Sri Lankan president sacks two ministers amid deepening crisis

K. Ratnayake

Sri Lankan President Gotabaya Rajapaksa delivers his policy speech in the Parliament in Colombo, Sri Lanka, Thursday, Aug. 20, 2020. (AP Photo/Eranga Jayawardena)

On March 3, Sri Lankan President Gotabhaya Rajapakse sacked Wimal Weerawansa and Udaya Gammanpila, respectively the ministers of industries and of energy, from the cabinet.

The immediate reason for their dismissals was their public criticism of Finance Minister Basil Rajapakse, the president’s younger brother, at a public meeting where they accused him of being responsible for the country’s economic crisis.

The removal of two key allies in the campaign that originally brought President Rajapakse to power underscores the deep political crisis of the government and political establishment. The ruling class is being hit by the economic turmoil and, above all, by the rising struggles of the working class in opposition to the government’s austerity measures.

Weerawansa and Gammanpila lead two small Sinhala racist parties—the National Freedom Front (NFF) and the Pivithuru Hela Urumaya (PHU)—that are partners of the ruling coalition led by Gotabhaya Rajapakse’s Sri Lanka Podujana Peramuna (SLPP).

The NFF has six MPs and the PHU one seat. They had banded together with other smaller organisations, including the Sri Lanka Freedom Party (SLFP), Sri Lanka Communist Party, Lanka Sama Samaja Party (LSSP), and the Democratic Left Front (DLF), to support the SLPP.

While complaining that they are being marginalised in the coalition, these parties, like all members of the government are sensitive to, and fearful of, the rising opposition of the working class and the rural masses.

On March 2, the 11 groups held a meeting to launch their alternative economic program, entitled “The whole country to the correct path,” that claims to be a solution to the country’s economic crisis.

The program, which calls for foreign debt restructuring following discussions with creditor nations, criticises the four-decade open market policies pursued in Sri Lanka, and advocates curbing imports and developing local agriculture and industry. In other words, it is a thoroughly nationalist austerity program to impose the burden of the crisis on working people.

Addressing the meeting, Weerawansa declared that the crisis was the deliberate creation of Basil Rajapakse who had failed as finance minister to take any measures to avert the economic devastation. The finance minister, he continued, had inflicted economic policies that aimed to bring the country under the control of the West, including the US. Gammanpila echoed these claims.

Following their cabinet dismissals, Weerawansa and Gammanpila intensified their denunciations of the finance minister, describing him as an “ugly American,” a reference to his US citizenship, acting in the service of Washington.

As a proof, the two ex-ministers cited the recent deal with the US-based New Fortress Energy Company (NFE) to sell a 40 percent stake of the state-owned Kerawalapitiya Power Plant. They also alleged he was attempting to transform Sri Lanka into Washington’s pawn in the geopolitical struggles between world powers in the Indian Ocean.

Weerawansa, Gammanpila and DLF leader and water resources minister Vasudeva Nanayakkara had filed cases in the Supreme Court against the government’s agreement with the NFE. These were dismissed by the courts, which claimed the agreement has merits for Sri Lanka.

Notwithstanding their nationalist denunciations and anti-US posturing, the NFF, PHU and other parties in their alliance, have backed the government’s ruthless policies over the past two years. They supported its criminal COVID-19 herd-immunity policies, its forcing employees back to work in unsafe conditions, the militarization of the administration, and other anti-democratic measures, and consented to its austerity attacks.

Demonising Finance Minister Rajapakse and blaming him for the economic crisis is an attempt to cover up the crisis of capitalism and the government’s desperate defence of the profit system. Halting the sale of a stake in the Kerawalapitiya Power Plant to a US firm will not stop the attacks on the wages and conditions of its workforce.

President Rajapakse is determined to stamp-out any dissent in the ruling coalition and criticism of his rule as his government prepares to unleash even more brutal attacks on all working people.

In early January, President Rajapakse sacked Susil Premajayantha, the state minister for education reforms, after he criticised the government’s ban of the import of agro-chemicals and fertiliser. Premajayantha’s mild criticism were in response to mass opposition to the ban in rural areas.

The global pandemic has shattered Sri Lanka’s foreign earnings following a dramatic decline of exports, tourism and remittances from overseas workers. External reserves have dried up and pushed the government to the edge of a default with little foreign currency to pay for essential food, fuel and medicine imports. The result is power cuts, transport breakdowns and immense hardships for millions of working people.

The ruling class fears that the Russian invasion and escalating war in Ukraine and US-led NATO war drive against Russia, will deepen the financial crisis on the island.

International and domestic pressures are forcing the government to seek funding from the International Monetary Fund (IMF) “to solve the crisis.”

Last week the international banks released a report on Sri Lanka demanding the government stop printing money, increase interest rates and taxes, devalue the rupee and step up economic restructuring.

On Tuesday, nine big-business chambers held a press conference and demanded the government seek IMF funding. Colombo business newspaper, the Dailyft, summed up the chambers’ call to the government as, “bite the bullet today to avert disaster tomorrow.”

The government has not yet decided to seek IMF assistance, but Finance Minister Rajapakse is scheduled to attend the IMF’s annual meeting in Washington in April and will be involved in discussions.

While the government may be forced to ask for IMF funds, it will come at the price of brutal austerity measures. Some are already being implemented. On Wednesday, the government drastically devalued the rupee by about 15 percent against the US dollar. Unofficially, the devaluation is about 30 percent.

The real fear of the Rajapakse regime is the rising tide of working class struggles across the country. Last year Sri Lanka saw a series of strikes and protests involving hundreds of thousands of teachers, health and state administration employees and plantation workers to list just a few.

In February, and again last week, more than 50,000 health workers went on strike, demanding higher salaries and improved conditions, which were betrayed by the Federation of Health Professional. Its leaders Ravi Kumudesh and Saman Rathnapriya issued a press statement which declared that, because the country was in a crisis, they were not encouraging strikes but were concerned about “managing” members.

In plain language, “managing” members is an indication that the unions are losing control of their workers and their ability to defend the government and big business.

As the crisis deepens, the Rajapakse government is also seeking the support of the parliamentary opposition for its austerity moves and to take on the working class.

On Wednesday, parliamentary leader and minister, Dinesh Gunawardena, announced that the president had decided to call an all-party conference to “discuss the current economic situation in the country.” No date or venue was announced.

Irrespective of any future all-party conference, the opposition parties, including the Samagi Jana Balawegaya (SJB) and United National Party (UNP) have already called for an IMF program to “resolve” the crisis. Early this year the JVP asked the government to establish a joint mechanism to manage the crisis.

UK: Record numbers of health workers quit NHS as Sajid Javid calls health spending “not sustainable”

Ben Trent & Richard Tyler

An average of 400 workers a week left the National Health Service (NHS) in 2021. Around 110,000 NHS posts in England are unfilled, with nearly 6 percent of doctor’s jobs and 10 percent of nursing positions empty, according to the most recent figures.

National Health Service workers at a hospital in southern England (WSWS Media)

Among doctors, the worst hit region is the Midlands, with a 9 percent vacancy rate, but London, the North West, the North East and Yorkshire, the East of England and the South East all have vacancies of around 5 percent.

For nurses, London tops the region with the most nursing vacancies, at 13 percent, with all other English regions exceeding a vacancy rate of 8 percent. Most acute is the shortage in mental health nursing, where one in six, or 17.1 percent, of all posts are unfilled.

There are also well over 100,000 vacancies nationally in social care, and the sector is further handicapper by high staff turnover, with an estimated 34 percent of care workers leaving their roles in 2020-2021.

Among the main complaints cited by departing staff are burnout, heavy workloads, low pay, and post-traumatic stress disorder (PTSD). These were prevalent before the pandemic, but all of them have been compounded by the COVID-19 crisis. At the end of 2021, the NHS forecast there would be a further 230,000 cases of PTSD in England due to the pandemic, with healthcare workers being one of the primary groups to experience the debilitating disorder.

During the first wave of the pandemic, 709 intensive care staff across six NHS hospitals were polled by the Royal College of Psychiatrists, with two in five reporting symptoms of PTSD—double the rate of military veterans with recent combat experience.

In one of the most comprehensive studies carried out, the University of Oxford placed the figures even higher, finding that 44 percent of NHS staff working with COVID patients had PTSD, with depression affecting 39 percent.

Although the specific symptoms of PTSD can vary, many people experience vivid flashbacks and nightmares, involuntarily re-living traumatic events. As a result of the UK’s bipartisan herd immunity policy, leading to several massive surges of infections, health workers have repeatedly witnessed the distressing deaths of COVID sufferers, often in conditions where providing care, let alone compassion to loved ones, was extremely difficult.

The shortage of NHS staff is having a major impact on patients, with a study by charity Engage Britain raising significant concerns about the quality of their care. According to their surveys, over a quarter of adults (28 percent) believe they or a family member have received poor care due to workforce problems.

John Hall, a former strategy director at the Department of Health and Social Care, and now Strategy Consultant for Engage Britain, stated that “The UK has long had significantly lower numbers of doctors and nurses per capita than comparable systems… More recently, the impact of working conditions is showing an increasing impact on the ability of the NHS to retain staff. Around 50 in every 10,000 staff working in hospital and community health services in June 2021 left the service within the next three months, citing work-life balance as the reason. This was a new record.”

Julian McCrae, Director of Engage Britain, stated that “NHS workers across the country have spoken to us about feeling overstretched, undervalued and struggling to get support in a chaotic system.”

These shortages are crippling a health service facing record waiting lists. The Conservative government’s criminal handling of the pandemic, placing the profits of the corporations above the health and lives of millions, put unbearable pressure on the NHS, creating long delays for treatment. A new record of 6.1 million are now waiting for medical procedures, with nearly a quarter of a million having waited for at least two years.

Demand will only continue to grow. The Office for National Statistics predicts that there will be more than 17 million over 65s in the UK by 2040, with increasing health needs in old age. The UK has some of the lowest staffing and bed rates per capita across developed countries.

The desperate situation is highlighted by the now expanded call for the recruitment of “NHS reservists” to help clear backlogs. They will assist with administering the COVID vaccine, specifically with the fourth round for the vulnerable, as well as helping patients who have been recently discharged.

Piloted in 2021, across five sites, the number of reservists has so far reached 17,000, barely a scratch on what is needed. In any case, while the reservists may be able to assist in certain limited circumstances, most are vastly under qualified to cover the staffing gaps across the NHS.

Health Secretary Sajid Javid has repeatedly blamed the NHS backlog on the pandemic. This not only sidesteps the fact that it was the government’s herd immunity policies which were entirely responsible for the havoc wreaked by COVID in the health service, it covers over the decades of privatisation and austerity that have gutted the NHS.

The past 10 years have seen the NHS budget cut as a percentage of GDP even as greater levels of demand are placed on the system. Swathes of the NHS have been privatised, some sold off to global investors, while what remains has become increasingly reliant on private patients—which can contribute up to 50 percent of a hospital’s income—to stay afloat. The pandemic was used as enormous opportunity to grant lucrative NHS contracts to private sector profiteers, providing PPE and tracing systems that were not fit for purpose.

Some of the worst cuts have fallen on health workers, who have endured years of pay freezes culminating in the insulting 3 percent “pay rise” last year—a real-terms pay cut—allowed through by the trade unions.

Attacks on the health service will now proceed even more quickly to provide funds for Britain’s participation in the NATO confrontation with Russia. The Institute for Fiscal Studies (IFS) has published a paper pointedly explaining that to maintain Britain’s position as the largest European military power, ahead of Germany, defence spending would have to increase by about 20 percent, or £10 billion.

Calls for military spending to trump all else mean the NHS budget is fair game. The Telegraph, house organ of the Tory party, writes in criticism that the post-Cold War “peace dividend” has “been spent in areas such as the NHS, which has risen from accounting for less than 3 percent of GDP to more than 7 percent over the same period.” It directly counter-poses military spending, reduced “as a share of GDP from more than 7pc in the 1950s to 2pc now.”

On Tuesday, addressing an audience at the Royal College of Physicians in London, Health Secretary Sajid Javid stressed his “small-state Conservative” beliefs and set out his plan for yet more NHS cuts. Claiming additional health spending necessarily meant making “some serious trade-offs on everything from education to infrastructure,” he demanded the health service “become much more efficient”.

He highlighted the government’s plan to use waiting lists as an excuse to more heavily involve the private sector and to dump ill patients on families.

“We can’t continue to have a system in which we need more and more money each year—more than double, on average, the rate of economic growth. It’s just not sustainable.”

EU summit pledges more arms to Ukraine against Russia

Alex Lantier & Johannes Stern

European Union (EU) heads of state ended a two-day summit at Versailles, France, yesterday addressing the Russian invasion of Ukraine. Pouring fuel on the flames of the war, they adopted multiple anti-Russian measures: further arming Ukrainian army units and nationalist militias while pledging to cut off deliveries of Russian oil, gas and grain critical to the food and energy supply of Europe and Africa.

French President Emmanuel Macron, left, looks at the President of the European Commission Ursula von der Leyen during a press conference after the EU summit at the Chateau de Versailles, Friday, March 11, 2022 in Versailles, west of Paris. (AP Photo/Michel Euler)

EU Commission President Ursula von der Leyen and EU Council President Charles Michel were joined by President Emmanuel Macron of France, which now holds the EU’s rotating presidency, at a press conference yesterday afternoon. While COVID-19 infects over 4 million people and claims over 15,000 lives each week in Europe, they said nothing about the pandemic. Nor did they refer to the growing international wave of strikes against rising fuel costs.

They called instead for massive, unspecified increases in EU military spending to “conduct the full range of operations and missions,” including warfare in space and cyberspace.

They announced that the EU would continue pouring weapons into Ukraine, providing a further €1 billion in arms to Kiev. EU foreign policy chief Josep Borrell had said earlier that the EU would increase its weapons supplies to Ukraine by €500 million. “The decision was taken to add a further €500 million” to the previously agreed-upon increase in weapons spending mentioned by Borrell, Michel said, without specifying how the money would be spent.

Ukraine has previously called on the EU to supply it with anti-aircraft missiles, anti-drone weapons, mine-detection equipment, radio and radar equipment, night vision goggles and ambulances.

While refusing to admit Ukraine into the EU, EU officials agreed to admit Ukrainian refugees into the EU—but only temporarily. Macron said, “The path to our Europe is open to Ukrainians. Their struggle for democracy and the values that unite us has shown that Ukraine indeed belongs to our European family.” However, he added, “Can there be an exceptional and accelerated procedure for entry [into the EU] for a country that is at war? The answer is no.”

In the summit resolution, the EU pledged to “phase out our dependency on Russian gas, oil and coal imports as soon as possible,” referring to 2027 as a possible deadline. This disruption of world energy markets would massively increase oil and gas prices that are already surging. Moreover, the moves by Washington and the European powers to cut Russia and Belarus out of dollar-denominated transactions in international trade would accelerate the surge in food prices, as the region is a critical exporter of grain.

Macron made clear these policies will have a devastating impact on workers’ living standards, but that the EU will proceed anyway. Europe and Africa “will be very deeply destabilized in terms of food” over the next year, he said. “We must re-evaluate production strategies to defend our sovereignty in food… as Europeans, but also re-evaluate our Africa strategy. Otherwise African countries will be hit in the next 12 to 18 months … because of what cannot currently be planted.”

To justify its policies targeting the working class, the EU summit resolution issued a one-sided denunciation of Russia. It declared: “Two weeks ago Russia brought war back to Europe. Russia’s unprovoked and unjustified military aggression against Ukraine grossly violates international law and the principles of the UN Charter and undermines European and global security and stability. It is inflicting unspeakable suffering on the Ukrainian population. Russia, and its accomplice Belarus, bear full responsibility for this war of aggression…”

While the Kremlin’s decision to invade Ukraine is undoubtedly reckless and reactionary, the EU’s blaming of militarism, mass COVID-19 infections and social austerity on Russia is a pack of lies.

First of all, it was not the Kremlin that “brought war back to Europe,” but the NATO imperialist powers. The Stalinist dissolution of the Soviet Union in 1991 cleared the way for a wave of bloody NATO wars not only in the Middle East, starting with Iraq and Afghanistan, but in Europe itself. The Yugoslav wars of the 1990s were incited and backed by the NATO powers, who encouraged various Yugoslav republics to secede and then bombed Serbia and Kosovo in 1999.

Moreover, the EU’s posturing as a temporary haven for Ukrainian immigrants is of truly staggering hypocrisy. After NATO wars across the Middle East and Africa over the last 30 years, over 80 million people have become refugees worldwide. The EU has closed its borders to them, consigning millions to refugee camps and leaving tens of thousands to drown in the Mediterranean. Now, however, to denounce Russia and justify its right-wing policies, it is making an insincere and discriminatory show of concern, but only for specifically Ukrainian refugees.

Finally, the EU’s program of rearmament and war targeting Russia is to be waged overwhelmingly at the expense of the working class. As the EU floats plans to borrow €200 billion for rearmament, this will clearly be financed by massive social attacks on workers in Europe. Already Macron has pledged to increase the retirement age in France by three years.

The far-reaching, essentially fascistic implications of this rearmament offensive emerge in bellicose articles in the bourgeois media. On the eve of the summit, German news magazine Der Spiegel published an article titled “An angel with a sword is still an angel!” Its author, Belgian philosopher Luuk van Middelaar, a former advisor to European Commission President Hermann Van Rompuy, praises the return of German militarism.

He writes, “After years of hesitation, the Federal Republic now intends to arm seriously. It has also started to support Kiev militarily. Berlin is breaking with its economic policy towards Moscow, recognising its dependence on gas as a strategic mistake … What its eastern neighbours and several US presidents have failed to do over many years, Putin has achieved in one fell swoop: Germany has woken up geopolitically.”

Middelaar calls on the EU to become a major military power that can wage war on other major powers: “If Europe wants to emerge as a power among powers, capable at some point even of commanding destructive military forces, it will need a different political language to talk about itself and its place in the world. The European Union will have to change its ethos and its demeanor. It must understand that it will then no longer be the angel that liberates the continent and the world from evil and tyranny—but a mortal, strategic and realpolitik actor…”

Workers in Europe and internationally must be warned. After triggering two world wars in the 20th century, the European ruling classes will stop at nothing to impose their imperialist interests in the 21st. Having used Putin’s reactionary invasion to launch its biggest rearmament programme since Hitler, the German bourgeoisie is debating building nuclear weapons.

As Focus magazine wrote, “No fear of nuclear weapons: Why Germany must now talk about nuclear rearmament,” German EU parliamentarian Manfred Weber declared: “The basis of real European sovereignty is the ability for Europe to defend itself—at some point including nuclear weapons.”

The alternative to the EU’s reactionary policies is the growing international class struggle against them. In Italy, fishermen are on a nationwide strike against skyrocketing fuel costs. According to the fishing sector of the Italian farmers’ association Coldiretti Impresapesca, fuel prices for fishing boats have risen 90 percent compared to last year.

Spanish truckers are to go on indefinite strike on 14 March, demanding cuts in fuel taxes to compensate for rising fuel prices.

In Albania, mass protests have erupted against fuel prices. Albanian police arrested at least 16 people Wednesday evening for “illegal assembly.” Street protests have been taking place for days in the capital, Tirana, and in other cities, against a 30 percent increase in oil and gas prices in one week.

In Germany, too, strikes are underway. On Tuesday kindergarten teachers, particularly hard hit by the pandemic, went on strike. Pilots of the cargo airline Aerologic have also voted to strike.

European Central Bank moves to tighten monetary policy

Nick Beams

The European Central Bank (ECB) has surprised financial markets with the decision by its governing council on Thursday to begin tightening monetary policy even as Europe is faced with possible financial turmoil and a slide into recession because of the conflict with Russia.

The general view in financial circles was that the ECB would put its moves towards so-called “normalisation” on hold. Instead, it set out a plan to reduce its purchases of government bonds more quickly. Under the previous plan, monthly asset purchases would be reduced from €40 billion to €20 billion in October. Now they will be cut to €20 billion in June.

Christine Lagarde, President of the European Central Bank [Credit: Bernd Hartung/European Central Bank]

According to the Financial Times, the decision has been taken as a signal that the ECB will start raising interest rates in the fourth quarter in a bid to clamp down on inflation—the first such move in more than a decade.

The decision is a significant concession to northern European members of the ECB, led by Germany, which have been pushing for action by the central bank on monetary policy in the face of higher inflation.

The inflation rate for the euro zone rose from 5.1 percent in January to 5.8 percent in February and could go much higher because of the surge in energy prices.

In her introductory remarks to a press conference, ECB president Christine Lagarde, said the bank expected inflation to rise further in the near term.

“Energy prices, which surged by 31.7 percent in February, continue to be the main reason for this high rate of inflation and are also pushing up prices across many other sectors. Food prices have also increased, owing to seasonal factors, elevated transportation costs and the higher prices of fertilizers. Energy costs have risen further in recent weeks and there will be further pressure on some food and commodity prices owing to the war in Ukraine,” she said.

In the question-and-answer session, Lagarde took issue with a journalist who asked how much agreement there was in the governing council about “accelerating the pace of normalisation.”

Lagarde attempted to maintain the façade that the ECB has the situation under control when economic and financial conditions are changing daily. She said “accelerated normalisation” was not “the decision that was made today.” Rather it was necessary “to progress step by step,” while acknowledging the uncertainty, “so that we can in all circumstances respond in an agile way.”

Lagarde’s claim that the ECB was not “accelerating” got short shrift in financial circles. “Sorry but, yes, you are,” was the response from one economist at a wealth management firm in Geneva cited by the Wall Street Journal.

A former vice-president of the ECB, Vitor Constâncio, tweeted that “the changes were unnecessary in my view, and all tilted to tightening policy.”

In taking its latest decision, the ECB was confronted with a conundrum that will also face the US Federal Reserve when it meets next week.

On the hand, the central banks want to clamp down on inflation, lest there is a repeat of the experience of the 1970s when it produced a major upsurge in the struggles of the working class. On the other, they are fearful that tightening monetary policy could result in turmoil in the financial markets, so dependent have they become on virtually free money, and set off a recession.

For three decades and more, central banks have not had to contend with inflation because of cheaper goods resulting from globalization and the suppression of the working class by the trade unions. But inflation is now taking off world-wide. The 7.9 percent increase for the US in February is indicative of global trends, with inflation in poorer countries likely to be much higher.

Three interconnected factors have been at work. First, the refusal of governments around the world to enact meaningful public health measures to deal with the COVID pandemic, lest they disrupt the stock market, has led to the inflationary supply chain crisis.

Second, the pumping of ever more money into the financial system has fueled speculation not only in stocks and financial assets but also commodities.

Third is the economic war aimed at the destruction of the Russian economy, in the hope economic and social devastation can create the conditions for “regime change” and the eventual dismemberment of the Russian Federation. Russia is the world’s 12th largest economy and a major global supplier of energy and gas, industrial metals, and food, particularly wheat.

In her prepared statement, when dealing with financial conditions, Lagarde was anxious to offer reassurances of calm and stability.

Expressing the delusionary thinking in ruling circles, she said: “The financial sanctions against Russia, including the exclusion of some Russian banks from SWIFT [the international financial messaging system], have so far not produced severe strains in money markets or liquidity shortage in the euro area banking system.”

In answer to a question at the press conference on financial stability, ECB vice-president Luis de Guindos said that “in terms of the exposure of the European financial sector to Russia, it’s not very, very relevant.”

For this writer it recalled the comment by the then Fed chair Ben Bernanke in 2007 who said growing problems in the US sub-prime housing mortgage market would not have a major effect because it was a very small segment of the financial system. In September 2008, the sub-prime crisis led to the biggest financial collapse since the 1930s.

Just two days before ECB officials gave their upbeat assessments of financial stability, the London Metal Exchange (LME) closed its nickel market—for which Russia is a key supplier—after prices had doubled overnight.

The crisis was sparked by the fear that a major Chinese nickel firm, Tsingham Holding Group, faced a $1 billion margin call from lenders and would not be able to pay, which would drag down other traders with it.

The company’s CEO had made bets that the nickel price would fall and, according to initial reports in Chinese media, was facing total losses of as much as $8 billion.

Rather than let it go down, the LME closed the nickel market, halting trades estimated to be worth $4 billion.

The incident recalled the demise of the $3 billion hedge fund Long-Term Capital Management (LTCM), run by some of the supposedly brightest minds in the financial world, in September 1998 because of wrong bets it had made on the Russian rouble. LTCM had to be bailed out by the New York Federal Reserve lest its bankruptcy lead to a broader financial crisis.

As firms pull out of Russia and the prospect of a Russian default on its sovereign debt increases, some financial firms are reportedly concerned, not so much about their own exposure to Russia, but to what extent their clients are exposed.

Others may be directly impacted. It has been reported that the giant bond trading firm Pimco could be on the hook for large amounts of money if Russia defaults. It has more than $1 billion in credit default swaps on its books.

These are a kind of insurance policy taken out by holders of the bonds in case of a Russian default. In effect, Pimco has made a bet that will not happen—an event, however, that is looking increasingly likely, with major flow-on effects.

Australian government announces largest military expansion since Vietnam War

Martin Scott

Australian Prime Minister Scott Morrison announced Thursday a plan to increase the size of the Australian Defence Force (ADF) by 30 percent over the next 18 years.

When implemented, the country’s permanent military ranks would swell from 59,000 to almost 80,000, with a further 21,000 otherwise employed by the Department of Defence. This would be the largest increase in the size of the armed forces since the Vietnam War. It is a major stepping up of the growth already set down in the 2020 Force Structure Plan.

A Royal New Zealand Air Force NH90 helicopter and an Australian Defence Force MRH90 land at Sam Hill Airfield in Shoalwater Bay Military Training Area in Central Queensland [Source: Australian Department of Defence]

The announcement shows that the government is preparing for large-scale conflict in the Indo-Pacific region, effectively placing the country on a war footing.

The personnel expansion is expected to cost “at least” $38 billion, on top of existing plans to increase military spending to $578 billion over ten years, including $270 billion on new military hardware.

Morrison said “we need a bigger ADF with more soldiers, sailors and airmen to operate the cutting-edge capabilities we’re getting to protect Australia.” This was necessary because “our world is becoming increasingly uncertain.”

In fact, there is nothing defensive about the rapid expansion of the country’s military, which is aimed at deepening Australia’s integration into the war plans of US imperialism. Growing “uncertainty” in the region is the result of US-led preparations for war with China. Washington sees the very growth in the Chinese economy as the main threat to its dominance in Asia and globally.

Since the Obama administration announced its “pivot to Asia” in November 2011, the US has dramatically stepped up its presence in the region, expanding bases in Guam, Australia and the Philippines, strengthening alliances and conducting provocative military exercises in the South China Sea.

The ramping up of Australian military expenditure is to prepare for a major role in conflicts with China, in order to assist the US drive for global hegemony and bolster the strategic and economic interests of Australian imperialism.

Morrison’s announcement came within hours of the US House of Representatives passing a budget containing a record $US782 billion for the military.

Like the Biden administration, Morrison’s Liberal-National Coalition government has seized upon the Russian invasion of Ukraine as an opportunity to escalate a planned military buildup. On Monday, the prime minister announced plans to build a $10 billion base for US, UK and Australian nuclear-powered submarines on Australia’s east coast.

While the primary focus of the military expansion is China, Morrison was quick to commit $105 million to the war against Russia, including $70 million for lethal weapons, confirming Australia is ready to play a critical role in US-led wars anywhere on the globe.

Morrison said the expansion would centre around “building the capabilities associated with our trilateral security partnership between Australia, United Kingdom and United States (AUKUS).”

The AUKUS alliance, announced last September, will allow the US greater access to Australian military facilities, further transforming the country into a base for US operations. The pact includes equipping Australia with nuclear-powered submarines, the only purpose of which would be long-range operations off the coast of China.

AUKUS was condemned by Beijing as a serious threat to “regional peace and stability.” A “senior Chinese military expert” warned in the Global Times the deal made “Australia a potential target for a nuclear strike.”

While every announcement of greater defence spending is couched in terms of “national security” and “protecting our people,” the reality is every additional dollar expended edges closer to the brink of war between nuclear-armed powers.

The latest announcement is part of a push to increase Australia’s capacity for high-tech warfare. Defence Minister Peter Dutton told the press conference: “It will mean we can build warfighting capabilities in the domains of space, and information and cyber.”

There is not a hair’s breadth between the Coalition and Labor. Labor Party leader Anthony Albanese has rushed to assure the Australian and US ruling elite that a government he leads would be even more hawkish than the Coalition.

The Australian’s columnist Greg Sheridan noted this week: “The Opposition Leader makes no criticism of the government from the left.”

Albanese used a speech at the Lowy Institute on Thursday to chastise the Morrison government for “an enduring focus on announcements but not on the delivery of them.” The Labor leader pledged to commit more than 2 percent of Australia’s gross domestic product to the military and ensure the ADF “has the resources it needs to defend Australia and deter potential aggressors.”

While Albanese criticised the Coalition for being too slow to build military capacity, Labor’s primary thrust on “national security” is the need for “maximum bipartisan consensus.” All Morrison’s initiatives to boost the military have Labor’s full support.

While ever-increasing billions are committed to finance militarism and war, victims of recent floods in Queensland and New South Wales have been abandoned.

The federal government has offered a pittance—$1,000 per adult and $400 per child—to people who have lost everything in the floods. Having received no advance warning of the impending floods, thousands of people waited hours, even days, for help that never came. Were it not for the self-sacrificing actions of ordinary people, hundreds, if not thousands, would have died.

Days after the floodwaters receded, “help” finally arrived, in the form of thousands of military personnel, who, according to local accounts, have done little to aid the clean-up effort. The real purpose of this deployment is to normalise the presence of the military in civilian life, amid mounting social unrest.

In one crisis after another, including the catastrophic 2019–20 bushfires, the ongoing COVID-19 pandemic and the floods, the clear message from government to the working class is “you’re on your own.”

The logic of this was spelled out in an Australian Financial Review editorial this week, calling for the doubling of military spending and an end to the “addiction” of the political system to “promising more money for endless worthy causes.”

As always, the working class will not only be the casualties of war they will be forced to pay for it.

Wracked with domestic social, economic and political crises, and threatened by the rise of China as a global economic power, American imperialism is determined to assert its dominance through war. Labor, the Coalition and the Greens are all committed to the US-led war drive, both as a loyal ally, and as a means to further the interests of Australian capitalism.

Australian capitalism is beset with the similar internal crises. Class tensions are mounting as cost-of-living increases outstrip wages and governments, Labor and Liberal-National alike, demonstrate in an endless string of disasters that they will not protect the health and lives of the population.

Two years since the WHO declared the COVID pandemic: New cases rising once again, driven by the BA.2 subvariant of Omicron

Benjamin Mateus

Friday, March 11, marked the second anniversary of the official declaration by the World Health Organization that the outbreak of COVID-19 was a “pandemic.” Two years into this global catastrophe, capitalist governments have effectively declared the pandemic over and announced a return to “normal,” despite persistent high rates of community transmission throughout the world.

Dr. Michael Ryan (left) at a conference in 2020 when the WHO declared the pandemic a Public Health emergency of International Concern [Credit: Fabrice Coffrini]

Many governments are lifting all mandates and curtailing testing and vaccination efforts. Global vaccination rates are down to levels last seen in May 2021 when campaigns were just underway to vaccinate populations. Vaccine inequity continues to plague lower-income nations. Budgets for pandemic response are being slashed, replaced with a massive infusion of funds to finance the drive to war.

Two years ago, when the global death toll stood at less than 5,000, WHO Director-General Dr. Tedros Adhanom Ghebreyesus referred to the “alarming levels of inaction” from national governments. Today, with the official death toll at more than six million, the response of the ruling class can be termed nothing less than social murder, a crime that continues.

The world remains under international health regulations that continue to deem the COVID pandemic a Public Health Emergency of International Concern (PHEIC). Some of these requirements include surveillance and mandatory case reporting.

According to Clare Wenham, a researcher in global health policy at the London School of Economics, the WHO convenes every three months to reappraise the global situation against three criteria. She told the Financial Times, “If the committee decides the outbreak is no longer unusual and unexpected, no longer risking international spread and no longer requiring a coordinated international effort, the PHEIC ends.”

The impact of the pandemic is staggering. Nearly one million people have died in the United States, 1.7 million in Europe, 1.3 million in Asia, 1.2 million in South America, and more than 250,000 in Africa. But these official figures far understate reality. According to the Economist’s modeling, excess deaths from the pandemic are closer to 20 million. This figure has been corroborated in a peer-reviewed study published in The Lancet, which found that excess deaths from the pandemic through December 31, 2021 are three times higher than official figures.

Excess deaths by region January 2020 to December 2021 (Source: The Lancet)

Since New Year’s Day 2022, another 600,000 people have died across the globe, predominately from the supposedly “mild” Omicron variant. The seven-day moving average of daily global deaths remains at close to 6,600. However, the prediction made by Dr. Hans Kluge, WHO’s Regional Director for Europe, that “European nations could soon be entering a long period of tranquility” after the Omicron wave passed is proving disastrous. As Editor-in-Chief of The Lancet said in mid-February, “His [Hans Kluge’s] words promote a false reassurance that could breed complacency, even deceit.”

The WHO's Technical Advisory Group on COVID-19 released an interim statement on Tuesday, March 8, 2022 that paints a grim picture. It cautioned that though global cases were declining, the situation remained tenuous and volatile, as many regions and countries have reported a sudden rise. It also warned that the drastic reduction in testing and resources would severely hinder pandemic response measures.

The situation remains more than volatile. Since the release of the interim statement, new COVID cases across the globe have taken a sudden upturn. On February 28 the number of daily cases stood at 1.15 million per day, but by March 10 that figure had rapidly risen to 1.82 million. The seven-day average of new cases globally is 1.56 million per day and climbing again.

Moreover, many of the major countries in Europe that are now seeing new surges where “BA.2 subvariant of the Omicron variant just came off a wave of infections caused by the BA.1 subvariant.”

Proportion of sequences of the BA.2 (light purple) subvariant Germany, United Kingdom, South Korea, and Hong Kong (Source Covariants.org)

The WHO added in their interim statement, “At a global level, BA.1 has been the predominant Omicron lineage. However, the proportion of reported sequences designated as BA.2 has been increasing relative to BA.1 in recent weeks and is the predominant Omicron lineage in several countries.”

Germany reported more than 300,000 new cases yesterday, a pandemic high for the country. The seven-day average of COVID deaths has crept upwards, passing 200 deaths per day. In response to these developments, Germany’s health minister, Karl Lauterback, said during a coronavirus briefing yesterday, “We are in a situation that I would like to describe as critical. We have strongly rising case figures again… I keep reading that the Omicron variant is a milder variant, but that’s only true to a limited extent.”

Like many of its major European counterparts, Germany has managed to fully vaccinate around three quarters of its population. More than half have received a booster, or third shot. The claims of the ruling class that the vaccine would solve the pandemic has proven bankrupt, as the continued spread of the virus leads to the evolution of new, vaccine-resistant variants.

Recent studies from the University of Tokyo and Michigan State University on the BA.2 subvariant have confirmed that it is not only more contagious than its predecessor, BA.1, by 40 percent. It is about 30 percent more immune-evasive and can re-infect people who had a prior infection with BA.1. Modeling studies predict that BA.2 will dominate globally, and there have been calls to give BA.2 a unique Greek letter.

As a case study, Denmark underscores the dangers posed by ignoring the threat BA.2 poses and lifting all mitigation measures to stem infections. The country boasts a fully vaccinated rate of 82 percent, and more than 60 percent of the population is boosted. It was also one of the first European countries where BA.2 came to dominate during this winter’s surge of infections.

Denmark encountered the highest level of infections and deaths at any point in the pandemic. Like many countries, the official mantra was that the disease remained mild and mitigation measures were not required because a significant majority of the population had been vaccinated. This proved disastrous. The daily death rate continues its climb, reaching 45 per day. With a population of 5.83 million people, this is equivalent to 2,554 deaths a day in the US.

Hong Kong, the autonomous region in China, is a densely populated area with almost 7.5 million people that had kept the virus in check for nearly two years. It is now experiencing a massive, deadly deluge of infections, inundating hospitals and leading to the health system's collapse.

Daily new confirmed COVID-19 deaths per million Hong Kong vs. the US (Source: Our World in Data)

The seven-day average of daily deaths continues to climb, reaching 255 per day, and it has surpassed every other country, including Peru, on a per capita basis. An equivalent death toll in the US, on a per capita basis, would be more than 11,000 a day, almost three times higher than the winter of 2021 peak.

Cases in South Korea continue to spiral upwards, with more than 325,000 infections reported yesterday. Deaths are also rising exponentially. A similar situation is evolving in Vietnam, where daily cases have increased over 150,00 per day, and deaths follow.

These developments will significantly impact the US, which used the decline in cases coming off the Omicron peak to fast-track policies that have essentially ended all mitigation measures, including mask mandates in schools. Additionally, all funding for pandemic measures has quickly dried up despite hundreds of billions available for their war machines.

Meanwhile, BA.2 subvariant sequences have climbed four-fold to around 12 percent over the last month, highest in New York City, where the first wave of the COVID pandemic had such a devastating impact.

Instead of taking heed of these developments, New York City Mayor Eric Adams said it was time “to celebrate” again after removing all the mandates and strict COVID protocols. He added, “We are not going to allow COVID to define us. We’re far from out of the woods. COVID is still here. But we are beating it back!”

The only way to beat back the pandemic is through an elimination strategy to drive new infections to zero and not continue to play a dangerous game of social roulette with a constantly mutating virus.

African Economic Research Consortium AERC PhD Fellowships 2022/2023

Application Deadline: 31st August 2022

About AERC PhD Fellowships: The African Economic Research Consortium (AERC) was established in 1988 as a public not-for-profit organization devoted to the advancement of economic policy research and training in Africa. The Consortium’s mandate and strategic intent is built on the basis that sustained development in sub-Saharan Africa requires well-trained, locally based professional economists. AERC agitates the provision of capacity building in economic policy in Francophone and Anglophone African countries through provision of support in the areas of policy research and graduate training.

Type: PhD

Eligibility: To qualify for AERC PhD Fellowships, an applicant must:

(a) Have applied and been admitted to any one of the listed CPP universities;
(b) Have attained at least a Second Class Honours (Upper Division) or equivalent in Economics, Agricultural Economics, or related field from an accredited university;
(c) Have a Masters degree (with coursework and thesis component) in Economics, Agricultural Economics, or related fields from a recognized University. The coursework should have covered microeconomics, macroeconomics, quantitative methods and econometrics;
(d) Possession of at least 1 relevant publication in a refereed journal will be an added advantage;
(e) Evidence of engagement in economic management, research and/or training in the public sector will be an added advantage; and
(f) Female and applicants from post-conflict and fragile states (especially the AERC PhD Bridge Programme alumni class of 2017 and 2018) are encouraged to apply.

Eligible Countries: Francophone and Anglophone sub-Saharan African countries

To be Taken at (Universities):

University of Cape Town, South Africa • University of Witwatersrand, South Africa
• University of Dar es Salaam, Tanzania • University of Nairobi, Kenya
• University of Ibadan, Nigeria • University of Benin, Nigeria
• University of Yaoundé II, Cameroon • Felix Houphouet-Boigny University, Côte d’Ivoire

How to Apply for AERC PhD Fellowships: Interested applicants must submit their applications for admission directly to the respective universities (application procedure can be obtained from the respective university’s website). Upon receipt of an admission letter from a specific university, applicants shall upload the following documents to the AERC scholarship portal http://scholarships.aercafrica.org:

1. Application cover letter;
2. Curriculum Vitae;
3. Evidence of admission at any of the universities listed above; and
4. Certified copies of transcripts and certificates.

• It is important to go through all application requirements in the Award Webpage (see Link below) before applying.

Visit Award Webpage for Details