E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER Volume 32, No. 36, September 6, 2018

E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER
Volume 32, No. 36, September 6, 2018

In Five Years, the Belt and Road Initiative Has Transformed Global Governance As China celebrates the fifth anniversary of the Belt and Road Initiative, which was launched on Sept. 7, 2013, plans to extend the vast project to many more countries are being intensely discussed and developed. That was also the main focus of the Forum of China Africa Cooperation (FOCAC) summit, held Sept. 3-4 in Beijing (cf. below). In those five years, the Belt and Road Initiative has profoundly shifted the fundamental dynamic of international relations toward “win win” cooperation and away from traditional British Empire geopolitics. As Chinese President Xi Jinping stated at a recent symposium commemorating the anniversary, the BRI “does not differentiate countries by ideology nor play the zero-sum game. As long as countries are willing to join, they are welcome.” An overview of the achievements of the BRI was given by Chu Daye in the Aug. 27 Global Times in an article titled “B&R Kindles Confidence, Inspiration Around the World.” As of last May, China had signed 103 cooperation documents with 88 countries, regions and global organizations. Trade in goods among countries and regions in the initiative totaled more than $5 trillion, while Chinese foreign direct investment to these destinations hit $70 billion during 2013-17. Trade between China and B&R partners in 2017 accounted for no less than “40% of global trade in goods in terms of value”, he wrote. In terms of transportation, China’s ports now connect with 600 global ports to ensure maritime connectivity. And the “number of freight train services has risen to 10,000 between China and the EU.” It is generally estimated that more than 200,000 jobs have been created in the various local economies thanks to the infrastructure projects and trade. The director of the China’s National Bureau of Statistics, Ning Jizhe, announced on Aug. 27 that over the five years of the BRI, Chinese enterprises have established 82 economic parks in the participating countries, with $28.9 billion in total investment, and 24,000 jobs created for local communities. Those projects, he emphasized, have brought real investments to the relevant countries (and not the so-called “debt trap” which the West so often denounces), boosted the local economy and improved people’s livelihood,.       Ning also pointed to the growing cooperation in the area of culture and education among B&R partners. In 2017, he 
said, a total of 317,200 students from those countries studied in China, an 11.58%  rise over 2016, accounting for nearly 65% of the total number of foreign students in China. On the question of education, President Xi just last week sent a letter to the Central Academy of Fine Arts, in which he stressed the importance of “aesthetical education” for the development of the individual and society, and to shape “a more beautiful mind”, as reported by Xinhua. The founder of the Schiller Institute Helga Zepp-LaRouche enthusiastically welcomed Xi’s intervention, noting the similitude to the ideas of the great German poet Friedrich Schiller, and his fundamental work titled Letters on the Aesthetical Edu cation of Man . China and Africa Resolve to  “Walk Together Toward Prosperity” The Forum for China-Africa Cooperation, which took place in Beijing on Sept.3-4, brought together the heads of state and government of all African countries together with their Chinese counterparts, under the banner of “China and Africa: Toward an Even Stronger Community with a Shared Future through WinWin Cooperation,” In parallel to the summit, more than 1,000 African representatives from over 600 enterprises, business groups, and research institutions (many more than expected), attended the Conference of Chinese and African Entrepreneurs, whose aim is to promote industrialization, investments, trade, and infrastructure connectivity between China and Africa. President Xi Jinping opened the event with a keynote speech on the theme of the “walk together toward prosperity”. Indeed, Chinese investments have already transformed the continent and given hope that poverty can actually be overcome. Just to name one figure: trade between Africa and China rose to $116 bn in the January-July period of 2018, which is an increase of 19% over 2017. And contrary to what many believe, the trade was balanced with Chinese imports and exports being about $56 and $60 billion. Improved relations between China and Africa are not new. In fact, for the past 28 years, Chinese foreign ministers have always chosen Africa for their first visit abroad in the year. The FOCAC itself was founded in 2000, and has held two summits since then, one in 2006 and one in 2015. What is newer, however, is the impact of the Belt and Road Initiative over the past five years. At the 2015 meeting in South Africa, China had pledged financing in the range of $60 billion for implementing 
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ten major cooperation plans announced at the time, including industrialization, agricultural modernization, infrastructure development, healthcare, the fight against poverty, etc. Investments in schools and training centers were also announced Since then, financing has also come from the Silk Road Fund, the BRICS New Development Bank, and private Chinese firms, as the Chinese Ambassador to the FOCAC, Zhou Yuxiao, recently pointed out. This year, a new plan of action was signed at the summit, since virtually all of the ten major plans set out in 2015 have been implemented! The challenge now, according to Zhou, is to better integrate the Belt and Road with the UN 2030 Agenda for Sustainable Development, the African Union’s Agenda 2063, and the various national plans of African countries. China’s input over the past years has already brought more progress to the continent than centuries of Western domination, as many African leaders are quick to point out (cf. below). Europe could have ensured the development of Africa, but deliberately chose not to for ideological reasons, in the name of neo-colonialism. And now that China is doing so, those same forces accuse the Chinese of only looting the raw materials and luring naïve African leaders into a “debt trap”, while that is precisely what the colonialist policy amounted to. African Leaders Look to Great Progress  in Overcoming Poverty A number of African leaders have stressed that what China is offering is not only mutually beneficial economic deals or win win cooperation, but scientific and cultural partnerships, friendship, and a common future. Lesotho’s Prime Minister Thomas Motsoahae Thabane told Xinhua (Aug. 22) that China is a “true friend” of Lesotho, not “by word of mouth ... but through actions, actions that push us to go from the situation of being underdeveloped to a situation of being developed. What more can you wish for from a friend than to stretch a hand of friendship in order to raise you up when you were flat on your stomach?” Thabane further pointed out that relations with China are “mutually beneficial,” whereas for for Western countries, the benefit was “always for what they call ‘the Mother country’.” The President of the Republic of the Congo Denis Sassou Nguesso, shortly before leaving for Beijing, noted that the Sino-Congolese cooperation “strongly based on sincere friendship, mutual respect.” That cooperation dates back to the 1960s, Sassou Nguesso pointed out, citing China’s assistance in building several thousand kilometers of roads in the African country. For the Ethiopian Deputy Minister of Finance and Economic Cooperation Admasu Nebebe, the bilateral relationship combines infrastructure and knowledge-based partnership, as close to 6,000 Ethiopians have received education in China over the last several years and hundreds more are preparing to attend higher learning programs in China. African countries can learn from China, he told Xinhua , to “transform their agricultural sector, engage in vigorous industrial development, invest in their infrastructure, and put resources to develop their science and technology”. The Chinese ambassador to Ethiopia Tan Jian also pointed out that the Beijing summit should serve as a platform to promote friendly cooperation in a holistic manner. The essence of how China has inspired African countries to resolve to win the fight against poverty and backwardness was expressed by  Ghana’s Ambassador to Beijing, Edward Boateng. In an editorial comment in the Global Times of Aug. 
30, he wrote: “the Chinese believe it is possible for a country like Ghana to be transformed into a technologically developed and  modernized economy within a generation; they have their own example and they know and they tell me every day that it is doable.” He is convinced that Ghana could use China as “a mirror to reflect on how we can achieve a similarly successful development path.” He pointed in particular to how China was able to maintain its own rich culture, while at the same time becoming a major economic and technology powerhouse. On a historical note, Ambassador Boateng recalled that Ghana was “the first African country to break the yoke of colonization and whose founding president, Dr. Kwame Nkrumah, was the father of Pan-Africanism [which] sits deeply in the conscience of Africa and Africans.” Nkrumah worked closely with then-Chinese leader Mao Zedong, “as the conscience of the oppressed during their generation.” British Intelligence Plots False Flag  Chemical Weapons Attack in Syria British intelligence and their on-site tool, the White Helmets, are reportedly preparing a chemical weapons attack in Syria, which would be misrepresented as another “atrocity” by the Syrian government warranting a counter-attack by the U.S., France, and Britain and leading to a dangerous escalation of tensions with Russia. Russian officials have repeatedly warned against such an operation, and provided precise information about it to the relevant government authorities and international institutions. On Aug. 22, Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov reported that eight canisters of chlorine had been delivered to a village near Jisr al-Shughur, and a specially trained group of militants, prepped by the British security company Olive, arrived in the area to be able to simulate a rescue operation, presumably with the help of the White Helmets. That organization, it should be recalled, was created by a former British military intelligence officer and mercenary, James Le Mesurier, and was funded by the British government. It is the logistics and propaganda arm of the Al-Qaeda franchise in Syria, Jabhat Al-Nusra, which recently changed its name to Hai’at Tahrir Al-Sham. Le Mesurier also served as vice president of Special Projects in the Olive Group, a Dubai-based subsidiary of the Londonheadquartered Olive Security, a private security firm heavily staffed and managed by former SAS personnel. The planned attack comes as the Syrian army is preparing for a large offensive in Idlib province, the last stronghold of the terrorist groups and their allied Syrian rebels. The Syrian government is reaching out to these groups and villagers under their control in order to offer a peaceful settlement, similar to that which allowed the Syrian army to retake almost all areas in the southern province of Dara’a. Due to coordination between Moscow and Washington, the settlement process in the Dara’a was rather smooth and rapid. In Idlib, however, the die-hard extremists are terrorizing the other groups and the population to prevent them from reaching reconciliation with the government. And they are being backed by British and American factions to stage a provocation. The airstrikes carried out in Syria last April by US, British and French forces came exactly at the time that the Syrian army was scoring major victories in the Eastern Ghouta suburb of Damascus, and reconciliation was being mediated by the Russian army, just as it is now doing in the areas near Idlib. While American, British and French officials at the UN have 
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warned the Syria government of preparing a chemical attack, there is no military reason for the armed forces to resort to such a move just as victory is near. The fact that Gen. Konashenkov explicitly mentioned the role of British secret services in preparing the provocation caused a total freakout by UK ambassador to the UN Karen Pierce. It has been reported that UK and US armed forces have drawn up lists of potential targets to hit in Syria in the event the false flag chemical weapons attack is actually carried out. Austrian Logistics Branch Calls for Active European Role in New Silk Road The association of logistics firms of Austria ( Zentralverband Spedition und Logistik – ZV ) has sumitted an appeal to the Austrian government asking that it use its six-month chair of the European Union to ensure progress in cooperation with China on the Belt & Road Initiative. ZV President Wolfram Senger-Weiss said during an Aug. 27 press briefing in Vienna that he was happy that the Austrian government “had included important trade issues like the New Silk Road and the extension of the broad gauge railroad [to Eastern Europe] in its program. Now however is the time to use the chairmanship of the European Union Council to advance this theme for Europe and Austria.” He urged the EU to “analyze the chances and risks of China’s initative in an unbiased way, and develop a clear, common strategy for the New Silk Road Project.” The Gebrüder Weiss firm is a leading transport enterprise in Austria and has been a prominent player in trade between Europe and Asia via Russia for many years. Since the major international Belt & Road summit in Beijing in May 2017 (cf. SAS
 37/17), the ZV and other leading organizations in the Austrian transport sector have been lobbying heavily for the government to take on a “first mover” role in ensuring a constructive substantial contribution from Europe to the New Silk Road. Moreover, the EIR special report The New Silk Road Becomes the World Land-bridge , has circulated widely in the transport sector in Austria. Greece Exits Bailout Program  in Severe Economic Distress There was much fanfare when it was announced in August that Greece had exited the bailout. But what was less said is that the infamous EU program has left the Greek economy in a state of collapse. Its Gross National Product has collapsed by a third since 2008, its foreign debt exceeds €337 billion, compared to a GDP of €161.7 bn., while interest payments amount to 18.6 bn a year or 20% of the national budget. Moreover Greece will be under surveillance of its creditors until… 2060, during which time it is supposed to maintain a 3.5% budget surplus to pay off the debt, all of which is absurd since even the International Monetary Fund acknowledges that the debt will become unsustainable long before it is ever paid off. In other words, the country will never be able to recover, let along truly develop.  The facts speak for themselves. On the list of the wealthiest countries in the EU, Greece has dropped to 24th place, down from 14th one decade ago, according to Eurostat data. In 2007 Greece’s GDP per capita stood at 95.1% of the EU average, but by 2017 it had plunged to 69.7%, The prices of goods and services, however, stood at 82.2% of the EU average, while in the important food and non-alcoholic beverages, they were 3.4 % higher than the EU average. While official unemployment has decreased to 20% , down 
from a height of 28 percent, this is easily accounted for. Since 2010, between 350,000 to 400,000, mostly young, university-educated Greeks left the country and are no longer counted in official statistics. Real unemployment is estimated at more than 30% with most new jobs being only part time. In terms of taxes to GDP ratio, Greece is now number one in the EU, up from 13th place in 2008, at 27% today. In 2008, taxes on production and imports accounted for 12.6%of GDP, while in 2017 the figure rose to 17.5%, according to data from the Hellenic Statistical Authority (ELSTAT). Taxes on income rose from 8.1% in 2008 to 10.2% in 2017. In social security contributions, the ratio went from 12.7% in 2008 to 14.6% in 2017. The situation in the health sector is catastrophic. According to a statement released last month by the country’s union of public hospital workers (POEDIN), since 2010 the number of permanent employees at hospitals has been slashed by 25,000, while state funding for hospitals was halved between 2015 and this year. Half of the equipment in state hospitals has exceeded its life expectancy, while acute doctor shortages persist on the islands. Moreover, doctors and other qualified medical personal are seeking employment abroad. The only bright spot in the economy is the fact that Greece is a strategic link in the Belt and Road initiative through the Chinese interests in the Port of Pireaus, where they have not only expanded the container port but are modernizing the passenger port and ship repair facilities, thus providing more jobs. Germany Has Yet to Choose Its “Africa Policy” Africa was a focus of German diplomacy in the last week in August, with Chancellor Angela Merkel visiting Senegal, Ghana and Nigeria, and her Development Minister Gerd Müller making stops in seven countries —Ethiopia, Eritrea, Mozambique, Botswana, Chad, and Rwanda before joining the Chancellor in Ghana on Aug. 30. However, there is no clear line to the government’s approach, which ranges from a real commitment to improve the economic situation in close cooperation with African partners, to outright neo-colonial views, of the type dominant at the European level among EU bureaucrats. In an interview with Germany’s state-run DLF radio on Aug. 30, Gerd Müller criticized the inaction of the EU but also of Germany, stressing the need for “a new partnership” between Africa and the EU. As for the openings for German industry in this “continent of resources”, he noted that “the Chinese, India, Japan, the Americans are here, only the Germans are not here. We are missing out on many opportunities.” In terms of real investments on the ground in Africa, he added, the EU is lagging far behind, but talks a lot about building walls against refugees. On the other hand, the neo-colonial attitude was openly expressed by Günter Nooke, the German government’s chief coordinator of Africa-related affairs. In remarks made on Aug. 31, he outrageously proposed that special economic zones could be set up in African countries which would delegate all sovereignty rights to European and other foreign investors for 50 years -- along the model of the status Hongkong had under British occupation prior to 1997. This, he claimed, would establish controlled  finances and outflank the “enormous corruption among African elites”, which are a deterrent against substantial foreign investments. If the pro-development current wins out in the debate over Africa, it will have to reverse the absence of substantial German investments in infrastructure and industry. With a total of only $12 billion, Germany is only number 11 on the list of inves
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tors, even behind Switzerland with its $13 bn. The Frankfurter Allgemeine Zeitung noted in a Sept. 1 review of Merkel’s tour that in Senegal alone, she witnessed the striking absence of German investments within only one hour or so: her airplane landed at a brand new airport built by Turkish firms, she then rode to the capital on a new highway built by a French firm and passed by the main central station modernized by a Chinese firm, before arriving at the presidential palace. These key infrastructure projects involve billions of dollars ofinvestments, while the German aid to all three countries she visited is only €365 million altogether. However, that may change somewhat: Siemens wants to build two conventional power stations in Ghana, Volkswagen envisages one plant in Ghana and one in Nigeria for the assembling of prefabricated car parts from Germany. Merkel, on the other hand, emphasized a rather small project, namely supplying electricity to 300 Nigerian villages with solar panels built with German government assistance. U.S. President Trump Is Not Caving In With just over eight weeks to go to the mid-term elections in the United States, Donald Trump has a heavy schedule of campaign rallies and interviews lined up, to talk to the voters directly, without the usual media spin. Despite the overwhelmingly negative coverage of his policy and the opposition of the establishment in both parties, Trump is waging a feisty counter-attack. On the impeachment drive, a long overdue spotlight has been shone on the role of British intelligence in orchestrating the “Russiagate” affair. It became clear last week, during the closed-door testimony to Congress by Associate Deputy Attorney General Bruce Ohr (since demoted) that the FBI had knowlingly misled the FISA court with false information in order to obtain authorization to spy on the Trump campaign. The main reason for the drive to bring down Trump, as we have amply reported, was his oft-stated intention to establish good relations with Russia and China, and to put an end to the “regime change” operations around the world. In that respect, he has not given in to the pressure of the putschists or “deep state”, although he has not been able to advance his agenda as much as he would like to. In a major interview granted to Bloomberg reporters on Aug. 30, Trump spoke frankly. He defended his summit meeting with Vladimir Putin in Helsinki, saying it “was actually one of my best meetings because of my talk on Syria, Ukraine, Israel and other things. I think the press covered it unbelievably fake.” In discussing China, when a reporter claimed that Xi Jinping “is an autocrat, doesn’t have to do midterm elections...”, Trump cut him off, rejecting the common mischaracterization of Xi and China in the West: “He has his own election. He has a different kind of election.” On the question of trade, he made clear that the problem not China, but the free trade structures that have been put into place over decades. And further, “the best thing that China and I have going, and the U.S. has going, is that President Xi and I have a really great relationship. OK? That being said, he represents China, I represent us.” Very importantly, Trump also contradicted his Defense Secretary James Mattis on Aug. 29, by stating that joint military exercises between the United States and South Korea would remain suspended, while talks with North Korean President Kim proceed on peaceful relations, as a follow-up to the hotly contested summit the two heads of state held in Singapore last June. 
Argentina in the Eye of Financial Chaos In the space of four days last week, the Argentine peso plunged by 25%, collapsing by 14% just on Aug. 30, while Argentine stocks and bonds traded on Wall Street fell by 16% the same day. In a desperate attempt to halt the debacle, the Central Bank raised interest rates to a whopping 60% -- the highest in the world, auctioned $1.1 bn. of its dollar reserves and increased the bank reserve ratio by five points. So far this year, the peso has been devalued by 50%. Explanations of the crisis from Wall Street and London financial media included the usual arguments that President Mauricio Macri has a “communications problem;” that this was just “contagion” from other emerging markets like Turkey, or the favorite line, that this is “typical of Argentina” which is always “a problem” for financiers. No, this is not a “typical Argentine problem.” It represents the global system of rampant financial speculation and indebtedness, economic looting and human misery which Mauricio Marci has always represented. Indeed, he has turned Argentina into a casino economy, eliminating all regulations intended to stem speculation, and reversing the social progress made under the Kirchners. Consider last week’s sequence of events. As the currency run accelerated on Aug. 29,  Macri offered a two-minute televised message, with no details, announcing that he’d asked the International Monetary Fund (IMF) to speed up disbursements of a three-year $50 bn. bailout package, which only went into effect on June 20. Instead of ending in 2021, Macri wants the remaining $35 bn. disbursed by the end of 2019, a year in which not only are large debt payments due, but presidential elections take place in October, and Macri is desperate to be reelected. The announcement was made without the IMF having agreed to any change, and instead of calming the crisis, his message sent the markets into a tailspin, portraying a government in disarray. Amidst rumors of cabinet heads rolling, Macri has been in non-stop meetings with his closest collaborators to craft a package of new austerity measures to be announced Sept. 3, after which Finance Minister Nicolás Dujovne will fly to Washington to meet with IMF staff to work out final details of the standby loan revision. The Fund has made clear that it will only revise the loan terms in exchange for deeper austerity: a 2019 fiscal deficit target of zero, pension reform, higher taxes, and an assault on state sector companies and their employees. All that despite the fact that these are guaranteed to unleash a social explosion. An enraged and panicked population recalls the tumultuous days of Dec. 2001 in which years of IMF looting culminated in unprecedented financial collapse, debt default, food shortages and poverty. The fear is that current events are a replay of that traumatic period. In the Patagonian province of Chubut and the northwestern province of Mendoza, incidents of supermarket lootings have already been reported. Expect more.

E.I.R. STRATEGIC ALERT        www.eir.de  Published by: E.I.R.GmbH,  Bahnstr. 9a, 65205 Wiesbaden Tel.: 0611/73650, Fax: 0611/9740935, Email:  info@eir.com Verantwortl. f. d. Inhalt: Dean Andromidas, Claudio Celani Subscription: EUR 3000/ ISSN  0936-7527 © E.I.R. GmbH  Alle Rechte vorbehalten, auch die des Nachdrucks von Auszügen, derphotomechanischen Wiedergabe und der Übersetzung,