BRIC-A-BRAC

Sometimes it's tough to take the media filter glasses off. We live in a world where all the important information is brought to us thanks to these internets, pity the fools that have to rely on the idiot box. So how is it that the most obvious of patterns are impossible to discern? The collage painted by the press should allow us to see the world how it really is, yet we miss the most obvious. Self-fulfilling prophecies such as last week's BRIC meeting spring to mind as the media simply brushed over the fact that the 4 nations that make up 43% of the world's population met last week to try to chart a mutually beneficial path through the future. The G8 will meet next month and there will be wall to wall reporting yet a group formed by the prediction of a Wall Street analyst gets swept under the carpet.

Reuters declares: Much-Trumpeted BRIC Summit Ends Quietly. "BRIC" is an acronym for Brazil, Russia, India and China, the world's four major developing countries. Jim O'Neill, global head of economic research at Goldman Sachs, first started the idea of BRIC in 2001. While it's obvious today thanks to the economic growth of these countries, which averaged 10.7% from 2006-8, it was only the idle talk of an analyst predicting the economic world of 2050, when the four countries would together pass the G7 in size. Since then we've watched the US economy lead an implosion of western economic power as these four nations have made strategic manoeuvers to position themselves to be exactly what we knew they'd be, the masters of our world. With Brazil and Russia pumping out the raw resources, China and India will consume the world.

The June 16 summit in the Russian Urals city of Yekaterinburg marked a huge step toward BRIC cooperation as a group. The fact that they have now met formally is story enough, but at the same time, the Russian city hosted another meeting, this a more formal grouping, the SCO, Shanghai Cooperation Organization (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, with Iran, India, Mongolia and Pakistan as observer states). Even more interestingly, both India and Iran took part at the most senior level as the Indian Prime Minister Manmohan Singh and Iranian president Mahmoud Ahmadinejad attended. Yes, just days after the election in Iran, Mahmoud was there, yet we barely heard a whisper of the meetings as his nation's spiral towards revolution captured our attention along with David Letterman's 14-year old rape inciting. Background buzz as we stumble towards a real new world order.

While BRIC countries account for 15 percent of the $60.7 trillion global economy, China is the world's largest holder of U.S. Treasuries with $767.9 billion while Russia holds around $400 billion in their foreign reserves. More importantly, Russian President Dmitry Medvedev has made proposals on giving a greater role to the International Monetary Fund's Special Drawing Rights that echo ideas from Chinese central bank chief Zhou Xiaochuan. China, Russia and Brazil have pledged to help capitalize the IMF as they seek more influence at the fund. Together, the BRIC have a 15-percent share of the world economy and a 42-percent share of global currency reserves. Last week Brazil and Russia joined China in announcing they would shift some $70 billion (50 billion euros) of reserves into multicurrency bonds issued by the International Monetary Fund. Tiring of the inequity of the system, Brazil, for example is the world's 10th largest economy, but has just 1.38 percent of the IMF board's votes, compared to 2.09 percent for Belgium, an economy one-third the size, they are starting to make noise about changing it.

Navel gazing is far more interesting as it seems more important whether or not Obama, and America, are doing enough, or meddling too much in the Iran election quagmire. The future is just the Heisenberg uncertainty principle at work, que sera, sera, plus there's the Jon and some chick thing to worry about, or Letterman. America has put the BRIC on the path to controlling the world, why would they need to worry about where the road goes? Of course looking forward to the year 2050 involves a myriad of uncertainties, it seems forecasts for when the combined BRIC GDP will pass the G7's are being revised with every new report, from 2050 to 2045 to 2032, sure to change again due to the current financial crisis. Of course they'll be potholes on the road to cooperation, not the least of which will be inter-BRIC conflict, particularly between China and Russia as they vie for dominance in Asia. China announced plans at the SCO summit to give $10 billion of loans to Central Asia, upstaging traditional power Russia whose promises of aid have not been fully delivered amid the financial crisis. But India's economy is projected to be 90% of the US while China will have grown to 130% by the year 2050. Not only will the BRIC dwarf the G7 in global importance, but the N11 (harder to make an acronym for an 11 nation group: Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam. Maybe BEIIKMNPPTV) will rival the economic size of the present elite 7 nations.

Notice how all these numbers assume unlimited resources to achieve growth. There will be a far more interesting chess game played with a more level economic table. China locks up resources in African nations without any of those human rights strings attached. Russia is circling the arctic, winning the new polar race. Markets are necessary too, and the US is sure to remain an important one, making killing the greenback a double edged sword, especially for China. Comments by Russian President Dmitry Medvedev questioning the dollar's role pushed down the U.S. currency by 0.9 percent against other key units, thereby hurting the value of China's investments. Baby steps towards independence from the west and the dollar will be the key word, but they'll add up quicker than you think.

The Heartland

In the geopolitical world nothing happens in isolation. Anybody caught by surprise over the events last week in Georgia really just hadn't been paying attention, or probably just forgot that what has been done can often be undone. The term geopolitics, while coined by Swedish political scientist Rudolf Kjellen, gained attention as a doctrine through the writing of Englishman Sir Halford Mackinder and his Heartland Theory of 1904. Essentially his doctrine divided the world into the World Island, comprising Eurasia and Africa; and the Periphery, including the Americas, the British Isles, and Oceania. The Heartland of the World Island was made up of the Ukraine, Western Russian and Mitteleuropa (Central Europe). His theory held that: "Who rules East Europe commands the Heartland. Who rules the Heartland commands the World Island. Who rules the World-Island commands the World."

Yesterday's seemingly curiously timed signing of a preliminary agreement between the US and Poland to host part of the missile defence system to be stationed near Russia's border must be part of this heartland strategy of the 21st century. Surprisingly the Russians are pissed off. The Russian talk had been largely ignored, all bluster with no bite. Suddenly, the world has been reminded that the bear still has claws. So when Gen. Anatoly Nogovitsyn, deputy chief of the Russian general staff, says the deal "cannot go unpunished...Poland, by deploying [the system] is exposing itself to a strike —100 per cent," we all take notice, especially those of us moving back to Poland in the fall, gulp. Funny that after 18 months of negotiations the Poles finally accepted. Guess they got something in return, such as: American soldiers to staff air defense sites in Poland oriented toward Russia; the United States would be obliged to defend Poland in case of an attack with greater speed than required under NATO (that's like...Superfast, not Georgiafast); a battery of patriot missiles. OK, so Mitteleuropa is pacified, what's next...?

"Do you understand George? The Ukraine is not even a state! What is the Ukraine? Part of its territory is in Eastern Europe. On the other hand, we gave them the most important part of their country!"
-Vladimir Putin to George Bush, April 4th, Bucharest
Yep, Vlad made quite an impression at his first and last NATO summit as Russian president. Not only did he manage to convince the right people (read France and Germany) that the Ukraine and Georgia shouldn't be offered a Membership Action Plan (MAP), but he gave a peek to the world of what was to come. The "most important" part of the Ukraine that Putin was referring to was the Crimean peninsula, where Russia's Black Sea fleet is based and most of the population is Russian. The area was given to the Ukraine by Khrushchev in 1954, when the collapse of the USSR was unthinkable, but control then went to the Ukraine in 1991 after the wall fell. Under a 1997 agreement, Ukraine agreed to lease harbor space in the Crimea peninsula base of Sevastopol to the Russians until 2017. Now, with tensions escalating, President Yushchenko's issued a decree on Wednesday requiring the Russian fleet to secure permission for any movements 72 hours in advance. Hmmm, what could happen next?

OK, Rose, Georgia; Orange, Ukraine; Tulip, Kyrgystan; the regime-change strategy under the cover of democratisation which Washington has sought to use to extend its influence in Eurasia with colour/flower coded revolutions is crumbling. Many thought Russia made a huge miscalculation in allowing them to happen, but those crafty Ruskies were just biding their time, knowing that democracy develops differently on different soils. The rest of the 'stans are seemingly lost to the SCO (Shanghai Cooperation Organization - China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan). At the same time many are losing faith in NATO. “Poland and the Poles do not want to be in alliances in which assistance comes at some point later — it is no good when assistance comes to dead people,” the Polish prime minister, Donald Tusk, said on Polish television. “Poland wants to be in alliances where assistance comes in the very first hours of — knock on wood — any possible conflict.” The Heartland could be lost to Russian influence in a heartbeat and many believe it is their goal, to truly reassert their presence as a superpower.

What ever happened to those heady days back in that innocent summer of '01. US hegemony was unquestioned, everyone was listening to Lifehouse (!?) the Twin Towers stood in New York, and Dubya peered at Putin for the first time and said: "I looked the man in the eye. I was able to get a sense of his soul". A tectonic shift has occurred threatening a domino effect. South Ossetia and Abkhazia will be the first to fall. Transdnistria, Crimea and South-Eastern Ukraine the next likely dominoes. Bielorussia, Armenia (along with the Nagorno-Karabakh, sorry Azerbaijan), Kazakhstan and Tajikistan complete the new Russian Federation. Looks like the USSR minus the Baltics, western Moldova and Ukraine along with Georgia, Azerbaijan and Turkmenistan. Do we have a colour to call this next revolution?

Crouching Bear, Snarling Dragon

The first foreign visit by a newly elected president is a highly symbolic gesture. I remember a few years ago, well almost eight long and torturous years in fact, shortly after Dubya was "elected", the uproar caused in Canada by the fact that his first trip abroad was to see Vicente Fox in Mexico instead of the traditional visit to his northern neighbour. It was seen as a deliberate snub to the Canadian government and a move towards the south as the previous three presidents had begun a tradition of smiling to the north first. So what can be read into Russia's newly elected President's first foreign diplomatic trip? This weekend Putvedev is visiting China.

Sino-Russian relations are possibly at an all-time high. Both economies are booming and both are looking to flex their muscle. Apart they are strong, together they hope to bring down American hegemony, a fact the hasn't been lost by any of the American presidential candidates, even if the electorate has missed it. Maybe if we weren't so inured to Dubya's failings it might have been a bigger part of the news coverage, but George W truly scored a triple crown of incompetence over the past couple months of foreign trips. In addition to being rejected by King Faud in Saudi Arabia in his request for more oil and trying to compare Barack Obama to Nazi appeasers in Israel he was also rebuffed by outgoing Russian president Vladimir Putin in Sochi, on the Black Sea. So long Vladimir, remember me, I'm the guy who looked into your eyes and got a sense of your soul, let's be friends, let us point interceptor missiles your way. NO! Now, with Putvedev in China, along with his Chinese counterpart Hu Jintao, they wasted no time signing a joint statement, marking the first time they have come together in denouncing the plan.

With the rise in US power since the end of the Cold War and fear of Islamic extremism in Central Asia, it should have come as no surprise that both Russia and China's unease would lead to closer ties. The Sino-Russian Treaty of Good Neighborly Friendship and Cooperation (yes, it's real name! Maybe I'll call it the SRTGNF&C),in 2001 marked a real turning point. Since then bilateral trade volume has surged from $10.67 billion in 2000 to $48.17 billion last year, with Putvedev stating a target of $60 billion for this year. Of that $48 billion, almost $7 billion of it is oil flowing into China, which will exponentially grow once the East Siberia-Pacific Ocean oil pipeline and its branch to China are completed. Of course all of this growth has been driven by the transformation of the USSR to capitalist Russia and the opening of the Chinese market to capitalism, as the west and especially America probably would have wished for 20 years ago. At the same time as buying Chinese goods and Russian oil, America has also done everything in it's power to improve their future prospects, seemingly investing in their future. While borrowing money mainly from China daily to fund a war whose most pronounced effect globally has been increasing terrorism and the price of oil from $25 to $135 a barrel. Driving the value of the dollar down, thus increasing the cost of importing, mainly from China to buy more crap and finance the debt. Oh, yeah, about that war on terror...

Ostensibly on the pretext of training for joint responses to terrorist threats (and extremism and separatism, hello Taiwan), the Russian and Chinese armies have been staging manoeuvres together since their inaugural Peace Mission 2005, a result of the war on terror and the aforementioned SRTGNF&C. The week of August 18-25 of that year saw joint war games involving 10,000 troops, cruise missile capable Russian heavy bombers and units of the army, navy, air force, marine airborne and logistics units from both countries. Week 2 saw an amphibious landing in Eastern China, not far from Taiwan. In what has been evolving towards an "anti-NATO" group, the SCO, or Shanghai Cooperation Organization (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan), played host to more "anti-terror drills" in 2007 on an even grander scale. In addition, through this group, both China and Russia are seeking to increase their influence, and reduce American influence in Central Asia both economically and militarily. Not only are they securing oil supplies, they've gone so far as to demand the US military out of it's member countries, with Uzbekistan complying. Yes, the names may be unpronounceable, but they are important staging posts for the war in Afghanistan. Remember Nixon in China? Neither do I, but I've read that it was a trip designed to counter fears of Soviet hegemony in Asia, an attempt to enlist China's support in America's containment strategy. The present American administration seems to have done everything possible to push them together.

The American plan to balance this new alliance in Central Asia has been the velvet revolution idea, working off the successes in the Ukraine of the orange revolution and the rose revolution of Georgia. However, with the possible exception of Kyrgyzstan, it's been a complete failure, most notably in Uzbekistan where yet another American staged coup attempt went awry in 2005 in Andijan. Two other wild cards, both of whom are observer states in the SCO, are Iran and India. With Iran obviously tilting to the east, India's role of possible kingmaker is undeniable. Donald Rumsfeld might have said of the 2005 Peace Mission "...I guess I don't find it notable" and continued, "I mean, countries do that. We are obviously observing what's takes place, but I didn't see anything in it that was threatening to Taiwan or anyone else." However, America has taken notice, witness the latest good cop-bad cop game played by McBush and Bush before and during Bush's last visit with Putin in Sochi. The reality is, for those of us who missed it the first time around, a new cold war is definitely forming with most of the same players playing different roles.