Russia – Ukraine War: America’s Proxy War and the Danger of a World War – Part 1

Russia – Ukraine War: America’s Proxy War and the Danger of a World War – Part 2

Russia is emerging as a rival to the United States, which dominates the production and distribution of petrol and natural gas. The European Union relies on Russia for a quarter of its oil imports and for 40 percent of its natural gas.

Germany, which is the largest economic power in the European Union, relies on Russia for more than half of its natural gas needs and for more than 30 percent of its crude oil needs.

In 2020, Germany’s natural gas demand increased by 75 percent. France, which meets its electricity needs through nuclear energy, is also dependent on Russia for its petrol, coal and natural gas.

Moreover, until the time of the ‘Orange Revolution’ in Ukraine, Ukraine was buying natural gas from Russia at subsidized prices.

The gas from Russia to Germany and other European countries is exported through pipelines via Ukraine and Poland. Not only this, the gas is also transported directly from northern Russia to Germany via the Baltic Sea, through the Nord Stream pipeline project.

The Nord Stream 2 gas pipeline project was launched in 2018 and completed in 2021. If this gas pipeline project starts functioning, there will be no need for Russian gas to be sent to European countries by land via countries such as Ukraine and Poland. Russia does not need to pay Ukraine and Poland to send gas to Europe.

Also Read : Sri Lanka, Pakistan, Afghanistan: Dice in the Fight for Hegemony of US-China in South Asia (Part 1)

This gas pipeline project could send 135 billion cubic metres of gas needed to the EU and strengthen the trade.

At the same time, the US is also seeking to occupy the EU’s gas market. The US and European countries have imposed sanctions on Russia, citing Russia’s war on Ukraine.

Contradictions within the European Union in opposing Russia!

On the one hand, the countries which refuse to accept US hegemony rally under the leadership of Russia and China. While on the other hand, the European Union countries are presented as a determined bloc which accept the US leadership. The truth is that not all countries in the European Union accept the boundless domination of the United States. Within the coalition itself, the contradictions are intensifying.

Austria, Germany, Hungary and the Netherlands do not support a gas embargo on Russia. Of these, Austria and Hungary have refused to supply Ukraine with weapons as demanded by NATO. Germany was also initially reluctant to provide weapons. It agreed to supply weapons only after repeated criticism from the US and other NATO countries.

Although the majority of countries support an economic embargo on Russia, it cannot be sustained for a long time. The Organization of the Petroleum Exporting Countries (OPEC) criticized the sanctions on Russia as it is not good for the EU countries. That’s the truth too. The majority of the European countries have no definite alternative to Russian gas.

According to a report published at the end of last April by the Centre for Research on Energy and Clean Air, Russia’s profits from the sale of gas to EU countries have doubled since the war in Ukraine. Russia has so far earned a profit of € 46 billion. This is the beauty of the so-called economic sanctions.

In this context, another statistic has also emerged which makes us laugh. In 2014, the European Union banned the sale of weapons to Russia for its Crimean annexation. But since that year, more than 10 countries in the European Union, including Germany, France and Italy, have sold weapons to Russia to the tune of € 230 million. There are currently reports circulating that it could be used by Russia against Ukraine.

Declining dominance of the petro-dollar and The Russia-China alliance

According to a statistic released in 2019, 88 per cent of the world’s trade is conducted in dollars. Russia and China, which have emerged as rivals to US hegemony, are seeking to put an end to this dominance of the dollar. Russia, in particular, is challenging the domination of dollar in the oil trade.

In the early 1970s, the US signed an agreement with oil-rich Saudi Arabia to carry out global energy trade in dollars. For 50 years, the dominance of the petro-dollar was unquestionably established.

But this position was questioned by Russia in 2014 when it faced sanctions imposed by the European Union and the United States over its annexation of Crimea. System for Transfer of Financial Messages (SPFS) was created by Russia as an alternative to Society for Worldwide Interbank Financial Telecommunications (SWIFT), an international money transfer system that is dominated by dollar. SPFS was created to integrate other countries to trade in Ruble.

Similarly, in 2015, China also created the China’s Cross-Border Interbank Payment System (CIPS) as an alternative to SWIFT. It integrates other countries that come forward to trade in the Chinese currency, the Yuan.

The UK, Germany and France have developed a mechanism called Instrument in Support of Trade Exchanges (INSTEX) to engage in non-dollar trade with Iran in defiance of US sanctions imposed on it. This mechanism which was formed in early 2019. It was jointly announced by the end of that year that five other European countries — Belgium, Denmark, the Netherlands, Finland and Sweden — wanted to join. Russia had also welcomed the move.

In addition to these, the Eurasian Economic Union (EAEU) led by Russia, consisting of Armenia, Belarus, Kazakhstan and Kyrgyzstan and BRICS, which includes Britain, Russia, India, China and South Africa, are also alliances formed against the dominance of the dollar.

Major oil producers such as Saudi Arabia and the United Arab Emirates are in talks to trade in currencies other than dollar. In particular, the media is writing that Saudi Arabia is going to recognize China’s yuan. Recently, Israel has also agreed to trade in China’s yuan.

It is noteworthy that all these countries have previously accepted the hegemony of the United States unquestionably. Combining this with India’s move to import oil at a 30 percent discount from Russia, regardless of the US sanctions on Russia, it is understandable that the dominance of the petro-dollar has been called into question.

In retaliation for the sanctions on Russia, Russia is now asking European countries to pay for the oil and natural gas that they import from Russia in rubles instead of dollars.

In order to trade in rubles, those countries must have rubles in stock. For that, they have to do business with Russia. Conditions imposed by Russia have created a situation, in which European countries have to act against their own sanctions. So far, four European companies have offered to trade in rubles.

NATO: A global military alliance against Russia-China

The victory-defeat of Russia in the war in Ukraine will determine whether the US is going to somehow prop up and maintain its declining world hegemony or lose and fall. That’s why the US has declared that “Our goal is to cripple Russia”.

This is an opportunity for Russia to defeat the domination of its enemy, the United States, and create a conducive global conditions for its development. So the war is going on fiercely.

Russia and China are working together in the race for political-economic hegemony against the United States. The United States, therefore, has to confront these two countries together.

Now that India is maintaining close ties with Russia without respecting the US. This has weakened the US-led QUAD military alliance against China. The US, therefore, plans to massively expand NATO to encircle and bring down not only Russia but also China.

NATO Secretary General Jens Stoltenberg told the Telegraph in an interview, “It is also of concern that we see that Russia and China are working more and more closely

together. This is something that matters for our security.” “NATO leaders are expected to make decisions on ‘what we call a reset, a longer-term adaptation of NATO’ at the Madrid summit in June.” he said.

The invitation of 13 non-NATO countries to a conference in Germany to aid the war in Ukraine is a clear testimony to the US’s NATO expansion plan.

Japan, South Korea, Australia and New Zealand from the Asia Pacific region, Israel, Qatar and Jordan from the Middle East, Kenya, Liberia, Morocco and Tunisia from Africa participated in the conference.

The NATO alliance, which is pressurising Russia, is planned to be expanded from the North Atlantic region to the eastern European countries. It is set to expand around the world to encircle China and Russian-Chinese spheres of influence.

We can’t align in the tug-of-war for hegemony

After its defeat in the Cold War, Russia is gradually strengthening itself politically, economically and militarily. China has grown to compete with imperialism in political, economic and military terms.

Following the Great Depression of 2008, the US economy did not make the expected progress. Following the failure of the privatization-liberalization-globalization policies, the unipolar world order of the American superpower began to loosen up. Russia and China are entering into an alliance to write the epilogue altogether.

The struggle between these two factions is the current international political trend.

Countries like India, which pretend to be neutral and independent also have a intend. They are waiting to embrace the alliance which gets strengthened in the aforementioned tug-of-war. They are now vacillating as they can’t foresee the end.

The US-led imperialism, which have no way of restoring the economy, regard fascism and world war as the weapons of last resort to prevent people from revolution and to maintain their world hegemony.

Also Read : The uprising of the working people that shook Sri Lanka! – Part 2

Russia’s war on Ukraine must be viewed from this background. But among the majority of the left wing and the democratic forces, we see only the denouncing of the US’s NATO expansionist policy. They don’t criticize Russia.

They define Russian invasion as a ‘war of self-defence’. That is true in a way, but we must not forget that the two warring countries are imperialists.

Russia is seeking to use the war not only as an opportunity to prevent its encirclement by winning the war, but also as an opportunity to assert its hegemony by questioning the US hegemony. This is what we have explained in the article.

In the war between the imperialists, the proletariat can take advantage of their weakness; should take advantage of it. But one imperialism (Russia) cannot be supported against the another (The US).

On the contrary, the revolutionary forces must peel off their country’s ruling classes, which engage in anti-Russian, pro-NATO, warmongering-jingoistic propaganda and are pseudo-neutral or  intending to ally in some way or the other in the war of hegemony; We must mobilize the working people for a revolutionary civil war!

(The End)

Palraj

For more than 30 years, the US, which emerged as a superior superpower at the end of the cold war, unquestionably dominated the world. But this unipolar world order of the US is now shaken. On one side, the neo-liberal policy, which is the tool for US hegemony, has emerged as a total fiasco worldwide. On the other hand, Russia and China are challenging the unipolar world hegemony. The fight between these two camps determines the international politico-economic trends.

The fight for hegemony between these two camps is the hidden reason behind the politico-economic crisis that occurred in Sri Lanka, Pakistan and Afghanistan; especially the fight between the US and China.

China has now emerged as the world’s largest manufacturing hub. It has been exporting its goods to other countries at a cheaper rate. In order to expand its economic hegemony, China has started “New Silk Road” project. This New Silk Road joins various countries in Asia and Europe and will encompass land routes and maritime routes. This has become a challenge to the US hegemony. In order to counter China’s New Silk Road, Biden government had proposed a new initiative called “Build Back Better World”.

Also Read : The uprising of the working people that shook Sri Lanka! – Part 2

By saying that there exists a security threat because of China, the US is pressurizing China militarily. China revealed about its plan to annex Taiwan according to the One China Policy. The US is deploying its forces in Taiwan under the name of military aid. Since QUAD was diluted as a result of India’s trade relations with Russia, the US intends to include Japan in NATO and expand its military presence in Asia.

Apart from pressurizing China externally, the US has been orchestrating coups in Sri Lanka and Pakistan to overthrow the pro-China and pro-Russia regimes by creating an economic crisis and installing a puppet rule. It has now emerged victorious too. Mahinda Rajapaksa regime in Sri Lanka and Imran Khan regime in Pakistan have been replaced with the puppet rules of Ranil and Shahbaz Sharif.

The US imperialism has destroyed Afghanistan in the name of “Fight against terrorism” and continuing the civil war for almost 20 years. On last October, after the withdrawal of US-NATO forces from Afghanistan, the interim Taliban government became close to China and Russia by initiating ties on politico-economic spheres. China is ready to include Afghanistan in its New Silk Road project. China has also signed new trade agreements with the Taliban regime.

The US did not want Afghanistan, a place with a great geo-political significance, to side with China. So, it is imposing economic sanctions at an international level and pressurizing the Taliban regime. The US froze the assets of Da Afghanistan Bank (Central Bank of Afghanistan). Afghanistan, which was already in drought, has become another Somalia as a result of US sanctions.

Understanding about the political trends of South Asia will enable the working people of this region to identify the reasons for the economic crises and to fight against the hegemonic forces.

Sri Lanka

As a result of people’s uprising which prolonged for more than a month, Mahinda Rajapaksa was forced to resign. The protests have crossed 50 days. The people gathered en mass in the Galle Face are continuing the protests and demanding for the resignation of Gotabaya and to arrest Mahinda and his goons for attacking the protesting people.

Ranil is being projected as a messiah who will solve the economic crisis. But he will only mortgage the country in the IMF through his ‘roadmap for economic recovery’. Even with such a loan, the economy is in such a crisis that it can’t be resolved immediately.

The debt and the foreign exchange crises are not accidental. It didn’t begin with the advent of corona as the ruling class press campaign.

The ongoing crisis has started in the 1970s, when Sri Lanka was mortgaged in the IMF and the World Bank. It was a result of relentless implementation of recolonization policies. Corona has only aggravated the situation.

At the same time, the crisis was intensified by the US-led imperialists to deter the pro-China stance of the Rajapaksa gang.

We have explained about this trend of economic crisis of Sri Lanka in our previous issue (October 2020) of New Democracy in an article entitled “Sri Lanka reeling under debt: Western imperialists desperate to dominate by intensifying the crisis”.

An excerpt from that article: “The pro-China actions of the Gotabaya government and non-cooperation with the strategic plans of the US have annoyed the US-led imperialists. With an intention to intimidate the Gotabaya government, the European Union (EU) has announced that it will end the tax concessions provided to Sri Lanka under the name of GSP (Generalized System of Preference)”.

The US-led imperialists have moved a step forward by successfully installing their puppet Ranil as the Prime Minister. Sri Lanka was made into a dice in the fight for hegemony of the US and China in South Asia.

During the regime of Mahinda Rajapaksa, Sri Lanka got unpayable loans from China in the name of ‘developing the infrastructure’. These loans acted as an instrument of hegemony for China. A few examples are mentioned below.

As Sri Lanka was unable to repay the loan it pursued for developing the Hambantota port, the port was sold to the Chinese Public Sector Company “China Merchants Port Holdings” by the Mahinda government. Moreover, 15,000 acres of land surrounding the port was leased for 99 years.

By utilizing 269 hectares of reclaimed land from the sea, a special economic zone called “Colombo Port City” is planned to be constructed by the Sri Lankan government.

This project is worth $ 1.4 billion and China Harbour Engineering Company had already begun its work. As a reward for this development project, 116 hectares of reclaimed land will be given to that Chinese company for a lease of 99 years. China is planning to include Colombo in its Silk Road project to strengthen its economic hegemony.

Not the Mahinda-Gotabaya government mortgaged Sri Lanka to China, but also it tried to deter the entry of the capital of ruling classes of other countries.

“The government of Maithripala Sirisena and Ranil Wickremesinghe, loyalists of US-led imperialism and Indian supremacy, planned to jointly develop the East Container Terminal (ECT) at the Colombo Port based on 2019 tripartite agreement with India and Japan. But within three months after assuming power, the Gotabaya government cancelled the project” – from the aforementioned article.

The US-led imperialists played their hand to worsen the foreign exchange crisis of Sri Lanka to stop the extreme inclination of Sri Lanka towards China. After the introduction of recolonization policies, the entire economy of Sri Lanka was tilted towards the US-led imperialists. This made the Rajapaksas conform to the US.

As the bourgeois press wrote, the Sri Lankan economy did not primarily depend on tourism alone. Readymade garments, porcelain products and rubber made a significant contribution to the GDP of Sri Lanka. They were produced solely for exporting.

The US and the EU are the top importers of these Sri Lankan products. That’s why cancellation of tax concessions (GSP) has aggravated the foreign exchange crisis.

““Former Prime Minister and current parliamentarian Ranil Wickremesinghe suggests the ruling party to approach the IMF to address the economic crisis. If we turn to the IMF, we can solve the economic crisis, but many social problems will arise. The terms of the IMF are now politically orientated. Therefore, the government does not need to go to the IMF”, Governor of the Central Bank of Sri Lanka Cabraal replied.” – From the aforesaid article. (In our previous article we have wrongly mentioned “Governor of the Central Bank of Sri Lanka” as “Finance Minister”)

But the Rajapaksa gang can’t stay in this stance till the end. Since April, the protests have intensified. The Rajapaksa gang reached to the IMF and had surrendered to the US as there was no other way and they had to save their designation.

We have explained this shortly in an article entitled “Sri Lankan people longing for a Revolutionary Party” in our website vinavu.com. An excerpt is provided below.

“Mahinda Rajapaksa initially rejected the opposition’s idea of borrowing from the IMF to recover from the economic crisis, but later set up a committee of his own to negotiate with the IMF.

Ajith Nivard Cabraal, a Chinese loyalist and close friend of Rajapaksa, who was the governor of the Central Bank of Sri Lanka, was ousted and replaced by Nandalal Weerasinghe, a former IMF executive.  Dismissed Ajith Nivard Cabraal was strongly opposed to borrowing from the IMF; He was the one who encouraged borrowing from China.

Mahinda Rajapaksa reshuffled his cabinet on April 18 in the name of ‘tackling the economic crisis’ to dispel the stigma among the people such as “family rule” and “corrupt rule”. A new cabinet of 17 members was formed and Basil, Chamal and Namal Rajapaksa were left out.

In the parliament, Mahinda surrendered, and said that the delay in borrowing from the IMF was wrong and that the crisis was due to some of his wrong decisions.

But people are not ready to believe any of these dramas. The struggles for the resignation of the Prime Minister and the President continued.

Despite his surrender, the United States did not help Rajapaksa because he had lost the moral support of the people and was not ready to fully trust the Rajapaksa mob. In talks with the IMF, it was agreed to pay between $ 300 million to $ 600 million, but the funds were not released until Rajapaksa’s resignation. In this way, the United States intensified the crisis.” – From the aforesaid article.

Now, everything happened according to the US’s plan and Ranil Wickremesinghe had become the Prime Minister. The stock market gained just after a few seconds after Ranil assumed office. Japan which accepted to provide $ 5 billion, released $ 2 billion immediately. The World Bank has approved to grant $ 600 million for importing basic amenities. The ruling class media is praising Ranil as ‘change bringer, political sage’ by mentioning the aforementioned things.

The US-led imperialists are now making their next move. First – stabilizing Ranil’s government. Second – diminishing the peoples protest.

Ranil has been the sole MP of his party; that too a nominated MP. Considering this situation, in order to stabilize Ranil’s government, there is a need for gaining of the support of MPs of other parties. This will be done through horse-trading. A tug-of-war is going on regarding this.

Also Read : The uprising of the working people that shook Sri Lanka! – Part 1

As of May 20, 13 persons from other parties took oath as Ministers in the Ranil government. Harin Fernando and Manusha Nanayakkara of Samagi Jana Balawegaya (United People’s Power) have been made as Ministers. Their party has said that disciplinary action would be taken against them. Party leader Sajith Premadasa said that they had violated the party decision to “not to a part of the cabinet”. For similar reason, Sri Lanka Podujana Peramuna (SLPP) has also announced that action will be taken against Mahinda Amaraweera and Nimal Siripala de Silva.

The stand of all the opposition parties is that they will provide ‘support from outside’ to the actions of Ranil, who has been sworn in as Prime Minister, to revive the economy. That is, all these traitors are complicit in the attempt to mortgage the country to the IMF.

However, the people did not want Ranil’s rule to continue with Gotabaya remaining as the President; Ranil is believed to be indirectly protecting the Rajapaksas.

That is why the opposition parties are fearing to directly participate in the government and are demanding for a general election. It may take a few more days for the tug-of-war and horse-trading to end.

Appu