FRIDAY, AUGUST 12, 2016

Volume 2, Number 253

EIR Daily Alert Service

P.O. Box 17390, Washington, DC 20041-0390

EDITORIAL

Between Putin and China,—Don’t You Realize What’s Happened to the World at Large?

Aug. 11 (EIRNS)—The dramatic intervention by Vladimir Putin in Southwest Asia, simultaneously solving longstanding strategic conflicts while implementing huge new development programs, with backing from China’s Silk Road diplomacy, has changed the world as a whole, and can not be reversed by Obama or NATO no matter how they may try. These are not spontaneous developments by any means. They are the result of the intervention of the creative human mind,—Vladimir Putin’s.

The Russian, Iranian and Azerbaijan Presidents met on Aug. 8, especially featuring the International North-South Transport Corridor of the New Silk Road.  Next, the Transport, Energy and Foreign Ministers of those three countries will meet in Tehran, in preparation for another three-way summit, this time in Iran.

Another follow-on to the Aug. 8 meeting was Putin’s summit with Armenian President Serzh Sargsyan in the Kremlin yesterday. They discussed Armenia’s integration into the Eurasian Economic Union (EAEU), and moving toward a settlement of the Nagorno-Karabakh dispute between Armenia and Azerbaijan, in light of Putin’s recent summit with Azerbaijan’s President Ilham Aliyev in Baku and his other diplomacy.

Putin’s historic Aug. 9 St. Petersburg summit with Turkish President Recep Tayyip Erdogan,—with its agreements on nuclear energy, increased trade, and the Turkish Stream gas pipeline,—was followed by a meeting today of the Foreign Ministers, Defense Ministers and intelligence heads of the two countries.  It was expected that they would try to coordinate their actions in Syria, including in the ongoing battle of Aleppo, near Turkey’s border.

It is no coincidence that just at this moment, Obama, with the help of his stooge Hillary Clinton, has suddenly raised the threat of war in Europe.  Yesterday, the Russian Federal Security Service (FSB) disclosed that it had intercepted two Ukrainian reconnaissance and sabotage groups in Crimea over Aug. 7 and 8, arresting seven persons at the cost of two Russian lives (an FSB officer and a soldier).  One of the arrested has confessed on Russian television that they were sent by Ukrainian military intelligence to sabotage infrastructure.

Putin said last night that the intended sabotage was intended to destabilize Crimea as it prepared for elections.  He rejected the proposal for a meeting of the Normandy Four on Ukraine on the sidelines of the Sept. 4-5 G20 summit in China, saying that it no longer makes sense, when Kiev is rejecting compromise in favor of terror.  And Putin knows what Crimean Prime Minister Aksyonov said aloud: that Kiev would not have done this without the go-ahead from Washington,—i.e. from Obama. And Obama is being loudly supported in his drive for war by Hillary Clinton.

“Putin has suddenly come into control of large developments in the world, and these guys are going wild,” Lyndon LaRouche said today.  “It doesn’t mean he’s perfect, but he’s in charge, and the others are having a freakout, and they don’t know what to do about their freakout.  Putin will do what he has to do,—expect all kinds of evil to pop up. Now another attack has popped up,—not from Ukraine, but through Ukraine from elsewhere.”

STRATEGIC WAR DANGER

Ryabkov: Risk of NATO-Russia War Is Rising

Aug. 11 (EIRNS)—In Moscow, Sergei Ryabkov, the Russian deputy foreign minister, said in an interview with Mezhdunarodnaya Zhizn(International Life) magazine, excerpted by TASS website yesterday, that there is no reason for war between NATO and Russia, but the risk of unplanned incidents is rising.

“I am convinced that there will be no war. What is happening now is the usual western practice of muscle flexing and a new attempt to show its place to Russia,” Ryabkov said. “It is also an attempt to play to those on NATO’s eastern and northeastern flanks who want to use this complicated period in the Russia-West relations in their narrow and momentary interests, i.e., to gain some bonuses in the form of greater physical presence of troops from other countries; the construction of certain facilities, etc.” There are no grounds for a full-scale war, he said. “Nevertheless, I cannot but say that the risks of unintended incidents are rising.”

Strong Warning of War from China’s Global Times over THAAD Deployment in South Korea

Aug. 11 (EIRNS)—Global Times, an official paper of the Communist Party of China, published a stern editorial warning to South Korea and the U.S. today, that the THAAD (Terminal High Altitude Area Defense) missile deployment in South Korea is a provocation towards war.  The editorial, “THAAD Cripples UN Unity on North Korea Nukes,” reads in part:

“The UN Security Council failed to agree on a U.S.-drafted statement that condemns North Korea’s latest ballistic missile launch on Tuesday, because China demanded the statement oppose any provocative moves that take advantage of North Korea’s nuclear threat and missile project to enable a deployment of anti-missile systems in Northeast Asia….

“The planned deployment [of the U.S. THAAD missiles in South Korea] is adding a new challenge to the vulnerable geopolitical landscape of Northeast Asia. The international collaboration against North Korea’s nuclear project has been crippled. A degenerative aura of the Cold War is emanating from the U.S.-Japan-South Korea alliance.

“China … has been a backer of the UN Security Council’s sanctions against [North Korea]. However, the U.S. and South Korea went too far and made use of North Korea’s nuclear threat to deploy THAAD, which will cause great harm to China’s national security. Given China’s cooperation in sanctioning North Korea, it is nothing but a stab in the back.

“North Korea’s nuclear ambition was primarily triggered by long-standing military pressures imposed by South Korea and the U.S…. The deployment of THAAD is a selfish and reckless move that will break the fragile balance with terrible outcomes: There will be a huge setback in the Sino-South Korean relationship; the susceptible Sino-U.S. collaboration over Northeast Asia will collapse—all will result in a reconfiguration of each stakeholder’s policy on the region.

“Beijing and Washington seem to have a tacit understanding that their rivalry won’t explode into a physical conflict. However, some countries cannot look at the big picture, and are eager to pick sides, but they will only find that they are cannon fodder…. [I]f South Korea leaps headlong into this round of games and becomes a U.S. agent, it will put itself in the middle of a new crisis.”

COLLAPSING WESTERN FINANCIAL SYSTEM

Deutsche Bank Nationalization ‘More and More Probable’

Aug. 11 (EIRNS)—The pressure on Deutsche Bank increases by the day in Germany. The daily Süddeutsche Zeitung titled an article yesterday, “The Nationalization of Deutsche Bank Is More and More Probable.” The article picks up the Center for European Economic Research (ZEW) study reported on yesterday in this EIR Daily Alert, which raises doubts about Deutsche Bank’s capability to find new capital. It then quotes Dieter Hein from Fairesearch, who says: “The bank produces billions in losses but nevertheless pays billions in bonuses. It increases its dependency on investment banking through the planned sale of Postbank, but investment banking is not profitable and is highly risky. The bank strategy has failed completely.” Ultimately, shareholders should intervene, but they prefer to leave the ship and sell their shares.

“It becomes more and more probable that Deutsche Bank won’t succeed in a shift. The scenario of a nationalization is more and more probable,” Hein says.

The only viable solution, however, has been presented in this news service repeatedly, as proposed by Lyndon LaRouche—recapitalize Deutsche Bank to prevent the collapse of the German (and Western) economy, but reconstitute the policies of the murdered Deutsche Bank Chairman Alfred Herrhausen, investing in the real economies of Germany, Eastern Europe and the developing nations, and writing off the worthless gambling debts.

THE NEW GLOBAL ECONOMIC ORDER

Wang Yi in Kenya Cites China-Built Railroad in Kenya as Model of China-African Cooperation

Aug. 11 (EIRNS)—On Aug. 10, China’s Foreign Minister Wang Yi, visiting Kenya, cited the railway line linking the port of Mombasa on the Indian Ocean to Kenya’s capital, Nairobi, as “a model of China-Africa cooperation in industrial capacity,” Xinhua reports today. Wang said, “Once completed next year, it will be one of the railway lines with the highest standard, quality and cost effectiveness in Africa.” Wang listed other gains from the project: “construction of the railway line has created more than 40,000 jobs for locals, with some 20,000 local employees having received training in related skills. It has contributed about 1.5% of Kenya’s gross domestic product.”

The 620-km long standard gauge railroad is expected to cost about $3.2 billion, 85% of which has been financed by China’s Exim Bank.  It is being built by the China Communication and Construction Company. Kenya has already signed a contract with China to extend the line to the Kenyan town of Naivasha. The standard gauge replaces the existing narrow-gauge railway, which was “built by the British at the turn of last century and was nicknamed the Lunatic Express, in part because workers constructing it were eaten by lions,” Britain’sGuardian had reported on July 31, 2015.

The Mombasa-Nairobi part of the railroad is the first phase of a $13.8 billion railroad-building project which will eventually link the port of Mombasa to other major East African cities, such as Kampala, Uganda; Juba, South Sudan; Kigali, Rwanda; and Bujumbura, Burundi, with standard gauge rails as part of the East Africa Railways Master Plan. According to the International Railway Journal, passenger trains will travel at 120 kph, and freight trains will be able to carry 25 million tons per year.

Follow-Up to Meeting of Russian, Iranian, Azeri Presidents

Aug. 11 (EIRNS)—As a follow-up to the meeting of the Russian, Iranian, and Azeri Presidents, Vladimir Putin, Hassan Rouhani, and Ilham Aliyev on Aug. 8, the Transport, Energy, and Foreign Ministers of the three countries are expected to hold a meeting in Tehran as part of the preparations for another such three-way summit to be held in Iran.

In a related development, on Aug. 10 Putin met with Armenian President Serzh Sargsyan, where he told a joint press conference that Russia wants to reduce tensions in relations between Armenia and Azerbaijan, and hopes that the two countries will be able to find a compromise on the disputed Nagorno-Karabakh region. All three are members of the Commonwealth of Independent States (CIS).

Putin also noted the importance of Armenia’s integration with the Eurasian Economic Union (EAEU).

“Armenia for us is a strategic partner in the Caucasus, and we systematically build our relations of alliance along the most sensitive lines and in the international scene, the CIS space first and foremost. Incidentally, I was very pleased to see that and I would like to congratulate you. I’ve taken a look at last year’s statistics. Since Armenia joined the EAEU, your GDP has grown 10%,” Putin said.

Sargsyan said that Russian-Armenian trade for the first six months of this year was up 12%, and attributed the growth to Armenia’s accession to the EAEU. Sargsyan said his country had no major problems in bilateral relations with Russia.

“During the talks, we focused on the Nagorno-Karabakh settlement in the light of the trilateral Armenia-Russia- Azerbaijan summit held in St. Petersburg on June 20, and my recent meeting with Azerbaijani President Ilham Aliyev in Baku,” Putin said.

Putin added that Russia would give all possible assistance to finding a solution to the “Karabakh knot.” He also expressed the hope that Armenia and Azerbaijan would be able to find a compromise “without losers and winners.”

Not mentioned is the other Caucasus “knot”—Georgia, and in this case Turkey also can play a role. The traditional allies of Armenia have been Russia and Iran, mostly as a counterbalance to Azerbaijan at the time when it was playing along with the British geopolitical games. This is now being positively resolved. The other side now, is resolving the Georgia-Russia problem, which is where Turkey and Azerbaijan can help, since they also have a rail project with Georgia to finish the Kars-Tbilisi-Baku railway.

On the question of Armenia, Iran can help, since the two have good relations, and neighboring Iran provides an outlet to landlocked Armenia.

Last April it was reported that China was interested in becoming involved in the construction of an Armenian-Iran railway. On April 1, Armenpress.am reported a statement by Armenian Deputy Foreign Minister Shavarsh Kocharyan, saying “China considers the Armenian-Iranian railway as one of the corridors of the Silk Road and is interested in prospect of building this railroad. China has already involved the proper company that conducts assessments and calculates the possible risks and benefits.”

Resolving the Armenia-Turkey-Azerbaijan tangle would serve to reopen the rail linkages between Turkey and Armenia, and Armenia and Azerbaijan, which would clear the way for an Iran-Azerbaijan-Armenia-Georgia path to the Black Sea.

Global Growth Will `Get New Meaning,’ from China’s G20 Leadership, Says Turkish Economic Researcher

Aug. 11 (EIRNS)—In an interview with Xinhua discussing the G20 Summit, the managing director of the Economic Policy Research Foundation of Turkey (TEPAV) Güven Sak, welcoming the Chinese presidency of the G20, saying that “economic growth is being made more diversified through structural reforms focusing on innovation.” This year’s G20 is being held under the banner, “Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy” (the “four I’s”) in Hangzhou, China, Sept. 4-5.

Sak pointed out that “China’s idea represents a shift from the infrastructure investment by public and private sectors so far in the G20 contribution to economic growth. The Chinese presidency is trying to make innovation, in addition to the transfer and diffusion of technology, important elements to enable the achievement of growth goals.”  Xinhua continued that Sak thinks “the debate covering fields such as the environment, society and economy, is important to developed and developing countries alike, adding that during the Chinese presidency, the development agenda is going to improve.”

Sak said he believes that “In the Chinese presidency year in 2016, the G20 is making itself more relevant to developing countries, and the global growth issue will get new meaning under the Chinese presidency.”  He also said that innovation for developing countries means the transfer of technologies from developed countries to them, and when that process adds to developing new technologies, it “can help countries achieve a win-win situation, not only in sustainable development, but also in global economic growth.”

China Issues Major Program for Innovation and Scientific Discovery

Aug. 11 (EIRNS)—The State Council of China issued on Aug. 9th a new five-year plan for the development of the country’s science and technology, with the aim of becoming one of the top 15 science nations by 2020. It is presently ranked 18th in a global innovation ranking developed by the Chinese Academy of Science and Technology for Development.

In line with its policy of using innovation as the main driver of economic growth, China will spend 2.5% of its GDP to fund innovation. In 2015 it spent 2.1% on innovation. The government also intends to tap into the equity market as an additional source for funding innovation. High-tech services contributed 15% of the country’s GDP in 2015, and the government expects this to rise to 20% by 2020. China has made great headway in fields such as high-speed rail, global positioning technology, hybrid rice development, and fourth-generation telecommunication technology.

The plan also calls for 15 major projects in the fields of quantum telecommunications, advanced manufacturing, cyberspace, and deep space. Xu Jing, director-general of the Department of Innovation and Technology at the Ministry of Science and Technology, said the manned space program and deep-sea exploration are also priorities.

“During the 13th five-year plan, we are also considering the start of Mars exploration, as well as a study on the overall development and utilization of aerospace, including the on-orbit and the Space-Air-Ground network,” Xu said. “As for deep-sea resources exploration, there are still lots of key technology challenges waiting to be solved. Establishing a deep-water station is also on the agenda,” Xu noted.

SCIENCE AND INFRASTRUCTURE

If We Don’t Get Rid of Geopolitics, Mankind Will Never Make It to Mars, Presses German Astronaut

Aug. 11 (EIRNS)—In an interview with the Mannheimer Morgendaily, Hans Schlegel, a German astronaut who was on the International Space Station in 2008, and is now working as a liaison for European astronauts and space technicians in the United States, said that a manned flight to Mars is a real challenge, and will not be possible for another 15-20 years. “Technically it would be possible, but you need the commitment to do it. So far, our politicians do not see any necessity for it.”

And the politicians are the problem, he said.

“If we don’t change our geopolitical designs, and don’t expand global scientific exchange and technological progress, we humans can’t reach Mars…. If we want to make something like a trip to Mars a reality, it only works on a global scale—that is, with China, Russia, Europe, America, Japan and other countries.” The ISS, he added, is an excellent model for international cooperation.

Schlegel is one of 11 Germans who have so far gone into orbit. In 2018, the ISS commander will be a German astronaut for the first time:  Alexander Gerst, who is familiar with the station from an earlier mission in 2014.

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