Back on September 11 and 12, there was a summit meeting in a city that involved an organization that most Americans have never heard of. Mainstream media coverage was all but nonexistent.
The place was Dushanbe, the capital of Tajikistan, a country few Westerners could correctly place on a map.
But you can bet your last ruble that Vladimir Putin knows exactly where Tajikistan is. Because the group that met there is the Russian president’s baby. It’s the Shanghai Cooperation Organization (SCO), consisting of six member states: Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.
The SCO was founded in 2001, ostensibly to collectively oppose extremism and enhance border security. But its real reason for being is larger. Putin sees it in a broad context, as a counterweight to NATO (a position that the SCO doesn’t deny, by the way). Its official stance may be to pledge nonalignment, nonconfrontation, and noninterference in other countries’ affairs, but—pointedly—the members do conduct joint military exercises.
Why should we care about this meeting in the middle of nowhere? Well, obviously, anything that Russia and China propose to do together warrants our attention. But there’s a whole lot more to the story.
Since the SCO’s inception, Russia has been treading somewhat softly, not wanting the group to become a possible stalking horse for Chinese expansion into what it considers its own strategic backyard, Central Asia. But at the same time, Putin has been making new friends around the world as fast as he can. If he is to challenge US global hegemony—a proposition that I examine in detail in my new book, The Colder War—he will need as many alliances as he can forge.
Many observers had been predicting that the Dushanbe meeting would be historic. The expectation was that the organization would open up to new members. However, expansion was tabled in order to concentrate on the situation in Ukraine. Members predictably backed the Russian position and voiced support for continuing talks in the country. They hailed the Minsk cease-fire agreement and lauded the Russian president’s achievement of a peace initiative.
However, the idea of adding new members was hardly forgotten. There are other countries which have been actively seeking to join for years. Now, with the rotating chairmanship of the organization passing to Moscow—and with the next summit scheduled for July 2015 in Ufa, Russia—conditions could favor the organization’s expansion process truly taking shape by next summer, says Putin.
To that end, the participants in Dushanbe signed documents that addressed the relevant issues: a “Model Memorandum on the Obligations of Applicant States for Obtaining SCO Member State Status,” and “On the Procedure for Granting the Status of the SCO Member States.”
This is extremely important, both to Russia and the West, because two of the nations clamoring for inclusion loom large in geopolitics: India and Pakistan. And waiting in the wings is yet another major player—Iran.
As always, Putin is not thinking small or short term here. Among the priorities he’s laid out for the Russian chairmanship are: beefing up the role of the SCO in providing regional security; launching major multilateral economic projects; enhancing cultural and humanitarian ties between member nations; and designing comprehensive approaches to current global problems. He is also preparing an SCO development strategy for the 2015-2025 period and believes it will be ready by the time of the next summit.
We should care what’s going on inside the SCO. Once India and Pakistan get in (and they will) and Iran follows shortly thereafter, it’ll be a geopolitical game changer.
As I argue in The Colder War, I believe that this is Putin’s ultimate aim: to stage an assault on the dollar that brings the US down to the level of just one ordinary nation among many… and in the process, to elevate his motherland to the most exalted status possible.
What happened in Tajikistan this year and what will happen in Ufa next summer—these things matter. A lot.
Perhaps no one knows how dangerous Vladimir Putin is and how much he controls the flow of capital in the global energy trade than author of The Colder War, Marin Katusa.
As slumping oil prices dampen Russia's economic outlook, the country's President has said that "at some moments of crisis it starts to feel like it is the politics that prevails in the pricing of energy resources".
The Russian state has been heavily exposed to slumping oil values, widely viewed to be the result of a supply glut.
“The obvious reason for the decline in global oil prices is the slowdown in the rate of [global] economic growth which means consumption is being reduced in a whole range of countries”, Mr Putin said.
The Russian President also declared that the planned Trans-Pacific Partnership (TPP) free-trade deal - between pacific countries including Japan and the US - was “just another US attempt to build an architecture of regional economic cooperation that the US would benefit from”.
“At the same time, I believe that the absence of two major regional players such as Russia and China in its composition will not promote the establishment of effective trade and economic cooperation”, he said.
What Ron Paul is referring to here is the petrodollar system. It's one of the main pillars that's been holding up the US dollar's status as the world's premier reserve currency since the breakdown of Bretton Woods.
Paul is essentially saying that, if we want to better understand the answer to the elusive question of "When will the fiat US dollar collapse?", we have to watch the petrodollar system and the factors affecting it.
At the recent Casey Research Summit, I had the chance to speak extensively with Dr. Paul on this subject, and he told me that he stands by his assessment.
I believe this is critically important, because once the dollar loses this coveted status, the window of opportunity to take preventative action will definitively shut for Americans.
At that moment, I believe the US government will become sufficiently desperate and implement the destructive measures that governments throughout the world and throughout history have all taken (overt capital controls, wealth confiscations, people controls, price and wage controls, pension nationalizations, etc.)
The geopolitical sands of the Middle East have been rapidly shifting.
The faltering strategic regional position of Saudi Arabia, the rise of Iran (which is notably not part of the petrodollar system), failed US interventions, and the emergence of the BRICS countries providing potential future alternative economic/security arrangements all affect the sustainability of the petrodollar system.
In particular, you should watch the relationship between the US and Saudi Arabia, which has been deteriorating.
The Saudis are furious at what they perceive to be the US not holding up its part of the petrodollar deal. They believe that as part of the US commitment to keep the region safe for the monarchy, the US should have attacked their regional rivals, Syria and Iran, by now.
This would suggest that they may feel that they are no longer obliged to uphold their part of the deal, namely selling their oil only in US dollars.
The Saudis have even gone so far as to suggest a "major shift" is underway in their relations with the US. To date, though, they have yet to match actions to their words, which suggests it may just be a temper tantrum or a bluff. In any case, it is truly unprecedented language and merits further watching.
A turning point may really be reached when you start hearing US officials expounding on the need to transform the monarchy in Saudi Arabia into a "democracy." But don't count on that happening as long as their oil is flowing only for US dollars.
Post a Comment