12 Apr Tihomir Kamenov: A new world economic order is coming. Bulgaria is leaving the Russian zone of influence
Putin fell into the trap of his own autocratic ideologies and conspiracy schemes, failing to understand that any person who has experienced the freedom and prosperity of liberal capitalism rebel against any form of despotism
Tihomir Kamenov is the founder of the Commercial League’s Group and a specialist in public and private international law; the only Bulgarian senior member of the World Economic Forum, Davos and the European Financial and Economic Conference ‘Ambrosetti’.
– With your many years of scientific interest, experience, erudition and vast global connectivity, how do you assess the development of the world, what lies ahead for humanity, where are we going, Mr. Kamenov?
– ‘Towards a brighter future, which we will feel not very soon’, is my short and jocular answer to this universal and even philosophical question.
Before the serious answer, let me tell you that my bio above is missing that my title is “thinker” (forgotten nowadays due to low aspirations) and a very important side of my entrepreneurship – Commercial League and I have never privatized anything in Bulgaria, which is a stamp of purity and innovation!
Everything I am about to tell you and predict is only on the single condition that nuclear restraint, which has been my specialty for 46 years (since the age of 17, as a student at the Vratsa mathematics high school), continues to work as it has for the past 77 years and does not lead to a world nuclear war.
– Do you think such self-destruction of the human race is possible?
– The emotional part of my expectation is an expression from Sting’s song that ‘Russians have children too and they love them’, the rational part is from a dictum by the creator of the separation of powers, the great thinker Montesquieu, that whatever disorganized nations, organizations (companies) and families justify themselves with, they are all dragging on the tail of history’! Just notice how, the once glorious Red Army, has now been stopped and ceded on the Kiev front to the hearty and well organised Ukrainian heroes. My main concern stems from a statement attributed to Putin: ‘If Russia (meaning Great Russia) is not in this world, why is this world at all’ – scary isn’t it!
Otherwise, in peacetime, life will change markedly and not for the worse, globalisation will reformat itself, it will of course lead to appreciation because more will be produced in countries where labour is more expensive and therefore the imminent closure of China due to the new Covid wave will further contribute. With the new level of stabilisation, the developed democratic world of the liberal market economy, led by the US and the EU, with the new strong role of NATO, will remain in the lead in the competition with the autocratic regimes in China and Russia.
– How will war change Europe? We see the strong cohesion of the EU against Russia, will this continue in the future?
– Russia’s aggression against a sovereign Ukraine and the shocking atrocities of the Russian occupation army after February 24 and in the last 7 weeks have put a definitive end to the “policy of inclusion” adopted by the developed democratic world towards Russia after Gorbachev and accelerated after the integration of Eastern Europe. The political and value delusion that through intensive trade and investment Putin’s Russia could be brought into line, integrated, reformed and democratised has now collapsed. This policy of encouragement and tolerance was fuelled by the interests of a section of the weak political class in Western Europe who sought quick and easy solutions to national social problems and, of course, the vested interests of big industry in Germany and Italy, primarily in securing access to cheap raw materials and energy carriers.
Just remember that before the pandemic, almost all Western European retirees were taking 2 holidays a year in South East Asia with transcontinental flights included in the affordable price, and now the oil giants have abandoned multi-billion dollar investments in Russia. The oligarchic, kleptocratic model and Putin’s corruption scheme collapsed, within days – look at how many prominent former heads of government swiftly ‘defected’ from the boards of Russian energy firms and banks.
The European Union has shown that it is first of all a community of values and then of interests. The unprecedented level of unity, interaction and cohesion achieved is particularly encouraging for accelerating the steps towards a European inter-state/ supranational confederation. Macron’s victory could accelerate the process.
– Will the US Treasury, the EU and Zelensky have any special role in the new global puzzle?
– The United States has 16 specialized agencies and organizations with national security tasks, where important work is done in the so-called “Russian departments” to safeguard the interests of the democratic world. Naturally, pre-war conspiracies are tested in wartime, and what has become evident recently is that the ‘American and European’ departments in Russia’s services have not shown much foresight or efficiency, not to mention the failings of the Russian army, which has had the comfort of ‘its own skies’ all along. The resort to atrocities that degrade human nature and are deeply repugnant, in addition to being serious internationally and nationally criminalised acts, show irreparable weaknesses in the Russian army on all fronts and at all levels. Even Russia’s military propaganda is laughable when it attributes facts and staging to foreign and Ukrainian services.
Putin fell into the trap of his own autocratic ideologies and conspiratorial schemes, failing to understand that any people who have experienced the freedom and prosperity of liberal capitalism rebel against any form of despotism, especially external brutal aggression.
Zelensky rose in a flash as a new great European tribune and national leader, and his very united government, party and MPs became heroes. I expect a powerful post-war recovery with double-digit economic growth, because they have understood, unlike other politicians in Europe, that the self-esteem of any nation is directly proportional to its GDP.
– But the EU is too dependent on Russian energy sources and this makes some European leaders hesitant about their policy towards Russia even at this moment!
– The EU seeks independence from Russian energy and raw material supplies through comprehensive diversification while maintaining Russian dependence on European purchases, which account for about 3/4 of the $26 billion paid monthly gas and oil exports from the Russian Federation. It is well understood in Brussels and Washington that the complete isolation of Russia, to the extent possible, regardless of the cost, is not the optimal course for realizing the goals of peace and stability. China, India and Turkey are not ready or able to confront the high-tech and financially powerful democratic world over Putin and his regime’s plans – they are simply enjoying temporary record discounts on their purchases of Russian raw materials.
On April 4, the US Treasury Department banned the use of $117 million of Russia’s blocked $670 billion in reserves in US banks to settle foreign debt denominated in dollars. This leaves Putin with the dilemma of paying with the newly collected cash from the energy deals, or releasing the reserve in gold, or defaulting on the foreign debt, which has not happened since the Bolshevik Revolution of 1917-1918. The Russian people have painful memories of the 1998 domestic debt default, and this situation will further inflame tensions within the country. The rouble has recently been on a strong ‘doping’ stimulus, and the Chinese yuan has no chance of becoming a major international payment currency because this ‘status’ follows the fundamental strength of the issuer’s national economy.
– How will the war end? Will Ukraine be divided, as some analysts predict? Others are threatening Russia with an international tribunal, is that possible?
– It is unlikely that Ukraine will gather so much strength to completely push the aggressor (the Russian army) out of the occupied territories in the east and southeast, especially Crimea. So we are heading for a “Korean” solution without a full peace treaty, or no treaty at all, and so with many, many unresolved post-war issues.
And there is no question of voluntary payment of reparations or recognition of the jurisdiction of an international criminal tribunal.
My nightmare is the still open real possibility, if Russia goes for total defeat, to use “limited” tactical nuclear weapons, via supersonic delivery systems or other weapons of mass destruction, such as chemical or biological, in order to break the will of Zelensky and his heroes for total national liberation.
The Geneva Conventions of 1949 and their Protocols of 1977 and 2005 on the protection of victims of war have been signed and ratified by the Russian Federation and necessarily commit its responsibility and that of the guilty – not only the soldiers and field commanders, but also their immediate superiors in the regular state army – and also the chain of command along the vertical. There has also been a great deal of practice in constructing and producing specialized jurisprudence in international tribunals to try and punish war criminals.
Criminal and financial liability will certainly be sought from Russia and those responsible in The Hague or elsewhere, according to the valid evidence gathered. In October 2019, however, Russia withdrew from Article 90 of the First Protocol, which it had previously ratified in 1989, and so does not recognise the International Humanitarian Fact-Finding Commission established in 1991 – behaviour that is typical in preparing to deny atrocities by regimes bent on perpetrating them.
The implementation of the Russian Federation’s responsibility is also hampered by the non-recognition of the mandatory jurisdiction of the UN International Court of Justice in The Hague. The court’s March 16, 2022 order to halt Russia’s aggression in Ukraine, while binding (adopted by 13 votes to two – Russia’s and China’s), remains unfulfilled. And so the problem of the rapid realisation of responsibility under international law against the world’s second nuclear power and permanent member of the UN Security Council remains for a long time.
– What will be the macroeconomic consequences for Bulgaria of this war? The forecasts of a “heavy gas regime” are quite worrying.
– Bulgaria is leaving Russia’s economic sphere of influence at an accelerated pace, which in various forms was maintained after 1989. Great joy – we are leaving the disorganized world of Putin and the muzhits, and their Bulgarian minions will finally reorient themselves. Our admission to the eurozone and the strengthening of NATO’s south-eastern flank will help this process, especially if Bulgarian politicians adopt a highly expert and pragmatic policy of economic growth through the promotion of competition, the fair and clever use of EU funds, and indeed zero tolerance of corruption. For now – lots of talk, the facts are not encouraging!
– What did Europe and the world learn from the participation of the Bulgarian Deputy Prime Minister and Minister of Finance Assen Vassilev in the leading European forum Ambrosetti, where you recommended him?
– There is no unambiguous answer – potential foreign investors and interested people, after the polite applause at the end, ask me as a big national investor what is going on, has the corruption model been overcome or is it continuing in new forms and with new actors, what is the climate in the new government, is there rule of law (?). Despite his assurances that the ban on issuing permits for new hospitals and new hospital activities, especially for big cities, is being respected, it has become clear, however, that his Minister of Health is doing what she wants and has issued one permit for Sofia [Recall the article in Epicenter. bg “Minister Serbezova’s dubious contracts…..”] and is now about to issue a new one for a big hospital in Burgas. Meanwhile, the hundreds of patients who have signed up for minimally traumatic surgical treatment with a robot at ‘Heart and Brain’ Burgas have been waiting for months because the Ministry of Health simply won’t issue the use permit without any reason.
– Did you tell this to Deputy Prime Minister Vassilev?
– Yes, we talked about the fact that Estelle Vassileva, the de facto head of the National Health Insurance Fund, instructed by Assen Vassilev, despite the thorough checks made on the activity carried out for the first three months of this year, illegally blocked the payment of the activity carried out in all hospitals in the country. The adopted indicative values of individual budgets based on the historical 1/12 are outdated and have led to the fact that non-working or non-treating patients “blank hospitals” receive money “in the pocket” for unfavourable working conditions (UWC), while the activity carried out and the treatment of tens of thousands of people in the hospitals ‘Heart and Brain’ and those of the Bulgarian Cardiology Institute, for example, for the first quarter alone, remain unpaid for months.
– I see you are extremely unhappy with the current leadership of the Ministry of Health. What steps will you take?
– We have been treating 2.6 million Bulgarians for the last 12 years and this is a great national responsibility, a great strength and you cannot have hatched officials training their mental concepts at the expense of people’s lives and health. Imagine, please, such imitation of governance to suppress the sacred competition in quality, and incompetence is evident everywhere – but they really do not know that if they continue this arrogant policy, they will soon crash – I will tell it documented to all Commissioners and up (laughs), the European media! Inexperienced, greedy and stupid decisions cannot deprive people of the right to medical care and emergency treatment by forcibly withholding the health contributions collected from everyone.
– Unfortunately, the health reform the new government promised is not happening. There is a sense of incompetence, a lack of vision. And you allude to abuse.
– Health reform is the most important for the life and health of the population, and for economic prosperity, because human capital is crucial for growth. Here, for example, you cannot stop competition in hospital care in Sofia, where half of the licensed beds are unoccupied, there are even “blank hospitals” as in fact throughout the country, and in large state hospitals abuse has been found on a particularly large scale. “Heart and Brain” Sofia (Kazichene) is the most modern (with helipads) and the most tested project for 18 months and is now blocked by illegal inaction in the Ministry of Health, where they are issuing flash permits for new hospitals in Sofia and preparing others in Burgas and Targovishte. What is this if not schemes.
– What does Minister Serbezova’s team respond to all this?
– The Ministry of Finance explains to me that they were going to make a new health card, but not a prohibitive one, but guaranteeing a minimum of widely available emergency care to the most remote settlements. This is a hollow paradigm and phraseology that has been bandied about for the last 33 years without much progress, despite the millions spent on new ambulances, and now come the helicopters, which do not in themselves save lives. And helicopters can’t land in city centres where the incumbent hospitals are. My solution for emergency care in the periphery and the whole country is simple and effective – I explained to Assen Vassilev – it has been done in all European developed health systems, where transport solutions have a decisive role only after elevating the quality of healthcare and medical care, and the leading quality competition is between high-tech hospitals in large centres, which are the backbone of real reform and the development of medical capacity and human potential.