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Page added on March 22, 2014
Petrodollar Alert: Putin Prepares To Announce “Holy Grail” Gas Deal With China
If it was the intent of the West to bring Russia and China together – one a natural resource (if “somewhat” corrupt) superpower and the other a fixed capital / labor output (if “somewhat” capital misallocating and credit bubbleicious) powerhouse – in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely “going according to plan.”
For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 steps ahead… and quite a few steps east.
While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the “Holy Grail” energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may refrain from foreign borrowing this year. Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasurys, and go straight to the source.
Here is what will likely happen next, as explained by Reuters:
Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow’s seizure of the Black Sea peninsula from Ukraine would be counter-productive.
The underlying message from the head of Russia’s biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances.
The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.
More details on the revelation of said “Holy Grail”:
State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world’s largest producer of conventional gas to the largest consumer.
“May is in our plans,” a Gazprom spokesman said, when asked about the timing of an agreement. A company source said: “It would be logical to expect the deal during Putin’s visit to China.”
Summarizing what should be and is painfully obvious to all, but apparently to the White House, which keeps prodding at Russia, is the following:
“The worse Russia’s relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you’re isolated,” said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.
Bingo. And now add bilateral trade denominated in either Rubles or Renminbi (or gold), add Iran, Iraq, India, and soon the Saudis (China’s largest foreign source of crude, whose crown prince also happened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.
As reported previoisly, China has already implicitly backed Putin without risking it relations with the West. “Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia. Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan, it has refused to criticize Moscow. The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world’s second biggest economy and it opposes the spread of Western-style democracy.”
This culminated yesterday, when as we reported last night, Putin thanked China for its “understanding over Ukraine.” China hasn’t exactly kept its feelings about closer relations with Russia under wraps either:
Chinese President Xi Jinping showed how much he values ties with Moscow, and Putin in particular, by making Russia his first foreign visit as China’s leader last year and attending the opening of the Winter Olympics in Sochi last month.
Many Western leaders did not go to the Games after criticism of Russia’s record on human rights. By contrast, when Putin and Xi discussed Ukraine by telephone on March 4, the Kremlin said their positions were “close”.
The punchline: “A strong alliance would suit both countries as a counterbalance to the United States.” An alliance that would merely be an extension of current trends in close bilateral relations, including not only infrastructure investment but also military supplies:
However, China overtook Germany as Russia’s biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan.
If Russia is isolated by a new round of Western sanctions – those so far affect only a few officials’ assets abroad and have not been aimed at companies – Russia and China could also step up cooperation in areas apart from energy. CAST’s Kashin said the prospects of Russia delivering Sukhoi SU-35 fighter jets to China, which has been under discussion since 2010, would grow.
China is very interested in investing in infrastructure, energy and commodities in Russia, and a decline in business with the West could force Moscow to drop some of its reservations about Chinese investment in strategic industries. “With Western sanctions, the atmosphere could change quickly in favor of China,” said Brian Zimbler Managing Partner of Morgan Lewis international law firm’s Moscow office.
Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1 billion but Russia was still only China’s seventh largest export partner in 2013, and was not in the top 10 countries for imported goods. The EU is Russia’s biggest trade partner, accounting for almost half of all its trade turnover.
And as if pushing Russia into the warm embrace of the world’s most populous nation was not enough, there is also the second most populated country in the world, India.
Putin did take time, however, to thank one other country apart from China for its understanding over Ukraine and Crimea – saying India had shown “restraint and objectivity”.
He also called Indian Prime Minister Manmohan Singh to discuss the crisis on Tuesday, suggesting there is room for Russia’s ties with traditionally non-aligned India to flourish.
Although India has become the largest export market for U.S. arms, Russia remains a key defense supplier and relations are friendly, even if lacking a strong business and trade dimension, due to a strategic partnership dating to the Soviet era.
Putin’s moves to assert Russian control over Crimea were seen very favorably in the Indian establishment, N. Ram, publisher of The Hindu newspaper, told Reuters. “Russia has legitimate interests,” he added.
To summarize: while the biggest geopolitical tectonic shift since the cold war accelerates with the inevitable firming of the “Asian axis”, the west monetizes its debt, revels in the paper wealth created from an all time high manipulated stock market while at the same time trying to explain why 6.5% unemployment is really indicative of a weak economy, blames the weather for every disappointing economic data point, and every single person is transfixed with finding a missing airplane.
32 Comments on "Petrodollar Alert: Putin Prepares To Announce “Holy Grail” Gas Deal With China"
Plantagenet on Sat, 22nd Mar 2014 3:15 am
Looks like Putin has outsmarted Obama again.
ghung on Sat, 22nd Mar 2014 3:49 am
He didn’t have to be very smart. The west got suckered…. and he’ll sell his gas to China and ignore the EU and US. Interesting, this:
Wikipedia: <b<"Central Asia–China gas pipeline"
“….The second line was completed by the end of 2010. The third line designed to deliver 25 Bcm/a of natural gas from Turkmenistan, Uzbekistan and Kazakhstan to China began construction in 2012. It is estimated that gas supply will commence from January 2014, and reach the designed throughput in December 2015, enhancing the total transmission capacity of the Central Asia-China Gas Pipeline to 55 Bcm/a.”
One has to wonder how much access Putin has to these and other pipelines.
Arthur on Sat, 22nd Mar 2014 11:23 am
Expect outright panic in Berlin:50% oil and 39% gas comes from the east. The Russians will leave the Germans no other option than to leave the West and, if necessary the EU, if France does not switch sides as well.
Arthur on Sat, 22nd Mar 2014 11:34 am
The Dutch always like to joke that Asia starts at the Dutch-German border. This could become reality, geopolitically speaking. Hollande and his handler Fabius won’t make the switch, but Marine Le Pen already announced she gladly leaves NATO and orientate herself towards Moscow. As I have been predicting for two years: the Paris-Berlin-Moscow axis is coming. And I have to admit that the EU could fall apart, which is What I don’t like.
Arthur on Sat, 22nd Mar 2014 11:49 am
The oil and gas weapon is very potent, but Wlad the Great has yet another, even more potent weapon, with which he can blow up the West: an archive full with historic truths about what really happened between 1914-1945.
1)
http://www.haaretz.com/jewish-world/jewish-world-news/1.530857
2) Russian client state Iran still denies the holocaust. Why? Because the Iranian leadership was briefed by Moscow, preparing the ground for Russia going for the kill at a geopolitical advantageous moment.
Imagine the following discussion in the Kremlin between Putin and Merkel or another German leader…
Putin: sure we can restore oil and gas deliveries to Germany. And on top of that I am willing to appear before the international press and declare, underpinned by original historic documents, that:
a) yes there was a secret alliance between Roosevelt-Churchill-Stalin, that dated before September 1939, aimed at the destruction of Germany
b) the hollowcause never happened
c) Nuremberg was a farce
In return for these services we expect you to:
a) abandon NATO, expel Anglo troops and nukes from Germany and join SCO
b) abandon the EU, if large parts of the EU will remain loyal to the US
Davy, Hermann, MO on Sat, 22nd Mar 2014 1:35 pm
It is not well accepted by commentators of politics, energy, and economics that we live in a complex global interconnected world in diminishing returns to limits of growth with a population in overshoot to its carrying capacity. A global financial system in a bubble with a Ponzi scheme of debt, a repressed business cycle, and wealth transfer. This is a global house of cards. China and Russia can bring on a financial collapse sooner than later if the like with actions that will further destabilize the global economy. The west is no better with their idiotic impotent policies against Russia. Russia and China’s effort to dump the dollar and hurt the west will have unintended consequences for both their economies bother heavily reliant on exports. China needs markets for its “junk” and banana republic Russia needs markets for it natural resources. Neither exporter can make it long with all the numerous and serious problems they have that require “money”. China is in a debt unwind currently that will either crash land it soon or this will slowly unwind with dangerously low growth for a country requiring high growth to function properly. Russia can sport the big energy stick for so long until it can’t hold its economic breath much longer. Russian economy relies on financing and it will shoot itself in the foot if it does more than makes threats. Nothing wrong with more gas to China. That production area is logical to go to China. All this talk globally about sanctions on both sides is dangerous. This danger should be great news for all those wanting the end of status quo BAU because that is what is coming from the consequences of trade wars and possible hot wars.
bobinget on Sat, 22nd Mar 2014 3:25 pm
Amplifying on Davy’s post:
Asia Times Online :: Saudi grant kills Iran-Pakistan pipeline
Saudi grant kills Iran-Pakistan pipeline
By Syed Fazl-e-Haider
KARACHI – A US$1.5 billion donation to Pakistan from Saudi Arabia is hotly being debated in the country’s parliament, political circles and among the analysts. The main question being under what deal Riyadh disbursed the crucial amount to help the cash-strapped country make short-term economic gains? What has Pakistan guaranteed or promised to do in return? Many believe Saudi Arabia killed many birds with one stone.
Saudi Arabia did what the US could not do to keep Pakistan away from a $7.5-billion gas pipeline project with Iran. In a tit-for-tat deal, Saudi Arabia might have persuaded Islamabad to cancel the Iran-Pakistan (IP) pipeline project, which is vital to end energy shortages that are crippling Pakistan’s economy.
Pakistan’s oil minister Shahid Khaqan Abbasi, after receiving funds from Saudi Arabia last month, reportedly said work on the pipeline was not possible because of sanctions imposed by the United States and the European Union on Iran over its nuclear
program. Iran has warned that Islamabad is contractually obliged to complete the project which would allow Tehran to export gas to its southeastern neighbor.
“Iran has carried out its commitments … and expects the Pakistani side to honor its own,” Iran’s deputy oil minister Ali Majedi was reported to have said. “They should even pick up the pace of work and make up for falling behind schedule in constructing Pakistan’s [780-kilometer] side of the pipeline.”
Iran has already laid the pipeline its side up to its border with Pakistan. Financing has been the key issue for Islamabad. Islamabad has so far failed to secure the required funding for the IP pipeline due to the threat of sanctions from the US. Pakistan had been asking Iran, China and Russia to fill the finance gap.
Ironically, Saudi Arabia’s $1.5 billion donation was the amount Pakistan needed complete the portion of pipeline on its territory. But this donation, or “gift” as called by Ishaq Dar, Pakistan’s finance minister, could not be used to finance the construction of the IP pipeline.
The Saudi grant has, however, helped Pakistan to shore up its foreign exchange reserves. It improved the health of the Pakistani rupee, which appreciated 6% to a nine-month high against the US dollar within a week.
Iran and Saudi Arabia have a history of mistrust, posing a serious challenge for Pakistan to maintain a delicate balance in its bilateral relations with both countries. Pakistan Prime Minister Nawaz Sharif has preferred friendship with Saudi Arabia over Iran. He enjoys good and close relations with the Saudi royal family.
Last year, former president Asif Ali Zardari inaugurated the delayed IP pipeline on March 11. The administration of Yousaf Raza Gilani downplayed the US pressure and continued to go ahead with the Iran pipeline project.
In 2012, Saudi Arabia had offered energy-deficient Pakistan the alternative options to cope with the energy crisis in a move to lull the country to abandon the IP gas pipeline project . A “special message” about the project from the Saudi king was delivered to Pakistan by Prince Abdul Aziz bin Abdullah, the Saudi deputy foreign minister, in his one-to-one meeting with former prime minister Gilani in Islamabad. The Saudi message came at a time when Pakistan had expedited its efforts to strike government-to-government deals on financing its portion of pipeline with Moscow and Beijing, despite stiff opposition from the US.
The “timing” of the launch of the pipeline project, which was scheduled to be completed by the end of this year when the US is scheduled to withdraw its forces from Afghanistan, is a crucial consideration for Islamabad. Washington direly needs Islamabad’s support and cooperation in the run up to Afghan war endgame, and represents a window of opportunity to complete the pipeline project at a time the US would not be in a position to significantly hurt Pakistan’s interest. Geopolitically, a major foreign policy challenge for the US was to convince Islamabad to abandon the pipeline without undermining its own interests in Afghanistan.
The fate of IP pipeline is now uncertain after Pakistan has showed its reluctance to go ahead with the project. The pipeline, which would initially transfer 30 million cubic meters of gas per day, could bail the country out of the acute energy crisis. Under pipeline contract, Pakistan has to pay a penalty of $3 million per day if fails to implement it by December 2014. Pakistan may face arbitration by Iran but believes that it is qualified for a waiver because the IP gas deal with Iran was signed before Western sanctions were imposed on Iran.
Geopolitics, corporate interests and other shenanigans have produced twists and turns in the pipeline project. It has been strongly been opposed by the US, while Russia and China have supported it. India withdraw from the project in 2009 after signing a civil nuclear deal with the US. Even as as it negotiates a nuclear deal with Iran, Washington has not so far exempted the project from the sanctions. Islamabad took up the issue with US authorities at a meeting on the sidelines of the revised bilateral strategic dialogue in Washington last year. The US however was not convinced.
Iran in December not only canceled a $500 million loan promised in 2012 with Pakistan for building the section of a pipeline to bring natural gas from Iran, but it also announced that it will demand compensation if Islamabad fails to build the pipeline by end of this year. Iran took a u-turn on the pipeline following the interim nuclear deal with Western powers last year. The u-turn turned the project, once considered an “energy lifeline” for Pakistan’s economy, into a liability. The latest turn, courtesy of the recent $1.5 billion donation from the Saudi Arabia, looks likely to kill the strategically significant project.
Syed Fazl-e-Haider ( http://www.syedfazlehaider.com ) is a development analyst in Pakistan. He is the author of many books, including The Economic Development of Balochistan, published in May 2004. E-mail sfazlehaider05@yahoo.com.
(Copyright 2014 Syed Fazl-e-Haider)
ulenspiegel on Sat, 22nd Mar 2014 3:46 pm
@Arthur
Pot now legal in your state? Moderation is the trick. And please, do not smoke before posting.
It takes many years to replace Germany as customer with China, the pipeline capacity for NG exports to China is not availabel and Russian LNG capaity is small.
Second aspect is that China will not pay German prices. Russia know this, Germany, too.
Oil is a sold on the global market, i.e. let Russia deliver now to China, then somebody else will deliver to Germany.
As long as Russia does not kill her own economy by cutting NG exports by 100%, the strategic situation is not so good for Russia.
BTW: Germany gets around 30% of the importetd NG from Russia, or around 20% of its primary energy. 60% of the Russian exports go through Ukraine (until 2018).
Davy, Hermann, MO on Sat, 22nd Mar 2014 3:57 pm
Good point Ulen!
Arthur on Sat, 22nd Mar 2014 4:35 pm
It takes many years to replace Germany as customer with China
True, but it takes a few hours to close down a pipeline. And it takes a few days for Germans to let the implications of a (thinly veiled) threat sink in. And the fact of taking a decision of building a pipeline and signing the contracts has irreversible consequences, long before the first m3 of gas flows south, years later. By letting themselves being dragged in a conflict with Russia as a consequence of the actions of the US in the Ukraine, Russia’s turf, Europe risks it’s economic future. Europe’s commercial relations with Russia are ten times as big as those between the US and Russia.
BTW: Germany gets around 30% of the importetd NG from Russia, or around 20% of its primary energy. 60% of the Russian exports go through Ukraine (until 2018).
But Germany also gets gas from other eastern countries, like Kasachstan, via the Russian pipeline distribution system. The figure I have is NG from East 39% in total.
More important, Germany gets more than 50% of it’s oil from the east:
http://deepresource.files.wordpress.com/2012/01/german-oil-dependencies.jpg
Germany better not pisses off Russia too much.
Oh, and the Ukraine gets 100% from Russia. For them there is no equivalent like the Dutch East Indies were for Japan. It’s Russia or nothing. If push comes to shove, Russia has Ukraine on it’s knees in a few weeks time, if necessary, certainly in the winter.
The Berlin Wall fell in a matter of a few hours, as a complete surprise for almost everyone. The West could be terminated likewise overnight.
Arthur on Sat, 22nd Mar 2014 4:41 pm
German dependency Russian gas 2008: 37%
http://www.stadtwerke-husum.de/energie-wasser/erdgas/erdgasfakten/deutsches-erdgasaufkommen-nach-herkunftslaendern/
ghung on Sat, 22nd Mar 2014 5:02 pm
Some interesting background from 2010: Russia, China, Iran redraw energy map –
h ttp://www.atimes.com/atimes/Central_Asia/LA08Ag01.html
paulo1 on Sat, 22nd Mar 2014 5:54 pm
Memory of WWll will never allow trust and relationship to blossom between Russia and Germany, regardless of needing gas. They will go to coal and nukes first. France? Not likely.
Paulo
Boat on Sat, 22nd Mar 2014 6:39 pm
And China will trust Russia with new source of fuel? Doesn’t Russia have a trust problem with it’s present consumers? I think Russia is cornering itself with their foreign policies.
ghung on Sat, 22nd Mar 2014 7:03 pm
“And China will trust Russia with new source of fuel? “
They already are. Russia is supplying oil and LNG to China, and several other agreements are underway. See Reuters – “Russia grabs China oil and gas export deals”, and numerous other articles.
ghung on Sat, 22nd Mar 2014 7:05 pm
… further, the US had major ‘trust issues’ with Chavez, but that didn’t stop the US from importing lots of Venezuelan oil.
energy investor on Sat, 22nd Mar 2014 10:48 pm
I suspect that many of you have ignored the substance of the deals that China has been doing with countries like Sudan, Nigeria, Venezuela, Russia, Saudi Arabia, Iran et al. These provide loans in exchange for long term oil supply deals at market prices – as and when China needs the oil, which as yet she doesn’t.
I reckon that they have an entitlement to 2 million bbls per day that they don’t yet exercise. What happens when they do?
Do your own research…
Davy, Hermann, MO on Sun, 23rd Mar 2014 12:05 am
Energy Investor, it is possible China is heading for a hard landing and or a 10% or better correction due to its debt unwind. In such a case growth could drop to 4% or lower. Their oil consumption growth may fall significantly.
rockman on Sun, 23rd Mar 2014 1:27 am
When talking about Russia exporting NG to China one should remember it will be from eastern Siberia for the most part which is not easily marketable to the EU. But we should remember the current chatter is Russia inability to cut off supplies to the EU long term since they are so dependent upon that cash flow. Reasonable assumption IMHO… in the short term. Now let’s think in terms of decades:
Russia’s reserves account for about a quarter of the world’s total proven reserves. Total European demand is around 547 billion cubic meters of natural gas a year. About 165 bcm now come from Russia. Russia sends about 76% of its natural gas exports to customers in Western Europe, with Germany, Turkey, Italy, France, and the United Kingdom receiving the bulk of these volumes. Smaller volumes of natural gas are also shipped via the Gazprom pipeline network to Austria, Finland, and Greece.
So Russia is also seeing some price decreases with the competition which may be why they are finally ready to cut a deal with China:
After more than a decade of negotiations, Gazprom plans to supply as much as 38-billion cubic metres of natural gas a year to China National Petroleum Corporation by pipeline. The firms are considering preparing a contract for signing at Russian president Vladimir Putin’s visit to China in May, Gazprom said in January.
And this is where Russia (and not Putin since he’ll be long gone) may eventually have the last laugh. All the suppliers of NG to the EU are depleting every day… some much faster than others. Russia and the KSA will likely remain the dominant oil and NG exporters for decades. The US and China will likely remain the dominant oil and NG importers for decades. Everyone else? Not looking too good. Better start working those alts as fast as possible.
Makati1 on Sun, 23rd Mar 2014 2:16 am
Some on here think that Russia is not going to cut off trade to the West because they need the money. Some think China is financially in bad shape. Hmmmm.
Maybe you all should look in the mirror at the US and most EU countries today. ALL are on their death beds financially and as high consumption countries. The days of mass consumption are about over. China knows it. So does Russia.
Russia is the only country I know on this planet that still has abundant resources and a small population. China has the people (labor) and the need for resources. Sounds like a match made in Heaven as they share borders also. Between the two, they cover almost 1/2 of the planet’s land mass.
Past differences are not a sharp as some here think. As I keep saying, you can no longer look to the past to predict future events. The world has never been in this fix before on a global scale. Nor has there been the capability for one nation to destroy the world in a few hours until the last century. Now there is, and all three are locked in a struggle for dominance. Interesting times…
Nony on Sun, 23rd Mar 2014 2:24 am
Note, that once infrastructure is built and business as usual is to export, that capacity can be realigned to Europe. Even if the gas goes to China for now, just the capacity being there ends up putting some sort of ceiling on how high EU price can go (because it can be diverted to Europe if there is a cutoff…and hence higher price in Europe.) It’s a big barrier to entry that is now gone…
Arthur on Sun, 23rd Mar 2014 11:55 am
Agree with Makati. Although I maintain that Russia would prefer Europe over China as a partner, I have to admit that unless European politicians quickly grow a pair and tell the US to stay out of the Ukraine and Russian-European relations, Russia could be lost for Europe for decades to come. Which would suit Washington fine, of course. But currently we leave the Russians no other choice.
What Europe should do is: refuse to implement sanctions, accept Russian Crimea and even Russian military intervention in Ukrainian Novorussia, if civil war breaks out, which could very well happen. No NATO in Ukraine, ever.
Davy, Hermann, MO on Sun, 23rd Mar 2014 12:40 pm
Makati said – Russia is the only country I know on this planet that still has abundant resources and a small population. China has the people (labor) and the need for resources. Sounds like a match made in Heaven as they share borders also. Between the two, they cover almost 1/2 of the planet’s land mass.
Reaching for straws again Makati. You and some others here lacking finesse with economics and bent on a new world domination of a hyper-example of overshoot (China) and another hyper example of a banana republic ruled by oligarchs and a dictator in severe social decline (Russia). Dream on Makati and all your buddies here (DC, Arthur, et all. Folks the global system is in free fall Russia and China will not decouple from this reality.
Arthur on Sun, 23rd Mar 2014 1:06 pm
Davy, we are indeed all going to fall, but some are going to fall more meters than others, for the simple reason they occupied the top floor of the house of cards.
And you are absolutely wrong about Russia being in a state of severe social decline. Russia under Putin has come a long way since 2000 and the situation has improved radically. Russia-2000 for instance would never have been able to organize Sotchi like they did in 2014.
The global system is not in ‘free fall’. Not yet.
Davy, Hermann, MO on Sun, 23rd Mar 2014 1:11 pm
Agreed Arthur on fall of those folks on top floor. (US/Europe)
Not agreed with Russia. Arthur read the statistics. Social statistics will take a generation to change. Russia is a mess and worse than almost all other G7’s and comparable to a 3rd world country.
The global system has started the decent Arthur and you are correct it is not yet in a free fall.
Northwest Resident on Sun, 23rd Mar 2014 3:29 pm
Arthur/Davy — This is some of what the Joint Operating Environment 2010 (by top military strategists) has to say about Russia:
“At present, Russian leaders appear to have chosen to maximize petroleum revenues without making the
investments in oil fields that would increase oil and gas production over the long term. With its riches in
oil and gas, Russia is in a position to modernize and repair its ancient and dilapidated infrastructure and
to improve the welfare of its long suffering people. Nevertheless, the current leadership has displayed little
interest in such a course. Instead, it has placed its emphasis on Russia’s great power status. For all its
current riches, the brilliance of Moscow’s resurgence, and the trappings of military power, Russia cannot
hide the conditions of the remainder of the country. The life expectancy of Russia’s male population, 59
years, is 148th in the world and places the country somewhere between East Timor and Haiti.”
“Russia’s failure to diversify its economy beyond oil and natural gas,
together with its accelerating demographic collapse, will create a Russia of greatly decreased political,
economic, and military power by the 2020s.”
“One of the potential Russias that could emerge in coming decades could be one that focuses on regaining
its former provinces in the name of “freeing” the Russian minorities in those border states from the ill treatment they are supposedly receiving. (Predicting Crimea/Ukraine back in 2010?)”
It seems like the U.S. Military sees Russia as being in a state of severe social decline.
Makati1 on Sun, 23rd Mar 2014 3:36 pm
Davy, how many buttons does it take to start a nuclear war? One? Russia has it and doesn’t need a fancy economy. Like little North Korea, they are immune to the empire’s attempts at a real takeover. Putin is so far ahead of the clowns in DC that there is not even a comparison. His background and popular support makes him at least 3 steps ahead in most areas of the game.
Like Arthur said, Europe is going to cut it’s own throat if they don’t grow a pair and tell the US to get lost.
Makati1 on Sun, 23rd Mar 2014 3:38 pm
NWR, I hope you are not drinking too much of that Ministry of Propaganda cool aid.
Davey on Sun, 23rd Mar 2014 3:59 pm
Makati one phase I wish you would research when you keep hyping on Nuk WMD use: “Mutually assured destruction”. Oh while your at it Nuk winter.
I love the Russian people. They are tough SOB’s. Unfortunately their leaders have exploited and pillaged them over the ages without exception!
Arthur on Sun, 23rd Mar 2014 4:14 pm
NRW, I agree that Russia is not a strong country and all the observations you mention are correct. Having said that we also need to acknowledge that Russia2000 was better than Russia1991 and that Russia2014 is far, far better than Russia2000. Hence, by definition, Russia is currently not in decline.
In 1991 everybody was a shabby commie. Now there is such a thing as an emerging middle class. The old Lada’s are replaced with relatively new cars. Ever been to holiday resorts in Turkey, Egypt or Greece?
Davey on Sun, 23rd Mar 2014 4:46 pm
Makati/Arthur, N/R, hit the nail squarely on the head!
Arthur on Sun, 23rd Mar 2014 5:56 pm
That makes NWR a good carpenter, but not necessarily a Russia connoisseur 😉