ST. PETERSBURG INTERNATIONAL ECONOMIC FORUM: PUTIN EXPOSES FAILURE OF US DOLLAR POLICY, FOREIGN INVESTORS SHOW INTEREST IN RUSSIAN PROJECTS
In the following is our translation of an article by Ivan Danilov from RIA Novosti with commentary and notes [in brackets] by Vince Dhimos. See the full text of Putin’s remarks at the SPIEF on June 7, 2019, here.
Russian speakers can see the video of this speech here.
Washington officialdom was a no-show at the St. Petersburg International Economic Forum (SPIEF), but investors don’t do politics. They want to make money. So they showed up and showed interest. And here are their choices: invest in a nation with an unpayable debt run by politicians who are obviously incapable of managing finances – and in the allies of that incompetent nation – or invest in a nation run by pros, with almost no debt at all, ie, Russia, as I showed here.
The first technological war: why Putin declared it first
June 10, 2019
Vladimir Putin’s speech at SPIEF-2019 [St. Petersburg International Economic Forum] is, on the one hand, a kind of sequel to his famous “Munich speech”, and on the other hand, a challenge for the most active participation of Russia in the process of reforming (or even breaking) the existing international order political, economic and technological sphere. Further, the Russian leader once again proved to be the only world politician who had the wisdom and courage to call a spade a spade, voice what is being stated in diplomatic insinuation, and give a correct description of what is happening in the world.
And in the world, unfortunately, we have a war - “the first technological war of the new digital era.” Its results will affect world history no less than the industrial revolution of the XIX century, the First World War, the Great Patriotic War [WW II] and the Cold War. Not participating will not work, and this “will not work” equally applies both to China (which has so far hit Washington), and to all other countries (including Russia), which the US wants to keep in a state of technological backwardness and technological dependence on US corporations and on the vagaries of American politicians.
When serious political leaders, such as President Putin or Chairman Xi, speak of large-scale conflicts and threats that Washington’s aggression poses to world stability, the Western media often (and absolutely groundlessly) accuse them of using “besieged fortress rhetoric” and trying to stir up anti-American sentiment. In fact, as it is easy to see, after the famous “distribution of cookies” [refers to Assistant Secretary of State Victoria Nuland’s handing out cookies at the Maidan as part of the US regime change effort] in Kiev and the sanctions (plus attempts to bankrupt) levelled against Huawei and ZTE, that no one will ever surpass the American politicians and diplomats themselves in intensifying anti-American sentiment from Kaliningrad to Hainan.
The important point of Vladimir Putin’s speech is a thorough listing of sore spots (or, to put it frankly, festering wounds) of the current international system, the sum of which suggests that the “king” (or in this case, the “hegemon”) has turned out to be, if not naked, then utterly in rags.
The point of no return was passed about a decade ago, when Washington (with the support of the Brussels bureaucracy) refused to reform the global economy, the development format and the international monetary system, giving unequivocal preference to measures that "anesthetized" the effects of the 2008 crisis, but led to serious side effects. The Russian leader described the logic and inappropriateness of the strategy of maintaining the status quo: "To tell the absolute truth, there was not enough will, or maybe courage, to fully understand what was happening and draw the appropriate conclusions. The simplified approach prevailed: they say the global development model itself is quite viable, and there is essentially no need to change anything. It will suffice to eliminate the symptoms and partly coordinate the rules and institutions of the world economy and finance, and everything will be fine. <...> At the time there were a lot of hopes and positive expectations, but they quickly dissipated. The policy of "quantitative easing" and other measures taken did not fundamentally solve the problems, but only pushed them into the future."
It is necessary to translate into polite Russian those polite words of the Russian president, which were addressed to businessmen, financiers and economists present at the SPIEF. The very “quantitative easing” and other measures that Vladimir Putin mentioned, in fact, boil down to the following: instead of recognizing the need to reform the world economy and monetary system, the United States first resorted to the dollar printing machine, and then to “dollar sanctions” "(disconnection from the dollar-based financial system, “secondary sanctions” and embargoes) in order to put pressure on competitors and ensure American hegemony, for which there are no longer any objective grounds.
In this context, it is worth quoting the position of the famous American financier and head of the DoubleLine Capital investment fund Jeffrey Gundlach (better known as the “Bond King”), who tweeted: “President Trump says that the US is a piggy bank from which the rest of the world wants to steal. But the US has $ 124 trillion in unfunded liabilities!"
There are two (fundamentally incompatible) views on the modern world and that is the view of Trump (and many others in Washington), which assumes that it is the United States that is the victim of the rest of the world — and well-known American financiers unabashedly publicly mock this position.
And there is the opinion of Vladimir Putin, who showed on the basis of statistics of international financial institutions, that claims not only of the United States, but even of the “collective West” to global domination are already unfounded: “Over the past three decades, the share of developed countries in global GDP at purchasing power parity has decreased from 58 to 40 percent. Even the share of the G7 states decreased from 46 to 30 percent, and, conversely, the weight of countries with emerging markets is growing. Such a rapid emergence of new economies not only with their own interests, but also with their development platform, with their views on globalization and regional integration processes, are poor fits with ideas that until recently seemed unshakable."
It turns out that it is precisely US President Trump who is resorting to the "besieged fortress" (more precisely, the "besieged pig-piggy bank") rhetoric, whereas the Russian leader proposes concrete solutions to preserve the bonuses of globalization while reforming its base: instead of respecting American hegemony, Putin proposes prioritizing respect for the sovereignty of participants in international trade and technical cooperation.
It may seem (and our Western partners, as well as their media allies inside Russia will do everything to promote this illusion) that the presidential message sent to the West at the SPIEF is doomed to remain without a positive response. This view of things does not correspond to reality, because it does not reflect the reality in all its complexity and completeness. Yes, official Washington is unlikely to agree to participate in the Russian-Chinese format of "globalization based on respect for sovereignties", but this is not so important, because the White House is not all of America, and the European Commission is not all of Europe. Business pragmatists look at the situation from a completely different angle. The theme of the meeting of Western businessmen with Vladimir Putin has become a symbol of this special relationship with Russia and its future. According to the general director of RDIF [Russian Direct Investment Fund] Kirill Dmitriev, "there was a very successful meeting of the president with investors who manage capital of 15 trillion dollars. They actually confirmed their interest in national projects based on the fact that they had already made a lot of profitable and good investments with us and they see the potential of implementing national projects. "
The desire of foreign business to rely on Russia is the best proof that globalization, on the basis of respect for sovereignties, has a great, though not trouble-free future.