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Kudrin Returns?

Why did Putin bring Alexey Kudrin back?

Alexander Mercouris

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The announcement that former Russian Finance Minister Alexey Kudrin has been appointed deputy head of Russian President Putin’s Council of Economic Advisers has provoked a stir.

This is not surprising. Few individuals in Russian politics polarise opinion as strongly as Kudrin does.

Kudrin’s admirers are to be found in the business community, amongst liberal economists and amongst people of generally elite backgrounds and liberal views. Amongst people of this sort Kudrin’s reputation is of the highest.

The wider Russian population – to the extent it is aware of him – however views Kudrin very differently, whilst his name is anathema across the very large “patriotic/left wing” section of Russia’s political spectrum

So who is Alexey Kudrin and why does he arouse such strong feelings? Kudrin was Russia’s Finance Minister from 2000 to 2011 as well as the Deputy Prime Minister in overall charge of the economy from 2007 to 2011.

Amongst his liberal admirers Kudrin is the official who is widely credited with engineering the economic boom Russia experienced during Putin’s first two terms as President. He is lauded for his rigidly orthodox free market economic thinking, his tight fiscal management, his refusal to run deficits, and for Russia’s early repayment of its sovereign debt just a few years after its humiliating default in 1998.

Above all he is credited with the creation of Russia’s two national savings funds, the Reserve Fund, which funds the national budget when it is in deficit, and the National Welfare Fund, which acts as Russia’s sovereign wealth fund.

Kudrin’s glowing reputation amongst people of elite and liberal backgrounds both in Russia and abroad is well illustrated by the awards they have showered on him.

He was named “Best Finance Minister of the Year 2005” by The Banker magazine, “Best Finance Minister of a Developing European Country”; in 2006 by the Emerging Markets newspaper (a journal published by the IMF and the World Bank) and “Best Finance Minister of the Year 2010” by Euromoney magazine.

Kudrin’s Russian critics have a very different view of him. They see him as a doctrinaire laissez faire Atlanticist, as the Finance Minister whose dogmatic insistence on cutting spending strangled the economy, causing its productive sectors to wither away as money which should have been used for investment was instead accumulated uselessly, becoming “dead money” in the two Funds.

In addition many Russians have not forgotten or forgiven Kudrin’s monetisation in 2005 of many of their Soviet era social security benefits, turning them from benefits in kind into benefits paid in money.

Given Russia’s historically high inflation and its two periods of hyperinflation in the 1990s this understandably was a very unpopular move and one which provoked widespread protests. Though in the West these protests are largely forgotten, they actually involved more people than the much better known protests which took place during the election season in 2011-2012.

Kudrin is also known to be a supporter of increasing the pension age – another reform that is for equally understandable reasons also very unpopular with many Russians. Beyond these very practical criticisms, much of the hostility to Kudrin within Russia has a distinct ideological hue.

In a country where opinion polls show a clear majority of the population favours a planned economy it is unsurprising that the man who was known as the most prominent economic liberal in the government became unpopular with many people. Russians also tend to conflate support for liberal economic policies with pro-Western political positions. As Russia’s relations with the West have deteriorated this has inevitably exposed economic liberals like Kudrin to charges that they are part of a pro-Western Fifth Column. In Kudrin’s case some of his actions have lent force to these fears.

Lastly but crucially, for many Russians an economic liberal like Kudrin who supports private business and private enterprise is almost by definition an apologist for the system that created the oligarchs – the hated class of plutocrats who emerged in Russia during the corrupt privatisations of the 1990s.

All these factors taken together explain why the individual who in the West was the most highly regarded official of Putin’s government in Russia is one of its least popular. The truth about Kudrin is that both the praise he gets and some – though not all – the criticism is overdone.

Kudrin as Finance Minister did indeed run a tight ship. He did indeed create the two Funds which did indeed help keep the economy stable by financing the budget deficit after the financial crash of 2008.

However the praise for Kudrin’s tight fiscal management ignores the fact that fiscal policy has been no loser since he left the government in 2011. On the contrary the high oil prices in 2012 and 2013 enabled the government to avoid running deficits in those years even though Kudrin before his dismissal had actually planned for them.

Since then the government has managed to run lower deficits during the current recession than those Kudrin ran and planned for during the 2008 crisis. In 2015 the federal deficit was just 2.4% of GDP and though it will probably be higher this year the target is still 3% of GDP.

If Kudrin is a fiscal conservative and a supporter of balanced budgets the record shows his successors also are. In the Russian government and in the Finance Ministry, Kudrin’s fiscal conservatism is not the exception. It is the rule.

This point about Kudrin that is consistently overlooked by his admirers is that whilst he was a member of the government he worked as part of a team. The head of that team was not Kudrin but Putin.

It is Putin not Kudrin who must ultimately take the credit – or blame – for the tough fiscal discipline of the Kudrin years. It is because of Putin’s heavy emphasis on budget discipline that budget spending has continued to be tight since Kudrin left the government in 2011. It was also Putin more than Kudrin who insisted on early repayment of Russia’s debt.

As for the idea of setting up the two Funds, credit – or blame – for that does belong to Kudrin. However it could not have happened without Putin’s support. One must resist the temptation – irresistible to Kudrin’s admirers – of giving Kudrin all the credit for everything that went right under his watch whilst putting all the blame on Putin for everything that went wrong.

If one believes that keeping tight control of budget spending, accumulating reserves and paying off debt is the hallmark of a good manager, then the record shows the good manager in Russia’s case is Putin not Kudrin and that it is Putin not Kudrin who should be given the credit.

In fact Kudrin’s record as an economic manager is decidedly mixed. It is certainly true that Russia’s economy grew rapidly during Putin’s first two terms when Kudrin was Finance Minister and that Kudrin’s success in restoring order to Russia’s previously chaotic budget played a role in this.

However though Kudrin – with Putin’s support – kept a tight lid on government spending he was far too complacent about the borrowing and spending binge Russian companies were cranking up towards in the years immediately prior to the 2008 financial crash.

Several commentators warned at the time that the credit build-up – much of it in foreign currency loans from Western banks – was getting out of control. However the mounting concern appears to have passed Kudrin completely by. Presumably as an economic liberal and as a believer in the virtues of free enterprise he found it difficult to believe the private sector could do wrong.

The result was that the country found itself dangerously exposed in the weeks and months following the financial crash of 2008 as Western banks at the urging of their own central banks scrambled to get cash out of Russia as fast as they could by calling in their loans.

Money poured out of the country putting the very existence of some of the country’s biggest companies at risk. The panic fed on itself as investors then also began to pull out of Russian companies causing Russia’s two stock markets to crash. For a few terrifying weeks it looked as if the entire economy was about to collapse.

In the event the reserves Kudrin and Putin had built up in the previous years proved sufficient to avert disaster, though the single thing that saved the economy… from a much more severe crisis was the sharp recovery in oil prices that took place in the spring of 2009.

Kudrin was obviously not solely to blame for all this. However as the country’s Finance Minister and as the man in overall charge of the economy he must bear the principal blame. At a crucial moment he took his eye off the ball and it was as much a matter of good luck as of good management that the country came through.

By contrast one of the reasons why the Russian economy has proved so resilient in the face of the sanctions and the 2014 oil price collapse is precisely because the lesson of those terrible months in 2008 and 2009 has been learnt. Instead of resuming their wild borrowing and spending spree when the crisis abated Russian companies and businesses instead – at the urging of their government – reined their borrowing and spending in as they moved to hedge and consolidate their positions.

The result was that this time round with the help of a certain amount of support from the government and the Central Bank they have been able to meet their debt obligations without undue strain and without the economy spiralling into crisis.

I would add in passing that the much discussed fall in the Russian growth rate since 2012 is in part a consequence of this process. Reining in borrowing and spending and consolidating positions has inevitably led to a cut in investment causing growth to slow. In other words the frenetic growth of the immediate period prior to the 2008 crash (which touched an annualised rate of 9% in the months preceding the crash) has had to be paid for by a lower growth rate since then.

None of these points are ever made by Kudrin’s admirers, just as when they claim – as they often do – that the Russian economy has been badly managed during Putin’s period as President so that the economy is supposedly insufficiently diversified they somehow manage to forget who was actually in charge of the economy during most of the time that Putin has been President.

This same exercise in selective memory comes up whenever the circumstances of Kudrin’s leaving the government are discussed. Kudrin’s admirers tend to claim that Kudrin left the government because of disagreements between him and Putin over defence spending. Kudrin supposedly was unhappy that defence spending was getting out of control and was becoming unaffordable. Putin supposedly refused to listen and

Kudrin therefore left the government rather than carry out a policy he considered irrational and unrealistic. No part of this is true. The true reason Kudrin was dismissed from the government was not because there was a row between him and Putin over defence spending. Kudrin was dismissed from the government because he made public his strong disagreement with Putin’s decision to appoint Dmitry Medvedev Prime Minister after the so-called “tandem switch” in 2011 when Putin and Medvedev swapped jobs, with Medvedev stepping aside from the Presidency to allow Putin to stand for the Presidency in the 2012 Presidential election and Putin in return nominating Medvedev to be his Prime Minister.

kudrin:medvedev

Alexey Kudrin with then President Dmitry Medvedev

What is strange about the claims Kudrin quit the government over defence spending is that his row with Medvedev which led to his dismissal was carried out in the most public way imaginable on national television for everyone to see. Kudrin started it all by saying on US television that he would not be able to stay in the government if Medvedev was appointed Prime Minister. There was then a public row between Medvedev and Kudrin in Russia shown in full view on national television during which an ashen-faced Kudrin asked for time to speak to Putin only to be sacked by Medvedev on the spot.

The issue of defence spending came up incidentally during the row as Kudrin searched for a reason to justify his objection to Medvedev’s becoming Prime Minister. The reason he hit upon was that he disagreed with Medvedev’s commitment to higher defence spending. He did not however exactly say it was completely unaffordable. Rather he said he wanted to spend more money on education instead.

As to the reasons for Kudrin’s objections to Medvedev’s appointment those to this day remain unclear. There were suggestions Kudrin was disappointed not to have been appointed Prime Minister himself.

There were also suggestions that he had come in for some criticism from within the government for his failure to foresee and pre-empt the 2008 financial crisis (see above) and that his position was already becoming shaky and that this provoked him to lash out.

It seems there was also a plan hatched by someone in the government (probably the Kremlin spin-doctor Vladislav Surkov) for Kudrin to leave the government to head a loyalist liberal pseudo-opposition party. It seems that Kudrin was unenthusiastic about this idea. However the fact it was floated at all shows that at the time of his dismissal the idea of Kudrin leaving the government was already in the air.

The true reason for Kudrin’s row with Medvedev is in fact obvious to anyone who watches the television film of their row: the two men detest each other. Quite why they do is unknown. Possibly it was rivalry for Putin’s favour and resentment by Kudrin that Medvedev – whom he obviously considers his inferior – was stealing a march on him.

Kudrin’s and Medvedev’s mutual dislike does however show one thing. This is that there is no united liberal Atlanticist bloc inside the government. At the time of their row Medvedev and Kudrin were widely credited with being the two most prominent liberal Atlanticists in the government.

Their all too evident mutual dislike however makes it all but inconceivable that they could forge a united front together. Having managed to get himself thrown out of the government in the most public way imaginable Kudrin then committed an action that deeply angered his former colleagues in the government and which has ever since fuelled widespread distrust of him in the country.

During the protests that followed the parliamentary elections in December 2011 Kudrin turned up and spoke at a liberal opposition rally on Sakharov Avenue in Moscow. By doing so he appeared to burn his bridges with the government and seemed to be aligning himself with the pro-Western liberal opposition against Putin.

Kudrin’s speech at the Sakharov Avenue rally in fact demonstrated something else: Kudrin’s complete lack of the most basic political skills needed by a successful politician. His speech at the rally was by common consent a disaster – a boring lecture from a former academic and technocrat that turned everybody off – very far from the rallying cry the situation demanded.

From that moment it was obvious to everyone including Kudrin himself that he could never successfully lead a political party or make himself a significant political force and that he represented no conceivable political threat or challenge either to Putin or to the government.

That realisation almost certainly explains Kudrin’s actions since then. Having realised that he had `no future as an opposition leader he began instead to try to work himself back into Putin’s favour.

The story of Kudrin’s career since then has been one of constant lobbying both by himself and by his supporters to bring him back into the government. Though during this period he regularly made coded criticisms of the government he always stopped short of direct attacks on it. The impression he gave was of someone who wanted the government to succeed but thought it was not being reformist enough. As is often the case with those in Russia who call for more reform he was vague about what was the reform he wanted but he tended to give the impression that he wanted to cut budget spending even more and wanted to raise the pension age.

It seems Kudrin finally persuaded Putin some months ago to bring him back and that the one issue that delayed his return was disagreement about the post he would be given.

In the event the post Kudrin was eventually given – deputy head of Putin’s Council of Economic Advisers – though important is advisory and hardly compares with the posts of Deputy Prime Minister and Finance Minister he held before he was sacked in 2011. If Kudrin held out for a more important position -as is likely – then he clearly didn’t get it. In fact it seems that both Medvedev and Sergey Ivanov (Putin’s Chief of Staff) vetoed any possibility of Kudrin being given executive posts either in government or in the Presidential Administration.

Why then did Putin bring Kudrin back?

There may have been an element… of political calculation behind the decision. Though Kudrin’s new post is hardly one of key importance his reappointment does carry important symbolism. It could be intended as a gesture to the West – where Kudrin is held in high regard – at a time when the anti-Russian policy the US and the EU have been following has been coming under increasing challenge.

More cynically, bringing Kudrin back into the fold might have been intended to keep him quiet and onside in the run-up to the pending parliamentary elections this autumn. More practically, it seems Kudrin is being asked to work on a national economic plan. Almost certainly this will include a recommendation to raise the pension age – a deeply unpopular measure which Putin is known however to have come round to. Possibly Putin is using Kudrin for political cover – looking to Kudrin to recommend an unpopular reform Putin realises is needed whilst setting Kudrin up as the fall guy who will take the flak if or rather when the measure is opposed.

However beyond these tough-minded political calculations personal factors have probably also played an important role. One must put aside the idea of major ideological differences between Putin and Kudrin. To the constant dismay of most of his supporters Putin’s record shows that he is a convinced economic liberal. Putin has never shown the slightest inclination to row back on the market reforms Russia has followed since the USSR’s collapse. If Kudrin is an economic liberal then the record shows Putin is one too.

As for Kudrin he is not quite the doctrinaire liberal or Atlanticist he is sometimes made out to be. He supported Putin’s action against Khodorkovsky and Yukos in 2004. As Deputy Prime Minister and Finance Minister he supported investment in Russia’s infrastructure. He also voiced support for the government’s policy of creating national champions in specific sectors of the economy.

Though a supporter of privatisation he never made this a fetish of his policy. Kudrin has also been careful not to challenge openly Putin’s foreign policy. Whatever his private thoughts on the matter he has never spoken out publicly against Crimea’s reunification with Russia. He surely knows that both for Putin and for the Russian public this question has become the touchstone of loyalty to the country.

Not only is there therefore enough common ground for Putin and Kudrin to work together in the future but there is a long history of close friendship and collaboration between them. Both Kudrin and Putin worked together in St. Petersburg in the 1990s for the city’s then mayor Anatoly Sobchak. Both Kudrin and Putin were then transferred to the Presidential Administration in Moscow when Sobchak failed to gain re-election in 1996. When Putin became the country’s President in 2000 he appointed Kudrin his Finance Minister and backed him in that post thereafter.

If there is one consistent pattern to Putin’s career it is his fierce loyalty to his friends even when – as in Kudrin’s case – that loyalty has not been fully reciprocated. It is probably Putin’s sense of friendship and loyalty to Kudrin which more than anything else explains his decision to bring him back.

Whether Putin’s feelings of friendship and loyalty to Kudrin will be enough to outweigh Kudrin’s unpopularity in the country and with many of his colleagues is another matter. On balance it is unlikely. However by bringing Kudrin back Putin has brought back into the fold an old friend and collaborator with a history of loyal service.

Should Putin decide to take a more liberal turn in managing the economy after the 2018 election Kudrin is there to help him take it. Whilst perennial rumours that Kudrin will become Prime Minister in place of Medvedev are probably misplaced, it is very much in character of Putin to move to keep his options open, and by bringing Kudrin back he has done just that.

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Foreign Banks Are Embracing Russia’s Alternative To SWIFT, Moscow Says

Given its status as a major energy exporter, Russia has leverage that could help attract partners to its new SWIFT alternative.

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Via Zerohedge


On Friday, one day after Russia and China pledged to reduce their reliance on the dollar by increasing the amount of bilateral trade conducted in rubles and yuan (a goal toward which much progress has already been made over the past three years), Russia’s Central Bank provided the latest update on Moscow’s alternative to US-dominated international payments network SWIFT.

Moscow started working on the project back in 2014, when international sanctions over Russia’s annexation of Crimea inspired fears that the country’s largest banks would soon be cut off from SWIFT which, though it’s based in Belgium and claims to be politically neutral, is effectively controlled by the US Treasury.

Today, the Russian alternative, known as the System for Transfer of Financial Messages, has attracted a modest amount of support within the Russian business community, with 416 Russian companies having joined as of September, including the Russian Federal Treasury and large state corporations likeGazprom Neft and Rosneft.

And now, eight months after a senior Russian official advised that “our banks are ready to turn off SWIFT,” it appears the system has reached another milestone in its development: It’s ready to take on international partners in the quest to de-dollarize and end the US’s leverage over the international financial system. A Russian official advised that non-residents will begin joining the system “this year,” according to RT.

“Non-residents will start connecting to us this year. People are already turning to us,”said First Deputy Governor of the Central Bank of Russia Olga Skorobogatova. Earlier, the official said that by using the alternative payment system foreign firms would be able to do business with sanctioned Russian companies.

Turkey, China, India and others are among the countries that might be interested in a SWIFT alternative, as Russian President Vladimir Putin pointed out in a speech earlier this month, the US’s willingness to blithely sanction countries from Iran to Venezuela and beyond will eventually rebound on the US economy by undermining the dollar’s status as the world’s reserve currency.

To be sure, the Russians aren’t the only ones building a SWIFT alternative to help avoid US sanctions. Russia and China, along with the European Union are launching an interbank payments network known as the Special Purpose Vehicle to help companies pursue “legitimate business with Iran” in defiance of US sanctions.

Given its status as a major energy exporter, Russia has leverage that could help attract partners to its new SWIFT alternative. For one, much of Europe is dependent on Russian natural gas and oil.

And as Russian trade with other US rivals increases, Moscow’s payments network will look increasingly attractive,particularly if buyers of Russian crude have no other alternatives to pay for their goods.

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US leaving INF will put nuclear non-proliferation at risk & may lead to ‘complete chaos’

The US is pulling out of a nuclear missile pact with Russia. The Intermediate-Range Nuclear Forces Treaty requires both countries to eliminate their short and medium-range atomic missiles.

The Duran

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Via RT


If the US ditches the Intermediate-Range Nuclear Forces Treaty (INF), it could collapse the entire nuclear non-proliferation system, and bring nuclear war even closer, Russian officials warn.

By ending the INF, Washington risks creating a domino effect which could endanger other landmark deals like the Strategic Arms Reduction Treaty (START) and collapse the existing non-proliferation mechanism as we know it, senior lawmaker Konstantin Kosachev said on Sunday.

The current iteration of the START treaty, which limits the deployment of all types of nuclear weapons, is due to expire in 2021. Kosachev, who chairs the Parliament’s Upper House Foreign Affairs Committee, warned that such an outcome pits mankind against “complete chaos in terms of nuclear weapons.”

“Now the US Western allies face a choice: either embarking on the same path, possibly leading to new war, or siding with common sense, at least for the sake of their self-preservation instinct.”

His remarks came after US President Donald Trump announced his intentions to “terminate” the INF, citing alleged violations of the deal by Russia.

Moscow has repeatedly denied undermining the treaty, pointing out that Trump has failed to produce any evidence of violations. Moreover, Russian officials insist that the deployment of US-made Mk 41 ground-based universal launching systems in Europe actually violates the agreement since the launchers are capable of firing mid-range cruise missiles.

Leonid Slutsky, who leads the Foreign Affairs Committee in parliament’s lower chamber, argued that Trump’s words are akin to placing “a huge mine under the whole disarmament process on the planet.”

The INF Treaty was signed in 1987 by then-President Ronald Reagan and Soviet leader Mikhail Gorbachev. The deal effectively bans the parties from having and developing short- and mid-range missiles of all types. According to the provisions, the US was obliged to destroy Pershing I and II launcher systems and BGM-109G Gryphon ground-launched cruise missiles. Moscow, meanwhile, pledged to remove the SS-20 and several other types of missiles from its nuclear arsenal.

Pershing missiles stationed in the US Army arsenal. © Hulton Archive / Getty Images ©

By scrapping the historic accord, Washington is trying to fulfill its “dream of a unipolar world,” a source within the Russian Foreign Ministry said.

“This decision fits into the US policy of ditching the international agreements which impose equal obligations on it and its partners, and render the ‘exceptionalism’ concept vulnerable.”

Deputy Foreign Minister Sergey Ryabkov denounced Trump’s threats as “blackmail” and said that Washington wants to dismantle the INF because it views the deal as a “problem” on its course for “total domination” in the military sphere.

The issue of nuclear arms treaties is too vital for national and global security to rush into hastily-made “emotional” decisions, the official explained. Russia is expecting to hear more on the US’ plans from Trump’s top security adviser, John Bolton, who is set to hold talks in Moscow tomorrow.

President Trump has been open about unilaterally pulling the US out of various international agreements if he deems them to be damaging to national interests. Earlier this year, Washington withdrew from the Joint Comprehensive Plan of Action (JCPOA) on the Iranian nuclear program. All other signatories to the landmark agreement, including Russia, China, and the EU, decided to stick to the deal, while blasting Trump for leaving.

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Converting Khashoggi into Cash

After two weeks of denying any connection to Khashoggi’s disappearance, Riyadh has admitted that he was killed by Saudi operatives but it wasn’t really on purpose.

Jim Jatras

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Authored by James George Jatras via The Strategic Culture Foundation:


The hazard of writing about the Saudis’ absurd gyrations as they seek to avoid blame for the murder of the late, not notably great journalist and Muslim Brotherhood activist Jamal Khashoggi is that by the time a sentence is finished, the landscape may have changed again.

As though right on cue, the narrative has just taken another sharp turn.

After two weeks of denying any connection to Khashoggi’s disappearance, Riyadh has ‘fessed up (sorta) and admitted that he was killed by Saudi operatives but it wasn’t really on purpose:

Y’see, it was kinda’f an ‘accident.’

Oops…

Y’see the guys were arguing, and … uh … a fistfight broke out.

Yeah, that’s it … a ‘fistfight.’

And before you know it poor Jamal had gone all to pieces.

Y’see?

Must’ve been a helluva fistfight.

The figurative digital ink wasn’t even dry on that whopper before American politicos in both parties were calling it out:

  • “To say that I am skeptical of the new Saudi narrative about Mr. Khashoggi is an understatement,” tweeted Republican Sen. Lindsey Graham of South Carolina. “First we were told Mr. Khashoggi supposedly left the consulate and there was blanket denial of any Saudi involvement. Now, a fight breaks out and he’s killed in the consulate, all without knowledge of Crown Prince. It’s hard to find this latest ‘explanation‘ as credible.”
  • California Rep. Adam Schiff, the ranking Democrat on the House Intelligence Committee, said in a statement that the new Saudi explanation is “not credible.” “If Khashoggi was fighting inside the Saudi consulate in Istanbul, he was fighting for his life with people sent to capture or kill him,” Schiff said. “The kingdom and all involved in this brutal murder must be held accountable, and if the Trump administration will not take the lead, Congress must.”

Turkish President Recep Tayyip Erdogan must think he’s already died and gone to his eternal recreation in the amorous embraces of the dark-eyed houris. The acid test for the viability of Riyadh’s newest transparent lie is whether the Turks actually have, as they claim, live recordings of Khashoggi’s interrogation, torture, murder, and dismemberment (not necessarily in that order) – and if they do, when Erdogan decides it’s the right time to release them.

Erdogan has got the Saudis over a barrel and he’ll squeeze everything he can out of them.

From the beginning, the Khashoggi story wasn’t really about the fate of one man. The Saudis have been getting away with bloody murder, literally, for years. They’re daily slaughtering the civilian population of Yemen with American and British help, with barely a ho-hum from the sensitive consciences always ready to invoke the so-called “responsibility to protect” Muslims in Bosnia, Kosovo, Libya, Syria, Xinjiang, Rakhine, and so forth.

Where’s the responsibility not to help a crazed bunch of Wahhabist head-choppers kill people?

But now, just one guy meets a grisly end and suddenly it’s the most important homicide since the Lindbergh baby.

What gives?

Is it because Khashoggi was part of the MSM aristocracy, on account of his relationship with the Washington Post?

Was it because of his other, darker, connections? As related by Moon of Alabama: “Khashoggi was a rather shady guy. A ‘journalist’ who was also an operator for Saudi and U.S. intelligence services. He was an early recruit of the Muslim Brotherhood.” This relationship, writes MoA, touches on the interests of pretty much everyone in the region:

“The Ottoman empire ruled over much of the Arab world. The neo-Ottoman wannabe-Sultan Recep Tayyip Erdogan would like to regain that historic position for Turkey. His main competition in this are the al-Sauds. They have much more money and are strategically aligned with Israel and the United States, while Turkey under Erdogan is more or less isolated. The religious-political element of the competition is represented on one side by the Muslim Brotherhood, ‘democratic’ Islamists to which Erdogan belongs, and the Wahhabi absolutists on the other side.”

With the noose tightening around Saudi Crown Prince Mohammad bin Salman (MbS), the risible fistfight cock-and-bull story is likely to be the best they can come up with. US President Donald Trump’s having offered his “rogue killers” opening suggests he’s willing to play along. Nobody will really be fooled, but MbS will hope he can persuade important people to pretend they are fooled.

That will mean spreading around a lot of cash. The new alchemy of converting Khashoggi dead into financial gain for the living is just one part of an obvious scheme to pull off what Libya’s Muammar Kaddafi managed after the 1988 Lockerbie bombing: offer up some underlings as the fall guys and let the top man evade responsibility. (KARMA ALERT: That didn’t do Kaddafi any good in the long run.)

In the Saudi case the Lockerbie dodge will be harder, as there are already pictures of men at the Istanbul Consulate General identified as close associates of MbS. But they’ll give it the old madrasa try anyway since it’s all they’ve got.Firings and arrests have started and one suspect has already died in a suspicious automobile “accident.” Heads will roll!

Saving MbS’s skin and his succession to the throne of his doddering father may depend on how many of the usual recipients of Saudi – let’s be honest – bribery and influence peddling will find sufficient pecuniary reason to go along. Saudi Arabia’s unofficial motto with respect to the US establishment might as well be: “The green poultice heals all wounds.”

Anyway, that’s been their experience up to now, but it also in part reflects the same arrogance that made MbS think he could continue to get away with anything. (It’s not shooting someone in the middle of Fifth Avenue, but it’s close.) Whether spreading cash around will continue to have the same salubrious effect it always has had in the past remains to be seen.

To be sure, Trump may succeed in shaking the Saudi date palm for additional billions for arms sales. That won’t necessarily turn around an image problem that may not have a remedy. But still, count on more cash going to high-price lobbying and image-control shops eager to make obscene money working for their obscene client. Some big American names are dropping are dropping Riyadh in a sudden fit of fastidiousness, but you can bet others will be eager to step into their Guccis, both in the US and in the United Kingdom. (It should never be forgotten how closely linked the US and UK establishments are in the Middle East, and to the Saudis in particular.)

It still might not work though. No matter how much expensive PR lipstick the spinmeisters put on this pig, that won’t make it kissable. It’s still a pig.

Others benefitting from hanging Khashoggi’s death around MbS’s neck are:

  • Qatar (after last year’s invasion scare, there’s no doubt a bit of Schadenfreude and (figurative) champagne corks popping in Doha over MbS’s discomfiture. As one source close to the ruling al-Thani family relates, “The Qataris are stunned speechless at Saudi incompetence!” You just can’t get good help these days).

Among the losers one must count Israel and especially Prime Minister Bibi Netanyahu. MbS, with his contrived image as the reformer, was the Sunni “beard” he needed to get the US to assemble an “Arab NATO” (as though one NATO weren’t bad enough!) and eliminate Iran for him. It remains to be seen how far that agenda has been set back.

Whether or not MbS survives or is removed – perhaps with extreme prejudice – there’s no doubt Saudi Arabia is the big loser. Question are being asked that should have been asked years ago. As Srdja Trifkovic comments in Chronicles magazine:

“The crown prince’s recklessness in ordering the murder of Khashoggi has demonstrated that he is just a standard despot, a Mafia don with oil presiding over an extended cleptocracy of inbred parasites. The KSA will not be reformed because it is structurally not capable of reform. The regime in Riyadh which stops being a playground of great wealth, protected by a large investment in theocratic excess, would not be ‘Saudi’ any longer. Saudia delenda est.”

The first Saudi state, the Emirate of Diriyah, went belly up in 1818, with the death of head of the house of al-Saud, Abdullah bin Saud – actually, literally with his head hung on a gate in Constantinople by Erdogan’s Ottoman predecessor, Sultan Mahmud II.

The second Saudi state, Emirate of Nejd, likewise folded in 1891.

It’s long past time this third and current abomination joined its antecedents on the ash heap of history.

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