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Offline Quo Vadis Petre

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« on: August 24, 2006, 11:45:43 AM »
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  • "In our time more than ever before, the greatest asset of the evil-disposed is the cowardice and weakness of good men, and all the vigour of Satan's reign is due to the easy-going weakness of Catholics." -St. Pius X

    "If the Church were not divine, this


    Offline Matthew

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    « Reply #1 on: August 24, 2006, 03:05:23 PM »
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  • Fascinating article -- it corroborates what I've read elsewhere about Russia's resurgence, petrodollars, competition for oil, preparation for another world war, etc.

    Matthew
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    Offline Matthew

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    « Reply #2 on: August 24, 2006, 03:08:07 PM »
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  • Russia spins global energy spider's web

    August 25, 2006

    The vast bulk of the world's oil, gas and strategic minerals resources either is coming under or is already under the control of authoritarian, or less-than-democratic, or leftist, or otherwise radical regimes either with a decidedly anti-Western political stance and ideology or pointedly decreased sensitivities to strategic US interests.

    It is difficult to name more than a handful of resource-rich states that are liberal democracies and that are still significantly aligned with the West. Only Canada and Mexico come immediately to mind, and even Canada is increasingly embracing China and the East in the sphere of strategic energy deals and agreements.

    Even those resource-rich regimes that are considered to be the  most moderate of the globe's producing states are far less closely aligned geopolitically with the US than they were previously.

    Saudi Arabia, for example, continues its "Look East" policy of diversifying its markets away from the US. It has concluded a range of important deals in the energy sector with China and India and is steadily moving into closer geopolitical alignment with the rising East.

    A number of other key Middle Eastern regimes are following suit. By and large Latin America is doing the same, as are Africa and Central Asia. Almost none of the world's oil and gas producers wants to be inordinately dependent on the US market any longer. Additionally, the steady rise of the powerful economies of Asia beckons oil and gas producers toward such lucrative markets that are politically cost-free, meaning they do not attach political demands and seek to interfere in the domestic affairs of the producing regimes, as does the US.

    In virtually all cases, the interests of the West and of its multinational oil companies and big Western financial institutions are being minimized and/or pushed out as the global trend of nationalization, by one means or another, of the oil-and-gas sector picks up speed.

    That is occurring in Russia, which has now surpassed Saudi Arabia as the world's largest exporter of oil, in Central Asia, the Middle East and in Latin America. Within virtually all such regimes the lines of separation between the top levels of political leadership and the directorship of key corporations and industries are not only blurred but are being obliterated. The multinational oil companies of the West are being marginalized as a direct result.

    That is the case in Russia, where in many key areas of industry corporate directors are intimately tied to President Vladimir Putin, having formed a close association with him long before he became president, and many even hold key positions as upper-level Kremlin officials, or as government ministers. Not merely coincidentally, the key corporations the directors of which are so closely allied with Putin are often resources-based and are also those that are state-controlled businesses, with the Russian state holding controlling (51% or more) interests.

    To varying yet alarming degrees, the resource-rich regimes around the globe are copying the Russian model. Resources-based corporate states with a profound political affinity for one another and a simultaneous collective disdain and even a hatred for US-led unipolar dominance are proliferating around the globe.

    Resource-rich Russia's mounting global leverage with the world's other producing states and with the powerhouse economies of the East, and its profound political affinity with such producers and key consumer states, far outweighs the influence of the Organization of Petroleum Exporting Countries (OPEC).

    How so? Russia is crossing the membership boundaries of OPEC to court its most powerful members and to conclude with them joint-venture agreements of huge consequence and importance for the future of global oil and gas exploration and production. The West is rapidly being pushed out of such ventures, or is being forced to take radical reductions in the size of its stakes, and is being left out entirely in many new ventures.

    Instead, the world's producing regimes are increasingly entering key joint ventures between themselves and in very close cooperation with the powerhouse economies of the rising East, such as China. We are witnessing not merely the formation of some new oil-and-gas cartel with Russia at its center, but rather the formation of something that includes both producers and the key consumer states of the East in an ever more cohesive de facto confederation. This is dedicated to the achievement of strategic energy security for those within its clearly defined circle.
    In the process, OPEC itself, as an entity, is being undermined and marginalized. Simultaneously, the West is being forcibly cast from the proverbial frying pan into the fire as something far more powerful, compelling and all-encompassing than OPEC is coalescing.

    The ominous rise around the globe of the resources-based corporate state is accelerating. The implications for the West are enormous, yet such implications are only beginning to be understood. As noted above, such states are concluding rapidly increased numbers of strategic agreements among themselves for the joint exploration and production of oil and gas, and with the rapidly rising powerhouse economies of the East, such as China and India, for the private long-term supply of oil and gas.

    The creation of such private pools of oil and gas for the consumption only by specific economic powers in the East and select economies of the West is also a new development that carries with it profound implications for the West.

    In essence, the circle defining international energy security is now being drawn. Inside the circle are those producer and consumer states whose political and geopolitical affinity for each other is the result of no mere chance occurrence and whose energy-security interests are being strategically served and addressed on both sides of the producer/consumer equation.

    Some of the economies of the West, such as Germany, are being included within the developing circle. Outside the circle are those economies of the West that are to be left out of the growing international energy-security arrangements currently being constructed, as alluded to above. Interestingly, and as a profound new development, it isn't the United States that defines the path and scope of the circle. Instead, it is Russia and its strategic partners who are defining it.

    Because Russia's leaders adroitly positioned the Russian Federation to capitalize massively on global energy developments, it is the state that inherited the unique ability to shape global developments as they unfold. Russia is shaping important developments among the world's key producing and consuming powers. They are being shaped contrary to the strategic interests of the United States, as noted above. The US is also shaping developments, foolishly handing Russia and the East ever more global leverage. By incessant strategic blunders, the US has isolated itself internationally and fanned the fires of global anti-Americanism, which increasingly engulf the very regions where its own resources-based strategic interests lie.

    An entire array of fundamental global developments as respect strategic resources is quite literally changing the landscape of the traditional global energy order. With regard to energy and energy security, a new global order is emerging. The US-backed liberal, open global oil market order is beset by an accelerating proliferation of private, state-to-state long-term agreements and contracts concluded within the circle Russia and its partners are defining.

    This is creating increasing numbers of private pools of oil and gas dedicated only to serving the energy-security interests of the circle of private participants. Along the way, Russia's export monopoly of the oil and gas that still flows outside the circle to the West continues to grow, further ensuring its mounting global leverage.

    Rather than being merely unrelated and random events, global developments in the energy and geopolitical spheres over the past seven years form a distinct pattern that bespeaks the execution of a developing strategy of a Russian reacquisition of global power, but in concert with its strategic partners, at the incalculable expense of the West in general and of the US in particular.

    Contrary to the assumptions of conventional wisdom, the US hasn't any longer the global leverage to shape unfolding developments in its favor. Russia is rapidly acquiring such leverage, and it is expertly plying that leverage against US vulnerabilities in the energy sphere.
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    Offline Matthew

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    « Reply #3 on: August 24, 2006, 03:08:54 PM »
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  • Moscow making Central Asia its own

    When President Vladimir Putin in his State of the Union speech last year called the collapse of the Soviet Union "the greatest geopolitical catastrophe of the 20th century", cold warriors on both sides of the Atlantic pounced on the statement as fresh evidence of Russia's imperial ambitions.

    Very few were prepared to accept Putin's statement at face value - a powerful articulation of an incontrovertible fact from the Russian point of view. The fact remains that half a million Soviet citizens perished during the painful transition, and 50 million people were displaced. Last week, on the anniversary of the August 19 coup that led to the disbandment of the Soviet Union, public opinion in Russia looked back at the events 15 years ago as a crude power struggle devoid of any high principles.

    Today, even former Soviet president Mikhail Gorbachev acknowledges, "Things certainly needed to change, but we did not need to destroy that which had been built by previous generations ... The dissolution of a country that was not only powerful but which, during perestroika [restructuring], demonstrated that it was peaceful and that it accepted the basic principles of democracy, would be a tragedy."

    It is no mere coincidence that Putin chose last week for hosting an "informal" summit at the Russian leader's summer residence in the Black Sea resort of Sochi, heralding a qualitatively new stage in the integration processes at work in the post-Soviet space. Of course, the participants - the leaders of the six-member Eurasian Economic Community (EEC) comprising Russia, Belarus, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan as well as of Armenia and Ukraine attending as "observers" - clearly realized that the Soviet Union lay buried in the heap of history and was irretrievable.

    Equally, they sensed that a chapter of post-Soviet history was quietly closing and a new one commencing. None in Sochi was talking about any revival of the Soviet Union, but to quote a Russian political observer, those present at the Black Sea resort also couldn't overlook anymore that "it's not easy to go it alone, and it's worth remembering the past".

    The process of winding down the Commonwealth of Independent States (CIS) is almost complete. As Putin said last year during a visit to Yerevan, Armenia, the CIS had served its purpose of facilitating the divorce among the post-Soviet states. The Sochi summit indicates that out of the debris of the plethora of CIS mechanisms, Russia is singling out just two forums for carrying forward the impulses of integration in the period ahead: the EEC and the Collective Security Treaty Organization (CSTO).

    In a way, EEC and CSTO are mutually reinforcing. The Russian thinking seems to be that the CSTO will in effect be transformed into the politico-military wing of the EEC. At Sochi, Putin touched on this when he said, "You cannot advance the economy without first ensuring security."

    Uzbekistan's decision early this year to join the EEC and its subsequent decision to return to the fold of the CSTO have given a significant boost to the integration processes that Russia has been seeking. What is taking place, in essence, is that the post-Soviet states that have been tacitly encouraged by Washington to apply "breaking mechanisms" on the path of the integration processes so as to subvert the CIS from within - principally, Georgia, Moldova and Azerbaijan - are being quietly sidelined, while the others are preparing to move forward.

    Ukraine falls in a category by itself. In fact, a significant point about the Sochi summit was the presence of Ukraine's pro-Russia prime minister, Viktor Yanukovich. To be sure, there is a hint somewhere that with the collapse of the "orange" coalition in Kiev, Russia hopes to involve Ukraine in deeper integration, and Yanukovich himself may have meaningfully scheduled his first visit to Russia after assuming office this month to coincide with the EEC summit in Sochi.

    The most far-reaching outcome of the Sochi summit would be to implement on a priority basis a long-standing objective to set up a customs union of the EEC member countries. Speaking at a press conference after the summit, Putin announced that steps would be taken within the next three months to put in place the legal foundation for establishing a customs union. The indications are that realistically speaking, the modalities of establishment of the customs union will be complete by the second half of 2008.

    According to Kazakh President Nursultan Nazarbayev, by November, the customs union will have taken place comprising Russia, Kazakhstan and Belarus, while the other EEC members may join in the next 18-month period or so. It is a dramatic gain for Russia to have reached such a high level of integration with Kazakhstan. The Moscow-Astana axis potentially forms a formidable core within the post-Soviet space. Russia has in effect rebuffed the US strategy of making inroads into its ties with Kazakhstan.

    Astana has been a frequent destination for US dignitaries in the recent months, including Vice President Dick Cheney, Secretary of State Condoleezza Rice and Energy Secretary Sam Boden. A visit by Nazarbayev to the US is in the cards. Of late, US officials have openly singled out Kazakhstan for flattering, fulsome praise in the hope of playing on Astana's perceived vanities as a geopolitical fulcrum.

    Furthermore, Russia has hit back at the US for the latter's delaying tactic apropos its membership in the World Trade Organization by getting the Sochi summit to agree that the integration within the EEC and the accession of its members to the WTO should be harmonized until the establishment of the customs union. In real terms, Russia is counting on the customs union being assigned the role of an alternative to the WTO.

    Putin emphasized this point at the Sochi summit. He said the ambitions of the EEC member countries to join the WTO should be coordinated with regional integration plans. "Our intentions to deepen cooperation within the framework of the EEC, including the setting up of a customs union, should be clearly and precisely coordinated with the pace and details of WTO accession by each of our countries," Putin added.

    What this means is that apart from harmonizing their customs legislation within the EEC, the member countries are obliged to bring their legislation in line with WTO requirements if they are to join the organization. Moscow has, at the very least, thwarted any US design to isolate Russia's regional integration plans by means of stalling its WTO membership. On the outer side, Russia is placing itself in a privileged position in Central Asia that the US will find impossible to breach.

    Eyes on the energy market
    However, it is the common energy market in Central Asia taking shape within the ambit of the EEC that will alter the region's geopolitics in the immediate term. The EEC summit deliberated on the formation of a hydropower consortium, which is crucial for Central Asia.

    The proposal was so sensitive that the summit kept this part of its deliberations confidential. Obviously, sensitivities cut across different levels. First, there is an acute "water problem" in Central Asia insofar as Kyrgyzstan and Tajikistan account for about 80% of the region's water resources, while Kazakhstan and Uzbekistan are the main users.

    In the absence of the Soviet-era common economic system, the apportioning of water resources and, more important, the maintenance and use of water resources (and the financial outlay for sustaining the same) pose problems.

    In spring, Kyrgyzstan and Tajikistan receive an excess flow of water from the Pamir glaciers and need to get rid of this, whereas the farms and cotton fields in Uzbekistan and Uzbekistan need more water in summer, during which the catchment facilities also need to store water for the normal operation of power plants in winter.

    The EEC seems to have taken the first steps in the direction of evolving a technologically and economically powerful system for addressing the interconnected problems of water distribution and the development of hydropower infrastructure for the region. From the details available, Russia has suggested the creation of a hydropower consortium financed by the Eurasian Bank of Russia and Kazakhstan.

    Significantly, the Russian proposal has appeared at a time when the US has waded into the region with its so-called "Great Central Asia" policy in recent months. The US strategy aims at its "re-entry" into the Central Asian region after severe setbacks to its diplomacy in the period under the cuмulative weight of the clumsily executed "Tulip Revolution" in Kyrgyzstan in March last year and the abortive uprising in Andizhan in the Ferghana Valley two months thereafter.

    The new US strategy professes a "cooperative partnership for development" of Central Asia that will have the United States in the lead, the five Central Asian states and Afghanistan co-opted as the principal members, and South Asia (India and Pakistan) roped in as robust participants.

    The main thrust of the strategy is to take the US grip over Afghanistan as a strategic opportunity or "bridge" for promoting optional and flexible cooperation in security, democracy, economy, transport and energy, and make up a new geopolitical compass by combining Central Asia with South Asia. Washington's new policy brief first surfaced last October when the State Department reorganized its South Asia Bureau and expanded it to include the Central Asian countries.

    The new strategy was fleshed out in great detail during a congressional hearing on April 25-26 in Washington. In June, virtually in the run-up to the summit of the Shanghai Cooperation Organization (SCO), Washington organized an international conference at Istanbul called "Electricity Beyond Borders" for discussing energy cooperation between Central Asia and South Asia. The Central Asian representatives who participated were sensitized at the conference that a viable alternative to the SCO was indeed available for them for advancing the impulses of regional cooperation.

    The US strategy must be seen against the backdrop of the unprecedented expansion of US influence in South Asia in the period post-September 11, 2001, especially in India. Washington is evidently counting on New Delhi and Kabul as its critical partners in the "Great Central Asia" policy. Afghanistan is geographically an important channel connecting Central Asia with South Asia. As regards India, Washington has been focusing on New Delhi as its key strategic ally in South Asia and as a counterweight to China.

    The "Great Central Asia" policy plays on New Delhi's manifest aspiration (with indifferent results so far) through the past 15 years to be an effective participant as a great power in the affairs of Central Asia.

    Furthermore, Washington is counting on New Delhi's keenness to secure energy supplies from Central Asia and is playing on the atavistic fears in sections of Indian opinion as regards China's rapidly expanding influence in Central Asia. Equally, Washington is acutely conscious that today like at no time before, there is also a willingness in New Delhi to bend Indian foreign policy orientations to "harmonize" with the United States' geostrategies.

    In the case of the "Great Central Asia" policy, in the event of it succeeding, Washington could also derive immense satisfaction that India's traditionally friendly relations with Russia and its increasingly cordial ties with China would inevitably come under immense strain. The fact remains that Central Asia lies in the first circle of security interests for both Russia and China, and these two countries cannot be expected to take lying down any US ingresses into their strategic back yard.

    The indications are that New Delhi (in contrast with Islamabad, which is somehow still persisting with its policy of forging ever closer links with the SCO) is seriously considering the opportunities offered by the US policy toward Central Asia. India was the only participant to keep a low-key representation at the SCO summit in June. Lately, India initiated some fence-mending with Uzbekistan, a key country in Central Asia with which the US has had profound difficulties in the recent period.

    Moreover, New Delhi just hosted a visit by Emomali Rakhmonov, president of Tajikistan, which is fast emerging as a new theater of the Great Game - a country that is being assiduously courted by Washington and encouraged to place distance in its relations with Russia. (Indeed, a major item during Rakhmonov's visit devolved on Indian participation in Tajikistan's hydropower projects.)

    Obviously, in geopolitical terms, the United States' "Great Central Asia" policy aims at crafting the sinews of cooperation in the areas of energy, transportation and infrastructure construction with a view to bringing the region out of the current orbit of Russian-Chinese influence within the SCO framework and to forge cooperative relations between the region and South Asia. Washington calculates that the policy will inevitably break the long-term Russian influence over Central Asia, disintegrate the cohesion of the SCO and, inevitably, catapult the US as the dominant power on the new template of Central Asia and South Asia.

    Both China and Russia can be expected to counter the United States' "Great Central Asia" policy. The People's Daily concluded an unusually lengthy and detailed commentary on the subject recently with the following assessment:
    Magnificent as it appears, the "Greater Central Asia" strategy will have to face some practical problems in its implementation. For historical and cultural reasons, Central Asian and South Asian countries lack a basic sense of [mutual] identification and experience in in-depth cooperation. The mutual trust between India and Pakistan is not enough for implementing large-scale, cross-border infrastructure projects.

    Afghanistan is the most critical "pawn" in the US strategy. But currently, the US and the Afghan government exercise very little control over the situation in Afghanistan ... The "Great Central Asia" policy strategy visualizes most major transport infrastructure and pipelines passing through Afghanistan. The risks are too high.

    An important part of the US strategy is to export the energy from Central Asia to South Asia. However, the total energy reserves and the current exploitation capacity in the Central Asian region are quite limited. A large part of it is under control of Russia. To export energy to the South Asian countries will inevitably cause conflict with Russia.
    The EEC summit's energy initiative, especially the decision on forming a hydropower consortium, will no doubt be seen in Washington as aimed at frustrating the "Great Central Asia" strategy. Actually, it may be an accurate reading of the emerging equations. The EEC decision, if it carries momentum, ensures a watery grave for the desperate US attempts to make a forceful comeback in the geopolitics of Central Asia.

    From available details, the Sochi summit has moved in the direction of bringing the issues of water-sharing and hydropower generation within the framework of EEC cooperation. A wide-ranging plan was apparently discussed at Sochi to manage the region's water resources. (Russia itself possesses one-quarter of the world's freshwater resources.)

    The Eurasian hydropower consortium will summarily kick Washington out of the arena of Central Asia's regional cooperation with the Chinese, Pakistani and Indian markets. Coupled with the formidable Russian presence in the Central Asian region's oil-and-gas sector, the consortium idea can be expected to give massive geopolitical momentum to Moscow's policy.

    The influential daily newspaper of the Russian armed forces, Krasnaya Zvezda, recently wrote:
    Over the past 12-18 months, Russia has gone on the offensive in Central Asia ... Our country is making a comeback to the region but it's coming back as a reliable economic partner, not as a politically dominating force. As economists describe, banks are better than tanks ... But "tanks" should not be overlooked either. Russia remains the leading supplier of arms and military hardware to Central Asian countries, much of it at concessional prices. The overwhelming majority of the officer corps is trained in Russia.

    Moreover, there are the CSTO and the SCO ... In other words, Central Asian states are still within the orbit of Russia's political, military-political and economic influence. And Russia must not stop here; it needs to continue building up its influence in all areas of activity.

    One reason to do this is for minimizing the possibility of any further American military facilities being established in Central Asia, no matter what they are called - be it "training centers" for military personnel, points for monitoring drug-trafficking from Afghanistan or anything else. For, one way or the other, they would be military facilities controlled by the US or NATO - our traditional geopolitical rivals.
    It is highly significant that Russia is assertively charting new frontiers in regional energy cooperation in Central Asia, confident in the knowledge that Moscow and Beijing are nowhere near facing a clash of interests in this sphere. China's support of the Russian stance on energy security at last month's Group of Eight summit in St Petersburg apart, the contours of Beijing's perspective give satisfaction to Moscow.

    Liu Jianfei, a leading professor at the International Strategic Research Center of China's Central Communist Party School, recently identified the principal elements in the Chinese thinking on energy security. He acknowledged that although energy security is treated as a part of non-traditional issues in the global agenda, there was no denying that it would affect the "traditional military, security and influence in international relations". Liu illustrated this point by saying that energy security was at the bottom of the Iran nuclear issue.

    Liu took an indirect swipe at the US for applying its reflexes of "traditional realism" to criticize "some developing countries' increasing energy demand". He said the specter of "energy threat" was a contrived one based on the premise that only the developed industrial countries were "the only eligible countries to consume energy on the Earth. It's irrational to ensure one's own supply by limiting the demand of other countries."

    Liu cautioned that such a self-serving approach to energy security would "easily trigger conflicts and undermine world peace". Almost echoing Moscow's stance, Liu concluded that the important point was not to divide the existing energy market for securing the "vested interests" of developed countries, but "how to make a bigger cake, how to develop new energy sources and improve energy efficiency, and how to maintain a sustainable energy development".
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