Canada’s Conservatives launch sweeping assault on democratic rights with new anti-terror bill

Roger Jordan

The anti-terrorism bill Canadian Prime Minister Stephen Harper unveiled last Friday contains measures signifying a vast intensification of the drive to abrogate democratic rights and establish the scaffolding for a police state.
Making the announcement in front of Conservative Party supporters rather than in parliament, Harper presented plans that will see Canada’s premier spy agency, the Canadian Security Intelligence Service (CSIS), freed from virtually any legal restraint in its day-to-day work.
Bill C-51 provides for CSIS to act in violation of domestic and foreign laws in its intelligence gathering practices and surveillance of suspects.
This is combined with a vast strengthening of the authority of CSIS to take action against terrorist suspects, including measures to disrupt alleged terrorist activity. According to information released by the government, it is no longer acceptable that “CSIS does not have a legal mandate to take action concerning threats. Instead, CSIS is limited to collecting and analyzing information and intelligence, and advising the Government of Canada.”
Under the new bill, CSIS operatives will be empowered to break the law and violate the Canadian constitution’s Charter of Rights, if they have “reasonable grounds” for believing that a threat is posed to Canada’s national security and have obtained court authorization. This is a lower level of legal evidence than would be expected in an investigation by law enforcement officials with the power of arrest.
If a court gives its assent, CSIS agents will be able to perform numerous illegal acts, including breaking into suspects’ homes, seizing and copying documents, and installing or removing “anything.” The only limitations are that CSIS cannot kill or physically harm someone or “violate” their “sexual integrity.”
The government is presenting these powers as a response to the threat of terrorist attacks.
But the legislation is worded in such a way that it empowers CSIS agents to disrupt not only terrorist activity and plots but rather all “threats to the security of Canada.” These include “espionage, sabotage, foreign influenced activities, terrorism and domestic subversion (activities against the constitutionally established system of government in Canada).”
The court oversight proposed by the Harper government would be limited to a judge signing off on these activities in advance. Thus, in effect, the courts would be providing CSIS with a blank cheque to act as it saw fit, with no further review after the fact.
With Bill C-51, the government has abandoned even the limited separation of intelligence work from law enforcement operations adopted by the Canadian ruling elite in the 1980s following damaging revelations about the activities of its security agencies. CSIS was founded in 1984, after a public inquiry uncovered systematic law-breaking and intimidation on the part of the Royal Canadian Mounted Police’s (RCMP) Security Service, CSIS’s predecessor. The Security Service employed violence, break-ins and arson, among other illegal techniques, against political parties and leftists, especially socialists and trade unionists.
The reformed framework did nothing to prevent CSIS from obtaining vast surveillance powers, such as spying on the population’s telephone and online communications, and systematically violating legal restrictions, illustrated most notably by the revelation that CSIS deliberately lied to the courts over several years about its spying practices.
The bill also broadens the definition of terrorist offences by criminalizing the act of “advocating” or “promoting” terrorism in general. Currently, the promotion of a specific act is required for an offence to be committed.
The new provision is patently aimed at targeting political opponents of the government’s embrace of militarism in Canadian foreign policy. Just last week, Harper implied that the leader of the opposition New Democrats, Thomas Mulcair, was a supporter of Islamic State in a parliamentary exchange in which Mulcair raised questions about the government’s deployment of special forces in Iraq. Harper told parliament, “I know that the opposition thinks it is a terrible thing that we are standing up to the jihadists. I know they think it is a terrible thing that some of these jihadists got killed when they fired on the Canadian military.”
If this is the response to those, like the NDP, who merely differ with the government over the tactics to be pursued in upholding Canadian imperialism’s interests, it is not hard to imagine what the reaction would be to the emergence of a genuine anti-war movement in the working class.
Provisions are also to be strengthened for facilitating the seizure and removal of material from the Internet considered to be encouraging terrorism. A court will be able to order the removal of articles, pictures or videos from websites that it deems to be “terrorist propaganda.” Information published on Harper’s website confirmed that this law was directly inspired by Britain’s example, where authorities are able to block “extremist” material online.
Bill C-51 will, in addition, expand the power of the RCMP to detain individuals without charge. It would allow suspects to be detained for up to seven days and expands the “peace bond” scheme, whereby suspects who have neither been convicted nor charged with an offence are compelled to give up their passports and banned from travelling abroad. The maximum period is currently two years. Bill C-51 would lengthen it to five years.
Judges would also have the authority to impose other conditions on suspects, such as reporting regularly to police officers or electronic tagging. Indicating the vague character of suspicion that would be necessary before adopting such measures, the government declared that they would be aimed at those “who may in some way be connected to carrying out a terrorist activity.”
The level of suspicion necessary to make an arrest will also be reduced from the current requirement that a “terror act will be carried out” to the much more vague belief that a terrorist attack “may be” in preparation. In the course of their investigations, government agencies will be permitted to share data on any individual.
Harper justified these draconian measures as necessary in the face of the grave threat posed by Islamist terrorism. In keeping with his repeated portrayal of Canada as a nation under siege from terrorists, he declared last Friday, “Our government understands that extreme Jihadists have declared war on us, on all free people, and on Canada specifically. Our government will continue to protect the rights and safety of all Canadians.”
In reality, the government is pursuing a very different agenda with this latest legislative package. Firstly, it is seeking to exploit the climate of fear whipped up by the claim that Canada is under attack to win support for Ottawa’s growing involvement in the predatory war in the Middle East led by US imperialism.
Domestically, the terrorist legislation is aimed at suppressing all opposition among workers to the government’s unpopular policies of war abroad and attacks on social and democratic rights at home. Bill C-51 is only the latest in a raft of repressive measures instituted by successive governments led by the Conservatives and opposition Liberals since the 9/11 terrorist attacks. These include an all-embracing definition of terrorism, which could cover protests and strikes by workers, mass surveillance of the population by CSIS and the RCMP, and powers to compel witnesses to testify in terrorism trials. In December, parliament adopted Bill C-44, granting blanket legal anonymity in court to CSIS informants, and sanctioning CSIS’s spying on Canadians outside the country.
This reactionary drive also feeds in to the Conservatives’ strategy for the upcoming federal election, which it intends to fight on an overtly right-wing basis by casting the opposition as soft on terrorism and incapable of carrying out the ruling elite’s demands for deeper attacks on the working class.
The opposition Liberals and New Democrats will offer no principled opposition to this programme. Liberal public safety spokesman Wayne Easter remarked, prior to the presentation of the new law, that the Liberals were “very open to what the government will propose.” Noting that his party’s only real complaint was a lack of parliamentary oversight, he left no doubt of his fundamental agreement with expanded state powers, asking, “One key question is: why have current laws not been utilized to the full extent we think they should be?

Mistreatment of detainees and asylum seekers widespread in Europe

Jean Shaoul

A report by the Council of Europe’s Committee for the Prevention of Torture (CPT) details the shocking abuse and mistreatment of detainees, particularly asylum seekers and juveniles, in some of Europe’s detention centres. It warns that prison guards had carried out reprisals against detainees who had spoken about their ill treatment to the CPT.
The CPT visited detention centres in 25 of the 47 members of Council of Europe to examine conditions relating to the treatment of detainees. These included prisons, police stations, holding centres for immigration detainees, psychiatric hospitals, and social care homes.
Its findings are contained in 24th General Report of the CPT: European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (1 August 2013-31 December 2014).
The CPT drew attention to the mistreatment of asylum seekers, saying that they were being held in conditions that were both inhumane and degrading, particularly in Spain, Italy and Greece, which take in the largest number.
In Greece, migrants were being held in police stations all over the country for long periods. The report cited the example of Perama Police Station in Piraeus, where two or more women were held for months in a dark, mouldy and dilapidated basement cell measuring just 5 square metres, with no access to outdoor exercise or hygiene products.
Greece’s austerity measures had affected the most vulnerable members of society. There was an extreme shortage of staff, and overcrowding at prisons was widespread. Prisons were operating at two or three times their capacity, prisoners were sharing beds or sleeping on mattresses on the floor, and there was a serious lack of hygiene and access to health care. At Korydallos Men’s Prison, a wing of some 400 inmates was staffed by only two prison officers during the day, leading to mistreatment, bullying and intimidation by police officers.
The detention and mistreatment of asylum seekers is becoming a growing issue throughout Europe.
In Britain, for example, around 30,000 asylum seekers—nearly one third of them women and children—are detained every year, and the number is growing. They are isolated from the outside world, allowed only one visitor, and confined, without time limit, until their asylum cases are heard. It is not uncommon for asylum seekers to be held for as long as a year until their cases are heard. If their appeal is rejected, they are deported immediately without regard for their safety. They have no right to health care or legal aid.
A report into Britain’s Yarl’s Wood Immigration Removal Centre, which holds more than 400 female asylum seekers, found that nearly three quarters of the 46 women interviewed had been raped, while 41 percent had been tortured. More than half said they had been persecuted for being a woman, while 18 percent had been persecuted for their sexuality.
Such treatment is bound up with the policy of “Fortress Europe” pursued by the European Union’s member states: the sealing off of the continent from the flood of refugees, the result in large part of Europe’s support for the US wars of aggression against Afghanistan, Iraq and Libya, and covert operations in Somalia, Syria, Yemen and elsewhere.
The CPT also expressed its concern about the situation confronting those under 18 years of age. It said that the deliberate ill treatment of juveniles by law enforcement officials remained a real concern in a number of countries.
There were credible allegations of detained juveniles being ill treated, including being kicked, slapped, punched or beaten with batons at the time of apprehension (even after the juvenile concerned has been brought under control), during transportation or subsequent questioning in law enforcement establishments. It was not uncommon for juveniles to become victims of threats or verbal abuse (including of a racist nature) while in the hands of law enforcement agencies.
It recommended that juveniles should not be subject to police questioning without a lawyer or trusted adult, held in law enforcement establishments for more than 24 hours, housed in large dormitories or placed in solitary confinement as a disciplinary measure. That the CPT should make such recommendations speaks volumes for the conditions its investigators observed.
Of great concern to the CPT was that their previous reports had been ignored, some of their previous recommendations had not been implemented, and prisoners or detainees who spoke with their investigators faced reprisals from guards.
Reprisals took the form of undue restrictions on basic entitlements, solitary confinement for fabricated disciplinary or security reasons, placement in worse conditions of detention, withdrawal of support for early release, assault and other kinds of ill treatment. This had occurred in Armenia, Azerbaijan, Bulgaria, Greece, Hungary, Moldova, Russia, Spain, the former Yugoslav Republic of Macedonia, and Ukraine.
One prisoner in Ukraine had allegedly been subjected to severe beatings after the CPT’s previous visit to the establishment and been made to shout to other inmates—while he was being beaten—that he would never again complain to the CPT. The CPT, which has no powers of sanction, called on the authorities to prevent the risk of further intimidation and to protect witnesses and “whistle-blowers.”
CPT President Letif Hüseynov said, “Intimidation or retaliation against persons the CPT has interviewed may not only violate their human rights but also strikes a blow to the preventive mechanism established by the European Convention for the Prevention of Torture.”
The CPT report has attracted little media attention—only Deutsche Welle reported it—and no public response at all from the political authorities responsible for this terrible state of affairs.

Australian central bank cuts rates as economic downturn accelerates

Nick Beams

The Reserve Bank of Australia (RBA) yesterday cut its base interest rate by 0.25 percentage points in a move that reflects both the intensifying global currency war and the rapidly worsening state of the Australian economy.
The RBA’s cash rate is now at an historic low—even below the level recorded in the depths of the 2008–2009 financial crisis. The Australian dollar fell to just above 76 US cents, its lowest point for more than five years, on the back of the news, amid predictions that further interest rate cuts will be made in coming months.
The RBA decision points to the deepening global downturn. In little more than a month since the start of the year, some 12 countries have now taken action, whether by cutting rates or other measures, to try to lower the value of their currencies as the struggle for markets intensifies and global growth declines.
Australia has been heavily impacted because of precipitous falls in commodity prices, most notably the halving of the price of iron ore, its leading export earner. The terms of trade, a measure of the relative value of exports compared to imports, have fallen by 25 percent over the past three years, leading to a contraction in real gross domestic income over the past half year. Real wages have contracted for the first time since 1991–92.
Having not experienced an official recession—defined as two consecutive quarters of negative growth—for almost a quarter of a century, Australia is now being sucked into the vortex created by the ongoing breakdown of the global economy that began in 2008.
Announcing the decision, RBA governor Glenn Stevens, who has advocated a lower Australian dollar in order to try to boost growth, pointed to two key motivating factors.
He said that while the Australian dollar had declined “noticeably against a rising US dollar in recent months,” its fall against a basket of major currencies was much less marked and it remained “above its fundamental value.” This is particularly significant because other central bankers have insisted that their rate cuts have not been aimed at reducing the value of their currency—such a policy being condemned as an expression of the beggar-thy-neighbour measures that characterised the 1930s.
Bank officials have generally tried to cover their tracks by citing the need to prevent the emergence of deflation. But with the inflation at or near 2 percent in Australia no such obfuscation was available to Stevens. He had to admit that the rate cut was specifically aimed at reducing the value of the Australian currency.
Stevens’ statement pointed to the rapidly worsening position of the Australian economy. Growth remained at “below trend pace, with domestic demand growth overall quite weak.” The major component of the weakness is the downturn in domestic investment as businesses anticipate stagnant or contracting markets.
Stevens said output growth would remain below trend and unemployment, now at 6.3 percent, would continue to rise.
This is in marked contrast to RBA forecasts made as recently as last November. Then it said that 2015 was likely to bring a recovery with growth rising from its level of 2.3 percent to 3.5 percent and possibly reaching 4.25 percent by the end of 2016.
As Business Spectator columnist Alan Kohler noted: “Taken at face value, the RBA has made a total reassessment of its view of the economy and concluded that things are not going that well—worse apparently than the statistics are telling us.”
He said the RBA had decided to “don the camouflage suit and tin hat and race out into the currency war battlefield, guns blazing.”
The RBA’s “total reassessment” is an expression of the ongoing downward assessment of the state of the global economy. According to Australian Treasurer Joe Hockey, the International Monetary Fund is about to release fresh forecasts on global growth expressing “further concern about some of the headwinds we are facing.” Just two weeks ago the IMF downgraded its forecast for global growth from 3.8 to 3.5 percent, but it now appears that even that was too optimistic.
Hockey’s warnings about IMF growth revisions made total nonsense of his claim that the RBA cut was “good news for families and small businesses” and “good news for the economy and … good news for jobs.”
In fact, the only beneficiaries will be the financial speculators—share prices rose to their highest levels since the financial crisis of 2008 following the RBA announcement—and real estate and property investors. In other words, the major economic outcome of the decision will not be real growth but ever-increasing financial parasitism and the further enrichment of the super-rich, together with widening social inequality.
Contrary to Hockey, the decision was made because RBA considers that, having held interest rates steady for the past 18 months, the economic outlook is now rapidly worsening, a downturn which has firmly taken hold since its assessment barely two months ago.
Hockey’s bizarre remarks are an indication of the underlying economic forces driving the growing political crisis which has gripped the Abbott Liberal government. On the one hand, it is faced with demands from the corporate elites, articulated in numerous editorial comments, especially in the Murdoch press, that, under worsening economic conditions, it press ahead with an austerity program aimed at lowering the living standards of the working class.
On the other hand, these attacks have produced a growing wave of opposition which last weekend led to the ousting of the Queensland state Liberal National Party government. Premier Campbell Newman, who lost his own seat in the debacle, had exhibited exactly the kind of “strong” leadership advocated in the editorial columns, casting a pall of doubt over the future of the federal government.
In an attempt to deflect growing criticism of his leadership, Abbott used his National Press Club address on Monday to assure the corporate elites that he was remaining firm, while warning his opponents within the party that any attempts to remove him would make the position of the government even worse. His stand, however, has so far failed to end the leadership turmoil.
A measure of the mounting frustration in ruling circles over the worsening economic position and the increasing difficulty of securing their agenda through parliamentary forms of rule was the editorial published in today’s Financial Review criticising the RBA decision.
“Fiscal policy is off the rails,” it declared. “Politics is a mess, with the instability of the Rudd-Gillard years infecting the Abbott government. There has been no major productivity-enhancing policy reform since the GST [the regressive goods and services tax] a decade and a half ago. Our national prosperity is receding as iron ore and coal prices slump. And now, the one upright institution—and the one credible and coherent policy lever—monetary policy—are bending under the pressure of policy failure elsewhere.”
The response of the working class to this deepening economic and political crisis must be to begin to advance its own independent program, based on socialist internationalism, and the building of a new leadership to fight for it.

Washington moves toward arming Ukrainian regime

Niles Williamson

On Monday, the New York Times announced that the Obama administration is moving to directly arm the Ukrainian army and the fascistic militias supporting the NATO-backed regime in Kiev, after its recent setbacks in the offensive against pro-Russian separatist forces in east Ukraine.
The article cites a joint report issued Monday by the Brookings Institution, the Atlantic Council, and the Chicago Council on Global Affairs and delivered to President Obama, advising the White House and NATO on the best way to escalate the war in Ukraine.
The think-tank report calls for the US to distribute at least $3 billion in military equipment to the Kiev regime over the next three years. Among the equipment proposed for delivery are light anti-armor missiles, counter-battery radars to target artillery and rocket launchers, medium range drones and armored Humvees. They also call on NATO member states in Eastern Europe with former Soviet equipment to provide weapons and equipment to Kiev.
According to the Times, US officials are rapidly shifting to support the report’s proposals. NATO military commander in Europe General Philip M. Breedlove, Defense Secretary Chuck Hagel, US Secretary of State John Kerry, and Chairman of the Joint Chiefs of Staff General Martin Dempsey all supported discussions on directly arming Kiev. National Security Advisor Susan Rice is reconsidering her opposition to arming Kiev, paving the way for Obama’s approval.
Behind the backs of the American people, Washington is recklessly escalating a conflict that threatens to provoke war with Russia. Offensives by Ukrainian fascist militias such as the Right Sector or the Azov Battalion have already led to the deaths of more than 5,000 people and forced over a million to flee their homes. Russian officials have repeatedly stated that they will intervene militarily to halt a bloodbath by Kiev regime forces in east Ukraine—a move that could trigger a global war between Russia and Ukraine’s NATO allies.
The way the report was assembled testifies to the utterly anti-democratic fashion in which US foreign policy is determined. The think-tank report, which the Times ludicrously described as “independent,” was authored by a cabal of former high-ranking Pentagon, NATO and State Department officials. Behind the backs of the American people, a policy is being set into motion that could trigger war between nuclear-armed countries including the United States and Russia.
In fact, the institutions and individuals that issued the report have close ties to the Obama administration and the Democratic Party. First Lady Michelle Obama sits on the board of directors of the Chicago Council.
Among those who signed off on the report, one finds:
Strobe Talbott, current President of the Brookings Institution, who served as Deputy Secretary of State in the Clinton administration and Ambassador-at-Large to the former Soviet Union. He oversaw the development of US policy toward Russia amid the Stalinist dissolution of the USSR, and early efforts to draw former pro-Soviet states in Eastern Europe and former Soviet republics in the Caucasus away from Russia. As President Bill Clinton’s closest advisor on Russia, Talbott supported Boris Yeltsin’s shelling of the Russian parliament in 1993, resulting in the deaths of hundreds of people.
Ivo Daalder, current President of the Chicago Council, was a foreign policy adviser to Obama during his 2008 presidential campaign and the US representative to NATO during the war on Libya in 2011. The bombing campaign led by the United States, France and Britain devastated Libya, killed tens of thousands and resulted in the lynch mob murder of Moammar Gaddafi.
Michele Flournoy currently chairs the Center for a New American Security think-tank and was the Under Secretary of Defense under Robert Gates and Leon Panetta from 2009 to 2012. She also served in the Defense Department in the Clinton Administration, formulating US policy on Russia, Ukraine, and Eurasia. She was considered a potential candidate to replace current Defense Secretary Chuck Hagel, who announced his resignation in November.
Two former US ambassadors to Ukraine, John Herbst and Steven Pifer, signed their names to the report. Significantly, Herbst was ambassador during the US-backed 2004-2005 Orange Revolution that brought to power a pro-Western government. In 2006, he secured $2.3 million in funding through USAID, a long-standing conduit for CIA funding and operations, to promote the development of pro-Western media in Ukraine.
In calling for such an escalation in Ukraine, the signatories are all following in the footsteps of former National Security Advisor to President Jimmy Carter, Zbigniew Brzezinski. Last year, Brzezinski delivered a speech at the Wilson Center laying out the policies now being advocated in the Brookings Institution report and discussed by the New York Times.
He called on Washington to provide Kiev with, “weapons designed particularly to permit the Ukrainians to engage in effective urban warfare of resistance. There’s no point trying to arm the Ukrainians to take on the Russian army in the open field, thousands of tanks, an army organized for the application of overwhelming force.” Instead, he proposed a policy of intimidating Russia and, if it decided to intervene in Ukraine anyway, bogging it down in urban ethnic warfare.
He explained, “There is a history to be learned from urban resistance in World War II and most recently in Chechnya, whose capital persisted for three months in house-to-house fighting. The point is, if the [Russian] effort to invade was to be successful politically, it would have to incorporate taking the major cities. If the major cities, say Kharkiv, say Kiev, were to resist and street fighting became a necessity, it would be prolonged and costly. And the fact of the matter is, and this is where the timing of this whole crisis is important, Russia is not yet ready to undertake that kind of effort. It will be too costly in blood, paralyzingly costly in finances.”
The strategy outlined by Brzezinski is sinister and reactionary. If US operations fail to intimidate Russia into ceding all influence in Ukraine and letting NATO proxies crush the Donbass, US weapons and equipment would be used to bleed Russia white in a war fought inside cities that are home to millions of people, and that might escalate into full-scale nuclear war.

ISIS releases video of barbaric execution of Jordanian pilot

Will Morrow

The execution by the Islamic State of Iraq and Syria (ISIS) of captive Jordanian pilot Moaz al-Kasasbeh, depicted in a video published by the terrorist outfit and widely circulated on social media on Tuesday, is a barbaric and heinous act. The grisly 22-minute video, which shows al-Kasasbeh doused in gasoline kneeling in a cage then set alight, has provoked revulsion among ordinary people around the world.
ISIS captured al-Kasasbeh on December 24 when his plane crashed over northern Syria during a bombing sortie as part of the US air war. In exchange for his release, ISIS had demanded the release of Sajida al-Rishawi, an Iraqi women imprisoned for her role in a 2005 bombing attack in the Jordanian capital Amman. Jordan’s government signalled its willingness to make the trade, but demanded proof of life.
In response to the killing of al-Kasasbeh, the despotic Jordanian regime of King Abdullah II announced today that it had carried out its own barbarities—hanging al-Rishawi and one other prisoner at dawn. Other executions could follow. Armed forces spokesman Mamdouh al-Ameri declared that “the revenge will be as big as the calamity that has hit Jordan.”
The execution of the Jordanian pilot has again exposed the reactionary character of terrorism. The methods employed by ISIS express the fact that it does not represent the strivings of the oppressed masses of the Middle East for a way to end imperialist domination. Rather it represents sections of the Arab elite who are seeking a more favourable accommodation with the major powers.
As with previous ISIS killings, including the beheadings of American journalist James Foley and Japanese journalist Kenji Goto, the murder of al-Kasasbeh directly plays into the hands of imperialism. The US and its allies are already using the atrocity to justify the further expansion of their war in Iraq and Syria.
US President Obama told a press conference on Tuesday that the execution, if verified, would “redouble the vigilance and determination on the part of our global coalition to make sure that they [ISIS] are degraded and ultimately defeated.”
In reality, ISIS is the direct product of the illegal US-led invasion of Iraq in 2003, and the subsequent regime-change operation in Syria. ISIS and its forerunner, Al Qaeda in Iraq, which did not exist in Iraq prior to the 2003 occupation, gained support among the country’s Sunni minority due to the savage repression unleashed by the invasion and the sectarian atrocities carried out by the US-backed Shiite puppet government in Baghdad.
Washington and its allies provided funds, arms and training to ISIS as part of the US-backed efforts to oust the Syrian government of Bashar al-Assad. The US turned a blind eye to ISIS’s atrocities as long as it was part of the “democratic revolution” against Assad. Only when its militias moved into western and northern Iraq and threatened US interests did the Obama administration use ISIS as the pretext for a renewed intervention in Iraq and Syria.
Obama is facing mounting criticism within the American political and military establishment over his administration’s policy in Iraq and Syria and demands for an escalation and widening of the Middle Eastern war.
Republican Senator Lindsey Graham (South Carolina), who is a possible presidential nominee, used an appearance on last Sunday’s CBS show “Face the Nation” to call for a major increase in US troops on the ground from 2,300 to 10,000. Former Republican presidential candidate John McCain had earlier called for such an increase.
Graham bluntly declared that the real target of the expansion of US military forces would be the Assad government in Syria. “You cannot successfully defeat ISIL [ISIS] on the ground in Syria… until you deal with Assad,” he said. Both McCain and Graham have also called for the imposition of a no-fly zone over Syria, which would mark a further step toward the initiation of open war against the Assad government.
These comments followed a speech last week by Michael Flynn, the recently-retired director of the Defence Intelligence Agency, in Washington DC. According to the Daily Beast, Flynn denounced Obama’s strategy against ISIS as “paralysed,” and called for a decades-long US-led war against it. Flynn reportedly received a standing ovation from the assembled crowd of intelligence officers.
General Martin Dempsey, the chairman of the Joint Chiefs of Staff, declared in an interview on January 23 that the Authorisation for the Use of Military Force (AUMF) being sought by the Obama administration for its war in Iraq and Syria, should be unlimited in scope and duration.
“I think in the crafting of the AUMF, all options should be on the table, and then we can debate whether we want to use them,” he said. He added that “it shouldn’t constrain activities geographically, because ISIL knows no boundaries.” Moreover, any constraints on time, or a so-called “sunset clause,” were unnecessary.
Yesterday, Marine Lt. Gen. Vincent Stewart testified before the House Armed Services Committee, declaring that the threat of ISIS was growing and that the war in Syria “is trending in the Assad regime’s favour.” The implication of his remarks is that the war in Syria must not only be extended against ISIS, but openly targeted against Assad as well.
The US and its allies are already stepping up the war in Iraq and Syria. The Combined Joint Task Force announced yesterday that 14 airstrikes had taken place over a 24-hour period, following another 34 strikes during the weekend. On the ground, Al Jazeera reported yesterday that Iraqi government forces, led by the Badr Brigade—a Shiite militia notorious for sectarian atrocities—had recaptured the province of Diyala, killing unarmed civilians in the town of Barwana.
The Obama administration also announced yesterday that it would increase its annual aid to the Jordanian regime from $660 million to $1 billion for 2015–2017. Jordan has been a key ally in the US-led wars in the Middle East. The country has hosted bases used by the CIA to train Islamist fighters being sent to fight against the Assad government in Syria.
The escalating US-led war in Iraq and Syria is not about fighting terrorism but is aimed at securing American domination over the energy-rich Middle East, in the first instance through the ousting of the Assad regime. The military intervention, which has already destabilised the region, threatens to trigger a wider conflict with Assad’s backers—Iran and Russia—and to draw in other powers.

Oil slump triggers North Sea crisis

Steve James

The slump in the price of oil is a powerful symptom of capitalist breakdown. To protect market share during declining demand, the Organisation of Petroleum Exporting Countries (OPEC), the cartel of oil producing countries who together produce around 40 percent of global oil supplies, has agreed to maintain current production levels.
Demand for OPEC oil in 2015 is anticipated to be about 28.8 million barrels per day (bpd), compared with a production figure of 30 million bpd. As a result, there is a growing surplus of oil on the world market and prices are collapsing. Oil is selling for well under $50 a barrel, less than half the price six months ago.
Saudi Arabian officials, representing the most powerful OPEC country, have stated they will not cut production regardless of price “be it $40, $30, or $20 per barrel.” A former Saudi oil minister, Mohammed al-Sabban, boasted that the country could sustain low prices for “at least eight years ... to see those marginal producers move out of the market.”
The price collapse has made a host of projects and oil fields unviable. Shell has abandoned plans to build a huge petrochemical plant in Qatar, the Al Karaana project. Premier Oil is expected to postpone the $2 billion Sea Lion project off the Malvinas/Falkland Islands and the Beam project in the Norwegian North Sea. Statoil has given up exploration licenses in Greenland, one of the most expensive exploration zones, while Canada Natural Resources is cutting capital spending by about 25 percent. Exploration rig hire charges have fallen 25 percent. In total, Goldman Sachs reckoned, $930 billion of projects could be shelved.
One of the most exposed regions is the British sector of the North Sea. Production, which began in the 1970s, has been in decline since 1999, with a sharp slump following 2010. New discoveries tend, year by year, to be smaller, in deeper water, with more complex extraction. While new techniques have raised the percentage of recoverable oil, this is ever more costly. With oil at over $100 a barrel, advanced methods still allow huge profits to be recouped. At below $50, few North Sea fields, currently the most expensive offshore locations in the world, are profitable. By contrast, production in Saudi Arabia costs less than $10 a barrel.
An extended price slump poses an existential threat to much of the British North Sea-based industry, as exploration of smaller, deeper fields becomes unviable and existing fields run dry. In December, Robin Allan of the oil industry explorers’ association Brindex, told the BBC that North Sea exploration was “close to collapse.” Allan, a director of Premier Oil, complained that even at $60 a barrel, exploration was unprofitable.
The slump destroys the Scottish National Party’s (SNP) mendacious perspective of an independent capitalist Scotland, so awash in oil revenue that the austerity policies imposed by the British and Scottish governments since the initial financial breakdown of 2008 could be reversed. At current prices, according to the British government’s Office for Budget Responsibility, tax revenues accruing from oil annually would be as little as £1.25 billion, in contrast to the SNP’s forecasts of some £6.9 billion.
The 2014 referendum on Scottish independence featured repeated spats over the amount of oil revenue that would come Edinburgh’s way in the event of a “Yes” vote. The SNP, leading the “Yes” campaign with the assistance of the pseudo-left groups, bombarded working class areas with promises that families would be thousands of pounds richer.
With the vote safely over and prices plummeting, SNP Energy Minister Fergus Ewing complained that the threat to the oil industry was creating “the most serious jobs situation Scotland has faced in living memory.”
Labour’s new leader in Scotland, Jim Murphy, agreed, warning, “The oil crisis is the biggest threat to jobs in Scotland since Ravenscraig.” The 1992 closure of the Ravenscraig steelworks indirectly cost up to 10,000 jobs. In Aberdeen, 13 percent of all jobs are oil-related and the northeast of England hosts a number of production sites, but oil-related jobs are scattered across the UK. In total, estimates of oil-related jobs in the UK run as high as 450,000. Of these, 35,000 are said to be imperiled, including 16,000 in Scotland.
In response, and seeking to defend the industry’s profit margins, the British and Scottish governments, in league with the oil corporations, are pursuing three angles.
Firstly, every party is calling for a sharp reduction on the level of corporation tax paid from oil production. The benchmark figure has been set by the industry lobby group Oil & Gas UK, whose boss, Malcolm Webb, wants the top rate of North Sea tax cut from 80 percent to 30 percent. There is cross-party agreement that a supplementary tax rate should be cut by around 10 percent. The SNP, led by newly-installed Scottish First Minister Nicola Sturgeon, is calling for tax cuts immediately, without waiting for the British Chancellor George Osborne’s next budget in March.
Secondly, there is all-party support for the implementation of the Wood Review. Ian Wood, billionaire and retired founder of the oil services Wood Group PSN, was hired to report on the options to maximise the life of oil fields in the UK’s continental shelf. Wood’s review warned that the “light touch” regulation of the early years of North Sea exploitation—for “light touch”, read dangerous scramble—had led to a situation where there are now over 300 oil fields of varying sizes competing for access to an aging and badly organised infrastructure. Wood called for an industry-backed regulator to ensure the most efficient and profitable exploitation of remaining resources, estimating that while 42 billion barrels of oil equivalent have been drawn out of the seabed, another 12-24 billion barrels could be available.
Thirdly, industry is also cranking up the exploitation of its workforce, while reducing its size. The industry centred on Aberdeen now has interests far beyond the North Sea, including Central Asia, Brazil and West Africa, and is worth up to $52 billion . To retain its global influence, costs—mostly wages—have to be driven down.
In response to the fall in oil prices, a wave of job losses was announced in the industry globally.
Oil industry trade unions in Scotland, despite verbal grandstanding, have a long record of doing nothing to fight job losses. Their main aim is to ensure the competitiveness of the oil industry. The Rail Maritime and Transport union (RMT) has endorsed the all-party consensus for tax breaks, with spokesman Jake Molloy insisting, “This is about sustaining oil and gas production from the North Sea ... and keeping the economy buoyant beyond May.”
Mick Cash, RMT general secretary, claimed, “We will be pushing for a halt to the job cuts programme and an emergency package of measures to stave off the destruction of both jobs and infrastructure.”
This is hot air, with the union’s main concern being, in Cash’s words, that firms presently have only “a short-term slash-and-burn approach that will have long-term implications for the future of the entire industry and the security of the UK’s energy supplies.”
The declaration that the RMT would fight job cuts followed the announcement by BP that 300 jobs would go at its North Sea operations. Following Cash’s statement, Talisman Sinopec said it would shed 300 jobs.

Former Maldives president mounts challenge to government

Wasantha Rupasinghe

In the wake of a visit to Sri Lanka last month, Maldives’ opposition leader Mohamed Nasheed is seeking to form an alliance to take control of the parliament (Majlis) and oust President Abdulla Yameen.
Nasheed’s trip to Colombo was significant as it came just one week after the Sri Lankan presidential election in which Maithripala Sirisena defeated the incumbent, Mahinda Rajapakse. Sirisena, whose candidacy was engineered with US support, is rapidly reorienting Sri Lankan foreign policy away from Beijing and towards Washington.
Nasheed is apparently looking for Western backing to bring about a similar shift in the Maldives. His Maldives Democratic Party (MDP) is about to sign a formal alliance with the Jamhooree Party (JP), which was a major partner in the ruling coalition until last June. President Yameen’s Progressive Party of Maldives (PPM) currently has 49 of the 85 seats in the country’s parliament while the MDP and JP have 22 and 13 seats respectively.
In a similar manner to Sirisena in Sri Lanka, Nasheed is now campaigning to “defend the constitution and democracy” against Yameen’s allegedly autocratic methods. The MDP has criticised the president for removing two pro-opposition Supreme Court judges and sacking the country’s auditor general arbitrarily. However, the opposition’s real target is the close relationship that the government has developed with China.
Nasheed, who became the country’s first elected president in 2008, resigned in 2012 amid mounting opposition protests particularly over his attempt to arrest the chief justice. Nasheed claimed he had been removed by the military in a coup. Vice President Mohamed Waheed Hassan took over as president.
Nasheed won the delayed presidential election in November 2013, but the supreme court annulled the result amid opposition claims of vote rigging. In the next round, Yameen narrowly won with the backing of all opposition parties.
The political turmoil in the Maldives, with a population of just 300,000, is closely bound up with rising geo-political tensions. The collection of islands off the tip of India is strategically located across major sea lanes in the Indian Ocean—midway between Strait of Malacca to the east and Suez Canal to the west. India considers the Maldives as part of its sphere of influence.
The US has been seeking to strengthen its influence in the Maldives at the expense of China as part of the Obama administration’s “pivot to Asia.” Washington signed an Access and Cross Service Agreement with the Maldives with the Nasheed government in 2010. In 2013, information leaked out that the Pentagon had been in negotiations with the Maldives for a Status of Forces Agreement to open the way for basing arrangements, but Yameen, on assuming office, blocked the move.
Nasheed used his visit to Sri Lanka last month to underscore his pro-Western orientation and again criticise Yameen for orienting to China. In an interview with the Daily Mirror, he declared: “We can’t isolate ourselves and move ourselves away from the outside world. It doesn’t work like that. We must have good relations with the West as much as with East.”
Nasheed accused the Maldivian government of “giving more room to China,” saying: “We want a new Maldivian government to work more closely with the Sri Lankan government and synthesise their foreign policy.” He was one of the first high-profile foreign visitors to meet with the leaders of the new Sri Lankan government—President Sirisena and Prime Minister Ranil Wickremesinghe—who are shifting firmly into the US camp following the January 8 election. He also met with European diplomats including the German ambassador to Colombo.
In an interview on Sri Lanka’s MTV channel broadcast on January 31, the interviewer asked Nasheed to respond to the accusation that he was acting on the “whims and fancies” of Britain and the US. Nasheed replied: “We should not be removed from the international world we live in... What happens in Sri Lanka has a strong impact in the Maldives.”
Nasheed added that because the Maldives relied completely on Europe for foreign trade and tourism, “We must have an amicable relationship with these people.” The European Union is the largest market for fish exports from the Maldives and also accounts for over half of the tourists who visit the island archipelago. Tourism is the country’s largest foreign exchange earner.
The US and India are both concerned about growing Chinese influence in the Maldives. Waheed Hassan, who took over from Nasheed in 2008, turned to China for financial assistance. He cancelled a contract signed with the Indian company, GMR, to construct the Male International Airport, straining relations between two countries.
After Yameen came to power in 2013, the tilt towards China became more pronounced. Last September, Xi Jinping became the first Chinese President to the Maldives as part of his South Asia tour. Xi signed nine agreements, including an upgrade of the Male airport. During the visit, Yameen also agreed to join China’s Maritime Silk Road (MSR) initiative aimed at securing Beijing trade and influence across the Indo-Pacific.
Speaking on the country’s independence day in November, Yameen criticised “Western colonial powers” and praised China for not imposing “compulsions” on the Maldives.
Nasheed has responded by stirring up anti-Chinese sentiment. He recently accused the government of planning to sign the MSR agreement and “hand over large parts of Laamu Atoll to China for the establishment of a military base for 99 years in return for US$2 billion.” The Chinese embassy quickly denied the claim, saying that China “does not maintain any military in any foreign country.”
On his return to the Maldives, Nasheed is seeking to build momentum for the removal of the government. On January 20, Yameen sacked Defence Minister Mohamed Nizam for unspecified reasons. Nizam was key player in the manoeuvres that led to Nasheed’s ouster in 2012. However, the opposition MDP has defended him and Nizam, in turn, has declared he will support anti-government campaign.
The Maldives Trade Union, which has been formed in May 2014 to protect small- and medium-sized businesses, has also decided to join the MDP-initiated campaign. JP deputy leader Ibrahim Ameen has called on “individuals, NGOs and political parties to join the cause of defending the constitution.”
While there has been no overt Western support for the opposition, Nasheed undoubtedly used his trip to Sri Lanka sound out backing from the US and the EU.

US spy bases in Australia central to war plans against China

Will Morrow

An article published on January 23 in the Fairfax-owned Australian Financial Review, the country’s preeminent business newspaper, calls attention to the complete incorporation of the Australian military and intelligence apparatus into the global operations of the US armed forces.
The article was written by Richard Tanter of the Nautilus Institute for Security and Sustainability, in collaboration with Max Suich, the former editorial executive of Fairfax media. It focuses on the critical international role of four joint US-Australian spy bases, which, in all but name, are operated as American facilities, jointly funded by both governments.
Tanter makes clear that the bases are at the very centre of Washington’s preparations for a war with China, including US plans for a nuclear first-strike.
The article underscores the far-reaching implications of Australia’s total alignment—begun under the previous Greens-backed Labor government and continued under the current Coalition government of Prime Minister Tony Abbott—with the Obama administration’s “pivot to Asia.” The “pivot,” which was formally announced by Obama on the floor of the Australian parliament in November 2011, involves a comprehensive drive on all fronts—diplomatic, economic and military—against China.
Behind the backs of the population, Australia has been placed on the frontline of US strategic planning for war with China. Such is the country’s integration into these preparations, that in the event of war between the US and China, Australia would also be at war. As Tanter writes, Beijing and Washington “now spend considerable time thinking about the war with each other. From a Chinese perspective, Australia is not so much hosting US military bases, but is a virtual American base in its own right.”
In particular, the bases would provide targeting information for a devastating US pre-emptive strike—that could include nuclear weapons—on China’s nuclear missile arsenal and satellite communications systems, as well as for America’s anti-missile systems designed to neutralise any of China’s remaining weapons.
The most strategically significant of the bases is the Joint Defence Facility Pine Gap, first established near Alice Springs in central Australia in 1970. It is currently staffed by up to 800 personnel, the majority of them American. It is one of just three global “control and command” stations for data sent by US satellites which maintain a geosynchronous orbit over the earth’s equator. The other two are at Buckley Air Force Base in Colorado, and Menwith Hill in Yorkshire, Britain.
The Financial Review article confirms what had already been reported, that Pine Gap provides “telephone intercepts and location intelligence” for the Obama administration’s criminal program of drone assassinations in the Middle East, including in Yemen and Pakistan, which have killed thousands of civilians. The Australian political establishment is deeply implicated in these war crimes.
According to Tanter, over the last 15 years, the facility has been upgraded with new antennas for processing data from US thermal imaging satellites, which are able to “instantaneously detect the heat blooms of missiles.”
The data from Pine Gap underpins the US-Japanese ballistic missile defence system in the western Pacific Ocean. “With that data,” Tanter writes, “the American and Japanese Aegis-class destroyers and their powerful radars, plus their land equivalents, have a reasonable chance of guiding their own missiles onto the incoming enemy missiles ...” Pine Gap will “also provide the information as to which enemy missile silos are now empty, and which should be targets in a US second strike.”
In addition to Pine Gap, Washington is systematically building up its network of bases across the country. The North West Cape facility in Western Australia has recently become a joint US-Australian facility after having previously been handed back to Australian control. It now forms a central component of Washington’s planning for outer-space warfare, or what Tanter terms “full spectrum dominance in space.”
The base is being upgraded with “the latest advanced US high-tech space telescope” and “space radar from an island on the Cape Canaveral launch range.” It sends its data, “on both space junk and Chinese and Russian military satellites alike, to the US Joint Space Operations Center.” In the event of war, North West Cape would provide targeting information for the shooting down of Chinese satellites. This would prevent Beijing from firing on US ships operating along China’s coast in the South China Sea.
Two bases in Geraldton, Western Australia, and Shoal Bay, near Darwin, monitor satellite data from across the Indian Ocean and the Pacific. Geraldton has been almost doubled in size following a series of agreements between the Obama administration and the previous Labor governments in 2008 and 2010. The deals allowed for the construction of antennas and other equipment for three new US military satellite communications systems.
The first system, known as Wideband Global SATCOM, provides for rapid transfers of huge amounts of data, which is critical for global US military communications, as well as the operations of surveillance and attack drones. The second system services a globally secure internal military Smartphone network. The article states that, without the third of the three new systems, known as DISA, “Pentagon plans for introducing armed and surveillance drones into south-east Asian and Indian Ocean operations will be difficult, if not impossible.”
The bases are just one component of the integration of the Australian Defence Forces (ADF) into a virtual arm of the US military. Pentagon strategic doctrines for war with China depend upon Australian forces blockading Chinese shipping lanes in south-east Asia. Agreements signed in 2011 allow for the stationing of 2,500 US marines in Darwin, and the opening up of Australian naval and air bases to US forces.
As the Financial Review article states: “Under a pervasive doctrine of interoperability, substantial numbers of ADF personnel—from major-generals down—are embedded in US high-technology units from Qatar to Hawaii to Colorado, building careers based on strategic doctrines which assume Australian and US national interests always coincide.”
Tanter’s article in the Financial Review is the latest to raise concerns about the degree of Australian integration into US war plans. While most of the Australian political establishment have lined up completely with the US “pivot,” some political figures and strategic analysts have urged caution. Former conservative prime minister Malcolm Fraser, for instance, has argued for ending the US alliance.
This layer is fearful that the Australian alignment with the US will damage economic relations with China, Australia’s largest trading partner, as well as precipitate a war with incalculable consequences. Moreover, they are deeply concerned that mass struggles could erupt, as workers and youth become aware of the implications of US war plans against China.
The entire ruling elite is determined to keep the working class in the dark over US military preparations and Australia’s involvement. That is why Tanter’s essay has only been published in the pages of Fairfax’s elite financial publication, and is not the subject of comment in the wider print and electronic media.
The Socialist Equality Party and the World Socialist Web Site have consistently sought to expose this conspiracy of silence and, in doing so, to build an international anti-war movement of the working class to abolish capitalism and its outmoded nation-state system that is the source of war.

Falling oil prices trigger new layoffs, budget cuts in Louisiana and Texas

E.P Bannon

Low oil prices have sparked an economic downturn in the state of Louisiana. Reports are already emerging of layoffs and drastic pay cuts throughout all sectors of industry. In one instance reported to the New York Times, a tugboat captain took a 90 percent pay cut just to keep his job. The same article describes the economic situation in Louisiana as a “slow strangle.”
Oil giant Halliburton hinted late last month that more layoffs are coming this year across North America. Executives said land rig counts have dropped by 250 since December, around 15 percent. Capital budgets for customers are down 25-30 percent and more rigs will be idled.
Halliburton employs around 1,000 workers in southern Louisiana. The company has confirmed recently that “minimal” layoffs have already begun across their operations in Lafayette, Louisiana. This comes after the company’s announcement of some 1,000 layoffs overseas late last year. Schlumberger, Halliburton’s chief rival in the industry, announced last month it would lay off 9,000 employees—roughly seven percent of its entire workforce.
More layoffs have begun in nearby Texas. GE Oil & Gas has announced that it will lay off 330 workers at its Lufkin Industries subsidiary. The plant, located in Lufkin, Texas, manufactures pumping units, enclosed gear drives, and castings for heavy equipment and machine tools for oil and gas operations.
US Steel Tubular Products is due to lay off 318 workers in Morris County, Texas. Last month, the company laid off 142 workers at its pipeline manufacturing facility near Houston. Lariat Services Inc., an onshore drilling provider, has announced that it will lay off 250 workers across the state. Trican Well Service has announced that it will lay off 125 workers in Gregg County and Sandridge Energy will cut 25 in Ector County.
Shell, ExxonMobil, BP and other energy giants have used the price fall to justify their hard line in negotiations for a new labor agreement for 30,000 oil industry workers. Last Sunday, the United Steelworkers called a limited strike involving 3,800 workers, including thousands of workers at five refineries in the Houston area. Talks between the USW and industry negotiators have resumed with the companies refusing to accept the union’s meager wage demands or back down on further cost cutting.
(See: “US oil industry strike enters fourth day as companies resist wage and safety demands” ).
Goodrich Petroleum Corp. announced last week that it would cut the amount of spending on oil exploration to $80 million to $100 million, down from its initial projection of $150 million to $200 million. The company extracts oil from Tuscaloosa Marine Shale, a geological formation located throughout South Louisiana. Only three rigs are now working in the region, according to the Times Picayune, down from nine in the summer of last year. It is speculated that production may soon fall down to two rigs.
Other drilling companies have begun to pull back as well. Comstock Resources has already suspended drilling throughout the area. Sanchez Oil and Gas Corp. claims that it will drill at three locations in the shale formation this year, but has not yet commenced at any of them. The much larger Encana Corporation also has investment in the shale formation. The company has announced plans to freeze drilling in a recent slide show meant for investors. The decision to pull back is described as having “massive upside potential” in the wake of the downturn.
The region of south Louisiana has already begun to react to the slowing economy. Major construction projects throughout the state are currently being frozen. Last Wednesday, plans to build a $14 billion gas-to-liquids plant in south Louisiana were put on indefinite hold. Similar announcements are expected in the coming months.
The year’s budget projections are increasingly grim and will likely be used for further cuts to what remains of the social infrastructure. Roughly 14 percent of the state’s general fund revenues come from oil and gas. Louisiana’s state revenue estimating committee announced that there will be a $104 million shortfall due to the falling prices. It also found that the budget hole for next year will be at least $204 million more than previously projected, bringing it to just over $1.6 billion overall.
Governor Bobby Jindal already cut state spending by $180 million last month, citing falling oil prices as a reason. Even before the prices plummeted, however, colleges throughout Louisiana were told to prepare for more than $300 million in cuts. It is already speculated that some smaller campuses will have to shut down entirely due to the reductions in funding. Health care services will be forced to take a $250 million hit, which could increase to double the amount if the state cannot access certain forms of federal funding. The full extent of dropping oil prices have not yet been felt and it is likely the state government will propose even further cuts.
The economic blowback, not readily apparent at the moment, will be felt in nearly all sectors of the economy. Service companies working for firms related to the oil and gas industry will also be hard hit as they lose business from their main clients. Several hundred people working as “landmen,” who negotiate leases and land rights for oil exploration, have already been laid off in Lafayette. Other service firms are beginning to accept dramatically lower contracts with oil companies, which are seeking to cut costs in any way possible. This will inevitably translate to wage cuts and layoffs in these peripheral industries, mainly based around small to mid-sized companies.
Many of these smaller firms faced with the real prospect of going under are being quickly bought up by large corporations. The downturn in the region is leading to an ever-increasing growth of monopolies throughout the industry. In turn, these large corporations are using the crisis as an opportunity to cut costs while often ignoring safety regulations.
In the comment section of Lake Charles local news outlet KPLC, residents and workers described the situation. One worker wrote that layoffs had already begun in Louisiana that had not been reported. “Layoffs started in October,” he wrote. “I was laid off November 3.” Another local resident wrote, “Any lower [oil prices], and my husband will get laid off. He is the main source of income in our home of three adults and a toddler.”
Some newspapers have begun to draw comparisons between the current downturn and the oil bust of the 1980s. Louisiana suffered a severe economic catastrophe in 1986, when oil prices plummeted from $27 per barrel to below $10. Entire shopping districts in major cities like New Orleans and Baton Rouge closed, while city centers and commercial hubs became largely vacant. One in eight workers in Louisiana was unemployed, the highest rate in the nation. In small oil-based towns in southern Louisiana, such as Morgan City, the unemployment rate was as high as one in four.

Testimony of Moussaoui in civil suit implicates Saudi monarchy as principal sponsor of Al Qaeda

Niles Williamson

Zacarias Moussaoui provided testimony last October implicating high-ranking members of the Saudi monarchy in funding and supporting al Qaeda in Pakistan and Afghanistan in the years before the attacks on the World Trade Centers and Pentagon on September 11, 2001.
This remarkable testimony was submitted this week in a brief filed against a motion to dismiss a longstanding civil lawsuit against the Saudi government for its involvement in the attacks. The brief was submitted on the behalf of relatives of individuals killed in the attacks. The testimony was featured in a lead New York Times article on Wednesday, with much of the material posted on the Times web site.
Moussaoui gave his testimony to lawyers representing the plaintiffs at the Florence, Colorado federal supermax prison. He sent a letter last year to Judge George B. Daniels of the United States District Court for the Southern District of New York, who is hearing the case, indicating that he wished to testify about what he knew about Saudi connections to Al Qaeda.
He is serving a life sentence after pleading guilty to being a coconspirator in the September 11 attacks. Moussaoui was detained by the FBI in Minnesota approximately one month before the attacks on charges of an immigration violation after flight instructors and the flight school he was attending raised suspicions about his intentions.
Moussaoui told the lawyers that he had been responsible for creating an electronic database of Al Qaeda’s financial records for the years 1998 to 1999. He remarked that many of the financial transactions during this time were “between Saudi bank, okay, and a Pakistani bank.”
He told the lawyers that his main task in compiling the financial records was to “create a database of donation to see how much money was being given to Al Qaeda.”
Asked by the lawyers if he remembered any of the individuals donors identified in the database, Moussaoui listed a number of leading members of the Saudi monarchy who were “known within the circle of mujahedeen.” He stated further that “it was all the—the people of importance used to—donate money to bin Laden, that’s my understanding.”
Among the donors Moussaoui recalled were Prince Al-Waleed bin Talal, a billionaire investment magnate who is one of the wealthiest men in the world; Prince Turki Al Faisal Al Saud, who resigned his position as the director of Saudi Arabia’s intelligence agency ten days before the 9/11 attacks; Prince Mohammed bin Faisal Al Saud, a leading Saudi banker with banks in Bahrain, Niger, Egypt and Pakistan; and Princess Haifa Al Faisal Al Saud, wife of Prince Bandar bin Sultan, Saudi Ambassador to the US from 1983 to 2005 and director of Saudi Arabia’s intelligence agency from 2012 to 2014.
All of these figures have close ties to sections of the American state and intelligence apparatus.
Moussaoui reported that the money coming from the Saudi royals was vital to maintain the organization. “I mean, without the money of the – of the Saudi you will have nothing,” he told the lawyers later in his testimony.
He also recounted an instance in which he traveled to the Saudi embassy in Islamabad and was flown by private jet to Riyadh. There he says he personally delivered letters from bin Laden to Prince Adbullah, later the king of Saudi Arabia; Prince Bandar; Prince Salman, the current Saudi king; and Al-Waleed bin Talal. Returning to Pakistan on a private jet he delivered two letters from Prince Turki to bin Laden.
Moussaoui recalled another instance in Pakistan in which he met with an individual from the Saudi Arabian embassy in Washington, DC’s Islamic Affairs Department named Abu Omar Muawiya. He claims that they discussed a plot to shoot down Air Force One with a stinger missile that would be smuggled into the country through the Saudi embassy. He told the lawyers that the plan was never put into action because Moussaoui was arrested before he could travel to Washington.
In his testimony, Moussaoui also implicated members of Saudi Arabia’s highest religious body, the Senior Council of Ulema, as donors to Al Qaeda. Bin Laden was operating Al Qaeda, according to Moussaoui, “with the express advice and consent and directive of the Ulema.”
Moussaoui’s account broadly conforms to what is already known about the open secret of the 9/11 attacks: that they were largely financed by one of the US’s chief allies in the Middle East, Saudi Arabia, headed by a monarchical family that has had close ties to the state apparatus, and in particular the Bush administration.
Almost all of the alleged hijackers on 9/11 were Saudi citizens. The official 9/11 Commission Report, which largely whitewashes the many unanswered questions about the circumstances that led up to the attacks, documents some of the ties. Two of the hijackers in the plane that crashed into the Pentagon were allowed to freely travel into the US, where they met with an individual with ties to Saudi intelligence and a supply of money from Saudi Arabia.
The Bush administration also organized a flight out of the US for high-ranking members of the Saudi ruling class, including members of the bin Laden family, in the days after the September 11 attacks.
Affidavits were also submitted on Monday in support of continuing the civil suit by former Senators Bob Kerrey and Bob Graham as well as former Secretary of the Navy John Lehman, calling for further investigations into Saudi ties to Al Qaeda and the September 11 attacks. Kerrey and Lehman served on the National Commission on Terrorist Attacks Upon the United States, which produced the 9/11 Commission Report.
Graham was the co-chairman of the Joint Congressional Inquiry into the activities of the intelligence community leading up to the attack. He has demanded the publication of 28 still classified pages from the report published by the Inquiry in 2002 that implicate Saudi Arabia as a chief financier of the attacks.

European leaders turn against Syriza’s appeals to alter Greek debt payments

Alex Lantier

After Greece’s newly-elected Syriza government repudiated its campaign pledge to write off Greek debt, European officials pressed Greek Prime Minister Alexis Tsipras to continue imposing unpopular austerity measures in order to repay Greece’s creditors.
When Tsipras visited Paris yesterday for talks and a joint press conference at the Elysée presidential palace, President François Hollande insisted that Greece submit to European Union (EU) demands. “Dialog between Greece and its European partners must go forward so as to reach agreement,” he said, adding that Athens should “respect European rules which apply to all, France included, and engagements that were taken on debts that are of importance to governments.”
This was a signal that Paris, which holds €42 billion of Greek debt as part of the European bailout mechanism, opposes a write-off of Greece’s €320 billion debts.
French officials made clear prior to Tsipras’s visit that Paris fully supports the basic thrust of the policies imposed in Greece by the EU, led by Berlin. “There is no point in playing euro zone countries against each other, and especially not France and Germany,” French Finance Minister Michel Sapin said Monday. “A solution that helps Greece while making sure it meets its commitments will have to go through an agreement between France and Germany.”
For his part, Tsipras hailed the Socialist Party (PS) government of Hollande, whose austerity measures have made him France’s most unpopular president since World War II. “We are not a threat for Europe,” Tsipras declared at the joint press conference with Hollande. He called on France to be a “protagonist for a change of policy in Europe.”
Since it won elections on January 25, Syriza has sought to reach an accommodation with European banks for a modification of the terms of repayment for the debt that the country owes. The party, which speaks for a section of the Greek bourgeoisie and rests on broader layers of the upper middle class, has repeatedly insisted that it accepts the entire framework of the EU and is determined to pay back Greece’s debt in some form.
In particular, Syriza has rejected any appeal to the mass opposition to EU austerity among workers in Greece, France and across Europe. Its appeal is entirely directed to the European banks and their political representatives.
These appeals, however, are falling on deaf ears. The EU views with contempt the opposition to austerity among the Greek people that underlay the vote for Syriza. Yesterday, a German government memo leaked to Reuters prior to a “euro group” meeting of EU finance ministers, made clear Berlin will not tolerate the slightest improvement in workers’ living standards. Instead, it demanded that Syriza impose rapid new cuts to jobs and social spending, of the sort that have bled Greece white over the last six years.
“The euro group needs a clear and front-loaded commitment by Greece to ensure full implementation of key reform measures necessary to keep the program on track,” the memo stated. “The aim is the perpetuation of the agreed reform agenda (no rollback of measures), covering major areas as the revenue administration, taxation, public financial management, privatization, public administration, health care, pensions, social welfare, education, and the fight against corruption.”
According to the memo, Berlin will demand that Greece run a budget surplus of 4.5 percent of its Gross Domestic Product (GDP). This would mean that nearly €10 billion per year would be sucked out of Greece’s devastated economy, in order to pay off its creditors.
Yesterday, the European Central Bank (ECB) also banned the use of Greek government debt as collateral for loans sought by Greek banks saying that “it is currently not possible to assume a successful conclusion of the program review.”
Greek Finance Minister Yanis Varoufakis has proposed that Athens raise €10 billion by issuing short-term Treasury bills to provide “bridging finance” over the next three months while a new long-term debt agreement is worked out. Unless some sort of financing measures are established the government could be hard pressed for cash.
“This is clearly the ECB signaling to the Greek government. You’re going to have to talk to [international lenders] and get a deal. Otherwise, really bad things are going to happen,” said Jacob Kirkegaard of the Peterson Institute for International Economics.
Varoufakis traveled yesterday to Frankfurt to meet ECB chief Mario Draghi. Varoufakis abased himself before both Draghi and German Finance Minister Wolfgang Schaeuble, one of the leading architects of austerity measures against Greece.
“We established an excellent line of communication that gives me great encouragement for the future,” Varoufakis said at ECB headquarters. “I am now proceeding to Berlin, where I am extremely eager to meet not with just the finance minister, but with the intellectual force behind the project of European monetary union, Mr. Schaeuble. I look forward to it.”
Varoufakis said Berlin could count on Syriza to go further than previous right-wing or social democratic governments in Greece. “I will try to be as charming as I can in Berlin,” Varoufakis declared. “I will tell Mr. Schaeuble that we may be a left-wing riff-raff, but he can count on our Syriza movement to clear away Greece’s cartels and oligarchies, and push through the deep reforms of the Greek state that governments before us refused to do.”
“Deep reforms” is a reference to measures aimed at opening up the Greek economy more fully to European and international capital.
Speaking to the German weekly Die Zeit, Varoufakis called Greece a “bankrupt country” and said that Syriza would ask major international financial institutions to help determine its policies. “We’ve approached José Ángel Gurría, the secretary general of the OECD [Organization for Economic Cooperation and Development], the organization of industrialized countries. He is supposed to help us put together a reform program,” he said.
Syriza is opposed to the only possible progressive settlement to the euro crisis: the repudiation of the Greek debt and the expropriation of the banks by the European working class. Instead, amid rising exploitation and anger in the working class reflected in the outcome of the Greek elections, it is promoting illusions in reactionary governments across Europe.

Imperialist hypocrisy over ISIS execution

Barry Grey

The release of a video showing the immolation of captured Jordanian pilot First Lt. Moaz al-Kasabeh by the Islamic State of Iraq and Syria (ISIS) has been followed by a wave of hypocritical moralizing, combined with threats of more violence, from the imperialist powers and their regional allies.
The killing of al-Kasabeh, which apparently took place in early January, not long after the fighter jet he was piloting crashed in Syria, has evoked revulsion among ordinary people around the world. It is a reflection of the backward and reactionary character of ISIS.
However, this act did not occur in a political vacuum. Both ISIS and the disaster unfolding in Iraq and Syria are the direct products of the criminal policies of the governments that now proclaim their moral indignation.
The imperialist leaders, beginning with US President Barack Obama, see the latest ISIS atrocity as an opportunity to bombard the public with lurid details and fear-mongering propaganda in an attempt to overcome antiwar sentiment. As with last month’s Charlie Hebdo killings, Tuesday’s execution will be used to justify an expansion of the current war in the Middle East in the name of fighting the “war on terror.”
Recent days have seen a barrage of statements from US politicians and current and retired military and intelligence officials demanding the introduction of thousands more US ground troops into Iraq and an escalation of the campaign to overthrow the government of Bashar al-Assad in Syria, including calls for the establishment of no-fly zones in that country.
On Tuesday, Obama denounced “the viciousness and barbarity” of ISIS and added, “This organization appears only interested in death and destruction.” Secretary of State John Kerry said the execution of Kasabeh “reminds of all of the evil of this enemy.”
What colossal hypocrisy! Obama speaks as the head of a state that has brought “death and destruction” on a mass scale, deploying the most advanced and lethal weapons against virtually defenseless populations in an effort to grab control of the Middle East’s vast energy reserves.
In Iraq, the US “shock and awe” invasion and occupation toppled the secularist Saddam Hussein and installed a sectarian Shiite puppet regime that carried out mass killings of Sunnis, triggering a sectarian war that continues to this day.
Washington systematically destroyed one of the most advanced societies in the Middle East, employing criminal methods captured by names such as Fallujah, Abu Ghraib and Haditha.
The United States has been waging war against the country—economic or military—for 25 years, since the imposition of crippling sanctions in 1990 and the first Gulf War of 1991, with a pause of less than three years between 2011 and 2014. The 13 years of sanctions, punctuated by bombing attacks, from 1990 to 2003 killed more than 1 million Iraqis, including hundreds of thousands of children.
Serious estimates of the number of Iraqis who died as a result of the 2003 invasion and subsequent occupation of the country range from several hundred thousand to over 1 million. As of 2007, it was estimated that 2 million Iraqis had fled their homeland and another 1.9 million had been reduced to the status of displaced persons within their own country. That amounts to 15 percent of the country’s population.
The United States destroyed Iraq’s water and sewage system, crippled its power plants, decimated its health care system, and virtually destroyed its educational system. Between 1990 and 2005, Iraq recorded a 150 percent increase in the rate of infant deaths. By the fourth year of the US occupation, less than a third of the population had access to clean drinking water and just 19 percent had a functioning sewage system. The result was rampant diarrhea, typhoid and hepatitis. Half of the country’s children suffered from malnutrition.
There is no precedent for this systematic destruction of an entire society through violence and criminality since Hitler’s armies ravaged Europe in the Second World War.
It is out of this devastation that ISIS emerged. It is a creation of US imperialism both in the general sense that Al Qaeda in Iraq, the forerunner of ISIS, arose on the ruins of Iraqi society at the hands of the United States, and in the more specific sense of direct American backing for it and other jihadist groups.
The US strategy for dominating the Middle East has involved the financing, arming and training of Islamist forces targeting secular regimes—in Afghanistan, Iraq, Libya and Syria—considered to be obstacles to the American corporate-financial elite’s pursuit of global hegemony.
In Syria, the US directly armed and trained ISIS fighters, establishing a CIA base in Jordan for that purpose. Its regional allies in the war for regime change against Assad, including the Saudi and Qatari monarchies, lavishly funded ISIS and other Al Qaeda-linked groups, such as Al Nusra. As long as ISIS was targeting Assad, Obama had nothing to say about the group’s sectarian killings and other atrocities against Shiites.
Only when ISIS moved into western and northern Iraq and threatened US interests in Iraq and the wider region did the Obama administration proclaim its “evil” nature and launch an illegal war in both Iraq and Syria to check its advance.
Over the past several months, the actions of ISIS—in particular, the various videotaped executions—have served as well-timed justifications for the US and its allies to expand their involvement in a renewed war in the Middle East. As always, the moral hypocrisy of imperialism is the precursor to even greater crimes to come.

NATO meeting in Brussels heightens danger of war with Russia

Johannes Stern

NATO defense ministers are meeting in Brussels today to consolidate the military alliance against Russia, increasing the risk of a direct military confrontation between nuclear-armed powers.
NATO sources have revealed plans to establish a long-term presence in Eastern Europe, according to a report in the Frankfurter Allgemeine Sonntagszeitung (FAS). So-called NATO “Force Integration Units” will be established in Estonia, Latvia, Lithuania, Poland, Romania and Bulgaria. There are also plans to deploy such a unit in Hungary at a later time.
The units will consist of 40 soldiers each. They will be tasked with preparing exercises for a new NATO rapid response force and coordinating military activities in emergencies. Germany, which is spearheading the operation this year, intends to deploy a total of 25 soldiers within the units.
The ground troops of the rapid response force are to consist of a brigade of some 5,000 soldiers. The goal is for their most flexible units to have the capability to move to a new location within 48 hours. The entire brigade will be trained and equipped to be able to move to a new location within a week. The leadership of the operation will rotate yearly between NATO member countries.
According to the FAS, NATO defense ministers have already decided on the equipment to be provided during the “test phase,” which is to last until the beginning of next year. Starting in April, a company of German paratroopers will supplement American units that have been stationed in the Baltic States and Poland since last year.
Two weeks ago, the FAS revealed that NATO defense ministers will convene the Nuclear Planning Group (NPG) at the beginning of today’s meeting to discuss “the nuclear threat scenario from Russia in the past few months.”
Unlike previous years, according to the FAS, this will not merely be a routine meeting. An analysis of threat scenarios worked out at NATO headquarters will be presented to the defense ministers. Afterwards, the ministers “will for the first time discuss the consequences for the nuclear strategy of the alliance.” A separate consultation session is planned with France, which is not a member of the NPG.
NATO’s nuclear simulations underscore the fact that the imperialist powers are ready to risk nuclear war in order to force Russia to its knees. In the past week, a number of prominent figures, including former Soviet head of state Mikhail Gorbachev, have warned of the danger of a Third World War if NATO, led by the United States, continues to take aggressive measures against Russia.
Under conditions of escalating fighting between troops of the Western-backed Kiev regime and pro-Russian separatists in eastern Ukraine, Gorbachev warned of a “hot war” that “could well inevitably turn into an atomic war.”
On Sunday, the Süddeutsche Zeitung quoted the Russian military expert Yevgeny Buchinsky, who warned that, in response to an offensive against the Donbass by Kiev, “Russia will have to intervene, and then, bluntly speaking, to take Kiev. Then NATO would be in a difficult situation. Then you would have to start World War III, which no one wants.”
In spite of such warnings, the imperialist powers and their proxies in Kiev are escalating the conflict. On Monday, the New York Times revealed that the Obama administration is considering sending advanced weapons to Kiev. The newspaper listed high-ranking current and former administration officials and military officers who are pushing for such a move.
The Times report triggered opposition among sections of the European elite. The Süddeutsche Zeitung wrote that a decision by Washington to arm the Kiev regime with offensive weapons would be taken by Russia as the equivalent of a declaration of war. Russian officials and German Chancellor Angela Merkel spoke against any such move during a visit to Hungary.
Washington intends to use today’s NATO meeting to bring the member states into line behind its provocative and reckless course. At the beginning of the week, Alexander Vershbow, a former US ambassador to Russia and currently the deputy secretary general of NATO, referred to “Russian aggression” in Ukraine as a “game changer in European security.”
He emphasized the necessity of deploying rapid response troops in Eastern Europe, extending NATO’s reach in the east, and arming the Ukrainian military. Referring to Ukraine, Georgia and Moldova, all former Soviet republics, he said, “The more stable they are, the more secure we are. So helping Ukraine, Georgia and Moldova—to strengthen their military forces, reform their institutions and modernize their economies—is not an act of generosity, it is in our fundamental strategic interest.”
He added, “NATO is doing its part. To help Ukraine to modernize and reform its armed forces, we have launched five trust funds to assist in areas like command and control, logistics, cyber defense and military medicine. We are sending more advisors to Kiev and will be carrying out exercises with Ukraine’s armed forces. And we are helping Moldova and Georgia to strengthen their defense capacity in similar ways, and, in Georgia’s case, to help it prepare for future membership in the Alliance.”
At the end of his speech, Vershbow warned: “This time around, having chosen our course, we must stick to it. We must stay united, stay firm and increase the costs to Russia of its aggression.”
Meanwhile, voices in favor of arming Ukraine are growing louder. Michael Gahler (Germany’s Christian Democratic Union—CDU), who is the spokesman on security policy for the European People’s Party in the European Union parliament, spoke in favor of sending weapons to Ukraine in an interview on Deutschlandfunk radio.
Wolfgang Ischinger, leader of the Munich Security Conference, which takes place this weekend, has adopted the same line. On ZDF Television he spoke in favor of the “announcement of possible weapons shipments” to Ukraine. “Sometimes one needs to use pressure to enforce peace,” he declared. While he cautioned that Germany should not send weapons, he said he could “imagine that other members of the alliance would want to do this.”
Ukrainian President Petro Poroshenko, whose regime was brought to power nearly a year ago by a fascist-led putsch backed by the US and Germany, and has since waged a brutal war against the population of eastern Ukraine, made an appearance yesterday in Kharkiv, which is near the border with Russia and the contested areas. He said that “we will need lethal weapons, and I am sure that foreign weapons will be sent to Ukraine.” He continued: “I don’t have any doubt that the US and other partners will provide help with lethal weapons so that Ukraine will be able to defend itself.”
Poroshenko will take part in the Munich Security Conference along with 20 other heads of state and 60 foreign and defense ministers. He is meeting with US Secretary of State John Kerry in Kiev today.

Peru’s currency falls sharply amidst economic crisis

Cesar Uco

The sharp fall in the value of Peru’s currency, the nuevo sol, against the US dollar—crossing the psychological benchmark of 3 soles to the dollar last week—signifies a turning point in the economic future of the country. The last time the Peruvian currency was above 3 soles per dollar was in June 2009—67 months ago. In January 2013, it reached 2.47 soles to the dollar, its highest rate relative to the US currency.
The general stability of the Peruvian currency from mid-2009 to mid-2014—notwithstanding the conscious manipulation of the US dollar against its main competitors—was a statistic used by government economists and forecasters to pitch Peru as the best place to invest.
In 2014, with the global economic deceleration spreading, sectors A and B (the rich and upper middle class) began to move their financial assets to US dollar deposits. The dollarization of bank accounts in foreign currency increased from 39.4 percent in March 2013 to 47.2 percent in November 2014.
Due to an annual devaluation of 6.4 percent of the Peruvian currency, US dollar financial investments yielded 10 percent while nuevos soles yielded 6.6 percent. To counteract this tendency the banks are increasing the interest rates paid for soles accounts.
It remains to be seen if this measure, which would constitute part of a “new” fifth reactivation package—to be discussed in Congress next month—has any positive effect. Since the Great Recession (2007-2008), Peru has promoted itself as a paradise for foreign investors. In July 2014, the US credit rating agency Moody’s Investor Services upgraded the country’s credit rating to A3, better than that of Mexico or Brazil and only trailing Chile in Latin America.
Other indications of Peru’s deepening crisis over the last week include the deceleration in consumption, mounting discontent with the political situation and the role played by political parties in Congress and an astonishing change from positive to negative outlook by 80 percent by 300 CEOs polled by the financial consulting firm Apoyo Consultoria.
The most important and longstanding cause of the deterioration of the Peruvian economy is the sharp drop in copper exports of 9.4 percent to US$ 3.63 billion. This is due in large part to the slashing of copper imports by China to the lowest level since 2010, and the lack of resurgence within the global economy in general.
Peru is the third largest copper producer in the world. Copper together with gold account for 40 percent of the country’s exports. The price of copper fell 18 percent on the world market last year—the worst performance for any industrial metal. Forecasters consulted by Bloomberg expect an additional drop of 13 percent in 2015. Copper revenues dropped 17 percent—US$ 920 million—last December according to Peru’s Central Bank. Metals in general experienced a similar fall of 18.4 percent in the same month. Shares of copper mining companies recorded heavy losses on the stock market.
Another development indicating a general deterioration in the economic situation is the action taken by private pension funds (Asociacion de Fondos de Pension, or AFPs) that hold a total of US$ 38 billion in assets. Over the past two years, Peruvian AFPs portfolios have cut exposure to local stocks in half, from 26.1 percent in January 2013 to 11.8 percent in January 2015.
The money went to foreign mutual funds. The exposure to these funds grew from 18.6 percent to 35.6 percent in two years. Also, Exchange Traded Funds (ETFs)—the most common investment fund traded on exchanges; most track a popular stock index—have become popular because they provide a broader exposure to diversified markets in the US, Europe and Asia.
Significantly, it was the Peruvian Central Bank’s lifting of foreign investments to 42 percent that allowed AFPs to go global.
Originally modeled to replicate Chilean private pensions, Peruvians AFPs funds were supposed to become the driving force in the growth of a national stock market; that is, people’s pensions would be invested in new national industries and expanding infrastructure, which supposedly would generate jobs and better wages. These promised benefits never materialized and, with the shift away from the Lima Stock Exchange and into foreign mutual funds and ETFs, Peru’s pension fund portfolios are even more closely tracking the speculative and parasitic nature of the financial markets in advanced countries.
Heads of industries have reacted with alarming pessimism to recent economic and political developments. Business daily Gestion wrote that 80 percent of Peruvian business executives believe that “the internal political situation will worsen in 2015… the most important risk factor that could affect the timid recovery of business confidence.” CEOs interviewed think the poor handling of “social conflicts” is at the heart of the problem.
According to Apoyo Consultoria, “the social conflicts are not related only to the extractive industries (mining and hydrocarbons),” as has been the case since the beginning of President Ollanta Humala’s government, “but also with themes as diverse as payments to the fonavistas [those who made compulsory contributions to FONAVI, a government housing fund that was dissolved under former President Alberto Fujimori to pay off the foreign debt] to the youth labor law.”
The youth labor law was repealed by Congress last week. But in the process, it produced major internal conflicts within bourgeois parties. As Gestion reports, “an evident loss of the ruling party’s relative majority in the Congress and the closeness to the beginning of the 2016 electoral process does not allow any expectation of an improvement in the conditions for governability.”
It is unquestionable that Congress repealed the youth labor law—which slashed benefits under the pretext of making it more attractive for employers to hire younger workers—under pressure from the thousands of students and workers who took to the streets in several cities in defiance of police repression. Initially led by students, street demonstrations rapidly gained support among layers of workers from several industries, as well as the main union confederations, and professionals working for government institutions, like nurses and doctors.
The new fissures opening up within the bourgeois political parties, together with the rapid turn toward a negative outlook on the part of the business establishment indicate fears within the ruling class of a potential for social upheavals that would frighten off foreign investors.
On the consumer side, supermarket sales grew a disappointing 8.6 percent in December (the holiday season) compared to 11 percent in November. According to Gestion, the total number of debtors amounts to just over 6 million people—the population of Peru is 30 million. The largest number involves consumer debt, 4.5 million, 3.2 million of which corresponds to commercial banks. The pymes (small and micro businesses) have more than 2 million borrowers in debt. The default rate for these businesses has risen to 8.9 percent, the magazine reported.
President Humala’s government is highly unpopular among all sections of the population. The disputes and cracks appearing among bourgeois political parties and entrepreneurs is giving rise to sectors of the ruling class demanding a strong hand to suppress any social conflict that will interfere with their interests.
It is noteworthy that in a recent student demonstration, the interior minister, Daniel Urresti, proposed that students be compelled to show identification papers in order to join the march. Such a measure, constituting an attack on the basic democratic rights of assembly, is indicative of how the economic crisis is driving the Peruvian state to dispense with democratic forms and resort to repressive measures.