Corporate Welfare Fails to Deliver the Jobs

Lawrence S. Wittner

For several decades, state and local governments have been showering private businesses with tax breaks and direct subsidies based on the theory that this practice fosters economic development and, therefore, job growth. But does it?  New York State’s experience indicates that, when it comes to producing jobs, corporate welfare programs are a bad investment. This should be instructive to state and local officials across the US.

In May 2013, New York Governor Andrew Cuomo, with enormous fanfare, launched a campaign to establish Tax-Free NY — a scheme providing tax-free status for ten years to companies that moved onto or near the state’s public college and university campuses.  According to Cuomo, this would “supercharge” the state’s economy and bring job creation efforts to an unprecedented level.  It was “a game-changing initiative,” the governor insisted, and — despite criticism from educators, unions, and some conservatives — local officials fell into line.  Reluctant to oppose this widely-touted jobs creation measure, the state legislature established the program — renamed Start-Up NY and including some private college campuses — that June.

After that, Start-Up NY moved into high gear.  A total of 356 tax-free zones were established at 62 New York colleges and universities, with numerous administrators hired to oversee the development of the new commercial programs on their campuses.  New York State spent $47 million in 2014 — and might have spent as much as $150 million over the years — advertising Start-Up NY in all 50 states of the nation, with ads focused on the theme:  “New York Open for Business.”  Nancy Zimpher, the chancellor of the State University of New York, crowed:  “Nowhere in the country do new businesses and entrepreneurs stand to benefit more by partnering with higher education than in New York State, thanks to the widespread success of Governor Cuomo’s Start-Up NY program.  With interest and investment coming in from around the globe and new jobs being created in every region, Start-Up NY has provided a spark for our economy and for SUNY.”  This was, she declared, a “transformative initiative.”

But how “transformative” has Start-Up NY been?  According to the Empire State Development Corporation, the government entity that oversees more than 50 of the state’s economic development programs, during all of 2014 Start-Up NY generated a grand total of 76 jobs.  Moreover, the vast majority of the 30 companies operating under the program had simply shifted their operations from one region of the state to another.  The New York Times reported that, of the businesses up and running under Start-Up NY, just four came from out of state.  Indeed, in some cases, the “new” businesses had not even crossed county lines.  One company moved one mile to qualify for the tax-free program.  Furthermore, when it came to business investment, there was a substantial gap between promises and implementation.  As the Empire State Development Corporation noted, companies promised $91 million in investments over a five year period, but only invested $1.7 million of that in 2014. Thus, not surprisingly, during 2014 the companies operating under Start-Up NY created only 4 percent of the new jobs they had promised.

Actually, Start-Up NY’s dismal record is not much worse than that of New York’s other economic development programs.  According to a December 2013 study by the Alliance for a Greater New York, the state spends approximately $7 billion every year on subsidies to businesses, including “tax exemptions, tax credits, grants, tax-exempt bonds, and discounted land to corporations, ostensibly in the name of job creation, economic growth, and improved quality of life for all New Yorkers.”  But 33 percent of spending by the state’s Industrial Development Agencies resulted in no job promises, no job creation, or a loss of jobs.  In fact, “with little accountability, businesses often take the money and run.”

A recent report by state comptroller Thomas DiNapoli reached similar conclusions. According to DiNapoli, in 2014 the programs overseen by the Empire State Development Corporation cost the state $1.3 billion (not including the voluminous tax breaks granted to companies) and helped create or retain only 14,779 jobs — at a cost to taxpayers of $87,962 per job.  The comptroller’s scathing report concluded that there was no attempt by the state agency to ascertain whether its programs “have succeeded or failed at creating good jobs for New Yorkers or whether its investments are reasonable.”

Of course, instead of shoveling billions of dollars into the coffers of private, profit-making companies, New York could invest its public resources in worthwhile ventures that generate large numbers of jobs — for example, in public education.  In 2011, as a consequence of severe cutbacks in state funding of New York’s public schools and a new state law that capped local property tax growth — two measures demanded by Governor Cuomo — 7,000 teachers were laid off and another 4,000 teacher positions went unfilled.  Overall, 80 percent of school districts reported cutting teaching positions.  Today, with New York’s schools severely underfunded — more than half of them receiving less state aid now than they did in 2008-2009 — this pattern of eliminating teachers and closing down educational opportunities for children has continued.  But what if the billions of dollars squandered on subsidizing private businesses in the forlorn hope that they will hire workers were spent, instead, on putting thousands of teachers back to work?  Wouldn’t this policy also create a better educated workforce that would be more likely to secure employment?  And wouldn’t this shift in investment have the added advantage of creating a more knowledgeable public, better able to understand the world and partake in the full richness of civilization?

It’s a shame that many state and local government officials have such a limited, business-oriented mentality that they cannot imagine an alternative to corporate welfare.

Australia: Labor backs move to sack thousands of electricity workers

Terry Cook

In the ongoing brawl over electricity pricing in the Australian state of New South Wales (NSW), the opposition Labor Party has lined up with business groups representing major commercial electricity users to condemn the Liberal state government headed by Premier Mike Baird.

The Labor Party’s federal resources spokesman Gary Gray and state Labor leader Luke Foley yesterday denounced Baird for launching a legal bid to overturn a pricing ruling by the Australian Energy Regulator (AER) that will lead to the elimination of at least 2,500 power workers’ jobs.

As part of the increasing privatisation of Australia’s state-run electricity grids, the AER has since 2005 regulated the electricity market. It sets prices and determines what the electricity corporations can charge corporate and household customers to recoup upgrade and maintenance costs. On April 30, the AER decreed that Networks NSW must cut its charges by about 30 percent to match the fully-privatised operators in neighbouring Victoria.

Earlier this month, Vince Graham, the CEO of Networks NSW—the state holding company that runs the electricity distributors Ausgrid, Essential Energy and Endeavour Energy—announced that the corporation would shed “a minimum” of 2,500 jobs as a result.

Publicly, Gray and Foley justified their support for the AER decision by claiming that it would cut household bills by “up to $313” a year. In reality, their prime concern is to reduce costs, and boost profits, for the biggest corporate electricity consumers.

In a Sydney Morning Herald column yesterday, Foley first postured as a champion of ordinary electricity consumers. Then he got to the point: “Lower prices benefit every business in the state—they reduce costs and help create jobs. That is why earlier this week the business users of energy, as represented by organisations such as the Energy Users Association of Australia and the Major Energy Users Inc, expressed their disappointment in the government's decision to seek higher electricity prices.”

As the Australian Financial Review noted, Labor “has joined business in slamming the Baird government’s decision to start a legal battle with the regulator.”

For his part, Baird is blatantly trying to boost the price that his government will get for the planned long-term lease of 100 percent of distribution firm Transgrid and 51 percent of Ausgrid and Endeavour Energy.

At the March 28 NSW state election, the Liberal-National Coalition claimed that it would raise $20 billion from the privatisation. But lower electricity consumption prices will sharply reduce Networks NSW’s revenues, cutting the amounts that investors are likely to pay for its assets.

The Labor Party lost that election after campaigning almost solely on the basis of supposedly opposing the sell-off, while indicating its readiness to back the then-anticipated AER ruling and enforce the resulting job destruction.

The AER dismissed NSW Networks’ contention that the revenue cuts would undermine service provision. The lack of adequate maintenance staffing was, however, exposed when storms swept through NSW last month, resulting in over 200,000 households being without electricity for days on end. Networks NSW personnel were stretched beyond capacity trying to reconnect damaged services.

Reduced spending on maintenance inevitably produces blackouts during heat waves and severe cold snaps. Outdated and poorly maintained networks have already led to electricity shortages during extreme weather conditions that have caused deaths, as well as severe dislocation.

Maintenance cutbacks also compromise hazard reduction programs, including brush clearance under transmission lines. Almost half the fires in Victoria’s 2009 Black Saturday disaster, which killed 173 people, were started by sparks from poorly maintained power lines.

To garner public support for its ruling, the AER said it could reduce annual household bills by $131 to $339. Even if this were true, it would do little to ease the burden on working-class families, who were slugged last year by power bills averaging $1,925.

In reality, Endeavour Energy customers would see bills reduced by just $106 annually, or 5.3 percent—that is, a mere $8.80 a month. For Ausgrid customers the fall would be $165, or around $13.70 per month. These two businesses provide electricity for Sydney, Newcastle and Wollongong, the state’s main population centres.

However, there would be significant savings for major corporate customers, which already benefit from cut-price supply contracts. In 2010, for example, Tomago Aluminium, which consumes around 10 percent of the state’s electricity—some eight million megawatts a year—locked in an 11-year contract with Macquarie Generation to allow it to “expand operations.”

The large industrial users are demanding even lower prices. In its submission to the AER, the Energy Users Association, whose members include some of the state’s largest corporate consumers, called for a further reduction of 20 percent. It criticised the April 30 AER ruling as only a “small step.”

The pricing cuts by the AER, which brands state-owned electricity businesses as “inefficient,” are also in line with long-running demands by federal governments, Labor and Liberal alike, for state governments to sell off their remaining power assets.

At the same time, the Baird government is confident of achieving further savings from negotiations with the Electrical Trades Union (ETU) and United Services Union (USU). Both have signalled their commitment “to work with Networks NSW and the Baird government” to identify cost-cutting “options,” including redeployment and early retirement schemes, to impose the required job cuts and a possible wage freeze.

A similar assault on the jobs and working conditions of power workers is on the cards in other states, such as Queensland. The AER is currently considering its revenue determinations for their electricity networks.

Another austerity budget in New Zealand

Tom Peters

With an extraordinary degree of cynicism, the National Party government presented its budget last Thursday as focused on alleviating poverty. Prime Minister John Key declared that it was based on “compassionate conservatism,” saying he was “proud” to increase welfare payments above the rate of inflation for the first time in four decades.

In reality, the budget continues and deepens the austerity measures that have been imposed on the working class since the 2008 financial crisis. These include cutbacks to health, education and welfare services, the destruction of thousands of public service jobs and another increase in the regressive Goods and Services Tax.

New spending is capped at $1 billion—Finance Minister Bill English described this as the “new normal”—well below the $2 billion to $3.5 billion increases in the five budgets before 2009. New Zealand Herald economics editor Brian Fallow described the budget as “tight-fisted.” The 2.5 percent spending increase was “less than is needed to compensate for the government’s own projections of population growth ... and the Reserve Bank’s forecasts for inflation.”

While the economy expanded 3.3 percent last year, this is largely due to rebuilding activity following the 2011 Christchurch earthquake and a highly unstable housing bubble in the largest city, Auckland. Treasury forecasts, which are almost always too optimistic, show growth slowing to 3.1 percent in the current financial year and to 2.4 percent by 2019.

New Zealand faces the growing risk of a downturn triggered by a collapse of the property bubble combined with plunging prices for dairy products, the country’s main export. It is highly exposed to the slowdown in China and Australia, New Zealand’s two largest trading partners. The government previously promised to return a surplus but instead unveiled a $684 million deficit, the result of near-zero inflation and shrinking tax revenue.

The media largely focused on the budget’s welfare measures, with oneHerald columnist absurdly declaring that it “takes from the rich and gives to the poor.” In fact, the increase amounts to a maximum of just $25 a week and applies only to beneficiaries with children. This will mostly be funded by axing a $1,000 “kickstart” for workers joining the retirement savings scheme KiwiSaver—a predicted saving of $500 million over the next four years.

The miniscule benefit increase will do nothing to reduce the estimated one in four, or 270,000, children living in poverty, including many whose parents work. Herald reporter Simon Collins noted that $25 would not even restore the cuts made in 1991, when benefits for sole parents were slashed by $43 in today’s money.

The government aims to push approximately 18,000 more parents off welfare by forcing them to look for work when their youngest child turns three, instead of five. It is also implementing work testing for thousands of invalid and sickness beneficiaries.

The health sector is appallingly under-resourced. Operational spending is “around $260 million short of what is needed,” according to the Association of Salaried Medical Specialists. Every year, funding falls further behind the expanding needs created by population growth and ageing.

Philip Bagshaw, chair of the Canterbury Charity Hospital, told Radio NZ that the $98 million increase over four years for elective surgeries would not even fund the existing backlog. A survey of some District Health Boards, published in the New Zealand Medical Journal last November, found that one in three people in need of surgery were not even placed on hospital waiting lists. Many of them suffered from severe pain or disability.

Core operational funding for schools will increase by just 1 percent, effectively freezing teachers’ salaries. The budget set aside money to open two privately run, for-profit charter schools. This is in addition to nine which already operate, mostly in oppressed parts of Auckland and Northland.

Spending on universities and polytechnics will rise just 1.4 percent, while institutions will be allowed to increase their fees by 3 percent per annum. Students and graduates collectively owe more than $14 billion in debt.

In Auckland, where the average house price is almost $810,000 and rents are soaring, the government will sell 430 hectares of land to private developers, which it claims will produce 4,500 to 10,000 new houses. Legislation has also been passed to privatise 8,000 existing state houses nationwide. Far from improving housing affordability, these measures are designed to provide more sources of profit for wealthy investors and landlords.

In the south, the government is working with the Christchurch city council to sell assets to pay for the reconstruction needed after the 2010-2011 earthquakes, estimated to cost $40 billion. Basic infrastructure in the city remains in disrepair. The government recently committed to building a lavish $300 million convention centre but has refused to pay a $400 million cost over-run to fix pipes and roads. Mayor Lianne Dalziel, a former Labour Party minister, wants to raise rates by 33 percent over the next four years to help cover the bill.

While effectively cutting funding to basic services, the budget provided an extra $264 million to the Defence Force over the next four years. It will go toward funding NZ troops in Iraq as part of the US-led war and purchasing new equipment. The spy agencies, the Government Communications Security Bureau and the Security Intelligence Service, will each receive a $20 million boost. The money will support New Zealand’s further integration into Washington’s military and intelligence operations, particularly the build-up to war against China.

The opposition Labour Party’s response to the budget revealed once again its lack of any significant differences with the government’s austerity agenda. Leader Andrew Little told parliament he gave National “some credit” for its pitiful welfare increase. Echoing sections of business, Labour’s main criticism was government’s failure to quickly return the budget to surplus, which would be achieved by cutting spending more vigorously.

Along with the far-right ACT Party, Labour wants to cut pensions. On Friday, Little told a business audience that it was “unfair” for people over 65 to receive the pension if they were still working. While he later said Labour was not considering means testing, Little told the Herald that it was “totally reckless” for the government to ignore “this big fiscal issue.”

Labour and the Green Party, along with much of the media, have joined the anti-Asian xenophobic NZ First Party in scapegoating foreigners for the lack of affordable housing. In the lead-up to last year’s election, Labour and NZ First both called for immigration—which is mainly from China and India—to be slashed.

Crisis in Burundi heightens danger of regional war in Africa

Stephane Hugues

Social tensions and bloodshed in Burundi’s capital, Bujumbura, have soared since the killing of opposition politician Zedi Feruzi on May 23. As of this writing, it remains unclear who is responsible for Feruzi’s murder.

The assassination came only one week after an attempted coup d’état and weeks of demonstrations against President Pierre Nkurunziza’s bid to run for a third term. The killing of Feruzi led to the collapse of UN-sponsored negotiations between the government and opposition parties, and the resumption of daily demonstrations in Bujumbura.

The government has now banned the demonstrations. However, they are continuing and much of the economic activity of the capital has ground to a halt. Already thirty people have been killed by police gunfire. Five radio stations have been shut down by the government for supporting the opposition to Nkurunziza’s third term.

The growing tensions raise the danger of a return to the civil war that raged in the country for 12 years until 2005, in which over 300,000 people died. Ethnic tensions between the Hutus and the Tutsis also threaten to spark a renewed regional war from Burundi to neighboring Rwanda and the eastern region of the Democratic Republic of the Congo.

The day before Zedi Feruzi’s murder, a main market in the center of the capital, Bujumbura, was the scene of a grenade attack killing three and injuring 40 people. Such political assassinations and grenade attacks were frequent during the civil war.

While the conflict in Burundi started as a political one, with escalating divisions inside the ruling Hutu establishment, there are increasing signs that the government is trying to push the conflict along ethnic lines. Hutus make up approximately 85 percent of the population, with Tutsis accounting for the remaining 15 percent.

After Nkurunziza said that ninety-nine percent of Burundi was “calm,” Pascal Nyabenda, the president of the ruling National Council for the Defense of Democracy-Forces for the Defense of Democracy (CNDD-FDD) party, accused the protests of being concentrated in a few Tutsi areas of Bujumbura.

In fact, however, the protests started based on opposition to Nkurunziza’s attempt to run for a third time as president; they found support even within the CNDD-FDD itself. “In the CNDD-FDD, the dissidents, who had signed a letter to express their disagreement, were reduced to silence,” wrote French daily Le Monde. “The divisions were covered over, but the demonstration had been made: the opposition to Pierre Nkurunziza was political and not ethnic.”

General Godefroid Niyombare, who led the recent failed coup, was Nkurunziza’s Intelligence Director until he was fired for writing a report hostile to a third presidential bid by Nkurunziza.

Zedi Feruzi had been one of Nkurunziza’s collaborators in the CNDD-FDD until he broke with him in 2007 and was subsequently arrested, sentenced, and jailed.

The US State Department has issued a statement pressing the government to negotiate a settlement to the conflict. It condemned the killing of Feruzi and the grenade attack in Bujumbura and called for an investigation into the deaths. It also called on the Burundian government to “permit the immediate resumption of broadcasts by independent radio stations, end the use of the term ‘insurgents’ to refer to peaceful protesters, and withdraw the proclamation by the Burundian National Security Council prohibiting future demonstrations.”

Without naming the United States, Burundian government spokesman Philippe Nzobonariba then issued a statement on state radio, declaring: “The government of Burundi is profoundly preoccupied by the current diplomatic activity which could undermine and denigrate our republican institutions and constitution.”

The Burundi unrest now threatens to explode into a broad regional war like the conflict, sometimes referred to as the Great African War, that erupted in Rwanda and the Congo in the 1990s and 2000s. Observers are warning that the Rwandan regime and Hutu “Democratic Forces for the Liberation of Rwanda” (DFLR) militias operating in the Congo could intervene militarily in Burundi if its government collapses.

In the Great African War, Washington trained and backed ethnic Tutsi rebel forces under Paul Kagame to overthrow the ethnic Hutu regime in Rwanda and undermine French imperialist influence in the region. As the Rwandan Hutu regime launched a genocidal attack on Tutsis, Kagame’s forces invaded and overthrew the regime.

The Hutu DFLR militias ultimately fled across the border into the Democratic Republic of the Congo. Forces in the Congo allied to Kagame then played a key role in launching the 1997-2003 civil war in the Congo that undermined the French-backed regime that emerged from the Mobutu dictatorship. Several million people in all were killed in these wars, which involved nearly every country bordering the Congo.

In Burundi, the government’s strategy of stoking up ethnic tensions threatens to spiral out of control at any moment. Filip Reyntjens, a professor at the Anvers University, spoke on Belgian television: “This weekend we have just seen the assassination of a political opponent for the first time in many years. The tension has clearly gone up a level… The President has already said a number of times that he will be a candidate. It is very difficult for Nkurunziza to back down on this. But the opposition will accept nothing other than him standing down as a candidate.”

Reyntjens drew two possible scenarios from his analysis of the situation: either “the party in power will persevere and continue to repress the demonstrations… The regime will become more oppressive than it is today,” or “a certain number of political parties will take up arms again and the civil war in Burundi will start up again. A return of the civil war cannot be excluded.”

Reyntjens concluded that the “borders are so porous that an international extension to the Democratic Republic of the Congo and Rwanda cannot be excluded either. If ever the Hutu rebels of the DFLR in the Congo intervene in the conflict, and there was the impression in [Rwandan capital] Kigali that the Burundi Tutsis were targeted, Rwanda has already said that it would be obliged to intervene.”

France claims killing of Al Qaeda leaders in Northern Mali

Kumaran Ira

The French defense ministry announced on May 20 that four Al Qaeda members, including two leaders allegedly involved in the deaths of several French citizens, were killed during a French Special Forces raid on the night of May 17-18 in northern Mali.

While it provided no details about the Special Forces raid, the defense ministry hailed the extrajudicial murder, declaring, “Four terrorists were killed in combat. They included Amada Ag Hama, alias ‘Abdelkim the Tuareg,’ and Ibrahim Ag Inawalen, alias ‘Bana,’ two of the main leaders of AQIM [Al Qaeda in the Islamic Magreb] and of Ansar Dine.”

These two groups, the ministry said, had carried out “numerous terrorist attacks on international forces, as well as repeated atrocities against Malian populations.”

Amada Ag Hama, also known as Al-Targui, claimed responsibility for killing two journalists of Radio France Internationale (RFI), Ghislaine Dupont and Claude Verlon, in Kidal in northern Mali in November 2013. The journalists were covering the Malian legislative election campaign.

Hama was allegedly involved in the killing of French aid worker Michel Germaneau in 2010 and Philippe Verdon in 2013, as well as in the kidnapping of four French citizens working for nuclear energy firm Areva in the uranium mining town of Arlit, Niger.

Bana was a former Malian colonel who deserted the army to join the Islamist group Ansar Dine. He reportedly executed 80 unarmed men in the rural village of Aguelhok in the Kidal region of northern Mali in January 2012.

The killing of the two men by French Special Forces occurred without any judicial proceeding—the inquiry into the assassination of two RFI journalists is still taking place. Moreover, the circumstances of the murder of the journalists remain unclear. They were killed in an area with a heavy presence of French and UN forces.

Previously, French and Malian authorities said the killing of the journalists would lead to an investigation and a trial. Last October, French Foreign Minister Laurent Fabius told deputies, “The investigation is entering an absolutely decisive phase. Investigators should be able to rapidly obtain all the elements allowing for the arrest of the guilty parties.”

On May 20, the parent company of RFI, France Médias Monde, said in a statement that it “expects that the ongoing judicial inquiry into the assassination of its two reporters will explain the circumstances of the tragedy and lead to the arrest of the assassins.”

The extrajudicial killing of the two Islamist leaders will allow French authorities to shut down the investigation into the murder of the two journalists.

After the raid, Fabius praised the killing of top Al-Qaeda members, boasting, “One should keep in mind that France has a long memory.”

The killing of the two men came after French forces killed Ahmed al Tilemsi, a senior commander of the al Mourabitoun Islamist group in northern Mali last December. He was a founding member of the Movement for Unity and Jihad in West Africa (MUJWA), which merged with fighters loyal to Islamist leader Mokhtar Belmokhtar to form al Mourabitoun in 2013.

Even as French officials persist in claiming that they are fighting a “war on terror” in Mali, Paris and its allies continue to depend on Islamist fighters elsewhere. Al Qaeda-linked Islamists targeted for assassination by French forces also serve as its proxy forces in wars for regime change in Libya and Syria. During the 2011 Libyan war, Paris and Washington used such Islamist militias as its ground troops to oust the regime of Colonel Muammar Gaddafi.

The ongoing war in Mali is the direct product of these NATO-led proxy wars. Mali has been rocked by conflict since Gaddafi’s overthrow, after Tuareg rebels who fought in support of Gaddafi returned with heavy weapons to Mali. They took control of vast areas of Northern Mali in early 2012, seeking greater autonomy in an area they refer to as “Azawad.”

France invaded Northern Mali in January 2013 to regain control of the region. Islamist control of the area would serve to discredit pro-French regimes in the region and undermine France’s highly profitable uranium mining operations, particularly in neighboring Niger.

Currently, France has 3,000 troops deployed across the strategic Sahel region as part of a military operation codenamed Barkhane. French troops are carrying out military operations in the former French colonies of Mauritania, Mali, Niger, Burkina Faso and Chad.

Since the French war in Africa began, the Malian crisis has escalated. The killing of the two Al Qaeda leaders came as the Malian government struck a preliminary peace deal, led by Algeria, with several armed groups on May 15. The main Tuareg rebel coalition, the Coordination of Azawad Movements (CMA), boycotted the deal however, demanding more concessions from the Malian regime in Bamako.

Bamako is seeking a deal with the CMA in an effort, in part, to isolate the Islamists. Speaking in Accra, Ghana’s capital, on May 19, Malian Foreign Minister Abdoulaye Diop claimed that Islamist groups remain a “big concern,” calling for a special military force to block them. At the same time, he called on the CMA to strike an agreement.

“The situation on the ground is very unstable, it’s critical, it’s time for them to take a decision so that we can go ahead and implement the May 15 peace deal,” he said.

Over the past days, Northern Mali has seen surging violence and atrocities. Thousands have fled fighting between French-backed Malian forces and rebels in the area. On May 21, the CMA said the Malian army executed nine civilians in Tin Hama, including a Malian aid worker.

A spokesman for the UN’s humanitarian office, Jens Laerke, said “Our partners and local authorities on the ground estimate that over the past two weeks, nearly 27,000 people have fled their homes and villages. In the past week alone, 20,000 people have been uprooted by this violence. The displaced people are currently staying in temporary shelters or with host families in the larger population hubs in the region or on the south bank of the Niger River. They are in urgent need of water, food, non-food items and emergency shelter.”

Conservative wins presidential election in Poland

Markus Salzmann

Andrzej Duda, the candidate of the right-wing Law and Justice party (PiS), emerged as the victor after two rounds in the Polish presidential election. The election is regarded as a significant indication of the outcome of the parliamentary election due this autumn in which the PiS under Jaroslaw Kaczynski hopes to take power.

Duda, who had already won the election in the first round, got about 52 percent of the votes. His opponent in the election, current president Bronislaw Komorowski of the ruling Civic Platform party, received 48 percent of the votes. Turnout in the second round was 56 percent. While higher than in the first round, it was still one of the lowest turnouts in a presidential election since 1989.

The return of the right-wing conservative PiS to the presidency and possibly also to parliament marks a shift to the right in Polish politics and a deepening of the crisis in the European Union (EU). Duda won the election on the basis of pursuing a confrontation course with Russia, rejecting the membership of Poland in the EU, social demagogy and an appeal to the ultraconservative Catholic base of the PiS.

Duda’s election victory will not be met with enthusiasm in Berlin and Brussels. The previous president, Komorowski, and the earlier head of state, Donald Tusk, who now heads the European Council, work closely with German chancellor Angela Merkel and favour a close alliance between Warsaw, Berlin and Brussels. Duda is an outspoken opponent of membership in the Eurozone, and the PiS is clearly more nationalistic and skeptical in regard to the EU.

Radoslaw Markowski from the Institute for Political Studies at the Polish Academy of Sciences remarked in the New York Times that the result would probably be difficulties for the EU. It emphasised that the PiS will cultivate a rather distant attitude to the EU. According to Markowski, the PiS has a “deeply rooted euro-skepticism.” He concluded, “If it wins, the PiS will build an alliance with Lithuania and Ukraine and neglect Germany and France.”

Duda’s election victory represents above all a rejection of the ruling Civic Platform (PO), which has pursued a brutal austerity course since 2007. As a consequence, the social crisis in Poland has deepened. Although Poland has suffered less as a consequence of the economic crisis than other European countries, wages and pensions are stagnating. A former worker or public employee receives on average a pension of between €300 and €600 per month.

Most recently, Prime Minister Ewa Kopacz announced comprehensive retirement cuts and a reform of the health care system after the elections. Mass layoffs in state-run coal mines have been put on hold for the time being after massive strikes, but the PO still plans to implement them eventually.

In this context, Duda was able to win support mostly in the impoverished eastern part of the country. In some regions—for example, Podkarpackie (Subcarpathia)—Duda received more than 50 percent of the votes in the first round of elections. By contrast, Komorowski only received 18 percent. Podkarpackie belongs to so-called Poland B, an area that is predominantly rural and economically devastated. Only the regional capital Rzeszów has more than 100,000 residents. In some places, the unemployment rate is almost 30 percent.

Duda appealed to social discontent by promising social improvements, more support for families with children and the reversal of the raising of the retirement age to 67, which Komorowski had approved. To win religious support from its base, the PiS opposed artificial insemination and the EU Convention on Combatting Domestic Violence. He accused Komorowski of moving “away from the teachings of the Holy Father John Paul II.”

Even though head of state Kopacz said immediately after the election that she will strive for the “best possible collaboration” with the president, everyone expects trench warfare between the government and the president. In addition to representative responsibilities, the president only has a say in foreign and defense policy and can issue a veto against legislative proposals.

The 43-year-old Duda has been a member of the European Parliament since last year and maintains close contact with the Catholic Church. He was secretary of state in the cabinet of former president Lech Kaczynski, who died in a plane crash in Smolensk in 2010. Duda has said that he sees himself as the “spiritual legate” of Kaczynski.

In the television debates before the second election, Duda unambiguously played the nationalist card. Poland must preserve its national identity in the EU and pursue national interests, he repeatedly emphasised.

Duda’s right-wing politics also appeal to the Polish unions. Both the former-Stalinist federation of trade unions OPZZ and Solidarnosc backed him and called for his election.

The OPZZ sees “many demands” in the election programme of Duda for which it had fought for many years, said a high-ranking union representative after a meeting with the presidential candidate of the PiS. For his part, Duda said he is in favour of “dialogue with the unions.” As the PiS seeks to implement ever deeper cuts, the unions will be brought on board even more in order to carry them out.

Duda also spoke out in favour of strengthening the country’s relationship with NATO and the US. He recently said, “The best solution for Poland would be the stationing of US troops on its land. This is the only means of guaranteeing security.”

Duda supports the building of a joint Polish-Lithuanian-Ukrainian military unit initiated by the PO. It is to include 4,500 men and would be completely operational in 2017. The brigade would take part in international operations and support Ukraine in its struggle against Russia.

Both the PiS and the PO represent a hard line with regard to Russia and President Vladimir Putin. During the election, Duda demanded an increase in the military budget. At the same time, he spoke in favour of good relations with all of Poland’s neighbours—with the exception of Russia.

Irish voters overwhelmingly support legalisation of same-sex marriage

Jordan Shilton

The Irish electorate voted by a margin of almost two-to-one last Friday to support a constitutional amendment legalising civil marriage services between same-sex couples. After all votes were counted, 62 percent voted in favour and 38 percent against.

The strong support received reflects the recognition among wide sections of the population that allowing gay couples to marry is a question of basic democratic rights. News reports spoke of many Irish citizens living abroad making the trip home to cast their vote.

The vote demonstrated the sharp decline in the influence of the Catholic Church, for centuries the dominant ideological influence in Ireland. However, the ruling elite continues to defend the Church as a crucial part of bourgeois rule in Ireland. Politicians even claimed that the referendum had nothing to do with the Church.

In addition, the reform affects only civil ceremonies, with the Church exempted from an obligation to conduct same-sex marriages. Some officials within the Church suggested that priests may be ordered not to conduct civil marriage services between same sex couples.

The Fine Gael-Labour Party coalition engineered this compromise following the calling of the referendum vote by the government in late 2013. In return, the church kept a relatively low profile in the campaign, leaving the leadership of the No side to organisations like the Iona Institute, a Catholic think tank.

Despite having its reputation discredited by a series of damaging child abuse scandals, the Catholic Church still plays a major role in areas such as social care and education. This was acknowledged in comments by Diermuid Martin, Archbishop of Dublin, on the referendum result. He complained, “Most of these young people who voted Yes are products of our Catholic schools for 12 years. There’s a big challenge there to see how we get across the message of the church.”

The most telling example of the church’s continued malignant influence on public policy is that abortion remains illegal in Ireland under any circumstances, except when there is an imminent danger to the life of the mother.

The discredited Irish political establishment sought to exploit the same-sex marriage issue for its own political agenda. All of the major parliamentary parties gave their backing to the referendum proposal, hoping thereby to use their support for gay marriage as evidence of their “progressive” credentials.

This was summed up by the Irish government’s health minister, Fine Gael’s Leo Varadkar, who claimed on television that the referendum was a “social revolution.” Fine Gael’s junior coalition partner, the Labour Party, emphasised the messages of “equality” and equal rights for all in its “Make It Happen” campaign.

Such posturing regarding a commitment to equality is obscene coming from parties that openly defend the grossest forms of economic inequality. This contradiction cannot be understood outside of current social and political conditions.

The gay marriage measure was proposed by Labour in its manifesto for the 2011 elections, following which it entered a coalition with Fine Gael, committed to imposing the dictates of the European Union-led troika. The EU, International Monetary Fund (IMF) and European Central Bank (ECB) arranged an €85 billion bailout in 2010 for the Irish financial elite to avoid the collapse of the major banks.

Continuing where the previous Fianna Fail-Green Party coalition left off, Fine Gael and Labour imposed crippling attacks on public services, oversaw a strike ban in the public sector while slashing wages, and increased taxes for working people. Labour abandoned its pre-election posturing as a progressive force, resulting in the collapse of its support to around four percent of the electorate.

The assault on jobs and living standards was enforced with the full support of the trade unions, which signed on to the Croke Park Agreement banning strikes in 2010 and prevented the emergence of any serious challenge by the working class to the government’s austerity agenda. As with Labour, the unions played a prominent role in the Yes campaign for the referendum in the hope of winning back some cheap credibility.

Meanwhile, the result of the pro-capitalist policies of austerity pursued by all these parties for the vast majority of the population have been disastrous. While a tiny elite of the super-rich have seen their wealth explode, and Dublin has been able to re-enter the bond market with the completion of its bailout programme, average earnings for working people have dropped drastically—in some cases by as much as 20 percent—since 2008.

All of the high-sounding commitments to equal rights made by government ministers during the marriage referendum campaign cannot disguise the fact that they head a coalition which has presided over an unprecedented acceleration in social inequality.

Labour leader Joan Burton, who launched her party’s referendum campaign by pledging to fight for equal rights for all, slashed billions from the social welfare budget during her time as social affairs minister, impacting some of the most vulnerable in society.

For his part, Varadkar, the self-proclaimed advocate of a “social revolution,” has repeatedly made headlines for his aggressive and inflammatory comments towards striking workers and protesters, like bus workers in Dublin in 2013 and anti-water-charge demonstrators earlier this year. In truth, what has happened in Ireland over recent years should more properly be understood as a social counter-revolution—one implemented by Varadkar’s government and the ruling elite as a whole, by clawing billions from working people to pay to the financial speculators and criminals who crashed the economy.

Fine Gael initially resisted the proposal for a marriage referendum, and it did not formally appear in the programme for government following the 2011 election. Instead, Fine Gael agreed to a compromise in which the issue was sent to a constitutional convention. After the specially-created body overwhelmingly backed the holding of the referendum, Taioseach (Prime Minister) Enda Kenny leant his full support to the Yes campaign.

However, even in the midst of the referendum campaign, Fine Gael was far from firm in its commitment to push for the new measures to be implemented. As one anonymous senior party member told the Irish Independent on 19 May, “It is one thing to back the same sex referendum, quite another to go out and actively advocate for it.”

The government was not obliged to hold a referendum. It could have decided to adopt the measure into law via a parliamentary bill. While in Ireland, constitutional amendments do need to be put to a vote, the constitution as it existed prior to Friday’s vote did not specify that marriage had to be between a man and woman. The need for a constitutional amendment was thus disputed.

In the end, the same-sex marriage referendum was seen as a useful measure to partially restore Labour’s tattered credibility ahead of elections early next year. Fine Gael, too, hoped to gain politically from its formal support for the bill. In the most recent polls, Fine Gael is securing around 28 percent of the vote, while Labour is on a mere seven percent.

The attempt by the political establishment to present itself as supporters of equality and human rights was seen as necessary, so as to convince an increasingly hostile population that their democratic and social aspirations can still be met by the Irish capitalist state.

But if equal rights for all are to mean anything more than hollow rhetoric, it must be linked to the struggle to transform society along socialist lines. This is the only way that the inequities of the capitalist system can be abolished. This will create the conditions for everyone, regardless of their sexual, gender, racial or other personal characteristics, to enjoy both full democratic rights and the essential social rights—to a decent education, health care, well-paid employment and a comfortable retirement—to which they are entitled.

NSA affair creates tensions between Berlin and Washington

Gustav Kemper

Tensions have been growing between Berlin and Washington and within the German ruling coalition since it became known at the end of April that the German foreign intelligence service (BND) had spied on European politicians, businesses and individuals for the American National Security Agency (NSA). In particular, the demand of the Bundestag (parliamentary) NSA committee of inquiry for the list of so-called selectors--the phone numbers, names and keywords by which digital communications were searched--has led to fierce conflicts.

According to a report in the Bild newspaper, Director of National Intelligence James Clapper threatened to restrict cooperation with the German secret services, or completely discontinue it, because confidential US documents had been leaked to the media by the parliamentary committee of inquiry. The paper quoted an American intelligence official as saying, “What the German government is organizing is more dangerous than the Snowden revelations.”

Two years ago, whistleblower Edward Snowden exposed the close cooperation between the BND and NSA under the code name “eikonal”. Since then, numerous other details have been made public.

After the terrorist attacks of September 11, 2001, the BND tapped into a major telecoms hub in Frankfurt and passed the data through a direct fibre optic cable to Pullach and Bad Aibling in Bavaria. There, digital communications from all over the world were searched by the BND using keywords (selectors) provided by the NSA, and then supplied the data back to the NSA.

There are supposed to be lists with a total of 800,000 selectors. Those affected include not only terrorist suspects, but also European politicians, institutions and companies, including ones in Germany. Among others spied upon were the aerospace and defence company EADS (Airbus Group), its wholly owned subsidiary Airbus Helicopters and Siemens. Via the Frankfurt network node, the NSA and the BND are able to monitor a large portion of the world’s population, including Germans.

This cooperation between the BND and NSA was established in April 2002 under SPD Chancellor Gerhard Schröder and the then Chancellery Minister and present Foreign Minister Frank-Walter Steinmeier. The BND took over a US monitoring station in Bad Aibling, and in exchange filtered the digital data flow for the NSA.

In the Bundestag investigative committee, not only the opposition Left Party and the Greens, but also the SPD, which is part of the government, are now demanding access to the list of selectors. According to Bild am Sonntag, SPD General Secretary Yasmin Fahimi posed an ultimatum to the Chancellor and loudly demanded “that the chancellor’s office finally provides clarity about how the Bundestag can examine the list of selectors by the parliamentary session next week”.

Vice Chancellor and Economy Minister Sigmar Gabriel also called for greater self-confidence. He demanded that the list of selectors be presented to the parliamentary inquiry committee for consideration without US consent, so that it can determine whether more industrial enterprises were affected by the spying. “No Congress and no Senate in the United States would let itself be refused this right to information,” he said. The German parliament should be “at least as confident. We are neither immature nor order takers.”

“What we are experiencing now is an affair, a secret service scandal, which is capable of rendering a very severe concussion,” Gabriel added. He tried to draw the Chancellor into the affair, claiming she had assured him there was no industrial espionage beyond what was previously known. Should this turn out to be false, this would place a heavy “burden on the trust of government action,” he threatened.

Most editorials suggest that Gabriel, who is also SPD chairman, has played up the issue on tactical grounds. The SPD has not yet succeeded in rising above its current 25 percent support in opinion polls. However, the SPD is not seeking a break in relations with Washington.

It is striking that Frank-Walter Steinmeier--who as a former head of the chancellery and long-time foreign minister is deeply involved in the affair--is holding back. In the Welt am Sonntag, SPD parliamentary leader Thomas Oppermann promised, “We cannot and will not end cooperation with the American services. The world has not become more secure in recent years. We thank the Americans for important information.”

On the “Berlin Direct” programme of broadcaster ZDF, even Gabriel declared that the functioning of the intelligence services was in the “national interest”.

Chancellor Merkel has kept a low profile, but stressed, “The fitness for purpose of the intelligence services can only be achieved in cooperation with other services. This includes the NSA.” She will only make the selector lists available to the committee of inquiry when the NSA gives its permission.

Testifying before the parliamentary committee of inquiry, the president of the Federal Intelligence Service, Gerhard Schindler, defended the cooperation with the NSA. He said that Germany was dependent on the American service and not vice versa. The NSA did not threaten Germany’s security but protected it.

Schindler warned that the sustainability of the BND was at stake if more details came to light. “First partner services in Europe review the cooperation with the BND,” he said. “The first meetings without the BND” had already occurred at the European level. “The signals we hear are anything but positive.”

Schindler also claimed that the clarification of European objectives--i.e. spying on EU partners--was not contrary to German law. This was immediately contradicted by chancellery chief Peter Altmaier (CDU), responsible for the secret services. Whether the BND should monitor European targets was not a matter of opinion, and “was to be answered by those who are called to serve”, he wrote on Twitter.

However, there are also those who regard the conflict with the NSA as an opportunity to emancipate the German secret services from those of the US. The taking on of more “German responsibility in the world” and the “end of military restraint”, which the Federal President Joachim Gauck and members of the federal government have advocated for a long time, not only demands a stronger army but also more powerful intelligence services. The corresponding demands are being raised in both the ruling parties and in the opposition.

This view is most clearly expressed by Left Party leader Gregor Gysi. He accused the BND of “treason”, a term that the nationalist right uses mostly as a rallying cry against internationalists and socialists. “It’s about treason. It’s about intelligence activity, possibly against German interests, against German companies, at least companies with German participation, against friendly politicians”, Gysi said on Deutschlandfunk.

The SPD is working on a law that will restructure the BND. It should only collect and pass on data that meet its own task profile. “We need a fundamental new beginning in communications intelligence abroad”, said Christian Flisek, the SPD representative in the NSA committee of inquiry.

The German government also wants to strengthen the BND. Since it became known that the NSA had intercepted the private mobile phone of the German Chancellor, she has repeatedly called for a return to an “equal footing” with the Americans. However, this is difficult.

In 2013, the budget of all American intelligence agencies, with 107,000 employees, amounted to $52.6 billion (at that time about 40 billion euros), many times the nearly 800 million euros allotted to the German secret services in the same year, with a total of about 7,000 employees. The dailyDie Welt names a sum of 496 million euros for the BND, 206 million for the Secret Service and 72 million for the Military Counterintelligence Service.

There is no doubt that the government will massively increase these amounts, as well as funding for the armed forces, at the expense of already reduced social spending.

Protests in Japan denounce US military presence

Ben McGrath

Japanese protesters gathered outside the parliament building in Tokyo on Sunday to demand the removal of a US base on the island of Okinawa. Numerous rallies have been held recently, both on the island and the Japanese mainland, to oppose the US military’s presence in the country.

An estimated 15,000 people took part in Sunday’s protest, denouncing plans to move the US Marine Corp Air Station Futenma base to a new location at Henoko, which is currently being constructed. Futenma is located in the city of Ginowan, while Henoko sits along a less populated coast in Okinawa. Many people held banners reading, “No to Henoko.” They demanded the base be removed from the prefecture altogether.

One protester, Akemi Kitajima, told the press: “We must stop this construction. The government is trying to force the plan, no matter how strongly Okinawa says ‘no’ to it.” The demonstrators also expressed opposition to US plans to deploy CV-22 Ospreys to the Yokota Air Base in Tokyo.

A larger protest took place on the previous Sunday, when 35,000 people gathered on Okinawa to oppose the base relocation plan. The protests began that Friday and continued throughout the weekend. On the Saturday, demonstrators marched around the Futenma base and were joined in other cities across the country by approximately 2,600 others. Besides their opposition to the base, people shouted slogans, such as “Oppose enhanced Japan-US defense ties,” directed against Japan’s turn to militarism.

Plans to move the Futenma base have been in the works since 1996, following the 1995 brutal kidnapping and rape of a 12-year-old Okinawan girl by three US servicemen, which resulted in widespread anti-US protests. Other, less publicized crimes by US personnel have also stoked anti-US sentiment.

Okinawa, however, is on the front lines of any conflict with China. A majority of the 47,000 American troops stationed in Japan are on the island, strategically located in the East China Sea adjacent to the Chinese mainland. Okinawa plays a key role in Washington’s “pivot to Asia,” designed to surround China militarily and economically subordinate it to US interests.

There is little chance the Obama administration would agree to relocate the Marine base off the island, especially at a time when it is engaged in provocations with China. The relocation of the base, which was outlined in a 2006 agreement between the US and Japanese governments, has provoked persistent protests. The Democratic Party of Japan (DPJ) came to office in 2009 promising to revise the agreement, but the Obama administration refused point blank to discuss the issue with Prime Minister Yukio Hatoyama, and worked to undermine him. He was forced to accept the 2006 deal, then resigned in June 2010. His DPJ replacement, Naoto Kan, quickly reaffirmed his full support for the US alliance.

The current Liberal Democratic Party (LDP) government has not only made clear that the base relocation will proceed. It has stepped-up the remilitarization of Japan, acting in concert with Washington as part of the US “pivot” against China.

The recent demonstrations have been organized by citizens groups with ties to the Okinawan prefectural government. Governor Takeshi Onaga was elected last November as an independent, largely on his opposition to the Futenma base and its relocation. He is formerly of the ruling LDP and draws support from the conservative Shinpukai faction that left the LDP due to its support for the Okinawan bases.

Onaga is not opposed to the military alliance with the United States, nor to Japanese militarism. His is simply making the limited, parochial demand that the Marine base be moved to another location in Japan. Onaga recently declared: “I fully understand (the importance) of the Japan-US alliance. You should never break it down.”

At the same time, the governor has fostered illusions in the possibility of a shift by Washington. Onaga said recently: “Only Okinawa is burdened with this heavy load, and I want to let the United States, a democratic nation, know about this unfair situation.”

Despite his explicit backing for US militarism, Onaga has been backed by the Japanese Communist Party and the Social Democratic Party, both of which posture as opponents of Japanese re-militarization. They function as a political safety valve. The protests allow people to blow off steam while the governor plays to Okinawans’ sense of mistreatment at the hands of the mainland.

For politicians like Onaga, the battle over the bases also provides a pretext for land grabs. Nearly one-fifth of Okinawa is covered in US military bases, taking up territory that the wealthy elite would rather use to turn a profit. The governor views the bases as the “biggest impediment” to increased business opportunities.

Onaga hopes to turn the island into a hub for tourism, which means more hotels, restaurants, and other businesses to cater for visitors, as well as construction deals. In 2013, a record 6.58 million tourists visited Okinawa while the number of overseas visitors jumped 64 percent to 630,000 over the previous year. In total, tourism accounted for 448 billion yen ($US3.87 billion) in revenue during the 2013 fiscal year.

Onaga is seeking to attract foreign investment. He visited China in April as a delegate for the Association for the Promotion of International Trade Japan. Before the visit, an Okinawa prefectural government spokesperson stated: “We would like to take this opportunity [of Onaga’s visit] to promote economic exchanges between Okinawa and China. We hope companies use special economic zones in China and Okinawa to trade with each other.”

Onaga is offering up the Okinawan people as a source of cheap labor. Okinawa is the poorest prefecture in Japan with an unemployment rate twice as high as on the mainland. “Companies were attracted by subsidies, low labor costs, and the abundant workforce,” Takehide Kinjo told the Wall Street Journal last November. Kinjo is president of Dinos Cecile Communications Company, based in Uruma City, an hour north of Naha, Okinawa’s capital.

Local investors are eager to get their hands on the land now occupied by the Futenma base. “Expectations are rising for redevelopment projects on the land after it is vacated,” an Okinawan bank official told the Asahi Shimbun. “Futenma has good transport connections, and the average land price there can rise higher than that in Naha’s new city center.” Naha’s city center, once the site of residences for US military personnel, now hosts shopping malls and duty-free shops offering luxury brands.

Okinawans have for decades had a strained relationship both with Japan and the United States. Known as the Ryukyu Kingdom until it was annexed by Imperial Japan in 1879, the island saw heavy combat at the end of World War II, during which more than 100,000 civilians were killed. Following the war, Okinawa remained under direct US control until 1972, two decades after the US occupation ended in the rest of Japan.

US-China tensions escalate over South China Sea

Peter Symonds

Tensions between the US and China are continuing to escalate after Beijing lodged a formal protest with Washington on Monday over a highly-publicised US military surveillance aircraft flight near Chinese-controlled territory in the South China Sea’s Spratly Islands.

An editorial in Wednesday's Washington Post continued the drumbeat of US denunciations of China’s land reclamation activities in the South China Sea and called for action by the Obama administration. “While it probably cannot be stopped, the project should be fully exposed—and China’s attempts to restrict air and sea traffic near its installations decisively rejected,” the newspaper declared.

The editorial’s language, condemning the "brazenness” of China’s territorial claims and its land reclamation as “a dangerous provocation,” has become standard fare for the US and its allies. In reality, the stepped-up actions of the US, thousands of kilometres from any American territory, have recklessly inflamed long-festering regional maritime disputes and are posing the danger of war.

Washington’s calls for “freedom of navigation” are nothing but a pretext for a military build-up in these strategically sensitive waters and for steadily escalating provocations, such as last week’s reconnaissance flight. Defence Secretary Ashton Carter has called for the Pentagon to prepare plans for American military aircraft and/or warships to directly challenge Chinese sovereignty by entering airspace and waters within the 12-mile territorial limit around its islets and reefs in the South China Sea.

The US is clearly aiming to provoke a Chinese response that can be exploited to dramatically escalate the diplomatic and military pressure on Beijing in order to extract major concessions, even if that precipitates an open clash and conflict between two nuclear-armed powers.

The Washington Post editorial encouraged the Obama administration to step up the war of words against China at the annual top-level Shangri La Dialogue starting Friday in Singapore, where Defence Secretary Carter will undoubtedly use the opportunity to confront senior Chinese officials. The US and China’s neighbours, it declared, should “push back against the [Chinese] sandcastles in the Spratlys.”

In a similar vein, China’s announcement yesterday that it was constructing two lighthouses on reefs in the Spratlys was portrayed in the US and international media as part of China’s supposedly menacing build-up in the South China Sea.

Chinese People’s Liberation Army (PLA) spokesman Yang Yujun hit back yesterday against the US, declaring that “outside powers” were trying to “tarnish the Chinese military’s reputation and create an atmosphere of exaggerated tension.” Referring to China’s land reclamation, he said: “There has been a lot of hype surrounding this news. Is it because the South China Sea has shrunk and become more crowded?”

Alluding to the danger of further US military provocations, Yang declared: “We cannot eliminate the possibility that this is to create excuses for the actions that certain countries may be planning to take. This is not a new trick and has been used many times in the past.”

Yang was speaking at the launch of China’s new Defence White Paper, which lays out, in broad terms, the PLA’s strategy and objectives. After painting a fantastic picture of a world in which “peace, development, cooperation and mutual benefit have become an irresistible tide of the times,” it proceeds to warn of “new threats from hegemonism, power politics and neo-interventionism.” It continues: “International competition for the redistribution of power, rights and interests is tending to intensify.”

The document explicitly points to China’s concerns about the US military build-up in the region and Japanese remilitarisation: “As the world economic and strategic centre of gravity is shifting ever more rapidly to the Asia Pacific region, the US carries on its ‘rebalancing’ strategy and enhances its military presence and military alliances in this region. Japan is sparing no effort to dodge the post-war mechanism, overhauling its military and security policies.”

The White Paper makes clear that China is turning toward Russia, which is likewise being aggressively confronted by the US and its allies in Eastern Europe. China’s armed forces, the document emphasises, “will further their exchanges and cooperation with the Russian military within the framework of the comprehensive strategic partnership” between the two countries.

The White Paper highlights the mounting tensions in the South China Sea, stating that some of China’s neighbours have taken provocative actions and reinforced their military presence on reefs claimed by China. “Some external countries are also busy meddling in South China Sea affairs; a tiny few maintain constant close-in air and sea surveillance and reconnaissance against China,” it declares.

China’s military build-up, along with its reclamation work in the South China Sea, is aimed at countering US threats to its interests. While Washington denounces China’s land reclamation as a grab for control of the South China Sea, the US actions are directed at securing its own dominance. Since 2010, Washington has exploited the maritime disputes to drive a wedge between Beijing and its neighbours and enhance the US military presence. The US now has basing arrangements with Singapore and the Philippines, directly adjacent to the South China Sea, and is seeking similar arrangements with Vietnam.

It is not China, but the US, that is threatening “freedom of navigation” through the South China Sea. China depends heavily on the key sea lanes through these waters for energy and raw materials from Africa and the Middle East, as well as for its global exports. A key element of the Pentagon’s strategic planning for war against China is to impose an economic blockade of the Chinese mainland by severing these shipping routes.

The defence shifts outlined in China’s White Paper are primarily aimed at preventing the US Navy and Air Force from mounting such a blockade. The document calls for a gradual shift from the PLA Navy’s current focus on “offshore waters defence” to include “open seas protection.” The White Paper also foreshadows a change in focus for the PLA Air Force, from territorial air defence to both defence and offence.

The danger of a catastrophic war between China and the US is being increasingly discussed in ruling circles. In comments last Friday, billionaire investor George Soros made an appeal for the US to make a “major concession” to China by allowing the yuan to join the International Monetary Fund’s basket of currencies and binding the two economies together more closely.

“Without it,” Soros said, “there is a real danger that China will align itself with Russia politically and militarily, and then the threat of third world war becomes real, so it is worth trying.” Like all of those who claim that international economic integration will prevent world war, Soros ignores the lessons of history—economic interdependence did not halt the slide into World War I or World War II.

The real driving force behind the eruption of US militarism and the growing dangers of war is the worsening breakdown of world capitalism following the 2008 global financial crisis. The only means for halting this drive to war is the revolutionary overthrow of the bankrupt profit system by the international working class.