TBR News May 16, 2018

May 16 2018

The Voice of the White House  

Washington, D.C. May 16, 2018:”Trump is not a stable person and is doing terrible damage to Amercan political and business both domestically and abroad. Netanyahu and the rabid right wing politicians in Isreal have made the error of believing Trump’s support will permit them to destroy the Palestinians with American permission. He may have Trump’s permission but the results of his pogrom will so outrage the rest of the civilized world that Trump will have to change his mind (which he does regularly and without regard to truth or morality) and Israel will then be facing legions of outraged Muslims. He can always come back to the United States but he is now too fat and ugly to model ladies underwear as he did the last time he lived in that country.”


Table of Contents

  • Newly Uncovered Pages From Anne Frank’s Diary Reveal Risqué Jokes
  • The Anne Frank Diary Fraud
  • Fist-size gunshot wounds, pulverized bones, inadmissible use of force by Israel in Gaza – HRW to RT
  • S. Media Whitewashes Gaza Massacre
  • Israel’s violent rule increasingly driving liberal American Jews on to the streets
  • We don’t need your permission: Russia responds to US condemnation of Crimean Bridge
  • Russian economy under Putin: Quality of life tripled, foreign debt fell 75%
  • Russia Economic Outlook
  • In Taking Crimea, Putin Gains a Sea of Fuel Reserves



Newly Uncovered Pages From Anne Frank’s Diary Reveal Risqué Jokes

May 15, 2018

by Sasha Ingber


Inside a secret annex above her father’s office, Anne Frank edited passages from her first diary, the book that captured a teenager’s experience of the Holocaust. What she hid underneath brown gummed paper on two pages was revealed on Tuesday — five crossed-out phrases, four risqué jokes and 33 lines about sex education and prostitution.

The two pages, the only pages that the teenager ever covered, were photographed in 2016 during a regular check on the condition of her diaries, said the Anne Frank House.

The pages were backlit by a flash, and image-processing software helped researchers make out the words, reported The Associated Press.

“I’ll use this spoiled page to write down ‘dirty’ jokes,” Frank had written on Sept. 28, 1942. Then she filled a page with words about how a young woman starts to menstruate around age 14, “a sign that she is ripe to have relations with a man but one doesn’t do that of course before one is married.”

She also wrote about prostitution. “All men, if they are normal, go with women, women like that accost them on the street and then they go together. In Paris they have big houses for that. Papa has been there.”

After the racy remarks, Frank discussed the importance of sex education, pretending that she had to teach someone else, which allowed her to show what she knew about sex. She didn’t understand why adults were so secretive about it, said the Anne Frank House.

The hidden texts were presented by the Huygens Institute for the History of the Netherlands, the Anne Frank House and the NIOD Institute for War, Holocaust and Genocide Studies.”Anne Frank writes about sexuality in a disarming way. Like every adolescent she is curious about this subject,” said Ronald Leopold, executive director of the Anne Frank House.

“Anyone who reads the passages that have now been discovered will be unable to suppress a smile. The ‘dirty’ jokes are classics among growing children,” said Frank van Vree, director of NIOD. “They make it clear that Anne, with all her gifts, was above all also an ordinary girl.”

The researchers said the newly discovered subject matter is not exceptional — Frank often wrote down suggestive jokes that she heard from her father, Otto; Peter van Pels, and radio broadcasts. And she wrote openly about her menstruation and conversations with van Pels on sex and sexuality.

Instead, the “dirty” humor reveals a way to break the tension in an 800-square-foot space where movement and expression were curtailed for survival, said the Anne Frank House.

“That Anne Frank had risqué jokes in her diary speaks to her humanity,” Sara Bloomfield, director of the U.S. Holocaust Memorial Museum, told NPR. “Anne is the Holocaust’s most well-known victim because her diary ​describes her inner life ​and her hopes​ for the future in the midst of the Nazi onslaught.”

In the two years that Frank hid from the Nazis, she wrote about hunger and fear of being discovered, but also celebrity gossip, arguments with her mother and her first kiss.

According to the Anne Frank House, the teenager often reread and edited her diary. She might have hidden these two original pages because she worried that the other seven people in the annex would read her diary.

After the group was discovered and deported, and Anne perished in Bergen-Belsen, her father — the only surviving member of the family — edited and published his daughter’s writing.

The Diary of a Young Girl became one of the world’s most widely read books, available in more than 70 languages.


The Anne Frank Diary Fraud

May 16, 2018

by Christian Jürs

When Harriet Beecher Stowe wrote Uncle Tom’s Cabin, she did so prompted by the highest of motives. Yet she, herself, relates the incident that when she first met Abraham Lincoln in 1863, he commented “So you are the little woman who wrote the book that made this great war!”

Few will deny that the printed word in this instance fanned the flames of passion which brought about one of the bloodiest and saddest wars of American history, with brother sometimes pitted against brother, father against son. Perhaps if there had been less appeal to the emotions the problems might have resolved themselves through peaceful means. However, almost universally read at the time, few people then recognized the potency of one small book or the injustice done the South through its wide acceptance as a fair picture of slavery in the South.

Propaganda, as a weapon of psychological warfare is in even wider use today. Communists were masters of the art. Often they used the direct approach; just as often they employed diversion tactics to focus the eyes and ears of the world in directions other than where the real conflict was being waged. For many years, through propaganda alone, the dead threat of Hitler and Nazism had been constantly held before the public in a diversion maneuver to keep attention from being directed against the live threat of Stalin, Khrushchev and Communism.

Such has been the effect, if not the deliberate intention of many who have promoted its distribution, of a book of popular appeal-The Diary Of Anne Frank. It has been sold to the public as the actual diary of a young Jewish girl who died in a Nazi concentration camp after two years of abuse and horror.

Many Americans have read the book or seen the movie version, and have been deeply moved by the real life drama it claims to present. But have we been misled in the belief that Anne Frank actually wrote this diary? And if so. should an author be permitted to produce a work of fiction and sell it to the world as fact, particularly one of such tremendous emotional appeal?

The Diary Of Anne Frank was first published in 1952 and immediately became a bestseller. It has been republished in paperback, 40 printings. It is impossible to estimate how many people have been touched and aroused by the movie production.

Why has the trial involving the father of Anne Frank, bearing directly on the authenticity of this book, never been “officially reported”? In royalties alone, Otto Frank has profited richly from the sale of this book, purporting to depict the tragic life of his daughter. But is it fact, or is it fiction? Is it truth or is it propaganda? Or is it a combination of all of these? And to what degree does it wrongfully appeal to the emotions through a misrepresentation as to its origin?

School publications for years have recommended this book for young people, presenting it as the work of Anne Frank. Advertising in advance of the movie showing has played up the “factual” nature of the drama being presented. Do not writers of such editorials and promoters of such advertising, “fan the flames of hate” they rightly profess to deplore?

Many American Jews were shocked at the handling of the Eichmann case, the distortions contained in the book Exodus and its movie counterpart, but their protests have had little publicity outside of their own organ, Issues, by the American Council for Judaism. Others who have expressed the same convictions have been charged with anti-Semitism. Yet it is to be noted that both Otto Frank and his accuser Meyer Levin, were Jewish, so a similar charge would hardly be applicable in pursuing this subject to an honest conclusion

Not only is the “Anne Frank diary now considered to be a fake, so also is “The Painted Bird” by Jerzy Kosinski. This book, which is a mass of pornographic and sadistic imagery which, had it not been taken so seriously by the Jewish community, would be merely the pathetic manifestation of a self-serving and very sick person.

This was duly exposed as a shabby, though much revered (by the Jewish community) and quoted, fraud. When this was exposed, Kosinski committed suicide. Later, in Kosinski’s footsteps we find the next fiction entitled “Fragments,” by a Swiss Protestant named Bruno Dosseker who spent the war in Switzerland as a young child. Dosseker posed as a very young Baltic Jewish concentration camp inmate named Binjamin Wilkomerski. This work consists of allegedly fragmented “memories” and is very difficult to read

Dosseker became the poster boy for the Holocaust supporters and was lionized by the international Jewish community, reaping considerable profit and many in-house awards for his wonderful and moving portrayal of German brutality and sexual sadism.

Another book, allegedly by a Hungarian doctor, concerning his deportation from Budapest in 1944 and subsequent journey by “Death Train” to Auschwitz is another fraud. There was never such a doctor in Hungary during the period involved and the alleged route of the train from Budapest to Auschwitz did not exist.

These sort of pathetic refugees from the back wards seem to be drawn to the Holocausters…and they to them. There are now “Holocaust Survivors” as young as thirty which is an interesting anomaly because the last concentration camp was closed in 1945. Perhaps they consider the last frenzied spring sale at Bloomingdale’s department store to be what they survived.

Next we can expect to see a book based on twenty-seven volumes of secret diaries prepared on a modern word processor within the current year by an alleged inhabitant of the Warsaw ghetto, describing the Nazi slaughter of tens of millions of weeping Jews by means that would shame a modern African state.

And, predictably, the publication of these howlers would be greeted with joy on the part of the fund raisers and fanatics, praised in the columns of the New York Times and scripted by Steven Spielberg for a heart-wrenching and guaranteed Oscar-winning film.

Hundreds of thousands of DVD copies will be donated to American schools and the Jewish community will demand that President Trump,and subservient executive and legislative bodies in America, create a Day of Atonement as a National Holiday to balance the terrible Christian Christmas and the wickedly Satanic Halloween.

Conservationists must hate these books because so many otherwise beautiful and useful trees are slaughtered for their preparation

Insofar as the Anne Frank diary is concerned, herewith is some background on Anne Frank, her family and her alleged diary.

The Franks were upper class German Jews, both coming from wealthy families. Otto and his siblings lived on the exclusive Meronstrasse in Frankfurt. Otto attended a private prep school, and also attended the Lessing Gymnasium, the most expensive school in Frankfurt.

Otto attended Heidelberg University. After graduation he left for a long vacation in England.

In 1909, the 20 year old Otto went to New York City where he stayed with his relatives, the Oppenheimers.

In 1925 Anne’s parents married and settled in Frankfurt, Germany. Anne was born in 1929. The Frank’s family business included banking, management of the springs at Bad Soden and the manufacture of cough drops. Anne’s mother, the former Edith Holländer, was the daughter of a manufacturer.

In 1934, Otto and his family moved to Amsterdam where he bought a spice business, Opekta, which manufactures Pectin used in making household jellies.

On May 1940, after the Germans occupied Amsterdam Otto remained in that city while his mother and brother moved to Switzerland. Otto remained in Amsterdam where his firm did business with the German Wehrmacht. From 1939 to 1944, Otto sold Opeka, and Pectin, to the German army. Pectin was a food preservative, and a anti infectant balm for wounds and as a thickener for raising blood volume in blood transfusions. Pectin was used as an emulsifier for petroleum, gelatized gasoline for fire bombing. By supplying the Wehrmacht, Otto Frank became, in the eyes of the Dutch, a Nazi collaborator.

On July 6, 1942 Otto moved the Frank family into the so-called ‘Secret Annex’. The annex is a three story, mostly glass townhouse that shares a garden park with fifty other apartments.

While he was allegedly in hiding, Otto Frank still managed his business, going downstairs to his office at night and on weekends. Anne and the others would go to Otto’s office and listen to radio broadcasts from England.

The purported diary begins on June 12, 1942, and runs to December 5,1942 . It consists of a book that is six by four by a quarter inches. In addition to this first diary, Anne supplemented it with personal letters. Otto said Anne heard Gerrit Bolkestein in a broadcast say: ~ “Keep a diary, and he would publish after the war”, and that’s why Anne’s father claimed she rewrote her diaries second time in 1944.

In this second edition, the new writer changed, rearranged and occasionally combined entries of various dates.

When Anne allegedly rewrote the diaries, she used a ball point pen, which did not exist in 1945, and the book took on an extremely high literary standard, and read more like a professional documentary than a child’s diary. In Anne’s second edition her writing style, and handwriting, suddenly matured.

The actual diary of Anne Frank contained only about 150 notes, according to The New York Times, of October 2 ,1955.

In 1944, German authorities in occupied Holland determined that Otto Frank had been swindling then via his extensive and very lucrative Wehrmacht contracts. The German police then raided his apartment attic, and the eight Jews were sent to Westerbork work camp and forced to perform manual labor .Otto himself was sent to Auschwitz.. Anne, her sister Margot, and her mother, subsequently died of typhus in another camp.

In 1945, after being liberated from German custody, Otto returned to Amsterdam, where he claimed he found Anne’s diary cleverly hidden in the Annex’s rafters. However, another version has a Dutch friend, Meip Geis finding Anne’s diary of fictional events, which she then gave to Otto Frank.

Otto took what he claimed were Anne’s letters and notes, edited them into a book, which he then gave to his secretary, Isa Cauvern, to review. Isa Cauvern and her husband Albert Cauvern , a writer, authored the first diary.

Questions were raised by some publishers as to whether Isa and Albert Cauvern, who assisted Otto in typing out the work used the original diaries or whether they took it directly from Mr. Frank’s personal transcription.

American author, Meyer Levin wrote the third and final edition

Meyer Levin was an author, and journalist, who lived for many years in France, where he met Otto Frank around 1949.

In 1980, Otto sued two Germans, Ernst Romer and Edgar Geiss, for distributing literature denouncing the diary as a forgery. The trial produced a study by official German handwriting experts that determined everything in the diary was written by the same person. The person that wrote the diaries had used a ballpoint pen throughout. Unfortunately for Herr Frank, the ballpoint pen was not available until 1951 whereas Anne was known to have died of typhus in 1944.

Because of the lawsuit in a German court, the German state forensic bureau, the Bundes Kriminal Amt [BKA] forensically examined the manuscript, which at that point in time consisted of three hardbound notebooks and 324 loose pages bound in a fourth notebook, with special forensic equipment.

The results of tests, performed at the BKA laboratories, showed that “significant” portions of the work, especially the fourth volume, were written with a ballpoint pen. Since ballpoint pens were not available before 1951, the BKA concluded those sections must have been added subsequently.

Further, the BKA discovered that the diary had been written on paper that contained whiteners and since these were never used before 1951, there was another proof that the diaries had been concocted after the war.

In the end, BKA clearly determined that none of the diary handwriting matched known examples of Anne’s handwriting. The German magazine, Der Spiegel, published an account of this report alleging that (a) some editing postdated 1951; (b) an earlier expert had held that all the writing in the journal was by the same hand; and thus (c) the entire diary was a postwar fake.

The BKA report, at the urgent request of the Jewish community, was redacted at the time but later inadvertently released to researchers in the United States.


Fist-size gunshot wounds, pulverized bones, inadmissible use of force by Israel in Gaza – HRW to RT

May 16, 2018


After the protests in Gaza, we’ve seen injuries that you see in conflict situations, not what you would expect in policing and law enforcement situations, Omar Shakir, Israel & Palestine Director at Human Rights Watch, told RT.

The UN Security Council gathered Tuesday for an emergency meeting following the killing and injuring of Palestinians in Gaza by Israeli soldiers during protests on Monday. At least 60 people lost their lives in what’s become the deadliest day in the Israeli-Palestinian conflict since 2014. More than 2,700 people were injured, many with live ammunition.

The violence came as the US controversially opened its new embassy in nearby Jerusalem. However, Washington’s envoy to the United Nations, Nikki Haley, said that there is no link between US Embassy move and deaths of Palestinians.

RT: Have you been surprised by the extreme force used by the Israeli military against the largely peaceful protests in Gaza?

Omar Shakir: Unfortunately, no. Israeli officials said quite clear that their live fire regulations permit them to open fire on demonstrators irrespective of whether or not they pose an imminent threat, which is a threshold required under international law. The scale of the killings reflects the fact that more protesters took to the streets. But the reality is for weeks now Israeli officials have green-lighted opening fire on largely unarmed demonstrators.

RT: The IDF said that they were using all possible restraint to keep the casualty numbers down. What do you make of the comment?

OS: Clearly not. Israeli officials have used live ammunition from the first moments of the protests beginning on March 30, continuing for successive Fridays and for this week. They have effectively turned a no-go zone into a free fire zone. And they fired into protesters inside of Gaza, who have not by the evidence of Human Rights Watch (HRW), accumulated, not posed the kind of threat that would justify the use of force. Remember, Israel has kept Gaza under closure for a decade, caged into a 50 by 11 kilometer strip, under occupation for a half century. And quite simply their use of force does not meet international standards.

RT: Could you comment on the severity of the injuries that have been seen?

OS: We’ve seen injuries reflect the kind that you see in conflict situations, not that you would expect in policing and law enforcement situation. You see small entry wounds, fist size exit wounds, according to doctors that treat patients. You see bones pulverized to the edge. And the kind of injures that reflect a grotesque use of force that should not be used in a policing situation.

RT: Is there a medical capability on the Palestinian side of the border to deal with this number of casualties?

OS: Unfortunately, hospitals in Gaza have been under incredible strain as a result of Israel’s decade-long closure, electricity cuts, limited supplies of medicine, inability of doctors to attend training, limited capacity. So, the reality is that hospitals have been overwhelmed having to take patients that have anything but life threatening situations outside of hospital care. Quite simply, they have been overwhelmed and the closure certainly doesn’t help.

RT: There have been reports of the IDF using devastating ‘butterfly bullets’ and high-velocity munitions. Why would it have been doing that?

OS: We are still investigating. What we can say is we’ve seen a caliber of weapons typically used in conflict situations, bullets that inflict significant damage on human body and should in no circumstances be used on demonstrators in a law enforcement situation.

RT: Israel claims it is just defending its borders. What would be, in your view, an acceptable way of doing that?

OS: The Israeli authorities should respect the right to demonstrate. Every population has a right to demonstrate. It is a different scenario and of course Israel has the right to protect unauthorized crossing of borders. But the way you respond to that is to follow the UN guiding principles and use non-lethal means and arrests. But we are talking about firing into Gaza, not actual individuals crossing the Strip. They have created the argument that obscures the reality of forces safely tucked away inside of Israel, picking off, one by one, protesters who do not pose an imminent threat inside of Gaza.

“In Gaza, dozens of people lost their lives, thousands have been injured. This is far beyond the capacity of the health system, which was weakened in the past by the humanitarian crisis in Gaza. Doctors were struggling [on Monday] to cope with the influx of patients… Al-Shifa hospital only was dealing with 400 injured people; at the same time, the doctors were overworked over the past weeks. Monday deepened the crisis in hospitals. Hospitals have been working with limited resources, doctors have been working around the clock to cope with the influx of the wounded.” – Suhair Zakkout, spokesperson of ICRC Gaza (International Committee of the Red Cross)

Marie-Elisabeth Ingres, MSF (Médecins Sans Frontières) representative in Palestine, described Israel shooting with live ammunition at Palestinian demonstrators as “shocking.” She told RT that what happened on Monday was unmanageable by the medical staff of the minister of health because of the number of wounded people.

“We did what was possible to do but there was more than 1,300 gunshot injures for Gaza. And MSF was presenting free hospitals in Gaza in support for the Minister of Health. For example, in Al-Aqsa hospital in less than 4 hours there was more than 300 injured people,” she said.

Ingres added that the situation, which reached its climax on Monday, has been going on for many weeks.

“Monday was the most impressive for the media and for the international community. Unfortunately, we are speaking about more than 3,000 injured people. And the health system for many years we are already on the verge of collapse. There is only four hours of electricity in Gaza, people are not paid, or partially paid. There is a shortage of drugs and disposables. The medical staff is struggling for many months to give a quality of care for the patients,” she said.

“As humanitarian actors, we do what we can, we try to send medical doctors, surgeons, nurses, but of course it is not enough. It is not the humanitarian actors who will solve the situation. We need a political solution to what happens in Gaza,” Ingres told RT.


U.S. Media Whitewashes Gaza Massacre

As Israel killed more than 50 Palestinians in cold blood protesting the American embassy move on Monday, U.S. corporate media failed to accurately report what happened in Gaza, once again meekly protecting the government line

May 14, 2018

by Joe Lauria

Consortium News

Typical of the mindset of corporate media reporting on what happened in Gaza on Monday as Israeli soldiers killed more than 50 protesting Palestinians, is this tweet from CNN. It says: “Death toll rises to at least 52 people during clashes along the border fence between Israel and Gaza, Palestinian officials say. More than 2,400 people have been injured.” CNN’s new slogan is “#FactsFirst.”

Adam Johnson, who writes for the media watchdog Fairness and Accuracy in Reporting, responded to CNN with a tweet of his own:

“This one’s got it all:

  • ‘death toll rises’ — no one was killed and no one specific party did the killing, the death toll just mysteriously ‘rises’
  • ‘clashes’ — launders all power asymmetry
  • ‘2,400 people have been injured’ — all 2,400 are Palestinian but lets go with ‘people’.”

Craig Murray, a former British ambassador to Uzbekistan, said on his blog that he did a Google News search for the word “massacre” and found not one reference to Gaza.

A New York Times headline on Monday said: “Dozens of Palestinians have died in protests as the U.S. prepares to open its Jerusalem Embassy.” Journalist Glenn Greenwald responded: “Most western media outlets have become quite skilled – through years of practice – at writing headlines and describing Israeli massacres using the passive tense so as to hide the culprit. But the all-time champion has long been, and remains, the New York Times.#HaveDied.”

[Perhaps because of pressure from Greenwald and others, the Times on Monday night changed its headline to “Israel Kills Dozens at Gaza Border as U.S. Embassy Opens in Jerusalem.”]

Yet another CNN headline simply read: “Dozens die in Gaza.” Journalist Max Blumenthal responded: “Maybe they were old. Perhaps they were very sick. They just up and died! Who will solve the mystery behind these deaths?”

Blumenthal later offered a possible solution to the mystery: “According to the White House, Khhamas launched 41 protesters into unsuspecting Israeli bullets.”


Deflecting blame from Israel is one thing. But projecting it onto the victim is quite another. Israel’s UN Ambassador Danny Danon on Monday called for the U.N. Security Council to, “Condemn Hamas for their war crimes,” because “every casualty on the border is a direct victim of Hamas.”

He said in a statement released by Israel’s U.N. mission:

“Condemn Hamas for the war crimes they commit. Not only does Hamas incite tens of thousands of Palestinians to breach the border and hurt Israeli civilians, but Hamas also deliberately endangers Palestinian civilians. The murder of Israeli civilians or deaths of the people of Gaza – each one of them is a desirable outcome for Hamas. Every casualty on the border is a victim of Hamas’ war crimes, every death is a result of Hamas’ terror activity, and these casualties are solely Hamas’ responsibility.”

That’s one way to wash the Israeli government’s (blood-soaked) hands of the matter. Especially if you fear Israel will be accused of war crimes itself for its actions on Monday. Danon mentioned “breaching the border.” But it is virtually impossible to get in or out of Gaza without Israeli permission. Burning kites lofted over the barrier that pens in nearly two million Gazans subject to an internationally unrecognized economic blockade, supposedly constitutes “breaching,” in Danon’s mind.

He would do well to consider the words of Moshe Dayan, one of the Israel’s Founding Fathers, who said in 1956:

What cause have we to complain about their fierce hatred to us? For eight years now, they sit in their refugee camps in Gaza, and before their eyes we turn into our homestead the land and villages in which they and their forefathers have lived.” He went on: “We are a generation of settlers, and without the steel helmet and gun barrel, we shall not be able to plant a tree or build a house. . . . Let us not be afraid to see the hatred that accompanies and consumes the lives of hundreds of thousands of Arabs who sit all around us and wait for the moment when their hands will be able to reach our blood.”

So on the day, 61 years later, when the United States declared Jerusalem/Al Quds as the capital of Israel by moving its embassy there, rather than leaving its status to negotiation, people still trapped in Gaza protested at the gate fencing them in while Israeli military snipers picked off more than 50 of them and wounded thousands more for protesting their entrapment.

U.S. Parrots Israel, Media Parrots U.S.

Danon’s position was callously promoted by the White House on Monday. Deputy Press Secretary Raj Shah was asked several times to condemn Israel’s military response. “We believe Hamas is responsible for these tragic deaths,” he said. “Their rather cynical exploitation of the situation is what’s leading to these deaths and we want it stopped.” He later blamed Hamas for a “gruesome and unfortunate propaganda attempt.”

Unsurprisingly, Congress also lined up behind the Jewish State, mostly ignoring what went on in Gaza.

At the ceremony opening the embassy, Senator Lindsey Graham of South Carolina, called Monday “a monumental day in United States-Israel relations.” Senator Ted Cruz of Texas, who was among four senators and 10 members of the House of Representatives present, incredulously said moving the embassy “furthers the chances of peace in the Middle East by demonstrating that America’s support for Israel is unconditional and will not be bullied by global media opinion.”

Back in Washington, Senator Chuck Schumer of New York, proclaimed: “Every nation should have the right to choose its capital. I sponsored legislation to do this two decades ago, and I applaud President Trump for doing it.”

Ajamu Baraka, the Green Party vice presidential candidate in 2016, tweeted: “Where are the democrats condemning the slaughter in Gaza? If this was Assad they would be joining the republicans calling for military action pretending like they cared for Arab life.”

Handful of Democrats Speak Out

Bernie Sanders of Vermont mildly criticized Israel’s murderous response. “Hamas violence does not justify Israel firing on unarmed protesters,” he said. “The United States must play an aggressive role in bringing Israel, the Palestinian Authority, Egypt and the international community together to address Gaza’s humanitarian crisis and stop this escalating violence.”

Senator Dianne Feinstein, a Democrat from California, was more critical: “It’s just heartbreaking. The humanitarian situation in Gaza is desperate. Instead of cutting aid, the Trump administration must restore our leadership role and do what it can to alleviate the Palestinians’ suffering. The location of the embassy is a final-status issue that should have been resolved as part of peace negotiations where both sides benefit, not just one side. Israel will only know true security when it is at peace with its neighbors.”

Representative Betty McCollum, a Democrat from Minnesota, tweeted: “Today’s @USEmbassyIsrael opening in Jerusalem & killing of dozens of Gaza protesters advances @netanyahu agenda of occupation & oppression of Palestinians. @realDonaldTrump policies are fueling conflict, abandoning diplomatic efforts to achieve peace.”

Pressure to support Israel on The Hill is infamously intense. But what is the media’s excuse for being afraid to simply report facts, such as that Israeli soldiers “killed” Palestinians on Monday. They didn’t just simply die.

Just because U.S. government figures are apologists for Israel, does not mean the media must be too. But that would require the U.S. having an independent mainstream media.

When control of powerful mainstream communications breeds self-aggrandizement and adherence to a line pushed for so long because it got you where you are in the pecking order of media culture, it seems virtually impossible to shift gears and take another look at what you are reporting.


Israel’s violent rule increasingly driving liberal American Jews on to the streets

At odds with established Jewish organizations, many younger groups are rejecting the notion of being progressive except for Palestine

May 16, 2018

by Tom McCarthy in New York

The Guardian

The massacre by Israeli soldiers of dozens of Palestinians in Gaza this week has prompted a new round of protests by progressive Jewish-American groups who object to the relocation of the US embassy to Jerusalem – and who lump the Donald Trump and Benjamin Netanyahu administrations together as enemies of peace in the region.

Groups such as IfNotNow, Jewish Voice for Peace, J Street, Jews for Racial and Economic Justice and others began to step up protest activity – marches, vigils and community meet-ups – in late March, when Israeli forces killed 17 Palestinians and wounded at least 1,400 in Gaza.

The protest activity has been echoed by influential voices such as the actor Natalie Portman – who last month canceled a planned trip to Israel to accept the Genesis Prize, saying through a spokesperson that “recent events in Israel have been extremely distressing to her” – and the comedian Sarah Silverman

The Israeli foreign ministry has said it was “protecting its citizens from thousands of violent rioters from Gaza, who have been trying to break the fence and cross into Israel, with the goal of killing or kidnapping Israelis”.

That rationalization was repeated and amplified on Tuesday by UN ambassador Nikki Haley and by the American Israel Public Affairs Committee, the Anti-Defamation League and other influential US-based institutions.

But those organizations are increasingly being taken to task by groups with younger members and different views on what it means to support the Jewish state.

“The violence that is being committed in our name, the massacre of 50-plus Palestinian protesters Monday in Gaza – we’re not going to sit idly by as that’s committed,” said Ethan Miller, a spokesman for IfNotNow.

“We’re actually going to be taking action and building a movement within our communities to make sure that we’re no longer part of supporting the occupation, and our community is actively working against it.”

Rebecca Vilkomerson, executive director of Jewish Voice for Peace, blasted the juxtaposition of the celebratory US embassy opening, attended by Ivanka Trump and Jared Kushner, and the killing of Palestinians.

“Monday I thought was one of the most disgraceful days in the history of the Israeli relationship to Palestinians, with the celebration of annexation – even as Palestinians, the vast majority of whom are refugees, were being gunned down, just for protesting their basic rights to live in dignity and freedom,” Vilkomerson said.

“The idea that this is being done in our name, or being justified in our name, is absolutely unacceptable.”

About 100 protesters affiliated with IfNotNow blocked Pennsylvania Avenue in Washington DC for about two hours Monday, chanting “stop the violence” and other slogans.

Jewish Voice for Peace has helped to organize 45 actions across the country since the end of March, Vilkomerson said, and on Monday the group held events in New Haven, Connecticut; Montclair, New Jersey; Philadelphia, Boston, central Ohio, Washington DC and New York City.

Concerns about an “American Jewish-Israeli Jewish divorce,” have grown over the past decade.

An in-depth 2013 Pew Research study found a decline in attachment to Israel among non-religious American Jews. Only 38% of Jewish-American respondents overall said the Israeli government was making a sincere effort to establish peace with the Palestinians.

“For several decades, the Jewish establishment has asked American Jews to check their liberalism at Zionism’s door, and now, to their horror, they are finding that many young Jews have checked their Zionism instead,” the editor and writer Peter Beinart warned in an influential 2010 essay titled “The Failure of the American Jewish Establishment”.

The progressive Jewish-American groups said they had experienced friction with more established groups.

Said Vilkomerson: “Often organizations like JVP get a lot of pressure from Jewish institutions because we’re speaking out so strongly for Palestinian rights. But … there’s a lot of people who feel alienated from their Jewishness, because of the way that Jewish institutions are mindlessly supporting Israel. People are finding their way back to us, and back to their Jewishness, through places like JVP.”

Miller described IfNotNow’s “You Never Told Me” campaign, which seeks to get Jewish education outlets including summer camps and day schools to teach the history of “the occupation”.

“What we’ve realized is that on the one hand the American Jewish community teaches its people about the values of social justice, of looking out for your neighbor – and on the other hand there are large institutions that do a lot of work to support and uphold the occupation.

“And that’s a hypocrisy that we’re no longer willing to accept. We know that we have to put our values first.”


We don’t need your permission: Russia responds to US condemnation of Crimean Bridge

May 16, 2018


Russia will not ask for anyone’s permission to build infrastructure on its territory. This was the response to the US, which condemned the opening of the Kerch Strait bridge between Russia and Crimea.

The US State Department accused Russia of flouting international law by building a bridge to “occupied” Crimea without the permission of the government of Ukraine.

“As one could predict, Washington is not happy with that. But Crimea is Russia,” the Embassy of Russia in the USA said in the statement on Tuesday. “We shall not ask for anybody’s permission to build transport infrastructure for the sake of the population of Russian regions.”

On Tuesday, Russian President Vladimir Putin opened the 19-km long bridge connecting Crimea to Krasnodar Region six months ahead of schedule. The bridge is now open for car traffic. Trucks will be allowed later in the year, while the railway is scheduled to be completed in 2019.

The bridge is the longest in Europe. It begins on the Taman Peninsula, passes over a 5km dam and Tuzla Island, crosses the Kerch Strait and reaches the Crimean coast.

“This is an excellent result that has made Crimea and the legendary Sevastopol stronger and brought us closer,” Putin said at the opening ceremony. “The bridge will mean faster and greater progress for the economy of Crimea and Sevastopol, and will improve the quality of life here.”

The president has pledged to continue realizing such major infrastructure projects all across Russia. “When I say across the country, I mean it. We will build more roads, bridges, airports and ports. We will make our peoples’ lives better and more comfortable,” Putin said.

One of the next projects could be building a mega-bridge to Russia’s largest island Sakhalin, which remains the only Russian territory in the Far East with no mainland connection. Russia is yet to decide what is a better option – digging a tunnel or building a bridge to the island.



Russian economy under Putin: Quality of life tripled, foreign debt fell 75%

January 27, 2018


Vladimir Putin was first elected as Russian President in 2000. Here’s how the Russian economy has transformed in the intervening years by numbers.

Quality of life

Before Putin’s election, Russia had a $9,889 GDP per capita by Purchasing Power Parity (PPP). The figure had almost tripled by 2017, and has now reached $27,900. Russia has the highest GDP per capita among its fellow BRICS countries, with the next-highest, China, having just $16,624. The PPP takes into account the relative cost of living and the inflation rates of countries in order to compare living standards in different nations.

The average nominal monthly wage has grown almost 11-fold from $61 to $652. Unemployment has contracted from 13 percent to 5.2 percent. Pensions have grown over 1,000 percent in the same period from $20 to $221.

Economy performance

Russia is the sixth-largest economy in the world by PPP, with a $4-trillion GDP. PwC has predicted that, by 2050, the country will become the largest economy in Europe by this measure, leaving behind Germany and the United Kingdom.

Back in 1999, the Russian economy by PPP was worth only $620 billion. So, in the last 18 years, Russian economic output in these terms has increased by 600 percent.

Inflation rates have decreased from 36.5 percent to 2.5 percent by the end of 2017. The total value of assets of the Russian banking system has risen 24-fold to $1.43 trillion. Capitalization of the Russian Stock Market has grown more than 15-fold to $621 billion.

Public debt & foreign reserves

When Putin was elected in 2000, Russia had just $12 billion in reserves, accompanied by a public debt, which was almost equal to the country’s economic output at 92.1 percent.

Things have changed markedly in 18 years, as Russia’s public debt has now shrunk to 17.4 percent of GDP and reserves have increased to $356 billion. Low debt and growing reserves helped the country to live through the economic crisis of 2008 and the recession of 2014-2016, caused by a fall in oil prices and Western sanctions.

Russian gold reserves have increased by more than 500 percent since 2000. The Central Bank of Russia (CBR) added 9.3 tons of gold to its reserves in December, bringing the total yearly holdings to a record 1,838.211 tons – worth over $76 billion in monetary terms.

The World Gold Council shows that Russia is the largest buyer of gold and is the world’s third-biggest producer, with the Central Bank purchasing from domestic miners through commercial banks.


While the Russian economy remains dominated by oil and gas revenues, its agriculture sector has boomed in recent years. Russian farmers produced their largest ever crop in the 2017 agricultural year, breaking the 40-year-old Soviet record, and harvesting more than 130 million tons.

In 2016, Russia became the world’s leader in wheat exports. Since the early 2000s, the Russian share of the world wheat market has quadrupled, from four to 16 percent.

Although agriculture still remains far behind the energy sector, it surpassed arms sales and became the country’s second-largest export.

Russia started exporting grain in 2002, selling a little over seven million tons. In 2017, Russia wanted to sell 45 million tons – an increase of more than 600 percent.


Russia Economic Outlook

May 8, 2018

Focus Economics

The economy appears to have gained some momentum in recent months after a soft end to 2017. The manufacturing and services PMIs rose in April and retail sales accelerated in March. Moreover, the Ural oil price hit the highest level since October 2014 in April, boding well for the energy sector. Outside of the domestic economy, however, the economic environment has become more uncertain in recent weeks following an escalation in tensions with the United States. Sanctions levied on several high-profile Russian businessmen and their companies sparked volatility in Russian financial markets and caused the ruble to plunge in April, threatening the inflation outlook and the Central Bank’s easing cycle. However, the U.S. has softened its stance on the sanctions somewhat since unveiling them and on 2 May granted an extension for compliance with the measures. In addition, the U.S. has stated that it would consider lifting sanctions on aluminum giant Rusal if billionaire Oleg Deripaska cedes control of the company.

Russia Economic Growth

The uncertain geopolitical atmosphere is casting a shadow on Russia’s economic outlook. However, an improving domestic economy thanks to a tight labor market and higher oil prices should support activity, acting as a buffer against uncertainty. FocusEconomics Consensus Forecast panelists see GDP expanding 1.7% in 2018, down a notch from last month’s forecast. In 2019, growth is seen broadly stable at 1.8%.

Russia Economy Data

2013 2014 2015 2016 2017
Population (million) 143 143 143 143 143
GDP per capita (USD) 15,553 14,374 9,503 8,947
GDP (USD bn) 2,230 2,062 1,363 1,283
Economic Growth (GDP, annual variation in %) 1.3 0.7 -2.8 -0.2
Consumption (annual variation in %) 4.4 2.0 -9.8 -4.5
Investment (annual variation in %) 0.9 -0.4 -9.9 -1.8
Industrial Production (annual variation in %) 0.4 1.6 -0.8 1.3
Retail Sales (annual variation in %) 3.9 2.7 -9.8 -4.6
Unemployment Rate 5.5 5.2 5.6 5.5
Fiscal Balance (% of GDP) -0.5 -0.4 -2.4 -3.5
Public Debt (% of GDP) 10.6 13.0 13.2 12.9
Money (annual variation in %) 14.9 1.5 11.3 9.2
Inflation Rate (CPI, annual variation in %, eop) 6.5 11.4 12.9 5.4
Inflation Rate (CPI, annual variation in %) 6.8 7.8 15.5 7.1
Inflation (PPI, annual variation in %) 3.7 5.9 10.7 7.4
Policy Interest Rate (%) 5.50 17.00 11.00 10.00
Stock Market (annual variation in %) 2.0 -7.2 26.1 26.8
Exchange Rate (vs USD) 32.73 56.26 72.88 60.27
Exchange Rate (vs USD, aop) 31.85 38.42 61.06 67.05
Current Account (% of GDP) 1.5 2.8 5.0 2.0
Current Account Balance (USD bn) 33.4 57.5 68.8 25.5
Trade Balance (USD billion) 181 189 148 90.3
Exports (USD billion) 522 497 341 282
Imports (USD billion) 341 308 193 192
Exports (annual variation in %) -1.1 -4.8 -31.3 -17.4
Imports (annual variation in %) 1.6 -9.8 -37.3 -0.7
International Reserves (USD) 510 385 368 378
External Debt (% of GDP) 32.7 29.1 38.0 40.1


Russia Economy Overview

Economic Overview of Russia

Following the collapse of the Soviet Union, the first decade of transition from a centrally-planned economy to market economy was disastrous for Russia: nominal gross domestic product (GDP) fell from USD 516 billion in 1990 to USD 196 billion in 1999, which represented a plunge of over 60%. In an attempt to address the economic turmoil and follow the recommendations from the IMF, the Soviet government began to privatize many Russian industries during the 1990s. Important exceptions were, however the energy and defense sectors.

The devaluation of the Russian ruble in 1998—after the financial crisis known as the ruble crisis—together with the uninterrupted upward trend that oil prices experienced in the period from1999 to 2008 propelled the Russian economy—heavily reliant on its energy sector exports—to grow at an annual average rate of 7%. Russia was among the hardest-hit economies by the 2008-2009 global economic crisis: the economy plunged 7.8% in 2009 as oil prices plummeted and foreign credit dried up. The economic contraction was the sharpest since 1994, but no long-term damage was caused due to the government and Central Bank’s proactive and timely response to ring fence key sectors of the economy, in particular the banking sector, from the effects of the crisis. As a result, Russia’s economy began to grow again and increased 4.5%, 4.3% and 3.4% in 2010, 2011 and 2012, respectively, before slowing to 1.3% in 2013 and 0.6% in 2014.

The Russian economy experienced two major shocks in 2014, narrowly avoiding recession with moderate growth of 0.6%. The first shock was the sharp decline in oil prices during the third and fourth quarter of 2014, exposing Russia’s extreme dependence on global commodity cycles. After fluctuating within a tight band near USD 105 per barrel from 2011-2013, crude oil prices ended 2014 at less than USD 60 per barrel. The second shock was the economic sanctions resulting from geopolitical tensions, which negatively affected investor appetite for Russian investments. Capital flights and high inflation compound Russia’s economic woes as the economy registered the steepest contraction since 2009 contracting 3.7% in the full year 2015. Forecasts are pointing to an end to the recession coming soon in 2017.

Inflation has been falling rapidly since August 2015, when it reached a peak of 15.8%. Along with the fall in inflation, Central Bank lending rates have been reduced. Russian bonds and equities are performing well against those of other emerging markets and a modest recovery in oil prices has bolstered economic sentiment.

Considering that the price for Urals oil will average USD 38 per barrel in 2016, the Central Bank expects the economy to contract between 0.3% and 0.7% this year, which is less than the Bank’s previous estimate that saw the economy contracting between 1.3% and 1.5%. The Bank expects the economy to expand at a rate of between 1.1% and 1.4% in 2017, assuming that Urals oil prices average USD 40 per barrel. Previously, the Bank had expected the price for Urals oil to average USD 35 per barrel and had projected economic growth rising to within a range of minus 0.5% and plus 0.5% in 2017.

Following the economy’s collapse in 2015, analysts surveyed by FocusEconomics expect the Russian economy to continue contracting in 2016, although at a more moderate pace. FocusEconomics Consensus Forecast panelists project that Russia’s GDP will fall 0.7% in 2016, which is up 0.1 percentage points from last month’s forecast. Panelists expect the economy to expand 1.3% in 2017.

Russia’s Balance of Payments 

Russia’s current account records regular trade surpluses largely due to exports of commodities such as crude oil and natural gas. From 2010 to 2014, Russia’s average current account surplus was USD 66.8 billion, reaching a peak in 2011 at USD 98.8 billion.

Russia’s balance of payments suffered a significant terms-of-trade shock in the fourth quarter of 2014 as a result of falling oil prices, which were, in part, offset by a drop in imports. Simultaneously, geopolitical uncertainties and related sanctions in 2014 resulted in large capital outflows, further deteriorating Russia’s BoP. Private sector capital outflows increased from USD 60.7 billion in 2013 to USD 130.5 billion in 2014. During the same period, capital and financial accounts of the Russian Federation fell from a deficit of USD 45.4 billion to a deficit of USD 146 billion (2.2% and 7.8% of GDP, respectively).

Russia’s economy registered the steepest contraction since 2009 last year as a combination of external factors—such as a plunge in oil prices and international sanctions—coupled with structural weaknesses took a heavy toll on growth. The economy contracted 3.7% in the full year 2015, which contrasted the meagre growth registered in the previous year. However, the contraction in the Russian economy in the second quarter of 20167 was the slowest since the recession began in late 2014. Comprehensive data showed that GDP contracted 0.6% annually in Q2, which came in above the 1.2% decrease recorded in Q1. Although industrial production shrank in September, falling at the fastest pace seen in 8 months, it is expected to expand slightly in 2016 after suffering the worst contraction in six years in 2015.

Russia’s trade structure

Crude oil, petroleum products and natural gas comprise roughly 58% of total exports, iron and steel represent 4% and other mining sector related exports including gems and precious metals account for about 2.5%. Sales to Europe represent over 60% of total exports while Asia has an export share of roughly 30%. Russian exports to the United States, Africa and Latin America combined represent less than 5% of total shipments.

Russia’s main imports are food and ground transports, which represent 13% and 12% of total imports, respectively. Other significant imports include pharmaceuticals, textile and footwear, plastics and optical instruments. Exports peaked in 2012 reaching USD 527 billion; imports peaked in 2013 reaching USD 341 billion.

In August of 2015, Russian exports amounted to USD 25.0 billion, which marked a 39.7% contraction in annual terms. This marked the 10th consecutive contraction at a double-digit rate. Imports totaled USD 16.5 billion, which marked a 34.7% year-on-year contraction.

Russia’s trade surplus is narrowing rapidly. Russia’s trade surplus narrowed to USD 4.4 billion in August of this year, which came in dramatically below the USD 8.8 billion registered in the same month last year and the USD 16.2 billion the prior year. August’s result prompted the 12-month rolling surplus to decrease to USD 99.5 billion, the smallest accumulated surplus in over a decade. The fall in the trade surplus continues to reflect the free fall that Russian exports have registered over the last few years.

Following a period of heightened volatility, oil prices have recently stabilized especially since the extraordinary meeting of the OPEC Conference in Algiers in the last week of September, which concluded with a commitment to freeze oil production at between 32.5 and 33.0 million barrels a day. Analysts expect the commitment to be honored by most members at OPEC’s official meeting in November where non-OPEC oil exporters are also encouraged to sign on the dotted line. The re-establishment of OPEC’s price leadership prompted global oil prices to spike, including for Urals oil. On 30 September, the price for Urals oil settled at USD 46.3 per barrel, which was 4.6% higher than at the end of August. Urals oil has also recovered from the lows registered earlier this year and was 31.8% on a year-to-date basis.

Russia’s Monetary Policy

The Central Bank of Russia (Bank Rossii), founded in 1990, has several responsibilities in compliance with the Russian Constitution and Russian Federal Law: maintaining the value and stability of the ruble, overseeing Russian financial institutions (including acting as a lender of last resort), managing Russia’s foreign reserves and foreign exchange, and setting short-term interest rates, which is one of the main instruments of the bank’s monetary policy implementation.

Low oil prices and sanctions shocks to the Russian economy resulted in the ruble losing 46% of its value against the U.S. dollar in 2014, prompting policies from the Bank Rossii aimed at stabilizing the financial system. Bank Rossii raised its key interest rate in December 2014 by 650 basis points to a lofty 17% to curb runaway inflation caused by the weakened ruble (core inflation reached 11.2% in December 2014, year-on-year). Bank Rossii spent USD 27.2 billion in October 2014 and USD 11.9 billion in December of the same year on interventions to support the ruble.

Russia’s Central Bank gradually reduced interest rates over the course of 2015, starting the year at 17.00% and reduced to 11.00% by July. Interest rates were kept steady for nearly a year until June 2016 when they were cut by 50 basis points to 10.50%. In making the decision to cut interest rates, the Central Bank indicated that authorities were more confident about the evolution of inflation and noted the positive results of a drop in inflation expectations and decreased inflation risks against a backdrop of their slowly but surely recovering economy.

Since then there has been a noticeable drop in inflation, which drove the Bank to cut rates in September 2016 from 10.50% to 10.00%. Authorities did however state that in order to cement a sustainable fall in inflation, “the current value of the key rate needs to be maintained till end-2016 with its further possible cuts in 2017 Q1-Q2.” Considering its decision, the Bank remains confident that with a still relatively-tight monetary policy, inflation will fall to 4.5% in Q3 2017 and decrease further toward its 4.0% target at the end of 2017. The bank also indicated that it will hold off from further monetary easing until the first or second quarters of 2017.

Russia’s Exchange Rate Policy

On 10 November 2014, Bank Rossii un-pegged the ruble from a dual-currency (U.S. dollar and euro) basket band, ending two decades of exchange rate controls and moving Russia to a free-float exchange rate system. The Central Bank also ended the regular interventions with the ruble, but signaled that it remained committed to intervening in support of the Russian currency in case there were risks to financial stability. As the ruble continued to slide against the greenback because of falling oil prices and higher uncertainty among investors, the Central Bank decided to continue intervening in the foreign exchange market, costing the Central Bank hundreds of millions per day.

The value of the ruble first began to fall in early 2014 after several years of an exchange rate of roughly 30 RUB per USD, as the country was acutely affected by weak economic growth, high geopolitical risks following the annexation of Crimea and the outbreak of war in Ukraine. However, it was with the collapse of oil prices at the end of 2014 when the ruble’s value could not defy gravity and thus began its free fall against the U.S. dollar, with the currency bottoming out at 68.5 RUB per USD on 16 December. Throughout 2015, the Russian ruble has been on a roller coaster. High volatility and strong fluctuations in oil prices have weighed heavily on the country’s currency. The beginning of 2015 saw strong volatility in the foreign exchange market, but the Russian currency stabilized within a corridor of 50 to 60 RUB per USD at the end of the first half of the year. There was another episode of strong volatility at the outset of second half of the year and, on 24 August, the Russian currency closed the trading day at 70.9 RUB per USD, which was even lower than the aforementioned low point of the December 2014 ruble crash and represented a new all-time low. The sharp drop in August was primarily a response to falling oil prices and rising fears regarding the effects that the shockwave caused by China’s stock-market crash could have on the global economy. The ruble closed 2015 at 72.9 RUB per USD—a 30% loss in value compared to the end of 2014.

Fluctuations of the Russian ruble are largely driven by the price of oil, which along with gas, is Russia’s main commodity export. The currency took a dramatic fall to an all-time low of 82.4 RUB per USD on 21 January 2016, as oil prices fell to lows not seen in over a decade. It has gradually stabilized between 60 and 70 RUB per USD as the economy has improved and oil prices have crept back up since January 2016.

Russia’s Fiscal Policy

Since the country’s 1998 debt crisis, a nearly decade-long environment of favorable commodities prices (particular in the energy sector), a relatively weak ruble and tight fiscal policy allowed Russia to run budget surpluses from 2001 to 2008 until the global financial crisis hit.

Russia depends heavily on its energy exports. In fiscal year 2008, oil and gas revenues reached a peak, accounting for half of the Russian federal budget. However, since the global financial crisis hit the country in 2009, the Russian economy began to run fiscal deficits. In 2012, 2013 and 2014 Russia ran budget deficits representing -0.02%, -0.7% and -0.6% of GDP, respectively. The exception was the year 2011, when the Russian budget incurred a 0.8% of GDP surplus.

Low oil prices and a collapse in domestic demand and imports as the economy fell into recession decimated fiscal revenues in 2015. In fact, the impact of low oil prices on Russia’s fiscal revenues raised questions about the country’s long-term economic prospects as well as fiscal sustainability. With the decline of energy prices and the Russian government’s dependence on energy revenues to fund its budget—revenues from oil and natural gas represented around 52% of the Russian budget—forced the Russian government to rethink its fiscal policy. The Finance Ministry announced in early September 2015 that it had decided to suspend the fiscal rule—a law designed to limit government spending.

The fiscal rule went into effect in 2013 to prevent the government from wasting windfall oil revenues and instead divert them into rainy-day funds. The rule also aimed to limit government expenditure to projected non-oil revenues, oil revenues calculated using long-term historical oil prices, and a fiscal deficit of at no more than 1.0% of GDP. At the time the rule was created, Russian authorities were concerned that the income generated from rising oil prices would encourage pro-cyclical spending. However, within the context of weak economic growth and oil prices at just half the level observed in 2014, Russia faced the opposite problem.

Because the budget rule limits government spending to long-term historical oil prices, if the law were to continue into 2016, it would have implied a reference price higher than the one that was forecast for 2016—which was an average USD 50 per barrel.

Officially, the fiscal rule was suspended temporarily. Some advisors, among them former-Finance Minister Alexei Kudrin, voiced support for suspending the rule, at least for a year. Moreover, in addition to the suspension of the fiscal rule, the government also announced a transition from a three-year budget plan to one-year budgeting. The three-year budget plan was designed to force the government to take a medium-term approach and avoid making unsustainable pledges. All in all, the changes to the budget process paved the way for a more accommodative fiscal stance in an effort to mitigate the low oil prices and weaker economic growth.

Some analysts suggest that, with sizeable reserves and low public debt, Russia can afford to run a modest fiscal deficit without imperiling fiscal sustainability. The fiscal deficit ended at 2.8% in 2015.

Russia has two fiscal buffers, the Reserve Fund and the National Welfare Fund (NWF), both of which have been under pressure as a result of deteriorating economic conditions. The Ministry of Finance indicated that the budget deficit projected for 2015 (RUB 2.7 trillion, equivalent to 3.8% of GDP) would be covered by the country’s Reserve Fund, rather than by raising debt. Unfortunately, the government was unable to sustain that deficit due to the inability to fund it. Due to international sanctions, the government has been unable to borrow from abroad. The government allowed for increased discretionary use of NWF resources in December of 2014 in order to help stabilize the financial system. The Russian government had no choice but to continue to draw down on the NWF.


In Taking Crimea, Putin Gains a Sea of Fuel Reserves

May 17, 2014

by William J. Broad

New York Times

When Russia seized Crimea in March, it acquired not just the Crimean landmass but also a maritime zone more than three times its size with the rights to underwater resources potentially worth trillions of dollars.

Russia portrayed the takeover as reclamation of its rightful territory, drawing no attention to the oil and gas rush that had recently been heating up in the Black Sea. But the move also extended Russia’s maritime boundaries, quietly giving Russia dominion over vast oil and gas reserves while dealing a crippling blow to Ukraine’s hopes for energy independence.

Russia did so under an international accord that gives nations sovereignty over areas up to 230 miles from their shorelines. It had tried, unsuccessfully, to gain access to energy resources in the same territory in a pact with Ukraine less than two years earlier.

“It’s a big deal,” said Carol R. Saivetz, a Eurasian expert in the Security Studies Program of the Massachusetts Institute of Technology. “It deprives Ukraine of the possibility of developing these resources and gives them to Russia. It makes Ukraine more vulnerable to Russian pressure.”

Gilles Lericolais, the director of European and international affairs at France’s state oceanographic group, called Russia’s annexation of Crimea “so obvious” as a play for offshore riches.

In Moscow, a spokesman for President Vladimir V. Putin said there was “no connection” between the annexation and energy resources, adding that Russia did not even care about the oil and gas. “Compared to all the potential Russia has got, there was no interest there,” the spokesman, Dmitry Peskov, said Saturday.

Exxon Mobil, Royal Dutch Shell and other major oil companies have already explored the Black Sea, and some petroleum analysts say its potential may rival that of the North Sea. That rush, which began in the 1970s, lifted the economies of Britain, Norway and other European countries.

William B. F. Ryan, a marine geologist at the Lamont-Doherty Earth Observatory of Columbia University, said Russia’s Black Sea acquisition gave it what are potentially “the best” of that body’s deep oil reserves.

Oil analysts said that mounting economic sanctions could slow Russia’s exploitation of its Black and Azov Sea annexations by reducing access to Western financing and technology. But they noted that Russia had already taken over the Crimean arm of Ukraine’s national gas company, instantly giving Russia exploratory gear on the Black Sea.

“Russia’s in a mood to behave aggressively,” said Vladimir Socor, a senior fellow at the Jamestown Foundation, a research group in Washington that follows Eurasian affairs. “It’s already seized two drilling rigs.”

The global hunt for fossil fuels has increasingly gone offshore, to places like the Atlantic Ocean off Brazil, the Gulf of Mexico and the South China Sea. Hundreds of oil rigs dot the Caspian, a few hundred miles east of the Black Sea.

Nations divide up the world’s potentially lucrative waters according to guidelines set forth by the 1982 Law of the Sea Treaty. The agreement lets coastal nations claim what are known as exclusive economic zones that can extend up to 200 nautical miles (or 230 statute miles) from their shores. Inside these zones, countries can explore, exploit, conserve and manage deep natural resources, living and nonliving.

The countries with shores along the Black Sea have long seen its floor as a potential energy source, mainly because of modest oil successes in shallow waters.

Just over two years ago, the prospects for huge payoffs soared when a giant ship drilling through deep bedrock off Romania found a large gas field in waters more than half a mile deep.

Russia moved fast.

In April 2012, Mr. Putin, then Russia’s prime minister, presided over the signing of an accord with Eni, the Italian energy giant, to explore Russia’s economic zone in the northeastern Black Sea. Dr. Ryan of Columbia estimated that the size of the zone before the Crimean annexation was roughly 26,000 square miles, about the size of Lithuania.

“I want to assure you that the Russian government will do everything to support projects of this kind,” Mr. Putin said at the signing, according to Russia’s Interfax news agency.

A month later, oil exploration specialists at a European petroleum conference made a lengthy presentation, the title of which asked: “Is the Black Sea the Next North Sea?” The paper cited geological studies that judged the waters off Ukraine as having “tremendous exploration potential” but saw the Russian zone as less attractive.

In August 2012, Ukraine announced an accord with an Exxon-led group to extract oil and gas from the depths of Ukraine’s Black Sea waters. The Exxon team had outbid Lukoil, a Russian company. Ukraine’s state geology bureau said development of the field would cost up to $12 billion.

“The Black Sea Hots Up,” read a 2013 headline in GEO ExPro, an industry magazine published in Britain. “Elevated levels of activity have become apparent throughout the Black Sea region,” the article said, “particularly in deepwater.”

When Russia seized the Crimean Peninsula from Ukraine on March 18, it issued a treaty of annexation between the newly declared Republic of Crimea and the Russian Federation. Buried in the document — in Article 4, Section 3 — a single bland sentence said international law would govern the drawing of boundaries through the adjacent Black and Azov Seas.

Dr. Ryan estimates that the newly claimed maritime zone around Crimea added about 36,000 square miles to Russia’s existing holdings. The addition is more than three times the size of the Crimean landmass, and about the size of Maine.

At the time, few observers noted Russia’s annexation of Crimea in those terms. An exception was Romania, whose Black Sea zone had been adjacent to Ukraine’s before Russia stepped in.

“Romania and Russia will be neighbors,” Romania Libera, a newspaper in Bucharest, observed on March 24. The article’s headline said the new maritime border could become a “potential source of conflict.”

Many nations have challenged Russia’s seizing of Crimea and thus the legality of its Black and Azov Sea claims. But the Romanian newspaper quoted analysts as judging that the other countries bordering the Black Sea — Georgia, Turkey, Bulgaria and Romania — would tacitly recognize the annexation “in order to avoid an open conflict.”

Most immediately, analysts say, Russia’s seizing may alter the route along which the South Stream pipeline would be built, saving Russia money, time and engineering challenges. The planned pipeline, meant to run through the deepest parts of the Black Sea, is to pump Russian gas to Europe.

Originally, to avoid Ukraine’s maritime zone, Russia drew the route for the costly pipeline in a circuitous jog southward through Turkey’s waters. But now it can take a far more direct path through its newly acquired Black Sea territory, if the project moves forward. The Ukraine crisis has thrown its future into doubt.

As for oil extraction in the newly claimed maritime zones, companies say their old deals with Ukraine are in limbo, and analysts say new contracts are unlikely to be signed anytime soon, given the continuing turmoil in the region and the United States’ efforts to ratchet up pressure on Russia.

“There are huge issues at stake,” noted Dr. Saivetz of M.I.T. “I can’t see them jumping into new deals right now.”

The United States is using its wherewithal to block Russian moves in the maritime zones. Last month, it imposed trade restrictions on Chernomorneftegaz, the breakaway Crimean arm of Ukraine’s national gas company.

Eric L. Hirschhorn, the United States under secretary of commerce for industry and security, said sanctions against the Crimean business would send “a strong message” of condemnation for Russia’s “incursion into Ukraine and expropriation of Ukrainian assets.”

Alexandra Odynova contributed reporting from Moscow.




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