Germany’s future lies East

Off the keyboard of Pepe Escobar
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THE ROVING EYE

Reuters / Ueslei Marcelino

Reuters / Ueslei Marcelino 

Originally published in Asia Times on March 3, 2015
Discuss this article here in the Diner Forum.

What the BRICS plus Germany are really up to?

Winston Churchill once said, “I feel lonely without a war.” He also badly missed the loss of empire. Churchill’s successor – the ‘Empire of Chaos’ – now faces the same quandary. Some wars – as in Ukraine, by proxy – are not going so well.

And the loss of empire increasingly manifests itself in myriad moves by selected players aiming towards a multipolar world.

So no wonder US ‘Think Tankland’ is going bonkers, releasing wacky CIA-tinted “forecasts” where Russia is bound to disintegrate, and China is turning into a communist dictatorship. So much (imperial) wishful thinking, so little time to prolong hegemony.

The acronym that all these “forecasts” dare not reveal is BRICS (Brazil, Russia, India, China, and South Africa). BRICS is worse than the plague as far as the ‘Masters of the Universe’ that really control the current – rigged – world system are concerned. True, the BRICS are facing multiple problems. Brazil at the moment is totally paralyzed; a long, complex, self-defeating process, now coupled with intimations of regime change by local ‘Empire of Chaos’ minions. It will take time, but Brazil will rebound.

That leaves the “RIC” – Russia, India and China – in BRICS as the key drivers of change. For all their interlocking discrepancies, they all agree they don’t need to challenge the hegemon directly while aiming for a new multipolar order.

The BRICS New Development Bank (NDB) – a key alternative to the IMF enabling developing nations to get rid of the US dollar as a reserve currency – will be operative by the end of this year. The NDB will finance infrastructure and sustainable development projects not only in the BRICS nations but other developing nations. Forget about the Western-controlled World Bank, whose capital and lending capacity are never increased by the so-called Western “powers.” The NDB will be an open institution. BRICS nations will keep 55 percent of the voting power, and outside their domain no country will be allowed more than 7 percent of votes. But crucially, developing nations may also become partners and receive loans.

Russia's President Vladimir Putin delivers a speech as he attends the VI BRICS Summit in Fortaleza July 15, 2014.(Reuters / Paulo Whitaker )

Russia’s President Vladimir Putin delivers a speech as he attends the VI BRICS Summit in Fortaleza July 15, 2014.(Reuters / Paulo Whitaker )

Damn those communists

A tripartite entente cordiale is also in the making. Indian Prime Minister Narendra Modi will be in China next May – and ‘Chindia’ will certainly engage in a breakthrough concerning their bitter territorial disputes. As much as Delhi has a lot to benefit from China’s massive capital investment and exports, Beijing wants to profit from India’s vast market and technology savvy. In parallel, Beijing has already volunteered economic help to Russia – if Moscow asks for it – on top of their evolving strategic partnership.

The US “pivoting to Asia” – launched at the Pentagon – is all dressed up with no place to go. Bullying Southeast Asia, South Asia and, for that matter, East Asia as a whole into becoming mere ‘Empire of Chaos’ vassals – and on top of it confronting China – was always a non-starter. Not to mention believing in the fairy tale of a remilitarized Japan able to “contain” China.

Isolating the “communist dictatorship” won’t fly. Just watch, for instance, the imminent high-speed rail link between Kunming, in Yunnan province, and Singapore, traversing a key chunk of a Southeast Asia which for Washington would never qualify to be more than a bunch of client states. The emerging 21st century Asia is all about interconnection; and the inexorable sun in this galaxy is China.

As China has embarked in an extremely complex tweaking of its economic development model, as I outlined here, China’s monopoly of low-end manufacturing – its previous industrial base – is migrating across the developing world, especially around the Indian Ocean basin. Good news for the Global South – and that includes everyone from African nations such as Kenya and Tanzania to parts of Southeast Asia and Latin America.

Of course the ‘Empire of Chaos’, business-wise, won’t be thrown out of Asia. But its days as an Asian hegemon, or a geopolitical Mob offering “protection”, are over.

The Chinese remix of Go West, Young Man – in fact go everywhere – started as early as 1999. Of the top 10 biggest container ports in the world, no less than 7 are in China (the others are Singapore, Rotterdam, and Pusan in South Korea). As far as the 12th Chinese 5-year plan – whose last year is 2015 – is concerned, most of the goals of the seven technology areas China wanted to be in the leading positions have been achieved, and in some cases even superseded.

The Bank of China will increasingly let the yuan move more freely against the US dollar. It will be dumping a lot of US dollars every once in a while. The 20-year old US dollar peg will gradually fade. The biggest trading nation on the planet, and the second largest economy simply cannot be anchored to a single currency. And Beijing knows very well how a dollar peg magnifies any external shocks to the Chinese economy.

Sykes-Picot is us

A parallel process in Southwest Asia will also be developing; the dismantling of the nation-state in the Middle East – as in remixing the Sykes-Picot agreement of a hundred years ago. What a stark contrast to the return of the nation-state in Europe.

There have been rumblings that the remixed Sykes is Obama and the remixed Picot is Putin. Not really. It’s the ‘Empire of Chaos’ that is actually acting as the new Sykes-Picot, directly and indirectly reconfiguring the “Greater Middle East.” Former NATO capo Gen. Wesley Clark has recently “revealed” what everyone already knew; the ISIS/ISIL/Daesh fake Caliphate is financed by “close allies of the United States,” as in Saudi Arabia, Qatar, Turkey and Israel. Compare that with Israeli Defense Minister Moshe Yaalon admitting that ISIS “does not represent a threat to Israeli interests.” Daesh does the unraveling of Sykes-Picot for the US.

The ‘Empire of Chaos’ actively sought the disintegration of Iraq, Syria and especially Libya. And now, leading the House of Saud, “our” bastard in charge King Salman is none other than the former, choice jihad recruiter for Abdul Rasul Sayyaf, the Afghan Salafist who was the brains behind both Osama bin Laden and alleged 9/11 mastermind Khalid Sheikh Mohammad.

This is classic ‘Empire of Chaos’ in motion (exceptionalists don’t do nation building, just nation splintering). And there will be plenty of nasty, nation-shattering sequels, from the Central Asian stans to Xinjiang in China, not to mention festering, Ukraine, a.k.a Nulandistan.

Parts of Af-Pak could well turn into a branch of ISIS/ISIL/Daesh right on the borders of Russia, India, China, and Iran. From an ‘Empire of Chaos’ perspective, this potential bloodbath in the “Eurasian Balkans” – to quote eminent Russophobe Dr. Zbig “Grand Chessboard” Brzezinski – is the famous “offer you can’t refuse.”

Russia and China, meanwhile, will keep betting on Eurasian integration; strengthening the Shanghai Cooperation Organization (SCO) and their own internal coordination inside the BRICS; and using plenty of intel resources to go after The Caliph’s goons.

And as much as the Obama administration may be desperate for a final nuclear deal with Iran, Russia and China got to Tehran first. China’s Foreign Minister Wang Yi was in Tehran two weeks ago; stressing Iran is one of China’s “foreign policy priorities” and of great “strategic importance.” Sooner rather than later Iran will be a member of the SCO. China already does plenty of roaring trade with Iran, and so does Russia, selling weapons and building nuclear plants.

Germany's Chancellor Angela Merkel.(Reuters / Eric Vidal)

Germany’s Chancellor Angela Merkel.(Reuters / Eric Vidal)

Berlin-Moscow-Beijing?

And then there’s the German question.

Germany now exports 50 percent of its GDP. It used to be only 24 percent in 1990. For the past 10 years, half of German growth depended on exports. Translation: this is a giant economy that badly needs global markets to keep expanding. An ailing EU, by definition, does not fit the bill.

German exports are changing their recipient address. Only 40 percent – and going down – now goes to the EU; the real growth is in Asia. So Germany, in practice, is moving away from the eurozone. That does not entail Germany breaking up the euro; that would be interpreted as a nasty betrayal of the much-lauded “European project.”

What the trade picture unveils is the reason for Germany’s hardball with Greece: either you surrender, completely, or you leave the euro. What Germany wants is to keep a partnership with France and dominate Eastern Europe as an economic satellite, relying on Poland. So expect Greece, Spain, Portugal and Italy to face a German wall of intransigence. So much for European “integration,” it works as long as Germany dictates all the rules.

The spanner in the works is that the double fiasco Greece + Ukraine has been exposing. Berlin as an extremely flawed European hegemon – and that’s quite an understatement. Berlin suddenly woke up to the real, nightmarish possibility of a full blown, American-instigated war in Europe’s eastern borderlands against Russia. No wonder Angela Merkel had to fly to Moscow in a hurry.

Moscow – diplomatically – was the winner. And Russia won again when Turkey – fed up with trying to join the EU and being constantly blocked by, who else, Germany and France – decided to pivot to Eurasia for good, ignoring NATO and amplifying relations with both Russia and China.

That happened in the framework of a major ‘Pipelineistan’ game-changer. After Moscow cleverly negotiated the realignment of South Stream towards Turk Stream, right up to the Greek border, Putin and Greek Prime Minister Tsipras also agreed to a pipeline extension from the Turkish border across Greece to southern Europe. So Gazprom will be firmly implanted not only in Turkey but also Greece, which in itself will become mightily strategic in European ‘Pipelineistan’.

So Germany, sooner or later, must answer a categorical imperative – how to keep running massive trade surpluses while dumping their euro trade partners. The only possible answer is more trade with Russia, China and East Asia. It will take quite a while, and there will be many bumps on the road, but a Berlin-Moscow-Beijing trade/commercial axis – or the “RC” in BRICS meet Germany – is all but inevitable.

And no, you won’t read that in any wacky US ‘Think Tankland’ “forecast.”

 

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

2 Responses to Germany’s future lies East

  • Ken Barrows says:

    Why do I think that Pepe sees business as usual continuing far into the foreseeable future?

  • Greg says:

    Compulsory reading. “The Perfect Storm” by Tullet Prebon research division. One major achilles heel most economies have is the global economy. Those that withdraw now and bite the bullet, i.e. become self sustaining will stand a far better chance than those that don’t. There isn’t much time left. It has already started.

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