Monday, March 07, 2022

Ukraine: March 7



As Russia’s isolation grows, China hints at limits of friendship Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy. ......... a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system. ..... a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system. ....... a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system. ........ expected Beijing to comply with US sanctions while continuing to support the Russian economy through the Chinese financial system. ....... “Even European banks can still finance energy imports, so why would Chinese banks not do it if European banks are going to do it, at least so far?” ...... China’s trade with Russia rose to $146.9bn in 2021, according to Chinese customs data. Although up 36 percent year-on-year, that figure still remains only about one-tenth of the volume of the China’s combined trade with the US and EU. ........ The Russian rouble plunged to a record low against the dollar on Monday, sinking as much as 30 percent in Asian trading, fueling expectations of a run on Russian banks. ........ China would be cautious about any action that could threaten its access to the international financial system. ........ China’s foreign exchange reserves fell around $28bn to $3.22 trillion in January this year. China also relies heavily on the SWIFT system. ........ Beijing’s moves to distance itself from Moscow appeared mostly symbolic, inflicting little actual pain on the Russian economy. ...... Beijing could find its balancing act harder to maintain if the US and its allies were to push for more severe sanctions down the track. Although expected to deal a significant blow to Russia’s economy, the sanctions blitz has largely spared the country’s lucrative energy industry due to fears of collateral damage to Western countries. Russia, the world’s third-largest oil producer and the second-largest producer of natural gas, provides about 40 percent of Europe’s supply of natural gas. ............ the pressure campaign could prompt ostracised countries to seek to “reduce dollar dependency and establish more cross-border payment systems”. .

. ‘The damage is done’: Russians face economic point of no return Shoppers and business people express despair and disillusion as sanctions cause run on rouble ........ ‘We have no clue what Putin will do next,’ said one business owner. ‘No one in the business community has a clue any more.’ ......... As markets opened in a panic on Monday, many Russians rushed to local cashpoints in Moscow to retrieve their savings before the damage got any worse. .......

Yesterday [the rate] was 80 [to the dollar]. Today it’s 100. Or 150.”

.......... “I just made a spontaneous decision today that I would ask [out of work] and go around until I took out all my money,” he said. “Before it was worth zero.” ....... “Who needs roubles?” one woman said sarcastically as she walked away. ........ There were signs that something extraordinary was taking place: the Moscow Exchange, Russia’s largest stock market, has halted trading until 5 March. ........ at the Metropolis Mall in Moscow, where there were signs that Russians were rushing to turn their cash into consumer goods before prices leapt up. ......... Several owners of mid-sized companies said that the invasion and subsequent isolation of Russia had made their businesses unprofitable overnight. ........ “I’m going to tell them that we are going into a crisis that we have never experienced before,” he said. “It’s like flying on a plane with no engines or the engines are on fire.” ......... “We have no fucking clue what he will do next,” he said. “No one in the business community has a clue any more. Everyone is so depressed. I have experienced so many economic crises here, the pandemic being the latest. “But there was always a reason to keep on fighting for your business,” he said. “Now, I don’t see the light at the end of the tunnel any more. Even if peace is achieved, the damage is done. How do we reverse it?” .......... Even top Russian business people, including the powerful oligarchs, appeared to be unsettled by the instability ushered in by the invasion, as well as the extraordinary measures being taken to prop up the rouble. ......... “We have left communism 30 years ago, we got accustomed to having a lot of comforts that are also seen in the West. All of that progress can be gone. We are no longer a member of the international community.” .

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Saturday, March 05, 2022

Ukraine Is Putin's Brexit With Too Many Dead Bodies

Russia did not go to war with the US, or Ukraine. Russia declared war on China. Russia is not competing to be number one. It is trying its best to suggest it is still number two. But that spot was long taken by China. The Ukraine misadventure is Russia trying to suggest one last time that, no, it's not China, it is Russia still.

Brexit was hubris. A former world power reduced to being an island that itself was on the verge of disintegrating. Ukraine is also hubris. Only there were no dead bodies to go with Brexit. And Brexit can be easily reversed. This was is the end of the road for Putin. And if he and his regime do not quickly exit the scene due to public pressure in the streers, the Russian economy, already in a bad shape, is going one major step down. Russians will be eating bread and drinking vodka, and there will be not much else.

Singapore paved the way for China. Deng Xiaoping learned a lot from Singapore. He had the humility to admit China was in a poor shape. Putin leacks that humility. Ukraine was his Singapore, though not as arrived, but still a few steps ahead of Russia in embracing true democracy, and a proper free market economy.

The Soviet Communist Party got ousted in 1991. But the KGB remained. It is the KGB clique that runs all aspects of Russian life. That is no way to run a major country.

Now it is the KGB's time to go.

What Russia needs is people out in the streets of Moscow to topple this regime.



Ukraine invasion: did China known about Putin’s plans, or was Beijing tricked? It remains unclear what Beijing knew and when about Moscow’s plans, but its implied support for the Kremlin is damaging China’s interests ...... Observers are divided but there are growing doubts about the competence of Chinese intelligence gathering and strategic decision-making .

China-backed AIIB puts Russia and Belarus lending ‘on hold’ over war in Ukraine Russia is a founding member and shareholder of the Beijing-based lender, holding a 6.7 per cent stake ....... China is the biggest member, with a 30 per cent holding in the AIIB, which is seen as a potential rival to the World Bank ............ The China-backed Asian Infrastructure Investment Bank has announced that “all activities relating to Russia and Belarus are on hold and under review” due to Russia’s war on Ukraine. “As the war in Ukraine unfolds, the Asian Infrastructure Investment Bank (AIIB) extends its thoughts and sympathy to everyone affected. Our hearts go out to all who are suffering,” read a statement published on the website of the Beijing-based lender. ........... the bank, which was founded in 2016 and seen by some as a potential rival to the US-backed World Bank. .......... With Russia facing isolation from the multilateral system, there has been intense scrutiny of China’s reaction. ......... a Chinese state bank saw a “surge in inquiries from Russian firms wanting to open new accounts”. ......... Moscow has hiked interest rates, temporarily closed the stock market and imposed strict capital controls. ...... the European Union said it was considering “the possibility of removing [most favoured nation] treatment to Russia on the basis of the WTO national security exception”. .

Putin blows up Brexit While the EU-UK relationship has been acrimonious since the latter left the bloc, Russia’s invasion of Ukraine has seen a rapprochement. ..... While the years following the U.K.’s vote to leave the European Union have been characterized by one-upmanship, failures to communicate and outright disagreements, the days since Russia’s invasion of Ukraine have seen politicians and officials on both sides of the Channel come together to coordinate their response. ....... And despite grave predictions from many on the pro-EU side of the Brexit debate that the U.K. would now be marginalized on the world stage, Prime Minister Boris Johnson has taken his place alongside counterparts in Washington and Brussels as the West grapples with how to respond. Britain, with its military and intelligence strength, and as one of the economies where Russian oligarchs have for decades sought to wash their dirty money, is well-placed to play a key role. .......... NATO, the G7 and the E3 group comprising France, Germany and the U.K. ........ Contact between senior British ministers and the European Commission is now frequent, according to diplomats. ...... Brexit doesn’t change the fact that we are liberal democracies that live in peace, freedom and security, and obviously when that’s threatened, Brexit doesn’t affect our desire to work together at all.” ......... The first British official quoted above said sanctions against Russia issued by Western allies are “all pretty aligned” despite some slight differences among the packages, and it “doesn’t really make sense to say that one side is going faster than the other.” ........ many believe Brexit disputes will resurface with the same strength of feeling once the heat of this crisis is over. .

The fighting is in Ukraine, but risk of World War III is real Conflict could easily escalate into a direct confrontation between Russia and the West, officials and analysts warn. .......... senior Western government officials, diplomats and military analysts acknowledge that there is now a grave danger that the United States and other NATO allies could be drawn into the war — at virtually any moment, as the result of any number of scenarios. ...... “One is a mistake,” said a Washington-based analyst whose work is partly financed by the U.S. government. “They lob a missile into Poland. That is not impossible and then it very quickly escalates. But we have to respond. We can’t not respond.” “Or the outcry against the crimes against humanity is so strong that we feel compelled to take what we think is a limited and judicious action,” the analyst said, speaking on condition of anonymity because of the sensitivity of the situation. “The enforcement of a no-fly zone means killing Russians,” the analyst said. “Anything that we do that results in killing Russians puts us into World War III.” ........ The shelling and a fire at the Zaporizhzhia nuclear power plant in the early hours of Friday morning provided yet another frightening example of the type of emergency scenario that could ensnare a broader international coalition in Putin’s war: to urgently prevent a global catastrophe. But other more mundane scenarios abound. Already, on Wednesday Russian planes violated Swedish air space multiple times. An Estonian cargo ship sunk off the coast of Odesa, apparently after hitting a mine. Any such incident could easily escalate..........

“Russia is ready to use a thermonuclear bomb in Ukraine”

....... “Today the problem is not only Donbas, the problem is not only Ukraine — what is at stake is the stability in Europe and the whole international order” .......... Officials and diplomats who are experts on Russia say the effort to portray the conflict as Ukraine’s war misses the key point: Putin has attacked Ukraine precisely because it chose a path toward the EU and NATO. Fighting Ukraine, they say, is a proxy for fighting the West. ......... Some believe the conflict can only be resolved if Putin’s complaints about the U.S. and NATO are resolved. Until then, he will continue the war, seeking to conquer or destroy the country, and making the peace negotiations with Ukrainian officials of little significance. ............. That calculation, of course, presumes Putin choose self-preservation over nuclear Armageddon. ........ the situation in Ukraine will get far worse in the coming days ........ As Putin realizes that fury among the Ukrainian population means he will lose politically, no matter the military outcome, there is a heightened risk he will simply seek to destroy Ukraine, flattening its cities and towns just as Russian forces obliterated the Chechen capital of Grozny. ........ And the devastating barrage of severe sanctions that are punishing the Russian economy will almost certainly remain in place, giving Putin little incentive to back away from his goal of conquering Ukraine and toppling its government. Putin chose war fully knowing there would be severe economic consequences — a calculation he made previously with the invasion and annexation of Crimea, which led to sanctions and steep absorption costs. ......... “The Union is not at war with Russia,” the second official said. “We are in line with the U.N. Charter.” The second official added: “But we need to help Ukraine because Ukraine is being attacked and has the right to self-defense.” ....... by denying their centrality in the dispute, Western powers were failing to seize on an opportunity to unite the three Slavic nations that Putin often talks about — Ukraine, Russia and Belarus — but against the Russian autocrat, in support of democracy. .......... “It’s like we’re not understanding that we’re a participant in this war already — not because we put ourselves there, not because we were looking for this war, not because of any decision that NATO made or any individual bilateral partners of Ukraine made, but because Vladimir Putin is fighting a war against us,” McKew said. “And if we show up to the war, it will end sooner and faster with less people dead, and that’s really the decision we have to make now.” ........ Putin is known to harbor deep anger over the death of the Libyan leader, Muammar Gaddafi, who was taken prisoner, humiliated, beaten and killed while begging his captors for mercy. The scenes were filmed on a mobile phone. ......... the Russian president would go to any lengths to avoid Gaddafi’s fate, and that suggestions Putin should be tried as a war criminal could trigger him. ........ the talk about trying him before the International Criminal Court,” the analyst said. “That’s kind of Gaddafi territory. You have to be real careful about putting a dictator who still has his finger on a nuclear button in a Gaddafi mindset.” .

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