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2017: The Ukrainian economy’s dismal year

Ukrainian economy continued to weaken as inflation rose and living standards fell

Alexander Mercouris

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In an article which I wrote about Ukraine on 13th December 2017 and in which I spoke of Ukraine’s continuing downward spiral I speculated that the situation might be even worse than it appeared since conditions in Ukraine meant that Ukraine’s already dismal statistics could no longer be relied upon.

This is of course always assuming that the statistics are being collected and collated properly, which in countries such as Russia was in the 1990s and such as Ukraine is now they never are.

That Ukraine’s statistics are not reliable has in fact been confirmed by studies of its population statistics, which show massive distortions intended to conceal how bad the country’s demographic situation has become.  There is no reason to suppose that the same distortions do not affect the economic data.

This speculation has now been given weight by an article carried by the official Russian news agency TASS, which all but says that Ukraine’s already terrible inflation statistics are unreliable and are being manipulated

The year 2017 saw two basic tendencies in Ukraine, namely an economic slowdown (to two percent from 2.3% in 2016) and growing inflation. Thus, inflation stood at 14.4%, whereas the state budget had a figure of 8.1%

However, actual inflation, according to economics expert Viktor Skrashevsky, was likely to be still higher. “Most likely, it was 17-18%,” he said, adding that official statistics underreported inflation rates “by means of manipulating calculation methods” as they had been updated exactly in 2017.

According to Skrashevsky, the government is deliberately deceiving people by saying that living standards will be raised in 2018 as the state budget for 2018 provides for no indexation of pension allowances while price growth seems to be inevitable. “Social standards are showing no upward tendencies while inflation is skyrocketing. The government is not taking proper measures,” he added.

Another gap between the government’s statements and reality is situation with the living wage, said Yuri Gavrilechko, an expert from the Public Security Foundation. Whereas nominal living wage from January 1 is 3,723 hryvnias (132 US dollars under the current exchange rate), minus taxes people will actually have not more than 3,000 hryvnias (106.4 US dollars). “Inflation will be some 18%, however it is not ruled out that the government may underreport these figures through manipulation,” he said.
The claimed growth rate of 2% for an economy like Ukraine’s which experienced such a savage contraction in 2014-2015 is already extremely disappointing.
For those who doubt this bleak picture, I would point out that one of Ukraine’s staunchest supporters, the Swedish economist Anders Aslund in a recent article published by the Atlantic Council has said essentially the same thing
A year ago, I expressed my hope that “2017 should be the year when Ukraine’s economy takes off.” It should have been, but it was not. In the last quarter of 2016, Ukraine’s GDP grew by 4.8 percent. Alas, in each of the ensuing four quarters, the growth rate declined and GDP grew by only 2 percent in 2017, slightly less than the cautious official projections. Ukraine is actually growing more slowly than the EU economy, and certainly slower than the global economy. Therefore, it is difficult to be optimistic about Ukraine’s economic growth in 2018.
After a combined GDP fall of 17 percent in 2014-15, which was caused by Russian aggression, a swift recovery to 6-7 percent growth should have been natural. Instead, Ukraine is competing with Moldova for the title of Europe’s poorest country. In 2007, Ukraine’s GDP per capita in current US dollars was 160 percent larger than Moldova’s. Now it is only 8 percent larger according to IMF statistics, and Moldova is growing by 4 percent a year.
If what the article by TASS says is correct and the rate of inflation in Ukraine is actually 17-18% not 14.4% then it is doubtful that Ukraine has even achieved the 2% GDP growth in 2017 which it is claiming.
The IMF describes GDP as “the measure of the monetary value of final goods and services – that is, those that are bought by the final user – produced in a country in a given period of time”.
Obtaining an accurate measure of prices and of price growth is therefore essential if GDP and GDP growth are to be measured properly.  If the inflation figures are badly wrong then the GDP figures will be also.
That in turn begs the question of whether there was actually any GDP growth at all in Ukraine last year.
As to that, with the reliability of the statistics now being questioned, I am in no position to say.
As for the reasons for Ukraine’s economic failure, here again is what Anders Aslund has to say
The worst part is that Ukraine’s economic shortcomings in 2017 were preventable. The two dominant factors that aggravated Ukraine’s economic performance in 2017 were the trade blockade and botched judicial reform. Last February, leading politicians in Samopomich (Self-Reliance) instigated a blockade against trade with the occupied territories in the Donbas, which disrupted heavy industry leading to stagnation of industrial production. This act alone probably cost Ukraine 2 percent of its GDP in the first half of the year.

At the same time, exports, investment, and consumption rose nicely, but then gross investment slumped from a healthy ratio of 24 percent of GDP in the second quarter to a miserable 16 percent of GDP in the third quarter. Domestic and foreign investors lost their rising confidence in Ukraine. Investors began to realize that the complex judicial reform that was underway would not cleanse the judicial system and thus reliable property rights would not materialize.

These tendencies only got worse later in the year. Businessmen often complained that the Prosecutor General’s Office and the Security Service of Ukraine (SBU) engage in aggressive corporate raiding. The only Ukrainian institution that really fights corruption, the National Anticorruption Bureau (NABU), came under heavy attack from the ruling coalition in parliament and the Prosecutor General’s Office for that very reason, further undermining the credibility of the rule of law in Ukraine.

On the subject of the economic blockade of the Donbass mounted by Maidan radicals last year, here is what I wrote about it at the time
Far right groups and people who the Ukrainian and Western media euphemistically call “activists” have initiated a blockade of coal imports from the Donbass, claiming that such imports are “treasonous”.  Since the Ukrainian energy system depends heavily on Donbass coal the result is to cause an energy emergency in Ukraine, risking another downward spiral in Ukraine’s economy.  The government however appears too weak to do anything about it.
As to the collapse of investment in the second quarter, the likeliest cause was the closure of Russian banks, not the botched judicial reform Aslund refers to.
Here is what I wrote about the bank closures just before they happened.

Gryzlov’s reference to “the Ukrainian authorities destroying their own banking system” refers to action Ukraine is now contemplating against Russian banksoperating on Ukrainian territory.  This follows protests by Ukrainian ultra right radicals who since 13th March 2017 have blocking access to the central office in Kiev of the local branch of Sberbank, Russia’s biggest bank.

Gryzlov’s claim that the action Ukraine is contemplating against Russian banks operating in Ukraine would destroy Ukraine’s banking system may be overstated.  Russian banks account for roughly 10% of Ukraine’s banking sector, supposedly holding $425 million in private customer deposits and a further $276 million in deposits held on behalf of business customers.  Though these are large sums, they do not look large enough to cripple the Ukrainian economy as a whole, even if the money in the deposits were to disappear along with the banks, which of course is unlikely.

Having said this, launching an assault on Russian banks just 3 months after Ukraine nationalised PrivatBank, its own largely bank, hardly looks like a good idea, and at a time of economic crisis it is certainly not a move best calculated to inspire confidence in Ukraine’s banking system even if talk of it triggering a cascade effect may be overstated.

Given that Russia remains the biggest investor in Ukraine’s economy it is completely understandable why action against Russian banks would have had a chilling effect on investment.

That after all is what was predicted, so it should not be surprising that it happened.

Aslund does claim some economic successes for Ukraine

These negative factors overshadowed the positive developments. Ukraine’s macroeconomic performance has been stellar. Finance Minister Oleksandr Danyliuk has kept the budget deficit below 3 percent of GDP. The National Bank’s leadership has nurtured the international gold and currency reserves that have increased to $18 billion, corresponding to four months of imports. Naftogaz won its gigantic arbitration case against Gazprom in Stockholm and made a substantial profit. The parliament adopted Acting Health Care Minister Ulana Suprun’s impressive health care reform.

Most of this however is simply wrong.

The budget deficit may in reality be greater than 3% of GDP if GDP in reality is smaller than is being reported (see above).

The $18 billion of foreign currency reserves is less than the $20 billion Ukraine must pay to its creditors between 2017 and 2020, and with reserves only sufficient to cover four months imports and with Ukraine’s trade deficit widening the margin of safety is dangerously small.

To the $20 billion Ukraine must pay its creditors between 2017 and 2020 must now be added the $3 billion the High Court has recently ordered Ukraine to pay to Russia and the $2 billion the Stockholm Arbitration Tribunal has ordered Ukraine’s Naftogaz to pay to Gazprom.

As to Naftogaz supposedly “winning” the case against Gazprom in the Stockholm Arbitration Tribunal, Aslund’s extreme antipathy to President Putin, Gazprom and to Russia blinds him to the reality that it was Ukraine which lost the case (see my discussion of the Stockholm Arbitration Court’s award and this discussion of the award by Gazprom’s Vice President Alexander Medvedev and by Paul Goncharoff on RT).

Even the sum of $18 billion Ukraine has managed to put away in its reserves is less impressive than it looks.

The reserves have been boosted this year by a payment of $1 billion from the IMF, and a further $3 billion Ukraine borrowed in the international money markets at very high interest.

However the $1 billion payment from the IMF was supposed to be just one tranche out of $4 billion which the IMF was supposed to give to Ukraine over the course of the year.

Here is what Anders Aslund has to say about why the extra $3 billion was not paid

Thanks to its improved macroeconomic situation, Ukraine’s government sold $3 billion of Eurobonds in September. Unfortunately, this sign of economic health tipped the political balance against reform. The International Monetary Fund (IMF) was supposed to give Ukraine credits of $4 billion in 2017. But since the government did not fulfill the IMF conditions, the country received only $1 billion, while it had to pay back $1.3 billion. The European Union canceled its last tranche of €600 million after Ukraine failed to fulfill four conditions.

At present, it looks doubtful whether either of these institutions will provide Ukraine with any funding in 2018, as their compassion has been replaced with distrust. The IMF is currently demanding five prior actions for further funding, namely the establishment of an independent anticorruption court, the legalization of private sales of agricultural land, the adoption of a privatization law, an improved pension reform, and adjustment of gas prices to market prices. The focal demand of all international creditors is an independent anticorruption court, since the court system has proved incapable of sentencing corrupt senior officials.

In reality the IMF almost certainly refused to provide Ukraine with the additional $3 billion not because Ukraine failed to perform its ‘reform’ obligations but because of the chilling effect of the High Court Judgment in London.

That threatens to declare Ukraine in a state of formal default, placing institutions like the IMF and the European Commission in unknown and potentially highly dangerous legal territory if they continue lending to Ukraine despite it.  I have discussed this previously at length for example here.

Since admitting this would be politically highly embarrassing given how much the IMF and the European Commission have loaned to Ukraine already, the IMF and the European Commission are hiding behind the fiction that it is Ukraine’s supposed failure to carry out its ‘reform’ programme which is causing them to stop lending.

The years 2016 and 2017 ought to have been economically favourable for Ukraine.

The weather was good, allowing for good harvests, the worst of the fighting in the Donbass was over, the country had restructured its debts and was obtaining support from the IMF and the European Union, and – most important of all – the oil price had more than halved, drastically reducing the country’s import bill and taking pressure off its budget.

Anders Aslund was not completely misguided when he predicted on 3rd January 2017 that 2017 would be Ukraine’s breakthrough year.

In truth 2016 and 2017 were for Ukraine as good as it is ever likely to get.

The favourable conditions of those years are now ending.

The situation in the Donbass is unresolved, the weight of debt repayment is once again increasing, and $5 billion of payments to Russia will shortly fall due.  Meanwhile IMF and EU lending has stopped.  Most serious of all, the oil price is rising again, and has now reached $70 a barrel.

As the TASS article I quoted at the beginning of this article says, Ukraine’s already very high inflation rate is likely to increase still further in 2018, putting even greater pressure on living standards and on the country’s economy and budget.

Even Anders Aslund is no longer optimistic about the future.

For once Anders Aslund puts his finger on the problem: Ukraine’s hopelessly dysfunctional political system, which makes rational decision making impossible

Sadly, the ruling coalition does not seem to be interested in a real independent anticorruption court or electoral reform even if legislation is under way. Absurdly, Ukraine’s politicians seem to be absorbed by the presidential election scheduled for May 2019. Instead, they should focus on securing real property rights so that Ukraine can boost its investment ratio to 25-30 percent of GDP and grow by 6-8 percent a year.

To which all I can say is that given Ukraine’s realities it is baffling Aslund ever expected otherwise.

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Theresa May set to order ministers to vote down no-deal Brexit amendments, risking cabinet split

Delaying Brexit would be “calamitous,” and much worse than no-deal.

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UK Prime Minister Theresa May is reportedly set to resist mounting pressure from pro-Remain Tory ministers, and order her cabinet to vote down amendments that would block a no-deal Brexit – risking possible resignations.

Parliament will vote on May’s alternative Brexit proposals on Tuesday, as well as a series of amendments that include delaying the UK’s departure from the EU by negotiating an extension to Article 50. The UK is set to leave the EU on March 29.

The prime minister will risk splitting her cabinet – ignoring pleas over taking no-deal off the table – and instead pursue a strategy of securing changes to the contentious Irish backstop, in a bid to win over hardline Tory Brexiteers and the Democratic Unionist Party (DUP), the Daily Mail reports.

May will be hoping that such a move will provide her with enough MPs to get her deal through the House of Commons at a second attempt. The PM’s original Brexit proposals were roundly rejected last week, with the government losing by 230 votes.

UK Work and Pensions Secretary Amber Rudd has warned May that she faces a spate of cabinet resignations if she fails to allow ministers to vote on a plan that could block a no-deal Brexit.

According to the Times, pro-EU Rudd has intimated that unless May allows a free vote on a Brexit amendment, tabled by backbench Labour MP Yvette Cooper, which calls for Article 50 to be extended if no deal is reached by February 26, then mass resignations could follow.

Labour’s Shadow Chancellor John McDonnell has praised Cooper’s “sensible proposal,” claiming that it’s “increasingly likely” that his party will vote for it next week.

Cooper’s is one of eight amendments tabled in recent days. Another, put forward by Tory MP and ‘people’s vote’ advocate, Dominic Grieve, would allow Parliament to set the agenda and vote on a variety of proposals, including a second EU referendum.

It comes as Liam Fox, the international trade secretary, claimed in an interview with BBC Radio 4’s Today program, that delaying Brexit would be “calamitous,” and much worse than no-deal.

Michel Barnier, the EU chief negotiator, has claimed that Brussels will only extend Article 50 if there is a “stable majority” in the UK for a deal – adding that the UK could avoid the problems of the Irish backstop by opting for a softer Brexit.

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Louis XVI (aka Emmanuel Macron) runs to Merkels’ arms in Aachen treaty (Video)

The Duran Quick Take: Episode 63.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at French President Emmanuel Macron’s comparison of the Yellow Vests movement to the times of King Louis XVI who, as Macron rationalizes, met his tragic fate by refusing to embrace reforms.

Emmanuel Macron told 150 corporate executives gathered at Versailles (including Uber CEO Dara Khosrowshahi, JPMorgan Chase CEO James Dimon, and Coca-Cola CEO James Quincey), that “a lot of people thought that it was not a good date to gather here,” referring to the execution of French King Louis XVI, who was guillotined on January 21, exactly 226 years ago on Monday…“but when you look at French history, if at the end they ended up like that, it’s because a lot of leaders decided not to reform.”

The meeting held by Macron was called together in part to alleviate investors’ fears after 10 weeks of Yellow Vest protests throughout France and spreading across Europe.

According to RT,  the nationwide protests have sometimes turned violent, and according to Macron’s office, have caused concern among foreign investors hoping to cash in on Macron’s business-friendly reforms.

Notably, Macron reassured his CEO guests that he would “not roll back what we have done in the past 18 months” – unpopular labor and tax reforms that have been cited as sparking the Yellow Vest protests.

Macron also said that the Yellow Vest movement had been spurred by middle-class anger over globalization, arguing that similar sentiments have given rise to Brexit and populist governments across Europe.

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Via Zerohedge


French President Emmanuel Macron’s push for what he previously called “a real European army” got a big boost on Tuesday amid France and Germany signing an updated historic treaty reaffirming their close ties and commitment to support each other during a ceremony in the city of Aachen, a border town connected to Charlemagne and the Holy Roman Empire. But the timing for the renewal of the two countries’ 1963 post-war reconciliation accord is what’s most interesting, given both the rise of eurosceptic nationalism, the uncertainty of Brexit, and just as massive ‘Yellow Vests’ protests rage across France for a tenth week.

Macron addressed this trend specifically at the signing ceremony with the words, “At a time when Europe is threatened by nationalism, which is growing from within… Germany and France must assume their responsibility and show the way forward.”

German Chancellor Angela Merkel and French President Emmanuel Macron attend a signing of a new agreement on bilateral cooperation and integration, known as Treaty of Aachen. Image via Reuters

Germany’s Angela Merkel agreed, adding in her own remarks: “We are doing this because we live in special times and because in these times we need resolute, distinct, clear, forward-looking answers.” The agreement, which is being described as sparse on specifics or detail, focuses on foreign policy and defense ties between Berlin and Paris.

“Populism and nationalism are strengthening in all of our countries,” Merkel EU officials at the ceremony. “Seventy-four years – a single human lifetime – after the end of the second world war, what seems self-evident is being called into question once more.”

Macron said those “who forget the value of Franco-German reconciliation are making themselves accomplices of the crimes of the past. Those who… spread lies are hurting the same people they are pretending to defend, by seeking to repeat history.”

And in remarks that formed another affirmation that the two leaders are seeking to form an “EU army” Merkel said just before signing the treaty: “The fourth article of the treaty says we, Germany and France, are obliged to support and help each other, including through military force, in case of an attack on our sovereignty.”

The text of the updated treaty includes the aim of a “German-French economic area with common rules” and a “common military culture” that Merkel asserted could “contribute to the creation of a European army”.

Later before a press pool, Merkel endorsed the idea of a joint European army further:

We have taken major steps in the field of military cooperation, this is good and largely supported in this house. But I also have to say, seeing the developments of the recent years, that we have to work on a vision to establish a real European army one day.

She clarified that the new military organization wouldn’t exist as a counterpart to or in competition with NATO, similar to prior comments she made before European parliament.

Previously in November she had assured, “This is not an army against NATO, it can be a good complement to NATO.” This was also in support of Macron’s early November statements wherein he said of the proposed EU army, “We have to protect ourselves with respect to China, Russia and even the US” — words that were issued on the heels President Trump’s initial announcement that the US would withdraw from the Intermediate-Range Nuclear Forces Treaty (INF).

Despite such such assurances analysts say the natural and long term by-product of a “real European army” — as Macron and Merkel suggesting — would be the slow eroding and demise of US power in the region, which would no doubt weaken the NATO alliance.

The closest thing to a current “EU army” that does exist (if it can be called even that) – the Common Security and Defence Policy (CSDP) – is generally perceived as more of a civil and emergency response joint EU member mechanism that would be ineffectual under the threat of an actual military invasion or major event.

Meanwhile perhaps a prototype EU army is already in action on the streets of Paris, revealing what critics fear it may actually be used for in the future..

The expected push back came swiftly and fiercely as Marine Le Pen, the leader of France’s National Rally party, slammed the updated Aachen treaty as “an act that borders on treason”, while others worried this is an attempt to create a “super EU” within the bloc.

Alexander Gauland of Germany’s Alternative für Deutschland (AfD), for example, warned:

As populists, we insist that one first takes care of one’s own country… We don’t want Macron to renovate his country with German money … The EU is deeply divided. A special Franco-German relationship will alienate us even further.

Italy’s far-right interior minister, Matteo Salvini, warned earlier this month that his country could seek an “Italian-Polish axis” to challenge the whole premise of a “Franco-German motor” that drives European centralization.

Also notable of Tuesday’s signing is that the Aachen document prioritizes Germany being eventually accepted as permanent member of the U.N. Security Council, which it mandates as a priority for French-German diplomacy. Such a future scenario on the security council would shift power significantly in favor of a western bloc of allies the US, Britain, and France, which Germany would vote alongside.

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The Integrity Initiative and the British Roots of the Deep State: How the Round Table Infiltrated America

Kissinger’s takeover of the State Department ushered in a new era of British occupation of American foreign policy.

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With the nearly weekly revelations that the British Foreign Office, MI6, and GCHQ have been behind the long standing agenda to undermine the Presidency of Donald Trump and undo the peaceful alliance between nationalist leaders in America, Russia, China and elsewhere, a new focus on the British hand in undermining the United States has become a serious thought for many citizens. In the first week of the new year, fuel was added to this fire when internal memos were leaked from the British-run Integrity Initiative featuring a startling account of the techniques deployed by the anti-Russian British operation to infiltrate American intelligence institutions, think tanks and media.

For those who may not know, The Integrity Initiative is an anti-Russian propaganda outfit funded to the tune of $140 million by the British Foreign office. The January 2019 leak, featuring documents dated to the early period of Trump’s election, demonstrate that this organization, already active across Europe promoting anti-Russian PR and smearing nationalist leaders such as Jeremy Corbyn, was intent on spreading deeply into the State Department and setting up “clusters” of anti-Trump operatives. The documents reveal high level meetings that Integrity Initiative Director Chris Donnelly had with former Trump Advisor Sebastien Gorka, McCain Foundation director Kurt Volker, Pentagon PR guru John Rendon among many others.

The exposure of the British hand behind the scenes affords us a unique glimpse into the real historical forces undermining America’s true constitutional tradition throughout the 20th century, as Mueller/the Five Eyes/Integrity Initiative are not new phenomena but actually follow a modus operandi set down for already more than a century. One of the biggest obstacles to seeing this modus operandi run by the British Empire is located in the belief in a mythology which has become embedded in the global psyche for over half a century and which we should do our best to free ourselves of.

Debunking the Myth of the “American Empire”

While there has been a long-standing narrative promoted for over 70 years that the British Empire disappeared after World War II having been replaced by the “American Empire”, it is the furthest thing from the truth. America, as constitutionally represented by its greatest presidents (who can unfortunately be identified by their early deaths while serving in office), were never colonialist and were always in favor of reining in British Institutions at home while fighting British colonial thinking abroad.

Franklin Roosevelt’s thirteen year-long battle with the Deep State, which he referred to as the “economic royalists who should have left America in 1776″, was defined in clear terms by his patriotic Vice-President Henry Wallace who warned of the emergence of a new Anglo-American fascism in 1944 when he said:

“Fascism in the postwar inevitably will push steadily for Anglo-Saxon imperialism and eventually for war with Russia. Already American fascists are talking and writing about this conflict and using it as an excuse for their internal hatreds and intolerances toward certain races, creeds and classes.”

The fact is that already in 1944, a policy of Anglo-Saxon imperialism had been promoted subversively by British-run think tanks known as the Round Table Movement and Fabian Society, and the seeds had already been laid for the anti-Russian cold war by those British-run American fascists. It is not a coincidence that this fascist Cold War policy was announced in a March 5, 1946 speech in Fulton, Missouri by none other than Round Table-follower Winston Churchill.

The Empire Strikes

When the Round Table Movement was created with funds from the Rhodes Trust in 1902, a new plan was laid out to create a new technocratic elite to manage the re-emergence of the new British Empire and crush the emergence of American-inspired nationalism globally. This organization would be staffed by generations of Rhodes Scholars who would receive their indoctrination in Oxford before being sent back to advance a “post-nation state” agenda in their respective countries.

As this agenda largely followed the mandate set out by Cecil Rhodes in his Seventh Will who said “Why should we not form a secret society with but one object: the furtherance of the British Empire and the bringing of the whole uncivilized world under British rule, for the recovery of the United States, and for the making of the Anglo-Saxon race but one Empire?”

With the help of an anglophile, racist president in America, leading figures organizing these think tanks first advanced a program to create a “League of Nations” as the solution to the “nationalist problem” which humanity was told “caused” World War One. Nationalist forces in America rejected the idea that the constitution should be rendered obsolete and the plan for global governance failed. However that did not stop the Round Table Movement from trying again. Leading Round Table controller Lord Lothian (British Ambassador to the USA) complained of the “American problem” in 1918.

”There is a fundamentally different concept in regard to this question between Great Britain and the United States  as to the necessity of civilized control over politically backward peoples…. The inhabitants of Africa and parts of Asia have proved unable to govern themselves…. Yet America not only has no conception of this aspect of the problem but has been led to believe that the assumption of this kind of responsibility is iniquitous imperialism.

They take an attitude towards the problem of world government exactly analogous to the one they [earlier] took toward the problem of the world war. If they are slow in learning we shall be condemned to a period of strained relations between the various parts of the English-speaking world. [We must] get into the heads of Canadians and Americans that a share in the burden of world government is just as great and glorious a responsibility as participation in the war”.

A Chinese leader of the American-inspired republican revolution of 1911 named Sun Yat-sen warned of the likes of Lord Lothian and the League of Nations in 1924 when he said “The nations which are employing imperialism to conquer others and which are trying to maintain their own favored positions as sovereign lords of the whole world are advocating cosmopolitanism [aka: global governance/globalization -ed] and want the world to join them… Nationalism is that precious possession by which humanity maintains its existence. If nationalism decays, then when cosmopolitanism flourishes we will be unable to survive and will be eliminated”.

New Name. Same Beast

By 1919, the Round Table Movement changed its name to the Royal Institute for International Affairs (aka: Chatham House) with the “Round Table” name relegated to its geopolitical periodical. In Canada and Australia, branches were created in 1928 under the rubrics of “Canadian and Australian Institutes for International Affairs” (CIIA, AIIA). However in America, where knowledge of the British Empire’s subversive role was more widely known, the name “American Institute for International Affairs” was still too delicate. Instead the name “Council on Foreign Relations” was chosen and was chartered in 1921.

Rhodes Scholar William Yandall Elliot surrounded by a few of his leading disciples: Sir Kissinger, Zbigniew Brzezinski Samuel Huntington and Pierre Trudeau

Staffed with Rhodes Scholars and Fabians, the CFR (and its International Chatham House counterparts) dubbed themselves “independent think tanks” which interfaced with Rhodes Scholars and Fabians in academia, government and the private sector alike with the mission of advancing a foreign policy agenda that was in alignment with the British Empire’s dream of an Anglo-American “special relationship”. One such Rhodes Scholar was William Yandall Elliot, who played a major role mentoring Henry Kissinger and a generation of geo-politicians from Harvard, not the least of whom include Zbigniew Brzezinski, Pierre Elliot Trudeau and Samuel (Clash of Civilizations) Huntington.

The Round Table in Canada and the Coup Against FDR

In Canada, five leading Rhodes Scholars were busy creating the League of Social Reconstruction as a self-described “Fabian Society of Canada” in 1931 which was meant to be a fascist/technocratic answer to the chaos of “greedy nationalism” that supposedly caused the economic collapse of Black Friday in 1929. During the same time in America, a different path to fascism was taken by these networks during the early 1930s. This plan involved installing a General named Smedley Butler into power as a puppet dictator steered by the Anglo-American establishment. Luckily for America and the world, General Butler blew the whistle on the coup against Franklin Roosevelt at the last minute.

Kissinger’s British Takeover of America

Though it took a few assassinations throughout the post war years, Kissinger’s takeover of the State Department ushered in a new era of British occupation of American foreign policy, whereby the republic increasingly became the “Dumb Giant” acting as “American Brawn for the British brains” using Churchill’s words. While a nihilistic generation of youth were tuning in on LSD, and an old guard of patriots surrounding Wallace and Kennedy had fallen to the “red scare” witch hunt, geopolitical theory was fed like a sweet poison down the throat of a sleeping nation, replacing a policy of peace and “win-win cooperation” advanced by true nationalist patriots as FDR, Wallace and the Kennedys, with an imperial clone masquerading as a republic.

Sir Kissinger did nothing less than reveal his total allegiance to the British Empire on May 10, 1981 during a Chatham House conference in Britain when he described his relationship with the British Foreign office in the following terms: “The British were so matter-of-factly helpful that they became a participant in internal American deliberations, to a degree probably never practiced between sovereign nations… In my White House incarnation then, I kept the British Foreign Office better informed and more closely engaged than I did the American State Department… It was symptomatic”.

During this period, Kissinger worked closely with CIA director George Bush Senior, who was later rewarded for his role in advancing the British-planned first war on Kuwait with a knighthood. This war set the stage for the second wave of Middle East wars beginning with the Anglo-Saudi orchestrated operation known as 9/11 and the ushering in of the new “post-nation state order” by Kissinger and Blair.

This was the era which was celebrated by both Kissinger and Bush in sundry places as “the New World Order”.

The Dystopic New World Order Threatened by a New Deal of the 21st Century

It is this dystopic geopolitical order which has been challenged by the Russia-China alliance which arose in earnest with Xi Jinping’s 2013 announcement of the Belt and Road Initiative as the Grand design for large scale infrastructure projects internationally and in September 2015 with Vladimir Putin’s intervention into Syria which defeated the Hobbesian regime change paradigm which poisoned the west. In 2016, the election of nationalist American President Donald Trump opened the door for the first time in over 50 years to a true national coalition of sovereign nations to eliminate the cancer of colonial thinking forever from the earth.

It is this same British-run deep state which owns Robert Mueller, who along with the Integrity Initiative, Five Eyes and other Deep State operatives are dedicated to overthrowing President Trump from office and undoing the great potential now facing the world as outlined by the Schiller Institute and American statesman Lyndon LaRouche: 1) an FDR-style re-organization of the bankrupt banking system and 2) the unleashing of a global New Silk Road as the New Deal of the 21st Century.


BIO: Matthew J.L. Ehret is a journalist, lecturer and founder of the Canadian Patriot Review. His works have been published in Executive Intelligence Review, Global Research, Global Times, The Duran, Nexus Magazine, Los Angeles Review of Books, Veterans Today and Sott.net. Matthew has also published the book “The Time has Come for Canada to Join the New Silk Road” and three volumes of the Untold History of Canada (available on untoldhistory.canadianpatriot.org). He can be reached at[email protected]

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