Iran Joins EAEU - 45 Years Of US Foreign Policy Down The Drain

Authored by Tom Luongo,

Iran is joining the Eurasian Economic Union (EAEU). By early next year, February by this account, Iran will join the five founding members of the Union and open the door for Turkey to do so later in 2018.

Between this and the end of the war in Syria, it’s not hard to declare the Brzezinski Doctrine of U.S.-led Central Asian chaos as gasping its last breaths.

Iran finally joining the EAEU is a response to a number of factors, the most important of which is the continued belligerence by the U.S. Expanded economic sanctions on Iran and the EAEU’s leader Russia has created the need for greater coordination of economic and foreign policy objectives between them.

And it is creating the new realities in the region that will reshape the word for the next hundred years.

The Nuclear Gambit

In the dying days of the Obama administration it looked like the goal was to placate Iran to stop its pivot towards Russia and China. I believe that was the driving force behind Obama’s negotiating the controversial nuclear deal.

In effect, Obama tried to trade unfreezing Iran’s hundreds of billions in assets held in Western banks for Iran to ignore our atomization of Syria and the creation of a complete mess there.

When you stop to think about it like that how venal are we? After putting Iran under economic lockdown, having frozen its accounts, barring them from interbank communication with customers (SWIFT removal), inducing hyperinflation to sow regime change they would agree to allowing its ally, Syria, to be handed over to Wahabist animals.

In exchange they would repudiate Russisa and be thankful for the opportunity to get their money back by signing a deal which forbade them from obtaining nuclear weapons?

Such is the ‘logic’ of the mental midgets running our foreign policy under Obama.

So, now, having assisted Russia and the Syrian army in defeating ISIS Iran is making the smart move by further integrating its economy in need of diversification and investment by joining an economic union which should align all of Central Asia’s interests along a similar path.

Chaos no longer. Zbigniew Brzezinski isn’t just dead, his strategy is as well.

Left to the likes of Obama, Hillary Clinton, John McCain and the dimbulbs of the Bush the Lesser administration before them, these buffoons were outplayed at every turn by Vladimir Putin, Chinese Premier Xi Jinping and Iranian President Hassan Rouhani.

And the world will soon be a better place for it.

The Status Whoa!

Everything about the status quo of the last thirty years is changing. Syria has made it clear to everyone that the U.S. is no longer infallible. In fact, it is close to incompetent in both military and diplomatic efficacy.

The Russian intervention exposed the real roots of the conflict as well as the lengths to which our leadership would lie, cheat and steal to achieve its chaotic regional goals. President Trump is changing the direction of this ship of state, but it is a slow process being fought at every level by those embedded in departments up and down the bureaucracy.

That said, Iran’s entry into the EAEU as a full member will break open the floodgates of new members into it. Russia has been courting everyone around the region as the EAEU members work on the rules and build the organization.

Adding Iran should see the union grow quickly and help facilitate China’s Belt and Road Initiative projects get completed.

Taking that one-step further, the bigger picture comes into focus with the establishment of the New Development Bank to challenge the U.S.-led Asian Development Bank, to fund infrastructure projects.

With the flurry of big projects announced recently, including the new version of the IPI – Iran/Pakistan/India – gas pipeline this announcement isn’t so much a diplomatic coup for Putin and Russia but rather a fait accompli.

It was always a matter of when not if Iran would join the EAEU. And with it on board, countries like India, Pakistan and Turkey can join and know that they have a level playing field on which to trade which will dampen down animosities and lingering disputes.

Peak U.S.

As Federico Pieraccini points out this morning at Strategic Culture Foundation, even the tensions between India and China have calmed down as it becomes obvious to all and sundry that the U.S. is simply neither willing under Trump nor able to maintain its dominance over central Asia anymore.

In this sense, the lack of interest from the Trump administration in certain areas of the globe is emblematic. While the chemistry between Trump and Modi appears to be good, the tensions between India and China, heightened by border disputes, seems to have nevertheless dissolved. Following on from the failure of the neocons to divide Russia and China, even the border tensions between India and China seem to be now dissipating. In addition, in Ukraine, even the decision to send lethal weapons to Kiev has been downplayed, and the country now faces a counter-coup led by Saakashvili (yes, him again). Ukraine is a country in a mess, experiencing first-hand the consequences of an evil Atlanticist posture with its vicious anti-Russia policies.

Pieraccini’s argument is the Trump is a mix of ineptitude and pragmatism when it comes to foreign policy. And that mix has led to the current state of affairs, where the U.S., Israel and Saudi Arabia are flailing about trying to remain relevant.

I won’t go nearly that far, as those countries all still have a powerful hand of cards to play, if only to stabilize most of what they currently have. And they will play those cards to the hilt in the creation of something approaching peace.

But, Iran is charting a new path, turning away from the open wounds in the West and towards the opportunities that lie all about them in every other direction. As I’ve been saying recently, the framework for a Grand Bargain in the Middle East is possible. And Iran joining the EAEU is a strong indicator that it wants to join the larger world economy as a trustworthy actor.

Putin has become the de facto negotiator for those allied against Israel and Trump is stepping up to do so for Israel. Once that deal is in place and Trump agrees to remove U.S. military presence in most of the region, then we’ll begin to see what the world can look like without manufactured conflict.

Silk Road Fever Grips The Russian Far East And Boosts Economy

Authored by Pepe Escobar via The Asia Times,

China"s Belt and Road Initiative heralds a new era with mega infrastructure projects dotting the landscape...

If  you are looking for the latest breakthroughs in trans-Eurasian geoeconomics, you should keep an eye on the East – the Russian Far East. One interesting project is the new state-of-the-art $1.5 billion Bystrinsky plant. Located about 400 kilometers from the Chinese border by rail and tucked inside the Trans-Baikal region of Siberian, it is now finally open for business.

This mining and processing complex, which contains up to 343 million tonnes of ore reserves, is a joint venture between Russian and Chinese companies. Norilsk Nickel, Russia’s leading mining group and one of the world’s largest producers of nickel and palladium, has teamed up with CIS Natural Resources Fund, established by President Vladimir Putin, and China’s Highland Fund.

But then, this is just the latest example of Russian and Chinese cooperation geared around the New Silk Roads or the Belt and Road Initiative (BRI). Beijing is the world’s largest importer of copper and iron ore, and virtually the entire output from Bystrinsky will go to the world’s second largest economy.

Naturally, to cope with production, a massive new road and rail network has been rolled out, as well as substantial infrastructure, in the heart of this wilderness. Yet there is another major BRI initiative about 1,000km east of Bystrinsky. Work started on the Amur River Bridge, or Heilongjiang as the Chinese call it, in 2016 and the road and rail links should be finished in 2019.

The project is being developed by Heilongjiang Bridge Company, a Russia-China joint venture, along a crucial stretch of the Russian-Chinese border. It will also be part of a huge trade corridor, which will transport iron ore to China from the Kimkan mine, owned by Hong Kong’s IRC Ltd,  in Russia.

The Amur River Bridge, linking Heihe, in Heilongjiang province, with Blagoveshchesnk in the Russian Far East, is a natural part of the New Silk Roads program. It is well connected to one of BRI six major corridors – the China-Mongolia-Russia Economic Corridor, or CMREC, via the Trans-Siberian Railway all the way to Vladivostok.

CMREC’s additional importance is that it will connect BRI with the Russia-led Eurasia Economic Union, or EAEU, as well as the Mongolian Steppe Road program. CMREC has two key links. One involves China’s Beijing-Tianjin-Hebei to Hohhot before winding on to Mongolia and Russia. The other is from China’s Dalian, Shenyang, Changchun, Harbin and Manzhouli to Chita in Russia, where the Bystrinsky plant is located.

Numerous aspects of the Russian-Chinese intranet were extensively discussed at the Third Eastern Economic Forum in Vladivostok in September. CMREC involves closer cooperation, especially in energy, mineral resources, high-tech manufacturing, agriculture and forestry. Chinese Vice-Premier Wang Yang had already announced even closer economic cooperation with Russia, including a $10 billion China-Russia Investment Cooperation Fund in yuan for BRI and EAAU projects.

Monetary integration

Part of this will include Russian-Chinese investment funds, known as Dakaitaowa, or “to open a matryoshka doll”. Monetary integration and energy cooperation are all part of an ambitious Russian-Chinese package. This will allow trade to be settled in yuan, instead of US dollars, in Moscow via the Industrial and Commercial Bank of China. Products promoted under the http://www.madeinrussia.com “Made in Russia” brand are bound to get a boost.

According to the China General Administration of Customs, Russia continues to be the country’s leading crude oil supplier, exporting more than one million barrels per day, ahead of Saudi Arabia and Angola. Exports of Russian oil to China have more than doubled during the past six years.

Last month, the Russian parliament approved the draft of a conservative 2018-2020 Russian federal budget at $279 billion. This included increased spending in the social sector, a higher minimum wage, and increased salaries for teachers and healthcare workers.

Manufacturing in Russia has actually grown in absolute terms during the past decade along with a slight rise in GDP. Contrary to Western perceptions, energy revenue in Russia amounts to only around 30 percent of the federal budget. In absolute terms, it actually fell from 2014 to 2016, while non-oil and gas income has increased steadily since 2009.

Those were the days when Saudi Arabia and the Gulf petro-monarchies were dumping excess capacity on the oil market in a price war that was bound to ruin Russia’s finances. The draft budget assumes the price of oil will stay around at least $40.80 a barrel during the next few years. In fact, it may actually rise from its current $61.03 for the OPEC basket. Of course, that would boost Russia’s reserves.

Natural resources

As for exports, oil accounts for around 26 percent of Russia’s GDP. Oil and gas as a percentage of total exports fell during the past two years from 70 percent to 47 percent, but they are still the country’s top export money earners. When you add other commodities, such as iron, steel, aluminum and copper, revenue from natural resources come to more than 75 percent of Russia’s total exports.

But the key problem ahead for the country is the debt of provincial governments, and not defense, which is much lower than during Gorbachev’s reign in the late 1980s. Still, the integration of BRI and EAEU now offers excellent opportunities for Russia.

To put this into context, we have to go back to the 1689 Treaty of Nerchisk at a time when Manchus, an ethnic minority in China and the people from whom Manchuria derives its name, were deeply concerned about Cossack incursions into their lands.

Nerchisk was the first Chinese treaty with a European power, and it safeguarded borders and regulated relations between the two neighbors for nearly two centuries. For the first time, Russians could trade directly with the Middle Kingdom and negotiate as equals. No Russian or Manchu was spoken, but Latin, via two Jesuit interpreters. They were well positioned in the Qing court by supplying the Kangxi emperor with weapons, as well as advanced courses in geometry and astronomy.

Century of humiliation

Now, compare this with the “unequal treaties” of the 19^th century with England, France, the United States and Germany, known as the “century of humiliation” in China. It is true that Russia gobbled up Chinese lands back then, as well as securing the Amur basin and the eastern side of the Sikhote-Alin mountains, which denied the country access to the Sea of Japan.

At the time, the Qing dynasty was helpless. Everything was later formalized by, well, treaties. China lost what was known as Outer Manchuria and Eastern Tartary. Today this whole region is known as Primorsky Krai, Russia’s Maritime Province. Then in 2006, President Putin solemnly announced the resolution of all border disputes with China along the Amur. Beijing de facto agreed.

Now, with the integration of BRI and the EAEU, Russia has a great chance of fulfilling part of its Pacific Destiny, first envisaged when the Trans-Siberian rail link was finished in 1905. Today, that vision is alive with gold and timber in the mountains north of the Amur, fish in the Sea of Okhotsk and the Bering Sea, and gas reserves from Sakhalin island all part of a modern export chain.

Turkey Faces Threats For Inking Landmark Arms Deal With Russia

Authored by Alex Gorka via The Strategic Culture Foundation,

The long awaited deal has taken place. A deposit has already been paid. Turkey has finally signed the $2.5bn (£1.9bn) contract with Russia to buy S-400 advanced missile defense system. With a range of 400 kilometers (248 miles), the system can shoot down up to 80 targets simultaneously, aiming two missiles at each one, at an altitude of up to 30 km.

The system is not operationally compatible with the systems used by NATO countries, which gives Turkey a military capacity independent of the alliance. NATO commanders will not have control over it. The identification friend or foe (IFF) equipment won’t prevent Turkey from using it against NATO aircraft and missiles. Reaching full operational capability will require Russian personnel to be stationed in Turkey on advice, assistance and training missions.

The technology transfer component of the S-400 deal is especially important as it would allow Turkey to rapidly expand domestic defense industry with Russia’s help. Russia would supply two batteries and help Ankara build two more such systems. A few years ago, the US refused to let Turkey produce Patriot air defense systems on its soil and the deal was off.

Ankara does not have industrial infrastructure to produce air defense systems. Russian specialists will have to come and build it from scratch. As a result, Russia will get access to the defense infrastructure of a NATO member state. The agreement to build the Akkuyu nuclear power plant in Turkey, which is to be launched by 2023, is another example of fruitful economic cooperation.

NATO insists members of the alliance are obligated to use military hardware that is interoperable with each other"s systems. But the S-400 deal is not the first time the principle of interoperability is not observed. Greece purchased Russia"s S-300 missile system several years ago.

The move - a further sign of Ankara"s gradual estrangement from its Western allies – meets the strategic goal to acquire the nationally controlled defense capability. Turkey has also criticized the US and its allies for their reticence about selling it military arms and technology.

As had been expected, the deal triggered the anger of the United States and other NATO members. The US had long been warning Turkey against the deal. "We have relayed our concerns to Turkish officials regarding the potential purchase of the S-400. A NATO interoperable missile defense system remains the best option to defend Turkey from the full range of threats in its region," Pentagon spokesman Johnny Michael said in a statement.

Maryland Sen. Ben Cardin, the ranking Democrat on the Senate Foreign Relations Committee, asked the US administration to assess how the deal might affect Turkey’s NATO membership and US security assistance to Ankara, which includes weapons sales. He issued the warning on September 14 in a letter to Secretary of State Rex Tillerson and Treasury Secretary Steve Mnuchin. According to him, the deal violated a bill signed into law in August that imposes sanctions "on any person that conducts a significant transaction with the Russian Federation’s defense or intelligence sectors."

The idea of introducing sanctions against Turkey has been on the EU’s agenda for quite some time. The announcement of the deal with Russia came after German Foreign Minister Sigmar Gabriel said his country was suspending all major arms exports to Turkey because of the deteriorating human rights situation in the country and the increasingly strained ties. Gabriel added he believed that Turkey had also abandoned NATO’s common values. The idea of economic sanctions against Turkey is quite popular in Germany.

So, the three big powers, Russia, Turkey and Iran, united by the desire to end the bloodshed in Syria and rout terrorists, have become the targets of Western sanctions already imposed or still to be introduced. The pressure makes them get closer to each other. The cooperation between Russia and Turkey is on the rise and offers great prospects. Iran"s Armed Forces Chief of Staff, Major General Mohammad Bagheri visited Turkey in mid-August - the first visit by an Iranian chief of staff since Iran’s 1979 Islamic revolution. The common threat of terrorism and Western pressure nudge Russia, Turkey and Iran towards one another.

The three states work together within the framework of Shanghai Cooperation Organization (SCO) where Russia is a full-fledged member, Turkey has the status of dialogue partner and Iran, an observer, is expected to become a member soon. Last November, Turkish President Recep Tayyip Erdogan said Turkey could become part of the SCO.

Ankara is also showing increasing interest in the Eurasian Economic Union (EAEU). It was invited to join the organization in 2014. This will open new opportunities for developing trade. Furthermore, many of the present and potential members of the EAEU are countries with whom Turkey already has close relations. The Eurasian Economic Union aims to finalize a free-trade deal with Iran by the end of the year. Reaching a deal with Iran on free trade would represent a notable victory for the organization. With Turkey and Iran as members, the EAEU would acquire a global dimension.

Obviously, there is one result the Western sanctions produce – the targeted countries come together to create alternative poles of power. Threats and restrictive measures spur the process. This policy has failed to keep Turkey away from military cooperation with Russia. In the multipolar world there is always an alternative to turn to.