Birmingham are protesting the obscene pay of their vice-chancellor, I opened an email asking for donations to a food bank that my university, Birmingham City, has started for students. This Dickensian contrast in fortunes demonstrates the widening problems of inequality in universities since fees have been introduced.

When my sister went to university, tuition was free and there was a generous maintenance grant. When I went a few years later, my fees were minimal and the grant was still intact for the students who needed it. I now teach in a sector that charges some of the highest fees in the world, and the maintenance grant has been replaced by a loan, with an interest rate far higher than that of most mortgages. It is chilling to think what future generations of students will have to overcome in order to participate in higher education.I have seen firsthand how hard some of our students struggle to make ends meet so I understand why the university offers emergency food services. I’m sure we are likely not alone. The initiative was started by those on the frontline of student support and is a valuable effort to provide help in a broken system. The very fact that staff have had to reach out for food charity demonstrates the failure of higher education “reforms” to provide for those that need it most.

At the other end of the spectrum to hungry students are university vice-chancellors (VCs), who are being paid a king’s ransom. VCs have become CEOs who are rewarded for attracting customers into multimillion-pound businesses. Competition for consumers (they used to just be students) has led to an arms race across the sector to renovate utilitarian campuses into lavish spaces with recreational facilities and high street coffee chains. Halls of residence have been transformed from being functional units to study for a degree into luxury apartments, which are often so expensive I cannot imagine how anyone affords them. My family certainly would not have been able to. The impact has been a predictably sharp rise in the cost of university accommodation – no wonder some students are having difficulty finding enough money for food.

The problem is that when education becomes a commodity and students are converted into consumers, the financial bottom line shapes decision-making. VCs are rewarded for staff cutbacks and saving money using casual contracts, no matter the impact on the quality of the “product” they are selling. Increasing the cost of living through outsourcing services and building luxury student housing is worth a bonus, as long as it pulls in the punters and generates more revenue.

VCs are rewarded for making the sort of decisions more associated with CEOs, with David Eastwood at the University of Birmingham “earning” almost £3m since taking over in 2009, not including the house and chauffeur-driven car. In fairness to him he is not alone in his absurdly high pay: Glynis Breakwell at the University of Bath stepped down amid controversy and Christopher Snowden is facing protests at the University of Southampton. But Eastwood is reserved a special circle in neoliberal hell because, alongside Baroness Julia King, who was then at Aston, they were the only VCs to sit on the Browne Review that led to market forces being unleashed on universities.

Lord Adonis has called for a cap on excessive VC pay, and wants an inquiry headed by the archbishop of Canterbury. Ignore the howls of disapproval from advocates of the free market claiming that the role is underpaid given the size of the businesses, and that without high salaries “the best people leave”.

I’ve spent the last 15 years in universities, experiencing every level from undergraduate to senior academic. There is perhaps no less appropriate institution for the “captain of industry” model. The lifeblood of the university is teaching, research and student support. Like most organisations, it is the staff at the ground level who ensure the smooth running of the university, and make decisions such as setting up food donations for students in need. Most strategic decisions are made at the department, school or faculty level and while the VC sets a framework for this work, they have little direct impact on the majority of the activity that makes a university education attractive. VCs play an important role but how could they ever truly justify the excessive sums that some universities pay out?

Even though students now pay for the privilege of learning, they are not simply consumers, but an active part of what makes university a unique experience. VCs are not directly responsible for all the hardships that students face – the government bears a significant responsibility. But it is undeniable that the changes most universities have championed under their leadership has drastically increased the cost of studying. While some VCs are getting rich, there are students who have to rely on charity for their most basic necessities. Let them eat donated non-perishables.

• Kehinde Andrews is an associate professor in sociology at Birmingham City University

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American ingenuity: Why the U.S. has the best hackers

By Roger A. Grimes, Columnist, CSO from IDG

Be scared| ! The Russians are attacking us. If it’s not the Russians, it’s the Chinese — or maybe the North Koreans.
Yes, foreign governments are attacking us. But we’re also attacking them. It’s spycraft as usual. The U.S. government and the media’s continued warnings about who is hacking us reminds me of a womanizing cheat worried about his wife.
Everybody is spying on everyone and has been since before computers were connected to networks. Heck, even my all-time favorite computer hacking book, “The Cuckoo’s Egg,” by Clifford Stoll, was written about a Russian KGB operative hacking way back in 1986, before the Internet was the Internet.
The only difference is that U.S. spies are likely the best ones in the world — and get in and out without being discovered most of the time. How do I know? A few reasons.
To begin, I have firsthand experience. For a significant part of my career I taught hacking (at Foundstone and other computer security education companies) around the world. I can tell you how well people from different countries hacked, how good they were overall, and what they excelled at. Bear with me while I indulge in geographic stereotyping.
Hacking around the world
I can proudly say that, overall, American hackers easily outperformed those from other countries. They were simply more innovative. They learned quickly — and pushed the limits of what could be done.
Hackers from other countries were great at learning exactly what I taught them, but were not as good at finding new ways to do something or at putting previous lessons together to create a new attack chain.
That said, hackers from many other countries also excelled: the United Kingdom, Poland, and Bulgaria, to name three. Hackers from Bulgaria were especially good at writing malware, as were Russian hackers (surprise, surprise). But more impressive was the way Russian hackers looked at hacking as a business. The Russians are great at mixing legitimate business models and frameworks with malware writing and hacking. They also excel at cracking and using encryption, probably for the same reason.
Israel is a special case. Not only does it have great hackers, but they are probably the best in the world I’ve met at defence. It’s no surprise that many (if not most) of the best defence ideas and companies have come out of Israel. Two years ago I went over there to teach about honeypots, a subject of a book I’ve written. The students in that class schooled me. It was almost embarrassing.
American exceptionalism
Perhaps it’s personal bias or a patriotic streak that made me most impressed with American hackers. I think it’s more than that.
When you look at the newest hacking innovations (there are only a few a year — everyone else is copying) they most often originate with American hackers. I don’t mean the latest malware or hacking kit. I’m talking about who is cooking up ideas that haven’t been thought of before and lead in an entirely new direction. Over the course of 20 years of hacking history, the United States leads in innovation by a mile.
I think this is due to several factors. One, the United States has led the computer revolution since shortly after it began (that is, after Alan Turing). The United States started the mainframe and personal computer revolutions. Some degree of computer literacy, along with a standard of living that enables access to a computer, is part of the culture.
But the real difference, if you ask me, is the American entrepreneurial spirit, which won’t take no for an answer. We’re taught to question everything. We question our parents, our bosses, our politicians.
I think this part of the American psyche — although it has its downsides — fosters innovation. Don’t like the way your boss or company does something? Go start your own company. The biggest monopolies in the United States are lucky if they can last 20 years before the next great thing knocks them off the top of the competitive stack.
This ultracompetitive behaviour carries over to hacking. Americans are always looking for a better way to do something, including breaking into places electronically. I’m not saying that other countries don’t have great hackers or come up with innovative hacking techniques, but if you’re looking for ingenious new lines of attack, you’d be remiss if you didn’t check out the U.S. hacker scene first.
Armies of hackers
I can’t provide conclusive, objective proof for my assertion. But I ask you this: When was the last time you heard about U.S. government hackers getting identified and caught?
The United States probably has the biggest offensive cyber capability in the world. I’ll wager a guess that we have at least tens of thousands of hackers working for the U.S. government. I know of a single entity that contains 5,000 hackers — and that isn’t considered one of the large divisions. We spend billions of dollars on offensive hacking.
The most news you’ve heard about U.S. hacking is related to the NSA. In various leaked documents, you’ll find a treasure trove of ingenious hacking devices. There are catalogues from which spies can select the latest gizmo guaranteed to gain unlimited, nearly undetectable access. This is hacking innovation at its most extreme.
Outside of the infamous leak, I’m willing to bet you’ve never read about a country, company, or individual who has been hacked by the U.S. government. Think about it. Billions are being spent on state-sponsored hacking, which — aside from one NSA whistleblower’s revelations — are almost never discovered or reported
Personally, I’m against this kind of unwarranted intrusion, though I know it happens many thousands (millions?) of times a day, conducted by various parties around the world. But let’s stop pointing fingers and trying to scare people because X country is caught spying on Y country. It’s being done by all sides. In all likelihood, the United States is doing more of it better than anyone.

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Is America in Terminal Decline ?

by Raul Ilargi Meijer

The Automatic Earth blog (November 18 2017)

Zero Hedge (November 18 2017)

John Rubino recently posted a graph from Bob Prechter’s Elliot Wave that points to some ominous signs. It depicts the S&P 500, combined with consumer confidence and savings rate. As the accompanying video at Elliott Wave, What “Too Confident to Save” Means for Stocks {1}, shows, when the gap between high confidence and low savings is at its widest, a market crash -often- follows.

In 2000, the subsequent crash was 39%, in 2007 it was 54%. We are now again witnessing just such a gap, with the S&P 500 at record levels. Here’s the graph, with John’s comments:

Consumers Are Both Confident and Broke {2}

Elliott Wave International recently put together a chart that illustrates a recurring theme of financial bubbles: When good times have gone on for a sufficiently long time, people forget that it can be any other way and start behaving as if they’re bulletproof. They stop saving, for instance, because they’ll always have their job and their stocks will always go up. Then comes the inevitable bust. On the following chart, this delusion and its aftermath are represented by the gap between consumer confidence (our sense of how good the next year is likely to be) and the saving rate (the portion of each paycheck we keep for a rainy day). The bigger the gap the less realistic we are and the more likely to pay dearly for our hubris.

John is mostly right. But not entirely. Not that I don’t think he knows, he simply forgets to mention it. What I mean is his suggestion that people stop saving because they’re confident, bullish. To understand where and why he slightly misses, let’s turn to Lance Roberts. Before we get to the savings, Lance explains why the difference between the Producer Price Index (“PPI”) and Consumer Price Index (“CPI”) is important to note.

Summarized, producer prices are rising, but consumer prices are not.

You Have Been Warned {3}

There is an important picture that is currently developing which, if it continues, will impact earnings and ultimately the stock market. Let’s take a look at some interesting economic numbers out this past week. On Tuesday, we saw the release of the Producer Price Index (“PPI”) which ROSE 0.4% for the month following a similar rise of 0.4% last month. This surge in prices was NOT surprising given the recent devastation from three hurricanes and massive wildfires in California which led to a temporary surge in demand for products and services.

Then on Wednesday, the Consumer Price Index (“CPI”) was released which showed only a small 0.1% increase falling sharply from the 0.5% increase last month.

Such differences have real-life consequences. In Lance’s words:

This deflationary pressure further showed up on Thursday with a -0.3% decline in Export prices. (Exports make up about forty percent of corporate profits.) For all of you that continue to insist this is an “earnings-driven market”, you should pay very close attention to those three data points above. When companies have higher input costs in their production they have two choices: 1) “pass along” those cost increases to their customers; or 2) absorb those costs internally.

If a company opts to “pass along” those costs then we should have seen CPI rise more strongly. Since that didn’t happen, it suggests companies are unable to “pass along” those costs which means a reduction in earnings. The other BIG report released on Wednesday tells you WHY companies have been unable to “pass along” those increased costs.

The “retail sales” report came in at just a 0.1% increase for the month. After a large jump in retail sales last month, as was expected following the hurricanes, there should have been some subsequent follow through last month. There simply wasn’t. More importantly, despite annual hopes by the National Retail Federation of surging holiday spending which is consistently over-estimated, the recent surge in consumer debt without a subsequent increase in consumer spending shows the financial distress faced by a vast majority of consumers.

That already hints at what I said above about savings. But it’s Lance’s next graph, versions of which he uses regularly, that makes it even more obvious.

The first chart below shows a record gap between the standard cost of living and the debt required to finance that cost of living. Prior to 2009, debt was able to support a rising standard of living, which is no longer the case currently.

The cut-off point is 2009, unless I miss something in Lance’s comment. Before that, borrowing could create the illusion of a rising standard of living. Those days are gone.

And it’s very hard to see, when you take a good look, what could make them come back.

Not only are savings not down because people are too confident to save, they are down because people simply don’t have anything left to save. The American consumer is sliding ever deeper into debt. And as for the Holiday Season, we can confidently – there’s that word again – predict that spending will be disappointing and that much of what is still spent will add to increasing Consumer Credit Per Capita, as well as the Gap Between Real Disposable Income (“DPI”) and Cost of Living.

The last graph, which shows Control Purchases, that is, what people buy most, a large part of which will be basic needs, makes this even more clear.

With a current shortfall of $18,176 between the standard of living and real disposable incomes, debt is only able to cover about two-thirds of the difference with a net shortfall of $6,605. This explains the reason why “control purchases” by individuals (those items individuals buy most often) is running at levels more normally consistent with recessions rather than economic expansions.

If companies are unable to pass along rising production costs to consumers, export prices are falling, and consumer demand remains weak, be warned of continued weakness in earnings reports in the months ahead. As I stated earlier this year, the recovery in earnings this year was solely a function of the recovering energy sector due to higher oil prices. With that tailwind now firmly behind us, the risk to earnings in the year ahead is dangerous to a market basing its current “overvaluation” on the “strong earnings” story.

“Prior to 2009, debt was able to support a rising standard of living …” Less than a decade later, it can’t even maintain the status quo. That’s what you call a breaking point.

To put that in numbers, there’s a current shortfall of $18,176 between the standard of living and real disposable incomes. In other words, no matter how much people are borrowing, their standard of living is in decline.

Something else we can glean from the graphs is that after the Great Recession (or GFC) of 2008~2009, the economy never recovered. The S&P may have, and the banks are back to profitable ways and big bonuses, but that has nothing to do with real Americans in their own real economy. 2009 was a turning point and the crisis never looked back.

Are the American people actually paying for the so-called recovery? One might be inclined to say so. There is no recovery, there’s whatever the opposite of that is, terminal decline?!. It’s just, where does that consumer confidence level come from? Is that the media? Is The Conference Board pulling our leg? Is it that people think things cannot possibly get worse?

What is by now crystal clear is that Americans don’t choose to not save, they have nothing left to save. And that will have its own nasty consequences down the road. Let’s raise some rates, shall we? And see what happens?!

One consolation: Europe, Japan, China are in the same debt-driven decline that Americans are. We’re all going down together. Or rather, the question is who’s going to go first. That is the only hard call left. America’s a prime candidate.





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Xi’s Road Map to The Chinese Dream

by Pepe Escobar

CounterPunch (October 25 2017)

Photo by Thierry Ehrmann | CC by 2.0

Now that President Xi Jinping has been duly elevated to the Chinese Communist Party pantheon in the rarified company of Mao Zedong Thought and Deng Xiaoping Theory, the world will have plenty of time to digest the meaning of “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”.

Xi himself, in his three-and-half-hour speech at the start of the 19th Party Congress, pointed to a rather simplified “socialist democracy” – extolling its virtues as the only counter-model to Western liberal democracy. Economically, the debate remains open on whether this walks and talks more like “neo-liberalism with Chinese characteristics”.

All the milestones for China in the immediate future have been set.

“Moderately prosperous society” by 2020.
Basically modernized nation by 2035.
Rich and powerful socialist nation by 2050.

Xi himself, since 2013, has encapsulated the process in one mantra; the “Chinese dream”. The dream must become reality in a little over three decades. The inexorable modernization drive unleashed by Deng’s reforms has lasted a little less than four decades. Recent history tells us there’s no reason to believe Phase Two of this seismic Sino-Renaissance won’t be fulfilled.

Xi emphasized,

the dreams of the Chinese people and those of other peoples around the world are closely linked. The realization of the Chinese dream will not be possible without a peaceful international environment and a stable international order.

He mentioned only briefly the New Silk Roads, aka Belt and Road Initiative (“BRI”) as having “created a favourable environment for the country’s overall development”. He didn’t dwell on BRI’s ambition and extraordinary scope, as he does in every major international summit as well as in Davos earlier this year.

But still, it was implicit that to arrive at what Xi defines as a “community of common destiny for mankind”, BRI is China’s ultimate tool. BRI, a geopolitical/geo-economic game-changer, is, in fact, Xi’s – and China’s – organizing foreign policy concept and driver up to 2050.

Xi has clearly understood that global leadership implies being a top provider, mostly to the global South, of connectivity, infrastructure financing, comprehensive technical assistance, construction hardware, and myriad other trappings of “modernization”.

It does not hurt that this trade/commerce/investment onslaught helps to internationalize the yuan.

It’s easy to forget that BRI, an unparalleled multinational connectivity drive set to economically link all points Asia to Europe and Africa, was announced only three years ago, in Astana (Central Asia) and Jakarta (Southeast Asia).

What was originally known as the Silk Road Economic Belt and the 21st Century Maritime Silk Road were endorsed by the Third Plenum of the 18th CCP Central Committee in November 2013. Only after the release of an official document, “Visions and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Roads”, in March 2015, the whole project was finally named BRI.

According to the official Chinese timeline, we’re only at the start of Phase Two. Phase One, from 2013 to 2016, was “mobilization”. “Planning”, from 2016 to 2021, is barely on (and that explains why few major projects are online). “Implementation” is supposed to start in 2021, one year before Xi’s new term expires, and go all the way to 2049.

The horizon thus is 2050, coinciding with Xi’s “rich and powerful socialist nation” dream. There’s simply no other comprehensive, inclusive, far-reaching, financially solid development program on the global market. Certainly not India’s Asia-Africa Growth Corridor (“AAGC”).

Have BRI, Will Travel

It starts with Hong Kong. When Xi said, “We will continue to support Hong Kong and Macau in integrating their own development into the overall development of the country”, he meant Hong Kong configured as a major BRI financing hub – its new role after a recent past of business facilitator between China and the West.

Hong Kong’s got what it takes; convertible currency; total capital mobility; rule of law; no tax on interest, dividends and capital gains; total access to China’s capital market/savings; and last but not least, Beijing’s support.

Enter the dream of myriad financing packages (public-private; equity-debt; short-long term bonds). Hong Kong’s BRI role will be of the Total Package international financial centre (venture capital; private equity; flotation of stocks and bonds; investment banking; mergers and acquisitions; reinsurance) interlinked with the Greater Bay Area – the eleven cities (including Guangzhou and Shenzhen) of the Pearl River Delta (light/heavy manufacturing; hi-tech venture capitalists, start-ups, investors; top research universities).

That ties up with Xi’s emphasis on innovation:

We will strengthen basic research in applied sciences, launch major national science and technology projects, and prioritize innovation in key generic technologies, cutting-edge frontier technologies, modern engineering technologies, and disruptive technologies.

The integration of the Greater Bay Area is bound to inspire, fuel, and in some cases even mold some of BRI’s key projects. The Eurasian Land Bridge from Xinjiang to Western Russia (China and Kazakhstan are actively turbo-charging their joint free trade zone at Khorgos). The China-Mongolia-Russia economic corridor. The connection of the Central Asian “stans” to West Asia – Iran and Turkey. The China-Pakistan Economic Corridor (“CPEC”) from Xinjiang all the way to Gwadar in the Arabian Sea – capable of sparking an “economic revolution” according to Islamabad. The China-Indochina corridor from Kunming to Singapore. The Bangladesh-China-India-Myanmar (“BCIM”) corridor (assuming India does not boycott it). The Maritime Silk Road from coastal southeast China all the way to the Mediterranean, from Piraeus to Venice.

Yiwu to London freight trains, Shanghai to Tehran freight trains, the Turkmenistan to Xinjiang gas pipeline – these are all facts on the ground. Along the way, the technologies and tools of infrastructure connectivity – applied to high-speed rail networks, power plants, solar farms, motorways, bridges, ports, pipelines – will be closely linked with financing by the Asia Infrastructure Investment Bank (“AIIB”) and the security-economic cooperation imperatives of the Shanghai Cooperation Organization (“SCO”) to build the new Eurasia from Shanghai to Rotterdam. Or, to evoke Vladimir Putin’s original vision, even before BRI was launched, “from Lisbon to Vladivostok”.

Xi did not spell it out, but Beijing will do everything to stay as independent as possible from the Western Central Bank system, with the Bank of International Settlements (“BIS”) to be avoided in as many trade deals as possible to the benefit of yuan-based transactions or outright barter. The petrodollar will be increasingly bypassed (it’s already happening between China and Iran, and Beijing sooner rather than later will demand it from Saudi Arabia.)

The end result by 2050 will be – barring inevitable, complex glitches – an integrated market of 4.5 billion people mostly using local currencies for bilateral and multilateral trade, or a basket of currencies (yuan-ruble-rial-yen-rupee).

Xi has laid China’s cards – as well as the roadmap – on the table. As far as the Chinese Dream is concerned, it’s now clear; Have BRI, Will Travel.


This piece first appeared at

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Britain once punched above its weight. Now we are irrelevant

Jonathan Powell

The Guardian

November 13, 2017

Britain has lost its way and is having an identity crisis, says the New York Times. Just as Dean Acheson’s barb that Britain had lost an empire and not yet found a role hit home in 1962, so did an article last week by Steven Erlanger, the paper’s diplomatic editor and former London bureau chief, claiming no one knows what Britain is any more.
The article sparked a storm on the twittersphere and hurt rebuttals in the rightwing British press. But the counterattacks missed the point. It is not a question of whether Britain still has some good universities or the gaming industry is doing well. The question is whether Britain still has real influence in the world: and the answer to that is clearly no.
As Simon Fraser, the former Foreign Office permanent secretary, said in a speech last week: “It is hard to call to mind a major foreign policy matter on which we have had a decisive influence since the referendum.” To put it even more cruelly: we have rendered ourselves irrelevant.
I work in 11 countries across the globe and no one is interested in what Britain thinks, even in those parts of the world where we had a historical role. Since the second world war, our foreign policy has been built on two pillars: Europe and the transatlantic relationship. Both are now broken, one by us and the other partly by circumstance. We are no longer able to build a coalition in Brussels behind our foreign policy objectives. No one wants to be seen to be working with a member state about to depart. And no one seriously believes that Donald Trump is sitting in Washington waiting for Theresa May to advise him on what to do on North Korea – as we were able to do with President Clinton on Kosovo.
Even if we did still have influence, we don’t have any attention to spare for the rest of the world because all of our efforts are going into the destructive process of Brexit. Just as blood goes to the stomach when you have a large meal, so most of our civil servants and diplomats are working on dismantling our EU membership rather than on maximising our influence around the world, – and paradoxically we are taking on thousands more to do so in the pursuit of less bureaucracy.
We can’t even get the negotiations with the EU right, even though that is supposed to be the government’s principal objective, because cabinet ministers cannot agree on what they want the end state of our relations with the EU to be. Our interlocutors in Brussels are giving up because they have nothing to engage with. And meanwhile the Brexiters are gearing up to blame the Europeans and our own quisling civil servants.
The foreign policy ministerial team is in crisis: the international development secretary resigned over an ill-advised private venture in Israel; and the foreign secretary should have resigned, having apparently failed to read his brief and thereby possibly landed a British mother held in Iran with a longer jail sentence. Our politics is in turmoil, the prime minister powerless, the minority government on the verge of extinction. The cartoon sequence of teetering on the edge of the cliff is likely to continue until Jeremy Corbyn goes down in the polls, because only then can the Tories risk an election.
Britain has historically been the strong and stable democracy in Europe on which others – both the Europeans and the US – could depend. In the first world war, in the second, in the cold war and in building a liberal, free-trading and open Europe, we played a central role. We took pride, as Douglas Hurd put it, in punching above our weight. Now we have taken to punching each other in a polarised and uncertain country. Italy appears more politically stable, and France far more internationally relevant.
What puzzles our friends and erstwhile allies most is that all of this is self-inflicted. We didn’t have to give up the two pillars on which our nation has depended for so long. And we didn’t have to do so when we had nothing with which to replace them. So Erlanger’s judgment of our state of introverted irrelevance is, if anything, an almost British understatement of the sad position in which we find ourselves.
• Jonathan Powell was Tony Blair’s chief of staff from 1995 to 2007

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