The flawed IMF program with its focus on the market has further aggravated the economic situation with a food crisis

Sri Lanka over the last three years has been hit by tremendous price hikes and shortages of essential services and goods. What does the New Year hold for the working people, pummelled by the rising cost of living and stagnant incomes, whose lives have become unbearable? 

Even as the public awaits the national budget next month, to address the ongoing economic crisis, the Government should announce a firm New Year resolution to address people’s suffering. I argue that resolution should be self-sufficiency first!

Vehicle imports 

Three years ago, with the disruptions of the Covid pandemic and rising global commodity prices triggered by the onset of the war in Ukraine, Sri Lanka faced tremendous shortages of imported goods with the collapse of foreign reserves. The Government of that time, failed to prioritise imports in the preceding years, which could have at least ensured the flow of essential goods. Those shortages were never really resolved. The so-called solution of market pricing imported goods from fuel to cement which only led to the contraction of demand for such goods. Indeed, the consumption of fuel and cement have fallen between thirty and fifty percent reflecting a deep economic depression; a drastic fall in consumption with people travelling less and not repairing or building houses.

Disregarding these dynamics, the wealthier classes are jubilant about the possibility of buying vehicles this year, as the IMF programme problematically calls for the lifting of restrictions on vehicle imports. What do more cars on the road mean when working people cannot even afford public transport?

In fact, the economic crisis itself was in part a consequence of vehicle imports funded by external borrowing. I warned about this trend and the impending disaster in this very column titled “Crisis, Class and Consumption” on 4 October 2021:

“In this context, from 2010 to 2019, Sri Lanka’s vehicle import bill was US$ 8,628 million. And the biggest headache for Sri Lanka today is the US$ 13,000 million in sovereign bonds that have to be repaid over the next many years. Here, the average each year of US$ 863 million in vehicle imports by using foreign exchange from sovereign debt requires debt payment ten years later of US$ 1,500 million each year. Multiply that debt repayment cost over ten years and the unsustainability of the sovereign debt stock becomes clear. Unable to pay for the past luxurious consumption of the elite, the country is now reduced to restricting the imports of essential foods for the people. Would it not be fair to wage a massive wealth tax on the wealthy classes and redistribute such wealth to the working classes so they can survive this crisis?”

The current IMF programme is marching Sri Lanka right back into a similar situation with another cycle of vehicle imports that will lead to the draining of foreign reserves. While those reserves are expected to increase with more commercial borrowing in international capital markets, another shock in the global markets will push Sri Lanka back to where it was four years ago. 

Food crisis 

The flawed IMF program with its focus on the market has further aggravated the economic situation with a food crisis. It is no longer imported goods alone that is a problem in the country, essential foods produced in Sri Lanka itself including rice, coconuts and salt, are now in shortage. The most economically marginalised of our people during the direst of times who rely on a plate of rice and sambol, or rice porridge, cannot even afford that.

What a dangerous state for our country, where people cannot afford the bare minimum of calories to keep them from starvation, not to mention the unaffordability of nutritious food such as fish and milk. Sadly, the average consumption of fish per person per year has dropped from 31kg in 2015 to 19kg in 2023, amounting to a forty percent drop due to the reduced production for local consumption and unaffordability of seafood. This is in the context where seventy percent of our people’s animal protein depends on seafood.

All this means, the Government needs to get its priorities right. Without food today, there is no point talking about economic prosperity in the future. There needs to be a resolute emphasis on self-sufficiency beginning with food we can produce in the country and extending to other goods.

Public distribution system

Self-sufficiency in food will only be possible if we rebuild our public distribution system that was long abandoned with the open economy reforms in the late 1970s. That means re-investing in many of our institutions such as the Food Commissioner Department, the Co-operative Wholesale Establishment, the Paddy Marketing Board, the Ceylon Fisheries Corporation and the Multi-Purpose Co-operative Societies. 

There will be the clamour of neoliberal proponents claiming these institutions are inefficient and have failed. In reality, it was a deliberate move of the political class and the economic elite to make these institutions fail for their extractive interests justified under the guise of a market economy. They never care about the consequences of a food crisis, as long as their supermarkets are stocked with food, even if it means unaffordable prices for ordinary people.

This year and the year ahead are likely to be full of global shocks. Geopolitical tensions, not to mention the ongoing wars, could escalate further. A global trade war seems imminent as Trump pushes his populist agenda. The climate crisis will, most of all, affect food production causing shortages and massive food price fluctuations.

In such troubling times there needs to be a focus on the food system. That will require the Government to focus on planning, and not the IMF prescribed reliance on markets. There is also the need to revive state institutions relating to the food system and social institutions such as co-operatives that can mobilise people towards food production. Indeed, the New Year’s resolution for us as a country should be self-sufficiency.

Republished From: https://www.dailymirror.lk/opinion/Self-Sufficiency-in-the-New-Year/231-299503

The current economic crisis cannot be resolved by households or social institutions alone, and loans are not the solution. The Government should introduce livelihood and income stabilisation programs to help people escape the debt trap. It should also leverage cooperatives to create markets and supply chains for rural production, while expanding affordable credit for rural livelihoods and small-scale industrial growth. Additionally, a universal social security program should be implemented

The ongoing crisis in Sri Lanka has greatly affected household debt. As the economy worsened due to inflation, higher living costs and job losses, more households are relying on debt. A significant portion of Sri Lankan households rely on microfinance companies or informal lenders and are trapped in cycles of debt. The situation mirrors what northern and eastern part of the country faced 10 years ago, which led many women to commit suicide or leave their homes. 

The household debt crisis is often attributed to people taking loans for conspicuous consumption and if financial literacy was provided, the people would avoid falling into the debt trap. However, amidst the current economic crisis, people are caught in another debt crisis. This time no one can deny that people are forced to take loans to meet their livelihood needs and cover daily essentials due to the effects of this crisis. Therefore, simply giving financial literacy will not help them escape the debt trap. 

Effects on the households 

Since 2022, when the economic crisis hit, inflation increased the prices of raw materials, energy, and transportation. Sectors such as Agriculture, Manufacturing, Small and Medium – size Entrepreneurs are facing difficulties in maintaining profit margins and have reduced their workforce leading to unemployment. Due to limited job opportunities many family members are migrating abroad for work.

When import tariffs and indirect taxes are imposed, and subsidies are removed, people pay higher prices for essential items, thus, medical, educational, fuel, and utility cost have increased. Our country depends on imports even for essentials goods such as rice, dhal, sugar, milk and so on. Therefore, the need for money to run a household has substantially increased. 

Household incomes are inadequate to keep up with rising living costs. People have been pushed to take loans or lose their small savings or assets to manage their livelihood. The current crisis has eliminated or reduced the means of repaying loans. As a result, more loans are taken to repay the loans previously taken.

Impact on different social groups

The ongoing crisis has impacted different social groups in varied ways, however, it reveals a pattern of how they have fallen into debt. People who do not have stable incomes, resources or assets are likely to fall into the debt trap quickly. 

For the fishing community, an increase in the price of fuel impacted operational costs, making it less profitable to go out to sea. The impact differs depending on the scale. Large-scale fishers have resources such as assets and social connections with state and commercial banks, so they don’t fall into the debt trap immediately. Small-scale fishers don’t have such connections to meet their financial needs in an affordable way. When the cost of fishing equipment (nets, hooks, engines and boats) increases, this makes it difficult for them to maintain or replace their equipment. Many small-scale fishers rely on loans from financial institutions or informal lenders (Sammaddy) to finance their operations. Often, these loans come with high interest rates, further deepening their financial burden and difficulty to repay, and eventually leading to a cycle of debt that many fishermen struggle to escape.

Farmers face rising costs for inputs like fertilisers, pesticides, and seeds. The Government’s 2021 ban on chemical fertilisers reduced agricultural productivity, while fuel price hikes, driven by the economic crisis, increased costs for machinery and transportation. These factors reduced profitability, causing farmers to cut back on labour, resulting in fewer job opportunities for agricultural wage workers. To manage these pressures, large-scale farmers turn to state and commercial bank loans or pawn jewellery, while small farmers rely on village-level institutions and microfinance companies. However, poor harvests and rising costs prevent many small farmers from repaying their loans, trapping them in a cycle of debt and eroding their economic resilience.

Daily wages have increased from Rs. 1,000 to Rs. 3,000 over the last three years, but job opportunities have decreased, leaving monthly income insufficient for basic needs. Many low-income earners and daily-wage workers have turned to borrowing to cover living expenses, taking out multiple loans from village savings groups, microfinance companies, and credit cooperatives, trapping them in a debt cycle. This crisis has depleted household savings and emergency funds. In this context, microfinance companies exploit people by offering daily, weekly, and monthly loans at high interest rates, targeting vulnerable people because credit is their only available means of survival. 

Behaviour of credit providers  

State and commercial banks provide loans only to people who have assets or guarantors – Government employees, large-scale farmers and fishermen – afer evaluating the borrower’s credit worthiness. Small-scale farmers, fishermen, daily wage-workers, and low-income earners are unable to access such loans.

Microfinance companies claim to provide fast and flexible loans at the doorstep, without assessing borrower’s repayment capacity. Then, they pressure borrowers to repay the loans on time. As a result, families prioritise repaying the loans from their income and are forced to take out new loans to meet their basic needs. 

Local moneylenders too offer high-interest loans during emergencies in an outwardly friendly manner. However, borrowers end up paying the interest for the rest of their lives for the loan they once received.

People end up using most of their time, labour, and incomes to obtain and repay the loans. Many women have become members of multiple village-level credit groups and spend 3 to 4 days a week attending group meetings to become eligible for loans. They also make small savings to use as collateral for the loans they borrow. To build these savings, they borrow money from friends, relatives, and microfinance companies that offer daily loans. Social groups who are directly affected by the debt crisis do not have time or agents to voice their issues or struggle against the exploitation, as all their time and labour are spent on their daily survival.

Role of State and social institutions 

The Government has failed to provide adequate social welfare for low-income and daily wage workers. Cash transfers and food aid have limited scope and don’t reach vulnerable people. The Aswesuma program offers Rs. 3,000-15,000 monthly based on family size and vulnerability, but a four-member household needs at least Rs. 3,000 daily to survive. Delays in aid disbursement and bureaucratic hurdles further prevent timely support.

Cooperatives and village groups offer affordable loans that help people maintain financial liquidity. However, they lack the capacity to provide loans for increasing credit needs and higher amounts because they circulate loans from the savings of their members. Cooperatives should enhance access to affordable credit by strengthening cooperative networks with unions and federations. In addition to offering credit services, they should focus on creating marketing opportunities for rural producers and ensuring efficient distribution of quality goods and services to consumers at fair prices.

Community-level organisations and non-governmental organisations should not limit their duties to merely providing low-interest loans as an immediate solution to this complex problem. They have a duty to reveal the depth of the issue and pressure the Government for permanent solutions.

The current economic crisis cannot be resolved by households or social institutions alone, and loans are not the solution. The Government should introduce livelihood and income stabilisation programs to help people escape the debt trap. It should also leverage cooperatives to create markets and supply chains for rural production, while expanding affordable credit for rural livelihoods and small-scale industrial growth. Additionally, a universal social security program should be implemented.

(The writer is a Research Officer at the Northern Cooperative Development Bank and a member of the Feminist Collective for Economic Justice.)

Republished From: https://www.ft.lk/opinion/Economic-crisis-and-household-debt-in-the-north/14-770935

As NATO fails in its attempt to expand into Ukraine, popular support has shifted significantly in favour of a path to peace.

16 January 2025

Dear friends,

Greetings from the desk of Tricontinental: Institute for Social Research.

Mark Rutte, the current secretary general of the North Atlantic Treaty Organisation (NATO), is not a poet. He, like other secretary generals of NATO, is a mediocre European politician who has been given the task of holding NATO’s reins for the United States (to be fair to Rutte, he has been the prime minister of the Netherlands for fourteen years, but mainly as a survivor rather than a leader). Yet, on 12 December 2024, Rutte gave a speech at the Concert Noble in Brussels (Belgium), a venue rebuilt in 1873 by Leopold II, the brigand king who looted the Congo as its sole owner from 1885 to 1908. This speech was then published on NATO’s website in a very curious form, as a poem rather than the typical bureaucratic prose. Most of the text is banal, but there are four stanzas that I wish to share:

From Brussels, it takes one day to drive to Ukraine.
One day –
That’s how close the Russian bombs are falling.
It’s how close the Iranian drones are flying.
And not very much further, the North Korean soldiers are fighting.
Every day, this war causes more devastation and death.
Every week, there are over 10,000 killed or wounded on all sides in Ukraine.
Over 1 million casualties since February 2022.

…..

Russia, China, but also North Korea and Iran, are hard at work to try to weaken North America and Europe.
To chip away at our freedom.
They want to reshape the global order.
Not to create a fairer one, but to secure their own spheres of influence.

They are testing us.
And the rest of the world is watching.

No, we are not at war.
But we are certainly not at peace either.

…..

And, finally, to the citizens of NATO countries, especially in Europe, I say:
Tell your banks and pension funds it is simply unacceptable that they refuse to invest in the defence industry.
Defence is not in the same category as illicit drugs and pornography.
Investing in defence is an investment in our security.
It’s a must!

…..

A decade ago, Allies agreed it was time to invest in defence once again.
The benchmark was set at 2%.
By 2023, NATO Allies agreed to invest ‘at least’ 2%.
At least…
I can tell you; we are going to need a lot more than 2%.

Alexander Berdysheff (Georgia), Anticipation of Departure, 2024.

Rutte wrote no such poem for Palestine or for Sudan, where the devastation has been much greater. Only Ukraine, with several evasions and errors of fact, at a time when there is no appetite within Europe to prolong this conflict. Rutte’s poem asks the already austerity-struck NATO states to increase their defence spending to at least 2% of their GDP. Donald Trump has already called to raise the threshold to 5%.

From No Cold War comes briefing no. 16, which provides a clear analysis of the overwhelming opposition to the Ukraine war within the Global South and Europe alike. Please read it carefully, download it, and share it. The clarity of this text speaks directly to Rutte’s doggerel.

From the beginning of the Ukraine war in 2022, countries in the Global South – which contains the overwhelming majority of the world’s population – have opposed US policy towards that conflict. A recent survey found that only two Global South countries have actually implemented US sanctions against Russia over the war, and India increased its oil imports from Russia tenfold during the war’s first year. Global South leaders, such as South Africa’s President Cyril Ramaphosa, stated that the US policy of expanding the North Atlantic Treaty Organisation (NATO) into Eastern Europe lay behind the war.

But, until recently, support for the war seemed firm in the US and among its European allies. This is now changing significantly. Media speculation has focused on Trump’s unsubstantiated claim that he could end the war within 24 hours, but much more substantial is evidence of a sharp change in popular attitudes to the war. This provides the basis for hopes to permanently end the war.

Gülsün Karamustafa (Turkey), Window, 1980.

The Necessity to Restore Economic Links Across Europe

The first pressure changing the situation is economic. On 1 January 2025, for example, a five-year gas transit agreement between Russia and Ukraine expired, ceasing Russian gas exports to Europe via Ukraine entirely and ensuring that the Ukrainian government will shut the pipelines across its territory. The US’s gradual success in achieving its decades-long objective of cutting the direct export of Russian gas to Europe has reduced the living standard of Europe’s population due to soaring energy prices and has simultaneously dealt a huge blow to Europe’s economy. Price shocks from the war spread out to affect many developing economies as well.

US liquid gas exports, on which Europe is now reliant, are on average 30–40% more expensive than Russian gas. Moreover, this Liquefied Natural Gas (LNG) is mostly sourced via the devastating fracking method and transported to Europe in an equally ecologically unfriendly way, on huge LNG carrier tankers.

The tremendous economic damage done to Europe has now created increasing opposition to the war, not least among the working class and households at large. More and more people have come to understand that they pay twice for the war in Ukraine: their taxes underwrite the enormous war and militarisation efforts, and at the same time they bear the brunt of the concomitant rising energy prices and imposed austerity measures.

In Germany, the leadership of Christian Democratic, Conservative, Social Democratic, and other ‘centrist’ parties implemented such US-enforced policies, thereby deeply damaging their own economies and societies. This sort of complicity has defined the approach in most European countries until recently and has continued despite the immense unpopularity it created for their own parties. The overwhelming majority of governing parties in Europe are now deeply unpopular, and there has been a sharp rise of xenophobic and overtly neofascist/fascist forces. In Germany and elsewhere in Europe, there is a sharp rise of support for parties opposing the war. Lately, an increasing number of politicians have openly stated that it is vital for Europe’s economy to break with this disastrous US policy and resume direct supply of gas from Russia, as well as to reinstate normal trade and investment relations with the Global South and BRICS countries, particularly China. Former Finance Minister Oskar Lafontaine summarised this sentiment by saying there should simply be a phone call to Russia to restore the gas supply.

Aubrey Williams (Guyana), Comic Storm, 1977.

NATO Cannot Win the War in Ukraine

The second factor changing public opinion is that the US and NATO are suffering setbacks in the Ukraine war.

NATO’s expansion into Ukraine is, of course, not the only example of US-supported aggression in the present world situation. Notably, in Gaza, Israel and the US are able to carry out unbridled military massacres, atrocities, and genocidal policies against the Palestinian people and other countries in the region. In Europe, however, the US and its allies are confronting Russia, which has the most powerful army on the continent and nuclear forces essentially equal to those of the US. The latter appears incapable of winning this proxy war; only direct intervention by NATO military forces, risking global nuclear war, would turn this around.

The dragging on of the Ukraine war, which has resulted in hundreds of thousands of victims –including thousands of children – and widespread devastation, has led to a sharp change in public opinion. In Ukraine, polls now show that 52% of the population supports the position that ‘Ukraine should seek to negotiate an ending to the war as soon as possible’. Only 38% support the view that ‘Ukraine should continue fighting until it wins the war’.

In Romania’s first-round presidential elections in November, after Diana Șoșoacă, a candidate opposed to the war, was banned from the election, Călin Georgescu, who also opposes the war, came in first place. Romanian authorities, with US support, responded by cancelling the election.

In December 2024, a YouGov survey of Germany, Britain, France, Italy, Spain, Sweden, and Denmark showed a sharp increase in support for a negotiated settlement. In four of these countries – Germany, France, Spain, and Italy – the position to ‘encourage a negotiated end to fighting, even if Russia still has control of some parts of Ukraine’ had more support than the view to ‘support Ukraine until Russia withdraws, even if this means the war lasts longer’.

In the US, only 23% of the population thought ‘supporting Ukraine’ should be a US foreign policy priority.

María Cenobia Izquierdo Gutiérrez (Mexico), Dream and Premonition, 1947.

The Situation in Ukraine

Re-establishing normal, mutually beneficial economic ties across Europe is necessary for the region’s economy but is only a first step in bringing an end to the disastrous Ukraine war that US imperialism has imposed on Europe.

NATO’s expansion effort is interrelated with the situation within Ukraine, which has a very large Russian-speaking minority (around 30% of the population) that is a majority in the East and Southeast of the state. Experiences in countries such as Canada and Belgium confirm that bilingual states can only be held together by strict guarantees of linguistic and other rights of the different communities and avoiding policies which are totally unacceptable to either.

Nonetheless, from the 2014 Maidan coup onwards, the Kyiv government, supported by the US, has set out to suppress the rights of the Russian-speaking minority. As the Council of Europe’s Venice Commission, which cannot at all be accused of being pro-Russian, stated, ‘the current Law on National Minorities is far from providing adequate guarantees for the protection of minorities… many other provisions which restrict the use of minority languages have already been in force since 16 July 2019’.

Both the attempt to oppress the Russian-speaking population and the question of NATO membership for Ukraine are two issues that must be resolved in order to bring a permanent end to the war.

Misheck Masamvu (Zimbabwe), Voodoo Astronaut, 2012.

The Conditions for an End to the War in Ukraine

Europe should undertake honest, serious efforts to bring the Ukraine war to an end. Building on public opinion that is longing for peace and progress and on a peace movement with a strong working-class component, European social and political forces must promote the following steps to end the war in Ukraine:

1. Opening peace negotiations without preconditions.
2. Calling for a ceasefire.
3. Opposition to NATO membership of Ukraine.
4. Recognition of language rights across Ukraine and the rights, including self-determination, of the Russian-speaking majority in the East and Southeast of Ukraine.
5. End of involvement by NATO countries in the Ukraine war, including a halt to all arms sales and withdrawal of all military personnel and trainers from Ukraine – the money saved to be used for strengthening social spending and public services.

It will take a significant period for Europe, and the world, to recover from the disastrous effects of US policy in the region. Permanently halting the war in Ukraine is an indispensable first step.

Bertina Lopes (Mozambique), Grido grande (Big Cry), 1970.

The steps drawn up by No Cold War are not only logical and humane: they are also the only way forward. All wars end in negotiations. So will this one.

Warmly,

Vijay

Even as the gloomy realities of war and hunger threaten to dull the light of humanity, the red sparkling dance of our struggles illuminates the path forward.

9 January 2025

Dear friends,

Greetings from the desk of Tricontinental: Institute for Social Research.

Very few humans have had the good fortune to descend into the depths of the world’s oceans. The deepest such place – 11 kilometres below sea level at its deepest point – is the Mariana Trench, which is located just north of the 607 islands of the Federated States of Micronesia in the Pacific Ocean (by comparison, Mount Everest is nearly nine kilometres above sea level). Down there, in the depths below six kilometres in what is called the hadal zone, there is no light. It is called the hadal zone after Hades, the ancient Greek god of the underworld. In Aeschylus’ The Persians, the chorus sings, ‘Hades, the all-receiving god, takes all into his grasp and never releases them’. The depths are treated with fear, the darkness below almost a gateway to Hades’ fiery hell.

Explorers who have been to the deepest ocean floors in various submarines report that it is indeed blindingly dark below six kilometres. But even in the deepest waters, they witnessed flashes of light and then saw that deep-sea creatures emit their own light (bioluminescence) to attract partners or hunt for food by producing luciferin (a light-emitting molecule) and luciferase (an enzyme), both named from the Latin for ‘light bringer’, which interact and produce photons. In fact, a new study now tells us that seventy-six percent of these deep-sea creatures possess this ability. Some are as small as single-celled algae that cannot be seen by the human eye while others are as large as the giant squid, which can reach up to thirteen metres long. There are unique creatures in these great depths, many of them evolved to adapt not only to the darkness but also to the extreme water pressure (16,000 pounds per square inch or psi compared to about 14.7 psi at sea level). They have been given fantastic names by humans who see them for their strangeness: goblin shark, dumbo octopus, vampire squid, zombie worms, half-naked hatchet fish. The key to their survival lies not merely in their fantastical eyes and mouths but in the light they produce to fight off the darkness.

Jean Cocteau (France), Oedipus or the Crossroads of the Three Roads, 1951.

The struggle to survive defines natural and human history on Earth. No animal or plant succumbs to whatever outrageous challenges are placed before it. On the beaches of Pohnpei, one of the Federated States of Micronesia, there are flowers – such as the beautiful orange, pink, and red coastal hibiscus – that erupt from the sandy soil and thrive when the saltwater washes over them. In 2013, the Pohnpeian poet Emelihter Kihleng wrote ‘Tide’, which captures that resilience:

The tide, it pulls at me,
a reminder of the things that are lost
and the things that return.
I stand at the shore,
feet sinking into the sand,
wondering if the ocean remembers me.

Pohnpei was not bombed in World War II, and it was spared from the nuclear tests that impacted Bikini Atoll (23 US nuclear tests between 1946 and 1958) and Enewetak Atoll (43 nuclear tests between 1948 and 1958), both approximately 900 to 600 kilometres away, respectively.

In 1934, Jean Cocteau published the play La Machine infernale (The Infernal Machine). In it, the Oracle of Delphi, who knows the story of Hades, tells the wise Oedipus, ‘The underworld is no more than a mirror of the world above, where we find only the same face, the same destinies, and the same shadows’. But, in fact, the Oracle of Delphi got it wrong. In the depths, near the gates of Hades, instead of succumbing to their situation, the creatures that live there – despite the reality of Thomas Hobbes’ motto Bellum omnium contra omnes (the war of all against all, or the struggle to survive) – produce their own inner light for reasons of reproduction or preservation. When I read about the ubiquity of these bioluminescent animals in the deepest ocean, I felt more for the metaphorical implications than for the evolutionary ones: is their luminescence merely a biochemical reaction or can it be read as resilience?

From Tricontinental: Institute for Social Research comes dossier no. 83 (December 2024), The False Concept of Populism and the Challenges facing the Left: A Conjunctural Analysis of Politics in the North Atlantic.

This text was spurred on by Donald Trump’s electoral victory in the United States, but also by the sensibility amongst sections of old liberalism and social democracy that it is this – the arrival of the far right of a special type – that is the cause of the problems facing humanity. Trump alone has not given us the habits of intimidation and repression that the United States and its allies inflict upon the Global South. Trump was born in 1946, a year after the US used atomic bombs on Hiroshima and Nagasaki. When he was a child, the US invaded the Korean peninsula (1945) and interfered in elections in Costa Rica (1948), Syria (1949), Iran (1953), and Guatemala (1954). Trump certainly set the terms for Israeli regional aggression with the Abraham Accords (2020), but he did not sign the orders to transfer dangerous weapons systems to Israel for its genocidal war, nor is he the only force in the North Atlantic committed to defending its financiers.

Trump is a product of the neoliberal compact. He is Frankenstein’s monster. His claim of being a self-made billionaire is as realistic as his claim of being a self-made politician: in both arenas, he was propelled by forces far bigger than him. When the old liberals and many of the social democrats tossed aside their commitments to welfare and the common good and salivated their way into neoliberalism, they increasingly lost popularity amongst large sections of the electorates in the North Atlantic. These old liberals and some social democrats used the state to divert enormous parts of the surplus to create billionaires and then take jobs in their world. As it lost its mass base, the ruling class frenetically searched for a way to maintain its electoral hegemony. This meant, first, destroying the possibility of any revival of welfarism through the centre left (the sabotage of the Bernie Sanders campaign and the conspiracy against Jeremy Corbyn are illustrations of this) and then finding candidates willing to say anything to create and discipline a new base (as long as these new candidates, such as Trump, remained committed to the rigid structures of surplus extraction from the social labour of the many for the bank accounts of the few). In time, unable to deliver upon their promises, Trump and others of the far right of a special type will fall out of favour with their mass base. When this happens, the ruling class, the Frankensteins of capitalism, will find another conjurer who will dazzle a disoriented mass base while continuing to inflict brutalities on the workers and peasants of the world.

Salah Elmur (Sudan), Golden Jubilee, 2020.

What will Trump’s presidency mean for the world, asks the liberal commentator? What has the neoliberal compact meant for the world? When the ‘lesser evil’ of the neoliberal compact – Biden in the United States, Starmer in the UK, Macron in France, Scholz in Germany (and until the pathetic end of his political career, Trudeau in Canada) – is totally complicit in an ongoing genocide, there is little that Trump could do to be worse. Beyond ‘finishing the job’ in Gaza as he and his cronies have vowed to do, perhaps all that is left is if he actually, Dr Strangelove style, conducts the extermination of the human race and the annihilation of the planet. But even when it comes to planetary destruction, what have the mega-corporations of the neoliberal compact done but commit ecocide and ignore the evidence of the climate catastrophe? These neoliberal forces claim to support forms of liberalism, such as freedom of speech, but indeed it is these old liberal and former social democratic forces in the Atlantic world that introduced widely unchecked powers for the forces of repression in the name of anti-terrorism, thereby delivering these powers to forces – such as Trump – that are instinctively against freedoms of speech and association. The old liberals and the former social democrats will say that at least they are not patriarchal or racist, but even here their records are abysmal: the deportation rate in the United States is as high if not higher under liberal presidents as under conservatives, and the old liberals and former social democrats have done almost nothing to defend women’s rights, which has become a campaign hobby horse rather than a field of struggle.

That is precisely the point: neither the old liberals and former social democrats nor the far right of a special type are capable of expanding the field of struggle. This allows space for working people to enter that field with confidence and clarity and shape a politics of emancipation from the grip of capitalism, and it allows them to deepen the battle of ideas and raise programmatic questions that seek to solve real problems rather than to merely try and build electoral formations to defeat the right.

Larkin Durey (Ivory Coast), Haut les mains (Hands Up), 2020.

I cannot get those deep-sea creatures out of my mind. At one point in Mary Shelley’s novel Frankenstein, the monster says that though he ‘ought to be thy [his creator’s] Adam’, he is ‘rather the fallen angel’ (i.e., Lucifer). The name Lucifer – like luciferin and luciferase – comes from the Latin word for ‘light bringer’, and although the term first appeared in a late fourth-century translation of the Hebrew Bible as a translation of the Hebrew phrase Heilel or ‘shining one’, it was not until John Milton’s Paradise Lost (1667) that it was identified with the fallen angel. Could it be that the monsters, the carriers of the far right of a special type – such as Trump – are also in some respect Luciferian ‘light bringers’ whose contradictions allow us to better see the deceptions of the neoliberal compact? They can do that, but they and the rest of the monsters of the North Atlantic world cannot do anything beyond that. They are not like the deep-sea creatures. Their followers are momentarily excited by their charisma but will soon tremble at their failures. Where will these masses go when they have lost interest in the far right of a special type? The gloomy realities of war and hunger have dulled the possibilities of an inner light for many humans who seem to have lost the spark in their eyes that holds the promise of illuminating a way forward.

But that light cannot go out. There is always a flash of light. The Haitian poet Paul Laraque (1920–2007) surrealistically wrote of those short bursts of light in the dances of the creatures and flowers deep in the waters in his poem ‘Mourir’ (To Die), which appears in his 1979 collection Les armes quotidiennes: Poésie quotidienne (Everyday Weapons: Everyday Poetry):

The wave of shadow dragged them to nothingness,
to the bottom of the sea, where they rest among the corals,
which open like roses, the red sparkling dance of fish,
the rusting remains of ships, the derisory opulence of the sands.

That red sparkling dance of fish, our protest for a new world.

Warmly,

Vijay

Republished From: https://thetricontinental.org/newsletterissue/struggles-illuminate-the-path-forward/

From Palestine to Sudan, imperialist wars are destroying the lives of innocent children, leaving long-term physical and psychological wounds on those who survive.

2 January 2025

Dear friends,

Greetings from the desk of Tricontinental: Institute for Social Research.

A study came out in December that made me cry. Titled Needs Study: Impact of War in Gaza on Children with Vulnerabilities and Families, it was conducted by the Community Training Centre for Crisis Management (CTCCM) in Gaza. Written in a clinical style, nothing about the language should have impacted me in the way that it did. But the study’s findings were shocking. Here are some of the cold facts:

1. 79% of the children in Gaza suffer from nightmares.
2. 87% of them experience severe fear.
3. 38% report bedwetting.
4. 49% of caregivers said that their children believed that they would die in the war.
5. 96% of the children in Gaza felt that death was imminent.

Put simply, every single child in Gaza feels that they are going to die.

Galal Yousif Goly (Sudan), Untitled, 2024.

This newsletter, the first of 2025, could have ended after that last line. What more needs to be said? But there is more to say.

In March 2024, the United Nations Committee on the Rights of the Child released a sharp statement on the war in Sudan between the Sudanese Armed Forces and the paramilitary Rapid Support Forces, both backed by a range of foreign powers. That statement had its own powerful facts:

1. 24 million children in Sudan – nearly half of the country’s total population of 50 million – are at risk of ‘generational catastrophe’.
2. 19 million children are out of school.
3. 4 million children are displaced.
4. 3.7 million children are acutely malnourished.

The first point refers to the totality of Sudan’s children, all of whom are at risk of a ‘generational catastrophe’. This concept, which was first used by the United Nations to describe the trauma and setbacks that children experienced due to COVID-19 lockdowns, means that the children of Sudan will not recover from the ordeal that the war has inflicted upon them. It will take generations before anything resembling normality returns to the country.

Pacita Abad (Philippines), Water of Life, 1980.

A scientific study from 2017 found that deep childhood traumas can mark a person both physically and psychologically. Trauma reroutes children’s developing nervous systems, causing them to be highly alert and anxious even decades later. This process, the authors write, generates a mechanism called ‘enhanced threat processing’. No wonder studies of children who lived through earlier wars show that they disproportionately suffer from medical conditions, including heart ailments and cancer.

In March 2022, five doctors from Afghanistan, India, Ireland, and Sri Lanka wrote a heartfelt letter to The Lancet in which they reminded the world of the plight of the children of Afghanistan. As of 2019, every child in Afghanistan was born and raised during war. Not one of them had experienced peace. The authors noted that ‘studies on psychotherapeutic interventions in Afghan children and adolescents are rare, and the evidence they have produced is low quality’. So, they proposed an integrated healthcare plan for Afghan children that relied upon telehealth care and non-medical professionals. In another world, the plan could have been debated. Some of the funds that had enriched the arms merchants during that war would have instead been expended to realise this plan. But this is not the way forward in our world.

Mahoud Ahmad (Iraq), Title Not Known (Ahmad 9), 1976.

The statement about arms merchants is not made idly. According to a December 2024 fact sheet from the Stockholm International Peace Research Institute (SIPRI), the world’s top 100 largest arms-producing and military services companies increased their combined arms revenues by 4.2% in 2023, reaching a staggering $632 billion. Five US-based companies accounted for nearly a third of these revenues. These 100 companies increased their total arms revenues by 19% between 2015 and 2023. Though the full numbers for 2024 are not yet available, if one looks at the quarterly filings from the main merchants of death, their earnings have spiked even further. Billions for warmongers, but nothing for children who are born into warzones.

Ismail Shammout (Gaza, Occupied Palestinian Territory), We Will Not Leave, 1987.

In 2014, Israel’s bombardment of Gaza resulted in the death of innocent children. Two incidents in July struck a special chord. First, Israel fired a missile that hit the Fun Time Beach Café (Waqt al-Marah) in Khan Younis at 11:30pm on 9 July. In the café, which was a makeshift structure about thirty metres from the Mediterranean Sea, several people had gathered to watch the 2014 FIFA World Cup semi-final match between Argentina and the Netherlands. They were all serious football fans. The Israeli missile killed nine young people: Musa Astal (age 16), Suleiman Astal (age 16), Ahmed Astal (age 18), Mohammed Fawana (age 18), Hamid Sawalli (age 20), Mohammed Ganan (age 24), Ibrahim Ganan (age 25), and Ibrahim Sawalli (age 28). They never got to watch Argentina win the match in the penalty stage or see Germany win the tournament in a tense match a few days later.

Israel’s bombing, meanwhile, was unabated. Three days later, on 16 July, several boys were playing football – as if replaying the World Cup on Gaza’s beach – when an Israeli navy ship fired first at a jetty and then, as the boys ran from the explosion, at the boys. Israel killed four of them – Ismail Mahmoud Bakr (age 9), Zakariya Ahed Bakr (age 10), Ahed Atef Bakr (age 10), and Mohammad Ramez Bakr (age 11) – and wounded others.

The 2014 Israeli barrage on Gaza killed at least 150 children in total. When the human rights group B’Tselem produced an advertisement to broadcast the names of the children on Israeli television, the Israel Broadcast Authority banned it. The British poet Michael Rosen responded to the killings and the ban with the beautiful poem ‘Don’t Mention the Children’.

Don’t mention the children.
Don’t name the dead children.
The people must not know the names
of the dead children.
The names of the children must be hidden.
The children must be nameless.
The children must leave this world
having no names.
No one must know the names of
the dead children.
No one must say the names of
the dead children.
No one must even think that the children
have names.
People must understand that it would be dangerous
to know the names of the children.
The people must be protected from
knowing the names of the children.
The names of the children could spread
like wildfire.
The people would not be safe if they knew
the names of the children.
Don’t name the dead children.
Don’t remember the dead children.
Don’t think of the dead children.
Don’t say: ‘dead children’.

Yes, the children have names. We will continue to name all those whose names we can remember. We will not forget them. In September 2024, the Palestinian Ministry of Health released an updated list of the names of Palestinians killed in the US-Israeli genocide from October 2023 to August 2024. On that list are 710 newborns whose ages are listed as zero. Many of them had only just been named.

Though the list is too long to reproduce here, the story of Ayssel and Asser Al-Qumsan is emblematic. On 13 August 2024, Mohammed Abu Al-Qumsan left his apartment in Deir al-Balah, within central Gaza’s ‘safe zone’, to register the birth of his twin children Ayssel and Asser. He left the twins with their mother, Dr. Jumana Arfa (age 29), who had given birth to them three days earlier at Al-Awda Hospital in Nuseirat. Dr. Jumann Arfa was a pharmacist trained at Al-Azhar University in Gaza. A few days before giving birth to her children, she posted on Facebook about Israel’s targeting of children, citing an interview with Jewish-American surgeon Dr. Mark Perlmutter on a powerful CBS News segment called Children of Gaza. When Mohammed returned from registering the twins, he found that their home had been destroyed and that his wife, newborn children, and mother-in-law had all been killed in an Israeli strike.

Ayssel Al-Qumsan.
Asser Al-Qumsan.

We must name the dead children.

Malak Mattar (Gaza, Occupied Palestinian Territory), Tiger Embracing the Boy, 2024.

Warmly,

Vijay

Republished From: https://thetricontinental.org/newsletterissue/palestine-gaza-2025/

As outgoing Defence Secretary Lloyd Austin embarks on his twelfth tour of the Indo-Pacific, the US’s New Cold War on China shows no signs of slowing down, even under a second Trump presidency.

21 November 2024

Dear friends,

Greetings from the desk of Tricontinental: Institute for Social Research.

On 31 May, the United States military endorsed a Statement of Principles for Indo-Pacific Defence Industrial Base Collaboration to strengthen military industry cooperation with its allies in the region. The principles outline commitments to initiatives such as the co-production of missile and rocket systems in Australia, the co-development of hypersonic missile interceptors with Japan, and possible collaboration with South Korea on defence technologies, including artillery systems. This collaboration adds to the extensive network of Indo-Pacific partnerships that the United States has created since the end of World War II.

As part of this deepened partnership, on 15 November US Defence Secretary Lloyd J. Austin III embarked on a tour of the region that will include stops in Australia, Fiji, Laos, and the Philippines. Austin’s tour began in Darwin, Australia, where he convened the fourteenth Trilateral Defence Ministers’ Meeting (TDMM) with his Japanese and Australian counterparts; Australia is also home to the Royal Australian Air Force (RAAF) Base Tindal, where the US is co-funding expansions that will allow the base to house US-made nuclear-armed B-1 and B-52 bombers. In Laos, the defence secretary will attend the Association of Southeast Asian Nations (ASEAN) Defence Ministers’ Meeting-Plus to discuss China’s so-called ‘aggression in the South China Sea’. The point of the tour is to underline the continuity of US policy in the region between the administrations of outgoing President Joe Biden and incoming President Donald Trump.

Rusiate Lali (Fiji), Qilaiso 2, 2017.

In early 2020, a group of people began discussing the need to create a platform to address the dangers of the US military build-up – both through its own military arsenal and its array of military alliances – along the coastline of East Asia. This build-up started to emerge after the US ‘pivot to Asia’, which started in 2011 under US President Barack Obama. The discussion led to the creation of the No Cold War collective, which was rooted in a statement signed by many individuals and organisations. The No Cold War collective held its first public webinar on 25 July 2020 and has since published 14 briefings on issues such as the war in Ukraine and the build-up of the US-NATO military machine in northeast Asia.

In the aftermath of the US election, No Cold War has released briefing no. 15, which explores what the second presidency of Donald Trump will mean for the world, with a focus on the US’s New Cold War on China. The briefing is below:

Préfète Duffaut (Haiti), Le Générale Canson, 1950.

Briefing no. 15: Trump’s Victory is a Morbid Symptom of US Imperial Decline

On 6 November, Donald Trump was elected as the 47^th President of the United States, ensuring he will return next January to the office he vacated in 2021 under the shadow of constitutional crisis and a failed far-right putsch. In doing so, he secured a more decisive and uncontested victory than in his first election in 2016, when he lost the popular vote to Hillary Clinton while prevailing in the United States’ Electoral College system – an arcane and profoundly undemocratic mechanism through which as little as 0.03% of the country’s voting population can decide the overall winner, with outsize consequences for the entire world due to US military and economic hegemony.

This time Trump scored over two million more votes than Vice President Kamala Harris, becoming the first Republican Party candidate in two decades to win the national popular vote. (This outcome had far more to do with the Democrats’ loss of almost ten million votes since 2020 than with the marginal increase in Trump’s support.) More consequentially, Trump swept all seven ‘swing states’ in the Electoral College.

Mathias Kauage (Papua New Guinea), Kauage Flies to Scotland for Opening of New Museum of Contemporary Art, 1999.

One of this election’s most emblematic swing state outcomes was in Michigan, home to the country’s largest proportion of Arab American voters. Here, the Biden-Harris administration’s full-throated military and diplomatic support for Israel’s genocidal onslaught on Gaza and Lebanon arguably sealed its ignominious defeat. In the Arab-majority city of Dearborn, Harris scored less than half of Biden’s 2020 vote share, falling behind Trump while anti-genocide Green Party candidate Jill Stein surged to over 18%. Nationwide exit polling by the Council on American-Islamic Relations found that a stunning 53% of Muslim voters opted for Stein, recognising that both major parties are ineluctably invested in imperialist aggression abroad and violent repression of the Palestine solidarity movement at home.

While core elements of the traditional Democratic Party voter base have deserted the Biden-Harris administration over its murderous foreign policy, the incoming Trump presidency will not bring any relief to Palestinians after more than a year of full-scale genocide. Trump has stated on multiple occasions his intention to let the Netanyahu regime ‘finish the job’ in Gaza, and all indications suggest that he will maintain and indeed accelerate Biden’s push for a ‘new Middle East’ fully subordinated to Zionism and US imperialism. Judging by his past and present bellicosity towards Iran – having assassinated Qassem Soleimani and unilaterally reneged from the Iran Nuclear Deal (formally the Joint Comprehensive Plan of Action, JCPOA) in his first term – he will likely display even fewer inhibitions about escalating the crisis into a full-scale regional war. One clear indicator of this is Trump’s choice of Iran hawk Marco Rubio as Secretary of State and of Brian Hook (author of the ‘maximum pressure’ strategy against Tehran in his first term) to oversee the transition.

Elmer Borlongan (Philippines), The Happiest Place on Earth, 2017.

The appointment of Rubio, who has historically been almost equally hawkish on Russia, seems to pour cold water on largely speculative hopes that Trump would at least de-escalate the NATO proxy war in Ukraine. Such hopes had been buoyed by his closest foreign policy advisers’ plans to condition US military aid on Ukraine’s willingness to negotiate and accept a temporary ceasefire with Russia, while threatening to ‘open the floodgates’ if Moscow in turn refuses this arrangement. This was motivated not by any principled commitment to diplomacy but by an equally belligerent realpolitik that envisions China as the United States’ number one enemy and aims to redirect US military assets into an even more menacing encirclement of that country.

Trump insider Elbridge A. Colby has laid out an exhaustive plan to provoke China into a shooting war over Taiwan, which his proposed National Security Advisor Mike Waltz would be well-placed to execute. Indeed, Trump in his second term will almost certainly intensify the US hybrid war against China that escalated dramatically in his first term and continued unabated under Biden – not just in the military domain but in information warfare and trade policy as well. In particular, he has proposed a minimum 10-20% tariff on all imports into the United States and a steep 60% tariff on those from China. This would sharply increase consumer prices and thereby cost the average household around $3,000 per year according to the Tax Policy Center.

Malangatana Valente Ngwenya (Mozambique), Faces, 1972.

Such a policy would only further immiserate a population already reeling from the Biden-Harris administration’s attack on working-class living standards – the proximate cause of the Democrats’ collapse. Real weekly wages have noticeably declined over the course of Biden’s term in office and rates of inequality increased (as of December 2023 one in nine adult women were living in poverty, including 16.6% of Black women and 16.8% of Latina women). At the same time, US billionaires’ aggregate wealth increased by an astonishing 88% (to $5.5 trillion) between March 2020 and March 2024, while capital wealth as indicated by the S&P 500 index rose by 72%. Small wonder that Trump won a majority of households earning under $100,000 a year (including a massive 74% of those reporting ‘severe hardship’ due to inflation) while losing the $100,000+ bracket: a complete reversal from the partisan breakdown in 2020 and all previous presidential elections in living memory.

Ultimately, such economic grievances garnered Trump large enough winning margins that the third-party vote share proved not at all decisive: a further humiliation for the Democrats, who mounted Herculean efforts to keep progressive anti-genocide candidates off the ballot. At first glance, the fact that many voters were disappointed with the failures of the Biden-Harris administration’s massive domestic spending initiatives would appear to complicate narratives that directly attribute Harris’s defeat to Biden’s foreign policy. But one can hardly call a country’s domestic budget ‘domestic’ when it includes its military budget – including maintaining a globe-spanning empire of over 900 military bases, investing $175 billion into the proxy war in Ukraine and $18 billion into Israel’s genocide, and when the actual military spending stands at more than double the official figure – an astounding $1.5 trillion in 2022 alone. Trumpism, in all its paradoxical extremes of isolationism and belligerence, populism and nativism, is but another morbid symptom of this violent imperial decline.

Andy Leleisi’uao (Aotearoa), Harmonic People, 2017.

These morbid symptoms, as noted in briefing no. 15, reflect the desire on the part of the US ruling class for a war to undermine the economic advances made by China. This is dangerous. We might want to listen to those who know what wars bring. Cao Cao, a warlord during the Eastern Han dynasty, wrote a charming poem that provides such a warning:

Lice and fleas infest the long-worn armor;
Tens of thousands of civilians perished.
Bones lie bare in the fields,
Not a rooster crow heard within a thousand li.
Out of a hundred, lives one;
The very thought of it breaks my heart.

Warmly,

Vijay

Republished From: https://thetricontinental.org/newsletterissue/give-us-peace-on-earth/

Key Highlights:

1. Growth Trends:
   • Industrializing economies reported a quarterly growth of 1.4% in manufacturing output in Q2 2024. High-income industrializing economies, such as Saudi Arabia and Chile, led with a growth of 2.2%, while middle-income economies grew by 1.2%​.
   • Emerging industrial economies like Malaysia and Rwanda showed exceptional growth rates of 2.7% and 2.6%, respectively, with countries such as India and Vietnam following at 1.3% and 1.2%​.
2. Sectoral Analysis:
   • High-technology industries rebounded in Q2 2024 with a growth of 1.6%, after stagnation earlier in the year. Meanwhile, lower-technology manufacturing remained relatively flat.
3. Challenges:
   • Growth remains uneven across low-income countries, with some regions experiencing contraction. For example, low-income industrializing economies saw a 0.5% decrease in production, highlighting vulnerabilities in these areas​.

Long-term Trends:

• A gradual convergence process appears underway, as industrializing economies outperform high-income industrial economies, which reported slower or stagnant growth​.
• These insights reflect a dynamic yet uneven industrial development landscape, emphasizing the potential for technological investment and productivity improvement to sustain growth.

For further details, refer to UNIDO’s World Manufacturing Report

Across the Pacific, Indigenous communities lead a growing wave of sovereignty against ongoing legacies of Western colonialism in the region, from the assault on Māori rights in Aotearoa to the US and French military presence in wider Oceania.

7 November 2024

Dear friends,

Greetings from the desk of Tricontinental: Institute for Social Research.

For the past few weeks I have been on the road in Aotearoa (New Zealand) and Australia at the invitation of groups such as Te Kuaka, Red Ant, and the Communist Party of Australia. Both countries were shaped by British colonialism, marked by the violent displacement of native communities and theft of their lands. Today, as they become part of the US-led militarisation of the Pacific, their native populations have fought to defend their lands and way of life.

On 6 February 1840, Te Tiriti o Waitangi (the Treaty of Waitangi) was signed by representatives of the British Crown and the Māori groups of Aotearoa. The treaty (which has no point of comparison in Australia) claimed that it would ‘actively protect Māori in the use of their lands, fisheries, forests, and other treasured possessions’ and ‘ensure that both parties to [the treaty] would live together peacefully and develop New Zealand together in partnership’. While I was in Aotearoa, I learned that the new coalition government seeks to ‘reinterpret’ the Treaty of Waitangi in order to roll back protections for Māori families. This includes shrinking initiatives such as the Māori Health Authority (Te Aka Whai Ora) and programmes that promote the use of the Māori language (Te Reo Maori) in public institutions. The fight against these cutbacks has galvanised not only the Māori communities, but large sections of the population who do not want to live in a society that violates its treaties. When Aboriginal Australian Senator Lidia Thorpe disrupted the British monarch Charles’s visit to the country’s parliament last month, she echoed a sentiment that spreads across the Pacific, yelling, as she was dragged out by security: ‘You committed genocide against our people. Give us our land back! Give us what you stole from us – our bones, our skulls, our babies, our people. … We want a treaty in this country. … You are not my king. You are not our king’.

Walangkura Napanangka (Pintupi), Johnny Yungut’s Wife, Tjintjintjin, 2007.

With or without a treaty, both Aotearoa and Australia have seen a groundswell of sentiment for increased sovereignty across the islands of the Pacific, building on a centuries-long legacy. This wave of sovereignty has now begun to turn towards the shores of the massive US military build-up in the Pacific Ocean, which has its sights set on an illusionary threat from China. US Secretary of the Air Force Frank Kendall, speaking at a September 2024 Air & Space Forces Association convention on China and the Indo-Pacific, represented this position well when he said ‘China is not a future threat. China is a threat today’. The evidence for this, Kendall said, is that China is building up its operational capacities to prevent the United States from projecting its power into the western Pacific Ocean region. For Kendall, the problem is not that China was a threat to other countries in East Asia and the South Pacific, but that it is preventing the US from playing a leading role in the region and surrounding waters – including those just outside of China’s territorial limits, where the US has conducted joint ‘freedom of navigation’ exercises with its allies. ‘I am not saying war in the Pacific is imminent or inevitable’, Kendall continued. ‘It is not. But I am saying that the likelihood is increasing and will continue to do so’.

George Parata Kiwara (Ngāti Porou and Te Aitanga-a-Māhaki), Jacinda’s Plan, 2021.

In 1951, in the midst of the Chinese Revolution (1949) and the US war on Korea (1950–1953), senior US foreign policy advisor and later Secretary of State John Foster Dulles helped formulate several key treaties, such as the 1951 Australia, New Zealand, and United States Security (ANZUS) Treaty, which brought Australia and New Zealand firmly out of British influence and into the US’s war plans, and the 1951 San Francisco Peace Treaty, which ended the formal US occupation of Japan. These deals – part of the US’s aggressive strategy in the region – came alongside the US occupation of several island nations in the Pacific where the US had already established military facilities, including ports and airfields: Hawaii (since 1898), Guam (since 1898), and Samoa (since 1900). Out of this reality, which swept from Japan to Aotearoa, Dulles developed the ‘island chain strategy’, a so-called containment strategy that would establish a military presence on three ‘island chains’ extending outward from China to act as an aggressive perimeter and prevent any power other than the US from commanding the Pacific Ocean.

Over time, these three island chains became hardened strongholds for the projection of US power, with about four hundred bases in the region established to maintain US military assets from Alaska to southern Australia. Despite signing various treaties to demilitarise the region (such as the South Pacific Nuclear Free Treaty, also known as the Treaty of Rarotonga in 1986), the US has moved lethal military assets, including nuclear weapons, through the region for threat projection against China, North Korea, Russia, and Vietnam (at different times and with different intensity). This ‘island chain strategy’ includes military installations in French colonial outposts such as Wallis and Futuna, New Caledonia, and French Polynesia. The US also has military arrangements with the Federated States of Micronesia, the Marshall Islands, and Palau.

Christine Napanangka Michaels (Nyirripi), Lappi Lappi Jukurrpa (Lappi Lappi Dreaming), 2019.

While some of these Pacific Island nations are used as bases for US and French power projection against China, others have been used as nuclear test sites. Between 1946 and 1958, the US conducted sixty-seven nuclear tests in the Marshall Islands. One of them, conducted in Bikini Atoll, detonated a thermonuclear weapon a thousand times more powerful than the nuclear bombs dropped on Hiroshima and Nagasaki. Darlene Keju Johnson, who was only three years old at the time of the Bikini Atoll detonation and was one of the first Marshallese women to speak publicly about the nuclear testing in the islands, encapsulated the sentiment of the islanders in one of her speeches: ‘We don’t want our islands to be used to kill people. The bottom line is we want to live in peace’.

Jef Cablog (Cordillera), Stern II, 2021.

Yet, despite the resistance of people like Keju Johnson (who went on to become a director in the Marshall Islands Ministry of Health), the US has been ramping up its military activity in the Pacific over the past fifteen years, such as by refusing to close bases, opening new ones, and expanding others to increase their military capacity. In Australia – without any real public debate – the government decided to supplement US funding to expand the runway on Tindal Air Base in Darwin so that it could house US B-52 and B-1 bombers with nuclear capacity. It also decided to expand submarine facilities from Garden Island to Rockingham and build a new high-tech radar facility for deep-space communications in Exmouth. These expansions came on the heels of the Australia-United Kingdom-United States (AUKUS) partnership in 2021, which has allowed the US and the UK to fully coordinate their strategies. The partnership also sidelined the French manufacturers that until then had supplied Australia with diesel-powered submarines and ensured that it would instead buy nuclear-powered submarines from the UK and US. Eventually, Australia will provide its own submarines for the missions the US and UK are conducting in the waters around China.

Over the past few years, the US has also sought to draw Canada, France, and Germany into the US Pacific project through the US Pacific Partnership Strategy for the Pacific Islands (2022) and the Partnership for the Blue Pacific (2022). In 2021, at the France-Oceania Summit, there was a commitment to reengage with the Pacific, with France bringing new military assets into New Caledonia and French Polynesia. The US and France have also opened a dialogue about coordinating their military activities against China in the Pacific.

Antonio Gramsci’s concept of “passive revolution” refers to a process of social, political, or economic change that is driven from above—by the ruling classes or the state—rather than through active and direct popular movements or revolutionary uprisings. Unlike traditional revolutions where the masses take control and overthrow the existing power structure, passive revolutions are characterized by gradual transformations that maintain the basic structure of power while incorporating some changes to accommodate new social or political realities. Key features of Gramsci’s concept of passive revolution include:

Top-down Reform: Changes are initiated by elites or the state to prevent revolutionary upheaval from below. These changes are often implemented to stabilize the system and absorb potential opposition.

Transformism: Related to passive revolution is the concept of “transformism,” where leaders from subaltern (or lower) classes are co-opted into the ruling class to neutralize radical challenges. This tactic allows the ruling class to incorporate elements of popular demands without fundamentally altering the power structure.

Conservative Modernization: The ruling elites might introduce reforms that modernize society or the economy, but in ways that ultimately consolidate or preserve their dominance. This modernization is not meant to empower the people but to strengthen the existing order.

Preventing Hegemony from Below: In Gramsci’s theory, the ruling class implements passive revolution to prevent the emergence of a counter-hegemony—an alternative ideological framework—by the subaltern classes. By making some concessions, the ruling class avoids the possibility of a mass revolutionary uprising.

Historical Examples: Gramsci used historical examples such as the Italian unification (Risorgimento) and the development of modern capitalist societies to illustrate passive revolution. In Italy, for instance, national unity was achieved through elite-driven processes rather than through a broad, popular movement. Similarly, many capitalist reforms were driven by elites to prevent radical upheaval.

In essence, passive revolution is a strategy of maintaining control through change, wherein the ruling class reshapes institutions, policies, or the economy in ways that absorb or deflect popular discontent without surrendering power. It contrasts with more direct, bottom-up revolutionary movements that seek to overturn the entire social and political system.

In recent history, there have been several examples of “passive revolutions” where significant social, political, or economic changes were initiated from above, often by elites or the state, rather than through mass popular movements. Here are some examples:

1. Economic Reforms in China (1978-present)

• After Mao Zedong’s death, China underwent major economic reforms under Deng Xiaoping. The ruling Communist Party introduced market reforms to modernize and transform China’s economy, moving from strict state control toward a more market-driven system.
• These reforms were introduced from above, by the Communist leadership, without a popular movement calling for such changes. The government retained tight political control while implementing capitalist practices within the socialist framework. This can be seen as a passive revolution because it prevented potential instability and dissatisfaction from below by modernizing the economy without losing control of the political system.

2. Perestroika and Glasnost in the Soviet Union (1980s)

• In the 1980s, Mikhail Gorbachev initiated Perestroika (economic restructuring) and Glasnost (political openness) in an effort to revitalize the Soviet Union. These were reforms that attempted to liberalize the economy and increase political transparency, but the Communist Party remained in control.
• The process was led from the top to avoid unrest and maintain the socialist state, even though it eventually led to the collapse of the Soviet Union. This could be considered a passive revolution because it involved significant reforms aimed at adapting the system to avoid a larger, potentially revolutionary upheaval.

3. Neoliberal Reforms in Latin America (1980s-1990s)

• In the 1980s and 1990s, many Latin American countries implemented neoliberal economic reforms under pressure from international institutions like the International Monetary Fund (IMF) and World Bank. These reforms included privatization, deregulation, and reductions in social spending.
• Although these changes were often unpopular and led to significant social consequences, they were introduced by elites to modernize economies in response to financial crises. In some cases, these reforms helped avoid larger social upheavals, acting as a passive revolution by incorporating some changes that were necessary for survival while maintaining the overall political-economic order.

4. Post-Apartheid South Africa (1990s)

• The transition from apartheid to a democratic system in South Africa can be viewed through the lens of passive revolution. Although apartheid was brought down by a strong mass movement (led by the African National Congress and other organizations), the transition to democracy involved a negotiated settlement between the ruling white minority and the liberation movements.
• The settlement, which allowed for political freedom and enfranchisement for the Black majority, also preserved much of the economic power structure, with white elites retaining significant control of the economy. This could be seen as a passive revolution because, while significant political changes occurred, the economic transformation was gradual and did not completely overturn the status quo.

5. Post-Socialist Economic Transition in Eastern Europe (1990s)

• After the fall of the Soviet Union, many Eastern European countries transitioned from socialism to capitalism through a series of top-down reforms. These transitions involved privatization of state assets and the establishment of market economies.
• While the political systems in these countries changed from authoritarian socialism to democracy, much of the economic restructuring was controlled by elites. In many cases, the former communist elites became the new capitalist elites, maintaining their dominance through a process of transformation rather than revolution. This gradual, elite-driven transformation mirrors Gramsci’s idea of a passive revolution.

6. The Arab Monarchies’ Reforms (2010s)

• In response to the Arab Spring uprisings, several monarchies in the Middle East, such as Morocco, Jordan, and the Gulf states, introduced limited political and economic reforms. These changes were aimed at addressing popular demands without surrendering control of the state.
• In Morocco, for instance, King Mohammed VI introduced a new constitution in 2011, granting some political powers to the parliament while keeping key executive powers in the hands of the monarchy. This process represents a passive revolution, as it was intended to preempt a more radical, revolutionary change from below by introducing controlled reforms from above.

7. Saudi Arabia’s Vision 2030 (2016-present)

• Saudi Arabia’s Crown Prince Mohammed bin Salman introduced Vision 2030, a series of economic and social reforms aimed at diversifying the economy away from oil dependence and opening up certain aspects of Saudi society.
• While some of the reforms, such as allowing women to drive and opening up entertainment options, were socially significant, they were initiated and controlled by the state without mass popular demands. The monarchy remains firmly in power, and political dissent is tightly controlled. This can be seen as a passive revolution because the leadership is initiating these changes from the top to modernize society without fundamentally challenging the existing political order.

8. Rwandan Development Model (1994-present)

• After the genocide in 1994, Rwanda, under President Paul Kagame, embarked on a top-down process of modernization and economic development. The country implemented policies aimed at transforming its economy and society, but this process has been controlled by a highly centralized state with limited political freedom.
• The Rwandan government has maintained stability and growth through a model that integrates some aspects of neoliberal economic policies with strong state control. While the country has experienced significant changes, the process has been elite-driven, with little space for political dissent, reflecting characteristics of a passive revolution.

These examples demonstrate how ruling elites or state actors can initiate changes to adapt to new realities while maintaining overall control, which aligns with Gramsci’s concept of passive revolution. The goal in these cases is often to prevent a larger revolutionary threat or to co-opt potential sources of opposition.

The notion of passive revolution is one of Gramsci’s most important theoretical contributions. This concept is also used to analyse various historical phenomena or present concrete situations. For Gramsci, the contributions of this notion seem to be positioned on at least two levels, linked dialectically: to conceive a modality of historical change that cannot be reduced to revolutionary upheavals in the strict sense; and to critically highlight the dominant classes’ political strategies to advance the emancipation of subaltern autonomous activity.

On August 5, 2024, one of the largest stock market collapses in the world in the history of capitalism took place. But the most important thing was not the dimension of the collapse, but its significance. The significance of the collapse is that the world economy is heading towards stagflation, a horrific combination of recession and inflation on a global scale, a prospect that appears on the horizon of the world capitalist system. The collapse of August 5 is the product of the fear that this prospect of global stagflation provokes in the capitalists.

Bailouts and financial rescue will not be able to prevent capitalism from entering this phase in the midst of the crisis that has dragged on for more than 20 years. The data that caused the collapse of August 5 were: 1) Firstly, the bursting of the Yen bubble that caused the collapse of the Tokyo stock exchange, 2) The data on the entry of recession in the US economy, 3) The data on fighting in the Middle East between Palestinian and Lebanese militias against the Israeli army, a state that is a pillar of global capitalism and aggravates its crisis in the face of the 3rd Intifada. Of all these data, the most relevant was the entry into recession of the United States economy.

The data on the recession in the United States is the most relevant because capitalism has been involved in global inflation since 2021. Then, if the recession data of the US economy is confirmed, to which are added the data from China, Japan and Europe that are already in recession, the prospect of the combination of recession and inflation, that is, stagflation, opens up. Stagflation is the term used by bourgeois economists to define the combination of both symptoms of capitalism’s crisis.

It’s a term coined in 1965 by then-British Chancellor of the Exchequer Ian McLeod in a speech to Parliament when he said: “We now have the worst of both worlds: not just inflation on the one hand or stagnation on the other, but both together. We have a kind of “stagflation”. And, in modern terms, history is being made” (Ian Norman Macleod, House of Commons’ Official Report, November 17, 1965).ParaphrasingMcLeod, “the worst of both worlds” that in 1965 was “a modern novelty” and a definition to be applied in national economies, is now presented as another “modern novelty” that is the application on a global and world scale of this definition. In turn, the perspective of “global stagflation” illustrates the gravity and depth of the world crisis of capitalism.

A collapse that combines inflation and recession

The trend towards stagflation occurs in the midst of the collapse that capitalism is going through, consisting of the combination of several factors such as the generalization of poverty, the cutting off of the supply chain or global gridlock, the collapse of trade, the destruction of productive forces, generalized precariousness, global recession, the devastation of nature, etc. climate change, bubbles, speculative maneuvers, the crash or bankruptcy of global corporations and banks, pandemics, wars, etc. It is in the context of this global situation of collapse that global inflation has been unleashed in 2021, hitting the entire world, which combined with the recession throws a picture of stagflation.

What is the problem facing imperialism if the world capitalist economy is heading for stagflation? That the tools available to imperialism to overcome the crisis are increasingly limited and complex to apply. In general, since 2008/09, every time the economy faced recession or the danger of generalized bankruptcies, the officials of the Central Banks and capitalist governments resorted to bailouts and financial bailouts to overcome the crisis, the so-called QE (Quantitative Easing).

QE is “injecting” money into global corporations to avoid their bankruptcies, which “heats up” the engines of the economy, temporarily reviving it and causing the stock markets to rise. On the other hand, the Bailouts drove inflation and developed dangerous speculative maneuvers known as “bubbles”, which is actually the phenomenon that Marxists call “overaccumulation” of capital, when enormous masses of capital accumulate in an asset, commodity or branch of production, seeking profits.

The bursting of the “bubbles” causes serious economic and social crises, for example the bursting of the “punto.com” bubble in the 2000s initiated the current world crisis of capitalism, and unleashed the wars in Iraq and Afghanistan that led to the military defeat of NATO and imperialism. Another example is the bursting of the “sub prime” bubble between 2007/08 that unleashed the bailouts and the 3 revolutionary waves that we are currently experiencing against capitalism. The response of capitalist-imperialist officials and governments to the danger of the bursting of “bubbles” has been QT (Quantitative Tightening), an operation that means “withdrawing” money from corporations, which produces an economic “cooling” with the aim of curbing bubbles, and avoiding inflation. In this way, what characterizes the policy of world imperialism in the face of the global crisis of capitalism in the last 16 years has been a successive alternation of QE with QT.

The alternation of QE and QT in the last 15 years

The alternation of QE and QT began with the first tranche of bailouts that was called QE1 in September 2008, until March 31, 2010, when the world economy again showed symptoms of recession. There began the second round of bailouts on November 3, 2010 called QE2 until June 30, 2011, which failed to remove the danger of crisis, which led to a third round of bailouts called QE3, which began on September 13, 2012 until October 29, 2014. when he stopped in the U.S. In Europe, QE was developed during 2015. But inthe face of the danger of speculative bubbles bursting, the bailouts were stopped and imperialism varied its policy by going towards the QT that began from October 2014 until October 2019 when the outbreak of the repo crisis occurred that threatened to bankrupt the Global Corporations again.

The threat of bankruptcies forced imperialism to launch a new round of bailouts inMarch 2022 when QE4 began,with which the equivalent of the bailouts implemented in the previous 10 years was injected in 3 years. With an even more accelerated and dizzying speed, QE4 coincided with the development of theCoronavirus pandemic and constituted the largest rescue operation in history, in which the Central Banks multiplied by 7 the masses of money injected into the Global Corporations, going froman average of 120 billion dollars per month between the years 2008-2019, to an average of more than 833 billion dollars per month between March 2020, and March 2022. If you want read more about the QE4 click here

The image shows the alternation of QE1, QE2, and QE3 with QT1 between 2008 and 2019. Source: Federal Reserve

The brutal injection of such a large amount of masses of fictitious capital into the economy triggered global inflation, which exploded the increase in prices in the 5 continents, from countries that have been living with chronic inflation for years, to countries that had not known inflation for decades.If you want read more about the world inflation click here

With global inflation having skyrocketed to these dangerous levels, the economic authorities of world capitalism went to a new QTand withdrew the QE4 Bailouts to implement for the second time an operation to withdraw the masses of capital and a rise in interest rates of up to 5 and 5.5 percentage points. The withdrawal of the QE4 bailouts pushed capitalism into a wave of bankruptcies in the United States, Europe, and China during 2023. If you want read more about the bankruptcies click here

The collapse of Silicon Valley Bank broke out in the United States, whose English branch was bought by HSBC for $1, followed by the crisis of First Republic Bank, and Signature Bank, after which the authorities announced that 186 banks were in danger. In Europe, Credit Suisse, one of the 10 largest corporations that dominate the global economy based in Switzerland, went bankrupt, which was resolved through a merger with the Union of Swiss Banks (UBS), while in China the bankruptcy of Evergrande, the most important corporation in the country’s real estate industry, was agreed.

To sustain and rescue the economy from these bankruptcies, imperialism carried out the Central Bank Agreement concluded on March 19, 2023 between the main 6 Central Banks of the world: The US Federal Reserve, and the United States. The Bank of Canada (BofCa), the Bank of England (BofE), the Bank of Japan (BoJ), the European Central Bank (ECB) and the Swiss National Bank (SNB) signed an agreementthat introduced the “novelty” of bailouts that are implemented on a “daily” basis, through the mechanism of “swap lines”, a “window” that provides money 24 hours a day to constitute and form a “money security mesh”. that provides loans for all the world’s millionaires and their Global Corporations. If you want to read more about the Central Banks Agreement click here

The image shows the QT1 and QT2. Source: Reuters

It should be clarified that the implementation of these measures is carried out simultaneously and in a coordinated manner by all capitalist governments and leading officials of capitalism throughout the world. QE and QT are implemented in the US. The United States, Japan, Canada, China, and Europe by mutual agreement, otherwise the measures would not have an effect. 

Despite the crazy theories that try to portray China as “confronting the United States” or “disputing global hegemony” the reality of 

more than 15 years of capitalist crisis is that all capitalist-imperialist governments, as well as the sub-metropolises, whether China, India, Israel, Brazil or South Africa, act in a centralized and disciplined manner following the guidelines set by the Central Bank of the United States called the Federal Reserve, the “Fed” in the jargon of bourgeois economists.

When it comes to rescuing capitalism there is no “decoupling”, nor “hegemonic dispute”, on the contrary, the hegemony of Wall Street and the US imperialist corporations is total and indisputable for the economic authorities of the entire world. The application of QE and QT is carried out by all the Central Banks of the main capitalist economies of the world, they are categorical facts that belie all the charlatanism of a “3rd World War” or the existence of “blocs” between China and Russia on the one hand and the US. On the other hand, they are at odds with each other. Far from this fantasy, all the governments, officials and authorities of the capitalist countries of the whole world act with the same policy subordinated to the orders of US imperialism. and Wall Street. That is to say, the crisis of capitalism, instead of being a factor of “division into blocs”, acts by unifying the ruling classes and their representatives in defense of capitalism.

The monstrous “bubble of everything”

With the Central Banks’ Agreement, the stage of the “alternation” between QE and QT ended, and a simultaneous combination of both mechanisms began. From 2023 onwards we began to observe that on the one hand QT2 was still in force, which included an interest rate hike of between 5 and 5.5, while on the other hand and simultaneously, the Central Banks’ Agreement was developed, which is in fact a QE, although imperialist officials refuse to declare and publicly acknowledge it. so as not to “scare” the markets, and not to suffer the worldwide “repudiation” of the population in the face of the rescue of the millionaires.

It is precisely this prospect of stagflation that began to be drawn on the horizon of capitalism throughout 2023 when, in the midst of the outbreak of global inflation, the “wave of bankruptcies” began to develop that has led imperialism, the authorities and Central Banks to this need to combine QE, and the QT. Both tools alone can no longer provide an answer to the crisis of capitalism, which opens up a very complex, very difficult situation for the authorities of world imperialist capitalism.

Speculative real estate bubbles in 2022 in the red are those at risk of bursting. Source: VisualCapitalist

Now the governments and officials who run capitalism must use both tools in combination but in a very difficult way because QE prevents bankruptcies but triggers inflation, while QT prevents inflation but develops bankruptcies. It is like trying to inflate a balloon by blowing air while pricking it with a needle simultaneously, two operations that are opposite but must be carried out simultaneously. You cannot “cool” and “heat” the economy simultaneously, but this is the challenge that governments and central banks of the imperialist countries are facing, a very hard and difficult road for world imperialism that is perceived by Wall Street produced the “crash” of the stock markets on August 5. 

In turn, the alternation of QE and QT for more than 15 years in the world economy has caused a real disaster that pushed capitalism into greater and more serious dangers. By having injected these enormous financial parasites with bailouts, the development of all kinds of speculative maneuvers such as share buybacks and fraudulent activities exploded, with which criminal financial activities multiplied, which according to capitalist analysts themselves are “weapons of mass destruction.”

If what had caused the outbreak was a crisis in US mortgages, then there is a crisis in the United States. In the US, now that mortgage crisis had multiplied by 12 and spread to 11 countries. Thesize of the companies that dominate the world economy, the “too big to fail” Global Corporations, are now real monsters bigger and more dangerous that have developed a monstrous global speculative bubble that bourgeois analysts call the “Bubble of Everything”. Financier Jared Dillian explains it this way: “… In 2000, we had the dot-com bubble. In 2007 we had the real estate bubble… In 2017, we have the bubble of everything…” (Capital Bolsa 29/6/17). In China, a gigantic bubble was formed that is called “the mother of all bubbles”

What has been the result of 15 years of QE, bailouts, or bailouts? They have inflated the largest, most horrific, and colossal speculative bubble in the history of capitalism, what Wall Street analystscall the “bubble of everything,” a kind of financial hurricane that can wipe out the entire planet because it is a bubble that, if it bursts, can bankrupt global capitalism. That is to say, capitalism does not arrive at this situation suddenly and randomly, but as a product of a genesis, a development of crises that it is important to evaluate in order to understand how it has arisen and how the capitalist governments and functionaries themselves have built the “bubble of the whole”.

The dot-com bubble in the 2000s (dot.com bubble), the housing bubble in 2008 (housing buble) and the “Everything bubble” shot up as the biggest and most monstrous. Source: The Board of Governors of the United States Federal Reserve

The collapse of August 5 exposed the seriousness of the phenomenon faced by governments and officials of global capitalism, for which they must use tools that place them before an arduous perspective. A phenomenon that they must face taking into account that the tools they have are already limited, which makes the whole process very difficult to face, and solve. But they need to face the political-social consequences that the crisis of capitalism means for capitalist governments.

This is so because the crisis of capitalism is the basis on which the revolutionary waves and the workers’ and people’s uprisings that sweep the world in the last century are sustained.

XXI. With the skyrocketing inflation, a wave of workers’ strikes broke out worldwide in the United States, France, England, Germany, Japan and developing countries, which underpinned the process of trade union reorganization and global “political revolution”. That is why the desperate measures they are already taking will not prevent stagflation from occurring. For example, in China, bailouts and bailouts of the People’s Bank of China (PBOC) have begun, driven by the concern of Xi Jinping’s regime about the slowdown in China’s growth rate.

The truth is that China’s collapse forced the start of QE with a reduction in the central bank’s base interest rate from 1.7 percent to 1.5 percent, a further reduction from 0.25 to 0.5 percentage points later this year, the injection of 142,000 million dollars to the banks, $71 billion in bailouts of brokers, insurance companies, stock buyouts, and $300 billion available for share buybacks.

The governor of the PBOC, Pan Gongshen, stated that such measures could be doubled or tripled if they work, with which China acts in conjunction with the United States authorities, who at the same time announce the reduction of interest rates with which they begin to leave QT2 to go towards QE5. Imperialism globally in conjunction with the capitalist government of China implements the same measures that only seek to save the oligarchy of Wall Street, and its junior partners such as the oligarchy of the CP of China. To read more about U.S. oversight of China’s economy, click here.

The Basel III “Endgame” farce

All these manoeuvres that begin in China and the US are not the same. The U.S. bailouts are the beginning of QE5, a new round of bailouts that seeks to pull the global economy out of the crisis. But we already anticipate that QE5 will not succeed in preventing the world economy from heading towards stagflation, an inevitable course as the struggles and revolutions of workers and peoples place a limit on the attempts of governments and officials to save capitalism.

After the sharp peak of the world crisis of capitalism developed between 2008 and 2009, capitalist governments and officials applied bailouts, financial bailouts and QE, but at the same time the reality of the need for supervision of corporations that carry out maneuvers and scams without any type of regulation by the states was imposed. and capitalist governments. During that time, the Basel Committee on Banking Supervision, a group convened by the Bank for International Settlements (BIS), stipulated that the capital requirement for a corporation to be considered solvent and financially sound was 19% of deposits in relation to loans and other financial instruments. this agreement of the Central Banks was called the “Basel III Framework”.

But, after the outbreak of the “bankruptcy wave” in 2023, the heads of Global Corporations pushed for the Basel rules to be modified, in favor of bankers. In July 2023, the Fed’s head of regulation, Michael Barr, published a new set of rules known as Basel III Endgame, in which the capital requirements that a bank must have to be considered solvent, and not be considered bankrupt, had been halved. Now the requirements have gone from 19% to 9%, which for corporations such as JP Morgan, Goldman Sachs, Bank of America, or Citigroup was a “godsend” because they freed up 100,000 million dollars to continue speculating.

Ironically, “Endgame” means “End of the Game”. The professional swindlers of Wall Street, the millionaire oligarchs of the 1%, the heads of the Global Corporations, applaud Basel III because it is a permission to continue to swindle the entire world while continuing to command a social system that is collapsing day by day. We repudiate Basel III, the bailouts, and all the speculative maneuvers that bring millions of dollars into the pockets of the rich, to be richer every day while 99% of the world’s population is poorer every day. The time has come to put an end once and for all to capitalism, whose crisis threatens humanity, in order to move towards Global Socialism.

Source by www.revolucion.org.es