THE PERKS FOR PUTIN OF HIS RUSSIAN MISCALCULATION

First things first: German Gas Diplomacy... Europe, Ukraine, and Russia The first action that Germany took against the invasion of Ukraine by Russia was to suspend the license of the Nord Stream 2 gas pipeline. Nord Stream 2 was the way how Angela Merkel tried to collude common interests between Germany and Russia, and manage her struggles for the always difficult relationship with Vladimir Putin. Now that She is gone, Energy Diplomacy is gone with her: a policy of inter-dependence in peace that was chosen by the German People better than one of conflict and war. Unfortunately, Putin had his own version of Energy Diplomacy, and his own plans for Russia, Ukraine, Europe, and the Globe. He; nevertheless, is not winning... This article is the second part of a previous article that depicted the general game that Putin is playing as an Energy Diplomacy (and War). STAGNATION AND STAGFLATION Stagnation in Economics is the state of not flowing or moving in the markets. Its results are the lack of activity, ill-growth, and absent development. The same, Stagflation in Economics means a persistent state of high inflation combined with high unemployment and stagnant demand in a country's markets, state, and society. They in Russia and We in the World are all entering into stagnation and stagflation. That means hunger and poverty: the first enemy of local and national governments. The World hates poverty nowadays, and that is why -in the game we explained in a previous article- that in special covered the first chapter of Putin's "Oil Diplomacy" in Latin America, some Latin American leaders are projected to abandon the game of Putin in order to follow their own national games, the same as will get appointed to gatherings in the regional, continental and global forums, for playing the new game that is starting to being played for protecting all the economies and societies against stagnation and stagflation. THE DEFINITIVE FALL OF THE USSR? Heroic Ukraine will most probably enter World history as the country that defeated, in coalition with the rest of the World, the last remaining of the Union of Soviet Socialist Republics: Vladimir Putin. Putin himself, and not Russia as a whole, has gone extremist by trying to create weaknesses affecting other countries, by intervening in their elections, by supporting revolts, and by hiring old leaders in its strategic media spaces. That evil game never ends well: the global consensus goes against totalitarianism, declines egos, goes for the weak, bets on globalization, democracy, stability, and freedom. People in the World have shown able to sacrifice for paying the costs of War. Maybe, the recent pandemia, the revaluation of the role of the family, the hunger for growth, and the hate of the lack of freedom that lockdowns generated, explain why Russia is confronting so much resistance inside Ukraine and around the Globe. Putin's miscalculation has diminished the very old power of domination game that he planted from Russia over America (as a continent). Putin tried to do mimic what he experienced since Germany exerted power over Russia first, after the disappearance of the URSS via Energy Diplomacy. He learned fast and tried to touch base in Latin America with the same recipe. Fortunately, he failed in understanding the global economic dimensions that local powers have over public (and private) oligarchs at the time of receiving investment and infrastructure diplomacy. He failed to develop ties with good links inside the different countries, and so, what his allies can offer him has no value for making him a global really strong player in different countries over several continents. While that frustrates Putin, he becomes more violent and tries to extend his old game that passes from local to continental and global. Germany understands that, and as a measure of the multi-continent alliance where Germany is playing, the first move was to make globally observable that they were ready to suffer. As the previous chapter of this article explained, the suffering has started by Russia on the grounds of exchange rates (where Russia is losing ground in a heavy manner) but has had devolution effect via increase of oil prices, where Russia supposed it was going to recover strenght but has not been able to cash out the gains because of the painful sanctions that have Russia out of the global financial circuits. Let´s see the figures. Nordstrom 2 Under the impossibility of playing fairly in the oil game, heavy investments were made under German Gas Diplomacy (1): €9.5 billion (US$10.6 billion) were invested in Nordstrom2 0.27% of German GDP, the equivalent of 0.71% of Russian GDP, of 11% of Ecuadorian GDP, and of 4% of Chilean GDP, were required to build a 1,230 kilometers long "diplomatic" pipeline (764 miles) that was a means for granting peace through the longest subsea pipeline in the world. Conceived under the Energy-Diplomacy of Germany more than a decade ago, construction finally began in May 2018 and was completed in September 2021. The pipeline is ready and runs through the Baltic Sea, connecting Germany to Russia, thanks to political agreements that granted peace and the opportunity to have a co-financed project where the very same Russians (via Gazprom) invested the most, along with several other European energy companies. The relative power of the European Union and its Economic cornerstone in Germany over Russia sounds very much like the phrase of Donald Trump towards its poorer neighbor, Mexico: "We will build a wall, and the Mexicans will finance it". The magnitude of the problem Even with the main financing of the Russians, the sanctions of Germany affect the last in a hard way, as long as they chose peace and mutual investment as the way forward for inter-dependence. Sanctions fall over both heads, as a result of that interdependence, and sanctions are the ultimate (still) diplomatic measure for protecting the always common (still, even in disregard interests in the long run. The Germans are not walking alone overt that cord, and get together with the rest of Europe and the United Kingdom (UK) in the short-run consequences of the sanctions. As a matter of fact, Russia's war on Ukraine could leave 8.5m UK households in fuel poverty according to https://www.energylivenews.com/. By attacking the "Russian energy giant Gazprom" as a subject to many sanctions across Europe, not only by taking away his license to operate in Germany but also by banning them to operate financially in the UK, the company will no longer be the operator of Energy Diplomacy, while it could no longer issue debt or equity after the conflict's first week. That is life nowadays Russian Government, Russian Corporations and Russian Oligarchs are now pahrias in the new European Diplomacy towards Russia. The result of a War is very well known: nobody wins. Unfortunately for the rest of the World, as long as that European continent´s diplomatic echoes are those of having started what many call a probable Third World War, Latin America has begun to suffer at least on the side of the benefits of producing, or the costs of consuming Energy, Gas, and Oil. That is where the now Old Oil Diplomacy of Putin has entered the game, in special through the roots that Russia developed over the years with Brazil, Mexico, Colombia, Venezuela, Argentina, Ecuador, and even Guyana, or Suriname: the top Oil producers of America: Source: https://www.statista.com/statistics/961585/latin-america-crude-oil-production-country/ Side Effects in Latin America Latin American countries, the same as global agencies, including those of the German government have stated their aim to accelerate renewable energy projects to reduce its reliance on oil, gas, and energy. These days, the run is against Russian oil and gas. Gas is currently used to heat half the homes in Germany, which has led to the nation setting a new target for renewable sources to account for 80% of its electricity needs by 2030 and all of them by 2035." If Putin wins the war, will lose its economy. In fact, he is losing it each minute he cannot export, trade, and sell its gas, oil, and other resources that he and his oligarchs will probably compensate with the appropriation of Ukraine heritage, as he risky bets. Putin's Oil Diplomacy in Latin America After the fall of the Soviet Union, where Putin was the Intelligence Master of a dismal lost empire, Putin´s In 2004, while working as Deputy Minister of Economics of Ecuador, I received an invitation from the dear "Universidad de Cuenca" for discussing Oil Diplomacy with my appreciated colleague Alberto Acosta. Programming Public Investment was my principal duty at those times, and our main governmental financing for that was the rents coming from the exports of crude oil. We had implemented a successful program of PPPs (Public-Private Partnerships) for receiving investments from the world in order to accelerate Ecuadorian public rents that allowed us to cut public debt, save interests, and program new projects of public investments with a view on the middle and long run, based on the certainty of the flows expected by the oil projects with international private partners of Ecuador. Our economic program also considered having debt swaps with Germany, Italy, Canada, the UK, and the creation of a National Program of Poverty Reduction that I had to lead together with the "Executive Cabinet" of Under-Secretaries of State in the different sectors of the state, for working in PPPs not only in Oil, Energy, Mining, Transport, and other infrastructures, but also for Education, Health, and other public industries, following the Chilean Model that I had studied and lived for 5 years in the Academia and the Consultancy before going back to Ecuador in order to implement what was seen as very successful at those times not only in Ecuador and Latin America but also in Europe, where I also had studied Public Finance and Social Protection Financing specialization and post-grade (Master) studies (in Maastricht, The Netherlands). Because of that, I received with good spirit the invitation to debate with my colleague Alberto Acosta, a brilliant leader of the Ecuadorian Left, that was specialized in Energy, received heavy financial support from the Germans (he specialized there) for his research and work, and a person that was always debating in our Alma Mater (the Pontifical Catholic University) where we both graduated as Economists with several years of difference. I liked to hear the debates of Alberto with his real counterpart: Pablo Lucio Paredes, another fellow Economist, who was a professor of mine during my undergraduate studies in Economics, and my original specialization in Finance and Development; therefore, the invitation to debate with Alberto was received with emotion and respect. Alberto is present, these days in Chile, and I remembered that debate because he became again famous because he attended a meeting with the Constitutional Convention here, in Santiago, as part of an international delegation, where the strangest thing happened: a Chilean girl got in the nude for revindicating the rights of Nature. I received an invitation from a mutual colleague that is also in the delegation that was invited by the Constitutional Convention, to hear them at the dear "Universidad de Chile" on Monday. I will certainly go, in order to see them as dear good old friends and colleagues, even when our different positions on development, constitutions and other issues for the Economy of Latin America and the World differ substantially. While thinking about what to discuss with them for Monday, I decided to write during the weekend, in English, in order to communicate better with the World about some views that people like me (sorry to put this in first person, but is necessary for the purpose of the article) have to say to Europe and the World in terms of what has been happening for decades in Latin America under the influence of Putin's Oil Diplomacy, and the nearing fields of its results here in Lat-Am, but also the war echoes of that that we all hear coming from Germany, France, the dear United Kingdom, where I also studied on Responsible Business, and of course, in loved Ukraine, where freedom is totally under attack, this time not by oil diplomacy, but because Putin wants all the oil, energy, and reserves of that very, but very rich country. Pro Putin Latin American Leaders Acosta I remember Alberto Acosta mentioning the Oil Diplomacy for the first time in Cuenca, Ecuador in 2004. By then, I made no connection between Putin and Oil Diplomacy, but only saw the role of Germany towards Nature Rights, that was the other topic touched then by Alberto. Both were new terms for me then (18 years ago). Alberto José Acosta Espinosa (Quito, 21 de julio de 1948) is 20 years older than me so, he has way more experience than one can have. In addition, I recognize his intelligence and talent, the same as his genuine (sometimes "crazy", as all the fellow Economics always said about him) search for development, with his single and lifetime position: leftism. On my side, as Editor of ADN@+, you can read my antagonistic but dialog-based position compared to that of Alberto and other leaders that have always received my points of view and actions as something that was good for the national and international common goals in life: serving with love. One of the most interesting debates with Alberto was not that in Cuenca, but a previous one, in 2001 when he was opposed to Dollarization and was the supporting intellectual behind the clear position of the Confederation of Indigenous Nationalities of Ecuador (CONAIE), that was opposed to Dollarization. Both were based on ideological grounds, and both were very strong at that time after having taken down President Mahuad, who took the decision of Dollarizing Ecuador. They both saw the new "national" currency (the US Dollar) as a threat to the development of a leftist regime (that they wanted) in the future. As a former World Bank-financed consultant and advisor to the Presidency in terms of social policy reform and consistency analysis in the economics of the reforms, I had been part of the team that discussed heavily (in the Presidency) the decision of dollarizing Ecuadorian Economy. My point and evidence were that Dollarization would control inflation, and that impacted heavily over poverty. Dollarization was the best social policy for the moment and for the future because that would bring down inflation and would allow Ecuadorians and -in special- rural populations, to have a way out of poverty. Alberto and I discussed and agreed on that point in the Presidency of the Republic, and that allowed us to discuss with other colleagues in the political teams of those times, where we served with love to the National Dialogue, appointed by President Gustavo Noboa (@+). Pure diplomacy and dialogue worked well, and the Indigenous Groups supported (happily) the Dollarization of Ecuador, which later saved the country from avoiding becoming Venezuela when a real leftist government took place in Ecuador with Rafael Correa, who was one of the leaders backed by Putin's Oil Diplomacy, as I learned with the years. Chavez I remember another conversation with Alberto Acosta, in 2006, when he invited me to a panel in FLACSO, where we both were teaching on economics and development to the Master's Program in Development there. I was not well-received by the other fellows who always knew that I was a social expert of the right wings of politics in Ecuador. but Alberto again had the kindness of inviting me to the panel of debate. I had no chance of mentioning anything but heard lots about Oil, prices, Oil Diplomacy, and the support for a process where "liberation" was to come. There was no debate possible there, and I, fortunately, had to retire in order to attend class with my students. That was my encounter with the head masters of what later would be the revolt of the Socialism of the 21st Century. Correa Trump Bolsonaro Acosta: again? Nature and Society in Latin America in WarTimes As 22022022 is a palindromic number, Oil Diplomacy is the same for what we see clearly after that figure: the support of some Latin American leaders towards Vladimir Putin in war times. Global Nature and Society for PeaceTimes As 22022022 is a palindromic number, Gas Diplomacy is the same for what we see clearly after that figure: the abandonment of German and European leaders' support towards Vladimir Putin in war times. (1) "Energy Diplomacy: Germany, the Soviet Union, and the Oil Crisis" (Frank Bösch, Universität Potsdam, January 2014). Historical Social Research / Historische Sozialforschung 39(4):165-185