18 Dec 2015

China Prepares for a Modern War

Asanga Abeyagoonasekera

"Under the leadership of the Communist Party, our military has gone from small to big, from weak to strong, from victory to victory. On this road, reform and innovation steps have never stopped."
President Xi Jinping
In 1919, Halford Mackinder wrote in Democratic Ideals and Reality that China would eventually guide the world by “building for a quarter of humanity a new civilization, neither quite Eastern nor quite Western.” Mackinder’s prediction so far has proven accurate, according to Robert D Kaplan, the geopolitical analyst.
President Jinping recently announced breakthrough military structural reforms to China’s military administrative structure and command. According to him, the current regional military commands will be adjusted and regrouped into new battle zone commands supervised by the Central Military Commission (CMC). The reform will establish a three-tier "CMC - battle zone commands - troops" command system and an administration system that will run from CMC through various services to the troops.
The reforms will enable China to win a modern war. Modernisation of the command structure of the world's largest armed force is significant and will impact the security apparatus of all of Asia. With rising global security threats, China as an emerging superpower is definitely on the right track by adopting structural military reform. China’s international standing and interest in security and development is seen as a priority with this reforms taking place. Jinping stated, "As the country progresses from a large country to a large and powerful one, defense and military development stands at a new and historic starting line.” In the next five years, China is expecting concrete results from these new reforms, and breakthroughs in the overhaul of the leadership and joint command system. This is a serious step to improve the military strength and capacity of China.
Against this backdrop, the third ASEAN-US conference was held with tough security measures in Kuala Lumpur, Malaysia, with 4,500 soldiers deployed on standby, on 21 November. The ongoing security threat from the Islamic State (IS) has escalated and over 30,000 foreign fighters from 100 countries have joined the terrorist group. Malaysian officials have arrested over 100 citizens suspected of links to the IS, from ordinary citizens, lecturers, civil servants, and even security forces. This is an emerging threat as Malaysia, Indonesia and Filipino affiliates of the IS could unite to form a Southeast Asian branch of the terror outfit. Some officials say it is only a matter of time before a major attack occurs.
It is also against this backdrop that President Obama has announced his government’s new strategic partnership with ASEAN. The US and ASEAN have elevated their partnership to a strategic relationship to support each other in five important areas: economic integration, maritime cooperation, transnational challenges including climate change, emerging leaders, and women’s opportunities. The action plan has been set from 2016 to 2020.
The statement directly refers to China re-affirming the importance of maintaining peace and stability, ensuring maritime security and safety, and freedom of navigation including in and over-flight above the South China Sea. Some scholars see this strategic partnership as an attempt to control and limit China’s role with ASEAN countries. The partnership does not mean that ASEAN members have now teamed up with the US against China. The preferred strategic option for most countries is balancing US and China and finding a way. The elevation of this partnership between ASEAN and the US should not be dismissed either.
To counter the ASEAN-US joint statement, China immediately launched a “five-pronged” proposal aimed to keep the South China Sea issue between China and ASEAN. With these developments, whether China has directly violated the key areas of the ASEAN-US statement when it comes to mutual respect for national sovereignty should be questioned.
In this context, the structural reform of the Chinese military in the next few years will affect the security of all of Asia, as China has already established its political and economic partnerships with many nations including Sri Lanka. This is the first indication that China is preparing for a modern war.

Weakening currency and economic slowdown in China

Peter Symonds

Amid a continuing weakening of the Chinese currency, the People’s Bank of China (PoBC) has signalled new moves that could accelerate the slide in the renminbi’s value and trigger a currency war among export-dependent countries in Asia and internationally.
Last Friday, as the renminbi hit its weakest level against the US dollar in more than four years, the PoBC announced that it intended to change the way in which the renminbi’s value is fixed. In the future, the renminbi will be measured against a basket of currencies, rather than the dollar, opening the door for further devaluation.
China is under pressure from a rising US dollar, compelling the PoBC to intervene to maintain the value of renminbi within its fixed band. This has led to a depletion of foreign currency reserves, which stood at $3.43 trillion in November, down 14 percent from the peak in June 2014. The renminbi is likely to come under greater pressure if the US Federal Reserve announces an expected rise in US interest rates later this week.
The downward slide in the renminbi’s value, which makes Chinese exports cheaper, threatens other Asian exporters, already being hit by the global economic slump, and heightens the danger of competitive devaluations. Societe Generale analyst Jason Daw warned on Thursday that “further renminbi depreciation risks a currency war, either directly by policymaker actions or indirectly by investors shorting Asian currencies.”
Commenting last week on the upcoming US Fed decision, UK Daily Telegraph business editor Ambrose Evans-Pritchard cautioned: “The greater risk for the world over coming months is that China stops trying to hold the line against devaluation and sends a wave of corrosive deflation through the world economy. Fear that China may join the world’s currency wars is what haunts the elite and funds in London.”
Evans-Pritchard warned that a large devaluation in the Chinese currency “would set off currency wars in Asia and beyond, replicating the 1998 crisis on a more dangerous level.” In the 1997–98 Asian financial crisis, China was generally praised for maintaining the renminbi’s value against the dollar and assisting in stabilising financial markets. Now China threatens to become a major source of instability.
Underlying the weakening currency is the slowdown of the Chinese economy, which was highlighted by figures released last week. Trade statistics showed further falls in US dollar terms, with an 8.7 percent drop in imports in November compared to a year earlier. Exports declined 6.8 percent year-on-year, steeper than the 5 percent fall in October.
China’s annual growth rate slowed to 6.9 percent in the September quarter, the weakest result since 2009 in the midst of the global financial crisis and below the 7 percent target set by the government. The Chinese leadership claims to be effecting a transition from an export-driven economy to one based on domestic consumption and services, as if this were a natural progression for all countries.
However, China’s rapid economic growth has been completely bound up with its integration into the world economy as the premier cheap labour platform. The regime responded to the 2008 global financial crisis, which led to a contraction in exports and the rapid loss of 20 million jobs, with a huge stimulus package that combined a flood of cheap credit with a massive infrastructure expansion.
The stimulus measures were based on the assumption that the world economy, and thus Chinese exports, would recover. Six years on, that premise has proven false. Moreover, the cheap credit only fuelled speculative bubbles in property and shares that have heightened economic uncertainty. Property prices are stagnant and shares on the Shanghai and Shenzhen stock markets plunged earlier this year.
The slowdown in the property market, combined with the slump in manufacturing exports, is compounding productive overcapacities in basic industries such as steel. China is the world’s largest producer of steel, accounting for about a half the total production of 1.6 billion tonnes. UBS analysts cited in the Economist estimate that China this year will produce 441 million tonnes more than it can consume.
In an effort to stave off a wave of bankruptcies, the Chinese government is encouraging steel producers to export and last week cut export tariffs on pig iron and steel billet. For the year to November, China exported over 100 million tonnes—more than the total production of any other country in the world except Japan. However, Chinese steel exports not only fail to soak up overcapacity, but also threaten to provoke demands for protectionist measures from hard-pressed steel industries in other countries.
The Chinese government is fearful that a wave of bankruptcies in manufacturing will send unemployment soaring and result in widespread social unrest. Strike figures reported by the Hong Kong-based China Labour Bulletin, based largely on media reports, hit 301 in November, the highest level for the year. Most of the workers’ protests were in manufacturing and construction over unpaid wages and factory closures and mergers.
The government’s plans to “transition” to a service economy involve a further round of market restructuring and opening up of service sectors to foreign companies by breaking the current dominance of state-owned enterprises. Given the lucrative opportunities that could open up for foreign investors, it is not surprising that major global institutions like the International Monetary Fund and World Bank, along with financial commentators, champion the proposals.
However, the Financial Times noted last week that not everyone is convinced that services in China will seamlessly takeover from a stagnant manufacturing industry. John-Paul Smith, from the investment advisory firm Ecstrat, argued that the services sector was heavily interconnected to manufacturing. If manufacturing “hit the wall, the idea that consumer spending won’t take a big hit is absolutely fanciful in the extreme,” he said, warning that China had a good chance of experience “a sudden stop”—i.e., zero growth—in the next couple of years.

UK spy agency admits hacking phones and computers without warrants

Trevor Johnson

Evidence given in a hearing brought against the Government Communications Headquarters (GCHQ), by Privacy International and seven international internet service providers has shed further light on its mass surveillance operations.
Privacy International is an international campaign group for private and unmonitored use of the Internet. The case is being heard at the Investigatory Powers Tribunal (IPT), which deals with complaints about the intelligence services and surveillance by government organisations. The four-day hearing in Central London is the result of American whistleblower Edward Snowden’s exposure of illegal and widespread abuse of power by both the US-based National Security Agency (NSA) and GCHQ.
Snowden revealed GCHQ’s use of computer network exploitation (CNE), also known as hacking, against whole sections of the population inside the UK and internationally. The programmes included ones with the following codenames: “Nosey Smurf, which involved implanting malware to activate the microphone on smartphones; Dreamy Smurf, which had the capability to switch on smartphones; Tracker Smurf, which had the capability to provide the location of a target’s smartphone with high precision; and Paranoid Smurf, which ensured all malware remained hidden.”
Snowden gave more details on these programs in a Panorama documentary aired on the BBC last October.
During the case, GCHQ admitted for the first time in court that it engages in computer hacking. Previously it had refused to confirm or deny whether it had such capabilities. In 2013, 20 percent of GCHQ intelligence reports were based on information from hacking, the tribunal heard. That proportion is likely to have increased since then, as the use of encryption has made it more difficult to listen in on communications.
Ben Jaffey, counsel for Privacy International, told the IPT, “GCHQ undertakes ‘persistent’ CNE operations where an implant ‘resides’ in a targeted computer for an extended period to transmit information or ‘non-persistent operations’ where an implant expires at the end of a user’s internet session.”
CNE is so effective that having a smartphone is like “carrying around a bug with you.”
The intelligence services are accused of using generalised “thematic” warrants that do not refer to named individuals or addresses but instead refer to whole categories of people or places. These are an “exorbitant” extension of normal powers, Jaffey told the tribunal. Under Section 5 of the Intelligence Services Act, safeguards are bypassed allowing the targeting of groups as loosely defined as “all mobile telephones” in Birmingham, the UK’s second largest city.
One instruction aimed at GCHQ staff states, “CNE involves gaining remote access to computers and networks and possibly modifying their software without the knowledge or consent of the owners and users with the aim of obtaining intelligence. ... CNE operations carry political risk. These risks are assessed by the relevant team—consult them at an early stage if you’re considering a CNE operation.”
Following a written response to the IPT by Ciaran Martin, director of cyber security at GCHQ, Privacy International concluded, “Previously secret documents, and witness statements produced by GCHQ now reveal and confirm:
“GCHQ confirmed that the Secretary of State does not individually sign off on most hacking operations abroad, but only when ‘additional sensitivity’ or ‘political risk’ are involved.
“Overseas hacking does not require authorisations to name or describe a particular piece of equipment, or an individual user of the equipment…”
The response also acknowledged that the monitoring agency does most of its surveillance work based on Section 5 (“class” or “thematic”) authorisations:
“GCHQ primarily operate under class authorisations and have very few specific section 7s [authorised targeting of named individuals].”
Lawyers representing GCHQ argued, “GCHQ and other intelligence agencies must develop innovative and agile technical capabilities to meet these serious national security challenges. Computer network exploitation is one such capability… CNE may, in some cases, be the only way to acquire intelligence coverage of a terrorist suspect or serious criminal in a foreign country.”
The reality is that, in virtually every terrorist-related incident from 9/11 to the latest attacks in Paris, far from being the work of unknown quantities that would require generalised surveillance to detect, the perpetrators have been well-known to the security services. In some cases, they were seen as potential recruits.
The other argument used in justification of the intrusive spying activities of GCHQ and MI5 is that that they are merely asking for their powers to be kept up to date with modern methods of communication.
This argument is fraudulent. The scale of state surveillance revealed by Snowden has no precedent. The British state now reserves the right to treat the mobile phones, computers and networks of its own citizens and those of other countries as its own property, to be interfered with, controlled and vetted—even when their owners are not accused of any crime. Whereas in previous centuries the state had to at least formally treat “every Englishman’s home as his castle” and not attempt to gain entry without a legal warrant, it now arrogates to itself the right to use all electronic devices as an extension of its own surveillance network.
The NSA and GCHQ have been engaged in large-scale and illegal surveillance of the world’s population for a number of years, while lying to anyone who tried to ascertain what they were doing.
While the IPT poses as a neutral arbiter, ensuring fairness for UK citizens in their treatment by the secret services and police, it is an essential part of the state machine it purports to be regulating. Since being set up in 2000, the IPT has upheld only 10 of the 1,468 complaints brought to its attention (0.68 percent).
Whether or not the IPT finds in favour of a complainant, it does not disclose whether he or she has been the subject of investigation by the security services or what methods of investigation were used.
When the IPT decides that a complaint should be upheld, this leads to little more than a rewording of legislation to ensure that operations can continue. The governments’ move to legislate what is dubbed the  Snoopers’ Charter” is the most recent example of this. In response to Snowden’s exposures, the legislation brings many of the formerly illegal practices within the remit of the law without any accounting for who was responsible for the prior abuse of power and law-breaking.
In December the IPT ruled, in another case brought by Privacy International and others, that mass surveillance under GCHQ’s Tempora programme was legal.
Given this record and the ruling elite’s increasing reliance on authoritarian methods to prolong its existence, it is likely that the IPT will find against Privacy International and the other complainants and allow the mass surveillance and hacking by GCHQ to continue.

Volvo truck plant lays off 734 workers ahead of contract deadline

Ed Hightower

Volvo Trucks North America announced plans earlier this month to lay off 734 production workers, about one quarter of the workforce, at its New River Valley assembly plant in Dublin, Virginia. The announcement came just one day before workers at the plant voted by 96.3 percent to authorize strike action as part of negotiations between United Auto Workers (UAW) Local 2069 and Volvo. The current five-year labor agreement is set to expire in March 2016. Layoffs are set to begin in February 2016.
The New River Valley assembly plant is the largest employer in Pulaski County, with more than 2,800 workers at its 1.6 million-square-foot facility. It is also Volvo’s largest truck manufacturing plant in the world, producing every Volvo truck and tractor-trailer in North America.
Just two months before the layoff announcement, Volvo unleashed plans to invest $38.1 million for the building of a 36,000-square-foot “customer experience center” that would house a movie theater, training rooms and a one-mile track where prospective customers could watch the trucks be test driven. Governor Terry McAuliffe made a well-publicized visit to the plant for the unveiling of the customer experience center. Volvo workers were required to leave their workstations and attend the event.
Volvo spokesman John Mies told the Roanoke Times that the layoffs were purely due to weakening market demand and poor economic conditions in the US. He denied that the layoffs had anything to do with other issues at the plant.
In reality, the layoffs are a deliberate effort to intimidate workers and force them to accept a sellout contract in March. (Recently laid-off workers are still permitted to vote on the upcoming contract.) Volvo used this same approach to force through the current contract, which was ratified in 2011. Shortly after that agreement, Volvo rehired about 700 workers who had been laid off as the contract deadline loomed.
UAW Local 2069 has taken no action in defense of the 734 workers it nominally represents. These workers are part of the second tier at the Volvo plant and make $18.77 per hour (first-tier or “core” workers earn $25.54 and represent roughly one third of the plant’s workforce).
According to a UAW-conducted survey, the primary concern of all workers at the plant is the elimination of the two-tier wage system, a demand that the union has no intention of raising. Instead, UAW officials announced that their negotiating platform consists largely of minor changes to health care coverage and other issues that pertain only to first-tier workers.
Like Volvo, the UAW uses divide-and-conquer tactics to split the first- and second-tier workers. In this effort, UAW Local 2069 tries to schedule its informational meetings at times that are inconvenient to second-tier workers.
Against the interest of all of the workers, UAW Local 2069 gave Volvo 90 days of notice in advance of any strike, allowing the company time to stockpile inventory. The response of the union to the announced layoff of a quarter of its members is silent acceptance. No demonstrations have been called in support of laid-off workers, nor have any calls been made to mobilize workers at other Volvo plants or auto manufacturers outside of Dublin, even though such workers are ostensibly organized under the same union.
UAW Local 2069’s Facebook page currently directs readers to “buy American” campaigns for Christmas gifts.
In the event that the UAW does call a strike, it will only be of the “Hollywood” variety, serving only as a safety valve for workers’ anger before the union calls them back to work, with or without a contract. Any contract promoted by the union will be a sellout, with the preservation of Volvo’s profitability as the main priority.
As in countless instances in the past year alone, the UAW will prove that it does not work for autoworkers, but for management. Through isolating Volvo workers, the UAW has helped the company achieve an estimated 25 percent reduction in wages over the course of the last four contracts.

Cases of malnutrition surge in UK

Liz Smith & Harvey Thompson

A recent report titled “The cost of malnutrition in England and potential cost savings from nutritional interventions” highlights the consequences of poverty affecting large parts of the population of the world’s fifth-wealthiest country.
The report is authored by the Malnutrition Action Group of the British Association for Parenteral and Enteral Nutrition (BAPEN) and the National Institute for Health Research Southampton Biomedical Research Centre (NIHR Southampton BRC).
Malnutrition is a serious medical condition that occurs when a person’s diet does not contain the necessary nutrients. Last year, almost 3 million people in the UK at any one time were estimated either to be suffering or at risk from malnutrition. The BAPEN/NIHR report, the result of three years of collaboration, focuses on England, but its findings could be applied to the rest of the country.
“Malnutrition is a common clinical and public health problem in England, which is found in all care settings, all disease categories, and individuals of all ages,” it states.
Using the Malnutrition Universal Screening Tool (MUST) for adults in England, malnutrition is estimated to affect approximately:
  • 30 percent of adults on admission to hospital.
  • 35 percent of residents in care homes.
  • 15 percent or more of adults attending hospital outpatients.
  • 18 percent of adults on admission to mental health units.
  • 12–14 percent of adults in sheltered housing.
  • 10 percent of adults visiting their general practitioner (GP).
  • 5 percent of the adult population of England.
Its research, and that of others, have shown that malnutrition increases:
  • Hospital admissions, length of hospital stay, as well as hospital readmission following discharge from hospital.
  • Risk of becoming dependent on others and becoming a permanent resident in a care home, especially those with nursing care.
  • Visits to a GP.
The report is written from the standpoint of advising the state of “potential cost savings.” It evaluates the “clinical and economic burden of malnutrition” and employs arguments in this vein. Nonetheless, the findings reveal a growing social scourge in contemporary England.
The “cost of malnutrition” in England is estimated to be £19.6 billion per year, or “more than 15 percent of the total public expenditure on health and social care.” Around half of this total expenditure is spent on those over 65 years of age, and the other half on children and young adults.
In conclusion, the report calls for, “The burden of malnutrition” to be “tackled in an integrated and coordinated manner by multidisciplinary groups of health and social workers, including health planners, commissioners, clinicians, nurses, dieticians and pharmacists.”
The “multidisciplinary” collaboration recommended by the report blatantly ignores the social reality of austerity in Britain, where the National Health Service (NHS) is being dismantled as the effects of the economic crisis are pushed onto the backs of the poorest and most vulnerable.
According to recent figures obtained through a freedom of information (FOI) request by Birmingham City University student Eiryo Saeki to NHS foundation trusts (43 responded), there were 193 “episodes” of malnutrition in just 12 months at Salford Royal NHS Foundation Trust alone, in Greater Manchester. Birmingham Children’s Hospital reported 31 instances of malnutrition last year, almost double the number for 2013.
NHS managers in Salford have warned that thousands of people in the city may be struggling to get enough food to eat. Kirstine Farrer, head of innovation and research at Salford Clinical Commissioning Group, said BAPEN, in 2013, “suggested that of Salford’s population of 35,000 aged 65 years or older, 14 percent or almost 5,000 people may be at risk of malnutrition.”
While Salford Royal had the highest number of malnutrition cases in 2014, incidences are spread throughout the country. Yeovil District Hospital in Somerset had 161 cases, followed by the Heart of England, Birmingham, with 113. Sheffield Teaching Hospitals had 92, University Hospitals Birmingham, 89, Norfolk and Norwich University Hospitals, 87, Colchester Hospital University, 75, East Kent Hospitals University, 70, University Hospitals, 70, and Bristol and York Teaching Hospital, 60.
NHS statistics cited recently in the Independent show that 7,366 people were admitted to hospital with a primary or secondary diagnosis of malnutrition between August 2014 and July 2015, compared with 4,883 cases in the same period from 2010 to 2011. This is an increase of more than 50 percent in just four years.
The rise in malnutrition has coincided with the explosion in the use of food banks by millions of people. Nationally, between April and September 2015, the Trussell Trust, one of the UK’s main food bank providers, gave 506,369 emergency food supplies to people, compared to 492,641 in the same period last year.
The Trust reports that in the hours from March 31 to April 1, 2015, food banks in Greater Manchester fed 16,083 people, including 6,206 children. Chairman Chris Mould said, “We meet families across the UK who are struggling to put enough food on the table, and at the extreme end of that you get people who are malnourished. We often see parents who are going without food so that they can feed their children, and these parents often struggle to afford enough nutritious food for their children too.”
These figures were revealed as Tameside Hospital, also in Greater Manchester, became the first NHS hospital in the UK to set up a permanent food bank on site. Three food collection points have been set up, with donations delivered to a central warehouse. These were established as medical staff were reporting a significant increase in the number of malnourished patients turning up for treatment and care.
The hospital’s chief executive, Karen James, said staff had noticed patients are “often coming through malnourished,” and when talking to patients “we find out that they are suffering and there is a need.” She said people were making choices about whether to pay a bill or feed the family.
Natalie Welsh, a nutrition specialist nurse at Tameside, said, “It’s really important that these people are highlighted in our community because quite often by the time they come through our doors and need to be admitted, the damage is already done. It can take us a long time to get them to recover from illness and disability because of the malnutrition they have suffered.”
The vast increase in social inequality in the UK is leading to increased levels of malnutrition, alongside the growth of diseases such as scurvy, scarlet fever, cholera and whooping cough. According to a report by the London Assembly, tuberculosis rates in some London wards such as Brent, Ealing, Harrow, Hounslow and Newham, are higher than in Rwanda or Iraq.

Job losses mount throughout Australian mining sector

Terry Cook

Thousands of jobs are being destroyed in Australia’s mining and resources sector as major companies restructure operations to slash costs amid a stagnating global economy and ongoing plunge in world commodity prices.
Last week, mining giant Anglo American unveiled a plan to eliminate 85,000 jobs internationally—potentially including 4,800 workers employed in its Australian coal mines.
The company has not yet specified the job cuts in Australia, but it has already put four coal mines up for sale—the Dawson, Foxleigh and Callide mines in central Queensland and the underground Dartbrooke mine in the Hunter Valley of New South Wales (NSW), which was mothballed in January 2007.
At Dawson alone, more than 1,000 regular and contract workers could lose their jobs, and approximately 250 at Foxleigh.
In late November, Anglo American already announced it would axe 500 jobs at its Drayton coal mine in NSW, which produces export thermal and pulverised coal injection (PCI) coal, after the state government rejected the company’s application for an extension of the operation.
Given the ongoing collapse in coal prices, there is increasing speculation no buyers will be found willing to pay the prices sought by Anglo American to offload the mines. Prices for thermal coal, which is used for power generation, stand at around $US52 a tonne, well down from the $150 a tonne reached in 2011.
Earlier this year, IHS Coal’s Australia senior manager Marian Hookham warned that potential buyers for struggling coal assets “appeared to be holding back,” believing that if they waited another few months “the prices for these assets could be cheaper.”
Anglo American could well opt to mothball the mines, as it did with its Dartbrooke operation, and lay off their entire workforces to save on labour and other operating costs.
Around mid-year, Anglo American Australia CEO Seamus French declared: “While we are exploring a sale, we will be disciplined in our approach and if offers we receive are below what we consider fair value, we will not sell these assets; these are good assets.”
Even if sell-offs are achieved, there is no doubt the new owners will implement deep cuts to jobs and working conditions in a bid to offset falling revenues and bolster profits.
Anglo said it was not considering any further sale of coal mines, including the four it owns on the country’s east coast that produce metallurgical coal used in steelmaking. However, falling steel production in Asia and China could lead to restructuring these operations as the company tries to lower costs and compete for market share against rivals.
Some steel producers in China have either reduced output or shut completely as consumption continued to shrink this year, after falling in 2014 for the first time in more than three decades due to the slowing economy.
The drop in global coal prices will spark further job cuts by other companies in Australia, such as Anglo-Swiss mining giant Glencore, and the Anglo-Australian firms BHP Billiton and Rio Tinto, which have each already slashed hundreds of positions. This month, Glencore announced it would cut 180 of the 230 jobs at its Collinsville mine in central Queensland, on top of the 80 positions it axed in May.
In October, Glencore announced it would halve zinc production across its Australian operations and eliminate over 530 jobs, or about one third of the company’s Australian zinc division workforce. The move came after the price of zinc plummeted 28 percent in a year, reaching a five-year low of $1,662 a tonne.
Further job cuts are sure to occur in Australia’s iron ore mining sector, also driven by falling prices. The price of iron ore for immediate delivery to China’s Tianjin port fell 1.3 percent to $38.30 a tonne last week according to The Steel Index. This was the lowest price since 2005 according to data compiled by Goldman Sachs. During 2010, the price peaked at around $180 per tonne.
Perth-based BC Iron has announced it will suspend production at its Nullagine iron ore operations, a joint venture with the Fortescue Metals Group in Western Australia (WA). The company employs around 30 regular workers and 200 contractors, together with 30 employees at its head office in West Perth.
Similar shocks are affecting Australia’s liquefied natural gas (LNG) sector. Chicago Bridge and Iron, the lead construction contractor on Chevron’s $54 billion Gorgon LNG project off northern WA, last week announced 1,000 layoffs effective immediately. The redundancies were originally expected next March. The company allegedly brought them forward to avoid paying a 2 percent pay rise due from January 1.
Chevron is desperate to reduce costs as the project nears the end of the construction stage. The cost of construction blew out from the original budget of $37 billion, set in 2009, to $77 billion; and the project is running two years behind schedule, so the company missed out on peak gas prices.
Chevron announced a global restructure in November to axe 6,000 to 7,000 jobs across its international operations over the next year. An estimated 2,000 jobs were expected to be shed from Gorgon and its other large LNG project in WA, Wheatstone, as the construction phase on the projects moved toward completion.
Under conditions of falling oil prices, to which gas prices are linked, these job cuts are a stark warning of what is to come throughout Australia’s LNG sector.
In January this year, an estimated 35,000 people were directly employed on the seven major onshore LNG projects under construction, including Gorgon and Wheatstone. The Australian Bureau of Resources and Energy Economics estimates that when all seven projects reach the operational stage, the numbers employed will be cut to just 7,000.
Amid escalating oversupply, and with major LNG producers already making multi-billion dollar write-downs, there is little incentive for investment in the construction of new gas platforms.
Brent crude oil closed at $44.61 a barrel at the end of last month, down from more than $115 in June 2014. In September, the International Energy Agency (IEA) warned that even if oil prices rose and averaged $60 a barrel for the next few years, “Australia’s LNG industry would struggle to be profitable.”
In a media interview, IEA’s senior gas expert Costanza Jacazio declared: “In a $60 oil environment the Australian projects will continue, but you are probably not breaking even,” adding: “Will anything else in Australia proceed beyond this next portion of projects? I think in this environment it is very unlikely.”
Among gas projects that the IEA predicts will not go ahead are Woodside Petroleum’s Browse floating project, located approximately 425 kilometres north of Broome in WA, together with the company’s Sunrise venture in the Timor Sea and the joint ExxonMobil-BHP Billiton Scarborough project off WA.

Saudi Arabia and the “war on terror”

Bill Van Auken

Speaking to the media during a visit to the giant Incirlik Air Base in Turkey Tuesday, US Defense Secretary Ashton Carter praised the Saudi monarchy for proclaiming a new “Islamic alliance” against terrorism.
“We are happy with the alliance formed by Saudi Arabia and looking forward for the steps being taken by them against terrorism,” Carter declared.
No sooner was the Saudi announcement made, however, than a number of countries raised questions about their inclusion, without their knowledge, in the so-called alliance. Three predominantly Muslim countries—Iraq, Syria and Iran—were excluded, leading to charges that the Saudi monarchy is really only patching together a Sunni Muslim alliance to prosecute its sectarian crusade against the region’s Shia population.
A more fundamental question is what does the Saudi regime mean by “terrorism”? Clearly, it is not referring to the various Al Qaeda-linked groups fighting in Syria, all of which get substantial funding as well as large numbers of fighters and their religious-ideological inspiration from the Wahhabist Saudi kingdom.
This fact was confirmed by then-US Secretary of State Hillary Clinton in a classified 2009 cable declaring that “donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide.”
This was further acknowledged by Vice President Joe Biden in a speech delivered at Harvard last year. He admitted that the Saudi regime, along with other US client despots in the Middle East, had “poured hundreds of millions of dollars and tens, thousands of tons of weapons into anyone who would fight against Assad. Except that the people who were being supplied were al-Nusra and Al Qaeda and the extremist elements of jihadis coming from other parts of the world.”
Of course what both Clinton and Biden sought to conceal was that this operation was fully coordinated by the CIA out of a station in southern Turkey. Washington had armed and funded similar groups in the US-NATO war for regime change in Libya, and well before that had worked closely with the Saudis in fomenting the Islamist war against the Soviet-backed regime in Afghanistan, which gave rise to Al Qaeda.
So what does the Saudi monarchy view as terrorism? The answer can be found in its prison cells, where three young men, all arrested when they were minors, are awaiting death by beheading for the “crime” of participating in peaceful protests against the relentless repression of the US-backed regime in Riyadh.
They are among 52 similar “terrorists” whose mass execution is expected at any time. Two of them—Ali Mohammed al-Nimr, who was 17 at the time of his arrest, and Abdullah al-Zaher, who was 15—in addition to being sentenced to die by decapitation with a sword, are to be crucified, their headless bodies mounted on crosses in a public space as an example to anyone thinking of defying the House of Saud.
What the Saudi monarchy considers “terrorism,” moreover, was codified into a new law last year. It establishes that terrorism includes “any act” intended to, among other things, “insult the reputation of the state,” “harm public order,” or “shake the security of society.”
Other acts defined as “terrorism” include: “Calling for atheist thought in any form, or calling into question the fundamentals of the Islamic religion on which this country is based,” as well as “Contact or correspondence with any groups, currents [of thought], or individuals hostile to the kingdom.”
The parents of Abdullah al-Zaher, now 19, have come forward to plead for his life. They describe how he was tortured and beaten with iron rods after his arrest until he signed a false confession that he was not even allowed to read.
The Saudi regime has already executed at least 151 people this year, the highest per capita rate of capital punishment of any country in the world.
Within the Obama administration and the corporate media, appeals for the lives of Ali Mohammed al-Nimr, Abdullah al-Zaher and the dozens of others who face imminent beheading have fallen on deaf ears.
Washington continues to count Saudi Arabia as its closest ally in the Arab world, selling it more US weaponry than any other country on the planet. Last year alone, the oil kingdom purchased $1.2 billion in US armaments. A new $1 billion deal was recently announced, as the Pentagon continues to resupply the Saudi military in its vicious war in Yemen that has already claimed more than 7,000 lives, while reducing tens of millions to the brink of starvation.
The media in the US has largely ignored the plight of the youth sentenced to beheading and crucifixion. Instead, it has lavished praise on recent elections to municipal councils on the grounds that women were for the first time allowed to vote and run for office, though they remain deprived of virtually every other right.
Most of the coverage dutifully ignored the fact that less than 10 percent of the population—and barely 1 percent of Saudi women—bothered to vote for the municipal bodies, which are utterly powerless advisory panels in a country where the royal family appoints all those who wield any real power.
Nor in the media’s celebration of a handful of rich Saudi women running for meaningless posts was any attention paid to a Sri Lankan woman, one of the many thousands of foreign domestic workers treated like slaves, who is awaiting death by stoning after being charged with adultery. Two Indonesian maids were executed by beheading earlier this year.
That US imperialism counts the Saudi regime as its closest ally in the Arab world debunks all the pretexts it has used to justify its continuous wars in the region. The alliance with a state that finances, arms and provides religious-ideological inspiration to Al Qaeda-linked groups gives the lie to the supposed “war on terror,” just as US support for an absolute monarchy that beheads and crucifies youth exposes the fraud of Washington’s promotion of “democracy” and “human rights.”
Washington’s real objectives are purely predatory, directed at utilizing military might to offset the economic decline of American capitalism by asserting hegemony over the world’s markets and resources.
That it relies on the ultra-reactionary and bankrupt Saudi regime as a key pillar of this policy only demonstrates that US imperialism is headed for a catastrophe. It is destined to reap all that it has sown in the massive crimes carried out against the peoples of the region, even as the immense contradictions building up within US society create the conditions for a revolutionary explosion.

12 Dec 2015

The Rise Of The American-Muslim Totalitarian State

Garikai Chengu

Muslim-Americans are living in a totalitarian police state with worsening harassment, profiling, and surveillance. The United States’ government may claim liberty and justice for all; however, in practice, towards Muslims, it exhibits all four major characteristics of a totalitarian state: a war on terror that targets Muslims abroad, a totalitarian police state at home, public executions by drones and gulags outside the rule of law, and a strong reliance on propaganda and political demagoguery.
The hallmark of fascism was state oppression of certain targeted non-privileged groups. Today, Muslims are bearing the brunt of America's totalitarian police state.
Despite FBI records showing that since 9/11, Muslims have committed far less domestic terror attacks than white supremacists, it is the American-Muslim community that is under unprecedented levels of surveillance and government intrusion. Muslims in America are unquestionably experiencing a fascist system of surveillance, operating at the same level that East Germans faced under the Stasi spy agency. Researcher, Arun Kundnani, has shown how the FBI has one counterterrorism spy for every 94 Muslims in the U.S., which approaches Stasi's ratio of one spy for every 66 citizens.
Clearly racism, as much as oil, fuels the War on Terror. White Christians rarely have to worry that an undercover agent or informant has infiltrated their churches, student organizations or neighborhoods. The simple fact that U.S. law enforcement has not infiltrated and spied on conservative Christian communities to disrupt violent rightwing extremism, which is the biggest terrorism threat in America, confirms what Muslims in American know in their bones: to worship Allah is to be suspect.
Federal judges recently ruled that suspicion-less surveillance of Muslims is permissible under the U.S. Constitution. The NYPD has admitted that Mosques, student groups, restaurants, even grade schools, have all been under surveillance. By rapidly increasing both government policies of secrecy and surveillance, Mr. Obama’s government is increasing its power to watch its citizens, while diminishing its citizens’ power to watch their government.
The threat of homegrown Islamic terrorism has been largely manufactured, so that the so-called War on Terror can promote multi-billion dollar, corporate-sponsored militarism abroad and the erosion of two hundred-year-old civil liberties at home.
Muslim-Americans are not only facing increasing oppression from the state, but they are also facing growing prejudice from their fellow countrymen, as hate crimes and civil liberty violations against Muslims continue to precipitously rise.
A recent Pew Forum Poll established that Muslims are by far the most disliked minority in America. According to FBI statistics, anti-Muslim hate crimes soared by an astounding 50 percent last year. Muslims constitute 1 percent of the U.S. population, but they are 13 percent of the victims of religious-based hate crimes. Islamophobia and xenophobia now seem as American as apple pie. Intolerance of Muslims is often inverted, depicting Muslim customs as an insult to Western customs.
One major aspect of American totalitarianism, shared by fascist regimes, is the nation's enormous military budget. In 1933, Nazi Germany’s military spending was 2 percent of their national income; by 1940, it was 44 percent.
Today, America spends more on her military than the rest of the world combined. America has expanded its military into having 662 foreign military bases, according to the Department of Defense’s 2010 Base Structure Report. The War on Terror has cost $6 trillion, the equivalent of $75,000 for every American household, calculates Harvard University’s Kennedy School of Government.
Another hallmark of totalitarianism is the creation of a prison system outside the rule of law that is largely designed to imprison and torture one minority group. The Guantanamo Bay gulag is unquestionably a crime against humanity. There is unlimited cruelty in a system that seems to be unable to free the innocent and unable to punish the guilty.
In April 24, 1934, a People's Court, just like Guantanamo was established, which also bypassed the judicial system: prisoners were held indefinitely in isolation and were tortured and subjected to show trials. The People's Court was signed into law by Adolf Hitler.
In 2007, a politician who was vehemently against the human rights abuses at Guantanamo Bay, explained what he would do about the torture camp if he ever became President:

"When I am President, I will close Guantanamo. It is a moral outrage, a blight upon America's conscience. It is the location of so many of the worst constitutional abuses in recent years. From inception, Guantanamo was a laboratory for unlawful military interrogation, detention, and trials."
The politician who uttered these words was Senator Barack Obama. Ironically, under President Obama's tenure, conditions for Guantanamo detainees, from both a physical and legal standpoint, have become markedly worse.
Public executions are perhaps one of the most overt and odious symbols of totalitarianism. In totalitarian Spain, under General Franco, mass public executions were the norm, and were often carried out in bullrings or with band music and onlookers dancing in the victims’ blood. With Hitler and Mussolini supplying arms to Franco, some 200,000 men and women were publically executed during the war and bombed from overhead.
Nowadays, drones are the ultimate totalitarian technology. Washington both uses drones for what amount to public extra-judicial executions of Muslims abroad, and for spying on American Muslims at home.
Most Americans believe that drones are targeted and therefore humane. Nothing could be further from the truth. By all accounts, drones have killed more children than terrorists. According to a new report from The Intercept, nearly 90 percent of people killed in drone strikes in Afghanistan are civilians.
By 2018, some privacy experts believe law enforcement will likely control over 35,000 drones that the government will use to monitor Americans from the skies.
Integral to the rise of the America Muslim Totalitarian State is propaganda. Sheldon Wolin has poignantly pointed out that, whereas the production of propaganda was crudely centralized in Nazi Germany, in the United States, it is left to highly concentrated media corporations, thus maintaining the illusion of a "free press".
The American propaganda machine is highly sophisticated. It does not rely upon the radio addresses, speeches, and leaflets disseminated by the Nazi Ministry of Propaganda and Public Enlightenment, nor does it rely on the crude censorship or harassment of free press ordered by a Politburo. The propaganda of America’s “one percent” is subtle yet pervasive; it relies not only on government diktats but also on the mass media, art, pop culture and Hollywood.
American cinema and music have always been a remarkably effective means of whipping up xenophobic wartime sentiment. For example, the highest grossing war film in history, American Sniper, and President Obama’s favorite television show, Homeland, both engage in an overly broad generalization of Islam, and depict Muslims and terrorists in a way that is indicative of widespread Islamophobia in American culture.
The American-Arab Anti-Discrimination Committee reported a spike in Islamophobia and hate crimes after the release of American Sniper, which culminated in the recent slaying of three young Muslims in North Carolina, who were shot in the head sniper execution style. American Islamophobia operates in the service of American militarism and American militarism abroad, and in turn, ratchets up Islamophobia against minorities at home.
The media determines our language, our language shapes our thoughts, and our thoughts determine our actions. Language is the fulcrum of a society's perception. Whosoever controls the public’s language, controls the public’s perception.
The corporate elites who sit on media editorial boards control said language. In 1983, fifty companies owned ninety percent of U.S. media. Today, only six media giants control a staggering ninety percent of what the American public listens to, reads, and watches. “Think of the press as a great keyboard on which the government can play,” once remarked Joseph Goebbels, Nazi Germany's Minister of Propaganda.
For Muslim-Americans the media's Orwellian totalitarian language is clear: Drones are Unmanned Aerial Vehicles. Torture is Enhanced Interrogation. Occupation is Liberation.
Donald Trump's recent call to ban Muslims from entry into the U.S. is not without precedent. The Chinese Exclusion Act of 1882 effectively banned all Chinese immigration to the US. This racist law remained in place for five decades and required all Chinese to carry identification certificates or face deportation. When Trump endorsed identification cards to be worn at all times by American Muslims, his popularity jumped almost 3 percentage points. If Donald Trump's policies are viewed by Americans as odious and un-American, then why has he consistently gained popularity after every anti-Muslim outburst?
America's history is stock full of totalitarianism and popularized, irrational fear of "the other". It began when the settler pioneers feared Native Americans and united against them by slaughtering millions in order to quell that fear. As settlers began to unite around a common identity they feared the British Monarchy and rebelled against it. Americans then fought against Mexico, France and various other countries for vast land control. Five hundred documented revolts on slave ships and the fact that plantation owners were greatly outnumbered by slaves, cemented the role of fear that perpetuated slavery for centuries. With greater fear comes greater violence, and with greater violence comes a greater need to justify that violence by ratcheting up the fear.
After the attacks on Pearl Harbor, Japanese Americans were forced into interment camps on American soil. Vietnamese Americans were then targets of xenophobia in America during the Vietnam War, and then there was the “Red Scare”, which targeted Russian-Americans throughout the Cold War.
From the ashes of the Soviet Union arose the terrorists from the oil-rich Middle East, who became America’s new number one enemy and so the legacy of American xenophobia continues. Today, as the deliberately unending war on terror rumbles on abroad, Muslim, Arab, and Sikh Americans fear that they are living in a totalitarian state.

A new tipping point in the global economic crisis

Nick Beams

The announcement by the global mining giant Anglo American that it will sack 85,000 workers world-wide, put 60 percent of its assets up for sale, and reduce its mining sites from 55 to just 20 signifies that the crisis of the world capitalist economy is heading toward a new tipping point. The world economy is threatened by a plunge into deep slump, coupled with a financial crisis even more devastating than that which erupted in 2007–2008.
The immediate cause of the Anglo American decision is the plunge in prices for all major industrial commodities—iron ore, coal, copper, nickel and manganese—to name but a few. Having reached their lowest levels since 2009, they are continuing to fall, signifying that, despite the trillions of dollars poured into financial markets over the past seven years by the world’s central banks, the over-riding tendency in the world economy is towards recession.
Nowhere is this more sharply expressed that in China, the centre of global manufacturing. Earlier this week, official data showed that Chinese exports slowed markedly in November due to falling global demand, while the currency, the renminbi, hit its lowest level in four years. The expectation is that if Chinese financial authorities withdraw support, the renminbi will rapidly fall still lower, sending another deflationary wave through the global economy.
The lack of confidence in the country’s growth prospects in the upper echelons of the financial and economic elites is exemplified by the flight of capital, with foreign exchange reserves recording their third-largest monthly fall in November.
In the years immediately following the 2008 financial crisis, the conventional wisdom was that the so-called BRICS countries together with emerging markets would provide a new base of stability for world capitalism. That rose-tinted scenario has been shattered.
The downturn in China is now ripping through world markets. The Brazilian economy is experiencing a contraction on a scale not seen since the Great Depression of the 1930s, Russia is in recession, India faces mounting corporate debt problems, and South Africa, together with economies across the continent, is being hit by falling commodity prices. The future for emerging markets is exemplified in Venezuela, the site of some of the largest oil reserves in the world, where the economy is set to shrink by 10 percent this year.
In its quarterly review of the world economy issued earlier this week, the Bank for International Settlements warned that the “uneasy calm” that had characterised global financial markets could soon be disrupted by the motion of “deeper economic forces that really matter.”
Over the past period, financial markets, sustained by the flood of cheap money from central banks, have seemingly been able to continue ever upwards in defiance of deepening global recessionary trends. However, the conditions have been created for this house of cards to collapse as the “deeper forces” assert themselves.
One of the most significant areas to which cheap money has flowed is the financing of high-yielding “junk” bonds, often issued by energy companies. With the price of oil reaching over $100 per barrel as recently as the early months of 2014, it seemed to be a viable strategy. But with oil now trading at below $40 and threatening to plunge even further, possibly down to $30, it is rapidly unravelling.
The rise of energy-related debt defaults is only a symptom of a more general process.
Last Friday, the Financial Times reported that more than $1 trillion in US corporate debt had been downgraded so far this year, as defaults climbed to their highest levels since the 2008 financial crisis. Analysts with the three major credit rating agencies—Standard & Poor’s, Moody’s and Fitch—expect the default rates to increase over the next 12 months, a process that could be accelerated if the Federal Reserve decides to lift is base interest rate next week.
An analysis by Deutsche Bank, portions of which were published on the Financial Times ’ web site this week, pointed to the potential for a rapid shift in financial markets.
“Late stages of every credit cycle,” it noted, “… are built on the theory as to why this time is different. This type of attitude was prevalent going into 2015, when credit markets largely dismissed the oil sector distress, choosing to believe this was an isolated issue and will stay that way.”
But, as the assessment went on to elaborate, this has proven not to be the case, as the percentage of corporate bonds designated as being “in distress” has steadily risen.
“From its starting point in energy a year ago, it has now reached other commodity-sensitive areas such as transportation, materials, capital goods and commercial services. But it did not stop here and is also visible in places like retail, gaming, media, consumer staples and technology—all areas that were widely expected to be insulated from low oil prices, if not even benefiting from them.”
The growing potential for a renewed financial crisis was also highlighted in a report issued by the US investment bank Goldman Sachs last month. It noted that corporate leverage in the US was now at its highest level in a decade.
Low interest rates and the incessant profit demands of speculators had encouraged corporate America to go on a spending spree, financing share buybacks, dividend hikes and a series of merger and acquisition deals, funded through the issuing of bonds. But the flow of cash has not kept pace with bond issuing, with the result that the total amount of debt on balance sheets is “more than double pre-crisis levels.”
Goldman reported that even after the energy sector was stripped out, the net debt to earnings ratio was at its highest point since the financial crisis. “The spectre of rising rates, potential global disinflation (dare we say ‘deflation’?), declining operating profits and wider credit spreads continues to create near-term consternation for weak balance sheet stocks,” the report concluded.
The Bank of England has added its voice to those expressing concern over the stability of financial markets, warning of the consequences of the divergence between the policies of central banks, as the Fed moves towards tightening while the European Central Bank and the Bank of England maintain a loose monetary policy.
The bank’s Financial Policy Committee said it was difficult to predict how markets would react to any increase in the Fed rate. The minutes of a meeting held at the end of last month and released on Wednesday state, “Capital flows had been sensitive to diverging prospects for monetary policy around the world and there was a risk of further volatility as that policy divergence progresses.”
The deepening global economic crisis is one of the driving forces for the eruption of militarism, especially over the past month. At the same time, the escalation of the war drive can only exacerbate the economic and financial situation. This underscores the fact that the mounting world economic and political disorder is not the result some kind of temporary or passing disequilibrium, but the expression of an ongoing and deepening breakdown of the global capitalist system.

Report highlights gap between executive and workers’ pay in UK

Barry Mason

The trade union-backed Labour Research Department (LRD) has issued a report showing how the gap between highly paid executives and most of the workforce is widening exponentially in the UK.
The salaries of top-paid executives in 2014 were a staggering 183 times the wages of average workers.
The LRD research noted at least 535 executives were being paid at least £1 million a year in salaries, with other payments and expenses on top.
According to LRD the UK’s current top earner is Sir Martin Sorrell, who is the chief executive of the advertising and public relations group WPP. He reportedly receives remuneration of £43 million a year, which includes a quarter of a million pounds to enable his wife to be with him on business trips.
The top 10 earners according to LRD are:
1. Sir Martin Sorrell, WPP, £42,978 million per annum
2. Tony Pidgley, Berkeley, £23,296 million
3. Ben van Beurden, Shell, £19,510 million
4. Jeremy Darroch, Sky, £16,889 million
5. Erik Engstrom, RELX Group, £16,176 million
6. Peter Long, TUI Travel, £13,333 million
7. Rob Perrins, Berkeley, £12,357 million
8. Tidjane Thiam, Prudential, £11,834 million
9. Breon Corcoran, Betfair, £11,627 million
10. Antonio Horta-Osorio, Lloyds Banking Group, £11,544 million
In 2014 the average pay of chief executives at the UK’s top 100 companies was £4.964 million. In comparison, according to the Office of National Statistics an average worker earned £27,200, making the ratio of pay 183:1.
The gap between executive pay and that of an ordinary worker continues to accelerate. The ratio has risen from 160 times in 2010 to 183 times today. In 1988 the pay of an average FTSE 100 chief executive was 47 times that of an average worker.
Deborah Hargreaves, the director of the High Pay Centre, commented: “Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives. It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest.”
The pay of executives in the public sector is also becoming increasingly divorced from that of most public sector workers. After enduring no pay rise for several years public sector workers’ pay is now capped at 1 percent for the life of the current government.
This has meant a big cut in real terms for the majority of public sector staff. According to the Daily Mail , over 500 top executives at council offices across the UK earned more than £150,000 last year. Some 50,000 executive level employees in the National Health Service (NHS) are on six figure salaries.
While not at the same level, the pay gap between senior managers and workers is also increasing, especially in the UK and the United States. A recent press release by the global management consultancy, Hay Group, stated the pay gap between senior managers and “lower-level” workers in the UK had widened by 5.3 percent, while in the United States it had widened by 7.2 percent since the recession began in 2008.
Adam Burden, a consultant at the Hay Group, said: “Globally, the job level pay gap increase has accelerated since the recession. However, it is not purely a post-recession issue. This is a complex trend that has been building for the past 30 years, through economic boom as well as bust.”
As well as pay levels for top executives soaring away from that of workers, their pensions are also rising steeply. The Trades Union Congress (TUC) produces a regular pension-watch report based on annual reports from FTSE 100 companies.
The average pension contribution (including cash alternatives) made to executives by a FTSE 100 company is 34.1 percent. Seventy percent of executives in the UK’s top companies receive cash lump sums for at least part of their retirement provision. Of these the vast majority pocket stand-alone cash payments. “These pay-outs alone are often multiples of the total pay package of a typical worker in the same company,” the TUC report notes.
The report highlighted some of those in receipt of enormous pension pay handouts, with Richard Solomons, chief executive of InterContinental Hotels Group, receiving £3.2 million and Douglas Flint, an executive at HSBC, getting three quarters of a million in cash contributions.
The ongoing rise in wealth and income inequality continues to impact adversely on the health and social conditions of the vast majority of workers. The recently released annual report produced by Sir Michael Marmot, chair of the Commission on Social Determinants of Health, showed that around a quarter of households in England do not have sufficient income to be able to live healthy lives, up from 20 percent in 2008.
The report plots the number of years a person can live without suffering a disability. In Blackpool, a neighbourhood suffering multiple deprivations, the number of years a man is likely to live free of disability is 55, while in the affluent neighbourhood of Wokingham in southeast England it is 71, a difference of 16 years.