US Senate resolution potentially changes Middle East dynamics

James M. Dorsey

A draft US Senate resolution effectively portraying Saudi policy as detrimental to US interests and values and Crown Prince Mohammed bin Salman as “complicit” in the killing of journalist Jamal Khashoggi, if adopted and implemented, potentially could change the dynamics of the region’s politics and create an initial exit from almost a decade of mayhem, conflict and bloodshed.

The six-page draft also holds Prince Mohammed accountable for the devastating war in Yemen that has sparked one of the world’s worst humanitarian crises, the failure to end the 17-month-old Saudi-United Arab Emirates-led economic and diplomatic boycott of Qatar, and the jailing and torture of Saudi dissidents and activists.

In doing so, the resolution confronts not only Prince Mohammed’s policies but also by implication those of his closest ally, UAE crown prince Mohammed bin Zayed. The UAE was the first country that Saudi leader visited after the Khashoggi killing.

By in effect challenging the position of king-in-waiting Prince Mohammed, the resolution raises the question whether some of his closest allies, including the UAE crown prince, will in future want to be identified that closely with him.

Moreover, by demanding the release of activist Raif bin Muhammad Badawi, better known as Raif Badawi, and women’s rights activists, the resolution further the challenges fundamentals of Prince Mohammed’s iron-fisted repression of his critics, the extent of his proposed social reforms as part of his drive to diversify and streamline the Saudi economy, and the kingdom’s human rights record.

A 34-year-old blogger who named his website Free Saudi Liberals, Mr. Badawi was barred from travel and had his assets frozen in 2009, arrested in 2012, and sentenced to 10 years in prison and 1,000 lashes for insulting Islam. His sister, Samar Badawi, a women’s rights activist, was detained earlier this year. Mr. Badawi’s wife and children were granted asylum and citizenship in Canada.

A diplomatic row that stunned many erupted in August when Saudi Arabia expelled the Canadian ambassador after the foreign ministry in Ottawa demanded in a tweet the release of Ms. Badawi and other activists.

Prince Mohammed and Saudi Arabia, even prior to introduction of the Senate resolution, were discovering that the Khashoggi killing had weakened the kingdom internationally and had made it more vulnerable to pressure.

Talks in Sweden between the Saudi-backed Yemeni government and Houthi rebels to end the war is the most immediate consequence of the kingdom’s changing position.

So is the resolution that is unprecedented in the scope and harshness of the criticism of a long-standing ally.

While the resolution is likely to spark initial anger among some of Prince’s Mohammed’s allies, it nevertheless, if adopted and/or implemented, could persuade some like UAE crown prince Mohammed to rethink their fundamental strategies.

The relationship between the two Mohammeds constituted a cornerstone of the UAE leader’s strategy to achieve his political, foreign policy and defense goals.

These include projecting the Emirates as a guiding light of cutting-edge Arab and Muslim modernity; ensuring that the Middle East fits the crown prince’s autocratic, anti-Islamist mould; and enabling the UAE, described by US defense secretary Jim Mattis as ‘Little Sparta,‘ to punch above its weight politically, diplomatically and militarily.

To compensate for the Emirates’ small size, Prince Mohammed opted to pursue his goals in part by working through the Saudi royal court. In leaked emails, UAE ambassador to Washington Yousef al-Otaiba, a close associate of Prince Mohammed, said of the Saudi crown prince that

“I don’t think we’ll ever see a more pragmatic leader in that country.”

Mr. Al-Otaiba went on to say: “I think in the long term we might be a good influence on KSA (Kingdom of Saudi Arabia), at least with certain people there. Our relationship with them is based on strategic depth, shared interests, and most importantly the hope that we could influence them. Not the other way around.”

The impact of the Senate resolution and what it means for the US policy will to a large extent depend on the politics of the differences between the Congress and President Donald J. Trump who has so far sought to shield the Saudi crown prince.

To further do so, Mr. Trump, with or without the resolution, would likely have to pressure Saudi Arabia to give him something tangible to work with such as an immediate release of imprisoned activists followed by a resolution of the Qatar crisis as well as some indication that the Yemen peace negotiations are progressing.

Whichever way, the fallout of the Khashoggi killing, culminating in unprecedented Congressional anger against Prince Mohammed and the kingdom, is likely to have significant consequences not only for the Saudi crown prince but potentially also for the strategy of his UAE counterpart.

That in turn could create light at the end of the Middle East’s tunnel of almost a decade of volatility and violent and bloody conflict that has been driven by Saudi and UAE assertiveness in countering dissent at home and abroad in the wake of the 2011 popular Arab revolts as well as Iran that has played its part in countries like Syria and Yemen in fuelling destruction and bloodshed.

More warnings of an Australian property market crash

Oscar Grenfell 

Prominent commentators and financial institutions have continued to warn that a slump in property prices, especially in Sydney and Melbourne, could mark the beginning of a sharp reversal throughout Australia’s highly inflated housing market, posing the risk of a deep financial crisis.

These fears have been compounded by indications that economic growth is already slowing. Australian Bureau of Statistics data released on Wednesday showed that the gross domestic product (GDP) grew by just 0.3 percent in seasonally adjusted terms during the three months to September.

This rate, the lowest in two years, was substantially below forecasts of 0.6 percent. Sharp falls were registered in construction, and household spending was lower than anticipated, amid stagnant or declining wages. The decline would have been greater without government investment, especially in infrastructure projects geared to big business, which added 0.2 percent to real GDP.

Analysts have stated that declining house prices will hit growth further next year. Paul Dales, chief Australia and New Zealand economist at Capital Economics, told Business Insider that the September data, “sets the tone for 2019,” adding that “the full effects of falling house prices and tighter credit conditions have yet to be felt.”

Figures compiled by CoreLogic, which analyses property data, found that during November, median house and apartment prices in Sydney recorded their biggest monthly slump in 14 years—down 1.3 percent. Median Melbourne prices fell by 0.9 percent.

The national monthly decline was 0.7 percent, spearheaded by the country’s two largest cities, which account for around 55 percent of total housing value. Sharp falls were registered in Perth, while prices were either stagnant, or registered modest increases in other state capital cities.

The latest falls take the overall decline in Sydney’s property prices, since the market began to fall in July 2017, to 9.7 percent. Prices in Melbourne have dropped by 5.8 percent since November last year.

Tim Lawless, CoreLogic’s head of research, warned the fall in Sydney prices could reach 15 percent. He told the Australian Broadcasting Corporation (ABC) “the rate of decline is starting to gather a little bit of momentum now.” Originally “fuelled by tighter credit conditions for investors,” it was spreading to owner-occupiers.

Other analysts have predicted greater falls. Martin North, the head of Digital Finance Analytics, told the Daily Mail on Wednesday that his “least worst scenario, assuming there’s no international crisis, is somewhere between 20 and 25 percent peak to trough on average.”

Referring to rising global economic and geopolitical turmoil, however, North said: “If we get shenanigans like the stock market in the US all over the place, we’ve got issues in Europe with Brexit, then we could be looking at 40 percent.” North predicted that the market could then remain in the doldrums for up to a decade.

Commentators have noted that the market downturn is taking place in economic conditions that are worse than during previous property falls, including the recession of 1989 to 1991.

Household debt to income now stands at a record 189 percent, more than doubling over the past 30 years, placing working class families under severe financial strain.

Following the collapse of the mining and resources boom, and a continuing decline in investment in manufacturing and industry, Australian capitalism relies more on property than ever before.

Earlier this year, Bloomberg argued that mortgage debt held by Australian banks is equivalent to roughly 80 percent of GDP. Property debt makes up more than 60 percent of the major banks’ assets. Their exposure means that an increase in mortgage defaults could lead to a new financial crisis.

Global credit ratings agency Moody’s this week warned that the Commonwealth Bank and Westpac were particularly exposed to any further deterioration of the property market.

Both banks have heavily promoted interest-only loans, whereby borrowers are not required to make payments on the principal for a fixed period, often seven years. Such loans account for a third of all the Commonwealth Bank’s outstanding loans. Westpac’s figure is 35 percent. Many of the loans are expected to mature in 2019–2020, so the borrowers will have to start making much larger repayments.

Moody’s predicted that mortgage defaults and delinquencies would rise next year, as a result of “low-wage growth not keeping pace with rising household expenses, such as fuel; hikes in mortgage interest rates by banks; and the conversion of interest-only mortgages to principal and interest loans… Australia’s very high level of household leverage adds to these risks by making households vulnerable to an economic or housing market shock.”

The decline in house prices over the past year has been caused, in part, by the introduction of tougher regulations, especially on interest-only loans. Approvals of interest-only loans have fallen by 57 percent over the past 12 months.

Having promoted a frenzy of financial speculation through “negative gearing” tax subsidies for investors, capital gains tax concessions and other measures, any effort by the government to rein in the market could lead to a precipitous crash.

The Reserve Bank continued to hold official interest rates at the record low of 1.5 percent this week. It has stated, however, that rates will likely rise over the next period, amid rate hikes around the world.

This will exacerbate a deepening social crisis. Already, property price declines mean that growing numbers of households are servicing mortgages greater than the value of their homes.

An estimated one million households are suffering mortgage stress—their household income is insufficient to cover ongoing expenses. Modelling has indicated that some 60,000 of these households are at risk of defaulting on their mortgage over the next 12 months.

Analysis by the ABC in September found that a 0.5 percent interest rate rise would increase the number of households suffering mortgage stress from around one in four to one in three. A 2 percent increase would put half of all mortgaged households into stress.

The housing crisis is a graphic expression of the growing social divide. While the banks and property developers have made unprecedented fortunes since the 2008 global financial crisis, encouraged by Labor, the Liberal-Nationals and the entire political establishment, that enrichment has imperiled millions of working people, who would be the hardest hit in the event of a crash.

National Health Service workers among increasing users of food banks in Britain

Ben Trent

Details have emerged on the use of food vouchers by National Health Service (NHS) staff in the Royal Victoria Hospital (RVH) and the Ulster Hospital, both in Belfast, Northern Ireland.

The Unison trade union distributed vouchers for use at food banks to staff who are struggling to pay bills and buy food. In the last weeks of October, 12 workers were referred to local food banks by the Unison branch.

The revelations came a month after many health sector workers in Belfast were not paid in full, due to an issue at the centralised Business Services Organisation—a subsidiary company that manages numerous aspects of health sector work in Northern Ireland.

Conor McCarthy, Unison trade union branch secretary at the RVH, said, “People like cleaners and porters are now just paying bills and no more.” In describing the use of food banks, McCarthy added, “This [the use of food banks] is new and I suspect there’ll be a stigma that people will have to overcome.”

On November 6, the Guardian published an interview with Geraldine Curran, a hospital cleaner who works at the Royal Belfast Hospital and has been employed by the NHS for 19 years. Curran is paid the paltry national minimum wage of £7.83—under the still miserly £9-per-hour real “living wage.” The real living wage is set by the Living Wage Foundation to benchmark the supposed minimum required to cover people’s basic needs.

Curran acknowledged that she has had to use her local food bank at least six times over the last year, but due to the stigma she had not even revealed this to her two school-aged children. Forty-eight percent of children in West Belfast live below the poverty line.

Expressing the financial constraints that afflict an ever-increasing number of the working poor across the country and internationally, she said, “I take home £220 a week. But my mortgage is £700 a month. Then there’s the food, electric, gas and rates.” Spelling out the Dickensian conditions facing growing sections of the working class, she added, “At the moment I’m having to choose between food and heating. Sometimes we put blankets on or we go to bed early so we’re under the quilt.”

The situation in Northern Ireland is particularly acute, as even a paltry pay deal rammed through this year in the public sector has yet to be implemented due to the lack of a government in Stormont—which collapsed in January 2017.

This is hardly the first time that the use of food banks by NHS workers has come up. In June, while discussing the single “Won’t Let Go”—a protest song released by the National Health Singers for the 70th anniversary celebrations—Dr. Georgina Wood, one of the founders of the singers, said of the state of the NHS, “We see the reality of this every day. The service is on its knees, doctors are committing suicide, nurses are using food banks and patients are having an awful time.”

This backs up the findings released by United Nations Special Rapporteur Philip Alston on extreme poverty following his recent visit to the UK. He noted, “Low wages, insecure jobs, and zero-hour contracts mean that even at record unemployment there are still 14 million people in poverty. … Jobs aren’t even a guarantee against people needing food banks. The Trussell Trust told me that one in six people referred to their food banks is in work. One pastor said, ‘The majority of people using our food bank are in work. … Nurses and teachers are accessing food banks.’ “

In October 2016, a study by Unison highlighted the precarious nature of work in the health service. From a survey of 21,000 health workers, 49 percent said that they had to seek financial help from friends and family in the previous year. Eleven percent of respondents had pawned their own possessions and 10 percent had used a pay-day loan. Almost one in five said they had taken on additional work—outside of their existing jobs—to supplement their finances. Most notably, the survey found that 1 percent of respondents had resorted to using food banks.

The use of food banks has rapidly increased across the UK in the last half-decade. According to figures published by the Trussell Trust charity that runs many food banks, in 2013 the number of three-day emergency food supplies distributed stood at 355,982. The figure has more than doubled over the last five years to reach 658,048 as of September 2018, in the last year alone rising 13 percent. While benefit delays were attributable to 21.6 percent of food bank users and a further 17.1 percent were due to benefit changes, the largest share of users was those on low incomes, at 30.71 percent.

Also interviewed by the Guardian was Darren Hanley, who works in the sterilising department for surgical instruments. Hanley earns £7.83 an hour, working for an outsourcing company (Mitie). He said, “You literally live from month to month. If you can make it on the next pay day you breathe a sigh of relief and carry on.” Hanley said he previously had to borrow money from his 80-year-old mother when he’s been on sick leave, to pay his bills and afford food. Others interviewed described how they had been holding off from using the heating—despite the cold—as they know it’s not something they can afford.

The conditions for workers across the UK stand in stark contrast with the proclamations of the Conservative government that “austerity is over.” Recent studies show that 28 percent of public sector workers are paid less than the previous real living wage of £8.75. Nearly half (46 percent) of those who work in social care, both in private and public sectors, earn less than the living wage.

Many of these have experienced using a food bank. According to the Trussell Trust, one in six people in employment has used one of its food banks. Over the last year, the Trust gave out a record 1,332,952 three-day emergency food supplies to people in crisis.

The trade unions, despite their occasional hullabaloo over such conditions, have worked hand-in-glove with the employers to ensure that the only “increases” health service workers see are in the number of rotten sell-out deals used to shut down strike action and a fightback. In March, 13 of the 14 unions in the health sector promoted a rotten pay deal—marketed as the “best deal in eight years”—in an attempt to enforce a sellout. When workers found out, in their pay packets, that the deal was in reality a pay cut, they passed a vote of no confidence in the Royal College of Nurses (RCN) leadership, who were forced to stand down in September.

The German Christian democrats elect a new leader

Peter Schwarz

On Friday, a congress of the Christian Democratic Union (CDU) in Hamburg will elect Angela Merkel’s successor as party leader. Merkel, who has led the CDU for 18 years, announced her resignation as party leader in October after massive losses in Hesse’s state elections. She wants to remain Chancellor, however, until the end of the regular legislative period in the autumn of 2021.

Three candidates are up for election in Hamburg: CDU Secretary General Annegret Kramp-Karrenbauer (56), Health Minister Jens Spahn (38) and Investment Manager Friedrich Merz (63), who retired from active politics 16 years ago. Over the past few days, the three candidates have presented themselves to the public at eight CDU regional conferences and in countless interviews and media appearances.

The media celebrate this as a rebirth of democracy in a party which held its last open election of its chairman in 1971, when Rainer Barzel prevailed against Helmut Kohl, who later became chancellor. The open culture of discussion will revive the party and increase its attractiveness, many comments claim.

In fact, nothing of the sort is the case. What distinguishes all three candidates is their detachment from the problems and concerns of the vast majority of the population. They compete, over who can shift Merkel’s policy furthest to the right—be it on refugees (Kramp-Karrenbauer), the harassment of welfare recipients (Spahn) or support for the financial markets and the super-rich (Merz). The public reaction remains understandably negative.

“The big hype about Angela Merkel’s successor does not benefit the CDU”, commented Forsa boss Manfred Güllner on his institute’s latest poll. “The CDU does not win any major sympathies among the electorate, there can be no question of a mood of optimism.”

The CDU remains at 27 percent in the Forsa poll, its coalition partner SPD at 14 percent. If elections were held now, the Grand Coalition would no longer have a majority and would only reach 41 percent. Only a coalition of the CDU and the Greens, which are in second place with 22 percent, could hope for a narrow majority of deputies. Otherwise only alliances of three or more parties would yield a government majority.

The mantra used by the candidates and numerous media to justify the CDU’s further shift to the right is that Merkel has placed the party too much in the “centre of society” and thus created space for the growth of the far-right AfD, which must now be reconquered.

In the editorial published in its latest edition, Der Spiegel calls for an “honest debate about the mistakes of the Merkel era”; otherwise the CDU would be threatened with ruin. “It was a mistake to move the CDU so far to the left that the AfD could easily take the place of the CDU,” it declares. “And it was wrong to allow months of loss of control at the German borders. The CDU must admit this to itself, even if it is tantamount to matricide.”

At the regional conferences, Merz promised that he would not accept “the AfD sitting in 16 state parliaments and with 12.6 percent in the Bundestag”. He was confident that he could change that—by adopting the policy of the AfD.

Kramp-Karrenbauer promised a tough line in migration policy, which she would make her top priority. “We need an intelligent border regime: Transit centres, dragnet controls, bilateral agreements for rapid repatriation,” she told the Merkur newspaper.

Spahn, who has long advocated an anti-refugee line, accused Hartz IV recipients of having their livelihood financed by ordinary workers and their taxes, and demanded tougher sanctions if they miss deadlines or turn down poorly paid work.

The claim that Merkel has moved the CDU to the left turns reality upside down. An objective assessment of her 13-year chancellorship proves the opposite.

Under Merkel’s responsibility, Germany has developed into the most unequal country in Europe, where one in six lives in poverty and around 40 percent of all employees work in precarious conditions. In Greece, Portugal and other European countries, Merkel’s name is synonymous with brutal austerity programs that have ruined the lives of millions. During her chancellorship, after five decades of military abstinence, Germany again developed into an interventionist power, with troops in Afghanistan, Iraq, Mali and numerous other countries.

The short-term opening of the borders to refugees in the summer of 2015 was not motivated by humanitarian reasons, but by fears of an uncontrollable crisis in the Balkans. It has long since been replaced by the ruthless closing off of European borders, mass deportations and the construction of camps in which refugees are imprisoned.

Merkel’s government and the state have ideologically and politically supported the rise of the AfD. This was obvious when the head of the secret service, Hans-Georg Maaßen, publicly supported the far-right party.

What distinguishes Merkel’s era, which is approaching its end, from her replacement as CDU leader, is not a left-wing policy, but her close cooperation with the SPD and the trade unions in implementing an extremely right-wing policy. There is no social regression and no dismissal that has not been worked out and supported by the Social Democrats and the unions.

When Merkel took over the chairmanship of the CDU in April of 2000, the CDU was politically on the floor, and the German economy was in crisis. Helmut Kohl had lost the Bundestag elections in the autumn of 1998 after 16 years as Chancellor, and the CDU was involved in corruption scandals. Merkel used this to outmanoeuvre Helmut Kohl and his team, including Wolfgang Schäuble and Friedrich Merz. At that time, she promoted a neo-liberal economic programme that provided for the abolition of solidarity-based health insurance and progressive income taxation.

But the SPD and the Greens took the burden off her shoulders. With the Agenda 2010 and the Hartz laws, they created a mechanism that effectively destroyed the social achievements of the post-war period. When Merkel won the Bundestag election in 2005 and formed her first coalition with the SPD, she was able to rely on these measures. With the exception of the years 2009 to 2013, in which she formed a coalition with the Free Democrats, she has always ruled in a grand coalition with the SPD.

Characteristic of her close cooperation with the SPD and the trade unions is an evening in March 2010: The then head of the IG Metall union, Berthold Huber, celebrated his 60th birthday in the Chancellor’s Office. Invited as guests were the president of the employers’ association Martin Kannegiesser, the bosses of Siemens and Volkswagen and the leaders of various works councils.

Today the unions are hated and the SPD is collapsing. The mood in the working class is boiling. In France, with the “Yellow Vests”, a powerful social movement has developed outside of the control of the trade unions and the traditional parties.

This is the real reason for the CDU’s shift to the right, and not the alleged competition with the AfD. It is preparing to violently suppress social protests and political resistance against social attacks, militarism and state repression. It will not only closely work with the AfD, but also with the SPD and the unions.

Friedrich Merz’s return to politics symbolizes this shift to the right. More than nearly any other German politician, he embodies the naked interests of capital. The former parliamentary party leader of the CDU has been active as a business lobbyist for 16 years and is currently chairman of the supervisory board of the German branch of the world’s largest investment company Blackrock. He was brought back into politics by Wolfgang Schäuble, the architect of the austerity diktat for Greece. Schäuble, who still has a lot of influence in the CDU, has openly called for his election.

Merz obviously has not only the CDU presidency in mind, but also the Chancellor’s Office. It remains to be seen whether he will cooperate with Merkel or whether he will seek a change of government in the near future. The FDP has already signaled its willingness to cooperate with Merz, should the Grand Coalition come to an early end.

But even Merkel’s temporary stay in office or the election of Kramp-Karrenbauer, who is given the best chances for party chairmanship alongside Merz, will not change this course of development. Merkel has proven her adaptability time and again throughout her long career. Kramp-Karrenbauer is an arch-conservative Catholic. She could possibly have an easier path to forming a coalition with the Greens than Merz. The Greens have moved closer to the CDU in recent years and have formed a joint government with it in two of its former strongholds, Baden-Württemberg and Hesse.

Workers and youth must prepare for violent attacks, which they can only counter by organizing independently and fighting for a socialist program.

Japanese police detain Zengakuren activists for nearly three weeks

Ben McGrath

Japanese authorities last month arrested two activists affiliated with the student organization Zengakuren (All-Japan League of Student Self-Government) for distributing leaflets in July at Tōyō University, a private campus. The pair was held for nearly three weeks before being released on November 22 without charges being filed.

Police detained Yōhei Sakube, 27, and Yūichi Utsumi, 38, on November 4 while the two headed to an annual rally at Hibiya Park in Tokyo co-sponsored by various groups, including the Doro-Chiba labor union. Both men joined Zengakuren as university students and have had a history of arrests over the years for similar actions.

The leaflets Sakube and Utsumi handed out encouraged students to attend a then-upcoming rally. That the police waited until the day of the Hibiya Park demonstration points to two things. First, the police used the arrests to intimidate other attendants of the rally and to make clear that their organizations are under state surveillance. Second, this was part of a crackdown on left-wing activists, demonstrating the fear in the ruling class that their messages will gain a hearing among students and other disaffected layers of society.

There has been a stepped-up campaign in recent years by the government to suppress oppositional speech. The Japanese ruling elite is well aware of widespread hostility within the working class and youth to remilitarization and attacks on social conditions. It does not want a repeat of the summer of 2015, which saw mass protests around the country to denounce military legislation allowing Japan to take part in wars overseas alongside an ally.

While the Democrats and the Japanese Communist Party politically contained these demonstrations, a renewal of protests could spiral out of the hands of the official “left” parties. The police also conduct raids on university campuses and dormitories to arrest members of groups like Zengakuren. Officials at various universities work with the authorities, expelling activists from Zengakuren and related organizations from their campuses.

This government repression represents a wider danger. During the past five years, the central and local governments have passed new laws, such as the 2013 state secrecy law and the 2017 conspiracy law, that make almost any dissenting political activity illegal, including holding peaceful demonstrations or going on strike.

Prime Minister Shinzo Abe’s government is already engaged in a campaign against free speech, particularly in the media. Last year, UN special rapporteur on freedom of expression David Kaye accused Tokyo of attacking the media over issues like the 2011 Fukushima nuclear disaster and Japan’s actions during World War II, and silencing public debate on these issues.

Kaye’s report stated: “The Special Rapporteur has identified significant worrying signals. The direct and indirect pressure of government officials over media, the limited space for debating some historical events and the increased restrictions on information access based on national security grounds require attention, lest they undermine Japan’s democratic foundations.”

In 2016, three news anchors at different stations, known for their criticism of Abe’s government, were removed from their positions almost simultaneously. Koichi Nakano, a professor of politics at Sofia University, said at the time: “There is plenty of anecdotal evidence that shows that Abe, and [Chief Cabinet Secretary Yoshihide] Suga in particular, have been very active in applying pressure and wining and dining media bosses.”

According to Reporters without Borders (RSF, Reporters Sans Frontières), Japan currently ranks at 67th in press freedom, having fallen from 11th in 2010. In August, the organization stated: “Japanese journalists have complained of a general climate of mistrust and hostility towards them, especially when they are dealing with the government.”

RSF demanded that Tokyo investigate a suspected attack on independent journalist Shunsuke Yamaoka after he was seriously injured in a fall at a Tokyo subway station. Yamaoka, who investigates connections between Abe and the Yakuza, or Japanese mafia, had received threats and believed this was no accident. Police refused to look into the matter, claiming there was no surveillance footage in the area where Yamaoka fell.

In schools, references to Japanese war crimes, including the military’s use of “comfort women” (i.e. sex slaves) and the Rape of Nanjing are being whitewashed or removed altogether. This is bound up with Tokyo’s push to dragoon a new generation of youth into fighting wars of imperialist aggression once more.

The Tokyo Metropolitan Assembly too has approved new laws targeting free speech. In October, Tokyo’s governing body passed an anti-discriminatory speech law to go into effect in April. In March, the Tokyo assembly amended the city’s Anti-Nuisance Ordinance to include the vague term “harassment,” which could be applied to anti-government speech or protests.

The media has promoted this supposed anti-hate speech law as a necessary measure to combat discrimination toward ethnic minorities and people in the LGBT community, both in public places and online. However, the law lacks specific details, so that, for example, an event at a public park could be shut down if alleged hate speech were used.

This raises several issues. What constitutes hate speech? Could denunciations of Abe or other government officials fall into this category? The new law’s coverage of speech online also indicates greater surveillance of the internet.

To silence anti-war demonstrations or similar protests, right-wing groups could create provocations using “hate speech,” thus inviting the police to shut down entire events.

Abe has cultivated and promoted far-right nationalism in Japan, particularly through his association with Nippon Kaigi, which supports a renewal of Japanese militarism and historical revisionism.

There is a long history internationally of laws nominally directed against right-wing and reactionary organizations and individuals being used against the working class. Significantly, the Japanese Communist Party, which is part of the political establishment, backed the “hate speech” law, along with the right-wing nationalist Tomin First no Kai, the leading party in Tokyo’s assembly.

Sri Lankan president uses executive powers to run government

W.A. Sunil 

Sri Lankan President Maithripala Sirisena has responded to Monday’s appeal court ruling by concentrating state power in his own hands and working with senior state bureaucrats to directly manage the government.

The interim court order was in response to a petition disputing the president’s October 26 sacking of Ranil Wickremesinghe as prime minister. Sirisena replaced him with former president Mahinda Rajapakse and then prorogued the parliament until November 14. When Rajapakse was unable to gain majority support in the parliament, Sirisena dissolved it.

The appeal was submitted by 122 MPs, including those from the United National Front (UNF), which is led by the United National Party (UNP), and two opposition parties, the Tamil National Alliance (TNL) and the Janatha Vimukthi Peramuna (JVP). Rajapakse immediately rejected the court order and appealed to the Supreme Court to reverse the decision.

On Tuesday, however, the Supreme Court resumed work on its legal response to 13 petitions filed by the UNF, the TNA, the JVP and other parties, which argue that Sirisena’s dissolution of parliament was illegal. Sri Lanka’s highest court, which is expected to deliver a judgment tomorrow, is also hearing five petitions supporting the president’s proclamation. The competing Sirisena-Rajapakse and Wickremesinghe factions hope that tomorrow’s Supreme Court ruling will back their respective bids for state power.

In a thinly-veiled rebuke of Monday’s interim court order, Sirisena’s media unit issued a statement advising all ministry secretaries to continue their duties. It declared: “The President has already given the necessary orders to all state services, Tri-forces and the police to fulfill their duties and responsibilities with commitment towards the general public of the country and for the national security.”

Sirisena’s autocratic actions are another dangerous sign that dictatorial forms of rule are being prepared.

In one of his numerous political manoeuvres to win parliamentary support for Rajapakse, Sirisena last week cynically promised the TNA that he would move to secure the release of Tamil political prisoners detained for years under the country’s draconian Prevention of Terrorism Act. Sirisena, however, dumped this “promise” on Monday, declaring that he could not take any decision on political prisoners “until the current [political] impasse was resolved.”

Sirisena and Wickremesinghe previously pledged to release Tamil political prisoners during their campaign in 2014–15 to remove Rajapakse as president. They quickly dropped these promises in response to agitation by the military and Sinhala chauvinist formations.

Addressing a Sri Lanka Freedom Party (SLFP) convention on Tuesday, Sirisena demagogically declared that he would end the ongoing political instability within a week. He did not explain how.

In a crude attempt to wash his hands of any responsibility for the imposition of International Monetary Fund (IMF) austerity measures and the government’s anti-democratic actions, Sirisena declared Wickremesinghe had “destroyed the country and the economy” and that he would not reappoint him as prime minister.

Wickremesinghe continues to denounce Sirisena’s claims and has accused him of violating the constitution and acting like “Hitler and other dictators.” But Wickremesinghe and the UNP, like Sirisena and the SLFP, are notorious for their violation of democratic rights and repressive attacks on working people, including instigating the almost three-decade communal war against the Tamil minority.

The US and other international powers have responded to the ongoing political deadlock by increasing their pressure on the ruling elite. The US Ambassador to Sri Lanka Alaina Teplitz told the Colombo-based Dailyft.lk yesterday that “Sri Lanka and its leaders [have] to move promptly to resolve the political crisis in a transparent and democratic way.” She warned that the ongoing factional war was impacting “on some of our bilateral opportunities.”

Teplitz insisted that the US, which is hostile to Rajapakse’s return to power, had no “favourites” in the Colombo infighting. Her claim is bogus. Sirisena came to power as a result of a US-orchestrated operation that ousted Rajapakse because Washington considered him too close to China.

Rajapakse’s political emissaries, however, have already started discussions with Western diplomats arguing that he has changed.

Yesterday, the Daily Mirror reported that US, EU and other diplomats met with Wickremesinghe at Temple Trees on Wednesday evening. Citing an unnamed UNP source, the newspaper said the diplomats predicted that Sirisena “will have to do the right thing at some point of time and that they were confident of such an eventuality.”

This week the European Chamber of Commerce of Sri Lanka, the American Chamber of Commerce and the Delegation of German Industry and Commerce in Sri Lanka warned “that the current situation will result in many adverse economic and social consequences to the country, if it remains unresolved.”

The three leading global agencies—Fitch, S&P and Moody’s—have cut their ratings on Sri Lanka. A Fitch and S&P statement said: “Investor confidence has been undermined as evident from large outflows from the local bond market and a depreciating exchange rate.”

The ongoing political deadlock, the statement added, “exacerbates the country’s external financing risks, already challenged by the tightening of global monetary conditions amid a heavy external debt repayment schedule between 2019 and 2022.”

According to Fitch, Sri Lanka, which has only $7.4 billion in reserves, has debt repayment commitments—principals and interest—of $20.9 billion due between 2019 and 2022. The rupee has devalued by 17 percent in the year up to the end of last month.

Notwithstanding their current differences, whichever faction of the ruling elite gains state power in Colombo, it will not hesitate to use police state methods to impose the austerity program being demanded by Sri Lankan big business, the IMF and international finance capital.

Sri Lanka Central Bank Governor Indrajit Coomaraswamy commented at a recent Colombo meeting: “Right across the political spectrum, there is a commitment to the macroeconomic framework, which we have to stick to, given our debt and deficit dynamics as there’s little room to manoeuvre.”

The turn by all sections of Sri Lanka’s political elite towards autocratic forms of rule is a grave warning to the working class and the rural masses. The “democratic” posturing of the competing bourgeois factions and all their political allies, is a fraud. Workers, youth and the rural masses cannot stand on the political sidelines but must intervene with their independent program that fights for a workers’ and peasants’ government based on an international and socialist perspective.

Huawei executive Meng’s arrest sparks market turbulence

Nick Beams

The arrest of Huawei chief financial officer Meng Wanzhou in Canada at the request of the US Justice Department, which is seeking her extradition to the US to face charges that the high-tech Chinese communications firm traded with Iran in breach of US-imposed sanctions, sent share markets in Europe and Asia tumbling and produced major gyrations on Wall Street yesterday.

The wild day on Wall Street began when the futures market opened overnight and the CME Group that runs it halted trading for a brief period “due to volatility.”

When the trading began, the market plunged in the first two hours before a recovery later in the day which left the Dow marginally down by 80 points.

Earlier markets in Asia had fallen by between 2.5 percent and 3 percent on the news of the Meng arrest which threatens to render null and void any trade war ceasefire between the US and China. This was followed by similar falls in European markets which were down by around 3 percent. The European Stoxx 600 index was down by 3.1 percent—its worst one-day fall since Britain voted to leave the European Union in 2016. The UK’s FTSE index fell 3.2 percent, its worst day in two years.

The market turbulence then spread to Wall Street and late morning trade saw the Dow off by 784 points. Combined with the 800-point fall on Tuesday—the market was closed Wednesday due to the funeral of former President George H.W. Bush—this meant the market had experienced a 1,500-point slide in a day and a half.

And then, in an expression of the increased volatility of the past two months, the market began to rise following a report by the Wall Street Journal that the US Federal Reserve was considering whether to signal to the markets that it was prepared to adopt a wait-and-see approach on interest rate increases next year.

The report said Fed officials did not know what their move on rates would be after an expected 0.25 percentage point increase later this month. The expectation had been that the central bank would continue rate rises into 2019. But there have been growing concerns that this could help push the economy into recession. Last month Fed chairman Jerome Powell indicated that its base was close to neutral, meaning that future rises could be slowed or even halted.

The market also received a boost from a speech delivered yesterday by Raphael Bostic, the president of the Atlanta Fed, in which he said the Fed was “within shouting distance” of neutral, that is a rate that neither stimulates nor slows the economy.

The news of Meng’s arrest and the extradition sought by the US came on top of considerable confusion over what was actually agreed to at the discussions between Trump and Xi last Saturday night, with different versions being put out by the two sides.

The move against Huawei does not directly relate to trade because it is based on a claim that the company breached US sanctions against Iran but if it stands it will effectively make any trade deal impossible.

As the equities strategist at the investment bank Jeffries, Laban Yu, told the Financial Times: “While China may stomach fines, investigations and market restrictions against its national champion, we do not believe it will tolerate the arrest of a CFO [chief financial officer],” and that if the US did not change course “trade negotiations are in serious jeopardy.”

The move on Huawei underscores the fact that the conflict is not over trade as such but is rooted in the drive by the US to maintain its dominance in high-tech development which it regards as a threat to its position.

The deepening US-China economic war was by no means the only factor roiling US and global markets. Clear indications that the world economy is slowing down, after a brief period of “synchronised” growth in 2017, is a major ingredient in the growing market turmoil.

The slowdown has been reflected in the sharp fall in oil prices over the past two months as supply has exceeded demand. The benchmark price for crude has fallen from more than $86 per barrel at the beginning of October to $58 yesterday amid forecasts that it would fall still further.

US shale producers featured prominently in yesterday’s Wall Street slide in response to the failure of OPEC, the oil cartel, to reach agreement on production cuts at its meeting in Vienna. Further talks, including with Russia, which is not a member of OPEC, will be held today and an agreement may be reached.

But the downturn in prices has already impacted heavily on US producers and their shares which fell between 6 percent and 9 percent yesterday. The decline is not only cutting profits but tightening credit in the junk bond market used to finance shale projects. There is now a 5.5 percentage point gap in the interest paid in the junk market compared to US Treasuries—the highest level in a year and a half.

The market is also reacting to fears of a recession as reflected the flattening of the yield curve—the convergence of interest rates on short-term government bonds and those on longer-dated securities. Earlier this week, the gap between the yield on the two-year and ten-year Treasuries narrowed to its lowest point in 11 years and yesterday the yield on three-year Treasuries rose above the five-year bond yield, raising the prospect of an inverted yield curve, widely regarded as a sign of recession.

The demonstrations in France and the global class struggle

Alex Lantier

The French government of banker-turned-President Emmanuel Macron is preparing for a major confrontation with “yellow vest” demonstrations and other protests this weekend, as the political crisis gripping the French state intensifies.

The interior ministry is planning to deploy 89,000 riot and military police throughout the country on Saturday, including 8,000 in Paris, backed by armored cars in the streets of the capital for the first time since 2005. This follows the positioning of snipers on Paris rooftops during last Saturday’s protest. Police are trying to intimidate protesters with threats that they expect fatalities and more arrests than at all the previous protests combined.

In a desperate attempt to play for time, the Macron government postponed and then announced the cancellation of the fuel tax that provoked the initial protests. However, anger continues to grow, bringing in broader sections of the population motivated by a diverse set of class issues. Demands for wage and pension increases, taxing the rich, and for a redistribution of wealth are spreading.

On Thursday, thousands of high school and university students participated in protests against education reforms and tuition increases. Police responded with repression and over 700 arrests. One video broadly shared online showed police rounding up students, whom they forced to kneel, some against a wall, in rows of dozens. This is just a preview of the state crackdown that will be meted out this weekend.

As the French government prepares a massive police-state crackdown, it is absurdly denouncing protesters as a danger to democracy. The Élysée presidential palace yesterday called on “political parties and trade unions, the business community to appeal for calm” and declared that it is “no longer time for political opposition, but for unity around our Republic.” Prime Minister Edouard Philippe said that protests threaten “the safety of the French people and our institutions.”

After Macron recently hailed Philippe Pétain—France’s Nazi-collaborationist dictator during World War II—he is in no position to lecture anyone about democracy. The danger to democracy comes not from the struggles of workers and youth against the dictates of the banks, but from the capitalist ruling elite, represented by figures like Macron, cowering behind his phalanxes of riot police and tanks.

With the development of the protests, the basic class issues are coming to the fore. The New York Times, in a worried article published Thursday, noted that the protests in France are “not tethered to a political party, let alone a right-wing one.” Instead, “The uprising is mostly organic, spontaneous and self-determined. It is mostly about economic class. It is about the inability to pay the bills.”

It is the fact that the protests emerged outside of the existing institutions, including the trade unions, that has lent them an explosive character. Responding to the widespread support for the protests among workers, unions have called limited strike actions for next week. However, the aim of the unions, which have the closest connections to the state, is to contain and corral the movement, and thereby bring it under control.

Macron has no intention of acceding to the demand for social equality and a redistribution of wealth that are driving the protests. The actions of the government are dictated by the class interests that it represents and by the demands of the global markets and financial institutions.

Developments within France are a national expression of a global process. In every country, the ruling class is seeking to enforce a new round of attacks on wages and working conditions. However, the growth of the class struggle—propelled by grotesque levels of social inequality—is also developing as a global process.

It is to the international working class that French workers and youth opposed to Macron must turn for support!

The past year has been characterized by a significant intensification of class conflict around the world. The year began with protests by Iranian workers against social cuts, followed by strikes in Europe for wage increases by Turkish and German metalworkers. In the United States, teachers struck in defiance of the union bureaucracy, followed by teachers in Britain, Tunisia and France.

Strikes in France against Macron’s privatization of the National Railways broke out, together with student protests against Macron’s regressive education reforms. Workers in countries across Europe struck against Ryanair, and workers internationally struck against appalling working conditions at Amazon, run by the world’s richest man, Jeff Bezos.

The year is coming to an end amidst growing working-class anger internationally. After an explosive protest by tea plantation workers in Sri Lanka last month, organized on social media to demand a 100 percent wage increase, the tea plantation workers are mounting strike action despite union opposition. Anger is building among US auto workers, as the unions and corporate management jointly plot mass layoffs and plant closures as part of a global restructuring of the auto industry. And, largely unreported in the media, strikes involving hundreds of thousands of workers are shaking South Korea, Chile and other countries.

In its 1988 world perspectives resolution, the International Committee of the Fourth International pointed to the implications of the globalization of capitalist production for the development of the class struggle: “It has long been an elementary proposition of Marxism that the class struggle is national only as to its form, but that it is, in essence, an international struggle. However, given the new features of capitalist development, even the form of the class struggle must assume an international character. Even the most elemental struggles of the working class pose the necessity of coordinating its actions on an international scale.”

Developments are now confirming this prognosis. For the working class, this raises critical strategic questions. Anger and opposition are not sufficient. The working class needs organization and a political perspective .

To coordinate their struggles, workers need their own organizations, completely independent of the pro-capitalist trade unions. The Parti de l’égalité socialiste (PES) calls on French workers and youth to immediately form committees of action in every workplace, neighborhood and school. These committees must unify the struggles now unfolding, prevent them from being dissipated and sold out, and organize actions to protect workers from repression.

In France, these committees would allow the “yellow vests,” largely drawn from rural and provincial city workers, to unify with the broadest sections of the working class, including immigrant workers in the suburbs of France’s largest cities, and to fight racist attempts to divide workers along ethnic lines.

The development of independent organizations of working-class struggle is inextricably connected to the building of a revolutionary leadership. In France and every country, the basic task facing the working class is the same—the overthrow of the capitalist system through the conquest of state power, the expropriation of the corporate and financial elite, a massive redistribution of wealth and the socialist reorganization of economic life.

The most critical issue of all is the construction of a Marxist leadership in the French and international working class. Only this way will the mass movement be able to acquire a consciously socialist character, opposing capitalism and war, and posing the question of the transfer of state power to the working class.

The Contours of Xi’s Chinese Nationalism

Palden Sonam

After China’s President Xi Jinping announced the ‘China Dream of Great National Rejuvenation’, the Communist Party of China (CPC) identified three important stages of development under three different leaderships: the Chinese people “stood up” under Mao Zedong; “became rich” under Deng Xiaoping; and are “becoming powerful” under Xi. Since Mao’s and Deng’s eras are long gone, naturally, Xi is the focus of this propaganda.

With his rise as the CPC’s core leader, Xi has embraced an authoritarian form of nationalism based on his strongman leadership in the quest to transform China into a ‘Great Power’, and has positioned nationalism as a route to realising the ‘China Dream’. The objectives of this Dream are expected to be achieved by 2049, coinciding with the 100th founding anniversary of the People’s Republic. To that end, the narrative of Chinese nationalism is anchored in two pillars: cultivating public support for the CPC leadership to achieve the China Dream; and delivering on some of the promises made in the China Dream with the underlying objective of increasing regime legitimacy and longevity.

The ‘strong leader’ and ‘powerful nation’ narrative appeals to China’s domestic population, which has for long been indoctrinated with memories of a ‘Century of Humiliation’. This historical sense of victim-hood and imposed inferiority makes Chinese citizens susceptible to falling for a belligerent form of nationalism that promises national power and pride. It is in this context that Xi’s ‘China Dream’ must be understood, in order to comprehend the long-term objectives of such nationalism, foremost of which is securing and sustaining the CPC’s authority. Additionally, the different strategies Xi deploys to boost a Party-authored version of nationalism too must be viewed in conjunction with his ‘China Dream’.

Equating the Party and the ‘Nation’Under Xi, China has witnessed a resurgence of ideological nationalism where the party is projected not only as the guardian of Chinese nationalism but also as the guarantor of China’s future. Xi demands public confidence in the party’s path and theory and his ‘Xi Jinping Thought’. In 2013, the Party further tightened its grip on Universities and prohibited discussions on matters such as free press and civil rights, branding them as ‘Western values’. In 2014, Xi called on Chinese artists to serve the masses and to aim for ideological success.

At the core of this ideological nationalism is the Party’s centrality in the Chinese state and society; and at core of the Party is Xi himself, as the new helmsman. In August 2018, the CPC launched a campaign to promote a “patriotic striving spirit" among the country's young and middle-aged intellectuals, to rally support for the party. By fusing the party and the ‘nation’ as one, Xi is attempting to cultivate a worldview that to love the CPC is to love the ‘nation’, and to serve the Party is to serve the people. Any criticism against the CPC is therefore considered anti-national and illegal—as is visible in the increasing repression of Chinese dissidents often on charges of subverting state power. This ideological nationalism also demands more ideological conformity and appreciation of his Thought from all sections of the society.

‘Great Technological Leap Forward’Through what is being referred to as ‘techno-nationalism’, Xi is attempting to induce patriotic pride through China’s technological success as well as ambition. The underlying strategic logic is that whoever dominates the future of technologies such as artificial intelligence will also dominate other critical sectors such as security and economy. Beijing’s eagerness and thrust to win the technological race is evident in the Made in China 2025 (MIC2025) strategic plan, and is reinforced by the 2018 propaganda film, Amazing China, which extols China’s technological achievements during Xi’s first term.

However, it is the former that sparked the clash of techno-nationalists in China and the US which culminated in a trade war. The objective of the MIC2025 is to transform China from a giant to a power in technological manufacturing and innovation by 2025, and a leading power in high-technology and innovation by 2049. This ‘great technological leap forward’ has been launched with a combination of vast resources and a nationalistic rhetoric of making China a tech superpower. Consequently, the US’ persistent pressure to modify MIC2025 will likely be seen as another form of national humiliation.

External Geopolitics and Internal Regime SupportXi uses geopolitical issues to generate nationalistic attitudes as another means to garner support for the regime. Under his leadership, China has, in both posturing and actions, intensified its claims over disputed territories extending from the East China Sea to the Himalayan borders.

He vowed to never cede “an inch of Chinese territory” and complete the ‘national reunification’ involving Taiwan. Geopolitical tensions have been ratcheted up with China’s neighbours due to Beijing’s increasing activities to assert control over disputed areas, such as through the establishment of the Air Defense Identification Zone (ADIZ) over the East China Sea; the development of artificial islands in the South China Sea; the construction of a strategic road along the borders with India and Bhutan; and belligerent military drills targeting Taiwan. Simultaneously, Beijing has also accelerated its military modernisation with the objective of developing world class military prowess. More recently, Xi called on China’s Southern Theatre Command (which monitors the South China Sea and Taiwan) to get ready for war.

Looking AheadWhile the ‘Century of Humiliation’ discourse continues to be a powerful component of the CPC-tailored Chinese nationalism, Xi’s “great goal of national rejuvenation” is an important addition that may change the future narrative of Chinese nationalism from one driven by collective historical memory of humiliation to one driven by a collective aspiration to be the next superpower. Moreover, given China’s growing influence in the world, the CPC might view Xi’s triumphalism as a more effective strategy to shore-up regime-oriented nationalism.