Not afraid of the IMF and Federal Reserve – Belarus President Alexander Lukashenko defends country and currency with war dirigism. Will Putin follow?
Webster G. Tarpley, Ph.D.
TARPLEY.net – World Crisis Radio
December 29, 2014
TRANSCRIPT (3:26 - 8:52)
The economic crisis in Eastern Europe of course includes Russia, which is now under heavy attack from the International Monetary Fund and its stooges – London and New York calling the shots on that one. These are not markets, these are economic attacks; this is economic warfare, not the workings of some mythical neoliberal market. But now, in the middle of all of this, we've got a shining ray of light: we have Belarus – gold is where you find it – Belarus, under President Lukashenko; and Lukashenko, for various reasons, is particularly hated by the Anglo-American elites. They would like to give him the Gaddafi treatment, or at least a color revolution, if they could. But Lukashenko is forewarned: he knows what a color revolution looks like – it's been tried a couple of times there. These are people who have seen the chaos of a color revolution in Ukraine, right next door; they've seen what it has meant for places like Libya and Syria. I hope there are not too many dupes and useful idiots running around in Belarus, because this government has now established something which is of universal value – and that is economic self-defense.
The government of Belarus, under President Lukashenko, in the capital of Minsk, has declared, first of all, If you want to export capital from Belarus, great: you pay 30%. You pay a tax of 30% – almost one-third of your flight capital will go to help the treasury. So if you're a libertarian, if you're a rip-off artist, if you're a leech, a parasite, a tick on the body of Belarus, and you try to get out of town with your ill-gotten gains, great: you're gonna take a haircut of 30%! This is how to treat speculators; this is how to treat those who go for economic warfare and call that their liberty. That's no liberty, that's license. That's sociopathic behavior. Belarus has shown the way. Remember, in the previous crisis, back in 1998, which is now on everybody's lips, it was Mahathir Mohamad of Malaysia who blazed the trail – showing, under those conditions back then, that a country that put in capital controls, and exchange controls, would have an easier time of riding out that crisis, than at the present time.
So Belarus says, 30% tax on capital exports. It also means that it's all reportable; I imagine it means that you have to report it, and if they don't want you to do it, they're gonna tell you, no, you can't do it at any price – forget about the 30%. But this is capital controls, exchange controls – and then some. It's exchange control with real teeth. This is exemplary. Go Belarus! And then the other thing they've done is, if you're bringing foreign exchange into the country – if you bring in dollars, euros, or yen, or whatever it is – you can't just hoard that, you can't just sit on that: you've got to exchange one-half of that for Belarus rubles. So you've gotta change it into Belarus rubles, and that simply means that your export earnings will be a support operation to buy Belarus rubles to prop up the currency – to support the national currency, and to counteract the baleful effects of flight capital.
Now remember, things have gotten much worse since 1998. In 1998, we had not had the general deregulation of the derivatives – in particular, credit default swaps. That happened in the year 2000, with the Commodity Exchange Modernization Act, signed by Clinton, whose wife now thinks she deserves to be President – based on what? Based on knocking down Glass–Steagall in 1999 and liberalizing derivative plague for the world in 2000. Well, as a result of those actions, since 2000 we've had this tremendous growth, this cancerous growth, hypertrophy of derivatives; and the derivatives are being used to attack Russia. But Belarus has put up an effective barrier. This is a small country. It would be wonderful – the NATO people would love – to have a color revolution in Belarus, knock off Lukashenko, and bring the NATO potential borders all the way into historic Russia, practically to Smolensk. They'd get Minsk, and they would like to get very close to Smolensk; and let's hope they don't. Because we don't want this: this is the road to World War 3. Therefore, what Belarus has done is actually a step for peace.
The neoliberal former Russian Finance Minister and IMF shock therapy advocate Aleksei Kudrin impudently blamed President Putin for problems created by US economic sanctions, by Prince Bandar's oil dumping policy, and by the flight capital activities of his fellow Russian oligarchs. Reuters reports that the Russian government is already implementing "informal capital controls."