Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.
Tuesday, May 20, 2014
Ukraine and Russia related " News and Views " May 20 , 2014 --Ukraine Set to Vote, But Likely Without East Election Officials Withdraw From Donetsk ........ Putin Orders Troops From Ukraine Border, NATO Doesn’t See It Ukraine Border Guards Confirm Decreased Russian Activity ........ OSCE calls on Kiev to free Russian journalists, ‘stop intimidating media’ ....... Russia and China pull closer ( blowback from Ukraine a part of the reason ) , Putin and Xi Jinping start their two days of talks ( still no agreement on price between Gazprom and CNPC on natural gas deal )
Zero Hedge ......
The Birth Of Eurasia - Russia & China Do Pipelineistan
A specter is haunting Washington, an unnerving vision of a Sino-Russian alliance wedded to an expansive symbiosis of trade and commerce across much of the Eurasian land mass - at the expense of the United States.
And no wonder Washington is anxious. That alliance is already a done deal in a variety of ways: through the BRICS group of emerging powers (Brazil, Russia, India, China, and South Africa); at the Shanghai Cooperation Organization, the Asian counterweight to NATO; inside the G20; and via the 120-member-nationNon-Aligned Movement (NAM). Trade and commerce are just part of the future bargain. Synergies in the development of new military technologies beckon as well. After Russia’s Star Wars-style, ultra-sophisticated S-500 air defense anti-missile system comes online in 2018, Beijing is sure to want a version of it. Meanwhile, Russia is about to selldozens of state-of-the-art Sukhoi Su-35 jet fighters to the Chinese as Beijing and Moscow move to seal an aviation-industrial partnership.
This week should provide the first real fireworks in the celebration of a new Eurasian century-in-the-making with Russian President Vladimir Putin visiting Xi in Shanghai this Tuesday and Wednesday. You remember“Pipelineistan,” all those crucial oil and gas pipelines crisscrossing Eurasia that make up the true circulatory system for the life of the region. Now, it looks like the ultimate Pipelineistan deal, worth $1 trillion and 10 years in the making, will be inked as well. In it, the giant, state-controlled Russian energy giant Gazprom will agree to supply the giant state-controlled China National Petroleum Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day for no less than 30 years, starting in 2018. That’s the equivalent of a quarter of Russia’s massive gas exports to all of Europe. China’s current daily gas demand is around 16 billion cubic feet a day, and imports account for 31.6% of total consumption.
Gazprom may still collect the bulk of its profits from Europe, but Asia could turn out to be its Everest. The company will use this mega-deal to boost investmentin Eastern Siberia and the whole region will be reconfigured as a privileged gas hub for Japan and South Korea as well. If you want to know why no key country in Asia has been willing to “isolate” Russia in the midst of the Ukrainian crisis - and in defiance of the Obama administration - look no further than Pipelineistan.
Exit the Petrodollar, Enter the Gas-o-Yuan
And then, talking about anxiety in Washington, there’s the fate of the petrodollar to consider, or rather the“thermonuclear” possibility that Moscow and Beijing will agree on payment for the Gazprom-CNPC deal not in petrodollars but in Chinese yuan. One can hardly imagine a more tectonic shift, with Pipelineistan intersecting with a growing Sino-Russian political-economic-energy partnership. Along with it goes the future possibility of a push, led again by China and Russia, toward a new international reserve currency -- actually a basket of currencies -- that would supersede the dollar (at least in the optimistic dreams of BRICS members).
Right after the potentially game-changing Sino-Russian summit comes a BRICS summit in Brazil in July. That’s when a $100 billion BRICS development bank, announced in 2012, will officially be born as a potential alternative to the International Monetary Fund (IMF) and the World Bank as a source of project financing for the developing world.
More BRICS cooperation meant to bypass the dollar is reflected in the“Gas-o-yuan,” as in natural gas bought and paid for in Chinese currency. Gazprom is even considering marketing bonds in yuan as part of the financial planning for its expansion. Yuan-backed bonds are already trading in Hong Kong, Singapore, London, and most recently Frankfurt.
Nothing could be more sensible for the new Pipelineistan deal than to have it settled in yuan. Beijing would pay Gazprom in that currency (convertible into rubles); Gazprom would accumulate the yuan; and Russia would then buy myriad made-in-China goods and services in yuan convertible into rubles.
It’s common knowledge that banks in Hong Kong, from Standard Chartered to HSBC - as well as others closely linked to China via trade deals - have been diversifying into the yuan, which implies that it could become one of the de facto global reserve currencies even before it’s fully convertible. (Beijing is unofficially working for a fully convertible yuan by 2018.)
The Russia-China gas deal is inextricably tied up with the energy relationship between the European Union (EU) and Russia. After all, the bulk of Russia’s gross domestic product comes from oil and gas sales, as does much of its leverage in the Ukraine crisis. In turn, Germany depends on Russia for a hefty 30% of its natural gas supplies. Yet Washington’s geopolitical imperatives - spiced up with Polish hysteria - have meant pushing Brussels to find ways to “punish” Moscow in the future energy sphere (while not imperiling present day energy relationships).
There’s a consistent rumble in Brussels these days about the possiblecancellation of the projected 16 billion euro South Stream pipeline, whose construction is to start in June. On completion, it would pump yet more Russian natural gas to Europe - in this case, underneath the Black Sea (bypassing Ukraine) to Bulgaria, Hungary, Slovenia, Serbia, Croatia, Greece, Italy, and Austria.
Bulgaria, Hungary, and the Czech Republic have already made it clear that they are firmly opposed to any cancellation. And cancellation is probably not in the cards. After all, the only obvious alternative is Caspian Sea gas from Azerbaijan, and that isn’t likely to happen unless the EU can suddenly muster the will and funds for a crash schedule to construct the fabled Baku-Tblisi-Ceyhan (BTC) oil pipeline, conceived during the Clinton years expressly to bypass Russia and Iran.
In any case, Azerbaijan doesn’t have enough capacity to supply the levels of natural gas needed, and other actors like Kazakhstan, plagued with infrastructure problems, or unreliable Turkmenistan, which prefers to sell its gas to China, are already largely out of the picture. And don’t forget that South Stream, coupled with subsidiary energy projects, will create a lot of jobs and investment in many of the most economically devastated EU nations.
Nonetheless, such EU threats, however unrealistic, only serve to accelerate Russia’s increasing symbiosis with Asian markets. For Beijing especially, it’s a win-win situation. After all, between energy supplied across seas policed and controlled by the US Navy and steady, stable land routes out of Siberia, it’s no contest.
Pick Your Own Silk Road
Of course, the US dollar remains the top global reserve currency, involving 33% of global foreign exchange holdings at the end of 2013, according to the IMF. It was, however, at 55% in 2000. Nobody knows the percentage in yuan (and Beijing isn’t talking), but the IMF notes that reserves in “other currencies” in emerging markets have been up 400% since 2003.
The Fed is arguably monetizing 70% of the US government debt in an attempt to keep interest rates from heading skywards. Pentagon adviser Jim Rickards, as well as every Hong Kong-based banker, tends to believe that the Fed is bust (though they won’t say it on the record). No one can even imagine the extent of the possible future deluge the US dollar might experience amid a $1.4 quadrillion Mount Ararat of financial derivatives. Don’t think that this is the death knell of Western capitalism, however, just the faltering of that reigning economic faith, neoliberalism, still the official ideology of the United States, the overwhelming majority of the European Union, and parts of Asia and South America.
As far as what might be called the“authoritarian neoliberalism” of the Middle Kingdom, what’s not to like at the moment? China has proven that there is a result-oriented alternative to the Western “democratic” capitalist model for nations aiming to be successful. It’s building not one, but myriad new Silk Roads, massive webs of high-speed railways, highways, pipelines, ports, and fiber optic networks across huge parts of Eurasia. These include a Southeast Asian road, a Central Asian road, an Indian Ocean“maritime highway” and even a high-speed rail line through Iran and Turkey reaching all the way to Germany.
In April, when President Xi Jinping visited the city of Duisburg on the Rhine River, with the largest inland harbor in the world and right in the heartland of Germany’s Ruhr steel industry, he made an audacious proposal: a new “economic Silk Road” should be built between China and Europe, on the basis of the Chongqing-Xinjiang-Europe railway, which already runs from China to Kazakhstan, then through Russia, Belarus, Poland, and finally Germany. That’s 15 days by train, 20 less than for cargo ships sailing from China’s eastern seaboard. Now that would represent the ultimate geopolitical earthquake in terms of integrating economic growth across Eurasia.
Keep in mind that, if no bubbles burst, China is about to become - and remain - the number one global economic power, a position it enjoyed for 18 of the past 20 centuries. But don’t tell London hagiographers; they still believe that US hegemony will last, well, forever.
Take Me to Cold War 2.0
Despite recent serious financial struggles, the BRICS countries have been consciously working to become a counterforce to the original and - having tossed Russia out in March - once again Group of 7, or G7. They are eager to create a new global architecture to replace the one first imposed in the wake of World War II, and they see themselves as a potential challenge to the exceptionalist and unipolar world that Washington imagines for our future (with itself as the global robocop and NATO as its robo-police force). Historian and imperialist cheerleader Ian Morris, in his book War! What is it Good For?, defines the US as the ultimate“globocop” and “the last best hope of Earth.” If that globocop “wearies of its role,” he writes, “there is no plan B.”
Well, there is a plan BRICS - or so the BRICS nations would like to think, at least. And when the BRICS do act in this spirit on the global stage, they quickly conjure up a curious mix of fear, hysteria, and pugnaciousness in the Washington establishment. Take Christopher Hill as an example. The former assistant secretary of state for East Asia and US ambassador to Iraq is now an advisor with the Albright Stonebridge Group, a consulting firm deeply connected to the White House and the State Department. When Russia was down and out, Hill used to dream of a hegemonic American “new world order.” Now that the ungrateful Russians have spurned what “the West has been offering” - that is, “special status with NATO, a privileged relationship with the European Union, and partnership in international diplomatic endeavors” - they are, in his view, busy trying to revive the Soviet empire. Translation: if you’re not our vassals, you’re against us. Welcome to Cold War 2.0.
The Pentagon has its own version of this directed not so much at Russia as at China, which, its think tank on future warfare claims, is already at war with Washington in a number of ways. So if it’s not apocalypse now, it’s Armageddon tomorrow. And it goes without saying that whatever’s going wrong, as the Obama administration very publicly “pivots” to Asia and the American media fills with talk about a revival of Cold War-era “containment policy” in the Pacific, it’s all China’s fault.
Embedded in the mad dash toward Cold War 2.0 are some ludicrous facts-on-the-ground: the US government, with $17.5 trillion in national debt and counting, is contemplating a financial showdown with Russia, the largest global energy producer and a major nuclear power, just as it’s also promoting an economically unsustainable military encirclement of its largest creditor, China.
Russia runs a sizeable trade surplus. Humongous Chinese banks will have no trouble helping Russian banks out if Western funds dry up. In terms of inter-BRICS cooperation, few projects beat a $30 billion oil pipeline in the planning stages that will stretch from Russia to India via Northwest China. Chinese companies are already eagerly discussing the possibility of taking part in the creation of a transport corridorfrom Russia into Crimea, as well as an airport, shipyard, and liquid natural gas terminal there. And there’s another“thermonuclear” gambit in the making: the birth of a natural gas equivalent to the Organization of the Petroleum Exporting Countries that would include Russia, Iran, and reportedly disgruntled US ally Qatar.
The (unstated) BRICS long-term plan involves the creation of an alternative economic system featuring a basket of gold-backed currencies that would bypass the present America-centric global financial system. (No wonder Russia and China are amassing as much gold as they can.) The euro - a sound currency backed by large liquid bond markets and huge gold reserves - would be welcomed in as well.
It’s no secret in Hong Kong that the Bank of China has been using a parallel SWIFT network to conduct every kind of trade with Tehran, which is under a heavy US sanctions regime. With Washington wielding Visa and Mastercard as weapons in a growing Cold War-style economic campaign against Russia, Moscow is about to implement an alternative payment and credit card system not controlled by Western finance. An even easier route would be to adopt the Chinese Union Pay system, whose operations have already overtaken American Express in global volume.
I’m Just Pivoting With Myself
No amount of Obama administration“pivoting” to Asia to contain China (and threaten it with US Navy control of the energy sea lanes to that country) is likely to push Beijing far from its Deng Xiaoping-inspired, self-described“peaceful development” strategy meant to turn it into a global powerhouse of trade. Nor are the forward deployment of US or NATO troops in Eastern Europe or other such Cold-War-ish acts likely to deter Moscow from a careful balancing act: ensuring that Russia’s sphere of influence in Ukraine remains strong without compromising trade and commercial, as well as political, ties with the European Union - above all, with strategic partner Germany. This is Moscow’s Holy Grail; a free-trade zonefrom Lisbon to Vladivostok, which (not by accident) is mirrored in China’s dream of a new Silk Road to Germany.
Increasingly wary of Washington, Berlin for its part abhors the notion of Europe being caught in the grips of a Cold War 2.0. German leaders have more important fish to fry, including trying to stabilize a wobbly EU while warding off an economic collapse in southern and central Europe and the advance of ever more extreme right-wing parties.
On the other side of the Atlantic, President Obama and his top officials show every sign of becoming entangled in their own pivoting - to Iran, to China, to Russia’s eastern borderlands, and (under the radar) to Africa. The irony of all these military-first maneuvers is that they are actually helping Moscow, Tehran, and Beijing build up their own strategic depth in Eurasia and elsewhere, as reflected in Syria, or crucially in ever more energy deals. They are also helping cement the growing strategic partnership between China and Iran. The unrelenting Ministry of Truth narrative out of Washington about all these developments now carefully ignores the fact that, without Moscow, the “West” would never have sat down to discuss a final nuclear deal with Iran or gotten a chemical disarmament agreement out of Damascus.
When the disputes between China and its neighbors in the South China Sea and between that country and Japan over the Senkaku/Diaoyou islands meet the Ukraine crisis, the inevitable conclusion will be that both Russia and China consider their borderlands and sea lanes private property and aren’t going to take challenges quietly - be it via NATO expansion, US military encirclement, or missile shields. Neither Beijing nor Moscow is bent on the usual form of imperialist expansion, despite the version of events now being fed to Western publics. Their “red lines” remain essentially defensive in nature, no matter the bluster sometimes involved in securing them.
Whatever Washington may want or fear or try to prevent, the facts on the ground suggest that, in the years ahead, Beijing, Moscow, and Tehran will only grow closer, slowly but surely creating a new geopolitical axis in Eurasia. Meanwhile, a discombobulated America seems to be aiding and abetting the deconstruction of its own unipolar world order, while offering the BRICS a genuine window of opportunity to try to change the rules of the game.
Russia and China in Pivot Mode
In Washington’s think-tank land, the conviction that the Obama administration should be focused on replaying the Cold War via a new version of containment policy to “limit the development of Russia as a hegemonic power” has taken hold. The recipe: weaponize the neighbors from the Baltic states to Azerbaijan to “contain” Russia. Cold War 2.0 is on because, from the point of view of Washington’s elites, the first one never really left town.
Yet as much as the US may fight the emergence of a multipolar, multi-powered world, economic facts on the ground regularly point to such developments. The question remains: Will the decline of the hegemon be slow and reasonably dignified, or will the whole world be dragged down with it in what has been called “the Samson option”?
While we watch the spectacle unfold, with no end game in sight, keep in mind that a new force is growing in Eurasia, with the Sino-Russian strategic alliance threatening to dominate its heartland along with great stretches of its inner rim. Now, that’s a nightmare ofMackinderesque proportions from Washington’s point of view. Think, for instance, of how Zbigniew Brzezinski, the former national security adviser who became a mentor on global politics to President Obama, would see it.
In his 1997 book The Grand Chessboard, Brzezinski argued that “the struggle for global primacy [would] continue to be played” on the Eurasian“chessboard,” of which “Ukraine was a geopolitical pivot.” “If Moscow regains control over Ukraine,” he wrote at the time, Russia would “automatically regain the wherewithal to become a powerful imperial state, spanning Europe and Asia.”
That remains most of the rationale behind the American imperial containment policy - from Russia’s European “near abroad” to the South China Sea. Still, with no endgame in sight, keep your eye on Russia pivoting to Asia, China pivoting across the world, and the BRICS hard at work trying to bring about the new Eurasian Century.
Crimea's secession to Russia - and Putin's gracious acceptance of their request for annexation - has focused all eyes on the peninsula's landmass and rolling tanks; but, as we have noted previously, NY Times reports that when Russia acquired not just the Crimean landmass but also a maritime zone more than three times its size with the rights to underwater resources potentially worth trillions of dollars. It's all about the resources as we have noted previously but Russian officials are quick to play this down, "compared to all the potential Russia has got, there was no interest there," but as one analyst noted, Russia’s annexation of Crimea "soobvious" as a play for offshore riches. No wonder Putin is happy to take on the 'burden' of Crimea.
Donetsk's huge shale fields... And as other regions in east and south Ukraine follow in the Donetsk' footsteps, assuring Russia a land connection to Crimea and cutting off Kiev from the Donbas industrial zones and the Slavyansk shale gas, Putin wins again.
As NY Times reports, when Russia seized Crimea in March, it acquired not just the Crimean landmass but also a maritime zone more than three times its size with the rights to underwater resources potentially worth trillions of dollars.
Russia portrayed the takeover as reclamation of its rightful territory, drawing no attention to the oil and gas rush that had recently been heating up in the Black Sea. But the move also extended Russia’s maritime boundaries, quietly giving Russia dominion over vast oil and gas reserves while dealing a crippling blow to Ukraine’s hopes for energy independence.
Russia did so under an international accord that gives nations sovereignty over areas up to 230 miles from their shorelines. It had tried, unsuccessfully, to gain access to energy resources in the same territory in a pact with Ukraine less than two years earlier.
“It’s a big deal,” said Carol R. Saivetz, a Eurasian expert in the Security Studies Program of the Massachusetts Institute of Technology. “It deprives Ukraine of the possibility of developing these resources and gives them to Russia. It makes Ukraine more vulnerable to Russian pressure.”
Gilles Lericolais, the director of European and international affairs at France’s state oceanographic group, calledRussia’s annexation of Crimea “so obvious” as a play for offshore riches.
In Moscow, a spokesman for President Vladimir V. Putin said there was “no connection” between the annexation and energy resources, adding that Russia did not even care about the oil and gas. “Compared to all the potential Russia has got, there was no interest there,” the spokesman, Dmitry Peskov, said Saturday.
As for oil extraction in the newly claimed maritime zones, companies say their old deals with Ukraine are in limbo, and analysts say new contracts are unlikely to be signed anytime soon, given the continuing turmoil in the region and the United States’ efforts to ratchet up pressure on Russia.
“There are huge issues at stake,” noted Dr. Saivetz of M.I.T. “I can’t see them jumping into new deals right now.”
Russia Reminds US It's Not Over: Test-Fires Nuclear Missile
Slowly - but surely - the USD's hegemony is being chipped away whether by foreign policy faux pas, crossed red-lines, or economic fragility. However, on Day 1 of Vladimir Putin's trip to China it is clear that the two nations are as close as ever. VTB - among Russia's largest banks - has signed a deal with Bank of China to pay each other in domestic currencies, bypassing the need for US Dollars for "investment banking, inter-bank lending, trade finance and capital-markets transactions." Kirill Dmitriyev the head of Russia’s Direct Investment Fund notes, "together it’ll be possible to discuss investment in various projects much more efficiently and clearly," as Russia's pivot to Asia continues to gather steam.
VTB, Russia’s second biggest lender, has signed a deal with Bank of China, which includes an agreement to pay each other in domestic currencies.
“Under the agreement, the banks plan to develop their partnership in a number of areas, including cooperation on ruble and renminbi settlements, investment banking, inter-bank lending, trade finance and capital-markets transactions,” says the official VTB statement.
The deal underlines VTB Group’s growing interest in Asian markets and will help grow trade between Russia and China that are already close trading partners, said VTB Bank Management Board Vasily Titov.
But it's not just the banking relationships...
In the first day of a two-day trip to China Russia’s President Vladimir Putin said the two countries will be increasing their bilateral trade to reach a new level.
“Our countries have done a huge job to reach a new historic landmark…. China has firmly settled in a position of our key trade partner,” Putin said.
Putin also said that trade turnover between Russia and China grew almost 2 percent during 2013 to reach about $90 billion.
“If we sustain this pace the level of bilateral trade of $100 billion will be reached by 2015 and we’ll confidently move on,” Putin said.
Increasing investment cooperation is crucial, Putin added.
“Together it’ll be possible to discuss investment in various projects much more efficiently and clearly,” as Interfax quotes Kirill Dmitriyev the head of Russia’s Direct Investment Fund.
On Sunday, Ukrainians will go to the polls for a presidential election aimed at finally installing an elected ruler to replace the interim government. But with the nation divided and much of the east facing military invasion, it is unclear how much of the nation will actually be participating in the vote.
Donetsk itself, one of the biggest cities in the country, is likely not going to be voting, as the election officials announced today they have shut down their office.
Officially, they say it was because of “safety concerns,” lashing the protesters as “terrorists” and saying they made it impossible to set up a vote. Other election officials elsewhere in the Oblast reported no problems however, and seem to be going fine.
Donetsk Oblast is about 10 percent of the nation’s population, and Luhansk another 4 percent. The oblasts have traditionally supported the Party of Regions, which was in power before being ousted by the interim government. Their candidate, Mykhailo Dobkin, is a backer of the secessionist movement, and was arrested in March in connection with the protests.
Russian President Vladimir Putin has ordered Russian troops deployed in an area near the Ukraine border to return to base after the completion of their training operation.
NATO Secretary-General Anders Fogh Rasmussen was quick to condemn the announcement, saying it was the third time Russia had reported a redeployment, and that they couldn’t see any movement on the border.
But maybe they’re not looking hard enough? Ukrainian border patrols confirmed a decrease in Russian military activity in the area along their mutual border, and Reuters also confirmed seeing tanks leaving the training area.
NATO has long demanded Russia withdraw the troops, while Russia has urged Ukraine to similarly withdraw its troops from the border areas, where they have been attacking protesters.
OSCE calls on Kiev to free Russian journalists, ‘stop intimidating media’
Published time: May 19, 2014 14:10 Edited time: May 19, 2014 20:20
The Organization for Security and Co-operation in Europe (OSCE) has urged Kiev authorities to release the Russian journalists captured in eastern Ukraine, saying that intimidation and obstruction of media working in the country is “unacceptable.”
The OSCE’s representative on freedom of the media, Dunja Mijatovic, has addressed the coup-imposed acting Ukrainian Interior Minister Arsen Avakov in a letter, urging to release the LifeNews journalists detained by Kiev forces on Sunday and thoroughly investigate the incident, Itar-Tass reports.
Mijatovic has condemned the harassment of journalists in Ukraine, noting that on May 15-16 a host of Russian journalists from Channel One, NTV, TVC and Zvezda channels were denied entrance at the country’s border despite “all of them have been accredited by the Ukrainian authorities for covering the presidential elections.”
In the letter, the OSCE representative has urged to “stop intimidating and threatening members of the media,” stressing that journalists must be allowed to do their jobs without fearing for their security.
The political powers in Ukraine “must fully realize that obstruction of the freedom of media is unacceptable,” Mijatovic said.
The detained journalists, Oleg Sidyakin and Marat Saichenko, are being investigated on the charges of “aiding the terrorist groups,” deputy secretary of Ukraine’s National Security and Defense Council (SNBO), Victoria Sumar, wrote on her Facebook page.
She added that there is “direct video evidence” of her claims, pointing at footage released on Monday showing Ukrainian troops rudely forcing a group of handcuffed people to get down on their knees and looking through belongings that appeared to have belonged to them.
Along with a close-up of the documents of two LifeNews journalists, the video showed some journalistic equipment, a pile of Ukrainian hrivnyas and Russian rubles, and a MANPAD with inscriptions in Polish. The third man shown kneeling on the ground was not identified.
The Ukrainian Security Service said on Monday, without elaborating, that two Russian citizens detained in the Donetsk Region with video equipment have been brought to Kiev for interrogation.
Meanwhile, a member of Russia’s presidential Human Rights Council negotiating with Kiev authorities, Maksim Shevchenko, said that the journalists are being accused of allegedly taking part in “violent interrogations” of ‘Alfa’ Ukrainian special service officers, and asking questions.
Shevchenko said he believes that the detained journalists did not take part in any interrogations, but some other journalists did, and in this sense LifeNews reporters were “set up” by those other people. The human rights activist said the council will ask distinguished Kiev lawyers to defend the LifeNews journalists in court.
Russian Foreign Minister Sergey Lavrov on Monday stressed that the Russian journalists detained in the Donetsk Region must be released immediately.
“We are concerned that during combat actions, which are led by [Ukrainian] armed forces with the participation of radicals, extremists, militants of the Right Sector and other groups, some journalists are suffering. Very often they are detained, faced with fictitious demands, which do not fit into generally recognized norms. The latter concerns two journalists from the LifeNews channel,” Lavrov said.
According to Lavrov, Moscow has been using all available OSCE channels, urging the organization to facilitate the journalists’ release.
LifeNews journalists meanwhile started a Twitter campaign under the hashtag #SaveOurGuys. In just hours, thousands have shared their pictures with the hashtag written on sheets of paper, or retweeted them.
Representatives from the Russian Union of Journalists started OSCE-brokered Vienna negotiations with the counterparts from Ukraine on Monday. The Ukrainian side has been asked to help prevent cases of detention and harassment of Russian journalists.
The union’s head, Pavel Gusev, told Itar-Tass that it is appealing to international organizations, including the OSCE, with a statement demanding the reporters’ release.
“This is a heinous campaign, when the journalists are being presented as terrorists and their work is obstructed...All the actions of the Ukrainian side contradict with international norms,” Gusev said, calling on Kiev to free the Russian journalists and apologize to them.
Numerous cases of Kiev-installed authorities banning Russian media workers from entering Ukraine have intensified, along with cases of their detention and deportation by special services and law enforcement for covering the events in eastern Ukraine.
Moreover, several cases of Ukrainian troops firing at people with cameras, even at those wearing blue press vests, have been reported. A video journalist working for RT’s Ruptly crew in the volatile eastern Ukrainian city of Mariupol was shot at and seriously injured during Kiev’s military operation on May 9. A medical jet sent for him was allowed to land in Donetsk only after three days of negotiations.
Ukrainian army servicemen stand near an armoured fighting vehicle as they man a checkpoint in the outskirts of Slaviansk (Reuters / Yannis Behrakis)
‘Kiev very keen to stop journalists’
The situation with the LifeNews crew is “bad news” for journalists working in Ukraine and for the international community, and it will only get worse as the Ukrainian election – set for May 25 – nears, Martin McCauley, an Eastern Europe expert from the University of London, told RT.
“In the week up to next Sunday’s presidential election, the situation will be very tense and the Kiev authorities will be very keen to stop journalists whom they regard as supporting the other side, or supporting separatism, and so on, from doing their jobs,” McCauley said.
According to the analyst, the international community should “do more” to ensure the rights of journalists are observed in Ukraine.
“It is up to the OSCE and the European Union and others to make clear to the authorities in Kiev that journalists should be allowed to do their job. If they are accused of terrorism, then they should be brought before a court with due judicial process being observed...It is up to the Kiev authorities to present the evidence and then a have a due process of law,” he said.
Donetsk, May 6, 2014. (Reuters / Konstantin Chernichkin)
Keeping the journalists in detention and isolation, which the Ukrainian authorities are doing instead, “is not correct and is not acceptable.”
“It has got to a situation where if the Kiev authorities believe that all separatists are terrorists, then all journalists who communicate with them and engage in interviews with them and pass on information to them, they then become terrorists as well. So therefore you have got an extraordinary situation in which journalists are not able to carry out their duties in eastern Ukraine,” McCauley said.
Russian battleships in Shanghai for joint naval drills
A squadron of Russia’s Navy Pacific Fleet has arrived in Shanghai to participate in joint Russian-Chinese naval training dubbed ‘Joint Sea-2014’. The drills in the northern part of the East China Sea start on Tuesday and will go on until May 26.
The Russian squadron consists of six battleships and support vessels: the flagship of the Pacific Fleet, missile cruiser Varyag, anti-submarine destroyer Admiral Panteleyev, large landing ship Admiral Nevelskoy, anti-surface destroyer Bystry, tanker Ilim and ocean tug Kalar.
Chinese sailors stand in formation in front of national flags of Russia (L) and China, as they get ready for a welcoming ceremony for Russian naval vessels ahead of the "Joint Sea-2014" naval drill, at a port in Shanghai, May 18, 2014.(Reuters / China Daily)
The Chinese Navy will be represented in the naval drills with six battleships.
All in all, during the active phase of the drills set for May 22-25, the maneuvers involve 14 ships, two submarines, nine warplanes, six shipboard helicopters and two operational detachments of marines from both sides.
All ships taking part in the training exercise are moored at the Usun naval military base in Shanghai.
A delegation of Russian Navy officers has already joined their Chinese colleagues to compare notes on the plan of the drills.
Chinese Vice Admiral Tian Zhong revealed to journalists that the major difference of the starting drills will be the increased difficulty of joint operations of battleships on both sides.
Russian anti-submarine destroyer Admiral Panteleyev (R) arrives at a port ahead of the "Joint Sea-2014" naval drill, in Shanghai, May 18, 2014.(Reuters / China Daily)
For the first time, Russian and Chinese sailors will operate within a mixed group of battleship from the two counties, holding joint missile and artillery strikes against sea targets at different ranges and performing anti-submarine activities.
“Accumulated experience of interaction will allow us to increase the possibility of conducting joint actions of the two fleets to perform a wide range of tasks,” the top brass Chinese naval officer said.
Tian Zhong (R), deputy commander of the Chinese Navy and Alexander Fedotenkov, deputy commander-in-chief of Russian Navy, attend a news conference as directors of the upcoming "Joint Sea-2014" naval drill, at a port in Shanghai, May 18, 2014.(Reuters / China Daily)
The crews of the Russian and Chinese warships made courtesy visits on board each other’s battleships to learn more about military hardware and service conditions.
Chinese officers will be given a formal reception on the Russian flagship, the Varyag, on Monday evening.
Russian sailors not taking part in preparations have been taken ashore for excursions organized by their Chinese hosts.
Russia's President Vladimir Putin (L) and China's President Xi Jinping shake hands after signing an agreement during a bilateral meeting at the Xijiao State Guesthouse ahead of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit, in Shanghai May 20, 2014.(Reuters / Carlos Barria)
Russia is about to hitch its wagon to the fastest growing economy and largest market in the world, Business New Europe editor Ben Aris told RT, adding that the West will ultimately be playing catch-up after its efforts to isolate Russia with sanctions.
RT:So, Ben, these stronger ties between Moscow, many expect them obviously to be beneficial for both sides. But where does that leave Russia’s significant trade partner, the EU?
Ben Aris: Well, it’s going to be part of Russia’s turn towards the East, reorientation if you like, as a function of the worsening relationships with Western Europe. I think to begin with, it won’t make that much difference in so much as Russia is a commodity provider, oil and gas being the main commodities, and Russia is tied to Europe through its gas pipelines, so that will continue.
What we’re talking about is where Russia’s going to go in the future and I think all of the intention, all of the energy is going to be thrown into building up Russia’s trade and energy exports to the East and those that existed in the West are going to sort of remain and not develop any further.
This could play against Europe in the long run; if all the growth is coming out of Asia and China and the BRICS countries, then it could be that the EU sort of gets left behind while Russia enjoys the ride on the wave of those growing economies.
RT:Putting economics aside, what about politically? What could this partnership do in terms of international affairs?
BA: I think we’re seeing - or about to see, assuming that these deals go well tomorrow - a massive change in the set-up, the balance, the geopolitical balance. In so much as the West has been confronting Russia over the Ukraine problem. But Putin said from the beginning that his goal in foreign policy is to create a multipolar world. Now he’s been kind of on his own doing that, as opposed to the unipolar world which is dominated by America. But Russia and China have never been natural friends. However, China has come out very strongly in support of Russia as they’ve showed down with the States.
And I think that’s because Chia is as worried about this unipolar set up as Russia is. So the irony is this whole fracas has been to push Russia and China together and to get them to get over their natural mistrust of each other and to become deep and strategic partners. So this is a new political alliance we’re seeing, a new political configuration. It’s got enormous consequences going forward.
RIA Novosti / Ruslan Krivobok
RT:Should Washington be concerned by all of this?
BA: Well, the irony of these sanctions is that they’ve been attempting to isolate Russia and make it a pariah. But one of the upshots of this, if this new relationship does work out, is that it could end up being the West that’s isolated, insomuch as they get to miss out on this sort of boom that’s going on in the emerging world. It’s been widely reported that China is about to overtake the states in terms of the size of its economy, and Russia’s about to hitch its wagon to the fastest growing and largest market in the world. So strategically you’ve got to wonder, what’s that going to mean for the West, who are going to end up playing catch-up?
RT:But surely Russia isn’t the only country - we’ve seen the likes of the UK, of course, doing massive trade deals with China. Do you think there would in effect be a race to do business with China - and Russia clearly isn’t the only country that’s going to be taking part in this?
BA: No indeed. But Russia and China have been described as the best synergy on the planet. China has the people, the massive consumer market, it’s got the cash. Whereas Russia has all the raw materials and that’s what China is missing. That’s what Russia offers China, and China doesn’t function without those inputs to its factories. What the Western countries are offering are high technology and finished goods. But Russia has the raw materials to make the Chinese economy work, without which it won’t be able to function and compete.
RT:So there have been concerns about China’s economy, haven’t there? Do you think perhaps countries could become too resilient on China at this stage?
BA: Well, its big, and I think the problem is, is that it remains an emerging market; it’s not a democracy, it’s not a free market in the sense that we have in Europe, and the history has been that emerging markets have crises and China hasn’t had one yet. So I think at some point, China is going to have a crisis. And when it does, the whole world is going to be affected. It’s going to be very nasty. Worryingly, the banks are overextended; worryingly, the property market has started to turn down in China. And they’ve got to manage this. Happily, they have this enormous cash cushion, so hopefully they can always engineer a soft landing. But it’s certainly going forward. This is going to be an increasing concern to everyone - how do you insulate yourself from China if it does crash and everyone’s rushing to expose themselves as much as they can at this point?
SHANGHAI, May 20 (RIA Novosti) – Russia and China are planning to increase the volume of direct payments in mutual trade in their national currencies, according to a joint statement on a new stage of comprehensive partnership and strategic cooperation signed during high-level talks in Shanghai on Tuesday.
“The sides intend to take new steps to increase the level and expansion of spheres of Russian-Chinese practical cooperation, in particular to establish close cooperation in the financial sphere, including an increase in direct payments in the Russian and Chinese national currencies in trade, investments and loan services,” the statement said.
The two countries are also set to deepen dialogue on macroeconomic policy issues, as well as boost growth in mutual investment, including in transportation infrastructure, the development of mineral deposits, and the construction of budget housing within Russia.
Russian President Vladimir Putin arrived in China on Tuesday for high-level talks with President of the People’s Republic of China Xi Jinping. A large package of documents, including bilateral, intergovernmental, inter-departmental and corporate agreements are expected to be signed during the two-day visit, aimed at cementing Russian-Chinese relations.
The decision to switch to the national currencies, thus reducing dependence on the US dollar was first announced in 2010 by then-Russian Prime Minister Vladimir Putin and Chinese Premier Wen Jiabao. The announcement was followed by a deal struck by the central banks of the two countries that allowed bilateral trade in the ruble and renminbi, as well as in freely convertible currency.
SHANGHAI, May 20 (RIA Novosti) – Russian President Vladimir Putin and Chinese President Xi Jinping are holding negotiations in Shanghai, China’s largest city.
The Russian leader arrived Tuesday on an official visit to China where he will also take part in the opening of joint military exercises and the summit of the Conference on Interaction and Confidence Building Measures in Asia.
Putin is expected to meet with the representatives of business circles from both Russia and China.
A welcoming ceremony was held for the Russian president before the formal talks started. The negotiations will later continue in a broader format involving delegations.
The Russian-Chinese talks are expected to result in the signing of a large package of documents, including bilateral, intergovernmental, inter-departmental and corporate agreements.
During the visit, Russia's energy giant Gazprom and the China National Petroleum Corporation (CNPC) are due to sign a deal for deliveries of 38 billion cubic meters of Russian natural gas over the next 30 years to power the booming Chinese economy.
Russia, China set to promote oil cooperation, soonest start of gas supply to China
SHANGHAI, May 20. /ITAR-TASS/. Russia and China intend to broaden cooperation in the oil industry and promote the soonest start of Russian gas supplies to China, the leaders of the two countries said in a joint statement adopted upon results of talks between Vladimir Putin and Xi Jinping in the Chinese city of Shanghai on Tuesday.
According to the document, the two countries agreed “to step up comprehensive Russian-Chinese energy partnership, broaden complex cooperation in the oil industry, promote the soonest start of Russian gas supplies to China, enhance cooperation in the coalmining industry, including through development of deposits in Russia and development of transport infrastructure and active development of construction projects of new power-generating facilities in Russia for a higher electricity export to China.”
Russia and China have signed 6 inter-governmental energy agreements over the past year. More than 20 agreements were signed between Russian and Chinese companies. The sides managed to reach agreements on a number of strategic projects and move closer to forming an energy alliance.
Launch of Eastern Siberia - Pacific Ocean oil pipeline
The launch of the Eastern Siberia - Pacific Ocean Oil Pipeline (Russia and China are implementing a large-scale project valued at more than $60 billion for deliveries of crude oil to China on a pipeline running from Skovorodino in Russia to Mohe in China) and contracts signed by the Russian oil company Rosneft (in June 2013, Rosneft signed a 25-year-long $270 billion contract for the delivery of 360.3 million tons of crude oil to China with the Chinese National Petroleum Corporation - CNPC) laid down the foundation for fruitful cooperation.
Gazprom’s contract for gas deliveries will be the next step. In 2013, Gazprom and CNPC signed a memorandum on pipeline deliveries of Russian gas to China “on the eastern route”. Liquefied natural gas (LNG) exports from a plant in Vladivostok, the Russian Far East, may help increasing the predicted gas delivery volumes. Russia and China are planning to sign a contract for delivery of 38 billion cubic meters of gas in the course of 30 years. Real supplies can start in 2018-2020. The project will mean diversification of gas supply routes for Russia and will help China to cut its energy deficit.
Other areas of energy cooperation include NOVATEK’s “Yamal LNG” gas project, Rosneft’s plans to increase oil supplies by sea as well as joint development of several fields on Sakhalin Island and in Eastern Siberia.
According to expert calculations, by 2030 China’s oil needs will account for 60% of oil demand in Asia. At the moment, China receives 40% of its oil from the Middle East.
NOVATEK and CNPC sign contract on supply of 3 million tons of LNG
NOVATEK and CNPC signed a contract of supply of three million tons of liquefied natural gas (LNG) a year. The signing ceremony took place within the framework of Russian President Vladimir Putin's official visit to China.
"We signed the basic terms last year, and now we've signed the finalized contract: three million tons," NOVATEK head Leonid Mikhelson told reporters.
LNG will be supplied within the scope of the Yamal LNG - the contract envisions the development of the Yuzhno-Tambeiskoye gas field and the construction of a plant with a capacity to produce 16.5 million tons of LNG and one million tons of natural gas liquid a year.
Three phases of the plant construction project are envisioned, each will successively increase the capacity by 5.5 million tons a year. The first phase of the plant is due to be commissioned in 2017.
NOVATEK has a 60% stake in Yamal LNG, CNPC has a 20% stake, and France's Total has another 20%.
Gazprom and Chinese National Petroleum Corp search for compromise on gas contract