The
Threat of War and the Russian Response
by
Sergey Glazyev for Russia in Global Affairs
How
to Lead a Coalition and Avoid a Global Conflict
Sergei
Glaziev is an Advisor to the President of the Russian Federation,
Full Member of the Russian Academy of Sciences.
the Vineyard of the Saker,
26 September, 2014
Summary:
The world needs a coalition of sound forces advocating stability –
a global anti-war coalition with a positive plan for rearranging the
international financial and economic architecture on the principles
of mutual benefit, fairness, and respect for national sovereignty.
U.S.
actions in Ukraine should be classified not only as hostile with
regard to Russia, but also as targeting global destabilization. The
U.S. is essentially provoking an international conflict to salvage
its geopolitical, financial, and economic authority. The response
must be systemic and comprehensive, aimed at exposing and ending U.S.
political domination, and, most importantly, at undermining U.S.
military-political power based on the printing of dollars as a global
currency.
The
world needs a coalition of sound forces advocating stability —in
essence, a global anti-war coalition with a positive plan for
rearranging the international financial and economic architecture on
the principles of mutual benefit, fairness, and respect for national
sovereignty.
CURBING
THE ARBITRARINESS OF RESERVE CURRENCY ISSUERS
This
coalition could be comprised of large independent states (BRICS); the
developing world (most of Asia, Africa, and Latin America), which has
been discriminated against in the current global financial and
economic system; CIS countries interested in balanced development
without conflicts; and those European nations not prepared to obey
the disparaging U.S. diktat. The coalition should take measures to
eliminate the fundamental causes of the global crisis, including:
the
uncontrolled issuance of global reserve currencies, which allows
issuers to abuse their dominant position, thus increasing
disproportions and destructive tendencies in the global financial and
economic system;
the
inability of existing mechanisms regulating banking and financial
institutions to ward off excessive risks and financial bubbles;
an
exhausted potential for growth within the prevailing technology-based
economic system and lack of conditions for creating a new one,
including insufficient investment for the broad use of basic
technological solutions.
Conditions
must be created to allow the national fiscal authorities to lend
money for building an economy based on new technologies and carrying
out economic modernization, and to encourage innovation and business
activities in areas of potential growth. The issuers of reserve
currencies must guarantee their stability by capping the national
debt and payment and trade balance deficits. Also, they will have to
use transparent mechanisms for issuing currencies and ensure free
exchange for all assets trading in their countries.
Another
important requirement issuers of global reserve currencies should
meet is compliance with fair rules of competition and
non-discriminatory access to financial markets. Other countries
observing similar restrictions should be able to use their national
currencies as an instrument of foreign trade and currency and
financial exchanges, and allow their use as reserve currencies by
partner countries. It would be advisable to group national currencies
seeking the status of global or regional reserves into several
categories depending on the issuers’ compliance with certain
standards.
In
addition to introducing rules for issuers of global reserve
currencies, measures should be taken to strengthen control over
capital flows to prevent speculative attacks that destabilize
international and national currency and financial systems. Members of
the coalition will need to forbid transactions with offshore
jurisdictions and make refinancing inaccessible to banks and
corporations created with offshore residents. The currencies of
countries that fail to follow these rules should not be used in
international settlements.
A
major overhaul of international financial institutions is necessary
to ensure control over the issuers of global reserve currencies.
Participating countries must be represented fairly, on objective
criteria, such as their share in global production, trade, and
finances; their natural resources; and population. The same criteria
should be applied to an emerging basket of currencies for new SDRs
(Special Drawing Rights) that can be used as a yardstick for
determining the value of national currencies, including reserve
currencies. Initially, the basket could contain the currencies of
those coalition members that agree to observe these rules.
Such
ambitious reforms will require proper legal and institutional
support. To this end, the coalition’s decisions should be given the
status of international commitments; and UN institutions, relevant
international organizations, and all countries interested in reforms
should be broadly involved.
In
order to encourage application of socially important achievements of
a new technological mode globally, countries will have to devise an
international strategic planning system of socio-economic
development. It should provide long-term forecasts for scientific and
technological development; define prospects for the global economy,
regional associations and leading countries; look for ways to
overcome disproportions, including development gaps between
industrialized and emerging economies; and set development priorities
and indicative targets for international organizations.
The
U.S. and other G7 countries will most likely reject the above
proposals for reforming the international currency and financial
system without discussion out of fear that they could undermine their
monopoly, which allows them to issue world currencies uncontrollably.
While reaping enormous benefits from this system, leading Western
countries limit access to their own assets, technologies, and labor
by imposing more and more restrictions.
If
the G7 refuses to “make room” in the governing agencies of
international financial organizations for the anti-war coalition, the
latter should master enough synergy to create alternative global
regulators.
The
BRICS could serve as a prototype and take the following measures to
maintain economic security:
- create
a universal payment system for BRICS countries and issue a common
payment card that would incorporate China’s UnionPay, Brazil’s
ELO, India’s RuPay, and Russian payment systems;
- build
an interbank information exchange system similar to SWIFT and which
is independent from the United States and the European Union;
- establish
its own rating agencies.
RUSSIA
AS UNWILLING LEADER
Russia
will have a leading role in building a coalition against the U.S.
since it is most vulnerable and will not succeed in the ongoing
confrontation without such an alliance. If Russia fails to show
initiative, the anti-Russian bloc currently being created by the U.S.
will absorb or neutralize Russia’s potential allies. The war
against Russia the U.S. is inciting in Europe may benefit China,
because the weakening of the U.S., the European Union, and Russia
will make it easier for Beijing to achieve global leadership. Also,
Brazil could give in to U.S. pressure and India may focus on solving
its own domestic problems.
Russia
has as much experience of leadership in world politics as the U.S. It
has the necessary moral and cultural authority and sufficient
military-technical capabilities. But Russian public opinion needs to
overcome its inferiority complex, regain a sense of historical pride
for the centuries of efforts to create a civilization that brought
together numerous nations and cultures and which many times saved
Europe and humanity from self-extermination. It needs to bring back
an understanding of the historical role the Russian world played in
creating a universal culture from Kievan Rus’, the spiritual heir
to the Byzantine Empire, to the Russian Federation, the successor
state of the Soviet Union and the Russian Empire. Eurasian
integration processes should be presented as a global project to
restore and develop the common space of nations from Lisbon to
Vladivostok, and from St. Petersburg to Colombo, which for centuries
lived and worked together.
A
SOCIAL-CONSERVATIVE SYNTHESIS
A
new world order could be based on a concept of social-conservative
synthesis as an ideology that combines the values of world religions
with the achievements of the welfare state and the scientific
paradigm of sustainable development. This concept should be used as a
positive program for building an anti-war coalition and establishing
universally understandable principles for streamlining and
harmonizing social, cultural, and economic relations worldwide.
International
relations can be harmonized only on the basis of fundamental values
shared by all major cultures and civilizations. These values include
non-discrimination (equality) and mutual acceptance, a concept
declared by all confessions without dividing people into “us” and
“them.” These values can be expressed in notions of justice and
responsibility, and in the legal forms of human rights and freedoms.
The
fundamental value of an individual and equality of all people
irrespective of their religious, ethnic, class, or other background
must be recognized by all confessions. This stems, at least in
monotheistic religions, from the perception of the unity of God and
the fact that every faith offers its own path to salvation. This
outlook can eliminate violent religious and ethnic conflicts and
permit every individual to make a free choice. But there must be
legal mechanisms in place to enable confessions to participate in
public life and resolve social conflicts.
This
approach will help neutralize one of the most destructive means of
chaotic global warfare employed by the U.S.—the use of religious
strife to incite religious and ethnic conflicts that develop into
civil and regional wars.
The
role of religion in molding international politics will provide the
moral and ideological basis for preventing ethnic conflicts and
resolving ethnic contradictions using national social policy
instruments. Various religions can also be engaged in charting social
policy, thus providing a moral framework for government decisions,
restraining the attitude of permissiveness and laxity that dominates
the minds of the ruling elites in developed countries, and bringing
back an understanding of the authorities’ social responsibility to
society. As the shaken values of the welfare state gain strong
ideological support, political parties will have to acknowledge the
importance of moral restrictions that protect the basic principles of
human life.
The
concept of social-conservative synthesis will lay the ideological
groundwork for reforming international currency, financial, and
economic relations on the principles of fairness, mutual respect for
national sovereignty, and mutually advantageous exchanges. This will
require certain restrictions on the freedom of market forces that
constantly discriminate against most people and countries by limiting
their access to wealth.
Liberal
globalization has undermined the ability of countries to influence
the distribution of national income and wealth. Transnational
corporations uncontrollably move resources that were previously
controlled by national governments. The latter have to trim back
social security in order to keep their economies attractive to
investors. State social investments, the recipients of which no
longer have a national identity, have lost their potency. As the
U.S.-centered oligarchy gets hold of an increasingly greater part of
income generated by the global economy, the quality of life is
dwindling in open economies and the gap in access to public wealth is
widening. In order to overcome these destructive tendencies, it will
be necessary to change the entire architecture of financial and
economic relations and restrict the free movement of capital. This
should be done in order to prevent transnationals from evading social
responsibility, on the one hand, and to even out social policy costs
shared by national states, on the other.
The
former means eliminating offshore jurisdictions, which help evade tax
obligations, and recognizing the nation states’ right to regulate
transborder movement of capital. The latter would mean establishing
minimal social criteria to ensure accelerated improvement of social
security in relatively poor countries. This can be done by creating
international mechanisms for balancing out living standards, which,
in turn, will require proper funding.
Acting
along the concept of a social-conservative synthesis, the anti-war
coalition could move to reform the global social security system. A
fee of 0.01 percent of currency exchange operations could provide
funding for international mechanisms designed to even out living
standards. This fee (of up to $15 trillion a year) could be charged
under an international agreement and national tax legislation, and
transferred to the authorized international organizations which
include the Red Cross (prevention of and response to humanitarian
catastrophes caused by natural disasters, wars, epidemics, etc.); the
World Health Organization (prevention of epidemics, reduction of
infantile mortality, vaccination, etc.); ILO (global monitoring of
compliance with safety regulations and labor legislation, including
wages not less than the subsistence level and a ban on the use of
child and compulsory labor; labor migration); the World Bank
(construction of social infrastructure facilities – water supply
networks, roads, waste water disposal systems, etc.); UNIDO (transfer
of technologies to developing countries); and UNESCO (support of
international cooperation in science, education and culture, cultural
heritage protection). Spending should be made according to the
budgets approved by the UN General Assembly.
Another
task to tackle is the creation of a global environmental protection
system financed by polluters. This can be done by signing an
international agreement establishing across-the-board fines for
pollution and earmark them for environmental protection under
national legislation and under the supervision of an authorized
international organization. Part of this money should be committed to
global environmental activities and monitoring. An alternative
mechanism can be based on trade in pollution quotas under the Kyoto
Protocol.
An
important aspect is the creation of a global system for eliminating
illiteracy and ensuring public access to information and modern
education throughout the world. This will require standardizing
minimum requirements for comprehensive primary and secondary
education and subsidizing underdeveloped countries with revenue
generated by the tax mentioned above. There must be a universally
accessible system of higher education services provided by leading
universities in major industrialized countries. The latter could
assign admission quotas for foreign students selected through
international contests and paid for from the same source.
Simultaneously, the participating universities could set up a global
system of free distance learning for all individuals with secondary
education. UNESCO and the World Bank could commit themselves to
creating and supporting the necessary information infrastructure,
while drawing funds from the same source.
ANTI-CRISIS
HARMONIZATION OF THE WORLD ORDER
The
growing gap between rich and poor countries is threatening the
development and the very existence of humanity. The gap is created
and sustained by national institutions in the U.S. and allied
countries that arrogate certain international economic exchange
functions proceeding from their own interests. They have monopolized
the right to issue the world’s currency and use the revenue for
their own benefit, giving their banks and corporations unlimited
access to loans. They have monopolized the right to establish
technical standards, thus maintaining technological supremacy of
their industry. They have imposed upon the world their own
international trade rules that require all other countries to open up
their markets and limit substantially their own ability to influence
the competitiveness of their national economies. Finally, they have
forced the majority of countries to open up their capital markets,
thus ensuring the domination of their own financial tycoons, who keep
multiplying their wealth by exercising a currency monopoly.
It
is impossible to ensure a sustainable and successful socio-economic
development without eliminating the monopoly on international
economic exchange used for private or national interests. Global and
national restrictions can be imposed to support sustainable
development, harmonizing global public affairs, and eliminating
discrimination in international economic relations.
In
order to ward off a global financial catastrophe, urgent measures
need to be taken to create both a new, safe, and efficient currency
and a financial system based on the mutually advantageous exchange of
national currencies. This new system would exclude the appropriation
of global seniority in private or national interests.
To
level out socio-economic development opportunities, emerging
economies need free access to new technologies, conditioned on their
promise not to use them for military purposes. Countries that agree
to such restrictions and open up information about their defense
budgets will be exempted from international export control
constraints and receive assistance in acquiring new developmental
technologies.
An
international mechanism to prevent multinational companies from
abusing their monopoly power on the market could ensure fair
competition. The WTO could exercise anti-trust control under a
special agreement binding for all member states. This would allow
economic entities to demand elimination of monopoly power abuses by
transnational corporations and seek compensation for losses from such
abuses by imposing sanctions against the entities at fault. Apart
from overstated or understated prices, quality falsifications, and
other typical examples of unfair competition, the payment of wages
below the ILO-defined minimum regional subsistence level should also
be regarded as an abuse. In addition, there should be reasonable
price regulation for the products and services of global and regional
natural monopolies.
Because
of unequal economic exchanges, countries should be allowed to retain
the right to regulate their national economies in order to equalize
socio-economic development levels. In addition to WTO mechanisms
protecting domestic markets from unfair foreign competition, such
equalizing measures could also be achieved by encouraging scientific
and technological progress and providing state support to innovation
and investment activities; establishing a state monopoly on the use
of natural resources; introducing currency controls to limit capital
flight and prevent speculative attacks on national currencies;
retaining government control over strategic industries; and using
other mechanisms to boost competitiveness.
Fair
competition in the IT sector is essential. Access to the global
information networks must be guaranteed to all people throughout the
world as both information consumers and suppliers. This market can be
kept open by using stringent antitrust restrictions that will not
allow any one country or group of countries to become dominant.
To
ensure that all parties to the global economic exchange observe
international and national rules, there must be penalties for
violators under an international agreement that would enforce court
rulings regardless of their national jurisdiction. However, one
should be able to appeal a ruling in an international court whose
judgment will be binding on all states.
Binding
rules and penalties for non-compliance (alongside penalties for
breaking national laws) would give international agreements priority
over national legislation. Countries that break this principle should
be restricted from participating in international economic activities
by excluding their national currencies from international
settlements, imposing economic sanctions against residents, and
limiting those operations on international markets.
In
order to enforce all of these fundamental changes in international
relations, a strong coalition will have to be created, capable of
overcoming the resistance of the U.S. and G7 countries, which reap
enormous benefits from their dominance on global markets and in
international organizations. This coalition should be ready to use
sanctions against the U.S. and other countries that refuse to
recognize the priority of international obligations over national
regulations. Rejecting the U.S. dollar in international settlements
would be the most effective way to coerce the U.S. into being
cooperative.
The
anti-war coalition should offer a peaceful alternative to the arms
race as a means of encouraging a new round of technological
development. This alternative would lie in broad international
cooperation geared towards solving global problems that require
concentration of resources for creating cutting-edge technologies.
For example, there is no ready-made solution to protect the planet
from threats stemming from deep space. Developing such solutions will
require technological breakthroughs that can be achieved by combining
the efforts of leading countries and by sharing costs.
The
paradigm of sustainable development rejects war as such. Instead of
confrontation and rivalry, it is based on cooperation and
collaboration as a means of concentrating resources in promising
areas of scientific and technological research. Unlike the arms race
provoked by geopolitics, it can provide a better scientific and
organizational basis for managing a new technological mode. The
latter will drive the development of healthcare, education, and
culture, which can hardly be spurred by defense expenditures. These
non-productive sectors and science will account for as much as a half
of GDP in major industrialized countries in upcoming years.
Therefore, a forward-looking solution would include shifting the
focus of government attention from defense spending to humanitarian
programs, primarily in medicine and bioscience. Since the state pays
more than half of health, education, and science expenditures, such a
shift would facilitate systematic management of socio-economic
development and curb destructive trends.
*
* *
A
new election cycle will begin in the U.S. in 2017 that is likely to
be underscored by anti-Russian rhetoric as the ideological basis for
the world war Washington is trying to unleash in a bid to retain its
power. By that time, the crisis in the American financial system may
have resulted in budget spending cuts, devaluation of the dollar, and
declining living standards.
Domestic
problems and foreign policy crises will cause the U.S. government to
ramp up its aggressive tactics, while at the same time weakening its
positions. If Russia mobilizes its intellectual, economic, and
military potential, it will have a chance to get through conflicts in
2015-2018 in view of the fact that the U.S. and its allies will still
not be prepared for direct aggression.
Russia
will face the most dangerous period in the early 2020s when
industrialized countries and China are expected to begin their
technological modernization and the U.S. and other Western countries
will emerge from financial depression and make a technological leap
forward. But Russia may dramatically fall behind technologically and
economically in 2021-2025, which will impair its defense capabilities
and spur internal social and ethnic conflicts in much the same way as
what happened in the Soviet Union in the late 1980s. These conflicts
will be fomented both from outside and inside, using social
inequality, development gaps between regions, and economic problems.
In order to avoid the worst possible scenario leading to the
disintegration of the country, Russia will need to adopt a systemic
domestic and foreign policy for strengthening national security,
ensuring economic independence, improving international
competitiveness, boosting economic development, mobilizing society,
and upgrading the defense industry.
By
2017, when the U.S. starts threatening Russia openly and on all
fronts, the Russian army should have modern and effective weapons,
Russian society should be consolidated and confident of its strength,
intellectuals should be in control of the new technological mode, the
economy should be growing, and Russian diplomacy should succeed in
building a broad-based anti-war coalition capable of pooling efforts
in order to stop American aggression.
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