Sunday, February 15, 2015

‘Turkey might become hostage to ISIL just like Pakistan did’ — Yonca Poyraz Doğan interviews Alistair Crooke


This is not a short post but it is a must-read in my view. It's about much more than Turkey and ISIL.
Would you tell us about your ideas in regards to the “financialization of the global order"? 
For some time, the international order was structured around the United Nations and the corpus of international law, but more and more the West has tended to bypass the UN as an institution designed to maintain the international order, and instead relies on economic sanctions to pressure some countries. We have a dollar-based financial system, and through instrumentalizing America's position as controller of all dollar transactions, the US has been able to bypass the old tools of diplomacy and the UN -- in order to further its aims. 
But increasingly, this monopoly over the reserve currency has become the unilateral tool of the United States -- displacing multilateral action at the UN. The US claims jurisdiction over any dollar-denominated transaction that takes place anywhere in the world. And most business and trading transactions in the world are denominated in dollars. This essentially constitutes the financialization of the global order: The International Order depends more on control by the US Treasury and Federal Reserve than on the UN as before.…
When did this start?

It started principally with Iran and it has been developed subsequently. In a book, “Treasury's War,” the tool of exclusion from the dollar-denominated global financial system is described as a “neutron bomb.” [A neutron bomb destroys life but leaves inanimate resources in place.] When a country is to be isolated, a "scarlet letter" is issued by the US Treasury that asserts that such-and-such bank is somehow suspected of being linked to a terrorist movement -- or of being involved in money laundering. The author of "Treasury's War" [Juan Zarate], who was the chief architect of modern financial warfare and a former senior Treasury and White House official, says this scarlet letter constitutes a more potent bomb than any military weapon.
 
This system of reliance on dollar hegemony no longer requires American dependency on the UN and hands control to the US Treasury overseen by Steve Cohen -- a reflection of the fact that the military tools have become less available to the US administration, for domestic political reasons. 
But with Ukraine, we have entered a new era: We have a substantial, geostrategic conflict taking place, but it's effectively a geo-financial war between the US and Russia. We have the collapse in the oil prices; we have the currency wars; we have the contrived "shorting" -- selling short -- of the ruble. We have a geo-financial war, and what we are seeing as a consequence of this geo-financial war is that first of all, it has brought about a close alliance between Russia and China. 
China understands that Russia constitutes the first domino; if Russia is to fall, China will be next. These two states are together moving to create a parallel financial system, disentangled from the Western financial system. It includes replicating SWIFT [Society for Worldwide Interbank Financial Telecommunication] and creating entities such as the Asian Development Bank. One of the principal tools in the hands of Washington to control the global system was always the International Monetary Fund [IMF].
Nations have to go to the IMF to ask for financial help, when in difficulties, but recently it was China -- and not the IMF -- which bailed out Venezuela, Argentina and Russia as their currencies crashed. China became concerned when the ruble crashed on Dec. 16-17, and intervened to halt a run on the currency. The IMF and the World Bank were no longer at the center of the global financial order. They had been displaced by China.
What would you say about the prospects of success of this new order?
 
It is too early to say that it will be successful, but it is a very important shift that is taking place. It has already started to have an effect. Take Russia: European and American leaders thought that Russia would weaken because of sanctions and the fall of the ruble, but China intervened and stopped the collapse in the ruble. In short, China is operating as a backstop to a financial system that is in the process of shifting dramatically away from Western control.
You can see where this is going.
These issues have been coming up and are being discussed in Iran, Russia and China. What sort of state should be built; how might it defend itself from a color revolution; from geo-financial predations; from globalised financial crises: how to build a strong state, how to give its people security? 
Russia experienced the grasping of the oligarchs and the disintegration of their economy. In China, too, consumer liberalism has taken a hold, but the atomizing effect of neo-liberalism is tearing at the fabric of society and attenuating its values. The main thing is that we rethink things. How do we put back values into the political system? How do we reinsert moral values back into the economic fabric? 
There is a strong reaction taking place against neo-liberalism -- everywhere. Every state will respond it in a different way. Russia is reaching back to Orthodox Christianity in order to re-invent what it means to be Russian -- in a new way: by emphasizing human "capital" and conservative family values. China, too, is looking afresh at its ancient masters. How do you make a state that is not vulnerable to the abuse of democracy by the West? How do you make a society that is not vulnerable to the control of economic variables in order to bring regime change? How do you withdraw from this vulnerability?…
The portions of the post I have omitted consider how this affects the petrodollar, the Middle East, oil, and the shifting world order. Also the position of Turkey, which is a strategic pivot point between East and West.

Today's Zaman (Times) — Istanbul
‘Turkey might become hostage to ISIL just like Pakistan did’
Yonca Poyraz Doğan interviews Alistair Crooke, director and founder of Conflicts Forum based in Beirut

3 comments:

Anonymous said...

It appears you might be confusing Alistar Cooke, television personality with Alastair Crooke, British diplomat. I believe the article is by the latter.

Anonymous said...

Interesting piece Tom. Thanks for posting it.

Tom Hickey said...

Thanks, elwoods. Didn't do it consciously. Either it was subliminal or my automatic spelling corrector.