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Russia and Britain continue to mend economic ties

Here’s why the future of Britain’s economy rests in choosing the right “company”.

Haneul Na'avi

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Mock on; thou hast a place of refuge; I am alone, an exile soon to be.” —Euripides, “Medea”

The 29 November Russo-British Business Forum (RBBF), held at the Queen Elizabeth II Centre in London, hallmarked continued efforts to mend Anglo-Russian business ties.

Russo-British Chamber of Commerce (RBCC) Patron HRH Prince Michael of Kent opened the event, followed by speeches from UK Trade Representative Boris Abramov, UK Ambassador Alexander Yakovenko, Tatarstan President Rustam Minnikhanov, delegates from the House of Lords and Commons, and many others.

Over 35 high-profile speakers in politics, business, AgriTech, FinTech, engineering and finance addressed pertinent topics. Bloomberg Radio’s Caroline Hepker moderated several open panel discussions and delegates signed numerous bilateral agreements.

Other notable projects were showcased, such as the Tatarstan Investment Development Agency (TIDA) and the Western Europe-Western China Transport Corridor (WE-WC), which aims to facilitate trade for the One Belt, One Road (OBOR) Initiative into the European Union.

In an interview, RBCC Board of Directors’ Chairman Roger Munnings expressed that “Brexit is going to require British companies to think adventurously and be faster on their feet — all of which is good,” drawing parallels to Russia’s economic rebound from international sanctions.

Many guests spoke on promising trends in increasing bilateral trade whilst underscoring the importance of closing trade deficits, to which Abramov noted, “Russia sells to Britain 1.7 times more goods and services than Britain sells to Russia”.

An RBBF press release extrapolates,

Over the first 9 months of 2017 Russian exports to the UK increased by 29.4% to US$ 6.5 billion compared to the 9 months of 2016 [whilst imports] from the UK, based on the results of the first 9 months of 2017, increased by 18.7% compared to the same period in 2016.

However, the event, full of optimism, laughter, and networking, was obscured by a dearth of attention to one of the most important obstacles sat in the way of progress: the British state.

In order to determine the future Russo-British ties, this issue must be addressed.

The “Special Relationship” and the State

Capitalism is an unabated sea of competition, alienation and monopolisation, which “always becomes the more destructive for bourgeois relations”, with the state determining such relations.

Vladimir Lenin defines it as,

[…] an organ for the oppression of one class by another [which] legalizes and perpetuates this oppression by moderating the conflict between classes.

Dialectically, Britain is undergoing a painful loss: its “special relationship” with the US empire, a product of the Cold War rising with former UK Prime Minister Winston Churchill and falling with current PM Theresa May.

Friedrich Engles saliently noted that,

The State was the official representative of society as a whole [only] in so far as it was the State of that class which itself represented […]

In this case, it operates solely for the dominant bourgeoisie to crush opposition at home with social-democracy and austerity, or abroad with NATO—the “strange fruits” of such a relationship.

Karl Marx highlights that,

The value of a thing consists solely in its relation to our wants [where] we wish to part with a useless thing, in order to get one that we need [and] exchange something superfluous for something necessary.”

A contradiction ensues: as the British state coalesces capital and power, sections of the bourgeoisie will revolt in order to circulate their commodities to accessible markets.

These two relationships find expression in diametrically opposed value-forms, with the former in the US petrodollar, a money-form used to suspend the production of commodities, and the latter commodities, which must circulate in return for money-forms; Solve et Coagula, in other words.

Marx also notes that hoarding becomes,

…a constantly extending market for gold and silver, unconnected with their functions as money [and] a latent source of supply [principally] in times of crisis and social disturbance.

One particular crisis—Brexit—has become so severe that the British state is compelled to hoard as it prepares for an uncertain future. The material evidence for this must be explored further.

Material Origins of Deteriorating UK-Russian Relations

Post 9/11, Russo-British relations began disintegrating with former UK PM David Cameron, whom reinvigorated the UK-US special relationship with former US president Barack Obama in 2010, cumulating with the 2014 fascist Ukrainian coup, in order to mitigate the EU-Russian trade deficit.

The Guardian quacked that,

[Cameron] said Russia cannot expect to continue enjoying access to European markets and pushed for stronger sanctions against the country, after both the UK and US said they strongly suspect the Malaysia Airlines flight MH17 was struck down in Ukraine by separatists using Russian-made Buk missiles.

Pandering to Washington and Brussels, Cameron rallied against Russia by joining US-EU sanctions, military and media (propaganda) regimes, of course, for completely material reasons.

A Russian embassy communique from Ambassador Yakovenko noted,

The [2013 EU-Ukraine Association] Agreement stipulates that 80% of export tariffs are to be cancelled or lowered right away and further 15% – within 5 years. As a result, we expect the Ukrainian market to be saturated with European goods and components quite quickly, which can lead to Russian goods being displaced from Ukraine and EU [and] that Ukraine will be used as a low-cost transit channel for European goods, […] bypassing the agreed tariff schedule.

This is where the destructive power of capitalist alienation began. Cameron, hoping to alienate British goods to Ukraine via the agreement, was instead alienated by his European counterparts.

The Normandy Four—France, Germany, and Ukraine, and Russia—negotiated the Minsk agreements without London’s participation, infuriating Cameron.

A Russian Embassy resumé discloses that,

Outside the ‘Normandy Four’ and with no stake in the political solution, Britain became the most vociferous critic of Russia and supporter of Kiev’s flawed strategy of military solution.

Thus, Cameron begot Brexit—the perfect alibi. Kowtowing Brussels, Washington and Kiev cost London billions due to collapsing exports to the EU and Russia, with nothing in return.

The OEC stresses that,

During the last five years the exports of the United Kingdom have decreased at an annualized rate of -11.966%, from $446B in 2011 to $404B in 2016.

RT elucidates the timing even further,

Russia-UK trade has almost halved in 2015 as a result of the tit-for-tat sanctions between Russia and the European Union [and that] the total trade between the two countries fell by nearly 50 percent compared with 2014, and the loss is estimated at about $10 billion.

In short, there was nothing special about the special relationship. Even worse, whilst the UK accuses Moscow of hostile “aggression”, it was Britain who severed diplomatic ties to Moscow.

The Russian Embassy highlights,

[At] the moment Russo-British political dialogue is non-existent. London unilaterally froze all the bilateral formats of Inter-Governmental cooperation which proved their worth […] Regular consultations between the foreign ministries have actually ceased.

It continues,

London is not ready either to drop its [visa] sanctions [against] Russian officials, introduced earlier [and still refuses] to fully restore the contacts between special services, [damaging] Russo-British counter-terrorism cooperation.

Not since the 1927 ARCOS incident has a Tory-led government become such a cacophony of Russophobia. Even today, UK Foreign Secretary Boris Johnson channels the humiliation of 1st Earl Stanley Baldwin of Bewdley. History repeats itself, first as tragedy, second as farce.

To understand why, a UK Parliament paper explains,

EU statistics indicate that EU goods exports to the UK amounted to €314 billion in 2016; more than EU goods exports to Brazil, Russia, India and China combined.

So, betrayed by the EU and US, yet dependant on the American state and European economy. Alienated by Brussels, and, under US president Donald Trump, alienated “at the back of the queue”, Britain becomes a shameless Ouroboros of self-destruction. Potentially without markets to which it can alienate its commodities, Britain began doubling down on hoarding.

An Inc. article details why,

[Imagine] you’re in charge of a large public company [and every] three months, investors are picking apart your balance sheets. […] Companies look better on the balance sheet if they hoard their cash–or spend it on low-risk, short-term, in-the-box, incremental innovations.

The British superstructure is being devoured by its material reality, ab irato, whilst its capital and stability remain under constant scrutiny from investors, the European Commission, and the public.

Unfortunately, after PM Tony Blair’s transatlantic honeymoon in Iraq and Afghanistan, British gold reserves plummeted from 588.27 to roughly 310 tonnes (2000-2002) and never recovered, which threatens British quantitative easing plans post-Brexit.

The 2008 global financial crises also aggravated matters to the point where QE began failing for the Bank of England. So, instead of hoarding gold, Britain hordes money-forms via austerity and prints cash via the BoE, to the chagrin of its citizens.

Should Westminster not change course, one can expect several phenomena to come to pass:

  1. With EU productive forces merging with the OBOR, defeat in ALL Brexit negotiations.
  2. To avoid a monetary collapse, hoarding via social welfare cuts and military/ security spending
  3. Massive capital flights to other European finance centres and tax havens
  4. A rapid collapse in Conservative (Tory) leadership and violent in-fighting
  5. A rise in the UK Labour Party (social-democrats) to capitalise on and mitigate capitalist crises

To survive, Britain must choose the OBOR, where commodity and money-form exchanges (non-USD) can prosper via emerging markets and kickstart its sluggish growth. Many EU nations are already doing so, and as Europe’s third-largest Asia Infrastructure Investment Bank member since 2015, it makes perfect sense. However, if it chooses the opposite, then prepare for the worst.

Furthermore, it is senseless why the British bureaucracy refuses to exploit all possibilities with organisations like the RBCC, even from a realpolitik perspective, or a Machiavellian one. It must integrate, not alienate itself from emerging economies like Russia, China, and countless others, particularly in the absence of the European market, and increase production of commodities of use-value, not exchange value. Cameron understood this when he joined the AIIB, and subconsciously, Theresa May also understands this and is reshuffling her cabinet in response.

As a final anecdote, one should recall the prophetic “wisdom” of Karl Kautsky,

There is no economic necessity for continuing the arms race [as] the capitalist economy is seriously threatened precisely by the contradictions between its States.

Every far-sighted capitalist today must call on his fellows: capitalists of all countries, unite!

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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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