BRICS: Mackinder & Geopolitics

Following World War 2 and the defeat of Germany, the very word geopolitics became taboo as it was linked in many eyes with Hitler, and the Nazis. Geopolitics however is larger than that, the study of integrating politics, economics, and geography. The father of British geopolitics, Sir Halford Mackinder, first unveiled his concept of that relationship in an address to the Royal Geographical Society in 1904 in London, “The Geographical Pivot of History.”

 It was a brilliant attempt to look at the world as an entirety – or as a single whole, with what Mackinder termed ‘natural space’. For him Russia was a mammoth threat to the future of the dominant British Empire because of its vast geography as the world’s largest land power with its vast steppes, its huge natural resources and its people. He wrote, “The oversetting of the balance of power in favor of the pivot state, Russia, resulting in its expansion over the marginal lands of Euro-Asia would permit the use of vast continental resources for building a navy, and the empire of the world would then be in sight. That might happen if Germany were to ally herself with Germany.”

 Preventing that German-Russian alliance was the focus of British diplomatic machinations from 1900 that led London to initiate World War 1 against an encircled Germany, using Germany’s natural ally, Russia to do the dirty deed.

As George Friedman, founder of Stratfor, had to say, “The prime interest of the United States, over which we have fought two world wars, has been the relationship between Germany and Russia because united there; they are the only force that could threaten us.” In his 1904 essay, Mackinder wrote, “True that the Trans – Siberian Railway is still a single line of communication, but the century will not be old before all Asia is covered with railways. The spaces within the Russian Empire and China are so vast, and their potential in population, wheat, cotton, fuel and metals so great, that it is inevitable that a vast economic world will develop there, inaccessible to marine commerce.”

 He meant inaccessible to the British control of the oceans. Instead, two world wars, and five decades of NATO Cold War delayed that natural fusion of the economies of all Eurasia with railways. Basically it was a fight between “maritime powers” versus “land powers”. And so far, the globe has been dominated by a maritime power; first Britain, and now America.

 Mackinder’s idea of geopolitics shaped the Anglo-Saxon world until British financial policies caused her defeat in the two world wars to the emerging power of the world’s second land power – North America.  He shaped the idea of postwar military strategy from Henry Kissinger to Zbigniew Brzezinski to George Friedman.

 However, both the Chinese and Russian high command also studied Mackinder thoroughly. This is today’s Silk Road, integrating for the first time in history the vast untapped resources of Eurasia. This is what is now unfolding before our eyes. This is what creates such alarm in Washington and London.

 Given that both Beijing and Moscow know that they face the same “geopolitical opponent”, namely an American superpower in terminal decline, the invitation to the EU and the Central Asian countries to join the Silk Road is a brilliant further development in the creation of a multi-polar world to replace a NATO-Washington Superpower dictatorship.

 Seen from Berlin, Paris and Rome, the Eurasian emerging to their east with the multi-trillion dollar trade potentials around the creation of the world’s largest rail infrastructure development is creating the magnet for rescuing the EU from its own foolishness. It will not be long before German industrial circles bring Berlin onto that constellation, even if kicking and screaming. The world is simply tired of these endless wars for nothing.

 Beginning with the marvelous tales of Marco Polo’s travels across Eurasia to China, the Silk Road has never ceased to entrance the world. Now, the ancient cities of Samarkand, Baku, Tashkent, and Bukhara are once again firing the world’s imagination.

  China is building the world’s greatest economic development and construction project ever undertaken in human history : The New Silk Road. The project aims at no less than a revolutionary change in the economic map of the world. It is also seen by many as the first shot in a battle between East and West for dominance in Eurasia.

 The ambitious vision is to resurrect the ancient Silk Road as a modern transit, trade, and economic corridor that runs from Shanghai to Berlin. The “Road “will traverse China, Mongolia, Russia, Belarus, Poland, and Germany, extending more than 13, 000 kilometers, creating an economic zone that extends from east to west.

The plan envisions building high-speed railroads, roads, and highways, energy transmission and distribution networks, and fiber optic networks. Cities and ports will be targeted for economic development.

 An equally essential part of the plan is a sea-based “Maritime Silk Road” (MSR) component, as ambitious as its land-based project, linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean. These both have been the “One Belt-One Road” project.

 When completed, like the ancient Silk Road, it will connect three continents: Asia, Europe, and Africa. The chain of infrastructure projects will create the world’s largest economic corridor, covering a population of 4.4 billion people and an economic output of $21 trillion. In the process creating around 1.5 billion sustainable jobs! This is not a typo. Truly, 1.5 billion NEW JOBS.

 The idea for reviving the new Silk Road was first announced in 2013 by the Chinese President Xi Jinping.  As part of the financing of the plan, in 2014, the Chinese leader also announced the launch of an Asian International Infrastructure Bank (AIIB) providing seed funding for the project.

 But, we are getting ahead of ourselves. First the key players, Russia and China, had to secure themselves from the destabilizing games of London and New York.

Enter Brics

As detailed in previous issues, both Russia and China created the Shanghai Cooperating Organization, the SCO, to secure their flanks in Asia from the ‘shooting-and looting’ tactics of the US.

Once this was achieved, the next step was to build up an economic grouping in order that each party will be a back-up for the other members in this group. And so was BRICS formed. The essence was this; “either we stand together, or divided we fall”.

 It was an analyst in a Wall Street investment bank, Goldman Sachs, Jim ‘O Neill, who coined the term BRIC (no South Africa then). It stands for Brazil, Russia, India, and China. ‘O Neill points out that China, even growing by a mere 7.7% in 2012, created the equivalent of another Greek economy every 3 months!. The BRICS push is part of an irresistible global trend. The bottom line:  the North is being overtaken in the economic race by the global South at a dizzying speed. For the first time in 150 years, the combined output of the developing world’s three leading economies – Brazil, China, and India – is about equal to the combined GDP of the long-standing industrial powers of the North.

The obvious conclusion is that the rise of the South is radically reshaping the world of the 21st century, with developing nations driving economic growth, lifting hundreds of millions of people from poverty, and propelling billions more into a new global middle class.

BRICS represents 42% of the world’s population and about 20% of the world’s GDP. Total trade between the countries stands at $6.2 trillion, or nearly 17% of the world’s total. According to Russian experts, economic turnover within the BRICS in the last five years has doubled. And, despite the crisis, any downturn is not expected: The growth rate is anticipated to be 5-10% per year.

In its quest for world domination, Washington has relied on two primary tools: the dollar and the pentagon. In order to prevent Washington from establishing complete global domination, certain countries have recently been revising their positions towards these two elements by developing alternative military alliances and by breaking with their dependence on the US dollar.

  From 1946 to 1971, the gold standard was the dominant monetary system, based on a fixed quantity of gold reserves stocked in Central Banks, which limited lending. In 1946, the US owned 80% of the world’s gold reserves. That’s how the US dollar became the dominant currency for international trade and payments.

 This system came to an abrupt end in August 1971. After the ‘engineered’ 1973 Arab-Israeli war, when oil was effectively used as a weapon, the ‘petrodollar’ was born. Read my earlier issues on this subject.

From 1975 on, the control over the oil trade has become the number one priority of Washington’s foreign policy. Petrodollars became the basis for American domination over the global financial system which resulted in countries being forced to buy dollars in order to pay for oil imports on the international market.

Challenging US-Dominated Institutions

 In recent decades Beijing has made every effort to ensure that it has the resources, markets, and the strategic alliances with developing agencies to ensure a stable growth of its economy. In particular, Beijing provided a number of African, Latin American, and Asian countries with large loans. Among the countries that received such loans are Venezuela, Argentina, Ecuador, Sri Lanka, Zimbabwe, South Africa, and Ukraine. Reinforcing its claim of being the world’s largest provider of funds for developing countries, China has allocated $380 billion (as of end-2014) to strengthen its relations with countries that are pursuing anti-American policies.

 However, Chinese client states have recently started facing an increasing number of political turmoil that has been jeopardizing China’s friendly efforts. Some of the former allies of China have even preferred to switch sides and obey the harsh rule of Washington, causing some serious damage to Beijing’s master plan. One example is Sri Lanka that made a U-turn from China after a new president assumed office in January 2015. At the same time Sri Lanka had received billions of dollars in investments from China, but instead of showing gratitude it chose to make friends with Beijing’s biggest rival in the region – India.

 The total amount of Chinese government and non-state loans to Latin America amounted to $ 60 billion by end 2015. Africa received about $90 billion for development.

Needless to say, trade between South America and China continues to boom. Argentina exports food and soya beans; Brazil the same plus oil, minerals and timber; Colombia sells oil and minerals; Peru and Chile, copper and iron; Venezuela sells oil ; Bolivia, minerals . China exports mostly high value-added manufactured products.

 A key development to watch in the immediate future is the Transul project. It boils down to a Brazil-China strategic alliance linking Brazilian industrial development to partial outsourcing of metals to China. As the Chinese increase their demand – they are building 30 super-cities upto 2030 – they will be met with Brazilian companies.

 This massive trade BRICS interplay is adding urgency to Washington’s plans to destabilize the top three Latin American countries – Brazil, Argentina and Venezuela. These three countries and their leaders – Dilma Rousseff of Brazil, Christina Kirchener of Argentina, and Nicholas Maduro of Venezuela are continuously being demonized. With different degrees of complexity and internal strife, these three countries are all simultaneously facing plots against their rule.

 Under these conditions, Beijing decided to create a new financial institution and attract joint partners, and launched the two new banks. This decision was long overdue, since starting in 2010 the emerging economies began actively proposing a reform of the IMF and the World Bank. There was a time when they were saying that the world would be bowing to the almighty dollar. But the story of the AIIB says that even today many of America’s allies are dreaming about cashing yuans. As the fist fight around AIIB between Washington and Beijing gets tenser, the ultimate question is what will prevail: the brutal military force or growing economic power.

Fortaleza, Brazil

At the 2014 BRICS summit in Fortaleza, Brazil, the five heads of states declared bluntly, “We’ve remained disappointed and seriously concerned with the current non-implementation of the 2010 IMF reforms which negatively impacts on the IMF’s legitimacy, credibility, and effectiveness.”

 The BRICS members announced the formation of two new international banks, the New Development Bank as it is formally called, or informally the BRICS Development Bank. It will be headquartered in Shanghai, China’s fast-emerging world financial hub. It will open for business with a $100 billion dollar liquidity reserve to defend against possibly currency wars as Wall Street launched in 1997 to destroy the then-booming Asian Tiger economies led by South Korea, Malaysia, Indonesia, and Thailand. The New Bank will also have an initial $50 billion in capital, each BRICS country contributing $10 billion, with the agreed option to rise to $100 billion for financing BRICS infrastructure projects.

  The second bank is the Asian Infrastructure Investment Bank, or the AIIB. This would also fund infrastructure projects; the difference being it would be open to other nations joining it, as members and shareholders.

 The combination of the two new infrastructure banks poses the greatest threat to the US dollar system and its control of world financial flows since 1945. It is this threat that is driving the foreign policy agenda of Washington.

These two new banks now threaten to rival the IMF, World Bank, and the related Asian Development Bank as a long-term creditor able to attract capital to major infrastructure investment across Eurasia and beyond. These three public banks are tightly controlled by Washington to the advantage of the dollar, and the Rockefeller Empire. Washington is holding on like a pit bull to the old bylaws in which the US retains a blocking veto share of votes. The US Congress refuses to pass the IMF reforms and to break the impasse. This in a major way forced China and the BRICS states to look outside the IMF and World Bank, and build an entirely new architecture. The AIIB today is emerging rapidly as a centerpiece in this emerging global architecture.   For Washington, China is the emerging global challenger to US military power, so Obama imposes an “Asian Pivot” military strategy to encircle and “contain” China, thus angering Beijing. China’s economic and financial influence threatens the dollar system, so that too must be opposed. The BRICS threaten to become independent of Washington’s control as vassal states, so the BRICS states must be  “thought a lesson” as Washington recently attempted with its usual Color Revolution organized opposition protests against pro-BRICS President Dilma Rousseff in hopes of installing a US-friendly ‘free market’ alternative.  Also targeted for destabilization was President Zuma of South Africa, as we shall now relate.

Target Brazil

Brazil’s newly re-elected President survived a massive US disinformation campaign to win a run-off vote against US-backed Aecio Neves.  Washington had opened a new assault on one of the key leaders of BRICS – Brazil.  With a full-scale financial warfare to weaken Russia, and a series of destabilizations aimed at China, including the October 2014, “Umbrella Revolution”, getting rid of Brazil’s President became a top priority.

 During the bitter election campaign in 2014 between Rousseff and Neves, the Neves opposition began circulating rumours that Rousseff was implicated in a scandal involving the state oil giant, Petrobras.  Rousseff had served on Petrobras’s board of directors until 2010.This is how a typical smear campaign begins, and gathers strength with more allegations.

 Just days after her election victory, on November 2, the American accounting firm, Price Waterhouse Coopers, PWC, refused to sign Petrobras’s third quarter earnings, and demanded wider investigation into the corruption scandal involving Petrobras. PWC is one of the most scandal-ridden American accounting firms. It was implicated in 14 years of covering up fraud in the AIG insurance group which was at the heart of the 2008 financial crisis. Both AIG and PWC are companies in the Rockefeller orbit.

 It is not merely Rousseff’s alliance with BRICS countries that has made her a prime target of Washington. Under her tenure, Brazil is moving swiftly to decouple from US NSA electronic surveillance vulnerability. Days after her re-election, the state-owned Telebras announced plans to construct a major underwater fiber optic telecommunications cable from Fortaleza to Portugal. It represents a major break for trans-Atlantic communications with US technology domination. The project will be built without involvement of US companies.

 The Snowden NSA revelations in 2013 revealed the intimate ties of key strategic IT companies like Cisco Systems, Microsoft and others to the US intelligence community. Brazil has reacted to the NSA leaks by making thorough audits of all foreign-made equipment to check for security vulnerabilities and accelerated the country’s move toward technological self reliance.

 Until now virtually all Trans-Atlantic traffic routed via the east coast of USA to Europe and Africa a major espionage advantage for Washington. Rousseff ordered termination of contracts with Microsoft for Outlook e mail services. She said it was to help “prevent espionage. Instead Brazil is going national with its own e-mail system called Expresso.

 In September 2013, in a response to the NSA spying on Petrobras and herself personally, she suspended a scheduled visit to Washington.

 What is unraveling is so crucial because Brazil is the second-biggest economy in the Americas (after the US) ; it is the biggest Latin American commercial and financial power, and it also hosts the biggest corporation in Latin America, Petrobras, also one of the world’s top energy giants. The hardcore pressure against Petrobras comes from US shareholders who act like vultures, bent on bleeding the company and profit from it.

 In a nutshell, Brazil is the last great sovereign frontier against unbounded Rockefeller domination in the Americas.  Washington had to be annoyed.

 The constantly evolving strategic partnership of the BRICS nations has been met by Washington circles with incredibility and fear. It is virtually impossible for Washington to do real damage to China, but much easier in the case of Brazil, South Africa or Russia. Even though Washington’s wrath targets China – which has dared to do deal after deal in the former America’s “backyard”.

 In the past five years, China and Russia have clinched many deals in Brazil, Argentina, Venezuela, Ecuador and Bolivia amounting to more than $150 billion, ranging from energy, to mining, to infrastructure, to railways, and agriculture.

Oil Geopolitics

 Brazil is also moving away from the Anglo-American domination of its oil and gas exploration. In 2007 Petrobras discovered a mammoth new basin of high quality oil on the Brazilian Continental Shelf offshore in the Santos Basin.  Since then, Petrobras has sunk 11 oil wells in the Santos Basin, all successful. At Tupi and Iara alone, Petrobras estimates there are 8-12 billion barrels of recoverable oil. In total the Brazilian Continental Shelf could contain over 100 billion barrels, transforming the country into a major oil and gas power, something the Rockefeller oil majors Exxon and Chevron have tried hard to control.

   In 2009 Rousseff’s predecessor Lula da Silva, or Lula, made Petrobras the chief operator of all offshore blocks. The Rockefeller oil companies were furious. Making matters worse in Washington’s eyes, Lula not only pushed Exxon and Chevron out of the controlling position in favor of Petrobras, but he also opened Brazilian oil exploration to the Chinese.

 In December 2010, he oversaw the signing of a deal between the Brazilian-Spanish company Repsol and China’s Sinopec. These two companies formed a new joint venture, Repsol Brazil, and invested more than $7 billion. In 2012 in a joint exploration drilling, Repsol Sinopec, Norway’s Statoil and Petrobras made a major new discovery in Pao de Acucar, which includes the Seat and Gavea, the latter one of the world’s 10 largest discoveries in 2011 American and British oil companies were nowhere to be seen.

 In May 2013, US Vice President Joe Biden made a trip to Brazil where his agenda focused on oil and gas development. He met with Rousseff and with Petrobras officials. Rousseff refused to reverse the 2009 oil law in a way suitable to Washington. Days after Biden’s visit came the Snowden NSA revelations that the US had spied on Rousseff and top Petrobras officials. She was livid and denounced the Obama Administration that September before the UN General Assembly for violating international law. She cancelled a planned Washington visit in protest. After that US-Brazil relations took a dive.

Before Biden’s May 2013 visit, Dilma Rousseff had a 7) % popularity rating. Less than two weeks after Biden left Brazil, nationwide protests by a well0organized group brought the country virtually to a halt and turned very violent. The protests were the hallmark of a typical “Color Revolution”, or Twitter destabilization that seems to follow Biden wherever he makes a presence. Within weeks Rousseff’s popularity plummeted to 30%.

   We shall now switch over to another BRICS member, South Africa, whose President Jacob Zuma, became the target of Washington.

   To be continued – – – –

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