E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER

E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER
Volume 31, No. 36 - September 7, 2017

BRICS Summit Shows the Way out of the Crises Seen from within the trans-Atlantic world, the future appears very, very dim. In addition to the danger of nuclear war, the collapse of the financial system, and the economic devastation wrought by austerity and non investment, the “British empire” faction together with the intelligence services is openly engaged in a coup against U.S. President Donald Trump, up to inciting to civil war. Fortunately, there is another dynamic underway, which was on display at the Sept. 3-5 BRICS summit in Xiamen, China. In spite of heavy headwinds coming from the trans-Atlantic world, that dynamic is gaining strength. Over the past ten years, the combined GDP of the five BRICS members (Brazil, Russia, India, China, South Africa) has grown by 179% and their trade by 94%, and the group’s New Development Bank, founded in 2014, is funding important projects. That, as Chinese President Xi Jinping pointed out, has helped stabilize the global economy. This year for the first time, five other heads of state were invited to attend the summit, from Egypt, Guinea, Mexico, Tajikistan and Thailand. This innovation is meant to transform the BRICS into a larger forum for South-South cooperation. At the opening ceremony of the BRICs Business Forum on Sept. 3, Xi said that within the group, countries treat each other as equals and seek common ground, they took a results-oriented innovative approach to matters so that the results would benefit all, and they “developed themselves to help others with the well-being of the world in mind.” The Russsian government had announced before the summit that the five leaders would be discussing vital regional issues as well, including the Middle East, Afghanistan, North Africa and the Sahara-Sahel region, plagued by terrorism and extremist groups. President Putin made known that Syria would be a special focus of the discussions, and that he would ask the other countries to join in the process of settlement of the conflict and reconstruction of the country. Another major theme was China’s infrastructure Initiative, which Xi Jinping described as follows: “The Belt and Road Initiative is not a tool to advance any geopolitical agenda, but a platform for practical cooperation. It is not a foreign aid scheme, but an initiative for interconnected development which calls for extensive consultation, joint contribution and shared benefits. I am convinced that the Belt and Road Initiative will serve as a new platform for all countries to achieve win-win cooperation.” Major breakthroughs are hoped for in the near future as con
cerns such stupendous projects as Transaqua in Africa (cf. below) and construction of the Kra Canal in Thailand. The type of infrastructure projects promoted by China obviously also hold the key to preventing such tragedies as the recent catastrophic flooding in South Asia, which claimed so many precious lives. Crackdown on Non-Productive Investment  in China, to Promote Belt and Road Projects In mid-August, the Chinese government released guidance on the orientation of overseas investments by Chinese citizens, which restrict speculative activities and encourage development of the real economy. This process has been discussed by Chinese economists since the launching of the Belt and Road Initiative and the Asian Infrastructure Investment Bank, as the necessary way to direct some of China’s savings abroad, without causing large capital flight that would disrupt the international financial system. Bloomberg reported on Aug. 18 that the National Development and Reform Commission had established three categories for overseas investments: banned, restricted and encouraged, which the news agency summarized as follows: “Banned: Core military technology, gambling, sex industry, investments contrary to national security; “Restricted: Real estate, hotels, film, entertainment, sports, obsolete equipment, investments that contravene environmental standards;” and “Encouraged: Investments that further Belt and Road framework, enhance China’s technical standards, research and development, oil and mining exploration, agriculture and fishing.” This guidance is the latest in a series of dirigist measures taken by the government to crack down on speculative activity, dry up “shadow banking,” and shore up foreign exchange reserves, so as to concentrate on development. The guidance states: “Some companies focused on property rather than the real economy, which, instead of boosting the domestic economy, triggered capital outflows and shook financial security.” Likewise, “some companies disregarded the environment, energy and safety regulations in target countries, which resulted in disputes and impaired China’s image,” according to Bloomberg . Recent data compiled by Thompson Reuters show that Chinese investments in countries targeted by the Belt and Road Initiative hit $33 billion in 2017 by the end of July, compared to the total of $31 billion in all of 2016. This figure does not include commitments, but invested funds.
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Meanwhile, on the domestic front, the Chinese government remains committed to completely eradicating poverty in the country by 2020. Concretely, that means lifting more than 10 million people out of poverty every year, “meaning nearly one million people per month, or 20 people per minute,” as recently reported by Xinhua . That is a prodigious task, by any standard, but the entire country is mobilized to ensure its success. After all, China has lifted 600 million people out of poverty in the past 40 years. (Need we underscore that in the European Union, poverty has increased drastically in the south, thanks to the EU/ECB policy.) No More Hurricane Harveys: What Must Be Done The LaRouche Political Action Committee issued a statement on Aug. 31, which we excerpt below. The catastrophe in Texas is a man-made disaster accomplished by the criminal negligence of this nation’s elected officials, who have continued to support Wall Street’s speculative economy and imperial ambitions while arguing that the nation cannot afford to rebuild and replace its ancient and broken-down economic infrastructure.... Hurricane Harvey now looms as the worst national disaster in our nation’s history and it is a disaster which did not have to happen. In 2005, Hurricane Katrina killed nearly 2,000 people and wreaked $130 billion in economic losses. Only then, slowly, new flood-control and seagate infrastructure was built -- at last -- for New Orleans, at a fraction of the human and monetary costs of the damage inflicted by the storm. How many unnecessary deaths and suffering could this project have averted? Four years later, the American Society of Civil Engineers met in Manhattan to discuss several storm surge barrier options for the New York City region. The estimate for the largest of these was $9 billion. The government decided to do nothing. Then, in 2012, Superstorm Sandy killed more than 100 people and caused $65 billion in economic losses. New York area residents now are going through a “Summer of Hell” as the 100-year-old regional transportation system, flooded and damaged five years ago, also was not repaired or replaced at the necessary pace. The staggering economic and human suffering caused by Hurricane Harvey in the Texas and Louisiana Gulf region are not yet known, and will grow in magnitude as the water recedes; but, what has been known for many years, is that Texas Gulf cities are flood-prone, and have repeatedly flooded. Yet, no flood control or storm protection infrastructure has been built since the end of World War II. Plans for a new system for the Houston area had been drafted, but their $25 billion cost was deemed “too high” a price tag for our Wall Street-dominated agencies and elected officials. Now, hundreds of billions of dollars, and priceless human lives, are lost. All of these disasters, and others in the recent period, could have been averted for a fraction of their eventual cost in lost wealth, let alone in lost lives. The media insist to Americans that each city’s disaster is caused by its particular economic habits, its choice of location, its squabbling jurisdictions, its ignoring of climate change, or its being close to water! This is nonsense. Wall Street, which has been bailed out repeatedly to the tune of trillions of dollars, with nothing but increased impoverishment of the American people to show for it, must no longer be allowed to dictate the economic policy of the United States of America. The statement goes on to call for an action plan including breaking up the Wall Street banks, creating national credit in stitutions, and cooperating on China’s Belt and Road Initiative. It can be read in full at:  https://larouchepac.com/20170831/
no-more-houstons-lyndon-larouche-says-what-must-happenright-now. Nuclear Is the Only All-Weather Energy Hurricane Harvey has once again demonstrated that nuclear is the only energy that is immune to all extremes of weather. While solar and wind power systems were interrupted, gas pipelines were shut down, and oil refineries were knocked out of operation, the nuclear plants, specifically built to withstand hurricane-force winds, tornadoes, and extreme heat and cold, have been humming along. The Houston-area South Texas Project reactors were built inland at an elevation of some 10 meters above sea level, to protect against flooding, and the building and doors are watertight. By the time Hurricane Harvey made landfall, the plant had completed its hurricane preparations, including providing for supplies to be in place for the storm crew of 250 workers who might be confined to the plants for days. Weather forecasters were warning days in advance of the coming storm. One can only ask why a similar approach of preplanning, and weather-proofing to protect infrastructure was not available to the rest of flood-prone Texas? The Reconstruction of Syria Is Ready  for Takeoff, Reports EIR Correspondent The incredible momentum of the Syrian Armed Forces in reconquering vast regions of Syrian territory from ISIS and other terrorist groups is also energizing the economic recovery of the country. Thus, after a five year hiatus due to the war, the Damascus International Trade Fair could reopen its doors in late August and it was a huge success with overwhelming popular support. Some 300,000 visitors flocked to the fair grounds every day, eager to see the state of Syrian productive capacities, as well as exhibitions from 45 other nations. EIR Stockholm correspondent Ulf Sandmark visited the Fair as part of a 25 person delegation of Swedish businessmen and was very impressed by the country’s spirit of reconstruction and determination to reach a full victory. Sandmark also had a number of meetings with high-level government representatives, to whom he gave the Arabic translation of EIR’s World Land-bridge Special Report. He also took part in a meeting at the Prime Minister’s office, where representatives from many of the nations of the old Silk Road renewed their cooperation with Syria. Sandmark subsequently met with the Minister of Tourism and the General Director of the Syrian Investment Agency, among others. A Swedish EIR subscriber had donated 15 WLB Special Reports in Arabic for Universities in Damascus and Aleppo, which Sandmark delivered. It contains a special chapter titled “Phoenix Project Syria: Discussion points on the reconstruction of Syria”, which should become the blueprint for relaunching the economy. The needs, of course, are enormous, after more than six years of war. Friendly countries are already involved in projects. Russia, for example, in addition to all the diplomatic, military and civilian aid, has restarted the coastal railway line and is helping the oil industry. Iran is committed to supporting industries, while China will first help rebuild all airports, then the railway system and subsequently the highway system. However, the main effort rests with the Syrian nation. The country’s sovereignty has been re-asserted and the government was able to maintain the functioning of strong national institutions for public services in all sectors. Therefore, the territories under government control during the conflict have been largely repaired and are functional. And reconstruction has begun in
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several of the devastated areas, that were occupied and terrorized by jihadi forces. There are still millions of internal refugees, who fled into the government controlled areas, in addition to those abroad. The national reconciliation process is now the key to the future. EIR’s World Land-bridge report can be ordered in Eng lish, German, Chinese and Arabic at eirshop.d e What Sigmar Gabriel and Steve Bannon  Have in Common... At a campaign event in Frankfurt on Sept. 2, Helga Zepp-LaRouche once again blasted the German government for sticking to the failed old paradigm, and refusing to join the dynamic of the New Silk Road. Berlin as well as the whole EU apparatus, she deplored, are terrified that they will lose control of the situation, if the development projects proposed by China in Europe are actually built. That fear was clearly and openly expressed by German Foreign Minister Sigmar Gabriel on Aug. 30 in Paris in a guest speech during the Week of French Ambassadors. Europe urgently needs a a common stance on China, he said, because China is attempting to divide Europe. He charged the Chinese de facto with an imperialist attitude in its policies in Eastern Europe, where the “16 plus1” format was turned into “1 plus 16”, meaning that China (1) wanted to dominate the 16 smaller countries in Eastern and Southeastern Europe. He has previously strongly criticized China for aggressively seeking to take over strategic industries in Europe. (What he does not mention is that no European companies were willing to do so.) China’s response to Gabriel’s diatribes came promptly: “We are shocked by Mr. Gabriel’s remarks,” Hua Chunying of the foreign ministry stated at a news briefing in Beijing on Aug. 31. “We hope that he can clarify that what he means by ‘one Europe,’ and whether there is a consensus on ‘one Europe’ among EU members,” said Hua. “We hope and believe his remark about China’s attempt to split Europe does not represent most European people’s thinking.” At first look, it may seem paradoxical that Gabriel, a Social Democrat, and Steve Bannon, the extreme right-winger whom President Donald Trump recently dismissed from his White House staff, share the same hostile view on China, but so it is. Just a few days before Gabriel’s remarks in Paris, Steve Bannon openly advocated western trade war with China, telling London’s The Economist (Aug. 25): “Let’s go screw up One Belt One Road... I want the world to look back in 100 years and say, their mercantilist, Confucian system lost. The Judeo-Christian liberal West won.” He has had similar rantings against China since leaving the White House. Such geopolitical utterings however, as well as Berlin’s attempts to sabotage Chinese rail development in South-Eastern Europe, or the Messina Bridge in Italy, as Helga Zepp-LaRouche pointed out, are doomed to fail, in particular when the next crash of the trans-Atlantic financial system comes. It would be foolish for a drowning man to refuse the life preserver extended to him.. Railway Transport: Germany Opts  for Regression to Third World Status Not all so long ago, Germany was renowned in the world for technological competence, efficiency and utmost reliability in building on time infrastructure and industries. That was before the country became plagued by the twin ills of monetarism (infrastructure costs too much) and environmentalism (technology is bad for nature).
As a result, the German government has become the main obstacle in Europe to infrastructure-related progress. Discontent has reached the point among neighboring countries that the Basler Zeitung wrote tongue-in-cheek on Aug. 18 that Germany should be redefined as a third world country, so that Switzerland could fund German railway projects from the Swiss budget for developing sector countries! An article in the Aug. 27. Frankfurter Allgemeine Zeitung
 went through seven concrete cases where the German side has delayed for years construction of trans-national rail lines. So the problem is well known, and yet it has been addressed at all in the ongoing election campaign, except by the BüSo (Civil Rights Movement Solidarity), which has taken as its main slogan “Germany’s future lies in the New Silk Road”. The seven cases taken up in the Frankfurter daily are: * Switzerland: The Rhine Valley line from Karlsruhe to Basel, is a crucial rail freight corridor to and from the Gotthard Tunnel, which will not be completed for another 10 years on the German side. It has now been hit by an additional delay, because the tracks at Rastatt collapsed into a new tunnel being built underneath. Repairs will take until at least Oct. 7, which implies that all the rail freight on that route will have to be transferred to trucks. Italian media have reckoned that 20,000 trucks will be needed to compensate. * Rail traffic between Switzerland and Germany has also suffered from the failure to modernize the Munich-Lindau section. This section is still serviced with diesel locomotives and will at best be ready by 2020. * Austria: Germany has failed to construct the route between Munich and Kiefersfelden on the border with Austria, which is a crucial section of the envisaged north-south corridor through the Brenner Base Tunnel between Austria and Italy. * Poland: The Dresden-Wroclaw route, provided for in a German-Polish treaty of 2003 (!), is still being served on the German side by slow diesel locomotives, while the Polish trains are electrified and run at speeds of 160 km/h. * Denmark: Germany has still not given a green light to construction of a tunnel under the Fehmarn Belt, infuriating the Danes. * Czech Republic: The fast “Supercity” train from Prague runs high speed up to Chleb on the border with Germany, but from there a one-track diesel locomotive pulls the trains. * France: The TGV coming from Paris is forced to slow down considerably after crossing the German border, as the line has yet not been modernized up to the ICE stop in Ludwigshafen. Transaqua Project: People’s Daily  Highlights Role of the LaRouche Movement The People’s Daily online of China published a lengthy report on Aug. 21 on the increased prospects for the long-planned “Transaqua” great infrastructure project, which would transform Lake Chad and sub-Saharan Africa. The article by Kimeng Hilton Ndukong points to the role of Lyndon LaRouche and his international political movement in bringing together the forces needed to move the plans forward. It also places this crucial water and power project in the context of China’s Belt and Road Initiative, or “New Silk Road,” in which Helga and Lyndon LaRouche’s historic role was highlighted Aug. 20 by China Daily . “Hopes have been revived for the 40 million people who depend on Lake Chad for their livelihoods,” People’s Daily wrote, “following the signing last June in Hangzhou, China, of a deal between Chinese construction giant, PowerChina, and the Italian firm, Bonifica Spa. However, the news was only made public at the beginning of this month....
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“The agreement concerns the carrying out of feasibility studies on transferring 100 billion cubic metres of water per annum from River Congo in the Democratic Republic of Congo, DRC, to replenish the fast shrinking Lake Chad, a distance of 2,500 km. The project is also known as Transaqua. According to the website of Executive Intelligence Review , EIR magazine, the letter of intent was signed at a meeting between the executive of the two companies in the presence of the Italian Ambassador to China, Gabriele Menegatti.” Under the headline, “Role of LaRouche”, the article notes: “Thanks to the fight taken up by LaRouche organization over the years and the initiators of Transaqua, the project is today becoming reality within the framework of the Belt and Road Initiative. Executive Intelligence Review magazine and Schiller Institute in 2015 arranged the first meeting between LCBC [the Lake Chad Basin Commission - ed.] and the brains behind Transaqua. This was followed in December 2016 by the signing of the Memorandum of Understanding between LCBC and PowerChina, and subsequent contacts between Bonifica Spa and the Chinese company.” (cf. SAS 32, 34-35/17). The website also notes that: “The Lake Chad Basin Commission resolved the issue of funding studies on water transfer by creating a new Silk Road to Lake Chad. PowerChina, one of the country’s largest multinationals that built the Three Gorges dam, signed a Memorandum of Understanding with LCBC last December.” Kimeng’s article contains impressive illustrations of the 50year shrinkage of Lake Chad, which has so adversely affected sub-Sharan Africa, leading to economic destruction and the rise of terrorism in the region. “Hope Has Been Revived for Lake Chad” For the first time, the issue of a water-transfer project for Lake Chad was raised at a meeting of top EU leaders as a concrete step in implementing a much touted „Marshall Plan“ for Africa. At the Aug. 28 Elysee meeting with Chancellor Merkel, President Macron and Prime Minister Rajoy, together with African leaders, Italian Premier Paolo Gentiloni said that the Italian Foreign Ministry is examining a plan for Lake Chad. He was referring, without naming it, to the prodigious Transaqua plan. According to information provided to EIR, the option of financing the feasibility study is being studied in Rome. As we reported in the last issue, pro-colonial interests have spread lies and slanders against Transaqua in the form of articles in some African media. The main thrust of the campaign is to claim that Transaqua is a plot to „steal“ Congo‘s water. The authors have attacked Helga Zepp-LaRouche and Jacques Cheminade, among others, as promoters of the alleged plot. Cheminade answered in a long letter to the editor in which he noted that development around Lake Chad is a life or death matter for hundreds of millions of Africans. He pointed out that he himself has also denounced the role of the IMF and colonial powers in blocking development, just as today, he supports “the suppression of the CFA franc, to allow African countries to regain their monetary sovereignty and allow them to issue credit for their infrastructure, their industry and their agricultural development.“ On another level, the CEO of Bonifica, the company that designed Transqua, also answered critics of the project in a statement released to EIR Aug. 29. Romina Boldrini noted that Bonifica had the merit of „denouncing for over thirty years now, the dimension of the emergency, of exploring a  myriad of possible solutions and identifying one possible organic solution after warning in an early stage about demographic growth
in Nigeria and about the social-economic crisis of a very large area, a job done by Bonifica alone.“ Today, she went on, the opportunity is greater than ever to mobilize international support to find a solution to Lake Chad. „Currently Transaqua is not a developed and approved project which, contrary to the will of countries and peoples, has been imposed on African countries: it is an opportunity. The opportunity of assessing and developing a solution that could allow all concerned parties to consciously criticize, modify, accept and share the proposed solution – or to propose another one.” Russia Set to Launch  Most Powerful Icebreaker in the World As part of China’s Belt and Road Initiative and its Strategic Partnership with Russia, the two countries are ready to cooperate on building the “Arctic Silk Road” connecting the Pacific to the Atlantic Oceans over the Northern Sea Route. This route could shorten the distance between China and Europe by ten days, as compared to going south through the Strait of Malacca and the Suez Canal. The Northern Sea Route is considered to be in the exclusive jurisdiction of Russia, but China has sailed this route three times, with pre-approval from Russian authorities. In that context, Russia has developed the nuclear powered LK-60Ya-class icebreaker, which will be used to lead convoys of cargo ships and tankers across the Arctic Sea. Russia, by the way, is the only country producing civilian nuclear powered ships. The first of the series of three such icebreakers, the Arktika , was will go into service in 2018; the second, the Sibir , in 2020, while construction has begun on the third, the Ural. With a length of 173 meters and a breadth of 34 meters, they will be the largest nuclear icebreakers in the world, capable of breaking through ice up to 2.5 meters thick. Their special dual draft design will allow them to operate in both the Arctic Sea and the shallow waters of the Yenisei River and the Gulf of Ob. Designed by the Iceberg Central Design Bureau they are being built under a contract for Rosatomflot, the national operator of the nuclear-powered fleet which is a subsidiary of Rosatom. The ships will be fitted out with two RITM-200 nuclear reactors rated at 55 megawatts. The same reactor design, which is more powerful, smaller and more energy efficient, will be used in future floating power stations. As for China, its icebreaker Xue Long ( Snow Dragon ) is now in northern Canada, preparing to follow the path of the ill-fated 1846 voyage of Sir John Franklin in his search for the Northwest Passage, after crossing the Northern Route. While the chief purpose of this voyage is to test the feasibility of moving cargo on container ships across the melting Arctic seas, the Xue Long is also conducting scientific experiments, with research focussed on marine biology, meteorology, geology, and environmental issues, such as ocean acidification and plastic pollution in the Arctic, according to