Pipeline Geopolitics: Major Turnaround. Russia, China, Iran Redraw Energy Map

by Amb. M. K. Bhadrakumar from Global Research 12 January 2010 The inauguration of the Dauletabad-Sarakhs-Khangiran pipeline in early January connecting Iran's northern Caspian region with Turkmenistan's vast gas field may go unnoticed amid the Western media cacophony that it is "apocalypse now" for the Islamic regime in Tehran. The event sends strong messages for regional security. Within the space of three weeks, Turkmenistan has committed its entire gas exports to China, Russia and Iran. It has no urgent need of the pipelines that the United States and the European Union have been advancing. Are we hearing the faint notes of a Russia-China-Iran symphony? The 182-kilometer Turkmen-Iranian pipeline starts modestly with the pumping of 8 billion cubic meters (bcm) of Turkmen gas. But its annual capacity is 20bcm, and that would meet the energy requirements of Iran's Caspian region and enable Tehran to free its own gas production in the southern fields for export. The mutual interest is perfect: Ashgabat gets an assured market next door; northern Iran can consume without fear of winter shortages; Tehran can generate more surplus for exports; Turkmenistan can seek transportation routes to the world market via Iran; and Iran can aspire to take advantage of its excellent geographical location as a hub for the Turkmen exports. We are witnessing a new pattern of energy cooperation at the regional level that dispenses with Big Oil. Russia traditionally takes the lead. China and Iran follow the example. Russia, Iran and Turkmenistan hold respectively the world's largest, second-largest and fourth-largest gas reserves. And China will be consumer par excellence in this century. The matter is of profound consequence to the US global strategy. The Turkmen-Iranian pipeline mocks the US's Iran policy. The US is threatening Iran with new sanctions and claims Tehran is "increasingly isolated". But Mahmud Ahmadinejad's presidential jet winds its way through a Central Asian tour and lands in Ashgabat for a red-carpet welcome by his Turkmen counterpart, Gurbanguly Berdymukhammedov, and a new economic axis emerges. Washington's coercive diplomacy hasn't worked. Turkmenistan, with a gross domestic product of US$18.3 billion, defied the sole superpower (GDP of $14.2 trillion) - and, worse still, made it look routine. There are subplots, too. Tehran claims to have a deal with Ankara to transport Turkmen gas to Turkey via the existing 2,577km pipeline connecting Tabriz in northwestern Iran with Ankara. Indeed, Turkish diplomacy has an independent foreign-policy orientation. Turkey also aspires to be a hub for Europe's energy supplies. Europe may be losing the battle for establishing direct access to the Caspian. Second, Russia does not seem perturbed by China tapping into Central Asian energy. Europe's need for Russian energy imports has dropped and Central Asian energy-producing countries are tapping China's market. From the Russian point of view, China's imports should not deprive it of energy (for its domestic consumption or exports). Russia has established deep enough presence in the Central Asian and Caspian energy sector to ensure it faces no energy shortage. What matters most to Russia is that its dominant role as Europe's No 1 energy provider is not eroded. So long as the Central Asian countries have no pressing need for new US-backed trans-Caspian pipelines, Russia is satisfied. During his recent visit to Ashgabat, Russian President Dmitry Medvedev normalized Russian-Turkmen energy ties. The restoration of ties with Turkmenistan is a major breakthrough for both countries. One, a frozen relationship is being resumed substantially, whereby Turkmenistan will maintain an annual supply of 30bcm to Russia. Two, to quote Medvedev, "For the first time in the history of Russian-Turkmen relations, gas supplies will be carried out based on a price formula that is absolutely in line with European gas market conditions." Russian commentators say Gazprom will find it unprofitable to buy Turkmen gas and if Moscow has chosen to pay a high price, that is primarily because of its resolve not to leave gas that could be used in alternative pipelines, above all in the US-backed Nabucco project. Third, contrary to Western propaganda, Ashgabat does not see the Chinese pipeline as a substitute for Gazprom. Russia's pricing policy ensures that Ashgabat views Gazprom as an irreplaceable customer. The export price of the Turkmen gas to be sold to China is still under negotiation and the agreed price simply cannot match the Russian offer. Fourth, Russia and Turkmenistan reiterated their commitment to the Caspian Coastal Pipeline (which will run along the Caspian's east coast toward Russia) with a capacity of 30bcm. Evidently, Russia hopes to cluster additional Central Asian gas from Turkmenistan (and Kazakhstan). Fifth, Moscow and Ashgabat agreed to build jointly an east-west pipeline connecting all Turkmen gas fields to a single network so that the pipelines leading toward Russia, Iran and China can draw from any of the fields. Indeed, against the backdrop of the intensification of the US push toward Central Asia, Medvedev's visit to Ashgabat impacted on regional security. At the joint press conference with Medvedev, Berdymukhammedov said the views of Turkmenistan and Russia on the regional processes, particularly in Central Asia and the Caspian region, were generally the same. He underlined that the two countries were of the view that the security of one cannot be achieved at the expense of the other. Medvedev agreed that there was similarity or unanimity between the two countries on issues related to security and confirmed their readiness to work together. The United States' pipeline diplomacy in the Caspian, which strove to bypass Russia, elbow out China and isolate Iran, has foundered. Russia is now planning to double its intake of Azerbaijani gas, which further cuts into the Western efforts to engage Baku as a supplier for Nabucco. In tandem with Russia, Iran is also emerging as a consumer of Azerbaijani gas. In December, Azerbaijan inked an agreement to deliver gas to Iran through the 1,400km Kazi-Magomed-Astara pipeline. The "big picture" is that Russia's South Stream and North Stream, which will supply gas to northern and southern Europe, have gained irreversible momentum. The stumbling blocks for North Stream have been cleared as Denmark (in October), Finland and Sweden (in November) and Germany (in December) approved the project from the environmental angle. The pipeline's construction will commence in the spring. The $12-billion pipeline built jointly by Gazprom, Germany's E.ON Ruhrgas and BASF-Wintershall, and the Dutch gas transportation firm Gasunie bypasses the Soviet-era transit routes via Ukraine, Poland and Belarus and runs from the northwestern Russian port of Vyborg to the German port of Greifswald along a 1,220km route under the Baltic Sea. The first leg of the project with a carrying capacity of 27.5bcm annually will be completed next year and the capacity will double by 2012. North Stream will profoundly affect the geopolitics of Eurasia, trans-Atlantic equations and Russia's ties with Europe. To be sure, 2009 proved to be a momentous year for the "energy war". The Chinese pipeline inaugurated by President Hu Jintao on December 14; the oil terminal near the port city of Nakhodka in Russia's far east inaugurated by Prime Minister Vladimir Putin on December 27 (which will be served by the mammoth $22-billion oil pipeline from the new fields in eastern Siberia leading to China and the Asia-Pacific markets); and the Iranian pipeline inaugurated by Ahmadinejad on January 6 - the energy map of Eurasia and the Caspian has been virtually redrawn. The year 2010 begins on a fascinating new note: will Russia, China and Iran coordinate future moves or at least harmonize their competing interests?

US ratchets up pressure on Russia amidst shifting imperial relativities

by Grant Morgan 27 October 2009 During October 2009, Washington suddenly ratcheted up its pressure on Russia. We are starting to see a slide back to a Cold War chill between the world’s two big nuclear powers. Acting on orders from US president Barack Obama, his vice-president Joe Biden toured Eastern Europe where he called for revolutions against authoritarian rule in Belarus, Moldova, Georgia, Ukraine, Azerbaijan and Armenia. Biden specifically named these six countries, which all happen to border Russia. Revolutions against authoritarian rule is, of course, code for pro-US revolutions. Likewise, Biden’s talk about spheres of influence being an outdated 19th century concept is code for Washington’s drive to undermine Moscow’s influence over bordering countries in order to defend US global influence. The US private intelligence agency Stratfor has analysed Washington’s renewed pressure on Moscow and its likely downstream implications. See the essay “Russia, Iran and the Biden Speech” on the Stratfor webpage. Washington’s renewed sabre rattling against Moscow grows out of the relative decline of American imperial power in the face of the economic, political and military rise of China, which is allying with Russia. The 20th century’s two World Wars grew out of Great Power moves to redivide an already divided world at a time of shifting imperial relativities. Now we are beginning to experience something similar with the upturn in Washington’s belligerence towards Moscow as a consequence of America’s relative decline, especially in relation to China. This frightening scenario contains the germs of new wars, possibly on a global scale and including nuclear exchanges. The shifting imperial relativities of the early 21st century both spring from and intersect with the quartet of contradictions driving late capitalism towards global collapse. The profitability crisis, the ecological crisis, the resource crisis and the legitimacy crisis are accelerating and coalescing worldwide. While the existential impacts of this quartet of contradictions may be slowed by intelligent government actions, they cannot be halted. Indeed, they are more likely to be hastened by stupid government actions flowing from the imperatives of competitive profiteering and imperial rivalries. The world is entering very dangerous times as social collapse contradictions become interwoven with shifting imperial relativities. Nearly a century ago, the Marxist Rosa Luxemburg predicted our future in her famous phrase “Socialism or Barbarism”. Given today’s perils of climate warming, nuclear warfare and resource depletion, we possibly need to upgrade her warning to “Socialism or Extinction”. Some of the feedback I get from good people runs along these lines: “We hate and fear what’s happening in the world. But socialism as a global force appears to be dead. There doesn’t seem to be any believable alternative to capitalism.” While I understand these sentiments, I don’t share them. Why? Because the intensification of social contradictions and imperial tensions mean that global capitalism is on a slide towards collapse and revolution. The real question arising within a historically short time period will be: “Capitalism is dying, so what will replace it?” During that interregnum the world will experience turbulent conflicts between opposing social forces. A new global order that’s better, not worse, than capitalism will grow from struggles for practical gains that strengthen the grassroots and weaken the elites. This is the living terrain of a powerful socialist rebirth. This is a process already underway in every country. This is where hope can realistically be found. If you liked this story, forward it to your friends. Feel free to contact the author at grantmorgan@paradise.net.nz Full address of the Stratfor article: http://www.stratfor.com/weekly/20091026_russia_iran_and_biden_speech?utm_source=GWeekly&utm_medium=email&utm_campaign=091026&utm_content=readmore

Towards the integration of the Dollar and the Euro?

by Michel Chossudovsky from Global Research 20 July 2009 With a view to restoring financial stability, World leaders have called upon the Group of 20 countries (G-20) to instigate a new global currency based on the IMF's Special Drawing Rights (SDRs). The media has presented the global currency initiative as a consensus building process, in which BRIC countries (Brazil, Russia, India and China) would participate in the revamping of the international monetary system.

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Towards the integration of the Dollar and the Euro?

by Michel Chossudovsky from Global Research 20 July 2009 With a view to restoring financial stability, World leaders have called upon the Group of 20 countries (G-20) to instigate a new global currency based on the IMF's Special Drawing Rights (SDRs). The media has presented the global currency initiative as a consensus building process, in which BRIC countries (Brazil, Russia, India and China) would participate in the revamping of the international monetary system. Russia and China have put forth "proposals" which have been highlighted as possible alternatives to the dollar. China has proposed the formation of a new global currency based on a reform of SDR system: "It is a feasible plan to reform the present SDR and make it into a real settlement currency, a universally accepted 'currency basket' that would replace the dollar at the heart of the monetary system," (Li Ruogu, chairman of the Export-Import Bank of China, Reuters, 6 July 2009) China's proposal does not imply a major shift in global banking arrangements, nor does it open up a window of debate regarding monetary reform. On the other hand, Russian President Dmitry Medvedev has explicitly questioned the composition of the SDR basket and has called upon the IMF "to expand the currency basket of SDRs to include the Chinese yuan, commodity currencies and gold in order that it matures into a reserve currency." Geopolitics Global Geopolitics bears a relationship to the international monetary system. Control over money creation is an instrument of economic conquest. The invasion and occupation of Iraq was to exclude rival Russian and Chinese interests from the Middle-East and Central Asian oil fields. The reform of the international monetary system is a project of the dominant financial elites, which is discussed behind closed doors. It is unlikely that Russia and China, which in large part remain subordinate to Western banking interests, will perform a significant role in central banking functions at a global level. Moreover, this initiative occurs at a time of East West confrontation, amidst veiled US-NATO threats directed against Russia as well China. The establishment of a new global currency and central banking system is an instrument of global economic domination which is intimately related to the broader US-NATO military agenda. While the SDR basket composition could be modified or revised, it is unlikely that the Yuan and the Ruble would be allowed to perform a role as major reserve currencies. What is more likely to occur is the formation of a global proxy currency predicated largely on the Euro and the US dollar. In response to the Dollar-Euro hegemony, Russia, China and the member states of the Shanghai Cooperation Organization (SCO) may decide to develop bilateral trading arrangements in Rubles or Yuan (renminbi). Special Drawing Rights SDRs are a composite accounting unit used by the IMF and the World Bank in loan agreements with member countries. The SDR is a basket of essentially four major currencies: the US dollar, the Euro, the British pound and the Japanese Yen. The IMF has recently presented a plan for issuing debt denominated in SDRs rather than US dollars. The media has heralded this decision as a major innovation, when in fact the Bretton Woods institutions have, for many years, been issuing debt denominated in SDRs. "Today, the SDR has only limited use as a reserve asset, and its main function is to serve as the unit of account of the IMF and some other international organizations. The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members." (IMF Fact Sheet on SDRs) What would happen if a new global currency were to be devised using the existing SDR framework? SDRs would no longer be an accounting unit but a unit of currency in a basket. Actual central banking functions, however, would not necessarily be transferred to the IMF, they would remain in the hands of four constituent central banks: The US Federal Reserve, the European Central Bank based in Frankfurt, the Bank of England and the Bank of Japan. I The IMF is a bureaucracy which serves the interests of major private financial institutions. While the IMF would formally be responsible for overseeing a global currency, the IMF would not actually be responsible for monetary policy. Under the existing SDR composition, the central banking functions would be divided between four central banks. These central banks are in turn controlled by a handful of private banking interests. A global currency based on the existing SDR arrangement would not fundamentally change the global monetary order. The SDR would be a proxy currency. Under the present composition of the SDR, what we would be dealing with is an alliance between US, British, European and Japanese banking institutions, ultimately with the US dollar and the Euro predominating. Euro-Dollar Rivalry From the outset in 1999, there has been a clash between the Euro and the dollar. In Eastern Europe, the former Soviet Union, the Balkans extending into Central Asia, the dollar and the Euro are competing with one another. Ultimately, control over national currency systems is the basis upon which countries are colonized. While the U.S. dollar prevails throughout the Western Hemisphere, the Euro and the U.S. dollar are clashing in the former Soviet Union, Central Asia, Sub-Saharan Africa and the Middle East. Prior to the invasion of Iraq in March 2003, there was a political confrontation between the Franco-German alliance and the dominant Anglo-American military axis. With the election of pro-US governments in both France and Germany, a political consensus seems to have emerged with regard to the Middle East war. In turn, this consensus regarding the US-NATO military agenda favors greater cooperation and integration between the US and the EU in global financial and monetary affairs. Would this potential "alliance" between powerful overlapping American, British, European and Japanese banking interests lead to the integration of the Euro and the dollar into a single global currency? This integration would lead to reinforcing the hegemonic control of a small number of global banking and financial institutions over the process of money creation. This, in turn, would overshadow the functions of national central banks, encroach on the sovereignty of the Nation State and eventually lead to a new phase of the global debt crisis.

A newer world order

by Lee Sustar

from US Socialist Worker

21 August 2008

The Russia-Georgia war has revealed a new balance of power in the world – and exposed the hypocrisy of U.S. politicians and the media who decry the imperialism emanating from Moscow, but embrace it when it's made in the USA.

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See also:

• Paul G. Buchanan A Word From Afar: Much ado about Russians

A newer world order

by Lee Sustar from US Socialist Worker 21 August 2008 The Russia-Georgia war has revealed a new balance of power in the world – and exposed the hypocrisy of U.S. politicians and the media who decry the imperialism emanating from Moscow, but embrace it when it's made in the USA. John McCain, of course, wins the prize for setting the most outrageous double standard. "In the 21st century," he informed us, "nations don't invade other nations." Unless, of course, we're talking about Afghanistan or Iraq, and the invading power happens to be the United States. McCain demanded and immediate pullout of all Russian forces from Georgia and insisted upon its "territorial integrity" – even as he claims the right for the U.S. to occupy Iraq for the next 100 years. The supposedly progressive Barack Obama sounded little different. "I have condemned Russian aggression, and today I reiterate my demand that Russia abide by the cease-fire," he said. "Russia must know that its actions will have consequences." One can imagine how a President Obama would respond if Russian Prime Minister Vladimir Putin or President Dimitri Medvedev declared that he wouldn't withdraw all troops from Georgia right away, but would leave behind a large occupation force in order to be "as careful in getting out of Georgia as we were careless in getting in." That, of course, is Obama's excuse for keeping up to 50,000 U.S. troops in Iraq for "force protection," the defense of U.S. military personnel and "anti-terrorist" missions – the same kind of pretext that Russia used to move beyond Georgia's disputed South Ossetia region to a full- fledged invasion. The media has been even more two-faced than the politicians. The same news outlets that parroted the Pentagon whitewash of civilian casualties in the horrific U.S. blitz on Falluja in Iraq in 2004 or aerial bombardment of wedding parties in Afghanistan now breathlessly report on the Russian bombs and artillery shells that hit apartment buildings and markets. For the U.S. media, when Washington military action causes civilian deaths – between 600,000 and more than 1 million in Iraq, according to some estimate – it's "collateral damage," a regrettable but unavoidable part of modern warfare. Yet when a Russian plane drops a bomb that kills innocent bystanders, it's a barbaric disregard for human life. One wonders just how much more unpopular the U.S. war in Iraq would be if the media worked as hard at exposing civilian casualties in that country as it has in Georgia. To point out this U.S. hypocrisy isn't to downplay the imperial nature of Russia's latest occupation of Georgia. Georgia may have initiated the conflict by trying to smash the Russian-backed separatists among the Ossetian minority – and likely did so with a green light from the U.S. But Russia seized the opportunity to make an example of Georgia through military might –and not for the first time. The Tsarist rulers of old Russia conquered Georgia more than two centuries ago. After a brief interlude following the Russian Revolution of 1917, Georgia was again imprisoned in Stalin's USSR. The Georgian nationalist movement revived in the 1980s despite murderous repression by the supposedly liberal Mikhail Gorbachev, the last president of the USSR. The 1991 collapse of the USSR saw the non-Russian "federal republics," including Georgia, gain independence. With Russian imperialism in crisis, U.S. imperialism was determined to fill the vacuum, not only in Moscow's former puppet states in Eastern Europe, but in countries formerly part of the USSR. Georgia, however, was slow going for the U.S. The pro-Western Georgian nationalist leader, Zviad Gamsakhurdia, pushed a "Georgia for the Georgians" line that frightened the 30 percent of the population that was non-Georgian--people whom Gamsakhurdia ominously referred to as "guests." The first non-Communist Party head of Georgia in the waning days of the USSR, Gamsakhurdia went on to revoke the autonomous status of Abkhazia and North Ossetia, which had been enshrined in the USSR's constitution. Resistance from the Abkhazians and Ossetians led to civil war and ethnic cleansing and, with Russian intervention, de facto independence for both regions since 1993. The situation was little changed under the regime of Eduard Schevardnadze, the former foreign minister of the USSR who returned home to Georgia to take over the presidency after Gamsakhurdia was ousted in a coup. During Schevardnadze's decade in power, Russia and the U.S. jockeyed for influence in Georgia. Washington found a willing business partner in Schevardnadze. He was in favor of an oil pipeline that would bypass Russia. He was also a career Soviet politician who had run Georgia in the 1970s and who refused to take a consistent anti-Moscow line. In 2003, an election year in Georgia, Schevardnadze set off alarm bells in Washington by making a deal with the Russian electrical power monopoly AES, which followed an earlier "strategic partnership" with the huge Russian gas company Gazprom. In late 2003, the U.S., then still in the confident "Mission Accomplished" phase of the Iraq war, decided to up the ante. It backed the U.S.-educated lawyer Mikheil Saakashvili, the leader of the mass protests of the "Rose Revolution" that ousted Schevardnadze after his party tried to rig parliamentary election results. Modeled on the rebellion that drove Slobodan Milosevic from power in Serbia in 2000, the Rose Revolution was sustained in part by money from the foundation controlled by billionaire financier George Soros. In the wake of the Rose Revolution the Soros foundation and other donors, as well as the United Nations Development Project, even paid salaries for 11,000 civil servants as part of a three-year aid program. The U.S. saw the Saakashvili government as a means to accelerate its energy and defense plans for Georgia. Saakashvili's presidential inauguration in 2004 was attended by then-Secretary of State Colin Powell, who announced $166 million in immediate aid as well as a three-year, $500 million aid package to promote "economic reforms." This was only part of a steady stream of U.S. dollars to a country of just 4.6 million people. According to one study, Georgia is the second highest recipient of U.S. aid per capita in the world. Meanwhile, the European Union and the World Bank pledged another $1 billion in assistance to Saakashvili's government. SOON, THE White House was ready to plant the U.S. flag in the heart of the South Caucasus. George W. Bush visited Tbilisi in May 2005 to "underscore his support for democracy, historic reform and peaceful conflict resolution," as the U.S. Embassy in Georgia put it in a press release. These "reforms," according to Kakha Bendukidze, the Russia-based industrial oligarch turned Georgian economy minister, meant that the Georgian state would privatize "everything that can be sold, except its conscience." With Saakashvili in power, Washington moved aggressively to create in Georgia a crucial gateway for oil and gas pipelines that could bypass Russia on the north and Iran on the south. It was under Saakashvili that the long-sought Baku-Tbilisi-Ceyhan (BTC) oil pipeline was finally completed in 2005, providing a means to get oil from Azerbaijan on the Caspian Sea across Georgia to a Turkish port on the Mediterranean. The U.S. had to strong-arm Western oil companies into building BTC – ultimately, BP agreed to take the lead. The U.S. also had to pressure the International Finance Corporation, the private development arm of the World Bank, to loan $250 million for construction of the pipeline. "In the South Caucasus, U.S. and European state interests are bound up with the commercial interests of major oil companies that form the principal Caspian energy consortia," wrote Damien Helly and Giorgi Gogia, two experts on Georgian politics. "To secure their investments in the Caspian Sea Basin, these companies have found allies among U.S. geostrategists who support a strong U.S. presence among Russia's neighbors. High-level former officials such as Zbigniew Brzezinski, Brent Scowcroft, John Sununu, James Baker and Richard Cheney (when he was head of Halliburton) have all visited Baku [Azerbaijan] and the Caspian region and lobbied in favor of the oil companies." These U.S. economic and political projects had to be secured militarily. Thus, in the wake of 9/11, the U.S. began to send military advisers to Georgia. That move rankled Moscow, which also accused Georgia of doing too little to stop the flow of arms and insurgents across its border into neighboring Chechnya, where separatists were fighting the Russian armed forces. For Russia, Georgia was seen as a red line that the U.S. and NATO could not cross. In the early 1990s, Russia had no choice but to allow the expansion of NATO to include its former satellites in Eastern Europe and the three former Soviet Republics on the Baltic. But the U.S. push to include Georgia and Ukraine in the alliance – as well as efforts to place anti-missile systems in the Czech Republic and Poland – was too much for the Kremlin. After Saakashvili took over in Tbilisi, U.S.-Russian tensions over Georgia increased dramatically. In 2004, NATO approved Georgia's "Individual Action Partnership Plan," the first step toward membership of the alliance, and stationed a liaison officer in Tbilisi. In the years since, the U.S. and Israel have sent military trainers to upgrade Georgia's military to NATO standards, and Saakashvili has showed his loyalty to the U.S. by sending 2,500 Georgian troops to participate in the occupation of Iraq. By 2007, the Georgian armed forces, previously a ragtag outfit unable to defeat irregular militias in South Ossetia or Abkhazia, was well-drilled, lavishly equipped and NATO-ready. The U.S. pushed for a fast-track acceptance into the alliance. All that state-of-the-art weaponry, of course, is now smashed or captured by the Russian army, and the armed forces shattered by the Russian occupation. What began as the latest U.S. attempt to use a small nation as an outpost of the American Empire has ended with a brutal invasion by a rival empire, one just as determined to police its own "backyard" as the U.S. has been in Latin America. And in the wake of the Russia-Georgia war, oil-rich Azerbaijan – which has its own separatist region populated by ethnic Armenians allied with Russia – will think twice about crossing Moscow to sign up with the U.S. and NATO. But the consequences of the Russian invasion go far beyond the South Caucasus region. The war has exposed the expanded NATO as a hollow organization. "For an organization that has come to rely heavily on words and symbolism, NATO issued a disconcertingly evasive communiqué at its emergency meeting on Georgia," journalist Vladimir Socor wrote. "The first mention of Russia appears only in the second paragraph, and it is a positive mention: NATO 'welcomes the [armistice] agreement reached and signed by Georgia and Russia.' No reference to the Russian military duress, under which this flawed armistice was 'reached.' The communiqué urges prompt, good-faith implementation of the armistice, politely ignoring its loopholes." So much for NATO's vaunted "one-for-all, all-for-one" principle. The U.S. and NATO have bankrolled and armed a tiny nation, encouraged or tolerated a military attack that was bound to trigger a response from a neighboring great power – and, when that small country was invaded and occupied, the U.S. stood back and did nothing. So much for the neoconservative dream of a "new world order" under U.S. domination, guaranteed by pre-emptive warfare and regime change. The U.S. wars in Iraq and Afghanistan were intended to allow Washington to consolidate its grip on the Middle East and project its power into the Caucusus and Central Asia. Instead, the U.S. finds itself militarily overstretched, incapable of protecting its new client states and unable even to get a strong resolution out of NATO condemning Russia's invasion of Georgia – to say nothing of NATO countries' reluctance to commit troops to the losing war in Afghanistan. There are other examples of waning U.S. imperial clout-the ouster of Pervez Musharraf as dictator of Pakistan being the latest serious example. The cracks in the empire, in turn, are widened by the ongoing U.S. financial crisis which is increasingly dragging down the entire world economy. The entire U.S. economic model – the pro-business, free-trade neoliberal program – is being discredited. The recent collapse of the latest World Trade Organization negotiations is a case in point. U.S. imperialism is far from a spent force, of course. The country still has enormous military might and economic resources, and a President Obama would likely bring in a foreign policy and military team that's more competent than the Bush administration hacks. But no matter who's in charge in the White House, the shift in the world balance of power – economically, militarily and politically – is bound to lead to further instability and crises.