Friday 10 June 2022

Nato's Economic War Is Causing Global Famines

NATO's economic war, its boycotting of Russian exports, and action to exclude Russia from global payments systems such as SWIFT, which prevents countries being able to buy Russian commodities, and pay for them via these systems, controlled by the US, is leading to famine in Africa, and other parts of the globe. That is both because it has caused a huge rise in primary product prices, including food, but also of actual shortages of them, including for things like fertiliser, needed to ensure successful crops.  UNCTAD produced these charts.


Africa was already suffering increased poverty and malnutrition, even before the recent spike in food prices, because, although Africa was not badly affected by COVID, as it has younger populations, who are not affected by the virus, it did suffer from the global imposition of idiotic lockdowns of economic activity, which slashed global output of everything, and restricted trade, which combined with huge amounts of liquidity injections, led to rampant inflation, which is continuing to rise across the globe.

As Human Rights Watch state,

“Many countries in East, West, Middle, and Southern Africa rely on Russia and Ukraine for a significant percentage of their wheat, fertilizer, or vegetable oils imports”

And,

“Even countries that import little from the two countries are indirectly impacted by higher world prices for key commodities.”

A look at the FAO, Food Price Index for so far this year, illustrates the point, compared to recent years.

NATO has tried to claim that the food shortages are due to Russia blockading Ukrainian grain exports. The inability of Ukraine to export its grain undoubtedly contributes to that, but a look at this other graphic shows that that is less than half the truth, because Russia accounts for double the amount of grain exports that Ukraine, does, and most of it goes to countries in the Middle East and Africa, such as Egypt, Sudan, Nigeria, Senegal, and Yemen, as well as to Asia, to Bangladesh, Turkey, and Vietnam.



It was known back in January that NATO sanctions on Russia would slash its grain exports, and so cause global food prices to soar further, and that was their intention. The claims of NATO that the current famines are solely the responsibility of Russian blockades of Ukraine, are clearly false, and just part of its global propaganda war.

#

Country

Value

in thousands of USD

1

 Russia

7,918,294

2

 United States

6,318,111

3

 Canada

6,317,889

4

 France

4,528,591

5

 Ukraine

3,594,217

6

 Australia

2,698,498

7

 Germany

2,105,865

8

 Argentina

2,029,494

9

 Kazakhstan

1,137,140

10

 Poland

1,047,399

A look at the list of the world's top wheat exporters shows that Ukraine is only the fifth largest wheat exporter, with Russia leading the pack, and exporting double the amount of Ukraine. It is fairly clear that, on that basis, NATO's boycotts and sanctions against Russian exports are what is having most effect on limiting supplies, causing prices to spike, and leading to global famines.

Nor is it just with foodstuffs. The same sanctions are preventing Russian exports of fertiliser, essential for farmers across the globe, and particularly in developing economies, where they do not have domestic production. But, also, the sanctions on Russian oil and gas exports have caused oil and gas prices to rise astronomically, meaning that feedstock for CO2, required for fertiliser production has also become too expensive for many producers.

On Bloomberg on Wednesday, Ed Morse, Global Head of Commodities Research, at Citigroup, said that we actually have a global oversupply of crude oil. The reason we have a spike in oil prices is the NATO sanctions on Russian oil exports. And, whilst the hapless Biden bemoans rising energy prices in the US, as petrol prices have hit record levels, hitting drivers, and the delivery system, it is Biden's own sanctions against Russia that has created it!

Morse says, that, across the globe, customers sought alternatives to Russian Urals Crude, and could not find it, other than from the US, which then responded to the higher prices, by increasing its exports of oil by around 2 million b/d, which then drew down US oil inventories, and led to higher domestic fuel prices. Before US sanctions against Russia, oil and gas prices were rising, because, as the global economy emerged from the idiocy of lockdowns, all of the liquidity that had been pumped into it, in the previous two years, in income replacement schemes, flooded out into expanded monetary demand, and suppliers could not increase supply fast enough, so that the liquidity fed into rising prices for everything, including all those primary products whose supply is most difficult to increase quickly.

But, even then, prices rose from around $50-60, where they had been for some time, only to around $70-80. It is the NATO sanctions that have pushed oil prices to $120, with the potential for them to go higher. Who is hurt by that? Not Russian oligarchs, or Putin, because, Russia still manages to sell oil to China, and, elsewhere, even if it has lost markets in Europe, and elsewhere, but, now does so at much higher prices, selling at around $90-100 a barrel.

The people who suffer are the developing economies who find that they must now pay much higher prices for vital energy, and who now find that things like fertiliser are not available, or else available only at exorbitant prices. Those who suffer are European countries which, in order to play second fiddle to US imperialism, have voluntarily reduced their imports of Russian oil, crippling their economies, whilst the US takes advantage of the situation to charge higher prices, and to become the world's top exporter of oil. It is European workers who have seen petrol prices rocket, heating oil prices rocket, and gas prices rise by 1000%, at one point!

But, its not just European workers, and workers and peasants in developing economies that have suffered from NATO's economic war against Russia, it is US workers too. They have also seen petrol prices soar, even if to levels that Europeans would love to be able to enjoy. And, those much higher prices for petrol in the US, also feed through into distribution costs for food and other commodities, contributing yet more to the soaring levels of inflation being seen in the US, as the oceans of liquidity that previously hyper-inflated asset prices, now flood out into the real economy. What do the speculators want in response to that inflation? They want the state to cause another recession to stop workers demanding higher wages, as unemployment rises, and to stop interest rates rising to stop asset prices crashing!

Who has benefited? It is, of course, the US oil majors, who, as Morse, says, have coined it in, as a result of NATO sanctions against Russian oil exports.

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