Saturday, February 15, 2014

THE ROVING EYE The new US-Russia Cold War By Pepe Escobar

The new US-Russia Cold War
By Pepe Escobar 

Meet the new (cold) war, same as the old (cold) war. Same same, but different. One day, it's the myriad implications of Washington's "pivoting" to Asia - as in the containment of China. The next day, it's the perennial attempt to box Russia in. Never a dull moment in the New Great Game in Eurasia. 

On Russia, the denigration of all things Sochi - attributable to the inherent stupidity of Western corporate media "standards" - was just a subplot of the main show, which always gets personal; the relentless demonization of Russian President Vladimir Putin. [1] 

Yet Nulandgate - as in US Assistant Secretary of State Victoria "neo-con" Nuland uttering her famous "F**k the EU" - was way more serious. Not because of the "profanity" (praise the Lord!), but for providing what US Think Tankland hailed as "an indicator of American strategic thinking". 

Here's the game in a nutshell. Germany remote controls one of the leaders of the Ukrainian protests, heavyweight boxer Vitali Klitschko. [2] 

"F**k the EU" is essentially directed towards Berlin and Klitschko, its key protege. Washington sees this going nowhere, as Germany, after all, has been slowly building a complex energy-investment partnership with Russia. 

The Obama administration wants results - fast. Nuland herself stressed (check it out, starting at 7:26) that Washington, over the past two decades, has "invested" over US$5 billion for the "democratization" of Ukraine. So yes: this is "our" game and the EU is at best a nuisance while Russia remains the major spoiler. Welcome to Washington's Ukrainian "strategy". 

The Ukrainian chessboard
US Think Tankland now also peddles the notion that the Obama administration is expertly adept at a balance of power strategy. To include Libya as part of this "strategy" is a sick joke; Libya post-Gaddafi is a failed state, courtesy of humanitarian bombing by the North Atlantic Treaty Organization. Meanwhile, in Syria, the US "strategy" boils down to let Arabs kill Arabs in droves. 

Iran is way more complex. Arguably, the Obama administration calculates that through talks between Iran and the P5+1 - the five permanent members of the United Nations Security Council plus Germany - it will be able to outmaneuver the Russians, who are close to Tehran. This assuming the Obama administration really wants a nuclear deal with Iran that would later release the floodgates of Western business. 

On Syria, it's the Russian positions that have kept the upper hand; not to mention that Putin saved Obama from yet another Middle East war. As Syria was a Russian win, no wonder Washington dreams of a win in Ukraine. 

We can interpret what's goin' on now as a remix of the 2004 Orange Revolution. But The Big Picture goes way back - from NATO's expansion in the 1990s to American NGOs trying to destabilize Russia, NATO's flirt with Georgia, and those missile defense schemes so close to Russian borders. 

In already trademark Obama administration style, the State Department's support for anti-Russia, pro-EU protests in Ukraine qualifies as "leading from behind" (remember Libya?) 

It comes complete with "humanitarian" appeal, calls for "reconciliation" and good against evil dichotomy masking a drive towards regime change. Abandon all hope to find voices of sanity on US corporate media such as NYU and Princeton's Stephen Cohen, who cut to the chase in this piece, stressing that the essential revelation of Nulandgate "was that high-level US officials were plotting to 'midwife' a new, anti-Russian Ukrainian government by ousting or neutralizing its democratically elected president - that is, a coup". 

Here the "strategy" clearly reveals itself as a US puppet now - coup or no coup - instead of an EU puppet later. No one in the Beltway gives a damn that Viktor Yanukovich was legally elected president of Ukraine, and that he had full authority to reject a dodgy deal with the EU. 

And no one in the Beltway cares that the protests are now being led by Pravy Sektor (Right Sector) - a nasty collection of fascists, football hooligans, ultra-nationalists and all sorts of unsavory neo-Nazi elements; the Ukrainian equivalents of Bandar Bush's jihadis in Syria. 

Yet the US "strategy" rules that street protests should lead to regime change. It applies to the Ukraine, but it does not apply to Thailand. 

Washington wants regime change in the Ukraine for one reason only; in the wider New Great Game in Eurasia context, that would be the rough equivalent of Texas defecting from the US and becoming a Russian ally. 

Still, this gambit is bound to fail. Moscow has myriad ways to deploy economic leverage in Ukraine; it has access to much better intel than the Americans; and the protesters/gangs/neo-Nazis are just a noisy minority. 

Washington, tough, won't give up, as it sees both the political crisis in Ukraine as the emerging financial crisis in Kazakhstan as "opportunities" (Obama lingo) to threaten Moscow's economic/strategic interests. It's as if the Beltway was praying for a widespread financial crisis in the Russia-led Customs Union (Russia, Kazakhstan and Belarus). 

Pray in fact is all they've got, while the EU, for all the grandiose, rhetorical wishful thinking, remains a divided mess. After Sochi, Vlad the Hammer will be back in business with a vengeance. Nuland and co, watch your back. 

1. Journalistic malpractice & the dangers of Russia-bashing, RT, February 9, 2014.
2. EU Grooming Klitschko to Lead Ukraine, Der Spiegel Online, December 10, 2013. 

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

He may be reached at

Tuesday, February 11, 2014

P5+1-Iran: U.S. in search of a new game by Pepe Escobar

P5+1-Iran: U.S. in search of a new game

The P5+1 negotiations with Iran, mostly a Washington-Tehran affair, may be a means to a complex and ambitious end: a new strategic and energy equation in Southwest Asia. U.S. President Barack Obama’s recent State of the Union address indicates that to reach this goal, the U.S. is steering away from war to diplomacy
Look at how U.S. President Barack Obama configured the U.S.-Iran relationship during his State of the Union address on January 28: “These negotiations do not rely on trust; any long-term deal we agree to must be based on verifiable action that convinces us and the international community that Iran is not building a nuclear bomb. If John F. Kennedy and Ronald Reagan could negotiate with the Soviet Union, then surely a strong and confident America can negotiate with less powerful adversaries today.”
Admittedly, Obama is fighting a formidable array of interests against a rapprochement between Tehran and Washington – from the Israel lobby and the Gulf petrodollar lobby to the Capitol Hill minefield (Democrats and Republicans alike), some sectors of the industrial-military-surveillance complex, and the neo-cons blaring inside the right-wing corporate media box.
However, it does also sound as if Obama was sabotaging his own negotiations. Iran “is not building a nuclear bomb,” as the alphabet soup of U.S. intelligence has already, tirelessly, established. And Obama’s America is not “strong and confident.” But at least he pledged to veto any bill sent to him by Congress to derail the negotiations. The American Israel Public Affairs Committee, the U.S.’s pro-Israel lobby, has tried and will keep trying again
Obama is not exactly a master of foreign policy. He “withdrew” from Iraq only because of a formidable rebuff by the Iraqi Parliament. On Afghanistan, it’s the Pentagon – and the CIA – that have always run the show. Because of one of his reckless “red lines,” Obama was, recently, on the brink of bombing Syria – with cataclysmic consequences – until he was saved by Moscow.
But now, it looks like Obama is steering away from war to diplomacy. For his administration, the P5+1 negotiations with Iran – which is essentially a Washington-Tehran affair – are a means to a complex and ambitious end: reaching a new strategic equation in Southwest Asia.
Obama himself would never conceptualise it this way – because he doesn’t know much about China. But it’s as if the Obama administration saw Iranian President Hassan Rouhani as a Persian Deng Xiaoping – with all manner of juicy business possibilities open if a definitive nuclear deal is reached. And reaching a deal would be Obama’s “Nixon in China” moment.
As much as Iran does not need to “rejoin the community of nations” (as Obama said), because it was never expelled from it, the myth of U.S. “geopolitical primacy” in Southwest Asia remains what it is – just a myth. You can’t have “primacy” in the region anymore based on a Likudnik Israel, a paltry military dictator in Egypt, and the petrodollar paragons of democracy in the Gulf.
The fact is that in an inevitably multipolar-bound world, Washington needs a new game. And an intelligent game implies a minimally decent relationship with Tehran. Otherwise, Iran will keep advancing as a key developing country on its own anyway, allied with Russia and China and expanding trade/business relations with everyone from Turkey, India and Pakistan to Northeast and Southeast Asia.
So now the formula could be: follow the money; follow the business sense; and follow a new strategic balance. Obama is certainly calculating that a broad understanding with Iran implies no more U.S. wars in West Asia, in parallel to the U.S. depending on less imported oil from the region. No wonder the House of Saud is agitated.
All through 2014, the P5+1 negotiations will hinge on whether we are slowly moving away from U.S. imperial power towards a new Southwest Asia equation where multipolar players include the U.S., Russia, Iran, the European Union and Turkey. The Saudi reaction has been to intensify, weaponise and then try to sell – again – the myth of a Sunni-Shia war, blaming the Shias, Persians and/or Arabs, as the source of all regional problems.
The possibility of a marriage of reason between Washington and Tehran is as enticing as the certainty of a divorce in the money marriage between Washington and Riyadh.
If he’s being true to himself, Obama ought to have observed that there are absolutely no common values between the U.S. he extolled at the State of the Union address and the land of a universal, non-stop jihad. Without those millions of barrels of oil a day, Saudi Arabia would have been “sanctioned” to death, if not outright shocked and awed, a long time ago.
But it’s too early to tell whether we are about to marvel at the first post-imperial U.S. presidency since World War Two. There’s always 2016; meanwhile, perhaps a U.S.-Iran deal may still be reached in 2014.
Pepe Escobar, born in Brazil, is the roving correspondent for Asia Times, Hong Kong. He has been a foreign correspondent for 30 years, working out of Europe, the U.S., and Asia. He is also an op-ed writer and contributes to various websites and radio stations from South America to West Asia. He is the author of five books, including ‘Obama does Globalisation’ (2009).

Iran looks to private sector By Chris Cook

Don't miss the latest from Chris Cook at Asia Times on everybody and his neighbor wanting to do business with Iran. 

Iran looks to private sector
By Chris Cook

As the saying goes: "It's an ill wind blows nobody any good." The almost unprecedented snowfall across northern and mid Iran last week spread as far south as the desert town of Yazd and forced the cancellation of a major conference hosted by the energetic Yazd Chamber of Commerce on the subject of empowering the private sector.

I was to be virtually the only non-Iranian plenary speaker during a series of Iranian ministers. But the Yazd snowstorm that forced the cancellation of all flights cleared my diary and opened the way to unplanned and unexpected meetings in Tehran with key public, private and state-sponsored institutions.

I was therefore able to outline in Tehran the simple framework
agreements, credit instruments and financing and funding techniques that open up new public/private policy options for domestic energy economics and international "energy diplomacy" that are emerging as cornerstones of the Hassan Rouhani administration.

Private sector in the lead
In meetings with the public sector oil companies and pension institutions there was great interest in the proposed outcomes but complete pessimism that the public sector could do anything in the face of sanctions. But as my Iranian colleague pointed out, if what we propose were conventionally possible, it would already have been done: our role is to discover and implement new "adjacent possible" solutions.

Following an excellent meeting with the heads of the leading Iranian oil policy think tank we heard today that the Majlis - Iran's parliament - is instructing the oil ministry, using our language almost word for word, to engage with and support Iran's private sector both in domestic and international energy co-operation initiatives.

The international dimension
Meanwhile, it is at last beginning to dawn on Israel that the tactic of attempting to force through further US sanctions and thereby implode negotiations between Iran and the P5+1 - the UN Security Council permanent members plus Germany - has become completely irrelevant in the face of the gold rush now gathering pace. The Israelis have been unusually slow to recognize what has been apparent to the global private sector for some time: Iran means business.

By way of example, last week, I ran into some of the 120-strong French delegation who were all over Tehran like a cheap suit. You name it, they were flogging it, with the exception of EDF and their nuclear technology, (who are probably champing at the bit). The US petro-corporations are watching the Europeans eat their lunch, and you can be sure that the wires to the White House and State Department will be humming.

Hot off the press, Mahdi Hosseini, who was appointed by Oil Minister Bijan Namdar Zanganeh to lead the development of new Iranian contractual terms to entice the oil majors, dangled the prize of US$150 billion in upstream investment in the next five years alone.

Hosseini's team has been trawling the contractual terms of 33 countries, has assimilated 71 PhD dissertations, and now believes that it is closing in on a new hybrid form of contract nearer to production-sharing agreements than the buyback contracts that were so detested by the oil majors. The riskier the project, the more the terms will approach the production-sharing arrangements preferred by the majors, but which they can only impose on minor producing nations.

The dollar trap
As I have been saying in Iran for several years, such contracts can only ever have short- to medium-term application for a very simple reason. This is that these contracts are based upon the pricing and settlement of sales of oil production in US dollars.

So, even if - after long negotiation - a satisfactory formula may be achieved for short-term pricing and settlement in dollars, sooner or later the relationship between Iran's riyal and the dollar, and the relationship between the buyer's currency and the dollar must always diverge. So whichever way this divergence takes place, sooner or later the disadvantaged party will default or demand renegotiation.

The prepay solution
The solution we propose in order to address this intractable issue - which is hard-wired into the bank-centric dollar economy - is for settlement to be made through energy swaps of "prepay" energy-based credits. These are returnable in payment for the downstream energy products such as oil products, petrochemicals, electricity, heat or power, which are the outcome of suitable partnership supply arrangements with Iran.

Now that Iran is once more led by sophisticated strategists of the caliber of President Rouhani, Oil Minister Zanganeh, and Foreign Minister Mohammad Javad Zarif, not to mention Iran's massively experienced and canny OPEC representative Kazempour Ardebili, the possibility of meaningful energy diplomacy becomes more likely by the day.

We recently saw a serious US article contemplating the re-opening of an Iran/Israel relationship once the Palestine question is resolved, which may seem unlikely. But even here I believe that there is scope for an unconventional "adjacent possible" consensual agreement which meets the needs of all stakeholders.

Post Sanctions Iran
For my part, I have another trek to Istanbul in prospect to pick up my visa for the upcoming Post Sanctions Iran conference on March 8/9 at which I am speaking. I am also awaiting formal confirmation of an invitation to present our thinking to another extremely influential institution within the complex Iranian power structure which wields a veto on policy decisions.

My visit to Yazd - one of the most historic of Iran's cities - will have to wait for better weather, which is a shame.

Chris Cook is a former director of the International Petroleum Exchange. He is now a strategic market consultant, entrepreneur and commentator. 

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