EIR Daily Alert Service

THURSDAY, JUNE 8, 2017

Volume 4, Number 113

EIR Daily Alert Service

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

EDITORIAL

World Silk Road of Development and Peace—Going ‘from Concept to Action’

June 7 (EIRNS)—Today, Chinese President Xi Jinping met with Kazakhstan President Nursultan Nazarbayev, in Astana, where in September 2013, Xi had announced his proposed Silk Road Economic Belt initiative. In an article Xi wrote for his present visit, he said that the proposal has succeeded in going “from concept to action,” and that it now functions as a “global public good.”

In the United States today, the same implicit public good principle was presented, as the concept of rebuilding the United States, in a presentation made by President Donald Trump, speaking on the banks of the Ohio River in Cincinnati.

Trump called for upgrading U.S. infrastructure and creating jobs. One focus was on refurbishing the locks and dams on the Ohio system, and throughout the 12,000 miles of U.S. inland and intracoastal waterways. He recounted past U.S. infrastructure accomplishments, including building the Hoover Dam in five years, and the Golden Gate Bridge in four years. Look at the Erie Canal—which was a dream of New York Gov. DeWitt Clinton. Thomas Jefferson, Trump said, thought it couldn’t be done. But, tell that to a New Yorker, and he will find a way to do it! Trump said, “We used to be a nation of builders…. [But] we don’t do it anymore…. Not even fix things….” This must change, he said.

Our challenge in the United States, is to succeed in bringing about the “action” part of “from concept to action.” We must force a U.S. breakout from the collapsing, monetarist mess of the Wall Street/City of London system, and create conditions for nation-serving banking, credit and advancement in productivity and science. We have two initiatives in that this week.

First, a new plan for the United States is being released by LaRouchePAC science team member Jason Ross, titled, “A Future Platform of U.S. Infrastructure—Case Study: New York” (see EIR, June 9, 2017, Vol. 44, No. 23). Ross has collaborated with Dr. Hal B.H. Cooper, a transportation engineer, and others, on specifics for New York City, which is an infrastructure disaster. Ross states in his introduction, “We begin by posing answers to overlooked questions about the role of infrastructure in the economy. Equipped with those concepts, we approach U.S. national infrastructure needs in light of international infrastructure developments in China. Finally, we return to New York City, situated in its national and international context, and discuss the necessary next stages of its infrastructure development, looking not 10 or 20 years into the future, but several generations ahead.”

Secondly, there is action on the necessary pre-condition to make this economic lift-off happen—to restore the 1933 Glass-Steagall Act, which worked for 66 years, to set apart and protect commercial banking from speculative finance, until it was wrongfully repealed in 1999. Two principal sponsors of the bill to restore Glass-Steagall (H.R.790, Return to Prudent Banking Act of 2017) in the House of Representatives—Marcy Kaptur (D) and Walter Jones (R)—briefed the House Rules Committee last evening, on the necessity of Glass-Steagall, and the need to get a fair debate in the House on re-instating it. Kaptur’s 8-minute presentation is now circulating nationally on social media. (See “Reinstate Glass-Steagall To Restore ‘Golden Age’ of American Growth.”) Kaptur is expected to speak up for it on the floor of the House in the June 8 debate on H.R.10, the Financial CHOICE Act—a stupid bill to further unleash Wall Street.

There is no time to lose; the dangers are many. As far as domestic infrastructure, we have entered a “Minneapolis Bridge” phase of decrepitude, referring to the disaster 10 years ago (August 1, 2007), when a bridge over the Mississippi River suddenly collapsed during rush-hour, killing 13 and injuring 145 more in the crash. Not only in New York City, this can happen anywhere, anytime, cross country.

Internationally, the situation in Southwest Asia is chaotic, complicated and dangerous. Today, terrorists struck at the Parliament of Iran, with 12 dead. As Russian President Putin reiterated, in sending condolences to the people of Iran, the attacks “once again corroborate the need to step up international cooperation in fighting terrorism.”

THE NEW GLOBAL ECONOMIC ORDER

SCO Summit Begins in Astana, with Xi Jinping, Putin, and Modi in Attendance

June 7 (EIRNS)—The summit of the Shanghai Cooperation Organization (SCO) will be held in Astana, Kazakhstan, June 8-9, with Chinese President Xi Jinping, Indian Prime Minister Narendra Modi, and Russian President Vladimir Putin in attendance, among heads of state of the other member nations, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. In the course of the summit, India and Pakistan will be formally admitted into the SCO.

India and Pakistan together represent 1.5 billion people, and with their addition, the SCO “will now represent the voice of 3 billion people—half the world’s population,” India’s ambassador extraordinary and plenipotentiary to the Republic of Kyrgyzstan, P. Stobdan, told Sputnik.

Leading into the summit, Xi Jinping is in Astana today for a state visit with host President Nursultan Nazarbayev, during which the two will discuss enhancing their bilateral economic, trade, cultural, and security cooperation.

In an opinion piece he penned for the Kazakh daily Aikyn Gazeti, published today under the headline “May China-Kazakhstan Relationship Fly High toward Our Shared Aspirations,” Xi recalled that it was in Kazakhstan that he first announced the Belt and Road Initiative in 2013. Since then, he pointed out, the project has developed into “an open and inclusive platform of cooperation and has become a global public good well received by the international community.”

The Belt and Road Initiative, the Chinese President said, offers “unprecedented historic opportunities,” and pointed to the success of May 14-15 Belt and Road Forum in Beijing. He also said that he will discuss with Nazarbayev joint cooperation in building the Belt and Road, to “synergize our development strategies … and work together to implement the outcomes of the Belt and Road Forum.” Xi and Nazarbayev will also participate in a video event to discuss cross-border transportation and “promoting connectivity under the Belt and Road Initiative.”

On the sidelines of the summit, Xi Jinping will meet with President Putin to discuss a wide range of matters related to regional and international issues, as well as their bilateral agenda. The situation on the Korean Peninsula will be a key topic of discussion. India’s Foreign Ministry has said that a meeting between Prime Minister Modi and President Xi is “possible,” but nothing has yet been confirmed.

U.S. POLITICAL AND ECONOMIC

President Trump on Infrastructure: We Should Be a ‘Nation of Builders’ Again

June 7 (EIRNS)—In an upbeat speech today in Cincinnati, against the backdrop of the Ohio River, President Trump proposed to make the United States a “nation of builders” again, capable of building projects on a par with the Panama Canal, the Transcontinental Railroad, the Hoover Dam, the National Highway system, etc. In the past, he said, we built those projects in record time. But today, “we don’t do that anymore … we don’t even fix things.” Whenever anyone proposes fixing things, they’re told there’s no money. That will change, he said.

Before an audience that included representatives of the United Ironworkers, Building Trades, and Laborers Union, among others, as well as many corporate leaders, Trump insisted that people should be inspired by “our legacy of a nation of builders.” We must see into the future, and see that it is bright. Crumbling dilapidated infrastructure—roads, bridges, locks and dams—can no longer be tolerated.

As an example of the “can-do” attitude that used to characterize the way Americans got things done, Trump cited the case of New York Gov. DeWitt Clinton, who 200 years ago had the kind of “bold, daring vision” that built the Erie Canal—even when Thomas Jefferson told him that the project was “madness.” If you want a New Yorker to do something, he said, tell him it’s impossible, and then watch him get it done. Just as occurred when the Erie Canal was built, he vowed, “we will open new paths, just as our ancestors did.” Chastising Democrats for being “obstructionist,” he called on both Democrats and Republicans to come together to rebuild the United States.

Trump made special mention of the importance of the 12,000 miles of inland waterways on which producers, heavy industry, farmers, and others depend. On the river behind him, was a tow of 12 barges.

“Rivers are the lifeblood of our heartland,” he underscored. We depend on our waterways for energy cargo, and yet, our locks and dams are almost half a century old. They are no longer reliable. “There have been no capital improvements.” Americans want to build brand new projects, he said. “Skilled workers are waiting to go back to work.”

Trump made a point of referencing his decision to pull out of the Paris climate treaty, citing it as an example of “outside interests trying to tell us what to do.”

He did not elaborate in detail how he intends to finance his infrastructure program, referencing his plan to generate $1 trillion in investment in infrastructure, $200 billion of which, he said, would come from direct federal investment. The federal government must be a responsible partner, he said, which will work with state and local governments to help them prioritize projects.

Michigan Lawmakers Tour Soo Locks with Governor, Push for Critical Upgrade

June 7 (EIRNS)—Last week, seven members of Michigan’s Congressional delegation joined Gov. Rick Snyder in touring one of the most consequential pieces of infrastructure in the country: the “Soo” locks and dams in Sault Sainte Marie, in Michigan’s Upper Peninsula. The locks carry an average of 80 million tons of cargo a year between Lake Superior and Lake Huron over a 21-ft. drop on St. Mary’s River. For the vast majority of the cargo that passes through the locks, those barges are the only economically viable mode of transportation. Sen. Debbie Stabenow (D-Lansing) and Rep. Jack Bergman (R-Watersmeet) have taken the point on an effort to drum up support for restarting the 1986 plan to replace the two, unused smaller locks with a new, modern, additional 1,200-ft. lock.

In recent years, both the smaller MacArthur Lock and the larger Poe Lock have experienced repair closures, delaying cargo shipments, and no comprehensive upgrades have been made to the locks for 50 years.

A Department of Homeland Security Report obtained by the Detroit Free Press earlier this year found that a six-month shutdown of the Poe Lock in Sault Sainte Marie (the one lock capable of handling the 1,000-ft. barges) would have catastrophic implications for the national economy. The Poe Lock is responsible for 70% of cargo moving through the locks; such a longer-term closing for repairs would effectively bring steel production and manufacturing to a halt in the country, creating a deep recession and costing the nation 11 million jobs.

Illustrating the complete idiocy of cost-benefit analysis used in determining federal spending on infrastructure, a 2005 analysis showed the upgrade plan to be ineligible for federal funds, because, supposedly, for every $1 spent the project would only return $0.73 cents in benefit! The Army Corps of Engineers received $1.35 million last year to redo the analysis, which freight companies said was flawed. Cost of the project could run as much as $1 billion and it is included as one of the 50 projects cited in the Trump Team Infrastructure Priority List.

The Army Corps of Engineers themselves have admitted that failure of the lock becomes more likely with time. Will Congress be so idiotic as to allow a belief in monetarism to lead to national economic suicide, or will the United States address critical projects as these in an accelerated way, as the Chinese do?

STRATEGIC WAR DANGER

Turmoil Roils Qatar, Mideast; Russia Calls for Dialogue

June 7 (EIRNS)—The nation of Qatar, with 2.7 million people, is in turmoil as a result of the economic and other punitive actions taken by the Saudi-led Gulf states, whose governments charge Qatar with financing terrorism and siding with Iran. The situation, as Lyndon LaRouche put it today, “is complicated.” There is panic in the capital of Doha, as the shutdown of air and other transportation to and from Qatar threatens its food supply, and talks are underway with Iran and Turkey to secure food and water imports, according to Iran’s PressTV.

But there is uncertainty in the whole region. Bloomberg reports that the United Arab Emirates will no longer grant visas on arrival for foreigners living in Qatar. U.A.E. public prosecutor said that any resident expressing support or sympathy for Qatar on social media could face a 15-year jail term.

Inside Qatar, an unnamed Qatari official told Reuters that there are enough grain supplies in the country to last for four weeks, and that the government also has large strategic food reserves in the capital. Until now, Saudi Arabia has provided Qatar with 90% of its food supply. A top Iranian official was quoted by domestic media as saying that Iran could send food shipments to Qatar by ship.

According to Reuters, large shippers Maersk and DP World are observing a ban on the berthing of Qatari-flagged, Qatari-origin and Qatar-bound ships at ports in four Arab countries. Maersk plans to give customers with Qatar shipments alternative options, and is identifying routes through Oman. A DP World spokesperson also confirmed to Press Trust of India (PTI) that Qatari-flag vessels and vessels destined to, or arriving from, Qatar, are not allowed to call at any DP World terminals in the U.A.E. until further notice.

Some diplomatic efforts are underway, TASS reports. In Moscow today, Russia’s Foreign Minister Sergey Lavrov spoke by phone with Iranian Foreign Minister Mohammad Javad Zarif, after which Lavrov said that he and Zarif urged Qatar and the Arab states to begin a dialogue and to work together to combat terrorism to guarantee regional peace and stability.

President Putin has spoken by phone both with the Emir of Qatar and with Egyptian President Abdel Fattah el-Sisi, although few details are available on the content of their talks. Russian Presidential aide Yuri Ushakov denied that Russia would play the role of go-between in the crisis, but he said that “the very instance of our proactive work and efforts by the President, the foreign minister, and through other channels, underscores the fact that we are interested in a settlement to the Qatar affair through political and diplomatic means.”

Speaking last night, Turkish President Recep Tayyip Erdogan said he opposed the punitive actions taken against Qatar, warning that they are “no good for any country in the region.” State news Anadolu Agency reports that over the past two days, Erdogan has carried out intense phone diplomacy with Russia, Arab, and European nations.

Tehran Terror Attacks: Revolutionary Guard Accuses Saudi Arabia

June 7 (EIRNS)—The Iranian Revolutionary Guard Corps (IRGC) has charged Saudi Arabia with being behind today’s two terror attacks in Tehran. According to Iranian news reports, the two attacks, one on the Iranian parliament building and the second on the mausoleum of Islamic Republic founder Imam Khomeini, killed 12 people and wounded 42 others. ISIS took credit for the attacks, ominously asking “Do you think we will go away? We are here to stay, God willing,” in a video it posted on its Amaq news site.

The IRGC statement said, “This terrorist attack happened only a week after the meeting between the U.S. president [Donald Trump] and the [Saudi] backward leaders who support terrorists. The fact that Islamic State has claimed responsibility proves that they were involved in the brutal attack.”

According to officials of the Iranian Intelligence Ministry, members of a third terrorist cell were arrested, but “several” had entered Tehran, suggesting that more attacks may be coming.

Russian President Vladimir Putin issued a statement of condolence to the Iranians which also stressed, “the need to boost international cooperation in the fight against terrorism.” He also “confirmed Russia’s readiness for further joint efforts with Iran in this field.” The U.S. State Department also issued a statement condemning the attack and offering condolences. “The depravity of terrorism has no place in a peaceful, civilized world,” it said.

Just hours before the terrorist attacks, Saudi Foreign Minister Adel Al-Jubeir declared in Paris that Iran “must be punished” for its (alleged) interference in the region and support for terrorist organizations such as al-Qaeda, reported Al Arabiya.

The THAAD Deployment Put On Hold by South Korean Government

June 7 (EIRNS)—The Blue House (South Korea’s Presidential mansion) announced today that the further deployment of the THAAD system has been placed on hold as an environmental impact study is conducted, taking perhaps one year. The two units now in place will remain, but the four additional units which were being deployed (without informing the new government) are to be put on hold.

President Moon Jae-in was furious when he learned of the effort to deploy the extra units without informing the government. The first two units were deployed duplicitously by the former regime during the election campaign period, despite the open opposition from the almost-certain winner, now President, Moon Jae-in.

Another scam by the former government (in cooperation with the U.S. military) was also exposed. Korean law requires an environmental impact study for any military site of 330,000 sq. meters or more. Although the area allotted for the THAAD is 700,000 sq. meters, the military only reported 320,000 (just under 330,000 sq. meters) were needed for the first two THAAD units, thus circumventing the law and proceeding without the required environmental impact study.

A Blue House official said that “the THAAD deployment is not considered an urgent matter that can avoid the environmental impact assessment,” according to the Korean Herald. The Defense Ministry had argued that the impact study should be skipped due to “urgent circumstances.”

By leaving the two units in place, the X-Band (deep range) radar will also remain, which is what has angered China and Russia, since the radar disrupts the strategic balance, contributing to a potential first-strike capacity by the U.S.

ISIS Planned Territorial Occupation in Philippines City

June 7 (EIRNS)—The unexpected ferocity and huge weapons capacity of the ISIS-linked combatants now at war with the Philippine Army in the city of Marawi in Mindanao, has demonstrated that the army raid in the city had pre-empted an ISIS plan to establish territory under terrorist control, as in Syria and other countries in Southwest Asia.

The Army has reported that the city had been prepared with bomb-proof tunnels, anti-tank weapons hidden in mosques, and huge stockpiles of weapons and ammunition before the army conducted a failed raid on a house, attempting to capture the head of the Abu Sayyaf, Isnilon Hapilon. The raid provoked the plan to be launched, apparently ahead of schedule.

Defense Secretary Delfin Lorenzana and military officials have reported that they had “interrupted plans by the militants to take over Marawi in a spectacular event to show that IS had arrived in the Philippines and was intent on carving out a local territory,” according to the Philippines Daily Inquirer today. The initial estimate of 100 fighters has now been expanded to at least 500, with many foreign fighters, including fighters from Saudi Arabia, Yemen, and Chechnya.

Last week, the Philippine Senate was shown a video of the terrorists plotting a far more sophisticated attack on Marawi than the assault they launched there on May 23 after the army raid.

A military spokesman said that military protocol called for mosques and madrassas to be spared from airstrikes and artillery, a limitation exploited by the terrorists. The early predictions of victory within weeks have proven false, and a long battle is now expected.

SCIENCE AND INFRASTRUCTURE

Korea’s Daewoo Delivers World’s First Icebreaker/LNG Ship Built to Russia

June 7 (EIRNS)—South Korea’s Daewoo Shipbuilding and Marine Engineering has delivered the world’s first icebreaker/LNG carrier to Russia in a ceremony in St. Petersburg, where it was constructed. It is targetted for use in the Yamal region in the Arctic, the site of new ports and rail connections being constructed, aimed at both exploiting the liquefied natural gas (LNG) resources there and as a springboard into other Arctic development. Russian President Vladimir Putin attended the christening ceremony of the $320 million ship in St. Petersburg on June 3. The vessel will bear the name of Christophe de Margerie, after the late Total CEO, who died in a plane crash at Moscow’s Vnukovo Airport in 2014. De Margerie was a close friend of Russia, setting up several joint ventures, Putin said.

The Yamal project aims to produce 16.5 million tons of LNG a year. Russia’s largest gas company, Novatek, is running the project in a joint venture with France’s Total and the China National Petroleum Corp. The ship is the most modern tanker of a high-ice class, and will become the flagship in a line of 15 similar vessels.

“The Yamal project paved the way for the Arctic route,” Putin said. “It will contribute to the development of the energy industry in the whole world as well as Russia and Europe…. Yamal LNG plays an important role in the development of the Northern Sea Route, and in the further study and exploration of the Arctic. I am counting on the successful launch of new, promising, large-scale projects with our French, Chinese and foreign partners, as well as on our growing cooperation in the extremely rich Arctic Region.”

Nikkei Asian Review points out that the Russian contracts are crucial for Daewoo, which is trying to re-schedule its $3.4 billion debt accumulated over the last few years during the trade slowdown. One of its creditors opposed a Korea Development Bank debt-to-equity swap plan and has taken the case to the Supreme Court, where the case is pending.

Daewoo Shipbuilding CEO Jung Sung-leep said in a statement: “We believe that we will be the biggest beneficiary from the active development of the Arctic, thanks to our high technology in ships navigating the area.”

Also, Hyundai Samho Heavy Industries, an affiliate of Hyundai Heavy Industries, set up a 49-51% joint venture with Russian military shipbuilder Zvezda. Hyundai Samho plans to build crude oil tankers starting next year, Nikkei reports.

“The joint venture is part of Russian President Putin’s plan to build ships which will carry energy sources from Asia,” said Lim Yoon-seon, a Hyundai Samho spokesperson. “We offer our know-how.” In February, Hyundai Samho won a contract to build four 114,000-ton LNG tankers from Russian state shipping company Sovcomflot.

COLLAPSING WESTERN FINANCIAL SYSTEM

ECB Orders Bail-In, Takeover of Spain’s Banco Popular

June 7 (EIRNS)—The European Central Bank has conducted a substantial bail-in of failing Banco Popular and a forced sale (for €1) to Spain’s biggest bank, Santander. Banco Popular stockholders and CoCo (contingent convertible) bondholders lost about 97% of their investments. Santander will try to raise €7 billion new capital to support Banco Popular’s €150 billion of significantly toxic assets. Santander is looking more like a toxic dump including its large U.S. subprime auto securities exposure. But also important is this ECB bail-in signal to Italy, and the fact that ECB may reverse its expected decision to raise its discount rate on June 8.

OTHER

2017 Philadelphia Orchestra Tours Asia, Performs Beethoven’s Ninth in Beijing

June 7 (EIRNS)—From May 18 through June 8, the Philadelphia Orchestra, led by conductor Yannick Nézet-Séguin, toured China, Mongolia, and Korea, presenting concert performances of Beethoven, Stravinsky, Brahms, Tchaikovsky, Liszt, and Mendelssohn.  The tour included Shanghai and Beijing, China; Seoul and Incheon, Korea; and Ulaanbaatar, Mongolia.  Over a two-day period from May 24-25, the orchestra staged side-by-side rehearsals with members of the Shanghai Philharmonic at Shanghai Oriental Art Center Chamber Concert Hall, culminating in a concert performance on the evening of May 25th.

On May 31 in Beijing, the orchestra teamed up with the National Center for the Performing Arts Chorus, and soloists, soprano Yuanming Song, mezzo-soprano Hongyao Wang, tenor Haoyin Xue, and bass-baritone Shenyang, for a performance of Beethoven’s Ninth Symphony.

In addition to the concert performances, officials and members of the orchestra participated in lectures on orchestra management, fundraising, a master class in conducting by Maestro Nézet-Séguin, an orchestra training class, and master classes given by members of the orchestra.

In Mongolia, master classes were given to military players, by the Philadelphia Orchestra’s top French horn and trumpet performers. Of note, is that when the Philadelphia musicians’ trip to Mongolia was in jeopardy at one point, because Mongolia was short of funds, the U.S. State Department came up with the needed $50,000, according to the Philadelphia Inquirer.

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