Why
Did BRICS Back Russia
on Crimea?
The
BRICS’s support for Russia shows the Western-
dominated post-Cold
War order is eroding.
By
Zachary Keck
31
March, 2014
There’s
been no shortage of reports and commentaries on the crisis in Ukraine
and Crimea, and Russia’s role in it. Yet one of the more notable
recent developments in the crisis has received surprisingly little
attention.
Namely,
the BRICS grouping (Brazil, Russia, India, China, and South Africa)
has unanimously and, in many ways, forcefully backed Russia’s
position on Crimea. The Diplomat has reported on China’s cautious
and India’s more enthusiastic backing of Russia before. However,
the BRICS grouping as a whole has also stood by the Kremlin.
Indeed,
they made this quite clear during a BRICS foreign minister meeting
that took place on the sidelines of the Nuclear Security Summit in
The Hague last week. Just prior to the meeting, Australian Foreign
Minister Julie Bishop suggested that Australia might ban Russia’s
participation in the G20 summit it will be hosting later this year as
a means of pressuring Vladimir Putin on Ukraine.
The
BRICS foreign ministers warned Australia against this course of
action in the statement they released following their meeting last
week. “The Ministers noted with concern the recent media statement
on the forthcoming G20 Summit to be held in Brisbane in November
2014,” the statement said. “The custodianship of the G20 belongs
to all Member States equally and no one Member State can unilaterally
determine its nature and character.”
The
statement went on to say, “The escalation of hostile language,
sanctions and counter-sanctions, and force does not contribute to a
sustainable and peaceful solution, according to international law,
including the principles and purposes of the United Nations Charter.”
As Oliver Stuenkel at Post Western World noted, the statement as a
whole, and in particular the G20 aspect of it, was a “clear sign
that [the] West will not succeed in bringing the entire international
community into line in its attempt to isolate Russia.”
This
was further reinforced later in the week when China, Brazil, India
and South Africa (along with 54 other nations) all abstained from the
UN General Assembly resolution criticizing the Crimea referendum.
Another ten states joined Russia in voting against the non-binding
resolution.
In
some ways, the other BRICS countries’ support for Russia is
entirely predictable. The group has always been somewhat constrained
by the animosities that exist between certain members, as well as the
general lack of shared purpose among such different and
geographically dispersed nations. BRICS has often tried to overcome
these internal challenges by unifying behind an anti-Western or at
least post-Western position. In that sense, it’s no surprise that
the group opposed Western attempts to isolate one of its own members.
At
the same time, this anti-Western stance has usually taken the form of
BRICS opposition to Western attempts to place new limits on
sovereignty. Since many of its members are former Western colonies or
quasi-colonies, the BRICS are highly suspicious of Western claims
that sovereignty can be trumped by so-called universal principles of
the humanitarian and anti-proliferation variety. Thus, they have been
highly critical of NATO’s decision to serve as the air wing of the
anti-Qaddafi opposition that overthrew the Libyan government in 2011,
as well as what they perceive as attempts by the West to now
overthrow Bashar al-Assad in Syria.
However,
in the case of Ukraine, it was Russia that was violating the sanctity
of another state’s sovereignty. Still, the BRICS grouping has
backed Russia. It’s worth noting that the BRICS countries are
supporting Russia at potentially great cost to themselves, given that
they all face at least one potential secessionist movement within
their own territories.
India,
for example, has a long history of fluid borders and today struggles
with potential secessionist movements from Muslim populations as well
as a potent security threat from the Maoist insurgency. China suffers
most notably from Tibetans and Uyghurs aspiring to break away from
the Han-dominated Chinese state. Even among Han China, however,
regional divisions have long challenged central control in the vast
country. Calls for secession from the Cape region in South Africa
have grown in recent years, and Brazil has long faced a secessionist
movement in its southern sub-region, which is dominated
demographically by European immigrants. Russia, of course, faces a
host of internal secessionist groups that may someday lead Moscow to
regret its annexation of Crimea.
The
fact that BRICS supported Russia despite these concerns suggests that
its anti-Western leanings may be more strongly held than most
previously believed. Indeed, besides backing Russia in the foreign
ministers’ statement, the rising powers also took time to harshly
criticize the U.S. (not by name) for the cyber surveillance programs
that were revealed by Edward Snowden.
The
BRICS and other non-Western powers’ support for Russia also
suggests that forging anything like an international order will be
extremely difficult, given the lack of shared principles to act as a
foundation. Although the West generally celebrated the fact that the
UN General Assembly approved the resolution condemning the Crimea
referendum, the fact that 69 countries either abstained or voted
against it should be a wake-up call. It increasingly appears that the
Western dominated post-Cold War era is over. But as of yet, no new
order exists to replace it.
Monetary
Blockade Of Russia
Begins: JPMorgan Blocks
Russian Money Transfer
"Under Pretext" Of Sanctions
1
April, 2014
While
the flare up of Cold War 2.0 may seem like last week's news,
overnight something very notable happened that so far virtually
nobody appears to have paid attention to. According to Russian
Kommersant, none other than the biggest US bank, JPMorgan, was
reported to be "reviewing
counterpart relations with all Russian lenders"
citing unidentified people. The review is part of JPMorgan’s push
for transparency in banking and not part of sanctions against Russia
over Crimea. Perhaps this is true: Kommersant added that Sberbank and
VTB were contacted in January and February while another unidentified
bank recently received letter saying JPMorgan would cease
correspondent accounts with them on April 1.
JPM
cleaning up its act is certainly plausible: after all the last thing
the bank that has paid out nearly $30 billion in legal charges,
penalties and settlements in the past few years need right now is
more legal charges due to laundering Russian billionaires' cash
(coughHSBCcough) at a time when Russia, which has humiliated the US
state department twice in under a year, is hardly perceived as a
critical ally to the US. So one can see why JPM would be cautious in
transacting with Russia financial entities.
And
yet, while the headline sanctions so far have involved mostly
freezing of Russian politician and oligarch assets in jurisdictions
in where there were no such assets, it appears that JPM has not only
escalated on its own but taken the Russian sanctions to an entirely
new level: one which may quite promptly devolve into a complete
monetary blockade of all of Russia.
Exhibit
A:
Wait,
did JPM just take a unilateral action, not mandated by the state
department (because nowhere in the Russian sanction list does it say
putting a freeze on Russian bank transfers), and refuse to process a
simple money transfer? Why?
And if indeed JPM is doing this, how long
until all other US banks, most of which are just
as allegedly criminal
in dealing with offshore sources of illegal money, follow suit and
leave Russia entirely in the world when it comes to USD-backed
transactions.
Because
what JPM may have just done is launch a preemptive strike which would
have the equivalent culmination of a SWIFT blockade of Russia, the
same way Iran was neutralized from the Petrodollar and was promptly
forced to begin transacting in Rubles, Yuan and, of course, gold
in exchange for goods and services either
imported or exported.
One
wonders: is JPM truly that intent in preserving its "pristine"
reputation of not transacting with "evil Russians", that it
will gladly light the fuse that takes away Russia's choice whether or
not to depart the petrodollar voluntarily, and makes it a compulsory
outcome, which incidentally will merely accelerate the formalization
of the Eurasian axis of China, Russia and India.
At
this point watch if any other US banks follow in JPM's footsteps, and
block money transfers to or from Russia. Because then will things get
truly interesting.
As
for the Russian response, it is coming and will most likely be
matched in severity.
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