Russia-India-China share a room with a view

July 01, 2019

by Pepe Escobar : Posted with permission

The most important trilateral at the G20 in Osaka was confined to a shoddy environment unworthy of Japan’s unrivaled aesthetic minimalism.

Japan excels in perfect planning and execution. So it’s hard to take this setup as an unfortunate “accident.” At least the – unofficial – Russia-India-China summit at the sidelines of the G20 transcended the fate of an interior decorator deserving to commit seppuku.

Leaders of these three countries met in virtual secrecy. The very few media representatives present in the shabby room were soon invited to leave. Presidents Putin, Xi and Modi were flanked by streamlined teams who barely found enough space to sit down. There were no leaks. Cynics would rather joke that the room may have been bugged anyway. After all, Xi is able to call Putin and Modi to Beijing anytime he wants to discuss serious business.

New Delhi is spinning that Modi took the initiative to meet in Osaka. That’s not exactly the case. Osaka is a culmination of a long process led by Xi and Putin to seduce Modi into a serious Eurasia integration triangular road map, consolidated at their previous meeting last month at the Shanghai Cooperation Organization (SCO) summit in Bishkek.

Now Russia-India-China (RIC) is fully back in business; the next meeting is set for the Eastern Economic Forum in Vladivostok in September.

In their introductory remarks, Putin, Xi and Modi made it clear that RIC is all about configuring, in Putin’s words, an “indivisible security architecture” for Eurasia.

Modi – very much in a Macron vein – stressed the multilateral effort to fight climate change, and complained that the global economy is being ruled by a “one-sided” dictate, emphasizing the necessity of a reform of the World Trade Organization.

Putin went a step ahead, insisting, “our countries are in favor of preserving the system of international relations, whose core is the UN Charter and the rule of law. We uphold such important principles of interstate relations as respect for sovereignty and non-interference in domestic affairs.”

Putin clearly underlined the geopolitical interconnection of the UN, BRICS, SCO and G20, plus “strengthening the authority of the WTO” and the International Monetary Fund as the “paragon of a modern and just multipolar world that denies sanctions as legitimate actions.”

The Russia-India-China contrast with the Trump administration could not be starker.

Those ‘tremendous assets’

BRICS, as it stands, is dead. There was an “official,” pro-forma BRICS meeting before the RIC. But it’s no secret both Putin and Xi completely distrust Brazil’s Jair Bolsonaro, regarded as a Trump neocolonial asset.

Ahead of his bilateral with Trump, Bolsonaro peddled Brazil’s mineral wealth, claiming the country may now export “niobium trinkets.”

Well, that’s certainly less controversial than the Brazilian military sherpa arrested in Spain for carrying industrial quantities of cocaine (36kg) in the presidential plane, definitely ruining the after-hours party time in Osaka.

Later on, Trump eagerly praised Brazil’s “tremendous assets,” now being fully privatized to the benefit of US companies.

Xi, as he addressed the BRICS meeting, denounced protectionism and called for a stronger WTO. BRICS nations, he said, should “increase our resilience and capability to cope with external risks.”

Putin went one up. Apart from denouncing “protectionist” tendencies in global trade, he called for bilateral trade in national currencies bypassing the US dollar – mirroring a commitment by the Russia-China strategic partnership.

Russia-China, via Finance Minister Anton Siluanov and head of the People’s Bank of China, Yi Gang, have signed an agreement to switch to rubles and yuan in bilateral trade, starting with energy and agriculture, and increase cross-currency settlements by 50% in the next few years.

There will be a concerted effort to increasingly bypass SWIFT, using the Russian System for Transfer of Financial Messages (SPFS) and the Chinese Cross-Border Inter-Bank Payments System (CIPS).

Sooner or later Russia-China will entice India to join. Moscow has excellent bilateral relations with both Beijing and New Delhi, and is decisively playing the role of privileged messenger.

The mini-trade war against New Delhi launched by the Trump administration – including the loss of India’s special trade status and punishment for buying Russian S-400 missile systems – is quickening the pace of the process. India, by the way, will pay for the S-400s in euros.

There were no leaks whatsoever from Russia-India-China about Iran. But diplomats say that was a key theme of the discussion. Russia is already – covertly – helping Iran on myriad levels. India has an existential choice to make: keep buying Iranian oil or say goodbye to Iran’s strategic help, via the Chabahar port, to facilitate India’s mini-Silk Road to Afghanistan and Central Asia.

China sees Iran as a key node of the New Silk Roads, or Belt and Road Initiative. Russia sees Iran as essential for strategic stability in Southwest Asia – a key theme of the Putin-Trump bilateral, which also discussed Syria and Ukraine.

The leaders of RIC – Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping – hold a meeting on the sidelines of the G20 summit in Osaka on June 28, 2019. Photo: Mikhail Klimentyev / Sputnik / AFP

RIC or Belt and Road?

Whatever the psyops tactics employed by Trump, Russia-India-China is also directly implicated in the massive short and long-term ramifications of the Trump-Xi bilateral in Osaka. The Big Picture is not going to change; the Trump administration is betting on re-routing global supply chains out of China, while Beijing advances full speed ahead with its Belt and Road Initiative.

Trump is heavily distrusted across Europe – as Brussels knows the EU is the target of another imminent trade war. Meanwhile, with over 60 nations committed to myriad Belt and Road projects, and with the Eurasia Economic Union also interlinked with Belt and Road, Beijing knows it’s just a matter of time before the whole of the EU hits the BRI highway.

There’s no evidence that India may suddenly join Belt and Road projects. The geopolitical lure of “Indo-Pacific” – essentially just another strategy for containment of China – looms large. That’s good old imperial Divide and Rule – and all the major players know it.

Yet India, now on the record, is starting to spin that Indo-Pacific is not “against somebody.” India getting deeper into RIC does not imply getting closer to Belt and Road.

It’s time for Modi to rise to the occasion; ultimately, he will decide which way the geoeconomic pendulum swings.

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The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Blog!

Insights on the Iran deal, BRICS and Venezuela

January 28, 2019

by Pepe Escobar (cross-posted with The Asia Times by special agreement with the author)

An exclusive interview with former Brazilian foreign minister Celso Amorim on how BRICS came into being, how the nuclear deal was done with Tehran and how the South dealt with Chavez

Brazil is once again in the eye of a political hurricane, after President Jair Bolsonaro’s appearance at Davos and explosive revelations directly linking his clan to a criminal organization in Rio de Janeiro.

With his administration barely a month old, Bolsonaro is already being seen as expendable to the elites that propelled him to power – from the powerful agribusiness lobby to the financial system and the military.

The new game among the elites of a major actor in the Global South, BRICS member and eighth biggest economy in the world consists of shaping a scenario capable of rescuing one the great frontiers where global capitalism is expanding from total irrelevancy.

That includes the possibility of a “soft coup”, with the Bolsonaro clan sidelined by the Brazilian military rallying around the vice-president, General Hamilton Mourao.

Under these circumstances, a conversation with former Brazilian foreign minister Celso Amorim is more than sobering. Amorim is universally recognized as one of the top diplomats of the young 21st century, a symbol of the recent past, under President Lula, when Brazil was at the top of its game as a resource-rich continental nation actively projecting power as a BRICS leader.

I had the pleasure of meeting Ambassador Amorim, who is also the author of ‘Acting Globally: Memoirs of Brazil’s Assertive Foreign Policy’ in Sao Paulo. Here are some highlights of our conversation – from the birth of BRICS to the current Venezuela crisis.

BRICS – the most important group in the drive towards a multipolar world – is a very dirty word in Washington. How did it all start?

I had met [British economist] Jim O’Neill a few times, who first talked about BRIC, which was not yet a group and nobody saw as a group. This may sound pretentious, but it’s a curious story. I told him, ‘It is you that invented the BRICS, right?’ He said, ‘Yes, of course, I’m very proud of it’. Then I replied, ‘Yes, but I’m the one who made it happen’. Well, it was not exactly me – under the Lula government and all that it entails. The first action in terms of creating the BRIC group – still without an “S” – came from Sergey Lavrov, in a meeting we had in New York in 2006. They had the RIC [Russia, India, China], but they did not hold many summits. And we had IBAS [India, Brazil, South Africa]. Both China and Russia were always trying to get into IBAS. There was the idea that these were three great democracies, each one in a continent and in a major developing country – so the Russians and Chinese might have thought, ‘we also want to get in, why not, because we are not democracies?’ IBAS was also present in the commercial G-20 at the WTO, and IBAS had similar ideas about reform of the UN Security Council; so the geopolitical interests were not the same.

Then Lavrov proposed BRIC as a forum, I think maybe to find some more equilibrium inside the RIC. I always talked in terms of BRICS, so one day he asked me ‘Why do you say BRICS?’ and I replied, “because it’s plural, in Portuguese’, so in a sense, we were already anticipating the entry of South Africa.

We first agreed we would have a meeting on the sidelines of the UN General Assembly. Lavrov and I already had something more substantial, the Indians and the Chinese just read a speech, so it looked like there would not be a consequential follow-up. Next year we met at the Brazilian UN mission, outside of the UN, and decided to do it later out of New York. Lavrov then offered Yekaterinburg, where we had the first ministerial meeting in 2008, and then next year the first presidential summit, also in Yekaterinburg, and in Brazil in 2010. It was here that the idea of BRIC was expanded into BRICS – through a dinner that concluded IBAS and inaugurated BRICS.

At the time, did you think about expanding to other top emerging economies, such as Indonesia, South Korea, Turkey, Iran?

IBAS was born on the second day of President Lula’s government [in January 2003], out of an idea to create a group of developing countries, around seven or eight. I thought a larger group would be very complicated, based on my experience – how to coordinate positions and engage in concrete projects. For instance, Egypt would have to be a member.

When did you start to seriously discuss practical steps towards the emergence of a multipolar world – such as trade in members’ currencies? Was it in 2010?

In 2010 certainly, we had the idea of trade using each member’s currency, not yet the idea – that happened under the Dilma government – of the BRICS bank. But we were already talking about the coordination of our development banks. The concept of multipolarity, the Russians may have been the first to outline it. What I do remember about the use of the concept was by the French, especially when there were serious divergences about the attack on Iraq.

Former French foreign minister Dominique de Villepin insisted on it.

Villepin, yes, but even Hubert Vedrine [foreign minister under Jacques Chirac from 1997-2002] before him, who came up with the concept of ‘hyperpower’. So the ones who spread the concept were the French, and we adhered to it, among developing countries. The French, when they talked about the expansion of the UN Security Council, they said they were in favor regarding Germany and Japan, but also ‘three great nations of the South’, Brazil included.

The Lula government started in January 2003. Geopolitics at the time was conditioned by the war on terror. We were already expecting the invasion of Iraq. How did you, in the first days of January 2003, knowing that Dick Cheney and the neocons were about to turn the Middle East upside down, with direct and indirect repercussions on the Global South, how did you start conceiving a multi-vector Brazilian foreign policy? Which were the priorities?

I think neither President Lula nor myself used the term “multipolar” – even though the concept was already on the table. We wanted to have good relations with the US but also with the largest developing countries. When we started the greatest problems were the Free Trade Area of the Americas [FTAA], so we had to look for other partners; the WTO and negotiations in the Doha round; and Iraq. The combination of all these led Brazil to get closer to India and South Africa, to a great extent via the WTO, and because of Iraq, we got closer to Russia, Germany and France. When President Lula went to Davos…

That was Lula’s first Davos, right?

Yes, but first he went to the World Social Forum in Porto Alegre [in Brazil], then he went to Davos. The message was the search for an equilibrium; to do business, of course, but based on the idea of democratic social change.

Were you discussing Iraq in detail with Russia, Germany and France?

Yes, we were, with Schroeder in Germany and Chirac, as well as Villepin at the Security Council. And there was a fourth problem: Venezuela. Lula had already talked about it with Chavez. During the inauguration of President Gutierrez of Ecuador, Lula’s first foreign trip, on January 15, Lula proposed, in a meeting in a room full of presidents, the creation of the Friends of Venezuela Group, at a moment when the crisis was acute, even though the country was not as debilitated as today.

Already in January 2003 was there neocon pressure on Brazil in relation to Venezuela?

I think they did not know how to deal with Lula and the new government. But they were very strong on Venezuela – especially [US diplomat] Roger Noriega. And yet they saw Brazil was proposing something and accepted it. Fidel was against it, but Chavez, in the end, was convinced by Lula. And this is also relevant for today. Lula said it in so many words; this is not a Friends of Chavez group, it’s a Friends of Venezuela group. So this must also include the United States, Spain and Portugal – under conservative administrations. That was a way to escape from the OAS [Organisation of American States] and its penchant for the Monroe doctrine [the US policy of opposing European colonialism in the Americas].

I used to talk to Colin Powell quite frequently – and not to receive instructions. There were many issues he wanted to know about, and he trusted Brazil. He had a notion of the importance of Brazil, our capacity for dialogue.

Switching to the Obama era, tell us about the role of Brazil, alongside Turkey, in the Iran nuclear negotiation, when you clinched a deal in Tehran in less than 24 hours, only for it to be smashed by then-Secretary of State Hillary Clinton the next day.

It was a long process, followed by 19 hours of negotiations, the Iranians tried to reopen one of the issues, both Lula and Erdogan refused. What facilitated our role as mediators was that the US had its hands full in the Middle East. I already had contacts with Javier Solana, then a sort of Foreign Affairs Minister of the EU, and also [Egyptian diplomat] ElBaradei, from my time at the UN. Obama, in a meeting of the G-8 + 5 in Italy, during a bilateral with us, he said three things: ‘I extended my hand and they did not answer’; ‘We need to solve the nuclear dossier’; ‘And I need friends to say what I cannot say’. What we did in the end, because we thought it was the right thing to do, with a lot of work and facing hardships, was exactly what the Americans wanted. One month before the deal I thought it would not happen. But then we received a letter from Obama, and to my greatest surprise, that was a reiteration of the same initial three points.

Hillary always had a different position. I foresaw her reaction as a possibility. We talked on the phone, in Madrid, when I was coming back from Iran, and I said, ‘Look, in Brazil we have this expression, ‘I didn’t read it, and I didn’t like it’. She did not want a deal. In a phone call before my trip, she was adding some other points of discussion and I said, ‘Hillary, this is a trust-building agreement. And these points that you mention were not in the letter delivered by your own President’. I’m not exaggerating, what followed was a silence lasting half a minute. So I thought; did she read the letter? Or she read it, and because they are a great power they can do what they want, and we have to take it, and adapt to it?

So what about China and Russia accepting the American line – no deal, more sanctions?

I know the sweeteners that made them accept it – concessions on the sanctions front. But geopolitically…

What’s your informed hypothesis?

There are two. This was a problem they did not solve. Who’s part of the global directory? The five permanent members of the Security Council. Now we have two developing countries, who are not even part of the Security Council, and they solve it? By coincidence, both were non-permanent members of the Security Council at the time. The other thing is whenever we are discussing a nuclear issue, the five get closer, because they are all nuclear powers.

What’s your insider view, as a statesman, of Vladimir Putin, demonized 24/7 in the US as a major existential threat to the West?

The first time I saw Putin face to face was when he received three nations from the Group of Rio, and the main topic of discussion was Iraq. That was before the invasion in March 2003. What most impressed me was his great knowledge of the dossiers – something you usually don’t expect from presidents. He’s extremely sharp, very intelligent, obviously cares for Russian interests but at the same time pays attention to the balance of power. A very realist politician. I don’t see him as a great idealist. He’s like a 19th-century politician, very conscious geopolitically.

Now, in the South American chessboard, regarding the Venezuelan crisis, we are seeing a direct confrontation between the four major poles of Eurasia – Russia, China, Iran, Turkey – against the US. And with another BRICS member, Brazil, siding against Russia and China.

In a multipolar world, we now have a huge test, because Brazil presides over the BRICS in 2019. How is Brazil going to be seen inside BRICS? There used to be an atmosphere of trust inside BRICS.

I’ve got to say that based on my experience at the Security Council, when I was ambassador, during the government of Fernando Henrique Cardoso [from 1995 to 2003], the Russians and the Chinese gave immense weight to respect for national sovereignty. In terms of international law, they always stress non-intervention. I hope we won’t have a confrontation like Vietnam in our region. But when President Trump says that all options are on the table, he’s obviously accepting a military solution. This is very dangerous. I see a very sound Brazilian position coming from General Mourao [the Brazilian vice-president]. And yet the Foreign Ministry says Brazil will support politically and economically a government that does not exist – so that already means intervention.

On a personal level, in the drive towards multipolarity, what is the most important story in the world for the next 10 or 20 years? What is the issue that drives you the most?

I think that the fundamental theme is psychological – and also civilizational. It’s respect for The Other – and the acceptance of alterity. And this also concerns international relations. We need to understand that the common good is part of our well-being. This reflects on individual attitudes, in internal attitudes in politics, and in international relations. Look at the current, violent attack on multilateralism. We should see that it’s better to work multilaterally than capitulate to the law of the jungle.

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The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Blog!

BRICS after Bolsonaro

November 08, 2018

by Ghassan Kadi for The Saker Blog

BRICS is the acronym of the “alliance” that includes Brazil, Russia, India, China and South Africa.

In reality, and with all due respect to Brazil and South Africa, BRICS is about RIC.

With Russia, India and China, in any order, there lies the future of Eurasia; the virtually unchartered quarter that houses over one third of the entire world population; a huge chunk of landmass, rich in resources, not only human resources, and just waiting for the right moment to make its mark in history.

The so-called “Silk Road”, or in reality silk roads, was historically the network of caravan paths that ancient traders took on their journeys from east to west, linking worlds largely unknown to each other, long before Vasco da Gama’s highly documented trips.

And whilst the ancient cultures of India and China flourished in their own right, apart from Alexander’s conquest, the Muslim and subsequent Mongol conquests, there was little historic geopolitical interaction between that far Far East and the Middle East; let alone Europe. The long icy and hard terrain made it very difficult, even for the brave at heart, to take the journey from Beijing to Vienna. The temptations to make that trip did not match the hardship of the journey for the averagely motivated traveler.

But this is all about to change. The new “Silk Road”, the network of super highways that the “RIC” nations are intent to build is going to change this status quo and shorten land distances.

The Trans-Siberian railway is a Russian route and constructing it linked Vladivostok with Moscow, but it was not intended to link China with Europe. If anything, it helped bolster the isolation of the USSR. But the new “Silk Road” project will change the transportation map of the world upside down once and for ever.

The determination to build this massive road network does not need either Brazil or South Africa; again with all due respect to both nations.

By taking many considerations into account, we must be realistic and say that the electoral win of Brazilian candidate Bolsonaro will not affect the prospect of the “Silk Road” one way or the other. The repercussions of his election will affect Brazil more than any other country. Purportedly, his policies will affect global climate, but this is another issue. His fiscal and international policy making decisions may put Brazil under the American sphere of influence, and this unfortunately can and will affect Brazil very adversely, but the damage is likely to be restricted to Brazil only.

With or without Brazil, BRICS can survive, but for it to survive and make a difference, it will need to become more serious about conducting its business.

The first step towards becoming more proactive is best done by establishing proper trust and conciliation between the three major players; Russia, China and India.

The love-hate relationship that marred the Soviet-Maoist era took a while to heal. The Russians and the Chinese seem to have gone many steps ahead towards establishing trust and confidence in each other. But China and India continue to have serious problems, and for as long as they have border and sovereignty disputes, this hinders them from becoming effective partners in every way.

Furthermore, BRICS needs a preamble and a Statement of Purpose. At the moment, it doesn’t have one. With all of its hypocrisies, the Western alliance camouflages itself behind the veil of Christian values, democracy and the “free world” slogans. Thus far, the only undeclared statement of purpose for BRICS seems to be that of defiance to the Western alliance.

The BRICS alliance will face a struggle founding an attractive preamble. Orthodox Christian Russia, predominantly Hindu India and Communist/Taoist/Buddhist China have little in common religiously speaking. Perhaps the BRICS leaders should be using common political grounds instead. They certainly cannot use democracy; not only because such an adoption would make them look as copycats, but also because they have different ideas about democracy, and Russia and China definitely do not endorse Western-style democracy.

In reality however, BRICS can use abstract lofty principles as their preamble; principles such as morality, honesty, and if they want to be less “theological” as it were, they could use principles such as “International law”, “International equality” and the like.

Apart from accumulating gold, building bridges and super road networks, planning fiscal measures to cushion the effects of a possible collapse of the Western economy on their own economies, developing state-of-the-art hypersonic weaponry and giving a clear message announcing that the world is no longer unipolar, the BRICS alliance ought to make clear statements about what kind of alternative world it envisions.

This is very important, because a significant percentage of the world population does not know what to expect if the BRICS alliance becomes the new dominant financial and military power. They have special concerns about China because they don’t know much about China, and they worry not only about whether or not China will be a new colonial super power, but they also worry about one day waking up and seeing traffic signals in Mandarin; so to speak.

To many people across the globe, the Chinese culture, language and modus operandi look like something from another planet.

The Cyrillic Russian and the Devanagari Indian scripts are no less daunting than the Mandarin script, but many Indians and Russians speak English and the West has had much more cultural interaction with both Russia and India than it ever did with China.

Furthermore, for the BRICS alliance to become more viable, it will need to develop a military alliance akin to that of NATO. When and if such an alliance is forged, then members will be protected as any attack on one will be considered as an attack on the whole coalition. Such an alliance will not increase the chances of war. Quite the contrary in fact, as it can lead to much needed stability. If for argument sake North Korea were a member, it would not be in a situation where it can claim that it needs nuclear weapons for self-defense, and secondly, the West would not be threatening to attack for fear of a major global escalation. The Cold-War, costly and potentially disastrous as it was, presents a successful model of nuclear deterrence. And in retrospect, had Vietnam been a member of the Warsaw Pact (or a similar one that included the USSR), it is possible that America’s war on Vietnam would have been averted. A more realistically plausible scenario is the case of former Yugoslavia. Had the Warsaw Pact been still standing, NATO would have never attacked Serbia back in 1999.

To be able to afford a more effective military deterrent, be a viable stand-alone economic power and to be attractive to the rest of the world, the BRICS coalition will ultimately need more member nations. Ideally, it would be of huge significance if Japan could be convinced to join it. The inclusion of Japan will not only add a huge financial power to the group, but it will also generate an in-house regional security to the China Sea region. Baby steps have been recently made between China and Japan towards conciliation, and much more needs to be done. It will take a lot of work and good intentions on both sides to undo a long history of hostilities and distrust.

Other nations that can and arguably should enter the coalition are; Venezuela, Mexico, Argentina, Iran, Iraq, Syria, Korea, Malaysia, Vietnam, Indonesia, and post Erdogan Turkey. Why post Erdogan? Because Erdogan’s Turkey can turn BRICS into a bag of TRICS.

Resource-rich Australia has much to gain in joining such an alliance as this will not only bolster its own security, but it will also secure economic stability and on-going trade.

Thus far, all the official visits that the RIC leaders have exchanged, all the business deals they made, all the projects they are embarking on, huge as they are, are only baby steps towards turning their alliance into one that can lead the world and establish the necessary moral, financial and security foundations that are capable of underpinning it.

Over and above establishing a new world reserve currency, setting up an alternative to the US-based Internet and WWW, SWIFT, etc, the brave new world will need hope, trust, morality and concrete assurances for a long-awaited change for the better. These are the real challenges facing the BRICS alliance now; not the Bolsonaro win.

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The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Blog!