A Presentation to Anti-NATO Conference, Moscow, May 15, 2012

Prof. Peter Dale Scott

I wish to thank the organizers of this conference for the chance to speak about the acute problem of the Afghan drug traffic, a current threat to both Russia and U.S.-Russian relations. I will discuss today the deep political perspective of my book Drugs, Oil, and War, which looks at factors underlying the international drug traffic and also U.S. interventions harmful to the interests of both the Russian and American people. I will also talk about the role of NATO in facilitating strategies for U.S. hegemony in Asia. But first I want to look at the drug traffic in the light of an important factor that is prominent in my book: the role of oil in U.S. policies for Asia, and also the role of the major international U.S.-aligned oil companies, including BP.

Oil has been a deep driving force behind all recent U.S. and NATO offensive actions: one has only to think about Afghanistan in 2001, Iraq in 2003, and Libya in 2011.  

My book studies the role of oil companies and their representatives in Washington (including lobbies) in all of the major U.S. interventions since Vietnam in the 1960s.  The power of U.S. oil companies may need a little explanation to an audience in Russia, where oil companies are controlled by the state. In America the relationship is almost reversed: oil companies tend to dominate both U.S. foreign policy and also the U.S. Congress. This explains why presidents from Kennedy to Reagan to Obama have been powerless to limit the oil industry’s special tax break called the oil depletion allowance, even now when most Americans are sinking deeper into poverty.

The underlying cause of U.S. activity in Central Asia, in traditional areas of Russian influence like Kazakhstan, lies in the heightened interest of western oil companies and their representatives in Washington, for three decades or longer, in developing and above all controlling the underdeveloped oil and gas resources of the Caspian basin. To this end Washington has developed policies that have produced forward bases in Kyrgyzstan and for four years in Uzbekistan (2001-05).  The overt purpose of these bases was to support U.S. military operations in Afghanistan. But the U.S. presence also encourages the governments in nearby Kazakhstan and Turkmenistan, both areas of U.S. oil and gas investment, to act more independently of Russian approval.

Washington serves the interest of western oil companies, not just because of their corrupt influence over the administration, but because the survival of the current U.S. petro-economy depends on western domination of the global oil trade. A passage in Drugs, Oil, and War describes this policy, and how it has contributed to recent American interventions, and also the impoverishment of the Third World since 1980. In essence, the U.S. handled the quadrupling of oil prices in the 1970s by arranging, by means of secret agreements with the Saudis, for the recycling of petrodollars back into the U.S. economy. The first of these deals assured a special and on-going Saudi stake in the health of the U.S. dollar; the second secured continuing Saudi support for the pricing of all OPEC oil in dollars.  These two deals assured that the U.S. economy would not be impoverished by OPEC oil price hikes. The heaviest burdens would be borne instead by the economies of less developed countries.

The U.S. dollar, weakening as it is, still depends largely on the OPEC policy of demanding U.S. dollars for payment of OPEC oil. Just how strongly America will enforce this OPEC policy can be seen by the fate of those countries that have chosen to challenge it. “Saddam Hussein in 2000 insisted Iraq's oil be sold for Euros, a political move, but one that improved Iraq's recent earnings thanks to the rise in the value of the euro against the dollar." Three years later, in March 2003, America invaded Iraq. Two months after that, on May 22, 2003, Bush by executive order decreed that Iraqi oil sales would be returned from Euros to dollars.

Shortly before the 2011 NATO intervention in Libya, Qaddafi, according to a Russian article, initiated a movement, like Saddam Hussein’s, to refuse the dollar for oil payments.  Meanwhile Iran, in February 2009, announced that it had “completely stopped conducting oil transactions in U.S. dollars.” The full consequences of Iran’s daring move have yet to be seen.

I repeat: every recent U.S. and NATO intervention has served to prop up the waning dominance of western oil companies over the global oil and petrodollar system. But I believe that oil companies themselves are capable of initiating or at least contributing to political interventions. As I say in my book (p.8):

There are recurring allegations that US oil companies, either directly or through cut-outs, engage in covert operations; in Colombia (as we shall see) a US security firm working for Occidental Petroleum took part in a Colombian army military operation "that mistakenly killed 18 civilians.”

More relevant to Russia was a 2002 covert operation in Azerbaijan, a classic exercise in deep politics. There former CIA operatives, employed by a dubious oil firm (MEGA Oil), “engaged in military training, passed ‘brown bags filled with cash’ to members of the government, and set up an airline...which soon was picking up hundreds of mujahedeen mercenaries in Afghanistan.” These mercenaries, eventually said to number 2000, were initially used to combat Russian-backed Armenian forces in the disputed region of Nagorno-Karabakh; but they also backed Muslim fighters in Chechnya and Dagestan. They also contributed to the establishment of Baku as a transhipment point for Afghan heroin to both the Russian urban market and also the Chechen mafia.

In 1993 they also contributed to the ouster of Azerbaijan’s elected first president, Abulfaz Elchibey, and his replacement by Heidar Aliyev, who then agreed to a major oil contract with BP, including what eventually became the Baku-Tbilisi-Ceyhan pipeline to Turkey. Note that the U.S. background of the MEGA Oil operatives is unmistakable. However who financed MEGA is unclear; and may have been the oil majors, many of which have or have had their own covert services. There are allegations that major oil corporations, including Exxon and Mobil as well as BP, were “behind the coup d’état” replacing Elchibey with Aliyev.

It is clear that Washington and the oil majors have a common perception that their survival depends on maintaining their present dominance of international oil markets. In the 1990s, when it was widely believed that the world’s largest unproven reserves of hydrocarbons lay in the Caspian basin of Central Asia, this region became the central focus for both corporate U.S. petro investment and also for U.S. security expansion.

Clinton’s close friend Strobe Talbot, speaking as Deputy Secretary of State, attempted to put forward a reasonable strategy for this expansion. In an important speech of July 21, 1997,

Talbot outlined four dimensions of U.S. support to the countries of the Caucasus and Central Asia: 1) The promotion of democracy; 2) The creation of free market economies; 3) The sponsorship of peace and cooperation within and among the countries of the region: and, 4) integration into the larger international community.... Inveighing against what he considers an outdated conception of competition in the Caucasus and Central Asia, Mr. Talbot admonished any who would consider the "Great Game" as a model on which to base current views of the region. He proposed, instead, an arrangement where everyone cooperates and everyone wins.

But this multipolar approach was immediately attacked by members of both parties. Only three days later, the right-wing Heritage Foundation, think-tank for the Republican Party, charged that, "The Clinton Administration -- intent on placating Moscow -- has hesitated to take advantage of the strategic opportunity to secure U.S. interests in the Caucasus."[20] In October this critique was echoed in a new book, The Grand Chessboard, by former National Security Advisor Zbigniew Brzezinski, perhaps Russia’s most important opponent in the Democratic Party. Conceding that the “ultimate objective of American policy should be... to shape a truly cooperative global community,” Brzezinski nonetheless defended for now the “great game” that Talbot had rejected. “It is imperative,” he wrote, “that no Eurasian challenger emerges, capable of ... challenging America.”

Meanwhile, behind this verbal debate, the CIA and Pentagon, through NATO, were developing a “forward strategy” in the area that was antithetical to Talbot’s. Under the umbrella of NATO’s Partnership for Peace (PFP) Program, the Pentagon in 1997 began military training exercises with Uzbekistan, Kazakhstan, and Kyrgyzstan, as “the embryo of a NATO-led military force in the region. These CENTRAZBAT exercises had in mind the possible future deployment of U.S. combat forces; and a deputy assistant secretary of defence, Catherine Kelleher, cited “the presence of enormous energy resources” as a justification for American military involvement.  Uzbekistan, which Brzezinski singled out for its geopolitical importance, became the linchpin of U.S. training exercises, despite having one of the worst human rights records locally.

The American sponsored “Tulip Revolution” in Kyrgyzstan (March 2005) was another conspicuous product of the CIA-Pentagon forward strategy doctrine. It came at a time when George W. Bush repeatedly spoke of a “forward strategy of freedom,” and Bush later, when visiting Georgia, endorsed the changeover (more like a bloody coup d’état than a “revolution”) as an example of “spreading democracy and freedom.” But the new Bakiyev regime, in the words of Columbia University Professor Alexander Cooley, "ran the country like a criminal syndicate.” In particular many observers accused Bakiyev of taking over and running the local drug traffic as a family enterprise.

To some extent the Obama regime has retreated from the hegemonic Pentagon rhetoric of (in its words) “full spectrum dominance.” But it is not surprising that under Obama pressures to reduce Russian influence (e.g. in Syria) have continued. For a half century Washington has been divided between a minority (principally in the State Department, like Talbot) who have envisaged a future of cooperation with the Soviet Union, and those hegemonic hawks (principally in the CIA and Pentagon, like William Casey, Dick Cheney and Donald Rumsfeld) who have pushed for a U.S. strategy of unipolar global domination. The latter have not hesitated to use drug-trafficking assets in pursuit of this unattainable goal, notably in Indochina, Colombia, and now Afghanistan.

Significantly, the hawks have used the drug eradication strategies of the DEA (Drug Enforcement Administration) as well.  As I wrote in Drugs, Oil, and War (p. 89),

The true purpose of most of these campaigns ... has not been the hopeless ideal of eradication. It has been to alter market share: to target specific enemies and thus ensure that the drug traffic remains under the control of those traffickers who are allies of the Colombian state security apparatus and/or the CIA.

This has been conspicuously true in Afghanistan, where the U.S. recruited former drug traffickers to join in its 2001 invasion. Later the U.S. announced a drug reduction strategy that was explicitly limited to attacking those drug traffickers supporting the insurgents.

Thus those concerned (as I am) with reducing Afghan drug flows are faced with a dilemma. Effective strategies against international drug trafficking must be multilateral, and in Central Asia they will require increased U.S.-Russian cooperation. On the other hand the energies of the principal pro-U.S. forces currently on the ground there – notably the CIA, U.S. armed forces, NATO, and the DEA – have in the past been intent primarily not on cooperation but on U.S. hegemony.

The answer I believe will lie in team efforts using the expertise and resources of both countries, housed in bilateral or multilateral agencies not dominated by either. A successful drug strategy will also have to be multi-faceted, like the successful campaign in northern Thailand, and will probably require both countries to consider people-friendly strategies not yet adopted by either.

Russia and America share many features and concerns. They are both still super states, even if now losing pre-eminence in the face of a rising China. As superpowers both were tempted into Afghan adventures that many wiser heads regret. Meanwhile Afghanistan, now a ravaged country, presents urgent problems for all three super states: the menace of drugs, and the related menace of terrorism.

The whole planet has a stake in seeing Russia and America deal with these menaces constructively and not exploitatively. And any progress made in reducing these shared threats will hopefully be another step in the difficult process of learning to consolidate peace.

The last century saw a Cold War between the US and the USSR, two super states which both armed heavily in the name of defending their people. The USSR lost, leaving an unstable Pax Americana much like the Pax Britannica of the 19th century: that is, a dangerous mix of globalizing commerce, increasing disparity of wealth and income, and wildly excessive and expansive militarism, leading to increasing conflict (Somalia, Afghanistan, Iraq, Yemen, Libya), and increasing danger of a possible new world war (Iran).

To preserve its perilous dominance the US today is arming against its own people, not just in defence of them. All the peoples of the world, including the American, have a stake in seeing that expansive dominance reduced, towards a less militarist and more multipolar world.

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