Unipolar Goals ‘Contradict Interstate Communication’ and Fail Needs of the Future, Warns Putin at SPIEF

June 8 , 2019 (EIRNS)—Russian President Vladimir Putin opened the St. Petersburg International Economic Forum (SPIEF) yesterday with a stern warning of a general global breakdown crisis, and a call for new international agreements based on harmony and development—but not for new institutions.

Putin warns of two extreme crises facing the world today. First,

“the degeneration of the universalist globalization model and its turning into a parody, a caricature of itself, where common international rules are replaced with the laws, administrative and judicial mechanisms of one country or a group of influential states. I state with regret that this is what the U.S. is doing today when it extends its jurisdiction to the entire world.... Such a model not only contradicts the logic of normal interstate communication and the shaping realities of a complicated multipolar world but, most importantly, it does not meet the goals of the future.

“The second scenario is a fragmentation of the global economic space by a policy of completely unlimited economic egoism and a forced breakdown. But this is the road to endless conflict, trade wars and maybe not just trade wars. Figuratively, this is the road to the ultimate fight of all against all.”

What is needed, Putin said, is global agreement on

“drafting a more stable and fair development model. These agreements should not only be written clearly but should also be observed by all participants. However, I am convinced that talk about an economic world order like this will remain wishful thinking unless we return to the center of the discussion, that is, notions like sovereignty, the unconditional right of every country to its own development road and, let me add, responsibility for universal sustainable development, not just for one’s own development.”

This requires

“the harmonization of national economic interests, principles of teamwork, competition and cooperation between countries with their own individual development models, peculiarities and interests. The drafting of such principles should be carried out with maximum openness and in the most democratic manner.”

Russia’s President did not make a case for new international institutions, but for changes in the current institutions—which shows a weakness in understanding the nature of the British Empire’s role in creating and controlling those institutions. Putin said:

“It is on this foundation that the system of world trade should be adapted to current realities and the efficiency of the World Trade Organization enhanced. Other international institutions should be filled with new meaning and content rather than broken. It is necessary to sincerely consider, rather than just talk about the requirements and interests of the developing nations, including those that are upgrading their industry, agriculture and social services.”

On the crash of 2008, Putin said:

“[T]ruth be told, there was not enough will or, perhaps, courage, to sort things out and draw the corresponding conclusions. A simplified approach prevailed whereby the global development model was allegedly quite good and, essentially, nothing needed to be changed since it was enough to eliminate the symptoms and coordinate some rules and institutions in the global economy and finance, and then everything would turn out just fine.... Quantitative easing and other measures failed to resolve the problems and only pushed them into the future.... The global trade to global GDP ratio of 2008 has never been recovered. In fact, global trade ceased to be the unconditional driver behind the global economy.”

On trade war:

“What undermines trust between the world economic players? I think the main reason is that the model of globalization offered in the late 20th century is increasingly at odds with the rapidly emerging new economic reality. In the past three decades, the share of advanced countries in the global GDP in purchasing power parity decreased from 58 to 40%. In the G7 it dropped from 46 to 30%, whereas the weight of the countries with developing markets is growing. Such rapid development of new economies that, apart from their interests, have their own development platforms and views on globalization and regional integration processes does not correlate well with the ideas that seemed immutable relatively recently.”

Putin termed the Nord Stream 2 and Huawei cases as illegal actions by “those who became used to exclusiveness and anything-goes behavior in the framework of the existing universalist model.” The Huawei case is “the first technological war to break out in the digital era.”

In light of the Nixon destruction of the Bretton Woods agreement in 1971, Putin said that the dollar retained its central role, but there was no resolution of the impact of floating rates on currencies and trade. As a result, he said,

“the role of regional currencies has increased, and the balance of forces and interests has changed. Clearly, in the wake of these profound changes, international financial organizations need to adapt and reconsider the role of the dollar, which, as a global reserve currency, has now become an instrument of pressure exerted by the issuing country on the rest of the world. Incidentally, I believe the U.S. financial authorities and political centers are making a big mistake, as they are undermining their own competitive edge that appeared after the creation of the Bretton Woods system. Confidence in the dollar is simply plummeting.”