Turkey’s existential choice: BRI or bust • The Cradle

By: Matthew Ehret

Source: The Cradle • Turkey’s existential choice: BRI or bust

Two destinies are pulling on West Asia from two opposing visions of the future.

As devotees of the rules-based order laid out by Zbigniew Brzezinski 40 years ago strive to uphold their dystopic model of dividing populations to feed endless wars, a more optimistic program of cooperation is being ushered in by China’s ever-evolving Belt and Road Initiative (BRI).

While many nations have jumped on board this new paradigm with enthusiastic support, others have found themselves precariously straddling both worlds.

Turkey plays footsie with great powers

Chief among those indecisive nations is the Republic of Turkey, whose leader was given a harsh wake up call on 15 July, 2016. It was on this date that Russian intelligence provided Turkish President Recep Tayyip Erdogan the edge needed to narrowly avoid a coup launched by followers of exiled Islamist leader Fetullah Gulen.

The timing of the coup has been subject to much speculation, but the fact that it occurred just two weeks after Erdogan’s letter of apology to Putin went public was likely not a coincidence. The apology in question referred to Turkey’s decision to shoot down a Russian fighter jet flying in Syrian airspace in November 2015, killing a soldier and very nearly activating NATO’s collective security pact.

For years instrumental in providing weapons and logistical support to ISIS in both Iraq and Syria (via Operation Timber Sycamore), it is possible Erdogan was tiring of being used to further western interests in the Levant, when it had its own, quite different, aspirations in those territories.

Whatever the case, since that fateful day, Turkey’s behavior as a player in West Asia took on an improved (though not entirely redeemed) character on a number of levels. Chief among those positive behavioral changes is Ankara’s participation in the Astana process with Tehran and Moscow to demilitarize large swathes of Syria. Turkey then purchased Russian S400 medium-long range missile defense systems, and has recently advanced plans to jointly produce submarines, jet engines and warships with Russia, while also accelerating the construction of a nuclear reactor built by Rosatom.

That said, old habits die hard, and Turkey has been caught playing in both worlds, providing continued support for the terrorist-laden Free Syrian Army and Al Qaeda offshoot Hayat Tahrir Al Sham in Syria’s Idlib governorate. Turkey now has a total of 60 military bases and observation posts that provide protection for these and other militant groups in the country’s north.

The Middle Corridor option

On an economic level, Turkey’s ambition to become a gateway between Europe and Asia along the New Silk Road also indicates Erdogan’s resolution to break from his previous commitments to join the European Union and engage more intricately with the East.

Turkey’s 7500 km Trans-Caspian East-West Middle Corridor is an ambitious project that runs parallel to the northern corridor of the BRI connecting China to Europe.

This corridor, which began running in November 2019, has the benefit of cutting nearly 2000 km of distance off the active northern corridor and provides an efficient route between China and Europe. The route itself moves goods from the north-eastern Lianyungang Port in China through Xinjiang into Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Turkey and on to Europe via land and sea routes. Erdogan has previously stated that “the Middle Corridor lies at the heart of the BRI” and has called to “integrate the Middle Corridor into the BRI.”

Other projects that are subsumed by the Middle Corridor include the $20 billion Istanbul Canal which will be a 45km connection between the Black and Marmara Seas (reducing traffic on the Bosporus) as well as the Marmara undersea railway, Eurasian Tunnel, and the third Istanbul Bridge.

Without China’s increased involvement, not only will these projects fail to take shape, but the Middle Corridor itself would crumble into oblivion. Chinese trade with Turkey recently grew from $2 billion in 2002 to $26 billion in 2020, more than 1,000 Chinese companies have investment projects throughout the nation, and Chinese consortiums hold a 65 percent stake in Turkey’s third largest port.

Restraining Ankara’s options

These projects have not come without a fight from both internal forces within Turkey and external ones. Two major Turkish opposition parties have threatened to cancel the Canal Istanbul as a tactic to scare away potential investors at home and abroad. And internationally, financial warfare has been unleashed against Turkey’s economy on numerous levels.

Credit ratings agencies have downgraded Turkey to a ‘high risk’ nation, and sanctions have been launched by the US and EU. These acts have contributed to international investors pulling out from Turkish government bonds (a quarter of all bonds were held by foreign investors in 2009, collapsing to less than 4 percent today) and depriving the nation of vital productive credit to build infrastructure. These attacks have also resulted in the biggest Turkish banks stating they will not provide any funding to the megaproject.

Despite the fact that Chinese investments into Turkey have increased significantly, western Financial Direct Investments (FDIs) have fallen from $12.18 billion in 2009 to only $6.67 billion in 2021.

Dialing down its Uyghur project

As with Turkey’s relations with Russia, Erdogan’s desperate need to collaborate with China in the financial realm has resulted in a change of policy in his support for Uyghur extremists. Of the 13 million Chinese Uyghurs, 50,000 live in Turkey, many of whom are part of a larger CIA-funded operation aimed at carving up China.

For many years, Turkey has provided safe haven to terrorist groups like the East Turkmenistan Islamic Movement, which cut its teeth fighting alongside ISIS in Syria and Iraq. Operatives affiliated with the World Uyghur Congress, funded by the US National Endowment for Democracy and based in Germany, have also found fertile soil in Turkey.

In 2009, Erdogan publicly denounced China for conducting a genocide on Muslims living in Xinjiang (long before it became de rigueur to do so in western nations). After Turkey’s 2016 failed coup, things began to change. In 2017, Turkish Foreign Minister Mevlüt Çavuşoğlu stated: “We will absolutely not allow in any activities in Turkey that target or oppose China. Additionally, we will take measures to eliminate any media reports targeting China.”

There are many parallels to Turkey’s protection of radical Islamic groups in Idlib, but Ankara’s protection of radical anti-China Uyghur groups was more gradual. However, recent significant moves by Erdogan have demonstrated good faith, including the 2017 extradition treaty signed with China (ratified by Beijing though not yet by Ankara), an increased clampdown on Uyghur extremist groups, and the decision to re-instate the exclusion order banning World Uyghur Congress president Dolkun Isa from entering Turkey on 19 September, 2021.

Might the INSTC bypass Ankara?

Not only is Turkey eager to play a role in China’s BRI and secure essential long term credit from Beijing – without which its future will be locked to the much diminished fortunes of the European Union – but Ankara has also factored the growing International North South Transportation Corridor (INSTC) into its calculus.

A multimodal corridor stretching across a dozen nations, the INSTC was launched by Russia, India and Iran in 2002 and has been given new life by China’s BRI. In recent years, members of the project have grown to also include Azerbaijan, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkey, Ukraine, Syria, Belarus, Oman and Bulgaria.

While Turkey is a member of the project, there is no guarantee that the megaproject will directly move through its borders. Here too, Erdogan is keen to stay on good terms with Russia and its allies.

The Middle Corridor loses its shine
Up until now, Turkey’s inability to break with zero-sum thinking has resulted in the self-delusion that Turkey’s Middle Corridor would be the only possible choice China had to move goods through to Europe and North Africa.

This perception was for many years buoyed by the war across the ISIS-ridden region of Syria and Iraq (and the relative isolation of Iran), which appeared to ensure that no competing development corridor could be activated.

However, Iran’s entry into the BRI as part of its 25-year Comprehensive Strategic Partnership struck with China in March, and its ascension to full membership in the Shanghai Cooperation Organization (SCO) in September, has provided an attractive new east-west alternative route to the Middle Corridor.

This potential branch of the New Silk Road connecting China with Europe via Iran, Iraq and Syria into the Mediterranean through Syria’s port of Latakia provides a unique opportunity to not only reconstruct the war-torn West Asian nations, but to also create a durable field of stability after decades of western manipulation.

This new route has the additional attraction of incorporating Jordan, Egypt, Lebanon and other Arab states into a new strategic dynamic that connects Eurasia with an African continent desperate for real development. As of this writing, 40 sub-Saharan African nations have signed onto China’s BRI.

The first glimmering light of this new corridor took form in a small but game-changing 30 km rail line connecting the border city of Shalamcheh in Iran with Basra in Iraq. Work began this year, with its $150 million cost supplied by the semi-private Mostazan Foundation of Iran.

Foreseeing a much larger expansion of this historic connection, Iran’s ambassador to Iraq stated: “Iraq can be connected to China through the railways of Iran and increase its strategic importance in the region … this will be a very big change and Iran’s railways will be connected to Iraq and Syria and to the Mediterranean.”

Ambassador Masjidi was here referring to the provisional agreement reached among Iran, Iraq and Syria in November 2018 to build a 1570 km railway and highway from the Persian Gulf in Iran to the Latakia Port via Iraq.

Already, Iran’s construction-focused investments in war-torn and sanction-torn Syria have grown immensely, boosting estimated trade between the two nations with an additional $1 billion over the next 12 months.

Indicating the higher development dynamic that is shaping the Iraq–Iran railway, Iraq’s Prime Minister stated in May 2021 that “negotiations with Iran to build a railway between Basra and Shalamcheh have reached their final stages and we have signed 15 agreements and memorandums of understanding with Jordan and Egypt regarding energy and transportation lines.”

Indeed, both Egypt and Jordan have also looked east for the only pathway to durable peace in the form of the New Silk Road. The trio of Egypt, Jordan and Iraq began setting the stage for this Silk Road route with a 2017 energy agreement designed to connect the electricity grids of the three nations and also construct a pipeline from Basra to Aqaba in Jordan followed by a larger extension to Egypt.

Iraq and the New Silk Road
In December 2020, Iraq and Egypt agreed on an important oil for reconstruction deal along the lines of a similar program activated earlier by former Iraqi Prime Minister Adil Abdul Mahdi and his Chinese counterpart in September 2019. The latter project was seriously downgraded when Mahdi stepped down in May 2020, and although PM Mustafa Al-Kadhimi has begun to repair Chinese relations, Iraq has not yet returned to the level of cooperation reached by his predecessor.

To date, the only major power that has shown any genuine concern for Iraq’s reconstruction – and been willing to invest actual resources toward it – has been China.

Despite the trillions of dollars wasted by the United States in its brutal invasion and occupation of the country, not a single energy project has been built by US dollars there. In fact, the only power plant constructed after 2003 has been the Chinese-built 2450 mW thermal plant in Wassit which supplies 20 percent of Iraq’s electricity. Iraq requires at least 19 GW of electricity in order to supply its basic needs after years of western bombardment strategically targeting its vital infrastructure.

To this day, hardly any domestic manufacturing exists in Iraq, with 97 percent of its needs purchased from abroad, and entirely with oil revenue. If this dire situation is to be reversed, then China’s oil-for-construction plan must be brought fully back online.

The kernel of this plan involves a special fund which will accumulate sales of discounted Iraqi oil to China until a $1.5 billion threshold is reached. When this happens, Chinese state banks have agreed to add an additional $8.5 billion, bringing the fund to $10 billion to be used on a full reconstruction program driven by roads, rail, water treatment, and energy grids, as well as soft infrastructure like schools and healthcare.

Where the western economic models have tended to keep nations underdeveloped by emphasizing raw material extraction with no long-term investments that benefit its citizenry, creating no manufacturing capabilities or an increase in the powers of labor, the Chinese-model is entirely different, focusing instead on creating full spectrum economies. Where the former is zero sum and a closed system, the latter model is win-win and open.

If Turkey can find the sense to liberate itself from the obsolete logic of zero sum geopolitics, then a bright future will await all of West and Central Asia.

There is no reason to believe that the Middle Corridor will in any way be harmed by the success of an Iran–Iraq–Syria Silk Road corridor, or by its African extensions. By encouraging the development of collaborative relations, large scale infrastructure, and full-spectrum economic networks, abundance can be created in these regions to offset the underdevelopment and stagnation of recent years.

THE US IS TURNING OIL-RICH NIGERIA INTO A PROXY FOR ITS AFRICA WARS

Under The Cover Of Counterterrorism, AFRICOM Is Beefing Up Nigeria’s Military To Ensure The Free Flow Of Oil To The West

And Using The Country As A Proxy Against China’s Influence On The Continent.

Source: https://popularresistance.org/the-us-is-turning-oil-rich-nigeria-into-a-proxy-for-its-africa-wars/

Last month, Nigeria’s President Muhammadu Buhari wrote an op-ed in the Financial Times. It might as well have been written by the Pentagon. Buhari promoted Brand Nigeria, auctioning the country’s military services to Western powers, telling readers that Nigeria would lead Africa’s “war on terror” in exchange for foreign infrastructure investment. “Though some believe the war on terror [WOT] winds down with the US departure from Afghanistan,” he says, “the threat it was supposed to address burns fiercely on my continent.”

With Boko Haram and Islamic State operating in and near Nigeria, pushing a WOT narrative is easy. But counterterror means imperial intervention. So, why is the Pentagon really interested in Nigeria, a country with a GDP of around $430 billion – some $300 billion less than the Pentagon’s annual budget – a population with a 40 percent absolute poverty rate, and an infant mortality rate of 74 deaths per 1,000 live births, compared to 5.6 per 1,000 in the US?

A US Naval Postgraduate School doctoral thesis from over a decade ago offers a plausible explanation: the Gulf of Guinea, formed in part by Nigeria’s coastline, “has large deposits of hydrocarbons and other natural resources.” It added: “There is now a stiff international competition among industrialized nations including the United States, some European countries, China, Japan, and India.”

Since then, the US has been quietly transforming Nigeria’s police and military into a neo-colonial force that can support missions led by the US Africa Command (AFRICOM). Buhari’s offer makes US involvement in Nigeria appear as if Nigeria is asking for help, when in fact the stage is already set for AFRICOM.

The Pentagon’s broader aim is to stop China and Russia from gaining a foothold in the continent. In the meantime, it aims to crush any and all opposition groups that disrupt energy supplies so that oil giants can continue exploiting Nigeria’s resources.

A Brief History Of A Complex Country

It’s important to get an idea of Nigeria’s ethnic and regional complexities. The country’s 206 million people, nearly half of whom are Muslim and nearly half Christian, live north of the equator in West Africa. Their country has 36 states, seven of which are coastal. The country borders Cameroon in the east, Benin in the west, Chad in the northeast, and Niger in the north and northwest.

A US Strategic Studies Institute report from the mid-‘90s describes Nigeria as “an artificial state created according to colonial exigencies rather than ethnic coherence.” Its fragility explains the country’s susceptibility to ethnic, religious, and class warfare. The majority of Nigerian Muslims are Sunni, but Islam in the country spans the spectrum, from Sufism to Salafism. The Christian population is distributed among the Protestant majority as well as Anglicans, Baptists, Evangelicals, Catholics, Methodists, and Roman Catholics. Most of Nigeria’s Muslims live in the north in 12 states whose laws are based on sharia.

Nigeria boasts hundreds of languages and ethnicities, the largest groups being the Hausa (who make up 30 percent of the population), Yoruba (15.5), Igbo (a.k.a., Ibo 15.2), and Fulani (6 percent). There are, of course, exceptions, but in general the Hausa-Fulani and Kanuri peoples tend to be Muslim and the Igbo, Ijaw, and Ogoni Christian. Islam and Christianity tend to be mixed among the Yoruba. During the late-19th century “Scramble for Africa,” the British colonized the region, Christianizing the south and leaving in place the Islamic political structures in the north both for convenience and as a useful divide and rule technique.

Black Gold, British Rule

Drawing up “contracts” for energy companies, the Foreign Office (FO) created a monopoly for Anglo-Persian oil (later BP) and particularly for Shell. Prospecting contracts were awarded by the FO in the late-1930s, but it was as late as 1956 that financially viable amounts of black gold were struck. Most of the country’s oil is in the southern, Niger Delta region populated by the Ijaw and Ogoni peoples, hence there is little militant Islam in Nigeria’s illicit oil sector. Shell operations began in Ogoniland in 1958.

Nigeria gained slow and painful independence from Britain in 1960. Seven years later, armed Igbo fought a war of secession in the oil-rich south to try to form their own country, the Republic of Biafra. Under a One Nigeria policy, the British supported the central regime of General Yakubu Gowon during the Biafra War (1967-70). Fighting and blockade  led to three million deaths. Biafra failed to secede.

The UK Labour government’s Commonwealth Minister, George Thomas, explained at the time: “The sole immediate British interest in Nigeria is that the Nigerian economy should be brought back to a condition in which our substantial trade and investment in the country can be further developed, and particularly so we can regain access to important oil installations.”

As the British Empire declined, the US gradually pursued the same policy in Nigeria. At first, the US considered supporting Biafra.

The Kennedy administration initiated $170 million in economic and military spending in Nigeria under a plan that continued until 1966, into the Johnson administration. William Haven North, who served as the Director for Central and West African Affairs for the US Agency of International Development (USAID) said: “The issue of supporting Biafra was also tied up with the question of oil interests; the major part of the oil reserves in Nigeria were in the Eastern Region with substantial American oil company investments.” In 1978, the US Navy’s Sixth Fleet began the regular exercises in the Gulf of Guinea that continue to the present.

Enter Uncle Sam

In 1990, the Nigeria-dominated Economic Community of West African States (ECO) established a military wing, the so-called Monitoring Group (ECOMOG). The George H.W. Bush administration contributed $100 million. The succeeding Clinton White House said that for so-called peace-keeping operations in other African countries like Liberia and Sierra Leone, “Nigeria provided most of the ‘muscle’.” At this point, the seeds were sown for Nigeria’s use as a delegate for US wars in Africa.

By the dawn of the new millennium, the 3rd Special Forces Group (Army Command) was training Nigerian battalions to assist United Nations support missions. The Nigerian military enjoyed tens of millions of dollars-worth of US weapons.

Meanwhile, indigenous activists suffering under oil spills and environmental destruction established the Movement for the Survival of the Ogoni People. Nine of this group’s leaders, including Ken Saro-Wiwa, were later arrested on trumped up charges and executed by the national military that had been funded by Shell to act as its own private army.

The murders sparked international outrage and activists successfully pressured the US to terminate military aid. General Sani Abacha, under whose dictatorship the Ogoni Nine were hanged, established a Multinational Joint Task Force (MNJTF) to fight both activists and gangs. The MNJTF was later centered in Chad and used as a base from which to fight Boko Haram.

In 1999, Nigeria ended its military rule, at least on paper. By the mid-2000s, Human Rights Watch was wrote that, under the façade of parliamentary democracy, “the conduct of many public officials and government institutions is so pervasively marked by violence and corruption as to more resemble criminal activity than democratic governance.”

With the Ogoni, Ijaw, and other Niger Delta peoples crushed with force, some turned to violence. Following lobbying by Shell, Nigeria’s old colonial master, the UK, began spending taxpayer money on military operations to counter armed groups: £12 million between 2001 and 2014, when Campaign Against the Arms Trade (CAAT) co-authored their report. CAAT documents the UK exportation of nearly £500m-worth of weapons to Nigeria in that period, including missiles and grenades. It cites increased UK arms exports as a direct reason for the failure of the southern ceasefire. UK “security contractors” including Control Risks, Erinys, Executive Outcomes, and Saladin Security were embedded with mobile police units to crush protestors.

Nigeria And The “War On Terror”

Western propaganda paid less attention to Shell’s systemic violence against the Ogoni and other peoples, focusing instead on the more headline-grabbing resistance, such as high-profile ransom kidnappings and pipeline disruption. State oppression in the drier, less fertile north, meanwhile, fed the narrative pushed by Islamic groups: that Western culture is toxic.

Founded in 2002 and led by Mohammed Yusuf who was later executed by the state, Boko Haram is officially called the Group of the People of Sunnah for Preaching and Jihad (Jamā’at Ahl as-Sunnah lid-Da’wah wa’l-Jihād). It emerged in the northeastern city, Maidugari, close to Chad and Cameroon, where it set up semi-autonomous communities. Religious graduates who studied in Sudan attempted to form similar communes but were attacked by the police. In 2009, Boko Haram members allegedly fired at a police station in Bauchi. The government response was to trigger civil war.

The MNJTF mentioned above, is described as “notorious” in a British House of Commons Library report. It was reactivated, this time to fight the Islamists. The report also notes how the Nigerian Armed Forces terrorized the civilian population with raids, arrests, and indiscriminate shelling.

The UK ramped up its training of Nigeria’s military while the US used Chad as a base for its “war on terror” operations: the Pan-Sahel Initiative (covering Chad, Mali, Mauritania, and Niger) and the Trans-Sahara Counterterrorism Partnership (which included Algeria, Morocco, Nigeria, and Tunisia). AFRICOM’s initial operations in Nigeria involved maritime training and integrating the country’s forces with those of other African nations to foster pan-African military alliances.

In its early years, AFRICOM paid little attention to Boko Haram. But this changed as the profile of attacks got bigger.

In 2011, Boko Haram launched a formal insurgency. A report published that year by the US House of Representatives Homeland Security Subcommittee on Counterterrorism and Intelligence outlined Boko Haram’s roots and the reasons for its popularity. They included “a feeling of alienation from the wealthier, Christian, oil-producing, southern Nigeria, pervasive poverty, rampant government corruption, heavy-handed security measures, and the belief that relations with the West are a corrupting influence.” It added that “[t]hese grievances have led to sympathy among the local Muslim population despite Boko Haram’s violent tactics.”

These grievances were met with the kind of violence that further fuels grievances.

The US Escalates Involvement

In the context of the “war on terror,” the Pentagon saw Boko Haram as an opportunity to train Nigeria’s military and employ it for its objectives. The primary US goal was ensuring that the oil-rich regions did not fall into enemy hands.

The Congressional Research Service noted that by the time AFRICOM was founded in the late-2000s, Africa “supplie[d] the United States with roughly the same amount of crude oil as the Middle East.” An Armed Services Committee report in 2011 noted: “Nigeria’s oil rich Niger Delta is a major source of oil for the United States outside of the Middle East.” The US Energy Information Administration states: “Nigeria is the largest oil producer in Africa. It holds the largest natural gas reserves on the continent and was the world’s fifth–largest exporter of liquefied natural gas.” The country has 37 billion barrels of proven crude, second only to Libya, which was bombed to pieces by the US and NATO in 2011.

Nigeria’s forces summarily executed Boko Haram’s leader Yusuf in 2009. A thesis published by the US Naval Postgraduate School notes that in addition to the assassination, “security forces killing or displacing thousands of Nigerian Muslims, is credited with swelling [Boko Haram BH]’s ranks.”

Yusuf’s deputy, Abubakar Shekau, took over and escalated a suicide bombing campaign. The Navy thesis also notes that “the actions of BH, along with other militant groups such as the Movement for the Emancipation of the Niger Delta (MEND), have reduced the country’s oil production, displacing Nigeria from 5th to 8th on the list of America’s largest foreign oil suppliers.”

In 2013, the states of Adamawa, Borno, and Yobe imposed emergency powers. The Pentagon announced a $45 Million-Dollar budget to counter Boko Haram by training troops in Benin, Cameroon, Chad, Niger, and Nigeria. One of the consequences is that Nigeria has been transformed from a peripheral US interest to a proxy force. Years of war, mostly in the north and border regions, have led to 2.1 million internally displaced people. The World Food Program calculates that 3.4 million face hunger and that 300,000 children are malnourished.

Building A Sparta State

In June 2014, it was reported that a 650-person unit, the Nigerian Army’s 143rd Battalion, was set up on the ground and trained by US Special Forces from the California Army National Guard’s Special Operations Detachment-US Northern Command and Company A, 5th Battalion 19th Special Forces Group (Airborne). By then the Nigerian Army was active in 30 out of the country’s 36 states.

Chief of the US Army Africa’s Security Cooperation Division, Colonel John D. Ruffing, said: “It is not peacekeeping … It is every bit of what we call ‘decisive action,’ meaning those soldiers will go in harm’s way to conduct counterinsurgency operation[s].” One US soldier said: “This is a classic Special Forces mission—training an indigenous force in a remote area in an austere environment to face a very real threat.”

In 2015, Boko Haram’s leader Shekau reportedly pledged allegiance to Islamic State, rebranding the organization IS West African Province (ISWAP). A Congressional Research Service report notes that ISWAP “has surpassed Boko Haram in size and capacity, and now ranks among IS’s most active affiliates.”

It’s not as if strategists don’t understand that violence doesn’t work. They understand that violence escalates violence which can then be used as pretexts for more violence. A US Council on Foreign Relations article from 2020 notes: “the last two years have been deadlier than any other period for Nigerian soldiers since the Boko Haram insurgency began.”

As the war against Boko Haram waged on, Niger Delta gangs in the south threatened to resume attacks on oil infrastructure. US “aid” expanded to include training the Nigerian Police Force (NPF) across the country. In November 2016, 66 officers graduated from the Fingerprint Analysis and Forensics training program, an initiative run by the US Embassy in collaboration with the Office of International Narcotics and Law Enforcement and Atlanta Police Department.

In March 2017, 28 Nigerian officers graduated from courses offered by the International Narcotics and Law Enforcement Affairs division, led by US police from Prince William County, Virginia. The program also provided “equipment, training, mentoring, and capacity-building support to various Nigerian law enforcement and justice sector institutions.”

Expanding AFRICOM’s Role

In what the US State Department calls a “whole of government” approach, military operations continued as police training expanded. In early-2018, 12 US Army soldiers, led by Captain Stephen Gouthro, trained 200 Nigerians at the Nigerian Army’s School of Infantry. Facilitated by the US Army Africa, eight Security Assistance and Training Management Organization soldiers and four 1st Brigade Combat Team soldiers shared “ground-combat tactics” with the Nigerian Army’s 26th Infantry Battalion.

In July this year, US Army Special Forces trained 25 officers of the Nigerian Navy Special Boat Service as part of JCET: a five-week Joint Combined Exchange Training program.  The Acting US Consulate Political and Economic Chief, Merrica Heaton, says that the training is designed to help the Nigerian military stop crime in the Gulf of Guinea and “counter violent extremists in the Northeast and enforce the rule of law throughout the region.”

As observers seemingly spotted the top-secret US stealth drone—Northrop Grumman’s RQ-180—over the Philippines, the Department of Defense sold nearly $500 million-worth of propeller planes to Nigeria, marking what the US Embassy and Consulate describes as “an historic level of cooperation …  between the U.S. and Nigerian militaries.” AFRICOM recently confirmed that the inauguration of twelve A-29 Super Tucanos into the Nigerian Air Force will serve a “critical role in furthering regional security and stability.”

The Pentagon allocated $36.1 million to the US Army Corps of Engineers to renovated Kainji Air Base, which will host the Super Tucanos. In addition to training simulator and small arms storage units, the Base includes “aircraft sunshades, a new airfield hot cargo pad, perimeter and security fencing, airfield lights, and various airfield apron, parking, hangar, and entry control point enhancements.”

“Gray Zone” Warfare Against China

Having left operations to Special Forces, AFRICOM is now tasked with overseeing an expanding footprint in Nigeria. But in addition to preventing oil supply disruptions, the US seeks to counter Russian but particularly Chinese involvement. According to the US state-run outlet, Voice of America (VOA), the China National Offshore Oil Corporation began investing in Nigeria’s state oil sector in 2005.

A 2007 US Army War College thesis expressed concern that, following “donations” of Chinese military equipment to Nigeria, China had helped the government to drill hundreds of boreholes in a goodwill gesture to provide clean drinking water. The US acted to tarnish China’s image. As part of what is now called the “whole of government” approach, the US 96th Civil Affairs Battalion, US Army Civil Affairs and Psychological Operations Command, networked with Nigerian civilians, private industry, and aid agencies. The US Army War College implies that this was to psychologically counter China’s influence.

Nigeria signed a Memorandum of Understanding with China in 2018 to integrate into China’s global infrastructure and investment project, the Belt and Road Initiative (BRI). More recently, the VOA has said that China took advantage of Nigeria’s crime- and terror-related oil instability, investing billions of dollars in oil to stabilize supply lines.

From the US military perspective, this so-called “political warfare” creates what they famously call a “gray zone” of conflict in which areas traditionally thought of as economic and civilian are weaponized. Analyst Kaley Scholl of the Assistant Secretary of the Navy for Research, Development and Acquisitions writes that in one war game, the 91st Civil Affairs Battalion coordinated with the 3rd Special Forces Group to uncover “a Chinese conglomerate active in Nigeria who announced a deep-water port being constructed in one month as part of China’s BRI.” In the war game, US PSYOPs beat back the Chinese.

Scholl claims that “Chinese gray zone operations are eroding the US’s legitimacy and challenging the liberal rules-based world order.” In reality, US imperial aggression and wars by proxy erode whatever legitimacy Pentagon planners think they have.

But such analysts seem to forget that both the US and China are armed with nuclear weapons and possess the intercontinental ballistic missiles capable of delivering them. The Pentagon might consider Nigeria to be just another pawn in the new cold war chess game. However, any escalation of tensions in flashpoints, like Taiwan, could unintentionally trigger nuclear catastrophe. This appears to be a risk the Pentagon is willing to take to enforce “full spectrum dominance.”

What Has Publicly Blaming Cyber Attacks on Governments Solved? • Foreign Policy Journal

Source: Original Article

Written by: Emilio Iasiello

Blaming cyber attacks on governments has become routine, but has it resulted in accountability, punishment, or reduction in hostile cyber activities?

In the ongoing cyber tete-a-tete between nation states, the digital domain has been used to conduct an array of operations including network exploitation, data theft, network disruption, and network destruction. Additionally, states have used the cyber domain and the tools therein (e.g., social media, chat rooms, bulletin boards, blogs) to enable other more traditional operations of statecraft such as propaganda, disinformation, and social/political influence operations. Long considered difficult to attribute, governments are more confident in publicly identifying the states they believe are responsible for covert cyber activities against them. In an effort to strengthen such claims, levying legal indictments against the individuals responsible—often foreign nationals with a direct tie to a government or a military—has become popular. The United States in particular has engaged in this practice, executing indictments for cyber activities since 2014 against state actors with direct or tangential ties to foreign governments.

The tactic seemed practical at first, bringing formal charges against suspected government actors, and by extension, implicating that government for supporting, or at least, giving tacit approval of, the activities. The May 2014 indictment against five actors tied to the People’s Liberation Army appears to have had direct influence in China and the United States agreeing not to not to hack each other for commercial advantage in 2015. For a brief period after, this seemed to work with a noticeable reduction in the volume of Chinese theft of intellectual property. However, this was short lived with China allegedly resuming normal level of cyber operations in 2018.

Still, proponents of the indictment strategy have pointed out that an important gain was made—persuading China to curb its previous levels of data theft; in essence, the indictment appeared to have influenced a state’s cyber behavior. While it did not last, it could be argued that even the momentary success suggested that the approach was viable and just needed adjustment for to accomplish strategic deterrence. After all, shortly after the 2014 China-U.S. agreement was made, China entered into similar understanding with Russia in 2015, and ultimately led the G20 (including China) to make a comparable arrangement in November 2015. Many G20 nations were among those that China had also targeted via its global cyber espionage and intellectual property theft operations.

Unsurprisingly, these agreements have not deterred commercial cyber theft, nor more traditional cyber espionage activities, particularly from China that likely views industrial cyber theft a national security imperative for the country’s continued economic development. As long as China sees economic strength as essential to its emergence as a global leader, supporting Chinese companies that are important to accomplishing this goal could be perceived as less about commercial advantage and more about preserving its national interests. This is an important nuance to keep in mind when understanding why China continues to do what it does. Countries finally began to see the futility in trying to make certain countries like China honor these agreements in 2019 when 27 governments signed a joint statement to advance responsible state behavior in cyberspace. Notably, neither China nor Russia were signatories.

Where diplomatic overtures have thus failed, the U.S. has resorted to indictments and has since levied them against official and non-official actors linked to Iran, North Korea, and Russia. As of this writing, these indictments have not yielded the obvious objective—state deterrence from conducting the crimes for which they have been charged. However, this raises the hopeful question—if deterrence wasn’t the primary objective, have indictments achieved what was truly intended? Certainly, indictments could be foils used to further other U.S. political or economic objectives. If so, their influence may not be readily seen as instrumental to achieving seemingly unrelated strategic goals.

Another likely objective is to get on record that a particular government is responsible for illicit cyber activity, thereby letting the world know of its culpability. This seems to be closer to the mark. Prior to May 2014, attribution made in public was mostly accusatory and based on speculation and suspicion, or at least without providing classified evidence to strengthen claims. Indictments have since changed that paradigm, purposefully made for global consumption and to make it clear who the charging state believes to be behind a specific incident. Since there is little hope that any of these individuals will be extradited to the United States, indictments seem less about arrest and prosecution and more about demonstrating capability to identify culprits by detailing their operations. Simply, punishment does not appear to be the primary motive.

Other states have now joined the public attribution bandwagon. In March 2020, Chinese computer security company Qihoo 360 reported that the CIA had been conducting an 11-year cyber espionage campaign against Chinese organizations and in April identified South Korean cyber espionage activity targeting Chinese health organizations for COVID-19 information. Qihoo 360 works closely with the Chinese government, which has prompted concerns with companies like Microsoft collaborating with the company. Although not an official arm of the Chinese government, its stature as a global cyber security leader and a primary supplier of security and monitoring equipment to the People’s Republic of China raises the question of how the company could be used as the voice for leadership. Iran, too, is no stranger to calling out perpetrators of cyber attacks, citing the United States and Israel for various cyber attacks. Even North Korea blamed the United States for knocking it off the Internet, after the former had accused North Korean hackers of attacking Sony in November 2014.

It remains to be seen if or when other foreign governments will step up to the next level and levy cyber indictments against other countries. It is likely that they will wait and see how the United States fares with this approach and if any favorable results are realized. The recent removal of two Russian companies from indictment set forth by special counsel Robert Mueller illustrates a potential impediment to indictment strategy, further raising the question of its effectiveness at deterring future cyber incidents by state and/or state-related entities. One of the companies challenged the charges, hiring a law firm to defend it, marking the first time a defendant has been willing to go to court on a cyber-related indictment. The potential threat of exposing classified information was one reason provided for this result. The fact that the charges were dropped may encourage other indicted individuals and entities to follow suit, potentially derailing the strategy, reducing it to an exercise in making formal attribution.

Cyber operations were once clandestine and mysterious; now, states are emboldened to pull back the curtain and sanitize them in the public spotlight. What remains consistent for now is that public attribution—whether via accusation, indictment, or naming and shaming—has done little to change state behavior, decrease volume of activity, or deter future activity. It’s clear that any one approach—whether it be a legal action, economic influence, a retaliatory strike, or diplomatic engagement—is not a silver bullet, and should not be done independently of each other if any progress is to be made in how cyber space is used for and against states. They must be done in concert and in proportion to the inciting incident, and with a quantifiable, reachable, goal in mind. Absent that, the stakes are not high enough to incite the change that’s often talked about but never done. Perhaps states should consider the fable of the shepherd boy who called wolf before making public attribution. Calling wolf frequently does not get the volume of support to stop the threat; rather, it numbs ears so that they don’t listen and ignore signs that that pack is closing in.

China Leads The 6G Charge • ZERO HEDGE

Source: https://www.zerohedge.com/technology/forget-5g-china-leads-6g-charge

While the world is still very much in the transition phase with 5G, research is already well underway for the next iteration of the technology standard for mobile broadband networks – 6G.

Statista’s Martin Armstrong notes that, according to a whitepaper by Samsung it takes an average of ten years for a new standard to become ready for commercialization, with 5G taking eight years. The tech giant suggested a potential rollout date of 2028-2030 for 6G, highlighting the urgent need for progress to be made.

As this infographic shows, the country at the front of this new charge is China.

Data from the Cyber Creative Institute as covered by Nikkei Asia shows that of around 20,000 6G-related patent applications as of August 2021, 40.3 percent originated from the Asian superpower. The United States isn’t far behind, however, claiming 35.2 percent of the applications. The home of Samsung, South Korea, is in fifth place (when combining applications for European countries) with 4.2 percent.

The source assessed patent applications for nine core 6G technologies including communications, quantum technology, base stations and artificial intelligence. 6G is expected to be about ten times faster than 5G.

Default looms larger for Evergrande

Hong Kong United Times丨香港聯合時報

The main unit of China Evergrande Group (3333), Hengda Real Estate Group, applied yesterday to suspend trading of its onshore corporate bonds while rating agency S&P said it is almost certain that the developer will default.

Hengda received notice on September 15 from rating agency China Chengxin International that the bonds’ ratings had been downgraded to A from AA, and that the bonds rating and its issuer rating were put on a watch list for further downgrades, it said in a stock exchange filing.

Trading suspensions are relatively common in China’s domestic debt market following credit rating downgrades because a score below AA requires bonds to be traded via bid-ask and block platforms, rather than auctions. That prevents smaller investors, some of whom already can’t buy Evergrande’s local notes, from making speculative investments.

S&P this week further downgraded Evergrande to “CC” from “CCC,” with a negative outlook, citing reduced liquidity…

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Iran has joined the SCO, now it needs to turbo-boost its economy • THE CRADLE

Source: https://thecradle.co/Article/analysis/2019

With Iran’s full accession to the Shanghai Cooperation Organization (SCO) complete, Tehran now needs to wrangle big trade deals with its new regional friends to offset US sanctions against its beleaguered economy.

“Today, we will launch procedures to admit Iran as a full member of the SCO (Shanghai Cooperation Organization),” Chinese President Xi Jinping announced on Friday, putting to rest the rampant speculation that Iran will officially accede to Asia’s most coveted security organization.

Iranian President Ebrahim Raisi is in Dushanbe, Tajikistan with a high level diplomatic and economic delegation to attend the annual two-day SCO summit. The visit, marking Raisi’s first foreign trip, is already a dazzling success for the new head of state. The Islamic Republic had, until today, only enjoyed SCO observer status (since 2005), and had undergone two previous failed attempts to gain full membership.

The announcement of Iran’s accession to the SCO comes as little surprise to experts who predicted that Tehran’s comprehensive strategic partnership agreement with China last March and its subsequent announcement of a similar agreement with Moscow, would pave the way for Iran’s upgraded SCO status. Recent developments in Afghanistan have only confirmed for Beijing and Moscow – the organization’s main stakeholders – the value of Iran within the regional security organization.

Founded in 2001, the SCO brings together regional powers, such as Russia and China, along with India, Kyrgyzstan, Kazakhstan, Pakistan, Tajikistan, and Uzbekistan. The organization represents a geographical region of 60 million square kilometers (23 million square miles) and a population of over 3 billion.

Economy of the SCO

During its first 20 years, the SCO was largely viewed as a political and security grouping of countries that sought to cooperate against “terrorism, separatism, and extremism.” However, it has recently also sought to bolster economic cooperation among members and is expected to further develop these ambitions in the coming years.

In 2018, at the Qingdao summit in China, the SCO adopted an agreement consisting of 17 documents, which included action plans for economic cooperation between the SCO member states and the need “to examine the prospects of expanding the use of national currency in trade and investment.”

The SCO’s eight member states, four observer states, and six dialogue partners boast a total economic volume of close to $20 trillion and a total foreign trade volume of $6.6 trillion, 100 times larger than the values of 20 years ago.

For Iran and its ailing, US-sanctioned economy, joining the SCO provides access to significantly larger markets and the world’s fastest-growing international corridors. It also further consolidates Tehran’s unofficial alliance with major powers Moscow and Beijing against the West on issues such as Iran’s nuclear program.

Iran’s trade with SCO members

According to the latest data announced by Iran’s Customs Administration (IRICA), the value of trade between Iran and the members of the SCO (including observer states) reached $28 billion during the last Iranian calendar year (ending 21 March, 2021). That makes China Iran’s single largest trade partner with a trade value of $18.9 billion, almost two thirds of Iran’s total trade with SCO members.

Despite being one of the pivotal members of the organization, Russia ranks fourth in terms of trade volume with Iran, after India ($3.4b) and Afghanistan ($2.3b), recording only $1.6 billion in total trade with the Islamic Republic. According to the Iranian data, Pakistan stands fifth in terms of trade value with Iran within the bloc, while the remaining six countries have a combined trade value of just $569 million.

IRSN

Considering Iran’s total trade volume of $73.89 billion during the last Iranian (1339) calendar year – $11.2 billion lower than the previous year – Tehran’s trade with the SCO countries has already approached nearly 38 percent of its total trade, 26 percent of which was with China alone.

Iran’s other top trade partners are Iraq, UAE, and Turkey respectively, followed by Afghanistan in the same period.

US sanctions

While Iran’s accession to full membership status in the SCO can theoretically boost the country’s trade with other member states, there are significant obstacles which are unlikely to allow Tehran to reap an economic windfall, at least in the short run.

Among Iran’s most difficult obstacles is a series of US-led sanctions against the country’s financial and transportation institutions, in addition to being blacklisted by the Financial Action Task Force (FATF), a global intergovernmental organization tasked with devising standards on combating money laundering and ‘terrorism financing.’ Given the exposure of most countries to US markets and financial networks, and due to the risk of heavy penalties or loss of access to US and European markets, major companies are reluctant to do business with Iran.

The former head of Iran’s Trade Promotion Organization (TPO), Mohammad-Reza Modudi, was quoted by local media earlier this week as saying that many countries, including Iran’s neighbors such as Iraq, “are not willing to do business with Iran out of fear of being sanctioned by American banks or the US Treasury.”

He added that despite Iran’s good production capability, exporting many of the Iranian-made products will not be easy. “We [Iran] have not prepared the needed capacity for these products to be competitive in international markets,” Modudi explained.

Compounding Iran’s lack of focus on the economic benefits of the SCO, is the fact that other Iranian officials view the SCO through a purely political and security lens. Hossein Malaek, Iran’s former ambassador to China, believes that Tehran’s membership in the SCO “has nothing to do with economic issues.”

In an interview with ILNA news agency last month, Malaek was quoted as saying that “Iran’s presence in the Shanghai Agreement will not have any economic aspect, and this cooperation only has security aspects,” and emphasized that “no economic agreement will be signed between Iran and the SCO.”

The political and security benefits of becoming a member state of the Shanghai Cooperation Organization might outweigh other benefits for Iran in the short run. However, if Tehran helps secure the SCO’s energy needs by increasing oil and gas output to its new partners, and facilitates much-needed land access to other markets in West Asia and Europe in the long term, Iran’s economy stands to benefit substantially from its new eastward alignment.

Part II of IV—A Brief History of World Credit & Interest Rates • 500 A.D. – 1690 A.D. The Fall of Rome to End Dark Ages | Armstrong Economics

The fate of the Roman Empire of the West had been cast with the sack of Rome in 410 AD by the Goths followed by the Vandals in 455 AD. What was once Rome was divided with the Franks in Gaul (France), Visigoths in Spain, Angles, Saxons and Jutes in Britain and theOstrogoths followed later by the Lombards in Italy. However, the barbarians had long admired Roman culture and subsequently became civilized. Much of the Roman culture and monetary system was thereby retained. While many of these new barbarian states continued to mint coinage in Roman style and denomination, eventually gold began to disappear from the money supply to be replaced by silver coinage in the form of a denier, denaro, phenig and penny all taking their name from the old Roman denarius.

The Byzantine Empire was certainly not immune to crisis concerned debt. The moneylenders and moneychangers were quite unpopular. They were forbidden to hold public office as time went by. The empress Sophia in 567 A.D. summoned the moneylenders before her and confiscated all agreements to, and pledges of, debt thereby simply forgiving all debts – a move that was obviously welcomed by the populace.

By the year 622, the Arab nations were on the rise. They had conquered Egypt, Syria and Persia and in 669 they took Asia Minor by storm. In 698, the Arab armies captured even Carthage and followed with an invasion of Spain in the year 711. The Arab goal to conquer the balance of Europe was finally thwarted at the Battle of Tours in 732. Nevertheless, the Arabs controlled the Mediterranean, which had essentially cut off all trade in Western Europe. The economy diverted to one of agriculture and mercantilism died a quite death. Cut off from world trade, the Latin tongue began to disappear and the emergence of independent languages began throughout Western Europe.

This was the atmosphere that history has labeled the “Dark Ages” and while coinage existed, the lack of commerce and increased hoarding had seriously reduced circulation. It was the rise of Charlemagne that brought light to this dark period in man’s history. Much of the circulating currency was still old Roman coins. Charlemagne brought forth a great monetary reform that has survived into our present day. He introduced the “denier” which was a silver coin eventually referred to as a penny. Twelve of these silver pennies equaled one “sou” which later became known as a shilling in many parts of Europe. Twenty shillings equaled one pound.

The Capitularies of Charlemagne, circa 800 A.D., also dealt with the issue of credit. Undoubtedly, this legal code had been highly influenced by the severe inflationary trends and debt crises that had plagued the final years of the Roman Empire. The charge of interest on loans was strictly forbidden. It was during this period when the evils of excessive debt were viewed not only as destructive socially but as a sin under church law known as usury. Any exception to this view on charging interest remained highly controversial for the following thousand years well into the Middle Ages.

The tenth century was a period of slow advance. While much of central Europe did not benefit, the Venetians gained major concessions in trade from Constantinople and the uptrend in trade brought with it wealth. Moneylenders in Venice were actually respected while banking facilities re-emerged out of the need to finance maritime ventures. The Vikings began to settle back into the position of traders rather than raiders and secure a dominant role in maritime trade between Northern Europe and the Mediterranean. Meanwhile, the Arab power, that had dominated the previous century and brought about the Dark Ages in Western European culture, gave way to decay. By the eleventh century, the Europeans were pushing the Arabs out of Sicily and Sardinia. By 1096, the First Crusade had re-established Italian dominance in the Mediterranean once again.

Nonetheless, the eleventh century was not void of its speculations and inflations. Currency was in a constant state of confusion and the practice of debasing the precious metal content, which had been absent in the West since the final days of Rome, reappeared. Merchants became wealthy enough that they emerged as the new bankers capable of lending to the king. The economic power of Venice had continued to expand and more sophisticated financial transactions, such as insurance, began to emerge.

Records of interest rates in Western Europe during this time are hard to find. When transactions were recorded, most have not survived unlike the clay tablets of Babylon. But documents have survived largely beginning with the late twelfth century. Of the evidence that has emerged, again we find that interest rates were rather high in poor nations, such as Britain, and significantly lower in the major trading nations. Although interest rates in Britain were 43% per annum or much higher, it must be kept in mind that long-term loans were not the norm. Interest rates were typically quoted on a weekly basis – 2 pence on the pound per week (43 1/3% per annum). This was the going rate for the best-secured loan. Those with poor collateral or credit were paying 80-120% per annum.

The thirteenth century was an age of accelerated economic expansion. The Mongol conquest of Asia played the final role in destroying the Arab Empire. This also opened the door for trade with China and it was the era of Marco Polo. Genoa rose to challenge Venice and Florence emerged as the strong international banking center. But even in the thirteenth century, the credit of merchants and landowners was viewed to be much better than that of government. Nobles were on the decline and much of the land became freehold.

Interest rates to a prince were often 30-40% as in the case of the Emperor Frederic II. Legal limits on interest rates began to rise once again. In Modena, the maximum rate was set at 20% while in Milan and Genoa the maximum rate was established at 15%. The trading cities remained quite wealthy and the legal maximum rates of interest were typically much less. In Verona, the maximum rate was 12.5% while in Sicily it was set at 10%. The maximum legal rate in Britain, however, remained at 43 1/3%. Germany perhaps had the highest during this period – 173%.

The prosperity of the thirteenth century brought with it inflation and speculation once again. Commodity speculating was common and many bankers participated with depositor’s funds. Currency was still being debased and new gold coinage was struck in Florence (florin) and in Venice (ducat). Economic prosperity had reached it peak.

The fourteenth century brought with it the Hundred Years War and the Black Plague. Both the kings of England and France defaulted on their national debts and most of the banks in Italy went broke. Financial chaos had become so widespread that in Venice, the bankers were forbidden from speculating in commodities and the government required that two fifths of all deposits be invested in the public debt. The world economy was in severe decline. Interest rates during the fourteenth century rose dramatically. Italy often charged 50% on loans to the once prosperous Netherlands and questionable loans demanded rates of interest as much as 100% per annum.

The fifteenth century was one of transition and expansion. The early part of this century still suffered from periodic plagues and the evils of unsound finance. But the wealth of nations also began to shift. Both the Dutch and English began to emerge as important international traders. In the central part of Europe, the cities of Geneva, Augsburg and Nuremberg rose in importance serving as the trade bridge between the new economic powers of the Dutch and English linking them with the Italians. Florence regained her glory and the Medici Bank of that city became the largest in Europe with branch offices scattered throughout Europe and into Northern Africa and Levant. Venice, however, continued to lead in trade ahead of Genoa.

Contemporary writers of the era have recorded much of the atmosphere. Once again this century brought forth the re-emergence of the capitalist. These were individuals who were extremely wealthy and no longer needed to be merchants or traders. They profited as moneylenders and were held in high esteem once again. This set the tone for a new age of capitalism. Trade was no longer the main goal – everyone wanted to acquire more money instead of land. This was a similar atmosphere that had existed in Socrates day. Nations sought new gold deposits more so than trade, which resulted in wars that were often fought for financial consideration.

The credit of government or the crown was still very dubious. In both France and England loans to the crown were forced upon the people who were paid no interest whatsoever. This quickly laid the foundation for greater organized taxation that followed in the centuries thereafter. Those who were willing to lend to the crown did so at high rates of interests. Charles VIII of France was reported to have paid 42% to 100% on a loan to the Genoa banking house of Sauli to fund his invasion of Italy after the Medici refused.

Commercial business rates declined from the 10-12% range in Italy down to 5%-8%. The emergence of local savings and loans known as “montes pietatis” were formed in many towns beginning around 1462. The montes pietatis were intended to provide much more reasonable rates charging 6% in comparison to the normal pawn rates of 32.5%-43.5%. Some pawnshops during this period were legally limited to 20% as was the case in Florence.

The sixteenth century was a powerful period in time. This was the century that opened the world leading with the discovery of the Americas. But the vast hoards of precious metals brought back from the Americas created sharp increases in inflation. Commodity prices rose dramatically – nearly 300% during 1550 to 1620. England, Spain and France all competed for dominance in the Americas and in Europe. This rapid rise in inflation and the loss of a monopoly on trade through the Mediterranean caused a decline in Italian influence. Royal debtors defaulted on the Italian banks and Italy was on its way toward becoming a second class economic power.

Despite the fact that usury laws still prevailed in church doctrine, the expansion of debt was prolific. Much of the debt was incurred for war. There were but only 25 years during this century when large-scale wars in Europe were absent. Local towns and cities had gained in credit worthiness and when funds ran out, the crown exploited the credit of the towns and cities sending most of them into financial ruin.

There was a sufficient quantity of debt issued from around Europe that the first major exchange emerged in Antwerp. The exchange grew to 5000 members and bills of exchange, bonds, demand notes, deposit certificates and credit instruments of all sorts were traded back and forth daily. An exchange emerged trading commodities in Antwerp and the city became the new financial capital of Europe with hundreds of ships visiting its port each day.

The ravages of debt were soon to worsen. Antwerp was forced into default by the unsound finances of the Spanish Crown in 1570. In 1576, unpaid Spanish mercenary armies sacked Antwerp and the exchange was destroyed. The marauding armies also sacked Rome and financial chaos grew. The financial turmoil in Italy and Spain, combined with the surge in inflation, aided greatly in creating the Protestant Reformation.

The French & Spanish Defaults
During the seventeenth century, the practices of unsound finance finally took their toll. The Crowns of Spain and France defaulted on all their debts and they destroyed their Italian and German bankers in the process. In fact Spain defaulted on her debts in 1607, 1627 and again in 1649. Despite the seemingly rich gold and silver flows coming from the New World, everything had been pledged as collateral often five to ten years in advance. All the gold and silver flowed straight to the Genoa bankers and the Spanish money supply became greatly debased and reduced to a mere copper standard.

The Spanish default destroyed the Fuggers who had risen during the sixteenth century to be perhaps the largest banker up until that time. They were located in Augsburg and had been the first great German bankers with a reported capital base of 5 million guilders. This once great banking establishment was completely ruined by the defaults of Spain.

The French defaults were also dramatic. There were two main periods of severe debt crisis in France in 1589 and 1648. The crisis of 1648 essentially destroyed the remaining Italian bankers – primarily Florentines. An exchange in Paris had emerged in 1639 where credit instruments traded regularly. The French government “rentes” (perpetual loans) traded rather well until the debt crisis of 1648. The French finances were again reformed where interest rates on previous government notes was arbitrarily reduced to 5% while other perpetual notes were simply paid off at a fraction of the previous agreements.

Out of this turmoil, the Dutch gained independence from Spain. The southern provinces had been given to Spain in 1598 as a dowry for the daughter of Philip II who history recalls as Isabella. Quickly after independence, the Dutch built a trading empire instituting new rules and banking practices that would serve as a model for other nations decades later. Germany went through the Thirty Year’s War (1618-1648) which was largely a struggle between Protestant and Catholic factions. This kept Germany as a collection of small states and the demise of the Fugger banking house more or less sealed the fate of Germany during this period in time.

England was ruled by the Stuarts and practiced reasonably sound finance in comparison to that of France and Spain. Gresham had revised the finances of the British government actually instilling a sense of honor to finance. His famous law for which he is best known, bad money drives out good, struck at the heart of depreciating currencies through debasement. Another major advantage of Britain was that it stayed away from foreign moneylenders for the most part. This helped to concentrate wealth within the domestic economy. However, England had practiced the art of forced loans to the Crown so one should not look upon England as a well managed affair during this period. Debts began to rise but the practice of forced loans came to an end under Charles II during the last quarter of this century.

The phrase most commonly used for two people going out to dinner when each party pays their own way is “going dutch.” This saying has its roots in the seventeenth century. The small Dutch Republic fought wars against England and France. The French actually invaded Holland but were defeated when the Dutch opened the dikes. But a large part of the success of the Dutch was owed to their efficient credit system within which even the government enjoyed honorable status and low interest rates.

The efficient Dutch government brought much faith and prosperity. There was more capital in Holland than borrowers. Speculation emerged as always whenever capital has concentrated to such an extent. The first stock market trading emerged in Amsterdam in 1613. Debt issues began trading on the exchange in 1672. Of course one has to mention the famous Tulip Speculation. The highest recorded price paid for a single tulip bulb took place in 1636 for the incredible sum of 4600 florins. In 1985 U.S. dollars, this would be close to $460,000 using gold at $400 per ounce.

The financial transformation of Britain came with the revolution of 1688. Previously, the Stuarts and Tudors restricted and controlled affairs. England never had a significant bank, exchange or organized money market and its national debt was never organized either. As capital began to concentrate during the later part of the seventeenth and primarily during the eighteenth century, prosperity and the emergence of the capitalist developed.

Prior to the revolution of 1688, banking began to evolve in the form of goldsmiths. These chaps quickly began to learn what the Italian bankers had discovered more than a hundred years before that only a small portion of the deposits needed to be retained to cover withdrawals. The large part of the deposits could be lent for interest or invested. Goldsmiths began to pay interest on deposits once this was discovered. But still many of the most prominent goldsmiths were ruined when Charles II suspended all payments on his debts to them in 1672.

Nonetheless, English banking contributed to the evolution of the industry. Checks were known to have been used dating as far back as the 1670’s. Receipts for deposits of gold with the goldsmiths circulated as paper money transferring assets from one person to another without physically handling the gold. The charging of interest had been considered to be a sin under the Catholic Church doctrine. Most Italian bankers got around this through clever means of disguising the interest as foreign exchange fees or transfer costs. In Britain, however, there were legal limitations on how much interest could be charged, but there were no laws against usury. Therefore, the receipts and contracts of debt circulated much more freely since they were drafted in British pounds rather than in some confusing foreign exchange contango.

 

Source: 500 A.D. – 1690 A.D. The Fall of Rome to End Dark Ages

China’s Belt and Road Initiative – Various Viewpoints

China’s Belt and Road – Mythical Vigilante

LYNDON LAROUCHE BELT AND ROAD 1997 SILK ROAD
Rothschild Controlled Belt and Road Initiative
BRI #1 of 3
BRI #2 of 3
BRI #3 of 3
Taiwan in the Crosshairs of the Belt and Road Initiative
Israel Opens Chinese Operated Port in Haifa – Belt and Road
Afghanistan • China’s Belt and Road Initiative
From the Suez Canal to the Belt and Road

Going to War Over Taiwan and the ‘Gas Tank of Will’

Benjamin Wallace-Wells profiles Elbridge Colby and discusses his hawkishness on China in a recent New Yorker article. This section was probably the most telling part of the entire piece:

Colby’s response is to try to sever the transformational vision of the forever wars from his own hawkishness – to argue that those were neoconservative adventures, intent on democratizing foreign countries, and that his own realist camp does not envision regime change and does not aspire to remake China. “What really makes me angry, frankly, is the aggressive kind of neoconservatives and liberal hawks. They are the ones that used up that gas tank of will [bold mine-DL],” Colby told me.

It is remarkable that Colby identifies using up the “gas tank of will” in the United States as his chief objection to neoconservatives and liberal hawks. He is not put off by their militarism or the destruction they have wrought, but he is angry at them for making it harder to sell his kind of militarism to the public. Indeed, “he is troubled by whether most Americans will see Taiwan as of sufficient interest to them.”

In fact, most Americans have consistently said for years that they do not support going to war to defend Taiwan. This is one of the more noticeable gaps between foreign policy elites and the public. As the Chicago Council of Global Affairs noted earlier this year in its survey report, “Majorities of opinion leaders across partisan lines support using US troops to defend Taiwan from Chinese invasion, while a majority of the American public opposes doing so, regardless of partisan affiliation.” Public support for going to war for Taiwan has increased since 2014, but it is still only at 41%.

Read the rest of the article at SubStack

Daniel Larison is a weekly columnist for Antiwar.com and maintains his own site at Eunomia. He is former senior editor at The American Conservative. He has been published in the New York Times Book Review, Dallas Morning News, World Politics Review, Politico Magazine, Orthodox Life, Front Porch Republic, The American Scene, and Culture11, and was a columnist for The Week. He holds a PhD in history from the University of Chicago, and resides in Lancaster, PA. Follow him on Twitter.

Source: Going to War Over Taiwan and the ‘Gas Tank of Will’