Topic: Donetsk, Kharkov, Lugansk - way to Russia. - page 90. (Read 734725 times)

Russia prepares 11th humanitarian aid column to be sent to Donetsk and Lugansk republics.

Russian Media Attack Belarus: a Warning for Minsk



The past few weeks have seen an unusual increase of anti-Belarusian activity in pro-government Russian media and blogs.

The Kremlin has not yet used its strongest media tools. However, the manner of the attack is in some respects similar to the information warfare which preceded Russia's annexation of Crimea.

In the face of the unfolding economic crisis in Russia and Belarus and the Belarusian presidential elections scheduled for 2015, this could signal a new shift in the relations between Russia and the regime of Alexander Lukashenka.

Second-tier media in action. Is more to come?

First, the widely-read pro-Kremlin blogger Aleksandr Shumsky has published a detailed post saying that Belarus was a natural part of Russia and suggesting that Russia should actively prevent attempts of a pro-Western revolution in Belarus.

Then, the popular entertainment TV channel REN TV on December 20 aired a half-hour long film about Belarus claiming that the West is preparing a coup d’etat in Belarus, criticising both the Belarusian opposition and the regime of Lukashenka.

Failing to spell the names of some Belarusian politicians and media outlets correctly, REN TV told its viewers about Western-sponsored bloody revolt being prepared in Belarus. This film came out as part of a three hours long marathon of anti-Western propaganda, along with conspiracy theories and homophobia.

The influential nationalistic online publication Sputnik & Pogrom is regularly publishing articles denouncing the right of Belarusians to have an independent state, denouncing the existence of the Belarusian language and culture.

Russian media portray the Belarusian democratic opposition as Nazis and accuse Lukashenka of being weak

Other publications have in the past weeks been even more aggressive in criticising things like the growth of popularity of Belarusian traditional clothing or the non-Russocentric view of Belarusian history by Belarusians.

Some of the articles, in a typical manner, portray the Belarusian democratic opposition as Nazis and accuse Lukashenka of being weak and opportunistic. The fact that Lukashenka has maintained good relations with Ukraine in 2014 is also a topic for hysterically critical publications on different levels.

Although the media participating in this campaign do not always have a formal affiliation with the Kremlin, in today's Russia there can be no illusions as to the orchestration of such things or at least their approval by state ideologists.

Anti-Belarusian propaganda has not yet reached the scale that the propaganda targeting Ukraine or the Baltic states in the past. For instance, first-tier nationwide TV channels have not yet been seriously involved in the latest round of attacks. However, this scale has certainly become the largest since a series of anti-Lukashenka films titled The Godfather aired in 2010 on the Gazprom-controlled TV channel NTV.

Lukashenka as the long-time hero of Russian nationalists

Russia's annexation of Crimea and the war in Eastern Ukraine, motivated by Russian nationalistic slogans, were preceded by a long-term information campaign. Numerous books, magazine articles and films aiming to discredit Ukrainian statehood, the Ukrainian language and culture, to demonise the Ukrainian independence movement, have been published over the past two decades and prepared the foundations for the tragic events of 2014.

At the same time, over the past years there has almost been no similar propaganda targeting Belarus. Russian nationalistic circles have never needed to resist growing Belarusian nationalism.

Lukashenka has been viewed as a hero and even as a desired ruler of Russia

The authoritarian regime of Alexander Lukashenka, established with direct Russian support and enjoying serious political and financial aid from Russia over the past two decades, has always had an ideology very close to Russian (or Soviet) revanchism.

In 1995, Lukashenka has de-facto restored Soviet state symbols and reintroduced Russian language as the dominating language in Belarus. The regime has cracked down the Belarusian national revival at the very same time as it has cracked down democracy and human rights.

Therefore, for the past two decades Russian nationalists could have viewed their goals regarding Belarus as almost achieved, with the exception of a formal incorporation of Belarus into Russia. Lukashenka has been viewed as a hero and even as a desired ruler of Russia by many Russian conservatives and nationalists.

Belarus: Kremlin’s next victim or its Trojan Horse?

The activation of anti-Belarusian propaganda in Russian media can be a warning and an indicator of Kremlin’s Belarusian agenda for 2015. For, in late 2014, the danger of an actual annexation of Belarus is higher than in previous years.

Russian society has greeted the incorporation of Crimea with great enthusiasm. Following this, approval ratings of President Vladimir Putin have been at an all-time high. However, towards the end of 2014 Western sanctions and falling oil prices have led Russia into an economic crisis.

The approval ratings are bound to fall, which creates a temptation for the Kremlin to repeat the "small and victorious" enlargement of Russia’s territory. And for this purpose, the compact, controlled and internationally isolated Belarus could be an attractive target.

Moreover, in 2015, presidential elections are scheduled to take place in Belarus. Together with a growing risk of a serious economic crisis in Belarus, this creates vulnerability and a window of opportunities for the Kremlin.

In this information war Lukashenka may just be a Trojan Horse in Kremlin’s hands

This also corresponds with what Gleb Pavlovsky, a former Kremlin ideologue and PR mastermind, said in his recent interview when commenting on the media attack being mounted against Lukashenka "[Putin’s system today] can’t bear any compromises and must turn an insecure ally [like Lukashenka] into an enemy".

Moreover, the criticism of Lukashenka will be a good topic for the Kremlin to turn society’s attention away from the economic problems and the failure of the war in eastern Ukraine, Pavlovsky said.

On the other hand, there is a less widespread opinion out there that in this latest information war Lukashenka is just a Trojan Horse in the Kremlin’s hands. Some Belarusian activists suggest that this wave of propaganda may have been initiated by Lukashenka himself using his regime's influence in the Russian media.

This could help him gain support from progressive circles inside Belarus and get sympathy and support from the West ahead of the 2015 elections. As to Lukashenka's actions in the Ukrainian crisis, several Russian pro-government commentators agree that his actions are being coordinated with the Kremlin or even follow Kremlin's instructions.

“His dependence on Russia is enormous, and everybody understands that”, says an expert quoted by the notorious pro-Kremlin online outlet Vzglyad. Despite all the seeming disloyalty in the situation surrounding Ukraine, Lukashenka is nevertheless continuing on with Belarus' growing involvement into Russia-led post-Soviet integration bodies, writes Viktor Militarev, a Russian right-wing writer and activist, in a column for Izvestia, the largest pro-government newspaper in Russia.

Anyway, if the media attacks on Lukashenka continue and keep growing in terms of their scale and prominence, this time it might indeed be more than just another staged conflict between Russia and its capricious vassal.

Aleś Čajčyc

Alexander (Aleś) Čajčyc is a Moscow-based writer, consultant and member of the Rada of the Belarusian Democratic Republic

http://belarusdigest.com/story/russian-media-attack-belarus-warning-minsk-21055

The Russians have some pretty good moves.

1. They could decide to suspend payments on their debt to Europeans

banks which are underfunded and pretty much insolvent already. This

would have wonderful results for the financial world.

2. They could let the Ruble totally tank, buy up foreign Ruble holdings

with their dollar reserves and then demand  payments in Ruble for exported

energy. This would have wonderful results for the E.U. economy.

To finally unite in the pan Slavic Union

http://en.wikipedia.org/wiki/Pan-Slavism#Creation_of_Pan-Slavic_languages

Bиктop ШEHДEPOBИЧ
A вoт и poзoчкa нa нoвoгoднeм тopтe: пpaвитeльcтвo peзкo cнизилo цeны нa вoдкy!
Этo, нaдo cкaзaть, oчeнь вoвpeмя.

B caлoн пaдaющeгo caмoлeтa, блядoвитo yлыбaяcь, вышлa cтюapдecca c бecплaтным бyxлoм: "Этo вaм, дopoгиe пaccaжиpы! Oт кoмaндиpa кopaбля. Hи в чeм ceбe нe oткaзывaйтe".

Caлoн зaмeтнo oживилcя. Жизнь нaлaживaeтcя. Двyм cмepтям нe бывaть, тaк xoть пpoцecc дocтaвит yдoвoльcтвиe! A вaм eщe кoмaндиp нe нpaвилcя, дypaкaм. Щac нaкaтим и пoйдeм мepить peйтинг.

 

Wishing in the coming 2015 peace to the Slavic nations that are torn by artificial rifts.

Vladimir Putin

Wins OCCRP’s Person of Year for 2014



Vladimir Putin has been named the 2014 Person of the Year by the Organized Crime and Corruption Reporting Project (OCCRP), an award given annually to the person who does the most to enable and promote organized criminal activity.

Putin was recognized for his work in turning Russia into a major money-laundering center; for enabling organized crime in Crimea and in the Donbass region of eastern Ukraine; for his unblemished record of failing to prosecute criminal activity; and for advancing a government policy of working with and using crime groups as a component of state policy.

“Putin has been a finalist every year so you might consider this a lifetime achievement award,” said Drew Sullivan, editor of OCCRP. “He has been a real innovator in working with organized crime. He has created a military-industrial-political-criminal complex that furthers Russia’s and Putin’s personal interests. I think Putin sees those interests as one and the same.”

Putin, a former KGB bureaucrat, began arresting most major organized crime figures in Russia several years ago, but then quietly released them. That was the start of Russia’s state policy of working with organized crime. OCCRP believes that Putin agreed to tolerate criminality in exchange for criminals’ support in advancing what he defined as Russian interests.

"Vladimir Putin and his siloviki fused a Cold War mentality with modern organized crime strategies and technology to create a new level of transnational organized crime,” said Paul Radu, executive director of OCCRP. “The Russian-backed money laundering platforms have exploited the lack of transparency in the global financial and offshore company registrations systems to create a new criminal financial infrastructure used by crime groups from as far away as Mexico and Vietnam".

For example, OCCRP looked at a sophisticated money-laundering system set up with the help of Russian and Moldovan organized crime that used Russian banks (including one connected to Vladimir Putin’s cousin Igor), fake bank loans, and corrupt Moldovan judges. The system moved the money of oligarchs, crooked government officials and organized crime into Europe through a Latvian bank. Money moved through the system was used to support Putin’s political interests.

In another project, OCCRP's partners aired a documentary which looked at the links between the state owned Russian Railways (which is close to Putin), a notorious banker known as the Black Banker who was shot in London, a slew of organized crime figures and hired assassins and a Russian/Moldovan businessman who also ran a pro-Russian political party in Moldova. The video was responsible in part for a decision by the Moldovan government to ban the Patria party on the eve of the elections because they received illegal financial assistance from Russia. Patria’s leader, fearing arrest, fled to Russia where Russian officials defended him publicly.

Organized crime figures have served as intermediaries for weapons transfers between the Russian army and Russian-backed separatist rebels in Ukraine. Working undercover, OCCRP reporters bought weapons from organized crime figures in Moldova; the weapons originated with the Russian 14th army in the breakaway region of Moldova known as Transnistria.

Putin’s government has forced the closure of media and civil society groups that have looked at its corrupt practices and ended the year in ironic fashion by finding its fiercest critic, blogger Alexey Navalny, guilty of corruption.

Putin was chosen as Person of the Year by more than 125 OCCRP-affiliated investigative reporters and 20 investigative reporting organizations in countries from Europe to Central Asia.

“For years Putin has created buffer states run by organized crime thugs, like Transnistria, Ossetia, Abkhazia and now Crimea and the Donbass,” Sullivan said. “While there is a long history of criminal groups working with governments around the world, both in the West and in the former Soviet Union, Putin has institutionalized these connections in ways never seen before.”

Runners up to Putin this year were Hungarian Prime Minister Viktor Orban and Montenegrin Prime Minister Milo Djukanovic. Previous winners include the Romanian Parliament for its role in legalizing crime in 2013 and Ilham Aliyev, the President of Azerbaijan, in 2012 for his role in taking large cuts of state business.

OCCRP is a not-for-profit consortium of regional investigative centers and for profit independent media stretching from Europe to Central Asia and in Latin America. Its goal is to help the public understand how organized crime and corruption affect their lives and to improve reporting on the issues of corruption and criminality. OCCRP seeks to provide in-depth investigative stories as well as the latest news pertaining to organized crime and corruption activities around the world. It is funded by the Open Society Foundations, USAID, European governments and other major international donors. It has offices in Sarajevo, Bucharest, and Tbilisi.

http://occrp.org/person-of-the-year/2014/

Best of luck in 2015 to Russians, Ukrainians, Poles and Belorussians.

Happy New Years

Western mob crap installs its ilk in power in Ukraine,

less than a year later the country is totally bankrupt.

What a surprise.

Ukraine president hands around 100 units of domestic military hardware, weapons to army
http://itar-tass.com/en/world/770075

Poroshenko speaks of peace, but sends more weapons to the East, to kill children and pensioners.

---

And about that demo in Moscow - about 1500 people turned up after Navanyj brothers got their sentence (they were found guilty of among other things, stealing 26.7 million roubles from Yves Rocher company). It's not Putin's fault that USA chooses criminals as their puppets (think Yatsenjuk, Poroshenko).

English:
http://itar-tass.com/en/russia/770086

http://www.gazeta.ru/social/news/2014/12/30/n_6793405.shtml

Navalnyj (and people generally view him as a traitor) had of course to defy house arrest and to turn up at the rally and then sent home:
http://itar-tass.com/en/russia/770069

Even Russian opposition party Yabloko was against this rally:
http://itar-tass.com/en/russia/770039

Of course, the US State Department expressed their displeasure that criminals got their sentence:
http://tass.ru/mezhdunarodnaya-panorama/1681151

More about the case:
http://rt.com/news/218767-navalny-rally-detain-russia/

Good reader comments:

PS: Should Russian Duma ask what happened to Enron case? Oh, wait, the documents conveniently burnt down in the neatly demolished WTC 7...

https://www.youtube.com/watch?v=9Ticlo5SbjA

Moscow now: protesters chanting "Russia without Putin!"



https://www.youtube.com/watch?v=11-mqWeAwXg#t=3232

I hope they realise that this is a double-edged decision. It does not necessarily mean that Ukraine will join NATO, as no-one is expecting them there, but it means that once the power changes in Kiev once again, Ukraine will be free to join in a military alliance with Russia.


What it really means, is that SBU at that time still had people loyal to the legitimate leader of Ukraine, people who were professional, and who didn't want all the information held in SBU to fall in the hands of CIA (American flag is now flying over the SBU headquarters along with the Ukrainian one). So when it became absolutely clear that a coup d'etat was happening, the last good order of the legitimate president of Ukraine was to secure the information pertaining Ukrainian security.

no comments  :V



Boeнный бyнт oпoлчeния Oбpaщeниe к Пyтинy и eгo шaвкaм 29 12 2014

https://www.youtube.com/watch?v=4TXlAg82K90

Wow! Was this partisans or just someone was smoking on the wrong place?

Ukraine drops its nonaligned status

KIEV, Ukraine (AP) — Ukraine's president signed a bill Monday dropping his nation's nonaligned status but signaled that he will hold a referendum before seeking NATO membership.

Using a news conference to sign the legislation, which parliament had adopted last week, Petro Poroshenko vowed to reform Ukraine's economy and military forces to meet European Union and NATO standards.

But he also said he will leave it up to Ukrainian citizens to decide in a popular vote whether to join NATO or not.

"When we are able to conform to these criteria, the people of Ukraine will make up their mind about the membership," Poroshenko said, adding that this will likely happen in the next five to six years.

While public support for joining the alliance has swelled after Russia's annexation of Ukraine's Crimean Peninsula in March and a pro-Russia insurgency in eastern Ukraine, prospects for NATO membership in the near term appear dim.

With its long-underfunded military suffering from the war with the separatists and the country's economy in peril, Ukraine has much to overcome to achieve the stability that the alliance seeks in its members.

Poroshenko said he is planning to meet with leaders of Russia, Germany and France in Kazakhstan's capital, Astana, on Jan. 15 to discuss a peace settlement for eastern Ukraine. The four leaders previously met in France in June.

Ukraine and the West have accused Russia of fueling the rebellion in eastern Ukraine with troops and weapons, which Moscow has denied. Fighting in the east has claimed more than 4,700 people since April.

Representatives of Ukraine and the rebels agreed on a cease-fire in September, but it has been frequently violated as the parties have failed to reach a deal on a line of division to create a buffer zone.

Poroshenko said he still believes there is "no military solution" to the conflict in the east, adding that he will press Russia to withdraw its soldiers from Ukraine and seal the border.

NATO Does Not Want Ukraine to Apply for Membership

by Ira Louis Straus

Now that Ukraine has voted to drop its non-aligned status, we are hearing an official story from Russia that "NATO has pushed Ukraine to do this." Endlessly repeated, it is exactly opposite to the truth. Russia's agression has changed popular opinion in Ukraine. Until recently every poll indicated that a plurality of Ukrainians was opposed to joining NATO -- the only qualification that Ukraine was lacking. NATO, however, still does not want Ukraine to apply.

No actor in NATO or the West has pushed Ukraine to drop its non-aligned status. The NATO countries and agencies for the last five years have been against the idea of Ukraine joining. No one in NATO wants Ukraine to apply for membership at this time because they all know they would reject it, making it an embarrassment for both themselves and Ukraine.

It is Russia, and Russia alone, that has pushed Ukraine into dropping its non-aligned status and trying to get into NATO.

And it is Russia alone that has transformed the views of Ukrainians about joining NATO. There was a large, quite secure plurality of Ukrainians against joining NATO in every poll from 1991 to 2013. There is a plurality of Ukrainians today in favor of joining NATO.

Public support was the only qualification for joining NATO that Ukraine was lacking all these years. It was the ground on which Ukraine was rejected by NATO in 2008, when the Bush Administration really did want Ukraine to join. No amount of "education" from Kiev or Brussels ever made a dent in the popular opposition to joining. Russia, and Russia alone, has done that. It has thereby made Ukraine qualified to join NATO.

That is what made it politically feasible for the Ukrainian government to rescind the law on non-alignment.

This is the first time ever that Ukraine has been qualified to join NATO. Russia needs to face the fact that it is the cause of this change.

One could joke about how Russia has scored an "own goal" with this, but it is a very bitter fact for Russia. It needs to take ownership of the fact and stop projecting blame. No one "did it" to Russia. Russia did it to itself.

Why doesn't the West want Ukraine in NATO, even now that it is qualified to join? It would seem easy to believe the Russian line that NATO is trying to get Ukraine in; this perhaps facilitates things for Russia as it talks itself and its believers into its alternative reality. But NATO in fact doesn't want Ukraine, for four reasons: legitimate diplomatic concerns, inaccurate ingrained beliefs about the rules on NATO membership, domestic politics, and inertia. Reality is the exact reverse of the Russian narrative about the West pressuring Ukraine to join.

Nevertheless, if Russia keeps pushing on Ukraine and its other Western neighbors, it will someday inevitably succeed in demolishing the resistance in NATO to taking in Ukraine. And then Russia, stuck in a mental universe of false histories of its own creation, will talk with endless repetition about how the West did this to it.

Historians of the real world will record that, if Ukraine in the future becomes a member of NATO without and against Russia, it will have been due to Russia's pressures against Ukraine and the West.

Ira Straus is the US Coordinator of the Committee on Eastern Europe and Russia in NATO.

Ukraine's top intelligence agency deeply infiltrated by Russian spies

By Christopher Miller

KIEV, Ukraine – On a morning earlier this year, Ukraine’s top intelligence officials woke up to discover that the country's spy agency had been ransacked and torched by intruders who seemed to know what they were looking for.

The previous night, it turned out, the country’s pro-Russian president, Viktor Yanukovych, had ordered his operatives to steal a trove of state secrets from Ukraine's Security Service, known as the SBU, before fleeing to Moscow on Feb. 22.

During their raid on the spy agency, the thieves also stole data on more than 22,000 officers and informants as well as anything documenting decades of cooperation between the SBU and its Russian counterpart, the Federal Security Service, or FSB.
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What the burglars weren't able to carry, they burned or destroyed. In the ruins of the offices, scorched files and empty folders lay strewn on the floors.

“Every hard drive and flash drive was destroyed — smashed with hammers,” said one current Ukrainian intelligence official recently. By the time he and his colleagues got there, "it was all ash and dust."

For a country in the shadow of Russia and embarking on an uncertain path toward democracy, the break-in was devastating.

As the current SBU director Valentyn Nalyvaichenko put it, the thieves took “everything that forms a basis for a professional intelligence service."

Just days after the break-in, the director of the intelligence service, Oleksandr Yakymenko, surfaced in Russia, having defected with four other top spies and a dozen or so subordinates loyal to Moscow.

In the following weeks and months, the security service was thrown into turmoil as the agents' new allegiances played out. After the Russian invasion of Crimea, thousands of Ukrainian spies switched sides and began reporting to Moscow. Similarly, as the Kremlin-backed insurgency took off in eastern Ukraine, dozens of Ukrainian agents in there became agents of the Kremlin.

“We have no idea who we can trust right now,” said a top SBU spy, still loyal to the government in Kiev. 
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"Everybody is suspicious of everybody." "Everybody is suspicious of everybody."

When Nalyvaichenko became the SBU’s new chief on Feb. 24, he inherited a spy agency already riddled with spies. According to him, as many as one in five SBU agents had either worked for the Soviet KGB or studied at its training academy.

Even as Ukraine was in the midst of pro-democracy protests, a team of 30 Russian agents from the FSB came to Ukraine to meet with Yakymenko, allegedly to discuss assisting his officers in quashing the civil uprising.

Since then, the SBU has sought to root out pro-Russian spooks among its ra

So far, 235 agents, including the former counterintelligence chief and his cousin, and hundreds of other operatives believed to be working for Moscow, have been arrested and 25 high treason probes against Yanukovych-era SBU officials have been launched. All regional directors for the agency have changed, as well as half of their deputies.
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After the arrests, Nalyvaichenko boldly stated that “all traitors” have been purged from the SBU — a declaration that even the agency's own officials say they find hard to believe.

Indeed, three senior sources from within Ukraine’s security services, who agreed to be interviewed on condition of anonymity, said the thefts and mass defections had compromised SBU more severely than previously acknowledged.

Many agents with ties to the Russians are “still in the business,” as one of the SBU officials said. He added, however, that these mostly dormant agents are "closely watched" by Ukraine's own security services.

Olexiy Melnyk, co-director for Foreign Relations and International Security Programs at the Kiev-based Razumkov Center, said that Nalyvaichenko's assessment is "too optimistic."

"It’s very unlikely that they got rid of all collaborators and spies," he said.

In April, as fighting raged between government forces and Kremlin-backed separatists in eastern Ukraine, the SBU started planning a secret operation for its elite tactical unit, called Alpha. An enigmatic Russian known as Igor "Strelkov" Girkin, himself a confessed former FSB agent, was commanding rebel fighters on the front lines and the Ukrainians were keen to get him.

According to two senior Ukrainian security officials, agents had figured out that Girkin was spending time at a checkpoint on the edge of Sloviansk with several of his fighters. But no sooner had the operation gotten underway before Girkin was tipped off by a mole inside the Ukrainian security service and he slipped away.

He has since surfaced in Russia, where he has become quite the star after boasting that he "was the one who pulled the trigger of war" in Ukraine.

But sabotage and defectors are not the only challenges — the country’s security service is also hobbled by inexperience and a lack of funds, officials said.

To overhaul the agency, the SBU has brought in scores of fresh recruits. But while the young agents come from more Kiev-friendly western regions of Ukraine, many of the recruits — who are mostly in their early twenties — have little experience. Still, the intelligence service has little choice.

“What is better, to have professional former KGB guys who probably still have more friends in [Russia] or have loyal young guys who can learn and who we can be confident he will not leak secrets to Russia?” said Melnyk.

And it may not be very hard to turn the new recruits as pay is meager — about $200 per month — and moonlighting as a Russian informant may pay "three, maybe four times more," according to one SBU officer.

To test their loyalty, new and old agents are subjected to recurrent interrogations and lie detector tests. But, as one security officer put it: “the rifle is the best lie detector.”

 

This Era of Low-Cost Oil Is Different

 By Mohamed A. El-Erian

Having seen numerous fluctuations in the energy markets over the years, many analysts and policy makers have a natural tendency to “look through” the latest drop in oil prices -- that is, to treat the impact as transient rather than as signaling long-term changes.

I suspect that view would be a mistake this time around. The world is experiencing much more than a temporary dip in oil prices. Because of a change in the supply model, this is a fundamental shift that will likely have long-lasting effects.

Through the years, markets have been conditioned to expect OPEC members to cut their production in response to a sharp drop in prices. Saudi Arabia played the role of the “swing producer.” As the biggest producer, it was willing and able to absorb a disproportionately large part of the output cut in order to stabilize prices and provide the basis for a rebound.

It did so directly by adhering to its lowered individual output ceiling, and indirectly by turning a blind eye when other OPEC members cheated by exceeding their ceilings to generate higher earnings. In the few periods when Saudi Arabia didn't initially play this role, such as in the late 1990s, oil prices collapsed to levels that threatened the commercial viability of even the lower-cost OPEC producers.

Yet in serving as the swing producer through the years, Saudi Arabia learned an important lesson: It isn’t easy to regain market share. This difficulty is greatly amplified now that significant non-traditional energy supplies, including shale, are hitting the market.

That simple calculation is behind Saudi Arabia’s insistence on not reducing production this time. Without such action by the No. 1 producer, and with no one else either able or willing to be the swing producer, OPEC is no longer in a position to lower its production even though oil prices have collapsed by about 50 percent since June.

This change in the production model means it is up to natural market forces to restore pricing power to the oil markets. Low prices will lead to the gradual shutdown of what are now unprofitable oil fields and alternative energy supplies, and they will discourage investment in new capacity.  At the same time, they will encourage higher demand for oil.

This will all happen, but it will take a while. In the meantime, as oil prices settle at significantly lower levels, economic behavior will change beyond the “one-off” impact.

As costs fall for manufacturing and a wide range of other activities affected by energy costs, and as consumers spend less on gas and more on other things, many oil-importing nations will see a rise in gross domestic product. And this higher economic activity is likely to boost investment in new plants, equipment and labor, financed by corporate cash sitting on the sidelines.

The likelihood of longer-lasting changes is intensified when we include the geopolitical ripple effects. In addition to creating huge domestic problems for some producers such as Russia and Venezuela, the lower prices reduce these nations’ real and perceived influence on other countries. Some believe Cuba, for example, agreed to the recent deal with the U.S. because its leaders worried they would be getting less support from Russia and Venezuela. And for countries such as Iraq and Nigeria, low oil prices can fuel more unrest and fragmentation, and increase the domestic and regional disruptive impact of extremist groups.

Few expected oil prices to fall so far, especially in such a short time. The surprises won’t stop here. A prolonged period of low oil prices is also likely to result in durable economic, political and geopolitical changes that, not so long ago, would have been considered remote, if not unthinkable.  

http://www.bloombergview.com/articles/2014-12-29/this-era-of-lowcost-oil-is-different