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ISIS enters its final days

Terror group unlike to survive end of its phoney “Caliphate”

Alexander Mercouris

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Though ISIS has held together surprisingly strongly in the face of the attacks of its multiple enemies, the last two weeks suggest that the tipping point has finally been reached, and that its disintegration has now begun.

Over vast stretches of central Syria its hold has been broken, with towns and villages being rapidly restored to the Syrian government’s control.

Its siege of Deir Ezzor has been broken and its fighters there are being slowly surrounded in the part of that city which it still controls.

It has lost its alternative capital of Mayadin after just a few days of fighting.

The Syrian army is now pressing it hard in its heartland east of the Euphrates river, but contrary to expectations of an apocalyptic battle between ISIS and the Syrian army there, its resistance has been sporadic, and its attempts to mount counter-attacks against the Syrian army’s lines of communication have all ended in failure.

Further north the Kurds have driven it out of Raqqa – though at horrific cost, and only after a deal was done to allow the 350 remaining ISIS fighters in the city to leave – whilst in Iraq it has been unable to capitalise on the Iraqi army’s re-focus on the Kurds to regain ground it has lost.

The organisation is not completely broken.  The rapid advance of the Syrian army through central Syria has left bands of ISIS fighters still roaming around the central Syrian countryside, cut off from their comrades further east, but still dangerous.

Within Syria ISIS still controls a rapidly contracting belt of territory on either side of the Euphrates river, though it is no longer in possession of any major towns.

However ISIS still controls some towns in western Iraq, notably the small but important town of Al-Qaim.

ISIS also remains capable of limited offensives in odd places: for example ISIS fighters recently carried out a successful attack against Al-Qaeda fighters within the Yarmouk Palestinian refugee camp in the suburbs of Damascus.

However the strongest sign that the organisation is indeed starting to disintegrate is that it appears to have lost a series of running battles it recently fought against Al-Qaeda in Jihadi controlled areas of north west Syria, a fact which suggests that as the star of its “Caliphate” wanes it is losing the loyalty of Jihadi fighters, some of whom may be switching back to Al-Qaeda.

Most striking of all is the reported mass defection of tribal fighters formerly loyal to ISIS who were guarding the key Al-Omar oil fields in eastern Syria.  They appear to have gone over en masse to the Kurdish led and US backed “Syrian Democratic Forces”, the umbrella name for the Kurdish led force which has just captured Raqqa.

No doubt this defection was carefully staged and was intended to keep the Al-Omar oil fields – the largest in Syria – out of the Syrian government’s hands.  However even if the defection was staged, it still points to an ongoing collapse on the part of ISIS in eastern Syria.

The critical remaining battle against ISIS in Syria is the one in the city of Deir Ezzor.  This is apparently a much bigger city than Raqqa (the published population figures for the two cities, which do not bear out this claim, are out of date and wrong) and there continues to be fierce fighting there between the Syrian army and the ISIS fighters who over the course of a four year siege were able to capture around two fifths of the city.

However latest reports suggest that the Syrian army has the ISIS fighters in Deir Ezzor largely surrounded, and it seems that their resistance there cannot be sustained for very long.  Most expect it to collapse within the next few days or possibly weeks.

When the collapse in Deir Ezzor comes that will release more Syrian troops to take the fight to ISIS elsewhere, at which point the pace of its disintegration will accelerate.

The received wisdom in the Western media is that ISIS will nonetheless be able to survive these defeats and the imminent loss of its remaining territory.  Supposedly, though these defeats will destroy the fiction of its “Caliphate”, ISIS will nonetheless be able to transform itself back into the terrorist and guerrilla organisation which it was before its territorial conquests of 2014, and will be able to survive that way.  For a classic though intelligent and nuanced statement of this view, see this lengthy article in the Guardian, which by the way is also remarkable for its failure to make any reference whatsoever to Iran and Russia and to the central role of those countries in the defeat of ISIS.

I do not agree with this view.  I think those Western commentators who hold it still have not grasped the implications of ISIS’s proclamation of the Caliphate and its declaration that it is the “Islamic State” to which all Muslims everywhere owe allegiance.

There is no going back on this claim and the making of it means that ISIS became a different organisation because of it than it had been before, and cannot go back to being the same sort of organisation again that it was before.

The thousands of fighters who flocked to ISIS in preference to other older and more established Jihadi organisations such as Al-Qaeda, and who fought ISIS’s battles for it after 2014, did so because they believed its claim that it was the Islamic State and that Al-Baghdadi was Islam’s Caliph.  Al-Baghdadi and ISIS’s other leaders cannot now credibly tell them that it was all a mistake, and expect them to remain loyal to ISIS in spite of it.

What that means is that the existence of ISIS is now inextricably bound up with its Caliphate.  As has been correctly said, a Caliphate without territory is no longer credible, and I would add that a Caliphate which has been repeatedly and resoundingly defeated by “apostate” and “Christian” armies is not credible either.

Perhaps if Al-Baghdadi survives the debacle and finds somewhere where he can hide he will continue to attract some followers who will still in spite of everything continue to accept him as Islam’s Caliph.  The number of these people will however be tiny – what sort of Caliph has to hide? – and whatever organisation survives ISIS’s loss of its territory it will be a shadow of the organisation ISIS once was.

I predicted all this and ISIS’s imminent demise in an article I wrote for Sputnik on 19th January 2016 – ie. shortly after the Russian intervention in Syria began – in which I also expressed some views about the organisation’s origins and the reasons for its ephemeral success.

Since this article was relatively short and sums up my views of the reasons both for the emergence of the organisation and for its eventual failure, I will set it out here in full

The Islamic State (also known as Daesh) is the bastard child of the US’s drive to achieve regime change in Syria.

To that end the US and its allies instigated an armed insurrection against the Syrian government.

Though protests — many of them violent — began in 2011, it was in 2012 — after the Geneva Peace Conference — which the US wrecked by insisting President Assad stand down — that the major fighting began, with a rebel offensive against Syria’s two biggest cities: Aleppo and Damascus.

The offensive failed. The Syrian government survived, retaining control of Damascus and half of Aleppo.

Defending these cities and the populated coastal core of Syria however forced the Syrian army to withdraw from large areas of Syrian territory, most of them desert.

In 2013 the military balance shifted back to the Syrian government.

The US response was to try to use a chemical attack on the Damascus suburb of Ghouta as a pretext to bomb Syria. When that failed because of strong opposition from Russia and US public opinion it stepped up support for the insurgency.

Weapons, money and fighters poured in, and over the course of 2014 the military balance shifted back to the rebels again.

The main beneficiary was the organisation that now calls itself the Islamic State.

This began as the Iraqi branch of the global jihadi terrorist group Al-Qaeda.

It took advantage of the vacuum created by the Syrian army’s withdrawal from Syria’s desert regions to expand into Syria and to establish itself there.

As the best organised, most violent and most militant of the jihadi groups that form the core of the Syrian rebellion, it quickly achieved predominance especially as it focused on seizing territory rather than fighting the Syrian army.

In 2014 it went on the offensive in Iraq, seizing the important city of Mosul.

Shortly after it declared itself the Islamic State and proclaimed its leader — the man known as Ibrahim Abu Bakr Al-Baghdadi — Islam’s Caliph.

The Islamic State is said to have a Wahhabist or Salafist ideology, like those in Saudi Arabia and Qatar, and like that of its original parent, Al-Qaeda.  Actually it combines Salafism with an apocalyptic vision previously unknown to Islam.

As it says its leader is the Caliph it claims to be the only legitimate government for Muslims.

It rules the areas it controls by violence and terror, backed by money it gets from the Gulf and from the illegal oil trade.

All this explains why following Russia’s military intervention in Syria it is doomed.

The Russian military intervention means there is no danger of the Syrian government collapsing — as looked possible just a few months ago.

The Syrian army has now been able to go on the offensive, and is advancing on all fronts.

The Islamic State cannot withstand the Syrian army backed by the Russian airforce and Iran and Russia.  However if it fails to hold the territory it has seized its claim to be the Islamic State collapses.

The only way the Islamic State could survive would be if the US and its allies acted to save it.

Its appalling violence and megalomaniac pretensions means that for the US it is however an embarrassment not an asset.  The main thing Its grotesque antics have achieved is to unite world opinion behind the Syrian government and Russia.

Instead of willing the Islamic State’s survival, the US would far rather it disappear so it can support the other jihadi terrorist groups — the so-called “moderates” — without embarrassment.

That seals the Islamic State’s fate.

It follows from this that there is no realistic prospect of ISIS or an organisation like it reappearing once it is destroyed.  The conditions which created it – the US drive for regime change in Syria and the collapse of the Syrian and Iraqi governments’ authority over large areas of their territory – no longer exist.
The regime change project in Syria has conclusively failed, and both the Syrian and Iraqi governments are now busy regaining control of their national territory and reasserting their authority over it.
There is no flood of US weapons going to Iraq or Syria to fuel Jihadi insurgencies there, and no territorial vacuum in which an organisation like ISIS might emerge.
As for the view beloved of some Western commentators who still hanker for regime change in Syria that the Sunni populations of Syria and Iraq will never reconcile themselves to the allegedly Alawite led Syrian government in Damascus or the allegedly Shia led Iraqi government in Baghdad, and that this will supposedly draw them to support militant Jihadist groups like ISIS and Al-Qaeda unless those governments are overthrown or changed, I have explained the fallacy behind these arguments many times.
Briefly, though the people of Syria and Iraq are certainly religious, their sectarian differences are consistently overstated.  The great majority of them are Muslims certainly, but their political and national self-identification is first and foremost to Syria and Iraq and to the Arab nation, not to Sunnism and Shiism, whose differences Western commentators anyway tend to misunderstand and overstate.
The current conflict within Islam is not between Sunni and Shia.  It is between a small and very violent minority of Takfiri militants manipulated by certain Western and Arab powers, and the vast majority of Muslims – Sunni as well as Shia – who are opposed to them.
I would add that if any Syrian or Iraqi Sunnis in eastern Syria or western Iraq were ever drawn to the sort of militant Salafi totalitarianism which ISIS represents, the reality of rule by ISIS will have quickly disabused them of their illusions.  It beggars belief that any large settled population in any country whatever its sectarian preferences would prefer the bleak and bloodthirsty rule of an organisation like ISIS – with public beheadings for the most trivial ‘offences’, slavery, a rampant drugs trade, systematic sexual abuse, and practices which in all respects amount essentially to murderous gangsterism – to the rule of a conventional government.

I discussed all this previously in another article I wrote for Sputnik on 4th October 2015

It seems to me Western pundits are making the same mistake now about Syria they made about Chechnya before.

They assume recklessly that local people prefer terrorism and violent jihadism to peace and orderly government.

They fantasise about the existence of a “third force” consisting of people opposing the government and those fighting it whom they also also oppose.

That this “third force” has no existence outside their imaginations was proved true in Chechnya, as it had previously proved true in Vietnam, and is undoubtedly true in Syria today.  The US admits it.

The latest opinion poll in Syria and Iraq exposes the extent of their mistake.

It shows very low support for the Islamic State in Iraq, and low support for the Islamic State in Syria.

It shows overwhelming majorities of Syrians and Iraqis reject sectarianism, want their countries to remain united, and believe the Islamic State is a creation of the US.

It shows a very wide belief in Syria that conditions were better before the war.

Given the danger of speaking out against the Islamic State in the areas it controls, the poll almost certainly underestimates the extent of opposition to it.

It shows a clear majority of Syrians support a position in all essentials identical to that of the Russian government: an end to the war, the defeat of jihadi terrorists, a return to peaceful conditions, and negotiations without preconditions between Syria’s factions.
As it happens in not a single town that the Syrian or Iraqi armies have liberated from ISIS or Al-Qaeda have the local people shown the least desire to have the Jihadis back.
Predictions that following the liberation of Aleppo from Al-Qaeda and of Mosul from ISIS Jihadi insurgencies would rise up against the “Alawite” and “Shia” authorities amongst the Sunni people of those cities have been proved to be completely wrong.
In the case of Syria the overwhelming response of the local people – Sunni as well as Shia – to the arrival in their towns and villages of the Syrian army has been to welcome it as a liberator, not to take up arms against it alongside the Jihadis to drive it back.
The pending defeat of ISIS in Iraq and Syria therefore signals the death-knell of the organisation, both as a territorial Caliphate and as a terrorist organisation.
A few fanatics gathered around Al-Baghdadi may try to continue the struggle, and ISIS pockets may linger for a while in a few places like Libya, Afghanistan and Nigeria.  However with its Caliphate gone the organisation itself is doomed.
Though Jihadi terrorism will continue in some form at least for a while – and will continue to pose a threat around the world – with the rapid recovery of state authority in Syria and Iraq the conditions which made it possible for an entity like ISIS to emerge are gone.
The focus of Jihadi activity will shift elsewhere, possibly to north Africa or Afghanistan or to the Arabian Peninsula, or conceivably to the increasingly disaffected Muslim populations of western Europe where for specific cultural reasons violent Jihadism has a particular appeal.
The organisation which will lead the renewed Jihadi struggle – if there is one – will however be Al-Qaeda, which has always been a far more sophisticated, well-resourced and intelligently led organisation than ISIS ever was.
As for ISIS – discredited by its failure in Syria and Iraq and disgraced by its grotesque atrocities – its time of power and terror is almost up.

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Russian Il-20 downed by Syrian missile. Russia blames Israel. Israel blames Syria (Video)

The Duran – News in Review – Episode 110.

Alex Christoforou

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The unthinkable has happened in Syria.

The world now teeters on the brink of all out war in Syria as a Russian Il-20 was downed by Syrian missile after Israeli F-16s used it as cover during attack, according to statements made by the Russian Ministry of Defense.

President Vladimir Putin, answering a reporter’s question during a press conference with Hungarian PM Viktor Orban, said the downing of the Russian Il-20 plane looks like “a chain of tragic circumstances.” 

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the tripwire triggered that has the potential to tip the fragile balance in Syria towards conflict between Russia, Iran and Israel.

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The Russian military says an Israeli raid on Syria triggered a chain of events that led to its Il-20 plane being shot down by a Syrian S-200 surface-to-air missile. Moscow reserves the right to respond accordingly.

Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov said…

“Israel did not warn the command of the Russian troops in Syria about the planned operation. We received a notification via a hotline less than a minute before the strike, which did not allow the Russian aircraft to be directed to a safe zone.”

The statement by the Russian Defense Ministry said that four Israeli F-16 fighter jets attacked targets in Syria’s Latakia after approaching from the Mediterranean.

The Israeli warplanes approached at a low altitude and “created a dangerous situation for other aircraft and vessels in the region.”

The statement further said that 15 Russian military service members have died as a result…

“The Israeli pilots used the Russian plane as cover and set it up to be targeted by the Syrian air defense forces. As a consequence, the Il-20, which has radar cross-section much larger than the F-16, was shot down by an S-200 system missile.”

According to reports from RT, the Russian military said that the French Navy’s frigate ‘Auvergne,’ as well as a Russian Il-20 plane were in the area during the Israeli operation.

Map of the incident on September 17 in Syria provided by the Russian defense ministry.

The Russian ministry said the Israelis must have known that the Russian plane was present in the area, but this did not stop them from executing “the provocation.” Israel also failed to warn Russia about the planned operation in advance. The warning came just a minute before the attack started, which “did not leave time to move the Russian plane to a safe area,”the statement said.

The statement gives a larger death toll than earlier reports by the Russian military, which said there were 14 crew members on board the missing Il-20. It said a search and rescue operation for the shot-down plane is underway.

A later update said debris from the downed plane was found some 27km off the Latakia coast. The search party collected some body parts, personal possessions of the crew, and fragments of the plane.

Meanwhile Israel has come out to blame the Syrian government for the downing of the military plane, according to an IDF statement.

Israel said that it “expresses sorrow for the death of the aircrew members” of the Russian plane. However, it stated that the government of Bashar Assad “whose military shot down the Russian plane,” is “fully responsible” for the incident.

Israel further blamed Iran and Hezbollah for the incident.

The Israel Defense Forces (IDF) explained that its jets were targeting a Syrian facility “from which systems to manufacture accurate and lethal weapons were about to be transferred on behalf of Iran to Hezbollah in Lebanon.”

Israel claimed that the weapons were “meant to attack Israel.”

Via RT

The IDF assumed that the Syrian anti-air batteries “fired indiscriminately” and didn’t “bother to ensure that no Russian planes were in the air.” The Israelis said that when the Syrian military launched the missiles which hit the Russian plane, its own jets were already within Israeli airspace. “During the strike against the target in Latakia, the Russian plane that was then hit was not within the area of the operation.”

According to the Israeli military, both IDF and Russia have “a deconfliction system,” which was agreed upon by the leadership of both states, and “has proven itself many times over recent years.” The system was in use when the incident happened, the IDF stated. The IDF promised to share “all the relevant information” with Russia “to review the incident and to confirm the facts in this inquiry.”

The military presented a four-point initial inquiry into events in Latakia. It insisted that “extensive and inaccurate” Syrian anti-aircraft fire caused the Russian jet “to be hit and downed.”

The Russian Il-20 aircraft, with 15 crew on board, went off radar during an attack by four Israeli jets on Syria’s Latakia province late Monday. Later on Tuesday the Russian Defense Ministry said that an Israeli raid on Syria triggered a chain of events that led to its plane being shot down by a Syrian S-200 surface-to-air missile.

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Trump Orders Immediate Release Of All Text Messages, Carter Page FISA Application From Russia Investigation

Trump has ordered the DOJ to release all text messages related to the Russia investigation with no redactions.

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Via Zerohedge

President Trump has ordered the Department of Justice to release all text messages related to the Russia investigation with no redactions, of former FBI Director James Comey, his deputy Andrew McCabe, now-fired special agent Peter Strzok, former FBI attorney Lisa Page and twice-demoted DOJ official Bruce Ohr.

Also released will be specific pages from the FBI’s FISA surveillance warrant application on former Trump campaign aide Carter Page, as well as interviews with Ohr.

The statement reads in full:

“At the request of a number of committees of Congress, and for reasons of transparency, the President has directed the Office of the Director of National Intelligence and the Department of Justice (including the FBI) to provide for the immediate declassification of the following materials: (1) pages 10-12 and 17-34 of the June 2017 application to the FISA court in the matter of Carter W. Page; (2) all FBI reports of interviews with Bruce G. Ohr prepared in connection with the Russia investigation; and (3) all FBI reports of interviews prepared in connection with all Carter Page FISA applications.

In addition, President Donald J. Trump has directed the Department of Justice (including the FBI) to publicly release all text messages relating to the Russia investigation, without redaction, of James Comey, Andrew McCabe, Peter Strzok, Lisa Page, and Bruce Ohr

***

As we reported last Monday, Trump had been expected to release the documents any time – with specific attention to the Page documents and the “investigative activities of Justice Department lawyer Bruce Ohr” – who was demoted twice for lying about his extensive relationship  with Christopher Steele – the former MI6 spy who assembled the sham “Steele Dossier” used by the FBI in a FISA surveillance application to spy on Page.

Republicans on the House Intelligence and Judiciary committees believe the declassification will permanently taint the Trump-Russia investigation by showing the investigation was illegitimate to begin with. Trump has been hammering the same theme for months.

  • They allege that Bruce Ohr played an improper intermediary role between the Justice Department, British spy Christopher Steele and Fusion GPS — the opposition research firm that produced the Trump-Russia dossier, funded by Democrats. (Ohr’s wife, Nellie, worked for Fusion GPS on Russia-related matters during the presidential election — a fact that Ohr did not disclose on federal forms.)
  • And they further allege that the Obama administration improperly spied on Carter Page — all to take down Trump. –Axios

Ohr, meanwhile, met with Russian billionaire Oleg Deripaska in 2015 to discuss helping the FBI with organized crime investigations, according to The Hill‘s John Solomon. The meeting with the Putin ally was facilitated by Steele.

Last month Trump called Ohr a disgrace, while also tweeting: “Will Bruce Ohr, whose family received big money for helping to create the phony, dirty and discredited Dossier, ever be fired from the Jeff Sessions  “Justice” Department? A total joke!”

Trump’s threat came one day after two tweets about Ohr, noting a connection to former FBI agent Peter Strzok, as well as a text sent by Ohr after former FBI Director James Comey was fired in which Ohr says “afraid they will be exposed.”

According to emails turned over to Congressional investigators in August, Christopher Steele was much closer to Bruce Ohr and his wife Nellie than previously disclosed.

Steele and the Ohrs would have breakfast together on July 30, 2016 at the Mayflower Hotel in downtown Washington D.C., days after Steele turned in installments of his infamous “dossier” on July 19 and 26. The breakfast also occurred one day before the FBI formally launched operation “Crossfire Hurricane,” the agency’s counterintelligence operation into the Trump campaign.

“Great to see you and Nellie this morning Bruce,” Steele wrote shortly following their breakfast meeting. “Let’s keep in touch on the substantive issues/s (sic). Glenn is happy to speak to you on this if it would help.”

“After two years of investigations and accusations from both sides of the aisle about what documents indicate, it is past time for documents to be declassified and let the American people decide for themselves if DoJ and FBI acted properly,” Freedom Caucus chairman Mark Meadows told Axios earlier Sunday.

In early August, journalist Paul Sperry tweeted that Trump may use his presidential authority to declassify “20 redacted pages of a June, 2017 FISA renewal, “and possibly” 63 pages of emails and notes between “Ohr & Steele,” and FD-302 summaries of 12 interviews.”

President Trump threatened to declassify documents two weeks ago – one day after the New York Times allegedly published an anonymous Op-Ed claiming to be from a White House official claiming to be part of an unelected “resistance” cabal within the Trump administration.

“The Deep State and the Left, and their vehicle, the Fake News Media, are going Crazy – & they don’t know what to do,” Trump tweeted earlier this month, adding: “The Economy is booming like never before, Jobs are at Historic Highs, soon TWO Supreme Court Justices & maybe Declassification to find Additional Corruption. Wow!”

Trump’s threat comes as calls by frustrated GOP legislators to release the documents have hit a fevered pitch. Spearheading the effort are Republican Reps. Meadows, Jim Jordan, Matt Gaetz and Lee Zeldin – who have repeatedly asked Trump to declassify more of the heavily redacted FISA surveillance warrant on former Trump campaign aide Carter Page in late 2016.

In June, Republicans on the House Intelligence Committee asked President Trump to declassify key sections of Carter Page’s FISA warrant application, according to a letter obtained by Fox News.

Carter Page, the DOJ/FBI’s person of interest, weighed in on the matter in late August, tweeting: “The Corrupt DOJ, co-conspirators in the DNC and their high-priced consultants correctly believed they had American democracy and the FISA Court over a barrel in 2016.”

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De-Dollarization Tops Agenda at Russia’s Eastern Economic Forum

The Eastern Economic Forum (EEF) was held in Vladivostok on Sept.11-13. Founded in 2015, the event has become a platform for planning and launching projects to strengthen business ties in the Asia-Pacific region.

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Via Strategic Culture

This year, the EEF brought together delegations from over 60 countries to discuss the topic “The Far East: Expanding the Range of Possibilities”. A total of 100 business events involving over 6,000 participants were held during the three days.

1,357 media personnel worked to cover the forum. Last year, the number of participants was 5,000 with 1,000 media persons involved in reporting and broadcasting. The EEF-18 gathered 340 foreign and 383 Russian CEOs. Nearly 80 start-ups from across South-East Asia joined the meeting.

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This year, a total of 175 agreements worth of 2.9 trillion rubles (some $4.3 billion) were signed. For comparison, the sum was 2.5 trillion rubles (roughly $3.7 billion) in 2017.

They included the development of the Baimsky ore deposits in Chukotka, the construction of a terminal for Novatek LNG at Bechevinskaya Bay in Kamchatka and the investment of Asian countries in Russia’s agricultural projects in the Far East.

Russian Direct Investment Fund (RDIF), Mail.Ru Group, Megafon and Chinese Alibaba inked an agreement on establishing AliExpress trade joint venture. Rosneft and Chinese CNPC signed an oil exploration agreement.

The Chinese delegation was the largest (1,096 people), followed by the Japanese (570 members). The list of guests included the president of Mongolia and prime ministers of Japan and South Korea.

It was also the first time Chinese President Xi Jinping attended the event to meet his Russian counterpart. The issue of de-dollarization topped the agenda. Russia and China reaffirmed their interest in expanding the use of national currencies in bilateral deals.

During the forum, Kirill Dmitriev, the head of RDIF, said the fund intends to use only national currencies in its transactions with China starting from 2019. It will cooperate with the China Development Bank.

This “yuanification” is making visible progress with Shanghai crude futures increasing their share of oil markets up to 14 percent or even more. China has signed agreements with Canada and Qatar on national currencies exchange.

READ MORE: Eastern Economic Forum opens new chapter in US-Russia dialogue

De-dollarization is a trend that is picking up momentum across the world. A growing number of countries are interested in replacing the dollar. Russia is leading the race to protect itself from fluctuations, storms and US-waged trade wars and sanctions.

Moscow backs non-dollar trade with Ankara amid the ongoing lira crisis. Turkey is switching from the dollar to settlements in national currencies, including its trade with China and other countries. Ditching the US dollar is the issue topping the BRICS agenda. In April, Iran transferred all international payments to the euro.

The voices calling for de-dollarization are getting louder among America’s closest European allies. In August, German Foreign Minister Heiko Maas called for the creation of a new payments system independent of the US.

According to him, Europe should not allow the United States to act “over our heads and at our expense.” The official wants to strengthen European autonomy by establishing independent payment channels, creating a European Monetary Fund and building up an independent SWIFT system.

Presenting his annual program, European Commission President Jean-Claude Juncker called on Sept. 12 for the European Union to promote the euro as a global currency to challenge the dollar.

According to him, “We must do more to allow our single currency to play its full role on the international scene.” Mr. Juncker believes “it is absurd that Europe pays for 80 percent of its energy import bill – worth 300 billion euros a year – in US dollars when only roughly 2 percent of our energy imports come from the United States.” He wants the raft of proposals made in his state of the union address to start being implemented before the European Parliament elections in May.

70% of all world trade transactions account for the dollar, while 20% are  settled in the euro, and the rest falls on the yuan and other Asian currencies. The dollar value is high to make the prices of consumer goods in the US artificially low. The demand for dollars allows refinancing the huge debt at low interest rates. The US policy of trade wars and sanctions has triggered the global process of de-dollarization.

Using punitive measures as a foreign policy tool is like shooting oneself in the foot. It prompts a backlash to undermine the dollar’s status as the world reserve currency – the basis of the US economic might. The aggressive policy undermines the US world standing to make it weaker, not stronger.

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