Moscow in secret talks with Syrian “rebels”

Bill Van Auken

Syrian “rebel” groups backed by the US, Turkey and other Western powers have entered into talks with Russia on brokering an end to the fighting in Aleppo, which was Syria’s largest city and commercial capital before being devastated in the US-orchestrated war for regime change against the government of President Bashar al-Assad.

The talks in Ankara, first reported by the Financial Times of London, were reportedly brokered by the Turkish government and convened in the context of the increasingly decisive rout of the Islamist militias that have controlled parts of eastern Aleppo for the past four years and threatened to overrun the entire city as recently as last year.

Since last weekend, Syrian government troops, backed by Lebanese Hezbollah fighters and Shia militias from Iraq, have retaken some 40 percent of the territory previously occupied by the Islamists, whose strongest contingent is the group known as the Al Nusra Front, which served as Al Qaeda’s Syrian affiliate.

Tens of thousands of civilians have poured out of the eastern section of the city, seeking refuge from both intense bombardment by Syrian government warplanes and the terror exercised by Al Nusra and similar jihadist groups. While the Western powers claimed that there were 250,000 civilians trapped in the “rebel”-held area, based on the inflated claims made in relation to other areas retaken from the Islamists, many believe that only a fraction of this number had resided in the eastern zone.

According to the Financial Times, “While the secret talks are not the first time a rebel representative has met with the Russians, those familiar with the talks said it was the first time such a large number of opposition groups were involved.”

The FT article highlighted the implications of the talks in terms of the sidelining of Washington and the increasingly evident debacle confronting the more than five-year-old US operation directed at arming, training and paying militias for the purpose of overthrowing Assad.

“The Russians and Turks are talking without the US now. It [Washington] is completely shut out of these talks, and doesn’t even know what’s going on in Ankara,” one unnamed opposition figure told the British daily.

Another opposition representative, asked why Moscow was attempting to reach a deal with the so-called rebels at this juncture, said that the Russian government was “essentially saying: ‘Screw you Americans.’”

The more likely motivation is the desire of the government of President Vladimir Putin to use ties with the armed opposition as a bargaining chip in its dealings with both Washington and the Assad government itself under conditions in which Russia’s intervention on the side of Damascus, which began 14 months ago, has apparently produced a decisive turning of the tide in the Syrian war.

The talks are indicative of closer relations between Ankara and Moscow, even as conflicting agendas in Syria and the wider region have led to intermittent frictions. Turkey sought a rapprochement with Russia earlier this year to break the tension caused by a November 2015 Turkish ambush and shooting down of a Russian warplane operating against Islamist militias in Syria near the Turkish border. Relations grew closer in the aftermath of the abortive July 15 military coup, which was widely blamed on the US.

Turkey’s own intervention into Syria, Operation Euphrates Shield, has been carried out with the tacit complicity of Russia, which controls much of Syrian airspace, even as the Assad government has denounced the Turkish incursion.

Tensions boiled to the surface after President Recep Tayyip Erdogan made a statement Tuesday declaring that Turkey had sent its military into Syria “to bring justice.” It added, “We are there to end the rule of the cruel Assad, who has been spreading state terror.”

The statement prompted demands from Moscow for an “explanation.”

“The announcement really came as news to us,” Kremlin spokesman Dmitry Peskov told reporters. “It is a very serious statement and one which differs from previous ones and with our understanding of the situation. We hope that our Turkish partners will provide us with some kind of explanation about this.”

This was followed by a phone conversation Wednesday between Erdogan and Putin. On Thursday, Erdogan offered the “clarification” demanded by Moscow. “The aim of the Euphrates Shield Operation is no country or person but only terror organizations. No one should doubt this issue that we have uttered over and over, and no one should comment on it in another fashion or try to [misrepresent its meaning],” the Turkish president told a meeting of village chiefs assembled at the presidential palace in Ankara.

By “terror organizations,” Erdogan and his government have consistently made clear they mean not only the Islamic State (ISIS), but also the Syrian Kurdish militia, the YPG, which the US has funded, trained and armed, utilizing it as its principal proxy force against ISIS. The Pentagon has declined to provide Turkish troops with air cover because of Ankara’s determination to attack Washington’s Kurdish proxies.

Russian Foreign Minister Sergei Lavrov and his Turkish counterpart Mevlut Cavusoglu, meanwhile, met in Turkey’s Mediterranean resort city of Alanya Thursday, announcing that both countries are seeking to broker a truce in Aleppo and assure the provision of humanitarian assistance to its battered population.

Russia has proposed opening up four “humanitarian corridors” into eastern Aleppo to permit civilians to escape the besieged zone and allow food and medical aid in. Previous attempts to open up such corridors have broken down, however, as a result of the US-backed Islamist militias shelling them and firing upon civilians attempting to escape.

The US and its allies have denounced the Russian-backed offensive by the Syrian government, highlighting the humanitarian crisis in order to demand an end to the attack on the Al Qaeda-linked militias that form the backbone of the Syrian “rebels.” The increasing hysteria of these denunciations reflects the fact that the fall of eastern Aleppo will deprive these militias of their last urban stronghold and consolidate Syrian government control over all of the country’s major population centers.

European Union Commission plans multi-billion weapons fund

Christoph Vandreier

In the wake of Donald Trump’s election as US president, the European powers are pushing ahead rapidly with plans for military rearmament. On Wednesday, the European Union (EU) Commission presented proposals for increased military spending and closer Europe-wide coordination on the research and development of weaponry.

The main change will involve the restructuring of relevant EU mechanisms and funding sources to direct them towards arms production. Following the use of the EU’s institutions to implement attacks on social and democratic rights in recent years, the bureaucratic apparatus is now to be deployed to enforce a deeply unpopular policy of war and the build-up of the military.

The Commission proposed the creation of a European defence fund. The goal of the plan is “that member states jointly purchase, develop and retain the full spectrum of land, air, space travel and naval capabilities,” a paper from the Commission states.

The main areas of focus will be expanding the capacities for surveillance, the development of armed drones, unmanned access to outer space, and cybersecurity. It is precisely in these areas that the European powers remain heavily dependent upon the United States.

The Commission acknowledged, “Taken as a whole, Europe has the second-highest level of military spending. Yet Europe trails behind the US and suffers due to an inefficient use of means, which can be linked to overlapping structures, a lack of interoperability and technological gaps.”

Therefore, major investments are necessary, and defence cooperation needs to be achieved, the EU Commission states. Only in this way can the necessary expertise be obtained and its resources used effectively to secure the “strategic autonomy of the union.”

In practice, the “defence fund” will comprise two parts. The first will be financed by EU funds and support research in weaponry. From the year 2020, €500 million is planned for this annually, which will most likely be raised through cuts to EU civilian programmes. Currently, all EU members spend just €2 billion on arms research. The EU fund would therefore amount to an increase in funding of 25 percent.

The much larger second part would cover the development and purchase of military equipment. Member states will coordinate their purchases through this according to demand. If France, Germany and Italy all intend to buy armoured personnel carriers, for example, they should not order these individually in the future, but coordinate purchases through the defence fund. The Commission estimates a gross total of €5 billion per year. But no limits on the fund have been established.

A central feature of the plan is that the investments undertaken through the defence fund will not be calculated when figuring out each state’s budget deficit. The Commission’s paper states that such investments will be “viewed as ‘one-off measures’ in the spirit of the Stability and Growth Pact and will therefore not burden the efforts towards structural consolidation expected from the member states.”

In practice, this means that EU states which breach the deficit criteria will be punished if they use funds for civilian jobs, hospitals, infrastructure projects or schools, but not when they invest the same loans for tanks, submarines and fighter jets.

In Greece, the EU’s insistence on debt reduction resulted in people dying from treatable diseases, youth unemployment increasing to almost 50 percent and the decimation of wages. By contrast, the floodgates are to be opened for loans to expand the military.

The military build-up is being undertaken in close collaboration with the companies which will profit from it. The defence fund is to be managed by a coordinating committee, which, along with representatives from the member states and the EU, will also include lobbyists from the arms industry.

In addition, the EU Commission will inject large amounts of resources actually intended for civilian and economic projects into the arms industry. For example, the European Investment Bank (EIB) will “make available loans, guarantees and its own capital for the expansion of ongoing activities in the area of goods with a double purpose,” according to the paper. In this way, the regulation prohibiting the funding of arms companies will be evaded.

Other EU funding sources, such as Erasmus+ and the funding of regional clusters of excellence, in which universities also participate, will be directed increasingly towards military research and production.

The Commission noted that its proposals were not about creating a European army, but that the jointly developed and purchased equipment would remain in the possession of the individual member states.

But the proposals correspond with the plan for a “security and defence union” to be discussed at the EU summit on December 15-16. The German government is the main driving force behind calls for a European army and the integration of European foreign policy. Berlin hopes in this way to dominate the EU’s structures and rise to the position of a world power.

On Tuesday, the European minister in the Foreign Office, Michael Roth, underscored this position at the Berlin Security Conference. Especially after Brexit and the election of Trump, Germany needed “a responsible European foreign policy. In foreign and security policy, the EU cannot afford to stand on the sidelines and take no action.”

Roth continued, “The EU must therefore now really assume responsibility for peace and security in the world–-as crisis manager and negotiator, and, yes if necessary, militarily.” This policy of wars and interventions is to be ramped up with the release of the EU Commission paper.

Tensions mount over US presidential election recounts

Patrick Martin

The first major statewide recount of a presidential election since the Florida standoff that determined the outcome of the 2000 election began Thursday in the state of Wisconsin, where Republican Donald Trump won by a narrow margin of 22,177 votes, less than one percent, over Democrat Hillary Clinton.

In Michigan, the state where Trump won his narrowest victory on November 8, with an initial margin of 10,704 votes, Green Party presidential candidate Jill Stein filed Wednesday with the State Board of Canvassers for a recount. On Thursday, lawyers acting for the Trump campaign filed an objection to block the recount, with a hearing set in Lansing on Friday morning to determine the outcome.

Stein has also filed for a recount in Pennsylvania, where Trump’s margin was more substantial, nearly 70,000 votes, but still well below the 1 percent mark. A full recount in Pennsylvania remains unlikely, since the procedure is prohibitively complex, requiring three voters in each of the thousands of precincts to seek a recount in that precinct. Stein has gone to court seeking a full statewide count.

The recounts are being conducted—or debated—under conditions where Hillary Clinton’s popular-vote lead over Trump has passed the 2.5 million mark, and her percentage lead in the popular vote is approaching 2 percent, larger than those won by 10 of the country’s 44 presidents.

Clinton’s popular-vote lead is five times that of Al Gore over George W. Bush in 2000, when the Republican became the first candidate in 112 years to win the presidency while losing the popular vote, thanks to the political intervention of the pro-Republican majority in the Supreme Court.

The historical precedent of the 2000 election was clearly on the minds of officials as they began the recount in the Wisconsin state capital, Madison. State elections administrator Mike Haas declared, “This is certainly not Bush v. Gore,” referring to the infamous Supreme Court decision that halted the Florida recount and awarded the White House to the Republican.

Bush lost the popular vote to Gore by a margin of 540,000 but edged him narrowly in the Electoral College, 271 to 267. Trump has a wider margin than Bush in the Electoral College, leading Clinton by 306 to 232, because of his narrow victories in Wisconsin, Michigan and Pennsylvania, the three states being recounted, with a combined 46 electoral votes. The initial results in all three states would have to be reversed to change the outcome in the Electoral College.

The three recounts were initiated by Stein after she was approached by a group of academics specializing in election cybersecurity. Stein has denied that she initiated the recounts in an effort to shift the result of the election and install Clinton in the White House, claiming that she is merely seeking to verify the results of the election against any possibility of tampering by cyberattack from Russian-based hackers.

But in taking up the claims by the Clinton campaign and the Democratic Party of a massive effort by Moscow to disrupt the 2016 election, Stein has solidarized herself politically with an effort closely akin to McCarthyite witch-hunting. No evidence of Russian government intervention in the US elections has been presented, either by the US government or the corporate media outlets, most notably the New York Times and Washington Post, which have promoted the “Russian hacking” story so assiduously.

Despite the dubious political motivations of those who initiated the recount, there is no doubt that the widespread response to it reflects both popular hostility to Trump and anger over the prospect that he will become president despite such a massive loss in the popular vote.

When Stein made an online appeal for money to pay for the legal and processing costs, more than $7 million was raised in a few days, almost entirely from small donors. This is twice the amount Stein raised for her own presidential campaign, which the Greens largely downplayed once it became clear that the contest between the two main capitalist candidates was tightening.

The recounts sparked a typically “big lie” response from Trump himself, who claimed in a tweet that he won the Electoral College in a “landslide” and would have won the popular vote in a similar fashion but for “millions” of illegal votes cast for Clinton. He also claimed that there was ballot-rigging for Clinton in New Hampshire and Virginia, which she won narrowly, and in California, where her margin was in the millions.

The Trump campaign has been equally hostile in its legal tactics, intervening in each state to oppose a recount, restrict its scope, and, if possible, prevent hand recounting of individual ballots in favor of machine recounts.

In Wisconsin, press reports indicate that most of its 72 counties will recount ballots manually, with a goal of completing the process by the deadline of 8 pm on December 12. Milwaukee County, the state’s largest, is one of a handful that will not recount by hand, but simply feed the ballots through the same machines that counted them initially. Stein went to court seeking to compel a hand recount in every county, but lost the case.

In Michigan, the Trump campaign argued that Stein was not entitled to a recount because she finished in fourth-place and therefore could not be “aggrieved” by any alleged fraud, as well as claiming that the recount could not be completed in time to ensure the state’s electoral votes are properly cast when the Electoral College meets December 19. “There is no reason to rewrite Michigan election law to accommodate the conspiracy-minded requests of an acknowledged loser,” the Trump petition argues.

Stein’s lawyers in Michigan pointed to the large number of ballots where no presidential vote at all was recorded—at least 60,000, far more than the 10,000-vote margin separating Trump and Clinton. Some optical scanners may fail to read faint pencil marks, they said.

The Democratic Party and the Clinton campaign have taken a largely hands-off approach to the recounts, sending legal observers to participate in hearings, but not giving any material or political support. Clinton’s legal counsel, Marc Elias, said that the recount effort was within Stein’s legal rights, but would not change the outcome of the election.

The Obama administration has been openly hostile, with an unnamed “senior official” telling the press last week, “We stand behind our election results, which accurately reflect the will of the American people.” This remarkable statement echoes the language used by Trump and his spokesmen, although the “will of the people,” at least as expressed in the popular vote, went clearly against Trump.

White House spokesman Josh Earnest was pressed on the subject at a briefing November 28, when he declined several times to go beyond the statement that Obama was fulfilling his “institutional responsibilities” in preparing the hand-over of power to Trump, and that “election administrators at the state and local level in states like Wisconsin and Michigan have a very clear set of rules and responsibilities that they should follow. And the President’s expectation is that’s what they should do.”

Mosul and imperialist “human rights”

James Cogan

Once again, the United Nations Security Council convened in emergency session on Wednesday to denounce Syria and Russia over the plight of civilians in the war-torn city of Aleppo.

An offensive begun last weekend by pro-Syrian government forces, backed by Russia, has recaptured 40 percent of the city’s sectors that were held by various Al Qaeda-linked and other Islamist militias since they launched a civil war against the regime of President Bashar al-Assad in 2011. Thousands of people are fleeing from the US-backed Islamist militias. Syrian government officials have asserted they will retake all of Aleppo by the end of the year.

US ambassador to the UN Samantha Power was among those who addressed the Security Council. Power spoke as the representative of the Obama administration, which actively intrigued with the Islamist militias to initiate the war against Assad. Washington has worked with Turkey, Saudi Arabia and the Gulf State monarchies, as well as the European powers, to recruit, fund and arm the “rebels.” It has used the Islamists as its proxies in a pro-imperialist regime-change operation. The result has been over 400,000 deaths, the displacement of over 10 million people and the destruction of much of Syria.

Power spoke as Washington contemplates the prospect that large sections of its militia proxies could be destroyed over the coming weeks, signalling the general failure of its efforts to overthrow the Assad regime. She demanded an immediate ceasefire and “compliance with international humanitarian laws.”

In emotive language, Power declared: “I would ask Council members and all citizens of the world to just force yourself to a take a break from your day and watch the images from eastern Aleppo. Parents cradling their children in agony, civilians on foot mowed down literally carrying their suitcases, which then lay beside their lifeless bodies…”

The Russian-backed Syrian government offensive in Aleppo is, without question, brutal and merciless. Professions of concern by US imperialism, however, which has ravaged much of the Middle East over the past 25 years, carry no political or moral weight. Power’s rhetoric and similar statements in the Security Council by US allies, such as France, Britain, Spain and New Zealand, were even more grotesque given the character of the US-directed assault underway on the Iraqi city of Mosul.

Six hundred kilometres to the east of Aleppo, the US and its allies are assisting an Iraqi government offensive against the Islamic State of Iraq and Syria (ISIS) which, bolstered through Washington’s intrigues in Syria, crossed into Iraq and took control of Mosul in 2014. The US-backed regime in Baghdad claims the city is now fully surrounded by tens of thousands of Iraqi Army troops, Kurdish forces and various Shiite militia members.

A claim, repeated in an Associated Press report, that the US-led forces are “avoiding the use of overwhelming power to protect civilians,” is crass propaganda. The Iraqi military has asserted that the ISIS fighters intend to “fight to the death,” effectively ruling out any prospect of negotiations. Leaflets have been dropped instructing the up to 1.6 million civilians trapped in the city to remain in their homes, while a “coalition” of American, British, French, Australian, Canadian and Jordanian aircraft bomb suspected ISIS positions. A November 24 humanitarian overview by aid organisation REACH reported that families are crowding into the lower floors of housing complexes out of fear of the airstrikes.

Iraqi special forces units, accompanied in most cases by American personnel, are pushing through the eastern suburbs, clearing them block by block. The tactics they employ are simple, crude and, given the instructions to civilians to remain in their homes, murderous. They call in air attacks, artillery or tanks to destroy any building that is suspected of being occupied by ISIS or booby-trapped with explosives. Civilian casualties have been justified in advance by claiming that ISIS is using people as “human shields.”

The Iraqi military boasted this week it has killed 1,000 ISIS fighters, while ISIS has claimed to have killed over 3,700 pro-government and Kurdish troops. No credible figures are being provided by either side on the toll inflicted on civilians, but reports suggest it is high. West Erbil Hospital, located some 80 kilometres away from Mosul, is admitting 150 military and civilian casualties every day. The only wounded civilians who could reach the hospital are those found in areas captured by government forces. Thus far, barely 70,000 people have managed to escape.

Mosul—a city with a history stretching back over 4,000 years—is literally being destroyed in order to “save it.” Bombing this week destroyed a major water pipeline in the eastern suburbs, cutting off water to some 650,000 people. Electricity is already largely cut. Food prices have reportedly doubled as supplies dwindle. The city’s health system is dysfunctional. The university and numerous other public buildings have been reduced to rubble. On Wednesday, coalition aircraft bombed and “disabled” four major bridges over the Tigris River that link the western and eastern sectors of Mosul, further isolating the population in the east from potential resupplies of food and other essentials.

The siege of Mosul is predicted to continue for weeks, if not months. As winter and freezing temperatures set in, exposure, starvation and disease will likely take more lives than the bombing, particularly among children, the infirm and the elderly.

The Obama administration did not this week demand ceasefires or “compliance with international humanitarian laws” in Mosul. The attitude of the imperialist powers to war crimes is determined by whether they benefit from them. In Aleppo, the interests of the US and European powers are being set back, so there is condemnation and calls for action. In Mosul, US interests are being asserted, so civilian deaths are downplayed or outright denied.

Whenever representatives of imperialism and the capitalist ruling elite speak of “human rights,” the independent standpoint of the working class must be contempt and hostility. The only way to end the criminality of imperialist war and neo-colonial intrigue is to end capitalism itself.

Australia: CIMIC Group’s takeover of UGL foreshadows more job cuts

Oscar Grenfell 

A takeover of UGL, an Australian-based mining and engineering contractor, by the Spanish-owned construction company CIMIC Group foreshadows further restructuring of UGL and a stepped-up assault on its workers’ jobs, wages and working conditions.

UGL shareholders are set to vote on the $526 million hostile takeover bid in the next week and a half, after UGL’s board of directors approved the offer last week. The announcement followed CIMIC Group’s acquisition of more than 50 percent of UGL’s shares. In a symptom of UGL’s decline since the end of the mining boom, the takeover offer values the business at $3.16 per share, down from $22 in 2007.

The UGL board issued a statement declaring that the company’s acquisition meant “UGL may not be able to execute its current strategy, business plan or turnaround” and its “business mix may change” if CIMIC Group “determine that some assets should be divested.”

CIMIC Group will conduct a review into UGL’s business model in order to “drive operational efficiencies.” It has flagged a potential sell-off of assets, along with an overhaul of management and other cost-cutting measures, raising the prospect of layoffs and closures of UGL-operated workshops and sites.

The takeover underscores the deepening crisis of a host of mining and engineering contractors as a result of the collapse of commodity prices, the implosion of the mining boom and a marked slowdown in the construction sector.

CIMIC Group’s bid for UGL, unveiled in June, coincided with a 28 percent fall in UGL’s share price, driven by a worsening dispute over Japanese company Inpex’s Ichthys liquefied natural gas (LNG) project in Darwin. A joint venture between UGL and Inpex contractor JKC, the construction of the project has reportedly been marked by repeated delays and disruptions, resulting in major cost blowouts.

In August, UGL announced a $200 million write-down on contracts for the Ichthys project, amid disputes with JKC. Workers involved in the LNG plant’s construction have been forced to foot the bill for its ongoing crisis. In June, JKC announced 130 redundancies. In November, another 460-480 jobs were cut. Among them were 380 boilermakers, electricians and other tradesmen employed by UGL, and up to 100 staff employed by JKC.

Law firm Slater and Gordon has foreshadowed a shareholders’ class action against UGL, alleging that the company did not disclose delays at the Ichthys project. In August, UGL posted a full-year loss of $106.3 million, largely on the back of the Ichthys project. Earnings for the construction and engineering divisions of the firm fell by 67 percent to $13.9 million, with fewer contracts in the resources and utilities sectors.

Last year, UGL registered a $236 million loss. The company responded by deepening a restructuring that it began following the global financial crisis. In September last year, it axed 200 jobs. The sackings followed a spate of workshop closures and major job cuts, including at Ballarat in 2012, Taree and Broadmeadow in 2013 and Chullora in Sydney in 2015.

The Australian Manufacturing Workers Union (AMWU), which covers a number of UGL’s sites, played the central role in enforcing the sackings. At UGL’s Auburn rail workshop in Sydney, the union defied a vote of workers in September 2015 demanding a halt to retrenchments, and blocked a motion put by workers to hold a sit-in until the company agreed to reinstate all employees who were contesting their retrenchments. 

In every instance, the union worked with management to suppress opposition from the workforce, clearing the way for job cuts and an ongoing assault on working conditions.

The most recent sackings followed years of restructuring that have seen UGL’s workforce decline from a peak of around 80,000, to less than 8,000. The company sold off its UK-based retail division, and scaled back its operations in the US and China, in the wake of the 2008 crash.

For his role in imposing the restructures demanded by UGL’s corporate shareholders, Ross Taylor, the company’s CEO, is set to receive a payout of at least $7.6 million. Almost $7 million of that is tied to his “performance,” i.e., pushing through the attacks on UGL’s workforce.

CIMIC Group’s history makes clear that further restructurings are on the agenda. Formerly Leighton Holdings, the business changed its name in early 2015 following a series of allegations of corruption, bribery and other malpractices. The ultimate owner of CIMIC Group is now Grupo ASC, a Spanish-based company with construction, telecommunications and engineering operations around the world. It has total assets valued at over €34 billion in 2016.

In 2013, the Financial Times reported: “Long considered one of Spain’s most secretive companies, ACS acquired a fearsome reputation for launching bold takeovers, using debt to buy up assets and then selling them on for a profit in a manner some analysts quipped was more akin to a private equity group than a construction company.”

Since its acquisition by ASC in 2014, CIMIC Group has launched a series of takeover bids, taking advantage of the financial woes of companies in the engineering and mining contracting sectors. At the beginning of this year, CIMIC Group acquired Sedgman, a mining contractor, and earlier took over Devine, a construction company.

The Australian Financial Review last month noted the growing number of takeover bids in the contracting sector. Danny Younis, senior analyst at investment group Shaw and Partners, told the newspaper: “The contracting game is currently more depressing than a Dostoyevsky novel, and it is no wonder in the past year or so we have seen companies like ALS, Bradken, Emeco Group, Downer EDI, Ausenco, Sedgman, Broadspectrum, Coffey and now UGL all either be an acquirer, acquired or subject to takeover offers.”

The newspaper listed a host of other contractors that have gone into administration, including ADG Global Supply, SubZero Group, Hughes Drilling, THO Services, WDS, Viento Group and Titan Energy Services.

Construction activity in Australia last month was at its lowest level since 2010, with the September quarter down by almost 5 percent on June. Non-residential building fell by close to 11 percent—the steepest drop since 2000. At the same time, mining companies have laid off thousands of workers and demand for coal, iron ore and other commodities remains low.

Speculating on what CIMIC Group will do with UGL, the Australian last month suggested that it may “tip” part of UGL into Ventia, CIMIC’s infrastructure, utilities and telecommunications firm, before selling off the new entity. Such a move would inevitably entail further job cuts.

The AMWU has issued no public statement on the takeover of UGL. This is a signal that, as in the past, the union will work with management to impose the demands of the corporate shareholders for ever-greater “efficiency” and profits.

Violent clashes follow announcement of businessman Jovenel Moïse as election winner in Haiti

John Marion

Protests and clashes with police broke out in Haiti Tuesday amid charges of electoral fraud in the country’s November 20 presidential election. Losing candidates have vowed to challenge the victory of banana exporter Jovenel Moïse, the candidate of former president Michel Martelly’s PHTK (Parti Haïtien Tèt Kale).

The largest demonstration erupted in Port-au-Prince’s sprawling shantytown of La Saline, a stronghold of Fanmi Lavalas, the party of former president Bertrand Aristide, which has described the official vote results as an “electoral coup.” Police used tear gas in an attempt to disperse protesters.

Meanwhile, the US Embassy issued a report Tuesday that it had “received reports of gunfire and burning tires at a protest in downtown Port-au-Prince,” advising American citizens to stay out of the area.

Preliminary results of the November 20 election have awarded the presidency to Moïse. If challenges to the vote count do not result in a change, the country’s Provisional Electoral Council (CEP) will publish the confirmed results on December 29 and Moïse will take office on February 7. Because he won more than 50 percent of the vote, there will be no runoff election.

Nonetheless, only slightly more than 20 percent of eligible voters participated. The election was originally scheduled for October 9, but postponed because of Hurricane Matthew. A month and a half after the storm tens of thousands of people in the south of Haiti still have no homes, and some polling places were being used as shelters as election preparations took place. An accurate count of how many thousands of people lost their voter identification cards in the storm is not possible, but according to the Miami Herald only 6,000 people had reapplied for cards before November 20.

The Sud, Grand’Anse, and Nippes departments, hit hardest by the storm, also lost most of their fruit trees and other crops, leading to what Le Nouvelliste has called “a food catastrophe.” According to United Nations figures, nearly 600,000 people in these areas are in urgent need of food assistance.

Haitian workers and peasants have good reason to be wary of elections organized by the country’s ruling elites. The vote to replace Martelly was originally scheduled for October 25, 2015 but was so blatantly fraudulent that the runoff scheduled for January 2016 was postponed and then cancelled. Jocelerme Privert, the president of Haiti’s Senate, was named provisional president when Martelly stepped down.

Political parties in Haiti are allowed to send observers, or mandataires, to voting centers; the mandataires receive credentials allowing them to vote where they are stationed, rather than at their normal polling place. More than 900,000 of these passes were issued for the October 25 election, and were so uncontrolled that they were openly being sold for as low as $3 each on election day. Nonetheless, European Union and Organization of American States observers called the vote “a breath of hope for Haitian democracy.”

Legislative elections held on August 9, 2015 were also so corrupted that, according to a National Lawyers Guild report, “fraud, violence and voter intimidation were widespread, affecting 67.8 percent of voting centers.” The NLG report noted that the police at polling centers did not stop “acts of violence and other disruptions, raising questions about whether officers had received an order from above directing them to stand down.”

Moïse, a businessman and former Secretary General of the Chamber of Commerce and Industry of Haiti, was given first place in the results of the October 2015 election, but did not receive enough votes to avoid a runoff. Jude Célestin of the Alternative League for Progress and Haitian Emancipation (LAPEH) came in second but boycotted the scheduled runoff, leaving Moïse as the only candidate holding campaign events. Célestin won second place again in the voting just concluded, but with slightly less than 20 percent of the vote.

The number of mandataire credentials issued for November 20 was significantly less (125,800) than in 2015, and controls were supposedly put in place requiring that each badge correspond to the voter ID number of the person wearing it. Nonetheless, a US lawyer from the National Human Rights Network told the Miami Herald that incidents of fraud had been observed.

With or without fraud, Moïse benefited from the votes of those who are not struggling just to survive. There were reports of dancing and celebrations in Petionville, a wealthy suburb of Port-au-Prince. One of Martelly’s last acts in office was an attempt to establish an off-shore banking haven on the island of Gonâve; it does not require a stretch of the imagination to predict that his protégé will work to benefit international finance.

The elections were held under extraordinary restrictions, ostensibly to prevent violence, but also suppressing basic rights. On November 18, the Haitian National Police (PNH) announced the prohibition throughout the country, from the evening of November 19 through midnight on the 21st, of selling or drinking alcohol; driving a car or motorbike within 100 meters of a polling place; and carrying guns, knives, and blunt weapons. The forced closing of all nightclubs was included in the decree which, however, made no mention of prohibiting bribery.

The PNH mobilized 9,400 police across Haiti, and approximately 3,600 of the UN’s hated MINUSTAH force were also used to police the elections. Five hundred MINUSTAH vehicles were made available for the crackdown. In an intimidating statement released November 16, the US embassy in Port-au-Prince said “the United States is taking note of parties involved in electoral violence.”

The CEP, obviously afraid of public opposition to the election results, made its announcement under heavy guard in Petionville. It also waited until late Monday night, even though the results were supposed to be announced Sunday.

Dr. Marysse Narcisse, the Fanmi Lavalas presidential candidate, won slightly less than 9 percent of the vote, despite campaign support from former president Jean-Bertrand Aristide. A lawyer for Fanmi Lavalas has sent a letter to the CEP questioning the vote tally, which was rebuffed by CEP president Léopold Berlanger even before the official count was announced. Opposition parties will be allowed a short window to challenge the results, from December 3 to the 5.

War tensions between India and Pakistan intensify

Wasantha Rupasinghe & Keith Jones 

Relations between India and Pakistan remain extremely taut, with South Asia’s rival nuclear powers the closest to all-out war since a 10-month period in 2001-2002 when India mobilized nearly a million troops on Pakistan’s eastern border.

The truce along the Line of Control (LoC) between Indian- and Pakistan-held Kashmir that was put in place in the aftermath of the 2001-2002 war crisis has manifestly broken down. Virtually every day for the past two months, Indian and Pakistani troops have unleashed intense barrages of artillery and gun fire across the LoC. And while continuing to disclaim wanting war, military and government leaders of both countries routinely make bloodcurdling threats.

To cite just one bellicose exchange from last week: On November 25, Pakistan Defence Minister Khawaja Asif told the country’s parliament that Pakistan’s military “will kill three Indian soldiers for every Pakistani soldier they neutralize,” adding India would face “dire consequences … if it went to war against Pakistan.” The next day Asif’s Indian counterpart, Manohar Parrikar, told a rally in Goa: “We don’t itch for a fight, but if someone looks at the country with evil eye, we will gouge his eyes out and put them back in his hand. We have that much power.”

Parrikar, who has repeatedly boasted that New Delhi has the military might and daring to force Islamabad to bend to its will, recently called for India to renounce its “no-first strike” nuclear pledge so as to increase its strategic leverage and spook its enemies.

On Tuesday, tensions heightened still further after Islamist, anti-Indian, Kashmiri secessionists attacked an Army post, killing seven Indian Army personnel, including two officers. The Nagrota Army post is near Jammu, the winter capital of Jammu and Kashmir, India’s only Muslim-majority state and the site of a quarter-century old, Pakistani-supported insurgency.

According to the Hindu, Tuesday’s deaths raised to 27 the number of Indian security personnel killed in Kashmir, either by Pakistani cross-border firing or in encounters with insurgents, since Indian Special Forces carried out “surgical strikes” inside Pakistan in late September, ostensibly in retaliation for an earlier insurgent attack on the Indian military base at Uri.

India claims to have killed a like number of Pakistani troops and at least 40 civilians on both sides of divided Kashmir have perished in cross-border firing.

Unnamed Indian military sources have told the media that evidence points to Pakistani involvement in Tuesday’s attack. But thus far, India’s Hindu supremacist Bharatiya Janata Party (BJP) government has not accused Islamabad of responsibility for the Nagrota attack, in marked contrast from its reaction to the September 18 Uri incident.

This could all change rapidly, however.

Prime Minister Narendra Modi and his BJP government are heavily invested, both strategically and politically, in securing a demonstrable advantage from the current confrontation with Pakistan.

Big business has vigorously applauded the BJP’s much-trumpeted claims to have freed India from the shackles of the “strategic restraint” policy that previous governments reputedly pursued in regards to Pakistan.

Moreover, the BJP has shamelessly exploited the war crisis with Pakistan to deride its opponents as weak, even disloyal, and served notice that it intends to make its aggressive stand against Pakistan a key issue in the coming elections in Uttar Pradesh, India’s most populous state.

Rattled by the world economic crisis, the Indian bourgeoisie brought Modi and his BJP to power two-and-a-half years ago to accelerate the pace of pro-investor socioeconomic “reform” and to more aggressively pursue its great power ambitions on the world stage.

In line with this, Modi has transformed India into a veritable “frontline state” in Washington’s military-strategic offensive against China, calculating that the strategic favours the US is lavishing on India in return will enable it to change the “rules of the game” with Pakistan and impose itself as South Asia’s regional hegemon.

In August, Modi unveiled a new hardline strategy against Pakistan, announcing New Delhi would mount a diplomatic campaign to have it labelled a “state sponsor of terrorism” and signaling India’s support for the nationalist separatist insurgency in Balochistan—that is for Pakistan’s dismemberment.

Then in late September the BJP government repudiated India’s longstanding policy of not publicly revealing its military operations inside Pakistan, which was adopted out of fear that to do so could ignite a dynamic of strikes and counter-strikes that could quickly escalate to all-out war.

In the ensuing two months, New Delhi has insisted that it will resume regular high-level contacts with Islamabad only if it agrees that “cross-border terrorism” is the core problem in Indo-Pakistani relations and acts to prevent the Kashmir insurgency receiving any logistical support from Pakistani territory.

In pursuing this hardline stance, Modi and his BJP have been buoyed by Washington’s endorsement of India’s illegal and highly provocative Sept. 28-29 attack inside Pakistan. While the Obama administration has counseled caution, it is anxious to show New Delhi that it recognizes there will be quid pro quos for India’s integration into Washington’s anti-China “Pivot to Asia” and in that vein is prepared to cede India more latitude in dealing with Pakistan.

India is also mindful that US president-elect Donald Trump has repeatedly lauded India as among Washington’s most valued strategic partners while attacking Pakistan for not acting like a US ally. It eagerly anticipates gaining even greater leverage over Islamabad when Trump takes office.

Pakistan, meanwhile, has been shaken by its strategic isolation. After the Uri attack, India was able to enlist most of the region’s other states in a boycott of the South Asian Association for Regional Cooperation (SAARC) meeting that was to be held in Pakistan last month. Islamabad’s calls for international condemnation of India’s illegal “surgical strikes” were met by a thunderous silence.

In an attempt to defuse the war crisis, Islamabad has announced that Prime Minister Nawaz Sharif’s top foreign policy advisor, Sartaj Aziz, will travel to India for the Dec. 3-4 Heart of Asia (HoA) conference on Afghanistan and that he will be available for “comprehensive and unconditional dialogue” with Indian officials on its sidelines.

India, however, has not shown any enthusiasm for Aziz’s participation in the HoA meeting in Amritsar, just 20 kilometers (12.5 miles) from the Pakistani border, let alone Islamabad’s offer of talks. Yesterday the Times of India cited unnamed Indian officials as saying Pakistan’s offer of dialogue “was meaningless in the light of continuing terror strikes from across the border.”

The protracted violent cross-border standoff and the Modi government’s bellicose rhetoric, including Defence Minister Parrikar’s calls for India to abandon its no-first strike nuclear pledge are, however, giving pause to some sections of the corporate media.

On November 24, the Chennai-based Hindu published an editorial titled “Restore the ceasefire” in which it said both India and Pakistan must be “alert … to the danger of the retaliatory cycle spinning out of control” and “must guard against adventurism.” It went on to call on New Delhi to take immediate steps to reopen dialogue with Pakistan. “Given India’s regional status and Prime Minister Narendra Modi’s unchallenged hold over political power,” declared the Hindu, “it is incumbent on him to initiate steps to restore the ceasefire that worked well for over a decade.”

The Economic Times in a November 25 editorial titled “Do not slide into a war no one wants” explicitly raised the prospect of the “high risk strategy” of “limited confrontation” aimed at whipping up “jingoistic fervor” for political gain ending in war between the “two nuclear powers in South Asia.”

“Even,” continued the Economic Times, “if that does not entail use of nuclear weapons—an eventuality no longer to be ruled out as absurd, given the line of thinking favoured by the political leadership both in India and in Pakistan—a war would be very costly in terms of both life and treasure.”

While in striking contrast with the bellicose mood being whipped up by much of the India, the two editorials grossly understated the extent to which South Asia is now enveloped in war clouds. Coincident with the Indo-Pakistan war crisis there has been a major escalation of Indo-China tensions.

Beijing is disconcerted by the extent of India’s strategic realignment with Washington, as exemplified by New Delhi’s ratification in late August of an agreement allowing US warplanes and battleships to make routine use of Indian military bases and ports. India is incensed that Beijing, while urging Islamabad to show restraint, has stood by its longstanding ally in the current crisis, and, in response to the burgeoning Indo-US alliance, has strengthened its partnership with Pakistan.

These developments underscore that the intractable Indo-Pakistani conflict has now become enmeshed with the growing confrontation between US imperialism and China adding to each a massive new explosive charge and raising the prospect that a war between India and Pakistan could rapidly involve the world’s great powers.

South Korean president offers to resign

Ben McGrath

South Korean President Park Geun-hye delivered a short, five-minute speech on Tuesday, three days after one of the largest mass rallies in South Korean history demanded her removal from office. The president suggested she was willing to resign in the future but the official opposition parties rejected the offer as an attempt to delay an impending impeachment vote.

“I will leave all decisions, including the shortening of my presidential term, up to the National Assembly,” Park said. It was her third such national address since becoming embroiled in a political scandal in late September. “Once the ruling and opposition parties draw up a measure to stably turn over the reins of government, I will step down from the office in line with that timetable and legal procedures.”

Park refused to answer questions from the press after her speech, which included another public apology for the scandal that will do little to dispel the public’s anger.

It has become increasingly unlikely that Park will finish her term in office, which is officially due to end in February 2018. All three opposition parties—the Minjoo Party of Korea (MPK, or Democrats), the People’s Party and the Justice Party—are proceeding with the president’s impeachment, backed by members of the anti-Park faction of her ruling conservative Saenuri Party. Even the pro-Park faction has begun to call for her to resign “honorably.”

Led by the MPK, the opposition is planning to vote on impeachment tomorrow. “When unconditional resignation is the only way to normalize state affairs, the president did not mention it and instead shifted the responsibility onto the National Assembly. It is a mere strategy to disturb the ongoing move toward impeachment,” MPK chairwoman Chu Mi-ae said. This sentiment was echoed by Park Ji-won and Sim Sang-jeong, leaders of the People’s Party and Justice Party respectively.

Until her speech, the opposition had been confident it had enough votes to secure Park’s impeachment, as they control 172 seats in the National Assembly, which includes seven independents. To impeach Park, they need only 28 Saenuri Party members to back the motion to secure the two-thirds majority necessary in the 300-seat body. If the impeachment resolution passed, the Constitutional Court would then examine the case, where six out of nine justices would have to approve Park’s removal from office.

However, since Park’s speech, Saenuri Party members, including from the anti-Park faction, have called for negotiations over her possible resignation. While 40 conservative lawmakers were likely to support impeachment, divisions have emerged in the anti-Park faction’s ranks, according to one of its leaders, Hwang Yeong-cheol.

“Just because [the ruling and opposition parties] don’t reach an agreement doesn’t mean that we’ll delay or reject the impeachment schedule itself. We need to do our best [to reach an agreement] before December 9,” Hwang stated, in an indication that they are trying to push back the vote to next week.

Saenuri Party floor leader Jeong Jin-seok, who belongs to the pro-Park faction, stated: “The talks over the impeachment have proceeded so far on the assumption that Park would not step down. But now that the situation has changed, I will discuss the process with the opposition parties from square one.”

If the impeachment vote passed, Park would remain president but her duties would be suspended and handed over to Prime Minister Hwang Gyo-an until the Constitutional Court reached a decision. If she were removed from office, a presidential election would be held within 60 days.

Park has also attempted to stall proceedings by expressing support for a special investigation council, which is expected to begin its work next week. On Wednesday, she selected Park Yeong-su, a lawyer recommended by the opposition, to lead the council. The president claimed through a spokesman she would “fully cooperate with the team’s investigation, including face-to-face questioning.”

However, Park has reneged previously on promises to cooperate with the current prosecution team investigating the scandal surrounding her and long-time friend Choi Soon-sil. Choi has been indicted on charges related to soliciting bribe money from corporations and being involved in deciding policy matters despite holding no formal government position.

Mass demonstrations are also set to continue. Another protest in Seoul is scheduled for this Saturday, following last week’s rallies, where 1.5 million people gathered in the capital alone. The Korean Confederation of Trade Unions (KCTU) held a so-called general strike on Wednesday to allow workers to let off steam, with 60,000 workers rallying around the country, including 22,000 in Seoul.

All the opposition parties are exploiting the public hostility to Park to position their candidates ahead for the next presidential election. They reflect the interests of sections of big business, which are increasingly dissatisfied with Park’s inability to force through attacks on working conditions. These so-called labor reforms would lead to the increased casualization of the workforce and the slashing of wages.

The Wall Street Journal noted in October that neither the MPK nor the People’s Party is “fundamentally opposed to reforms, and both are likely to propose their own variations on labor reform as the December 2017 presidential election draws near.” The Justice Party, which poses as a left-wing alternative, as well as the unions in the KCTU and Federation of Korean Trade Unions, regularly line up with the Democrats.

The widespread anger of ordinary working people toward Park is an expression, in the first instance, of the outrage felt over her administration’s alleged corrupt practices and its contempt for basic legal and democratic norms. At the same time, it reflects broader concerns about the decline of living conditions as a result of the sustained attack on jobs, working conditions and the country’s limited social services by both Saenuri and Democrat-led administrations.

The opposition’s drive to remove Park is an attempt to funnel that frustration and anger into support for their presidential election campaigns. None of the economic and social issues will be resolved however as the Democrats, no less than the conservatives, are responsible for the social crisis that workers and youth face today.

Dire situation in UK social care for the elderly

Dennis Moore

Age UK and the Alzheimer’s Society, charities supporting older people, have published reports describing the way older people are cared for as “shameful” and “scandalous.”

Figures suggest that the number of older people not getting necessary help from the authorities now stands at 1.2 million, rising by 48 percent since 2010. Age UK found that since 2010, there are 383,000 people aged 65 or over living with some level of unmet need.

Care in the UK is funded by individuals themselves or local councils, but there are increasing numbers of people reliant on family and friends to support them.

The 1.2 million seniors with insufficient assistance includes 696,500 who receive no help from paid carers, friends or family. A further 487,400 receive some help but not enough, due to help only being available at particular times of the day or their carers only being able to manage some tasks and not others.

Those older people who reported having unmet needs included 291,400 people who have difficulty with three or more essential tasks, including getting out of bed, going to the toilet, dressing and washing. Of this figure, 52,700 people receive no help at all. Overall, local authorities agreed to help just under half of the 6.6 million people who approached them for help.

Where care in the home was provided, there were serious problems identified as to the way patients with dementia were treated. Families of those cared for reported examples of poor care, including loved ones being left in dirty clothes for days at a time, not being given medication and residents going missing from homes due to lack of security.

Staff said they had not been given enough training to enable them to deal with people with complex needs.

The Care Quality Commission, the official inspection body that investigates standards of care, warned a month ago that the sector was at “tipping point.”

The lack of care is having a direct effect on public hospitals, which are experiencing more and more elderly people arriving at local accident and emergency departments needing help.

The day-to-day impact on people’s lives, including those who are carers, is mounting. The BBC identified 11 councils who had rejected more than 75 percent of applications for help. One example is that of Lorna Wheatley, from North Yorkshire, who has been trying to secure a nursing home place for her 82-year-old mother Celia. Speaking to the BBC, Wheatley said, “My mum can barely walk or look after herself, and the council says she only qualifies to live in sheltered housing. I’m terrified that without constant support, she could die.”

An Alzheimer’s Society investigation exposed serious shortfalls and a lack of training for home care staff working with people with dementia, leading to intolerable levels of stress for sufferers, family, carers and staff. The investigation utilised a survey of homecare workers and included a Freedom of Information (FOI) request sent to all local authorities in England. The survey included first-hand testimonies of 1,220 people directly affected by dementia.

The Alzheimer’s Society documented numerous failings in the system, including people not being provided with food or water, being left to sleep in wet or soiled bed sheets, not giving people baths or showers for weeks and people being left with infections that have led to emergency admissions to hospital.

Care workers are facing enormous pressures, with the adult social care budget cut by 40 percent since 2010.

The budget for training and the development of staff is usually the first to be cut. The FOI request showed that 71 percent of the local authorities that responded do not include money for training within their homecare contracts. Another 38 percent do not fund dementia training sessions for homecare providers.

The number of homecare workers who have had dementia training stands at 38 percent of the workforce, with 71 percent not receiving dementia training that is accredited. Fully 43 percent of homecare workers have asked for further dementia training, yet 54 percent of applications for training are turned down.

Linda Jackson, from Orpington in Kent, struggled to get good homecare for her father, Ken, who had Alzheimer’s disease. She said, “’Dad was challenging at times and I was told that some carers refused to come back and care for him. They simply didn’t know how to cope with his behaviour. He was distressed and worried, yet no one seemed equipped to look after him and give him the basic things he needed—food, medication, and comfort.”

She added, “Dad’s last year was a living hell and he was eventually sectioned under the Mental Health Act before dying six weeks later.”

Such accounts provide a shocking insight into the lives that many older people and their families endure each day, left struggling to manage tasks that are the most basic human functions and intrinsically connected to a person’s sense of dignity.

Those having to work with older people suffering with conditions such as dementia face enormous challenges in attempting to carry out their work. They are generally poorly paid and have to work 60 to 80 hours a week to make a living. A recent employment tribunal case, involving 17 care workers employed by the private contractor Sevacare in the north London borough of Haringey revealed that some of the staff were being paid £3.27 an hour. This is less than half the minimum wage. It is the largest-ever legal claim brought in the care sector. Sevacare, which last year raked in profits over more than £1 million, has contracts across England employing 5,500 care staff, providing care and support to 9,600 people a week.

According to the Unison trade union, some of those on £3.27 an hour were women, employed as live-in carers. They stayed for seven days a week at a time in the home of an elderly women with severe dementia. These carers were on duty 24 hours a day, sleeping on a bed next to the person they were looking after, attending to the woman’s needs throughout the night.

One carer likened the experience to being “in prison”, saying they were not allowed to leave the house all week. Workers were also not being paid for the time they spent travelling between home visits. One of the careers, Florence Wambulu, said she worked seven days a week in order to make sure she could pay her bills and look after her family. “They have to treat us like human beings, not just someone who is there to make money for them,” Wambulu said, adding, “We were working like slaves.”

Last year, whistle-blower Gillian Demet resigned from her job as a care worker at Sevacar because she was only allowed to spend 15 minutes at a time on visits with frail pensioners.

The care of older people in privately-run care homes, and their own homes, has been increasingly outsourced to the private sector under Conservative and Labour governments. Labour-run councils throughout the UK routinely offer contracts to private companies to provide care. The intolerable conditions outlined by the charities are inhumane. For those being cared for, and the workers tasked with looking after them. They are both exploited by a system that sees them, first and last, as a source of profit.

OPEC announces deal to cut oil production

Nick Beams

The OPEC oil cartel has reached an agreement to cut production in response to the halving of oil prices since 2014, the most significant downturn in the market in a generation.

The deal, finalised at the OPEC annual meeting in Vienna yesterday, came after two months of negotiations following an in-principle agreement reached in September to reduce output. The negotiations, which appeared several times to be on the brink of breaking up, were over the details of where the cuts in production would fall.

The talks were conducted under a degree of tension, amid warnings that if a deal were not reached then oil prices, which stabilised at $45 to $50 per barrel following the September agreement, would plummet, possibly to as low as $20 per barrel.

The main conflict in the negotiations was between Iran and Saudi Arabia. The Saudis demanded that Iran take a cut while the Iranians insisted they were still recovering from the sanctions imposed by the US, which had reduced production. Iran called on the Saudis to cut output as they had increased it after prices began to fall in 2014.

Under the agreement, OPEC, which supplies about one-third of the world’s oil, will cut production by 1.2 million barrels per day (a reduction of around 4.5 percent) to about 32.5 million barrels for six months from the start of January. There is an option to extend the agreement until the end of 2017.

Saudi Arabia will bear the major portion of the cuts, reducing its production by half a million barrels per day, with Kuwait, Qatar and the United Arab Emirates agreeing to a reduction of 300,000 barrels a day. Iran promised to freeze its output at 3.8 million barrels a day, close to its present level of production, while Iraq agreed to a reduction of 210,000 barrels per day. Libya and Nigeria were granted exemptions because of the political turmoil in both countries.

Russia, a major oil producer that is not an OPEC member, agreed to a tapered reduction of output by 300,000 barrels per day in the first half of 2017. However, it said its cutback was subject to OPEC adhering to the overall limit as well as to Russian Energy Minister Alexander Novak described as “maximum participation” by non-OPEC countries in the restrictions.

At this point, it is not clear from which oil-producing countries outside OPEC—including Azerbaijan, Mexico, Oman and Brazil—cuts will come.

The biggest single winner out of the agreement appears to be the US energy companies, particularly those involved in shale oil production.

When oil prices plummeted from their levels of $100 per barrel in 2014, at times reaching as low as $30 per barrel, the Saudi regime stepped up production. Its aim was to drive down prices, expecting this to force high-cost US shale oil producers out of the market.

The tactic appears to have failed. Crude oil production in the US (both from shale and more conventional methods) is down by 6 percent this year and a further decline is expected in 2017. But this decline has not been enough to boost prices to anywhere the level of $60 per barrel that the Saudi regime appears to be seeking. Despite the reductions, US output is still above the levels reached in 2014.

On Wall Street, the S&P 500 oil and gas exploration production index, which mainly comprises US shale companies, was up by 10.8 percent in response to the OPEC announcement. Energy stocks as a whole rose by 5.6 percent, following a rise of around 8 percent in oil prices.

Whether this is maintained is yet to be seen. Michel Cohen, an analyst at Barclays Bank, told the Financial Times the outcome was consistent with what OPEC production levels had been expected to be in 2017 in any case. The OPEC agreement, he said, was “highly unlikely to affect the oil market balance.”

Others pointed to the fact that the deal is contingent on an agreement with non-OPEC producers to reduce production and cast doubts on whether the cartel can shift prices as it did in the past.

The main factor in the Saudi promotion of the agreement is the impact of falling oil prices on its financial position and fears this could lead to political instability.

Summing up the overall position of oil-producing countries last April, the International Monetary Fund said the adjustment in government spending and taxation needed to absorb the oil price shock was “unprecedented.” It said export revenues of oil exporting countries in 2015 fell by $390 billion, equivalent to 17.5 percent of their total gross domestic product.

The reduction in revenue has had major effects in Saudi Arabia, with billion-dollar government projects put on hold or cancelled and payments to major construction firms, medical establishments and foreign consultants delayed. According to a Reuters report, the amount still owing to construction firms alone is $21 billion. Companies were faced with delays of up to six months on work they had completed, as the government sought to retain cash.

Earlier this year, the ascendancy of deputy crown price Mohammed bin Salman to a leading position within the regime, second only to King Salman, and his plan for economic restructuring and diversification, was hailed as a major boost. His economic agenda was accompanied by a drive to push back Iranian influence as he launched a brutal air bombing campaign directed against Iranian-supported forces in the Yemen.

But the position of the Saudi economy has gone from bad to worse. The government’s austerity drive—including delays in payments and cuts to public sector workers’ benefits—has pushed the non-oil sector of the economy into a near-recession. It grew by only 0.7 percent in the second quarter of 2016 compared to 3.5 percent for the corresponding period in 2015.

The crown prince’s Vision 2030 program is now widely regarded as a joke and wealthy Saudis have been moving billions of dollars out of the country.

One fund manager told the Financial Times: “The honeymoon is indeed over. There has not been one bit of good news for the government—from the economy to the disaster in Yemen.”

Facing global economic stagnation—the driving force behind the oil price slump—and the boost that other energy sources may receive in the US from the incoming Trump administration, the OPEC agreement has an air of desperation.