(https://www.c-span.org/video/?414272-1/defense-department-briefing)

Daniel McAdams, a foreign policy analyst at the Ron Paul Institute for Peace and prosperity, has raised some interesting questions regarding a press conference held by the Pentagon on August 22nd:

Reading between the lines in today’s Pentagon press briefing, a bombshell US policy shift is becoming more apparent: Syrian forces and their Russian partners are being told that conducting military operations in some parts of Syrian airspace opens them up to being shot down by the US military.

Pentagon Spokesman Peter Cook was asked numerous times in numerous ways whether this amounts to a US “no fly zone” over parts of Syria. His first response was vague but threatening:

We will use our air power as needed to protect coalition forces and our partnered operations. …We advise the Syrian regime to steer clear of [certain] areas.The policy shift was so apparent that, one-by-one, the press corps asked for clarification. Does this mean that the US would shoot down Russian or Syrian planes if they attacked any US-backed partners even if they were engaged against Syrian government forces? Are those “coalition forces” and “partnered operations” receiving US protection against attack from the air always in receipt of that protection, or only when they are actively engaged in military operations? What are the rules of engagement?

There was no clear answer from the Pentagon spokesman.

“Is this a ‘no-fly’ zone, then,” asked another reporter. It’s not a “no-fly zone” Cook responded.

Another journalist tried to get some clarity:

How is telling Syria not to fly in certain areas not a ‘no fly’ zone?

“Call it what you will,” Cook eventually said.

Another journalist asked, “Do you think the Syrian regime has the right to fly over its own territory?”

Same answer: “We will use our air power as needed to protect coalition forces and our partnered operations.”

The press conference in question can be viewed here.

On a separate but related note, it has been reported at The Intercept, that U.S. defense contractors are telling investors that the “threat” of Russia that is being played up in Washington and in the corporate media represents a boon for their business:

The escalating anti-Russian rhetoric in the U.S. presidential campaign comes in the midst of a major push by military contractors to position Moscow as a potent enemy that must be countered with a drastic increase in military spending by NATO countries.

Weapon makers have told investors that they are relying on tensions with Russia to fuel new business in the wake of Russia’sannexation of Crimea and modest increases in its military budget.

In particular, the arms industry — both directly and through its arsenal of hired-gun, think-tank experts and lobbyists – is actively pressuring NATO member nations to hike defense spending in line with the NATO goal for member states to spend at least 2 percent of gross domestic product on defense.

Retired Army Gen. Richard Cody, a vice president at L-3 Communications, the seventh largest U.S. defense contractor, explained to shareholders in December that the industry was faced with a historic opportunity. Following the end of the Cold War, Cody said, peace had “pretty much broken out all over the world,” with Russia in decline and NATO nations celebrating. “The Wall came down,” he said, and “all defense budgets went south.”

Now, Cody argued, Russia “is resurgent” around the world, putting pressure on U.S. allies. “Nations that belong to NATO are supposed to spend 2 percent of their GDP on defense,” he said, according to a transcript of his remarks. “We know that uptick is coming and so we postured ourselves for it.”

….Think tanks with major funding from defense contractors, including the Lexington Institute and the Atlantic Council, have similarly demanded higher defense spending to counter Russia.

Stephen Hadley, the former National Security Advisor to President George W. Bush now serving on the board of Raytheon, a firm competing for major NATO military contracts, has argued forcefully for hiking defense budgets and providing lethal aid to Ukraine. Hadley said in a speech last summer that the U.S. must “raise the cost for what Russia is doing in Ukraine,” adding that “even President Putin is sensitive to body bags.”

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(Netanyahu and Abbas.  Credit: Associated Press;  http://www.haaretz.com/israel-news/1.737979)

Meanwhile, the Israeli newspaper Haaretz has reported that, according to Egyptian president, Al-Sissi, Putin has stated his willingness to hold a peace summit between Palestinian president Mahmoud Abbas and Israeli prime minister, Benjamin Netanyahu:

Egyptian President Abdel-Fattah al-Sissi said that Russian President Vladimir Putin has expressed a willingness to host Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas for talks in Moscow, Egyptian media reported on Monday.

Sissi’s remarks came as Israeli and Palestinians officials reported unsuccessful efforts on the part of European officials to try and arrange a similar summit.

“The Russian president has informed me that he has invited Palestinian President [Abbas] and Prime Minister Netanyahu for a meeting in Moscow,” Sissi said.

“Egypt supports these efforts and both sides are urged to participate and respond positively to the initiative for the sake of finding light at the end of the tunnel for Palestinians and establishing their state alongside Israel.”

According to Sissi, “Egypt’s relationship with both sides, Israelis and the Palestinians, permit it to play a central role in the attempt to renew the diplomatic process.” Nonetheless, he said, Egypt cannot be solely responsible, but will rather be “that which convinces the sides that if peace will be attained light will shine on the entire region.”

I’m not sure how Putin would be able to work around the Israeli government’s intransigence on this issue, but if any world leader is adept at pulling a rabbit out of his hat, it is Putin.  I wish him much luck – he will need it .

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There have been several OSCE reports over the months indicating that OSCE monitors of the contact line in Donbass have encountered hostility and threats from soldiers representing the Donetsk People’s Republic (DPR) in the course of doing their job. I’m also aware of reports that many in the DPR do not trust the OSCE monitors and believe them, for various reasons, to be biased.

Consequently, DPR’s leader Aleksandr Zakharachenko, had a meeting with leaders of the OSCE mission in Ukraine, after which he gave the following statement:

We have discussed with Mr. Hug all the questions which are of interest for, on the one hand, the OSCE monitoring mission and, on the other hand, the Donetsk People’s Republic. In particular, it was issues relating to the ceasefire o the contact line. In this regard, I appealed to Mr. Hug with a request for the OSCE mission to be more objective.

With regard to the security of the OSCE observers in the Donetsk People’s Republic, I suggested that Mr. Hug consider an option of our officers accompanying the observers. Then we will be able to take responsibility not only for the safety of the observers, but also for the fact that there will be no obstacles and misunderstandings in the performance of their duties.

In addition, I made a proposal that the OSCE warn us about the work of their drones. In this case, no one will interfere with their work. Otherwise, our military perceive drones as unidentified aircraft that may pose a threat to our residents. As it is known, recently, the Ukrainian side has been using their drones not only for the reconnaissance and subsequent shelling, but also directly to attack, stuffing their UAVs with explosives.

On the whole, the conversation was constructive, and we agreed to meet again after Mr. Hug ponders my suggestions.

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(Map of Syria; https://consortiumnews.com/2016/08/23/propaganda-for-syrian-regime-change/)

Rick Sterling, whom was an acquaintance of mine during the mid-2000’s when we both volunteered for the Mt. Diablo Peace & Justice Center in Walnut Creek, has gone on several fact-finding missions to Syria in the past couple of years.  His latest article details how the American people are being primed with propaganda to support military escalation on behalf of regime change in Syria, being sold under the “humanitarian” label:

….There has been lots of publicity around a letter to President Obama, supposedly written by 15 doctors in East Aleppo. The letter ends “We need your action.” The flow and wording of the letter suggests it may have been composed by a marketing company and there has been no verification of the doctors who supposedly signed it.

The letter was likely written by a paid Syria War propagandist or Washington lobby firm. Read the letter here and judge for yourself. For contrast watch this interview with a real Syrian doctor not mouthing propaganda from K Street in Washington D.C.

An online Change petition asks German Chancellor Angela Merkel and President Barack Obama to “save the people of Aleppo.” The publicly funded Holocaust Memorial Museum has promoted the video #SaveSyria. One of the producers of the video is The Syria Campaign which is the marketing organization which branded the pervasive “White Helmets,” as documented in “Seven Steps of Highly Effective Manipulators”.

In parallel with this media campaign, the House Foreign Affairs Committee has introduced HR5732 the “Caesar Syrian Civilian Protection Act of 2016.” The resolution calls for escalating economic/financial pressure on Syria and “Assessment of potential effectiveness of and requirements for the establishment of safe zones or a no fly zone in Syria”.

Dr. Sahloul, the Syrian American Medical Society doctor / spokesperson, says that Obama’s legacy will be defined by whether or not he attacks Syria to impose a “no fly zone.”  It seems unlikely that Obama would do that at the end of his term. Instead, the goal is to prepare the public for the new war to begin after Hillary Clinton becomes President.

….Here a few facts about Aleppo which contradict the mainstream media narrative:

–At least 85 percent of Aleppo’s population is in government-controlled areas.

–The estimate of 300,000 civilians in rebel/terrorist-controlled east Aleppo is likely a gross exaggeration. In spring 2015, Martin Chulov of the Guardian visited the area and estimated there were 40,000.

–While there are very few doctors serving in the opposition-controlled Aleppo, there are thousands of doctors working in the government-controlled area.

–The dominant rebel-terrorist group in Aleppo is the Syrian version of Al Qaeda.

–The armed groups who invaded Aleppo have been unpopular from the beginning. In the fall of 2012, journalist James Foley wrote: “Aleppo, a city of about 3 million people, was once the financial heart of Syria. As it continues to deteriorate, many civilians here are losing patience with the increasingly violent and unrecognizable opposition — one that is hampered by infighting and a lack of structure, and deeply infiltrated by both foreign fighters and terrorist groups.” (Foley was later captured by Syrian rebels and executed by the Islamic State on Aug. 19, 2014.)

–The rebel-terrorists launch dozens and sometimes hundreds of mortars daily into the government-controlled areas causing huge casualties. Western media ignores this destruction and loss of life.

–The much publicized April bombing of the supposed Medecins sans Frontieres-supported “Al Quds Hospital” in Aleppo was full of contradictions and discrepancies. These were highlighted in an Open Letter to MSF. To this date, MSF has not provided corroborating information.

–Much of the video purporting to show bombing effects in Aleppo are stamped with the “White Helmets” logo. White Helmets is a creation of the U.S. and U.K. and primarily a propaganda tool. The claims they are Syrian, independent and non-partisan are all false.

–Much of the information about Syria comes from “activists” trained and paid by the U.S. In her book  Hard Choices, Secretary Clinton says the U.S. provided “training for more than a thousand (Syrian) activists, students, and independent journalists” (p464, hardback version). Obviously they are not independent and their reports should be carefully checked.

–In contrast with the ambiguous situation at “Al Quds Hospital”, consider what happened to Aleppo’s “Al Kindi Hospital.” Take three minutes to view the suicide bombing of Al Kindi Hospital. Take two minutes to view what the “rebels” did to Syrian soldiers who had been guarding the hospital.

–Like NBC correspondent Richard Engels’s fake kidnapping and the contrived CNN reports by “Syrian Danny,” the Aug. 21, 2013 chemical attack in Ghouta has been essentially shown to have been a staged event intended to force a U.S. attack on the Syrian government by making it appear that President Bashar al-Assad had crossed President Obama’s “red line.”

–The latest propaganda tool being used to promote U.S. aggression against Syria is the photograph of little Omran in the orange ambulance seat. The video comes from the Aleppo Media Center, or AMC. Like the White Helmets, AMC is a U.S. creation.

The photo of Omran has been widely accepted without scrutiny. The insightful Moon of Alabama has raised serious questions about the media sensation. Brad Hoff has documented that the main photographer, Mahmoud Raslan, is an ally of the Nour al Din al Zenki rebel terrorists who beheaded a young Palestinian Syrian a few weeks ago, confirmed step by step in this short video. Another good short video exposing the propaganda around #Syrianboy is here.

Why the Burst of Propaganda?

The Syrian crisis is at a critical point with the prospect that the rebel/terrorists will collapse.  If they are crushed or expelled, it would allow hundreds of thousands of displaced Aleppans to return home as soon as services are restored. This would also allow the Syrian army and allies to focus on attacking the Islamic State in the east and rebel/terrorist groups remaining in Idlib, Hama, the outskirts of Damascus and the south.

The full article can be read here.

As reported in The Duran, recently leaked emails reveal that George Soros used his influence with many key players from Washington with respect to the Ukraine coup and its aftermath in 2014.

Soros has a history of using his network of NGO’s to foment instability in target countries in order to help pave the way for insertion of leaders who will be receptive to American corporate and geopolitical interests, while Soros often gets to profit as a carpetbagger afterwards.  The role of Soros and his network of NGO’s in the Ukraine crisis of 2013-2014 is discussed in my co-author’s half of Ukraine: Zbig’s Grand Chessboard & How the West Was Checkmated.

….More documents, in the massive 2,500 leaked tranche, show the immense power and control Soros had over Ukraine immediately following the illegal Maidan government overthrow.

Soros and his NGO executives held detailed and extensive meetings with just about every actor involved in the Maidan coup…from US Ambassador Geoffrey Pyatt, to Ukraine’s Ministers of Foreign Affairs, Justice, Health, and Education.

The only person missing was Victoria Nuland, though we are sure those meeting minutes are waiting to see the light of day.

Plans to subvert and undermine Russian influence and cultural ties to Ukraine are a central focus of every conversation. US hard power, and EU soft power, is central towards bringing Ukraine into the neo-liberal model that Soros champions, while bringing Russia to its economic knees.

Soros NGO,  International Renaissance Foundation (IRF) plays a key role in the formation of the “New Ukraine”…the term Soros frequently uses when referring to his Ukraine project.

The leaked documents can be found here.

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EurActiv is reporting that, as a consequence of cratered relations between Washington and Ankara in the wake of the failed coup attempt which Erdogan blames on Washington, the U.S. is in the process of removing its 50 tactical nuclear weapons from the Incirlik base in Turkey to Romania.

EXCLUSIVE – Two independent sources have told EurActiv.com that the U.S. has started transferring nuclear weapons stationed in Turkey to Romania, against the background of worsening relations between Washington and Ankara.

According to one of the sources, the transfer has been very challenging in technical and political terms. “It’s not easy to move 20+ nukes,” said the source, on conditions of anonymity.

According to a recent report by the Simson Center, since the Cold War, some 50 U.S. tactical nuclear weapons have been stationed at Turkey’s Incirlik air base, approximately 100 kilometres from the Syrian border.

During the failed coup in Turkey in July, Incirlik’s power was cut, and the Turkish government prohibited U.S. aircraft from flying in or out. Eventually, the base commander was arrested and implicated in the coup. Whether the U.S. could have maintained control of the weapons in the event of a protracted civil conflict in Turkey is an unanswerable question, the report says.

Another source told EurActiv.com that the U.S.-Turkey relations had deteriorated so much following the coup that Washington no longer trusted Ankara to host the weapons. The American weapons are being moved to the Deveselu air base in Romania, the source said.

Deveselu, near the city of Caracal, is the new home of the U.S. missile shield, which has infuriated Russia.

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By now, many are aware of the reports of dead civilians allegedly resulting from Russian bombing runs in support of the Syrian government in the battle of Aleppo.

Russia’s Defense Ministry has announced an official denial of the charges:

Russia’s Defense Ministry has denied claims it carried out attacks on a civilian area in Aleppo’s Qaterji district. The claims were made by Western media after video and pictures of a wounded five-year-old boy from the area emerged online.

“The critical plight that the children from eastern Aleppo districts are in – unwillingly taken hostage by terrorists – is surely a tragedy,” said the official representative of the Russian Defense Ministry, Igor Konashenkov.

He criticized certain Western media for the “cynical use of this tragedy in anti-Russian propaganda material,” calling it a “moral crime.”

“We have repeatedly stressed that the Russian Air Force planes operating in Syria never work on targets within residential areas,” Konashenkov said.

“It is all the more relevant regarding al-Qaterji, mentioned by the Western media, as it is adjacent to the exit corridors for locals which were opened in the framework of the Russian humanitarian mission,” he added, as quoted in a Defense Ministry press release.

Russian monitoring groups have noted daily terrorist strikes in the area, conducted using makeshift artillery mounts. The terrorists, the Russian humanitarian mission says, “target roads, streets, and residential buildings in the close proximity of the humanitarian passages.”

“It is done to disrupt any attempts to receive medical and other kinds of aid for eastern Aleppo residents, who are basically terrorist hostages now.

“The nature of the debris shown by Western broadcasters during the operation to save [the wounded boy, Omran Daqneesh] demonstrates that there are intact windows in a building nearby, and this in turn shows that the strike, if it happened, was carried out not using aircraft ammunition but a mine or a gas cylinder, which are commonly used by terrorists,” Konashenkov also said.

1.  Deconstructing the NATO Narrative on Syria by Eva Bartlett.  (Bartlett is an independent journalist who has been reporting in different parts of Syria throughout the war)
2. Syria; Another Pipeline War by Robert F. Kennedy, Jr. (This article appeared at The Ecologist in February of 2016)
3. Pentagon Report Says West, Gulf States and Turkey Foresaw Emergence of ISIS by Nafeez Ahmed (This article was originally published at The Middle East Eye on May 29, 2015)
4. The Red Line and the Rat Line by Seymour Hersh (This article was originally published in April of 2014 by Hersh, Pulitzer Prize winning investigative journalist, at the London Review of Books)

As mentioned in a previous post, Putin’s long-time Chief of Staff, Sergei Ivanov, resigned recently and has been replaced by Anton Vaino.  Vaino is not well-known and Marina Obrazkova at Russia Direct had an article providing some background and information about him:

Last week Russian President Vladimir Putin appointed a new Chief of Staff of the Presidential Administration, Anton Vaino, who will also become a permanent member of Russia’s Security Council. The former head of the Presidential Administration, Sergei Ivanov, will now focus on questions of environmental protection, ecology and transport as a special presidential envoy.

….Until recently Vaino worked as a deputy head of the Kremlin’s Presidential Administration. The new Chief of Staff is 44 years old and is originally from Tallinn, the capital of Estonia. A graduate of the Moscow State Institute of International Relations (MGIMO University), Vaino is fluent in English and Japanese. After graduation, he worked in the Russian embassy in Japan and, later, served in the Asia department of the Russia’s Foreign Ministry.

Vaino’s colleagues argue that he is a competent and reserved person. “Such traits as composure, friendliness, and discretion will merge well with his managerial style. He is hardworking and energetic. He is capable of setting goals of different scope and scale as well as controlling them. Vaino is a classic manager,” Dmitry Orlov, general director at the Agency of Political and Economic Communications, told Russia Direct

The new Chief of Staff has acquired his popularity quite quickly, the expert points out. “In terms of ratings, Vaino moved up quickly from the top 90 to the top 20, even though transitions in Russian politics are usually quite conservative,” he explains. “This is a sign that he has a serious position in the power structure and the president has a high assessment of his work.”

According to Orlov, the growth of Vaino’s influence has not surprised the expert community. His appointment, though, did.

Meanwhile, Pavel Salin, director of the Center for Political Studies at the Financial University under the Russian Government, argues that Ivanov, as a trusted member of the president’s inner circle, was a very strong political figure and had power to influence the decision-making process. In contrast, Vaino is just a technocrat, notwithstanding his knowledge of the Kremlin’s inner workings.

“It might be said that he is Putin’s former aide-de-camp. He was the head of protocol carrying out all technical functions and had access to the physical presence of the president 24/7,” the political analyst says. “Notwithstanding his invisibility, he is well aware of all intricacies of the Presidential Administration.”

Obrazkova’s sources reiterate the importance of this particular political role in the Kremlin:

The position of Chief of Staff of the Presidential Administration is one of the most influential ones in Russian politics. According to Orlov, this position is in the top five judging by overall importance. Officially, the head of this structure is the third most important person in the country.

“The head of the Presidential Administration is an important position – the third most significant role in Russia,” the political analyst says.

Salin agrees with this view but he adds that this position depends a lot on personality.

“The role of Chief of Staff as well as the role of any presidential body, is highly dependent on the loyalty of its leader. Another factor is the president’s vision for the given institution: whether he wants to see it strong or weak, independent or simply technical,” he said.

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Gilhard Verjoen, a new writer on Russia issues over at The Duran,  discusses his experience with a phenomena that many of us independent Russia analysts (who have done in-depth research with an open mind and even visited the country we’re commenting on) know all too well:  the major disconnect between the real Russia and the Russia that is portrayed in western mainstream media.

Just as in any other country some people in Russia like their President and some people don’t.  However when the Western media continually bad mouths a country (Russia), there is always an agenda behind it. In every country where Washington wanted a regime change, they demonised its leader in order to get public support to intervene and come to the rescue of its poor population that suffers under this demon of a leader. Now they are doing the same with Russia.

Truth however is, Yes Putin is not an Angel nor a knight in shining armour, but he has paid off all the debt the country owed and he turned the economy round and built up its military again.

One of the most common ways to interpret a country’s well being is to look at its GDP. Russia’s GDP speaks for itself.  However I went further and looked at findings of the OECD (Organisation for Economic Co-operation and Development), which states on its website, that 69% of people in Russia are employed compared to 65% of OECD countries. In OECD countries 13% of employees work extremely long hours, compared to 0.2% in Russia.

Yes in Russia, the average disposable income per household is at $19,292, lower than the $25,908 of the OECD countries, but when people were asked how satisfied they are with life (out of 10), the Russian average was 6 – very close to the OECD average of 6.6. In the OECD countries, 75% of people have secondary education, whilst in Russia it is 94%. The list goes on and on. All the detail can be found here.

So just where do the Western media get their sources that Russians are not happy or are suffering under Putin?

Most of the cross-section of Russians I spoke to on my trip last October, were reasonably content with their lives.  I will add the caveat that I visited major cities and, therefore, cannot speak to how Russians living in the hinterlands may feel about their lives – at least, not from personally talking to them.

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Independent journalist and academic, F. William Engdahl, reports at New Eastern Outlook that Putin has finally sidelined the neoliberals, led by Alexei Kudrin, and given a green light to the “statists,” led by Sergei Glazyev.

After more than two years of worsening economic growth and an economy struggling with 10.5% central bank interest rates that make new credit to spur growth virtually impossible, Russian President Vladimir Putin has finally broken an internal factional standoff. On July 25 he mandated that an economic group called the Stolypin Club prepare their proposals to spur growth revival to be presented to the government by the Fourth Quarter of this year. In doing so, Putin has rejected two influential liberal or neo-liberal economic factions that had brought Russia into a politically and economically dangerous recession with their liberal Western free market ideology. This is a major development, one I had been expecting since I had the possibility to exchange views this June in St. Petersburg at the annual St. Petersburg International Economic Forum.

With very little fanfare, Russian press a few days ago carried a note that could have a most profound positive significance for the future of the Russian domestic economy. The online Russian blog, Katheon, carried the following short notice: “Russian President Vladimir Putin instructed (the Stolypin economist group–w.e.) to finalize the report of the Stolypin Club and on its basis to prepare a new program of economic development, alternative to Kudrin’s economic plan. The program itself should be given to the Bureau of Economic Council in the IV quarter of 2016.”

….In the current situation of severe Western economic and financial sanctions against Russia the flows of such private investment into the economy as the Kudrin camp advocates are rare, to put it gently. Cutting what is a very minimal budget deficit only increases unemployment and worsens the situation. President Putin has clearly realized that that neo-liberal “experiment” has failed. More likely, is that he was forced to let economic reality unfold under the domination of the liberals to the point it was clear to all internal factions that another road was urgently needed. Russia, like every country, has opposing vested interests and now clearly the neo-liberal bested interests are sufficiently discredited by the poor performance of the Kudrin group that the President is able to move decisively. In either case, the development around the Stolypin Group is very positive for Russia.

In convening the new meeting of the Economic Council Presidium on May 25, after a hiatus of two years, President Putin, noting that the group deliberately consisted of opposing views, at that time stated, “I propose today that we start with the growth sources for Russia’s economy over the next decade…The current dynamic shows us that the reserves and resources that served as driving forces for our economy at the start of the 2000’s no longer produce the effects they used to. I have said in the past, and want to stress this point again now, economic growth does not get underway again all on its own. If we do not find new growth sources, we will see GDP growth of around zero, and then our possibilities in the social sector, national defense and security, and in other areas, will be considerably lower than what is needed for us to really develop the country and make progress. “

Now just two months later, Putin obviously has decided. He clearly has an eye as well to Russia’s next presidential elections in March 2018. In doing so he has selected the one group of the three on the Economic Council that believes that the state has a positive role to play in development of the national economy.

The Stolypin group in many ways harkens back to the genius behind the German “economic miracle” after 1871, whose ideas created the most impressive economic growth from backwardness in all Europe within just over three decades. The only other countries to come near to that German economic achievement were the United States after 1865, and the Peoples’ Republic of China after 1979, with the Deng Xiaoping “Socialism with Chinese Characteristics.” The national economic development model is based on the work of the now-all-but-unknown 19th Century German national economist, Friederich List, the developer of the basic model of national economic development.

….The group is in essence followers of what the great almost-forgotten 19th Century German economist, Friedrich List, would call “national economy” strategies. List’s national economy historical-based approach was in direct counter-position to the then-dominant British Adam Smith free trade school.

List’s views were increasingly integrated into the German Reich economic strategy beginning under the Zollverein or German Customs Union in 1834, that unified one German internal domestic market. It created the basis by the 1870’s for the most colossal emergence of Germany as an economic rival exceeding Great Britain in every area by 1914.

….A broad indication of the kind of proposals the Stolypin group will propose to revive substantial economic growth in Russia and deal with major basic infrastructure deficits that greatly hinder productive enterprise came in a series of proposals Glazyev made in September 2015 to the Russian Security Council, a key advisory body to the President.

There, Glazyev proposed a five-year ‘road map’ to Russia’s economic sovereignty and long-term growth. It was aimed toward building up the country’s immunity to external shocks and foreign influence, and ultimately, toward bringing Russia out of the periphery and into the core of the global economic system. Goals included raising industrial output by 30-35 percent over a five year period, creating a socially-oriented ‘knowledge economy’ via the transfer of substantial economic resources to education, health care and the social sphere, the creation of instruments aimed at increasing savings as a percent of GDP, and other initiatives, including a transition to a sovereign monetary policy.

However, Dmitry Dokuchaev at Russia Direct has taken a much more tepid view of what has actually been decided upon in terms of the economic policies of the liberals vs. the statists:

For now, the competing strategies have not been written yet, and public discussions on them have not started. True, this May, the two concepts were discussed during the meeting of the Presidential Presidium of the Economic Council, but only behind closed doors. Nevertheless, over the last couple of months, the two sides have made a sufficient number of statements and allowed some “leaks” that can provide the basis on which to judge the content of future programs.

In December 2015, representatives of the Stolypin Club issued a report, which, apparently, will form the basis of their strategy. In it, they outline how to boost the economic growth in the country. They proposed to increase investments, pumping up the economy with state money from the budget, and by having the Central Bank issue 1.5 trillion rubles. Simultaneously with that, they expressed the idea of cancelling the “free floating” ruble (i.e., the pure market determination of its exchange rate), by having the exchange rate set by the Central Bank, while at the same time limiting speculative assaults against the national currency.

At the second stage, they plan to bring the tax system into line with the standards used in developed countries. In particular, this calls for the return of the unified social tax (UST) that was canceled in 2010, as well as the reduction of the tax burden on businesses from the current 49 percent, to an average 41 percent level. Also outlined were such measures as “soft” currency regulation, as well as reforms to land laws, the judicial system and certain aspects of the old age pensions program.

A different concept was proposed by the Center for Strategic Studies, headed by Kudrin. In his opinion,investments should come from the private sector, but the state needs to create favorable conditions for this – by ensuring macroeconomic stability, low inflation and reduced budget deficits. This also means carrying out reforms, as well as ending the new “cold war” with the West, reducing geopolitical tensions and seeking foreign investments.

In addition, Kudrin does not believe that economic growth is being hampered by a lack of money, which allegedly the country needs to print. Corporate bank accounts currently have accumulated savings of 14 trillion rubles, which is sufficient for the investment needs of the country for one year. However, according to Kudrin, in the current circumstances, business simply prefers not to invest these funds, but keep them in reserve for the proverbial “rainy day.”

Commodity companies have also acquired a stockpile of money, which they are not planning to invest. This money is sitting in bank accounts, earning very good returns due to high interest rates, argues Titov of the Stolypin Club. The demand for cheap money is huge – if one were to announce the availability of loans at below market rates, lineups would form from the Kremlin to the Garden Ring Road, he insists.

Titov refers to the economic program of his rival Kudrin as the “lazy economy.” According to him, Kudrin’s plan, which involves inflation targeting and following a tight fiscal policy, does not imply active actions – one just needs to wait for the economy to adapt to external conditions. For their part, Kudrin and his supporters are convinced that the active stimulation of the economy, through the use of the printing press and the issuance of cheap loans, as proposed by the Stolypin Club, will, in the end, only lead to the acceleration of inflation and ruble volatility.

….With his program, Kudrin is forcing the head of state to make a tough choice – either ambitious political goals and economic stagnation, or modest political goals and moderate economic growth. The ex-finance minister’s concept is strong, in that it will preserve the financial reserves of the government and the Central Bank, which, in turn, ensure the security of the state.

However, Putin is unlikely to look favorably on Kudrin’s defeatist position, which involves talk about backwardness and a lack of faith in a positive future, as well as conviction that Russia cannot rely on four-percent GDP growth in the coming years.

The same applies when it comes to improving relations with the West: Putin has already clearly stated that Russia will not sell its sovereignty. Nevertheless, many experts believe that, in the end, priority will be given to Kudrin’s program. After all, Putin, over the years of his reign, has shown himself as a statist in the political sense, but at the same time, he has always favored liberal approaches when it came to the economy.

I don’t totally agree that Putin has always had a cut-and-dried preference for neoliberal economic policy.  In my assessment, he has had a more discerning approach, believing in trade and markets but not to the extent of selling out control of its economic resources to foreign investors or completely lopsided trade agreements, and also stating publicly that Russia is a welfare state.  I think Putin tends to lean more toward the economic model of the Scandinavian countries (circa the 1970’s and 1980’s) as a long-term goal.

This will, no doubt, be an interesting story to follow in the coming months.

As an update to the last post in connection with the provocations from Ukraine into Crimea, analyst Alexander Mercouris has noted that Western governments have provided little to no public support to the Kiev government on this issue:

In the event the most surprising fact about the Crimean incident is that there have not even been the ritual statements from Western governments of support for Ukraine that I expected.  On the contrary Western governments have publicly said virtually nothing about the incident.  A meeting of the UN Security Council did take place on Thursday to discuss the incident, but the meeting took place in closed session so scarcely anything is known about it.  By contrast the calls for restraint I said would be made by the West to Ukraine in private are being made in public as well.

Meanwhile Ukrainian attempts to drum up international support have met with only a tepid response.  US Vice President Biden did speak on Friday to Ukrainian President Poroshenko.  However the White House press release on the conversation significantly fails to support the Ukrainian account of the Crimean incident.  Instead, whilst making ritual references to US support for Ukraine’s sovereignty and territorial integrity, it says that

“The Vice President urged President Poroshenko to do his part to avoid escalating tensions. The Vice President noted that we have urged the Russian side to do the same.”

Not only does this comment fail to back Ukraine’s account of the incident, but it puts Ukraine on the same level as Russia, implying that Ukraine needs to heed calls for “restraint” as much as Russia.  That would certainly not be what the US would be saying if it were publicly blaming Russia for the incident.

….The lack of support for Ukraine over this incident is partly explained by the fact that the Russian account of it is (as I have said previously) undoubtedly true.  Not only do all the known facts confirm as much, but Ukrainian explanations – that the shooting incident was the result of drunk Russian soldiers shooting at each other, and that Yevgeny Panov (the alleged Ukrainian leader of the spy ring) was supposedly abducted by the Russian secret service from Ukraine and smuggled to Crimea in order to give the Russian account verisimilitude – is just too fantastic for anyone to take seriously.  The Kremlin’s website shows that no Western leaders have called Putin to discuss or rather scold him over the incident.  The absurdity of Ukraine’s explanations probably means they are too embarrassed to do so.

Western governments have not however in the past hesitated to back Ukrainian accounts of incidents however preposterous those accounts might be.  The failure in this case therefore has to be taken as further evidence of Western “Ukraine fatigue” and disenchantment with the Maidan regime.

Consistent with this assessment are the public comments from Germany’s foreign minister, Frank-Walter Steinmeier in which he admonished both sides to refrain from escalation.  UPI reports the following:

German Foreign Minister Frank-Walter Steinmeier on Monday said Germany is concerned about the security situation in Crimea, adding that Russia and Ukraine “must refrain from anything that may lead to a further deterioration of the situation.”

Steinmeier met with Russian Foreign Minister Sergey Lavrov in the Russian city of Yekaterinburg to discuss Moscow’s evidence about an attack the Kremlin accuses the Ukrainian government of carrying out in which two Russian servicemembers were killed. Ukraine denies the attack took place.

“The main thing is that the situation doesn’t get out of control,” Steinmeier said. “We call on everyone to de-escalate.”

A personal contact in Yalta had the following to say when asked how things were going this past week in this scenic city in Crimea:

People go to the beach, thousands of holiday makers enjoy their time, we do feel very secure and protected.  Thousands of Russians are flying into Crimea right now for summer holidays and security measures are pretty high everywhere. So we feel no danger.  This is the view from inside.

(Erdogan’s TASS interview, August, 2016; http://johnhelmer.net/?p=16253)

There are conflicting reports about what came out of the much-ballyhooed meeting between Putin and Erdogan in St. Petersburg earlier this week.  The Turkish news outlet, Anadolu Agency, reported that the two nations would be establishing a joint defense mechanism, as well as increased cooperation in the economic sphere:

Turkey and Russia will establish a joint military, intelligence and diplomacy mechanism, Foreign Minister Mevlut Cavusoglu said Wednesday.

Speaking at Anadolu Agency’s Editors’ Desk, Cavusoglu said the previous day’s meeting between Presidents Recep Tayyip Erdogan and Vladimir Putin had paved the way for closer ties following a nine-month freeze after the shooting down of a Russian warplane.

“The officials will go to St. Petersburg tonight,” Cavusoglu said. “Our delegation will consist of foreign ministry [personnel], the Turkish Armed Forces, along with our intelligence chief.”

Cavusoglu said meetings will be held at ministerial level.

Erdogan’s trip to Russia and the revival of ties between Russia and Turkey have sparked concern that the NATO member is turning increasingly to the East as it feels rebuffed by the West over a host of issues such as EU membership and the West’s tepid response to the defeated July 15 coup.

Questioned about increased cooperation between the Turkish and Russian defense industries in the context of Turkey’s NATO role, Cavusoglu said Ankara had already established defense sector cooperation with non-NATO countries, including missile development.

“Turkey wanted to cooperate with NATO members up to this point,” the minister said. “But the results we got did not satisfy us. Therefore, it is natural to look for other options. But we don’t see this as a move against NATO.”

Referring to the Nov. 24 downing of a Russian warplane over the Turkey-Syria border by the Turkish Air Force, Cavusoglu explained that the Turkish pilots involved in the incident had been arrested on suspicion of being involved in the coup bid.

However, a far less rosy characterization of the substantive results of the meeting was reported by John Helmer, the longest-serving western journalist in Moscow.  According to Helmer, Erdogan essentially put the kibosh on any meaningful geo-strategic shift toward Russia during a pre-meeting interview with Russia’s TASS News Agency:

Just before Erdogan’s arrival in St. Petrersburg, he and the Kremlin agreed to stage a television interview in which Erdogan mixed several metaphors to ingratiate himself with the Russian audience. The meeting with Putin,  Erdogan claimed, is “a new landmark in bilateral relations, a clean slate from which to start anew.” Erdogan referred to the Russian president as his “dear friend Vladimir” every four minutes of the interview. Read the Tass version in English.

Erdogan did more than apologize for the shooting-down of the Russian Su-24 fighter-bomber last November. He admitted the aircraft was in Syrian airspace, not Turkish, when it was attacked. “The culprits in what happened in Syrian territory have been detained and brought to justice already. The investigation is continuing. In fact, I conveyed that in my message [to President Putin].  As for the pilots, I ordered a probe into the circumstances that occurred beyond the bounds of our customary rules of response. You also know that the man who caused the Russian pilot’s death, who killed the Russian pilot, is now in custody. He is standing trial. I would like to emphasize that.”

 

….[However,] Erdogan’s responses on the real agenda were as far apart as ever.  He put a stop to press hints that he is suspending his campaign to overthrow the Syrian president, Bashar Al-Assad. “We don’t want Syria’s disintegration, but the departure of Bashar Assad who is guilty for the deaths of 600,000 people. This is the condition for preventing this scenario. Syria’s unity cannot be kept with Assad. And we cannot support a murderer who has committed acts of state terror.”

 

He denied any role in the financing , oil trade,  weapons and other supplies for ISIS forces in Syria and Iraq.  He repeated Turkish backing for the Crimean tatars fighting Moscow with support from Kiev and Washington.

 

On the future of the Gazprom projects and the Akkuyu reactor, he offered more talks, no commitments. Vegetables and fruit weren’t mentioned.  As for tourism, Erdogan declared that no tourist had been killed in last month’s military putsch, and that “currently the beaches are safe.”

 

The Tass interviewer, deputy director-general of the news agency Mikhail Gusman,  carefully avoided mentioning the Chechens, the Straits, NATO, Cyprus, Crimea, or the Azeri-Armenia war.

 

“Erdogan used the Tass interview to take off the table what the Russians had been hoping might be a breakthrough,” a Moscow observer noted. “He used Tass to out-manoeuvre Putin – it’s clear from the St. Petersburg record Putin wasn’t happy. Putin is the big loser from the Turkish hype – and the Russian propaganda organs, especially the English language ones, are also covering up.”

….The official record of the delegation talks, which started at 1 in the afternoon, and ended after three hours, reported no discussion and no agreement on a single Russian political or security priority.    The presidential press conference revealed that despite declarations of best intentions, nothing of importance to either side was agreed. The Russian Foreign Ministry has reported nothing on Foreign Minister Sergei Lavrov’s meeting with his counterpart…hours after it concluded.

Read the full article here.

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(OSCE observers document shelling of town of Stakhanov, Lugansk republic, in early August 2016; https://newcoldwar.org/situation-donetsk-lugansk-august-9-2016/)

Irina Burya of the DONi News Agency, an independent Finnish media project that reports on the ground in the Donbass, states, from DPR sources, that the Kiev regime has fired over 4,000 rounds of ammunition into the Donbass territory in the space of a week, 75% of which was from heavy weapons.   Furthermore, it is reported that the Ukrainian military is building up heavy weapons on the front and Neo-Nazi militias are beefing up their presence as well:

At the same time, Kiev continues to strengthen its group with weapons and personnel in all three directions of the front. According to the DPR intelligence, tanks, 122 and 152mm howitzers, motorized artillery systems and MLRS (‘Grad’ multimple launch rocket systems) are being delivered to the Ukrainian units on the forefront in dozens. In addition, over the past week at the Donetsk segment of the front arrived about 200 radicals of the «Right Sector».

The observers of the Organisation for Security and Cooperaton in Europe (OSCE) mission also noted in their weekly report the absence of 60 tanks, 50 152mm howitzers, 24 122mm motorized artillery systems, 17 100mm anti-tank cannons and over 10 Grad MLRS at sites of Ukrainian weapons storage.

Residents of Mariupol, the largest Kiev-controlled city in the south of Donbass, informed that on the outskirts of the city, the Ukrainian military were hastily building new defenses. The local residents were surprised by the fact that these defenses were not located in the direction of the DPR but that of Ukraine. It appears that Kiev does not intend to defend the city in case of a counter-offensive of the DPR army, but seeks only to prevent its further advance after the liberation of Mariupol.

In the Lugansk segment of the front, the international observers documented the absence of 27 Ukrainian tanks, 14 152mm howitzers and 10 Grads from their storage areas. The LPR intelligence reported the arrival at Ukrainian position sof 45 tanks, 10 MLRS «Grad» and about 50 Chechen mercenaries.

In addition, LPR intelligence sources on the ground informed that the Ukrainian military were mining banks of the Seversky Donets River, which forms the contact line, and continued to seize areas of the buffer zone.

In one of the Kiev-controlled Kiev localities of the Lugansk region, the Ukrainian military seized a local clinic. Locals, who are now banned from entering it, explain this by increases in the number of non-combat losses in units of the Ukrainian army.

However, on the whole, the situation in the Lugansk segment of the front was all this time considerably calmer than in the Donetsk Republic. According to the LPR People’s Militia, over the past week, the Ukrainian side opened fire on the territory of the Republic about 900 times, including about 100 rounds from the heavy artillery.

….Last week, the head of the UN monitoring mission on human rights in Ukraine arrived in Donetsk . She visited places where Ukrainian prisoners of war are held and had an opportunity to talk with them personally. After her inspection, she said that she did not have any claims to the conditions of their detention.

At the same time, a delegation of the UN Commission on Human Rights in Ukraine was not allowed in places of political prisoners detention, after which it left the country in protest.

Last month, international observers from Germany, Finland and Serbia came to monitor the opening of the election primaries in the DPR. After spending several days in Donetsk, they made an official statement about having heard the nightly bombardments of the city from the Ukrainian side and seen their devastating effects.

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The FSB has reportedly stopped two attempts by Ukrainians to cross into Crimea to cause trouble, resulting in armed clashes and two deaths.  Euronews reports the following:

The country’s FSB security service says there have been at least two armed clashes recently on the border between Crimea and Ukraine.

It also says it has dismantled a spy network inside the annexed peninsula.

The FSB says it thinks Ukrainian special forces had been planning attacks targeting critical infrastructure.

An FSB employee and a Russian soldier were killed in the clashes at the weekend, according to officials.

The FSB says it tackled one group of what it describes as Ukrainian “saboteurs” in the early hours of Sunday, smashing what it says was a Ukrainian “spy network”.

Ukrainian and Russian nationals were arrested.

Twenty homemade explosive devices, ammunition, mines, grenades and weapons normally used by Ukrainian special forces were recovered, the FSBsaid, adding that there were more incidents late on Sunday and early on Monday.

“Ukrainian special forces units tried to break through two more times with groups of saboteur-terrorists but were thwarted by FSB units and other forces,” a statement said.

“The aim of this subversive activity and terrorist acts was to destabilise the socio-political situation in the region ahead of preparations and the holding of elections,” the FSB said in a statement.

….A spokesman for Ukrainian military intelligence has dismissed the claims as “false information”.

Kyiv has denied Russia’s claim of attempted armed incursion into Crimea.

The Ukrainian Defence Ministry said in a statement that the FSB’s assertions look like an attempt to justify “acts of aggression” and the redeployment of military units to Crimea.

“Representatives of the Russian special services are trying to divert the attention of the local population and the international community from criminal acts to transform the peninsula into an isolated military base,” it said.

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Neyla Miller, an American expatriate living in Moscow, writes of her impressions of Russia as she nears the one-year anniversary of her stay:

Next month will be the one-year anniversary of decision to make Moscow my new home. Though Moscow, like any major city around the globe, does not speak for the heart of its country… it does provide a rough summation of its various cultures and peoples – only highlighting what is Russian. I was lucky to have been fairly well traveled prior to my arrival, easing any culture shock. Eleven months into our relationship, I’ve noticed it’s the only city that hasn’t let me down by this marker.

Cleanliness – It’s clean, very clean

A few days prior to leaving for Moscow, I was taking a walk through New York City with an acquaintance I had recently been put in touch with by a friend, whose family lives in Moscow. He is a young Russian and who just arrived in NYC to continue his studies. While snaking our way from Union Square to Little Italy, I could see him assessing the amounts of garbage on the streets and sidewalks. He politely commented it was dirtier than he imagined. This caught me by surprise, as I thought most movies set in NYC capture it quite honestly.

Read the full article here.