New Zealand, Japan prime ministers sign security pact

John Braddock

New Zealand Prime Minister Jacinda Ardern used what was publicly-billed as a “trade mission” to Singapore and Tokyo last month to sign a significant new security pact with Japan’s Prime Minister Fumio Kishida. Ardern was on her first overseas trip in over two years due to the COVID pandemic.

Japan-New Zealand Summit Meeting, 21 April 2022 [Image: Japan Cabinet Public Affairs Office]

The NZ-Japan agreement, announced on April 21 after months of preparation, signifies a further strengthening of strategic alliances and partnerships, centred on the US, to confront China and prepare for major conflict. Tokyo and Wellington are both looking to extend their reach further into the Pacific.

The pact enables the two countries to negotiate a legal framework for an intelligence-sharing arrangement to “enable more seamless sharing” of classified material. Ardern confirmed the arrangement could see information classified as “top secret” being exchanged.

Ardern and Kishida committed to holding regular dialogues between leaders, foreign ministers and defence ministers, “with a view to promoting closer bilateral ties and deepening our coordination on regional and global challenges.” This will include working closely together on “cyber security” and matters of economic security.

A joint statement promised stepped-up miliary co-operation between Japan’s so-called Self-Defense Forces (SDF) and the NZ Defence Force. It noted the “close partnership” achieved during recent deployments of NZ Air Force aircraft to Japan and foreshadowed further Japan-New Zealand bilateral military exercises.

The preparations for intelligence sharing are particularly significant. While NZ has a relatively small military, it is a partner in the top-level “Five Eyes” intelligence network with the US, Britain, Canada and Australia. New Zealand’s Waihopai spy base, partly funded by the US, intercepts electronic communications on a vast scale throughout the Asia Pacific, including in China. 

The agreement will strengthen Tokyo’s case to eventually join the Five Eyes partnership. Japan has previously negotiated intelligence-sharing agreements with the US, Britain and Australia, and the pact with New Zealand will give it access to more sensitive Five Eyes material.

In 2020, then Japanese Defence Minister Taro Kono proposed Japanese membership in a revamped “Six Eyes”. Last year, Shingo Yamagami, Japan’s ambassador to Australia, said that he “would like to see this idea become reality in the near future”. A major overhaul of Japan’s intelligence apparatus, including the passage of a state secrets law in 2013 against broad public opposition, was in part to further this ambition.

The central thrust of the new agreement was against China and also Russia. The joint statement tied the pact to declarations about “protecting peace and security in the Indo-Pacific”. Kishida declared in his opening remarks: “Russia’s aggression against Ukraine has shaken the very foundation of the international order, and I want to work closely with New Zealand to take resolute responses.”

Like New Zealand, Japan has backed the US-NATO proxy war against Russia in Ukraine. In early March, Kishida, from the right-wing Liberal Democratic Party, formally announced a series of “powerful sanctions” on Moscow following an online meeting with US President Joe Biden and allied leaders.

The sanctions are part of Tokyo’s alignment with Washington’s war drive against Russia and China. NATO Secretary-General Jens Stoltenberg announced in March that the alliance had agreed to “step up cooperation with our partners in the Asia-Pacific.” NATO will provide Australia, Japan, New Zealand and South Korea with “practical and political cooperation” in cyber surveillance, new technology, and “countering disinformation.”

Ardern emphasised that Japan and New Zealand were aligned on the major issues amid a “volatile strategic environment”. The two would commit to “an Indo-Pacific region that is open, inclusive, stable, prosperous, and underpinned by a rules-based order free from coercion,” she declared. Ardern said any threat to another nation's sovereignty would not be tolerated and there will be “a swift response should that occur in any other region or country.”

The references to the “rules-based order” and “security of the Indo-Pacific” reprise Washington’s self-serving assertions that the “rules” US imperialism imposed after World War II give it the unfettered right to enforce its global hegemony. What is being prepared is an aggressive US-led war against China, into which every country in the Asia-Pacific region is being drawn.

Ardern’s expressions of concern about threats to national sovereignty—a thinly veiled swipe at China over Taiwan—are utterly hypocritical. New Zealand’s agreement with Japan was announced just two days after the Solomon Islands signed a security agreement with China. The US, Australia and New Zealand immediately lashed out, claiming, despite denials from Honiara, that it would allow Beijing to establish a Chinese military base in the South Pacific.

A US delegation led by Kurt Campbell, the White House Indo-Pacific coordinator, visited Honiara to lay down the law to Prime Minister Manasseh Sogavare. When Sogavare refused to back down, the White House declared that if Chinese established a de-facto military presence in the Solomons the US would “respond accordingly”—a thinly-veiled threat of a US military intervention or regime-change operation.

Ardern, of course, made not the slightest protest against the US threat to the national sovereignty of the Solomons. Japan sent its own top official to intervene. Parliamentary Vice Foreign Minister Kentaro Uesugi directly conveyed Japan’s “apprehension” over China’s “military activities” in the South Pacific, according to the Japan Times.

The anti-China thrust of the NZ-Japan pact was highlighted by the joint statement, which reeled off “serious concerns” about China’s purported “human rights” violations in Xinjiang and Hong Kong, and “strong opposition to any unilateral actions” by China “to alter the status quo in the South China Sea.

In reality, it is the US that has deliberately raised tension with China throughout the region, including its naval provocations in the South China Sea and the narrow Taiwan Strait between Taiwan and the Chinese mainland. The US has repeatedly used the banner of “human rights” to justify the raining of death and destruction on the targeted country, while ignoring the human rights abuses of its strategic allies and partners.

By sticking to Washington’s anti-China propaganda script, the New Zealand and Japanese prime ministers demonstrate that their governments are fully on board the reckless drive by US imperialism to reassert its hegemony in Europe and Asia against China and Russia.

New Zealand experiences deadliest month of the COVID pandemic

Tom Peters

New Zealand’s COVID-19 death toll has increased more than tenfold over the past two months, as a result of the Labour Party-led government’s decision to keep schools and non-essential businesses open and to remove most public health restrictions.

Medical staff test shoppers who volunteered at a pop-up community COVID-19 testing station at a supermarket carpark in Christchurch, New Zealand. (AP Photo/Mark Baker)

The country’s total COVID death toll stood at 68 at the beginning of March, when the highly-infectious Omicron wave had just begun to take off. This relatively low number was due to New Zealand’s adoption of a zero COVID policy two years ago.

Prime Minister Jacinda Ardern announced the end of this policy last October, as the government succumbed to pressure from big business, which views lockdowns and all public health measures as an intolerable impediment to profits.

Because of this criminal decision to allow the mass infection of the population, by May 3 the number of COVID deaths had increased to 777. More than half of these occurred in April. Hundreds of people have lost loved ones due to a virus that could have been prevented had the elimination policy been maintained.

According to the Ministry of Health, more than 950,000 people have had COVID, which is almost one in five. Nearly all of these cases were recorded in the last two months. The real total is undoubtedly much higher as the official figures are based on unreliable, self-administered and self-reported rapid antigen tests (RATs). Thousands of those listed as “recovered” will likely be suffering from Long COVID, a set of conditions that can include severe damage to the heart, lungs and brain.

The government is seeking to normalise COVID deaths and behaving as though the pandemic is coming to an end. On Monday, Ardern told a press conference that the tourism industry was recovering, “with our COVID-19 control now a matter of record.” None of the reporters present challenged the false claim that the virus is under control.

Mandatory isolation requirements for international arrivals have been dropped. Airports NZ, Air New Zealand and the Tourism Export Council are now demanding that pre-departure COVID testing requirements also be scrapped. This follows the ending of vaccine mandates, contact tracing systems and masking requirements in schools.

The healthcare system, which was already facing a crisis of understaffing and unmet needs before the pandemic, has been overwhelmed by the Omicron wave. Thousands of nurses and doctors have been infected, and hospitals have been forced to postpone tens of thousands of vital operations.

Nationwide, there were 481 people with COVID in hospital yesterday. Royal NZ College of General Practitioners medical director Dr Bryan Betty told the Rotorua Daily Post there were reports of emergency departments “all over the country” being filled to capacity due to “a combination of the pressures that we’ve been under with COVID, the pressures that we’ve been under in general practice,” as well as an increase in other viral illnesses.

On Monday morning, Christchurch Hospital reported that it was at 109 percent capacity and 180 staff were either sick with COVID or isolating because a household member had the virus. District Health Board chief executive Peter Bramley said COVID case numbers “are not dropping away as quickly as we originally predicted, and we envisage this situation will continue for some time.”

Wellington emergency surgeon Dr Kelvin Ward started a petition last month calling for the government to urgently adopt a “vaccines plus” approach to COVID—that is, to introduce public health measures in addition to a stepped-up vaccination campaign. The open letter was co-written by nine other scientists and public health experts, including epidemiologists Professor Michael Baker and Dr Amanda Kvalsvig. It has been signed by more than 150 doctors and scientists.

In late March 2020, during the initial wave of the pandemic, Dr Ward initiated a healthcare workers’ petition calling for a nationwide lockdown. It quickly gained support from over 150,000 people, despite opposition from the New Zealand Nurses Organisation and the teacher unions, which falsely claimed that schools could safely stay open.

The Ardern government, fearing that a movement of the working class could emerge outside the control of the trade unions, decided to act and imposed one of the world’s strictest lockdowns, which succeeded in reducing case numbers to zero.

The new petition does not call for a lockdown, but for the reinstatement of mandatory masking in schools, as well as carbon dioxide monitors and air filtration systems, and “clear ventilation standards for indoor public spaces.”

The experts demand better public education about the nature of the airborne transmission of the virus and how to prevent it and government funding to ensure a good supply of N95 and similar high-quality masks, rather than the inadequate surgical masks widely in use.

They also call for a stronger effort to boost vaccination rates, particularly for children. At present, just over 2.6 million people—half the population—have received the three doses of the Pfizer vaccine required to give significant protection from Omicron.

The experts state that “COVID-19 is a highly infectious disease, but transmission is preventable.” They warn: “Relying on ‘personal responsibility’, without effective public health measures, will result in repeated waves of infection, an overloaded and dysfunctional healthcare system, and ongoing disruption to daily life. This scenario is currently playing out around the world. Instead, a collective approach is required that focuses on minimising transmission by means of public health policies.”

The WSWS supports the public health measures advocated in the “Vaccines Plus” petition, but insists that they must be part of a comprehensive, fully resourced elimination strategy. This includes the immediate closure of schools and non-essential businesses, with support provided to workers and small business owners, until case numbers are reduced to zero. The mitigationist approach, which accepts the transmission of COVID-19 in the community, will not stop ongoing deaths and severe illnesses or the emergence of new and more dangerous variants.

China has demonstrated that Omicron can be stamped out in the world’s most populous country, saving millions of lives. But the continual reintroduction of COVID into China shows that elimination must be adopted as a global strategy.

How is this to be achieved? It is no use appealing to capitalist governments, including the Ardern government in New Zealand, which have allowed the virus to spread out of control. Internationally, governments have presided over more than 20 million deaths from COVID-19, proving their sole concern is to satisfy the demands of the banks and big business.

The Coming Old New Order

Mel Gurtov

From Cold War to Cold War

A principal lesson of the war in Ukraine is that the Cold War never ended. German reunification, the Soviet Union’s collapse, new entries in NATO, democratic springs in Poland and Hungary, Ukraine’s independence, the removal of nuclear weapons from eastern Europe, including Ukraine—all these events once augured a new era in Europe. Russia would embrace perestroika and glasnost, globalization would fully integrate the eastern European economies with the European Union, and demilitarization would free up funds for social well-being and environmental rehabilitation. American triumphalism was at its height, with President George H.W. Bush proclaiming a “new world order” after the Iraq intervention, and Frances Fukuyama prophesying “the end of history.”

Those dreams were shattered by subsequent events in the Middle East, the rise of China, and, in Europe, developments both unforeseen—such as large-scale immigration from the Middle East and north Africa, and the resurfacing of Russian authoritarianism—and unwise, such as the unequal impact of globalization on working classes and NATO’s eastward expansion.

These new sources of European division provided fertile ground for the rise of right-wing populism and white supremacist nationalism. The 1990s proved to be a transitional period, not the start of a new era. We’re now in Cold War 1.5, not Cold War II.

Regardless of the outcome in Ukraine—a Russian occupation of the eastern regions, an unending insurgency, or a Ukrainian victory—the European security order will continue along an East-West divide. As Stephen Kotkin puts it, geo-economics has not replaced geopolitics.

Vladimir Putin is trying to create his own new order by force—an order in which a Russian-dominated east faces a US-NATO-dominated west. Neutrality has become a thing of the past as Sweden and Finland seem ready to join NATO, Germany has broken with tradition on military aid in a conflict, and even Switzerland has contributed to Ukraine’s defense against Russia’s invasion. It’s us-versus-them again.

The Stakes

A central principle of post-World War II international politics was that aggression must not pay. That principle has been under fairly consistent assault since, but never so profoundly as it is today. European Commission President Ursula von der Leyen said in a statement that the Russian invasion “Is not only a defining moment for our continent, but also for our relationship with the rest of the world.”

She specifically meant to include China. General Mark Milley, the US joint chiefs chairman, tells CNN:

“What’s at stake . . . is the global international security order that was put in place in 1945. . . . And underlining that entire concept is the idea that large nations will not conduct military aggression against smaller nations, and that is exactly what’s happened here, by Russia against a smaller nation.”

Therein lies the importance of how the war in Ukraine ends.

One possibility is that Putin will not survive, a return of some semblance of democracy in Russia is possible, and the threat to democratic and semi-democratic states bordering Russia will subside.

Human rights and pro-democracy forces in currently pro-Russian authoritarian regimes such as Belarus, Hungary, and Kazakhstan may bring on a new wave of color revolutions. Europe would essentially be back to 1989-1991 and the post-Soviet upheaval, though with the ever-present danger of Russian revanchism. It would be an uneasy peace, however, with parallels to Europe in 1945 when another great power was defeated, the Americans went home, and Europe quickly faced political and economic upheaval.

In Asia, China’s close ties with Putin’s Russia would have been proven bankrupt, forcing China to reconsider its global strategy and giving the Chinese military good reason to shy away from reliance on a Russian army that has proven grossly incompetent.

US alliances in Asia—with South Korea, Japan, Australia, and with India in AUKUS and the Quad—would all be given a boost. China, would charge all those countries with seeking to contain it, and would likely invest more heavily in its naval and air forces. That could spell trouble in the Taiwan Strait and, with North Korea, on the Korean peninsula. The nuclear issue could then become more salient—with South Korea wanting its own nuclear deterrent against North Korea and Japan not just expanding its military but considering having a nuclear deterrent against China. A new Cold War in Asia, already much discussed these days, might be unavoidable.

Worst-Case Futures

If, on the other hand, Putin emerges with new territorial gains in Ukraine, unpunished for his war crimes and determined to refurbish his military’s damaged reputation, the battle lines for the next confrontation in Europe will be apparent.

A new Iron Curtain is likely to descend on Europe: Georgia, Moldova, and possibly Poland may face serious security threats from Moscow even though Russia’s economy has been seriously weakened, the Russian military had gotten a black eye in Ukraine, and the quality of life for Russians will have been dramatically scaled back. The US-NATO alliance system will have to be fortified for another long haul.

That scenario may not bode well for the alliance. Long-term economic sacrifice could cause some EU populations to drift from generosity with Ukraine to indifference. Central Asia’s security picture may become more dire as well. Countries that are dependent on Russia for security and trade, such as Kazakhstan, or host Russian military forces, such as Kyrgyzstan and Tajikistan, may worry about where Russian hyper-nationalism will move next.

The immediate future of Europe may feature prolonged fighting in Ukraine without any clear outcome. That eventuality means further increases in military spending and armed forces throughout Europe, deeper political divisions within countries, and the dashing of hopes for combatting climate change and other social problems.

Talk of a nuclear confrontation will grow more ominous, not just in Europe but in East Asia too. Above all, think of what Ukraine, in victory or defeat, will be like. It already is a completely devastated country, with a huge refugee population, splintered families, industry reduced to primitive levels, and severe food, water, and electrical shortages. Ukraine, in short, will be a basket case after the war, dependent on the West for many years and constantly facing threats from the east. Like Western Europe after the Nazi defeat, Ukraine and possibly its neighbors will need a Marshall Plan and security guarantees. Where will the money and the guarantees come from?

Cold War I was enormously costly to all countries and to the planet. With pandemics and the climate crisis now ongoing threats to species survival, the last thing the world needs is a new round of Cold War that not only detracts attention from those existential threats but adds a new one: use of a nuclear weapon.

Ukraine must be rebuilt and European security must be reinforced, but there should be less talk about a “new order” and Cold War, and more talk about human and environmental security.

Can We Abandon Pollutive Fossil Fuels and Avoid an Energy Crisis?

Richard Heinberg

Refinery, Ashland, Kentucky. Photo: Jeffrey St. Clair.

Similar to the two navigational hazards mythologized as sea monsters in ancient Greece—Scylla and Charybdis—which gave rise to sayings such as, “between the devil and the deep blue sea” and “between a rock and a hard place,” modern energy policy has its own Scylla and Charybdis. On the one hand is the requirement to maintain sufficient energy flows to avoid economic peril. On the other hand is the need to avert climate catastrophe resulting from such activities. Policymakers naturally want all the benefits of abundant energy with none of the attendant climate risks. But tough choices can no longer be put off.

Russia’s invasion of Ukraine and the West’s response of imposing sanctions on Russia are forcing a reckoning as far as global energy policy is concerned. The International Energy Agency (IEA) forecasts that the ongoing war and the U.S. sanctions may together reduce Russian oil exports by at least 3 million barrels per day—more than 4 percent of global supplies, which is a huge chunk of the delicately balanced world energy market. Some energy analysts are forecasting that oil prices could spike up to $200 per barrel later this year, exacerbating inflation and triggering a global recession. We’re facing the biggest energy crisis in many decades, with supply chains seizing up and products made from or with oil and gas (notably fertilizers) suddenly becoming scarce and expensive. Scylla, therefore, calls out: “Drill more. Lift sanctions on Venezuela and Iran. Beg Saudi Arabia to increase output.” But if we go that route, we only deepen our dependency on fossil fuels, aggravating the climate monster Charybdis.

The IEA was created in the aftermath of the 1970s oil shocks to inform policymakers in times of energy supply crisis. The agency recently issued a 10-point emergency plan to reduce oil demand and help nations deal with looming shortages owing to Russia’s invasion of Ukraine. Its advice includes lowering speed limits, instituting car-free Sundays, encouraging working from home, and making public transport cheaper and more widely available.

All of these are good suggestions—and are very similar to what my colleagues and I have been advocating for nearly 20 years (some were even part of U.S. energy policy 50 years ago). Fossil fuel supply problems shouldn’t come as a surprise: we treat these fuels as though they were an inexhaustible birthright; but they are, of course, finite and depleting substances. We have extracted and burned the best of them first, leaving lower-quality and more polluting fuels for later—hence the recent turn toward fracked oil and gas and growing reliance on heavy crude from Venezuela and “tar sands” bitumen from Canada. Meanwhile, rather belatedly, it has gradually dawned on economists that these “unconventional” fuels typically require higher rates of investment and deliver lower profits to the energy industry, unless fuel prices rise to economy-crushing levels.

Indeed, it’s as though our leaders have worked overtime making sure we’re unprepared for an inevitable energy dilemma. We’ve neglected public transportation, and many Americans who are not part of the white-collar workforce have been pushed out from expensive cities to suburbs and beyond, with no alternative other than driving everywhere. While automakers have turned their focus to manufacturing electric vehicles (EVs), these still account for a small fraction of the car market, and most of today’s gas-guzzling cars will still be on the road a decade or two from now. Crucially, there are as yet only exploratory efforts underway to transition trucking and shipping—the mainstays of global supply chains—and find more sustainable alternatives. That creates a unique vulnerability: the current worldwide diesel shortage could hammer the economy even if the government and the energy industry somehow come up with enough gasoline to keep motorists cruising to jobs and shopping malls.

Then there’s the issue of the way fossil fuels are financed. They’re not treated as a depleting public good, but as a source of profit—with investors either easily enticed to plunge into a passing mania or spooked to flee the market. Just in the past decade, investors have gone from underwriting a rapid expansion of fracking (thereby incurring massive financial losses), to insisting on fiscal responsibility, while companies are now milking profits from high prices and buying back stocks to increase their wealth. Long-term energy security be damned.

Meanwhile, the climate monster stirs fitfully. With every passing year, we have seen worsening floods, fires and droughts; glaciers that supply water to billions of people melting; and trickles of climate refugees threatening to turn into rivers. As we continue to postpone reducing the amounts of fossil fuels we burn, the cuts that would be required in order to avert irreversible climate doom become almost impossibly severe. Our “carbon budget”—the amount of carbon we can burn without risking catastrophic global warming—will be “exhausted” in about eight years at current emission rates, but only a few serious analysts believe that it would be possible to fully replace fossil fuels with energy alternatives that soon.

We need coherent, bold federal policy—which must somehow survive the political minefield that is Washington, D.C., these days. Available policies could be mapped on a coordinate plane, with the horizontal x-axis representing actions that would be most transformative and the vertical y-axis showing what actions would be most politically feasible.

High on the y-axis are actions like those that the Biden administration just took, to release 1 million barrels a day of oil from the strategic petroleum reserve and to invoke the Defense Production Act to ramp up the production of minerals needed for the electric vehicle market. While politically feasible and likely popular, these efforts won’t be transformative.

An announcement by President Joe Biden of an ambitious energy-climate vision, with the goal of eliminating our dependence on foreign fuel sources and drastically reducing carbon emissions by the end of the decade, would probably fall somewhere in the middle, where the x- and y-axes meet. Such a vision would encompass a four-pronged effort being proposed by the government:

+ Incentivizing massive conservation efforts, including “Heat Pumps for Peace and Freedom” and providing inducements for businesses to implement telework broadly.

+ Directing domestic production of fossil fuels increasingly toward energy transition purposes (for example, making fossil fuel subsidies contingent on how businesses are growing the percentage of these fuels being used to build low-carbon infrastructure).

+ Mandating massive investments in domestic production of renewables and other energy transition technologies (including incentives to recycle materials).

+ Providing an “Energy Transition Tax Credit” to households or checks to offset energy inflation, with most of the benefits going to low-income households.

Ultimately, some form of fuel rationing may be inevitable, and it is time to start discussing that and planning for it (Germany has just taken the first steps toward gas rationing)—even though this would be firmly in the x-axis territory. Rationing just means directing scarce resources toward what’s vital versus what’s discretionary. We need energy for food, critical supply chains and hospitals; not so much for vacation travel and product packaging. When people first hear the word “rationing,” many of them recoil; but, as author Stan Cox details in his history of the subject, Any Way You Slice It, rationing has been used successfully for centuries as a way to manage scarcity and alleviate poverty. The U.S. SNAP (food stamp) program is essentially a rationing system, and all sorts of materials, including gasoline, were successfully rationed during both world wars. More than two decades ago, the late British economist David Fleming proposed a system for rationing fossil fuel consumption at the national level called Tradable Energy Quotas, or TEQs, which has been discussed and researched by the British government. The system could be used to cap and reduce fossil fuel usage, distribute energy fairly and incentivize energy conservation during our transition to alternative sources.

Also, we need to transform the ways we use energy—for example, in the food system, where a reduction in fossil fuel inputs could actually lead to healthier food and soil. Over the past century or so, fossil fuels provided so much energy, and so cheaply, that humanity developed the habit of solving any problem that came along by simply utilizing more energy as a solution. Want to move people or goods faster? Just build more kerosene-burning jet planes, runways and airports. Need to defeat diseases? Just use fossil fuels to make and distribute disinfectants, antibiotics and pharmaceuticals. In a multitude of ways, we used the blunt instrument of cheap energy to bludgeon nature into conforming with our wishes. The side effects were sometimes worrisome—air and water petrochemical pollution, antibiotic-resistant microbes and ruined farm soils. But we confronted these problems with the same mindset and toolbox, using cheap energy to clean up industrial wastes, developing new antibiotics and growing food without soil. As the fossil fuel era comes to an end, the rules of the game will change. We’ll need to learn how to solve problems with ecological intelligence, mimicking and partnering with nature rather than suppressing and subverting her. High tech may continue to provide useful ways of manipulating and storing data; but, when it comes to moving and transforming physical goods and products, intelligently engineered low tech may offer better answers in the long run.

Further along the x-axis would be the daring action of nationalizing the fossil fuel industry. But at the very farthest end of the x-axis is the possibility of deliberately reining in economic growth. Policymakers typically want more growth so we can have more jobs, profits, returns on investment and tax revenues. But growing the economy (at least, the way we’ve been doing it for the past few decades) also means increasing resource extraction, pollution, land use and carbon emissions. There’s a debate among economists and scientists as to whether or not economic growth could proceed in a more sustainable way, but the general public is largely in the dark about that discussion. Only in its most recent report has the Intergovernmental Panel on Climate Change (IPCC) begun to probe the potential for “degrowth” policies to reduce carbon emissions. So far, the scorecard is easy to read: only in years of economic recession (such as in 2008 and in 2020) have carbon emissions declined.

In years of economic expansion, emissions increased. Policymakers have held out the hope that if we build enough solar panels and wind turbines, these technologies will replace fossil fuels and we can have growth without emissions. Yet, in most years, the amount of increased energy usage due to economic growth has been greater than the amount of solar and wind power added to the overall energy mix, so these renewable sources ended up just supplementing, not displacing, fossil fuels. True, we could build turbines, panels and batteries faster; but, as long as overall energy usage is growing, we’re continually making the goal of reducing our reliance on fossil fuels harder to achieve.

Wouldn’t giving up growth mean steering perilously close to the Scylla of economic peril in order to avoid the Charybdis of climate doom? So far, we’ve been doing just the reverse, prizing growth while multiplying climate risks. Maybe it’s time to rethink those priorities. Post-growth economists have spent the last couple of decades enumerating the ways we could improve our quality of life while reducing our throughput of energy and materials. Policymakers must finally start to take these proposals seriously, or we will end up confronting the twin monsters—economy-crushing fossil fuel scarcity and devastating climate impacts—without prior planning and preparation.

It was always clear that we would eventually have to face the music with regard to our systemic economic dependency on depleting, polluting fossil fuels. We have delayed action, making both the economic challenge and the climate threat harder to manage. Our possible navigation channel between Scylla and Charybdis is now perilously narrow. If we wait much longer, this channel will vanish altogether.

British Virgin Islands premier’s arrest exposes Britain’s central role in global corruption and criminality

Jean Shaoul

On Thursday, the US Drug Enforcement Agency arrested Andrew Fahie, prime minister of the British Virgin Islands (BVI), in Florida charging him with drug trafficking and money laundering after undercover agents caught him in a sting operation set in motion last October. Also arrested were BVI port authority director Oleanvine Maynard, and his son Kadeem in a separate operation.

Andrew Fahie (Credit: Government of the Virgin Islands)

The arrests expose the financial skullduggery of not only the BVI, one of the world’s premier tax havens, but Britain, which retains overall control of the islands. Far from serving as a check on criminal activities, Britain stands exposed as the ringleader.

US law enforcement officials lured the pair into Miami’s Opa-Locka Executive Airport with the promise of $700,000 in cash in designer shopping bags in return for help in enabling drug shipments. Earlier this month, Fahie had agreed a 12 percent commission on a three-ton shipment for cocaine smuggled via the BVI. According to court filings, Fahie had complained that “the British did not pay him much.”

British Foreign Secretary Liz Truss struck an outraged pose, saying she was “appalled” by the arrest and associated revelations. The BVI has long been known to be the centre of a major drug trafficking route, with shipments of cocaine routed from Columbia to the US through the islands. In November 2020, the authorities seized more than two tons of cocaine at a property on the islands belonging to a serving police officer. Truss immediately dispatched Amanda Milling, the minister for overseas territories, to the British Virgin Islands for talks.

Fahie, widely described as a flamboyant character, was first investigated in 2003 in relation to money laundering, allegations he denied as 'outdated, unproven, and unsubstantiated,' but the investigation resulted in no action being taken against him.

So rife were the allegations of drug smuggling, corruption, nepotism, jury intimidation and the misuse of public funds that in January 2021 Britain’s then governor of the islands, Gus Jaspert, who once served as private secretary to former Prime Minister David Cameron—himself a beneficiary of BVI’s tax haven status, was forced to set up a Commission of Inquiry into mis-governance in the British overseas territory.

However, as the present governor John Rankin pointed out, “The remit of the Commission of Inquiry focused on governance and corruption and was not a criminal investigation into the illegal drug trade.” He failed to explain why it did not deal with the serious claims of high-level collusion with drug trafficking.

The Commission, due to report last January, conveniently published its 943-page long report the day after Fahie’s arrest. Headed by retired judge Sir Gary Hickinbottom, it found that “almost everywhere the principles of good governance… are ignored” but concluded it was “highly likely” that serious dishonesty had taken place. It recommended imposing direct rule from London by the BVI’s governor, tantamount to putting the mafia boss in direct charge.

The recommendation to suspend the elected government and impose direct rule comes just months after Barbados dumped the Queen as head of state and Prince William and Kate’s visit to Jamaica prompted similar calls, amid protests calling for apologies and reparations over slavery and historical mistreatment.

The lawyer hired to defend Fahie’s administration is former attorney-general, Sir Geoffrey Cox, widely criticized for taking on highly lucrative legal work when being a Conservative MP is supposed to be a full-time job. He earned more than £1 million in 2021 from his non-parliamentary work for the international law firm Withers. During his visits to the BVI, he stayed in a luxury villa that costs $7,100 a week to rent during the low season, paid for by the BVI government.

Locator map of British Virgin Islands (Credit: Creative Commons-UN Office for the Coordination of Humanitarian Affairs (OCHA)

The 50 or more islands that comprise the British Virgin Islands are situated to the east of Puerto Rico and the US Virgin Islands and have a population of just 30,000. After capturing the islands in 1672, the British introduced sugar cane production and brought slaves from Africa to work on the plantations. In the years that followed the Abolition of Slavery in the British Empire in 1833, the BVI, like its counterparts throughout the Caribbean, was never able to overcome British imperialism’s legacy of underdevelopment, dependency and economic hardship.

On gaining notional independence from Britain in 1960, when few people had access to electricity, the BVI diversified away from its traditionally agriculture-based economy in favour of tourism and financial services for the world’s corporations and kleptocrats that use the islands as a tax haven. Since the 1980s, the BVI has become synonymous with the tax avoidance industry, hosting the brass plates of 370,000 companies that control an estimated $1.5 trillion of assets, and is now one of the wealthiest areas in the Caribbean.

The scale of its transactions is enormous. By 2012, according to the Financial Times, the British Virgin Islands was the fifth largest recipient of foreign direct investment globally, “with inflows at $72 billion, higher than those of the UK, which has an economy almost 3,000 times larger.” Despite the enormous wealth controlled by BVI’s corporations, little remains in the BVI, with BVI’s entire banking system holding just $2.5 billion.

The money, often of dubious origin, and the financial services industry that provides the necessary legal cover is channeled through these tax havens that offer their owners both anonymity and tax-free status. The money is then funneled through to businesses and banks in the City of London that then pay little or no tax on their operations, while at the same time underpinning London’s position as a major financial centre as it laundered the world’s dirty money. Such is the sordid status today of what was the world’s first major capitalist state.

This is likely why the US launched the sting operation: to undermine London’s position and shore up New York’s. It comes as the City of London is still reeling from sanctions imposed in the wake of the US/NATO provoked war in Ukraine on Russian oligarchs who have parked their money in Britain’s capital.

The latest scandal follows the release of the Panama papers in 2016, and later the Paradise Papers in 2017 and the Pandora Papers in 2021, by International Consortium of Investigative Journalists (ICIJ). The Pandora Papers’ analysis identified 956 companies specializing in offshore tax havens with ties to 336 “high-level politicians and public officials, including country leaders, cabinet ministers, ambassadors and others.” “More than two-thirds” of the companies identified were “set up in the British Virgin Islands.”

The BVI is one of the 15 British Overseas Territories, a collection of islands strategically located around the world. Most of them function as tax havens and military bases for British imperialism, with Britain responsible for their criminal justice system, defence and foreign relations. To put it another way, their governments have no more powers than local authorities in Britain. The British government can issue instructions to the BVI, declare a state of emergency as the previous governor Jaspert did after Hurricane Irma caused devastation on the islands in 2017, and even assume overall control of the islands.

Thus, Britain plays a crucial role in enabling the tax havens that protect the wealth of the world’s kleptocrats and depriving the world’s governments of nearly half a trillion dollars through tax abuse by multinationals and the super-rich, according to the State of Tax Justice 2021 published jointly by the Tax Justice Network (TJN), the Global Alliance for Tax Justice and the global union federation Public Services International last November. It found that estimated tax losses had risen from $427 billion in 2020 to $483 billion in 2021, although these figures were likely “the tip of the iceberg”, with the UK alone responsible for almost 40 percent of the total. These losses must be recouped through savage cuts and ramping up the taxation and, above all, exploitation of the working class.

For decades successive British Chancellors of the Exchequer have lyingly protested their helplessness in the face of tax havens, even as the governor of the BVI, and the governors of Britain’s other tax havens, has for decades and by right attended and presided over the BVI’s cabinet, and is thus intimately involved in the formulation and implementation of its financial policy.

Fahie’s arrest come as British politicians, many of whom benefit from Britain’s offshore tax havens, insist there is no money to pay for the most essential social services. They allow the world’s financial elite and its bribed political stooges to dodge taxes by stashing their wealth in secretive locations right under the noses of the so-called “financial regulators,” while the working class is told it must accept ever worsening poverty and deprivation.

Sharp rise in cost of living, high unemployment portend renewal of class conflict in Chile

Mauricio Saavedra

Soaring costs of basic consumer goods triggered by the US/NATO war against Russia in Ukraine, the normalization of COVID-19 infections and deaths, high unemployment and historic levels of social inequality once again have brought to the surface immense social tensions in Chile. 

Chilean President Gabriel Boric arrives to La Moneda presidential palace in Santiago, Chile, Monday, May 2, 2022. [AP Photo/Esteban Felix]

As in October 2019, the eruption of the class struggle is a specter that brings jitters to the ruling class and the newly installed government of the pseudo-left-Stalinist coalition Apruebo Dignidad (I approve dignity).

Confronted in the last month with the outbreak of hunger riots and looting, school occupations, road blockades by truck owner-operators and striking port and health workers, the immediate reaction of the government of Gabriel Boric has been to unleash the murderous Carabinero special forces. 

Although the right-wing corporate media has all but censored the police-state repression and deliberately distorted the narrative to paint students, workers and the poor as common criminals, dozens have uploaded video and photos on social media reporting scenes of militarized riot police and special forces violently beating striking workers and protesting children with truncheons, indiscriminately using water cannon and tear gas and conducting mass arrests.

Up to 400 people were involved in a hunger riot culminating in the looting of a supermarket on the outskirts of Santiago last Monday, a gauge of the desperate situation facing the working class. What started off with 40 or 50 people setting up barricades in Talangante, a working class commune in the Metropolitan Region, quickly attracted hordes of desperate people ransacking a Tottus supermarket. 

The militarized police responded swiftly, arresting 48 people. Egged on by the right, baying for law and order, several parties in the coalition government condemned the riots as criminal and criticized the Prosecutor’s Office for releasing 33 of them. 

“All these were a bunch of criminals that the only thing they came to do was to steal, to loot,” the mayor of Talagante Carlos Álvarez (Socialist Party), told Expreso Biobio. “In the theory of criminal law, the state of necessity is an exoneration of responsibility in famine theft, which means that it is theft by hunger. Here nobody took something to eat … they were taking household appliances.” 

Álvarez’s contemptuous attitude betrays the cynicism of the government’s propaganda campaign of “empathizing” with “the people.” 

Gabriel Boric’s administration, which includes the pseudo-left Broad Front, the Stalinist Communist Party and sectors of the parliamentary left, came to power promising the masses that it would put an end to the “neo-liberal” free-market model. Yet the series of reforms that he has announced to date amount to a drop in the ocean compared to what is required to address entrenched poverty and social inequality, now exacerbated by steeply rising costs. 

Data from the National Statistics Institute indicates that the March Consumer Price Index reached a historical increase of 1.9 percent on top of a 9.4 percent inflation rate over the last 12 months. 

The surge in prices is in large part the outcome of the policies of the right-wing government of Sebastián Piñera approved by former deputy Boric and his associates in the parliamentary left, which mimicked those of the US and Europe during the economic crisis triggered by the COVID-19 pandemic in March 2020. 

Piñera introduced economic “reactivation” programs that consisted of providing collateral for credits to predominantly medium to large firms, guaranteeing up to US$20 billion in bank loans. It also covered the payroll by up to 80 percent of small and medium sized businesses. Beginning in May 2020, Mario Marcel—current finance minister and the former chief of the autonomous Central Bank—massively expanded the bank’s balance sheet to prop up the financial markets. 

All these measures helped increase the fortunes of the super-rich by 73 percent between 2020 and 2021. The combined wealth of the eight richest billionaires reached US$42.7 billion last year.

Forbes' list of Chilean billionaires in 2021

It now has come to light that the large supermarket chains in the country have over the last year artificially jacked up prices of basic consumer goods over and above inflation.

The 2022 World Inequality Report, coordinated by economists Thomas Piketty, Emmanuel Saez, Gabriel Zucman and Lucas Chancel, places Chile as among the most unequal countries in the Latin America. 

According to the report: “Available estimates suggest that inequality in Chile has been extreme over the past 120 years, with a top 10 percent income share constantly around 55%-60 percent and a bottom 50 percent income share around 9-10 percent.” 

Household wealth (the sum of all financial assets plus non-financial assets plus net debts) is even more skewed. In 2021, the average wealth for the bottom 50 percent in Chile was negative—meaning half of the population was in debt. On the other hand, the top 10 percent and top 1 percent of the population held 80 percent and 50 percent of total wealth, respectively. 

Fundación Sol infographic illustrating the sharp rise in basic consumer products over the last year. (Source: National Institute of Statistics)

Most significantly, the report explains that since 1995, that is, under the so-called socialist administrations of Ricardo Lagos (2000-2006) and Michelle Bachelet (2006-2010, 2014-2018), the wealth of the bottom half remained at zero or less while the shares of the top 10 and top 1 percent more than doubled.

This persistence of extreme inequality in Chile, whether under military or civilian rule, is key to understanding the profound social eruption that shook the country in late 2019 and the beginning of 2020 and threatens to erupt today in response to catastrophic food and energy prices rises.