New Zealand universities hit by long-term assault on pay and jobs

John Braddock

The Tertiary Education Union (TEU) recently released a report into funding and salaries in New Zealand’s universities.

While limited in scope, the report commissioned from economic consultants BERL (Business and Economic Research Ltd), provides a glimpse into the long-term assault on the wages and conditions of university staff.

The report constitutes a damning, albeit unintended, indictment of the TEU, which has done nothing to oppose the wave of offensives against public education, staff and students by university administrations and successive governments.

Unitec Institute of Technology Carrington Road Campus, Auckland

The TEU said it commissioned the report, titled Where does the Money Go? Analysis of NZ universities’ financial statements, because it wanted to know where public and private investment in universities was being directed and “identify issues that needed addressing.” BERL’s analysis was based on the annual reports of all eight of the country’s universities since 2008.

The report establishes that overall operating revenue and expenses from 2008–2020 increased faster than inflation, reaching a high point in 2019, prior to the onset of the COVID pandemic. Universities’ total operating revenue grew by 25 percent, government funding by 16.5 percent, student fees revenue by 45 percent and research revenue by 48 percent.

The sector oversaw a significant increase in international students and a drop in domestic students. As is the case throughout the world, international students, who pay much higher, unsubsidised fees in the tens of thousands of dollars, were used as cash cows to prop up the universities. International students became New Zealand’s fourth biggest export earner.

Prime responsibility for this system lies with the 1984–1990 Labour Party government’s “Learning for Life” agenda, which opened the door to a swathe of government funding cuts, abolished free tertiary education and introduced the first student fees, while forcing universities to run on competitive “business” lines and through entrepreneurial activities.

According to BERL, since 2008 access to contestable research revenue and student fee revenue grew faster than government funding, thereby shifting the burdens, financial and otherwise, onto staff and students. While total university operating expenses increased by 18 percent, growth in staff costs and wages, despite an increase in personnel numbers, went up by just 7 percent. Spending increases have centred on property, new buildings and equipment.

The report highlights that average salaries have not kept up with inflation since 2007/8. University of Otago salaries fell in real terms by 10 percent in the 13 years, while at the University of Auckland, the country’s biggest, the decrease was 17 percent.

The TEU contrives to evade its own culpability in this assault. It boasts that the union “negotiated settlements in most years that reflect inflation.” From 2006–08, following two years of unspecified “nationwide action” by TEU members resulting in “tripartite talks,” salary increases of 7.5 percent in 2006 (CPI 3.3 percent), 6.2 percent in 2007 (CPI 2.5 percent) and 5 percent in 2008 (CPI 4.1 percent) were negotiated.

The TEU says nothing about pay settlements or any purported “action” from 2008 to 2020. This was a period, following the financial crisis of 2008, of intense restructuring, with widespread layoffs, soaring student fees and debt, and cuts to admissions, courses and libraries.

The union collaborated in numerous attacks. In March 2010, for example, TEU branch president Megan Clayton declared that she was “reasonably happy” with the way Canterbury University had consulted the union before imposing nearly 100 redundancies.

In 2015, the TEU responded to 300 impending job cuts at Unitec in Auckland by calling on management “to undertake a change in such ways that staff are brought along with the changes; and at a pace that will allow change to bed in.”

With the onset of the COVID pandemic in early 2020, border closures saw international student enrolments cut by more than half. In 2019, New Zealand had about 22,000 full-time international students paying total fees of $NZ562 million. That quickly fell to less than 10,000 students. While applications are now “recovering” with borders reopened, they are running at only 50 percent of pre-pandemic levels.

The financial “hole” produced an immediate and severe assault on jobs. Victoria University of Wellington (VUW) said it expected a $12 million loss and Auckland University anticipated a $30 million loss.

The TEU promptly signaled that it would not oppose the assault. In May 2020, with a hiring freeze already in place, the TEU demanded that union officials be included in all “high level decisions” on the impacts of COVID-19. It called for “all affected parties representing government, sector leaders, unions, staff, students and their communities,” to collaborate on a “nationwide strategy” to address the impact of the travel ban.

The TEU welcomed bogus advice by the Tertiary Education Commission (TEC) that financial impacts would be “managed appropriately” in relation to staff cuts. Then TEU national president Michael Gilchrist declared: “Staff cuts should be the last option considered.”

By March 2021, some 700 jobs had been shed nationwide. At the University of Auckland 300 had signed up for a “voluntary” severance package, at VUW 100 did the same, and at each of AUT, Massey and Lincoln more than 70 staff had already left or were going. Auckland reported paying $44 million in redundancies to staff whose jobs were axed.

New TEU president Tina Smith told Radio NZ the job cuts were “huge” and that “senior academics are being pushed out, shoved out, encouraged to leave because they want them to be replaced by cheaper options.”

The modus operandi of the TEU was shown at VUW, where staff were warned that “extra measures” would be required due to expected losses ballooning to $33.5 million in 2021, adding to a $19 million deficit for 2020. TEU branch president Dougal McNeill—a leading member of the pseudo-left International Socialist Organisation—declared the announcement had left members “prepared to fight.” In fact, the TEU accepted some cuts as inevitable and helped to impose them.

After VUW publicly ruled out “large scale” sackings, the TEU claimed a victory, declaring on Facebook: “The Vic Uni branch has shown how much is achieved when we stand together.” Some 60 “voluntary” redundancies were carried through while the TEU made no attempt to unite staff across universities in a nationwide campaign against the cuts.

The entire trade union bureaucracy, meanwhile, has done nothing to oppose the Ardern Labour government’s decision last October, following demands by big business, the media and university administrations, to ditch virtually all public health precautions and let COVID “rip.” The unions have acted as enforcers of the “return to work” agenda.

The results have been a disaster, including in the universities. In March this year, COVID-19 swept through the halls of residence at VUW. The university reported 648 cases in its 13 live-in premises, making up a quarter of all student residents, many of whom had only arrived a week earlier to begin the year. The administration kept in-person lectures going, with a streaming option made available.

Attacks on jobs in the wider tertiary sector are set to continue. The government is currently restructuring the country’s polytechnic system, merging 16 trades training institutions into a single entity, forecast to save $52 million per annum from 2023.

The polytechnics currently have about 7,800 staff. The TEC recently pointed to a 16 percent decline in enrolments over the past five years and warned that necessary financial results could not be achieved unless a large number of staff left and further job cuts were imposed.

The TEU has moved to channel members into a corporatist “consultation” process which involves making submissions on the proposed “operating structure,” with no campaign to oppose any assault on jobs, wages and conditions.

Euro zone inflation hit new high amid near certain recession

Nick Beams

The escalation of the euro zone inflation rate to 9.1 percent in August, amid forecasts that it will soon hit double digits, makes it a near certainty that the European Central Bank (ECB) will impose a significant interest rate hike when it meets next week.

A cashier changes a 50 Euro banknote with US dollars at an exchange counter in Rome. (AP Photo/Gregorio Borgia, File) [AP Photo]

The inflation spike, which was marginally higher than anticipated, and the moves by the ECB to lift interest rates, take place in conditions where the European economy is heading for a recession, if not already in one.

It has been battered by rising energy and electricity prices, a product of the escalating NATO proxy war against Russia in Ukraine. But one of the significant features of the latest data is that inflationary pressures are spreading more broadly.

The so-called core inflation rate, which strips out volatile energy and food prices, rose to 4.3 percent, up from 4 percent in July.

Reporting on the European inflation, the New York Times noted that in Estonia it had reached 25 percent, with nine countries registering double-digit levels, including Lithuania and Latvia where it is over 20 percent. This is an indication that processes at work in the extremities of the euro zone economy could soon reach the heart.

Responding to the inflation data, German central bank president Joachim Nagel said inflation was “becoming an enormous burden for more and more people.” But this “concern” for the mass of the population was wheeled out to provide the rationale for a tightening of monetary policy which will only accelerate the recessionary trends while doing nothing to bring down prices.

“We need a strong interest rate hike in September. And further interest rate hikes can be expected in coming months,” he said.

In a speech in Berlin on Tuesday, he ruled out any relaxation of the interest rate hikes because of their impact on the economy declaring: “We should not delay further hikes for fear of a possible recession.”

The aim of this tightening, in line with the class war agenda agreed to by central bankers at their Jackson Hole meeting last month, is to contract the economy in order to batter down workers’ wage demands to compensate for the highest inflation in four decades.

Jack Allen-Reynolds, an economist at Capital Economics, told the Financial Times (FT) that inflation was set to hit a headline rate of 10 percent by the end of the year.

“With ECB policy rates a long way below appropriate levels [they are close to zero], it is clear that the bank will raise interest rates by a larger-than-normal increment next week. A 75 basis point hike looks increasingly likely,” he said.

In an article on the European economy this week, headlined “Europe is heading for recession. The only question is how bad it will be,” the Economist said “every single warning light is flashing red.”

According to the article, amid all the confusion about the effects of the COVID-19 pandemic, the impact of the drought across much of the continent and the future of gas supplies there was broad agreement on one thing: recession is coming.

It would be led by Germany, Italy, and central and eastern Europe. According to analysts at JP Morgan Chase, there will be a 2 percent contraction for the overall euro zone in the fourth quarter. Growth rates for France and Germany will be -2.5 percent, Italy -3 percent. It said Italian industry appeared to be in “free fall.”

Italy could also spark a financial crisis as a result of ECB monetary tightening because of the high levels of government debt. ECB officials are fearful that if the yield on Italian government bonds rises too sharply in relation to German debt this could lead to a crisis of the euro zone currency system as took place in 2012.

At its last meeting in July, the ECB put in place a mechanism to try and prevent this; but despite assurances by the central bank’s president Christine Lagarde, there is no guarantee it will work.

If Italian industry is in “free fall,” the situation in Germany is no better.

Earlier this week it was reported that some German companies are halting production because of rising gas and energy costs. Economy minister Robert Halbeck said industry had worked to cut gas consumption and switch to alternatives.

But some companies had stopped production altogether, a situation he described as “alarming.”

“It’s not good news, because it can mean that the industries in question aren’t just being restructured but are experiencing a rupture—a structural rupture, one that is happening under enormous pressure,” he said.

The crisis is hitting middle-sized industrial companies, the so-called Mittelstand, which form a crucial component of the German economy.

According to a poll published on Wednesday by DMB, a lobby group for the Mittelstand, reported by the FT, 73 percent of companies were experiencing “severe strain” with 10 percent saying that in the next six months their “existence is under threat.”

Commenting on the results, DMB head Mark Tenbieg said: “Trust in the economic competence of the government is disappearing and small- and medium-sized enterprises feel they have been left alone by the authorities.”

The recessionary trends are not confined to Europe. The US economy has contracted for each of the past two quarters and there are moves by major companies, including Ford, to cut their labour force.

One indicator of the state of the global economy is the fall in oil prices. They have been in steady decline over the past three months, falling by 8 percent in the first two days of this week. The price of Brent crude, the main international benchmark, dropped by 12 percent in August.

Evercore ISIO analyst Stephen Richardson told the Wall Street Journal: “The oil market is going from recession fears to recession acceptance.”

Edward Moya, senior market analyst at the trading firm Oanda told the Journal: “Energy traders anticipate a brutal period for global growth.

“China factory activity remains depressed and another eurozone record-high inflation reading has raised the prospects of much more aggressive European Central Bank tightening that could trigger a severe recession.”

Russian President Vladimir Putin visits Kaliningrad as Ukrainian counteroffensive falters

Clara Weiss

On Thursday, Russian President Vladimir Putin visited Kaliningrad, a Russian enclave on the Baltic Sea, which is disconnected from Russian-aligned Belarus through the Suwałki Gap that runs along the Polish-Lithuanian border. 

Amidst the imperialist proxy war against Russia in Ukraine, the Suwałki Gap has been the focal point of growing tensions between NATO and Russia. The stretch of land passes through NATO territory, and Lithuania and Poland have both systematically sought to provoke a conflict with Russia over it by first attempting to ban freight deliveries from Russia to Kaliningrad, and, most recently, ceasing to issue visas to almost all Russian citizens. Commentators have long warned that if a direct military conflict between NATO and Russia were to occur in Europe, it would likely start over the Suwałki Gap.

Tensions between the EU and Russia have also soared this week over the move by the EU to make the issuing of visas to Russian citizens a lot more difficult amid the ongoing conflicts over Russian gas supplies to Europe, above all, via the Russian-German Nord Stream pipeline.

Putin’s visit on Thursday was clearly designed to reinforce Russia’s claim to Kaliningrad. It was also one of the rare occasions in which Putin openly spoke on the ongoing war in Ukraine. In a discussion with high school students, he stated that an “anti-Russian enclave” had been created in Ukraine after the 2014 US-backed coup, posing a threat to Russia. The liquidation of this “enclave,” Putin said, was the main goal of what is officially called the “Russian special operation” in Ukraine. “Therefore, our guys who are fighting there are defending both the citizens of the Donbass and Russia itself,” said Putin.

His appearance in Kaliningrad came amid signs that the Kremlin is preparing for a protracted conflict with the imperialist powers which might well transcend the borders of Ukraine.

The Ukrainian army’s counteroffensive to retake Kherson, a strategic city in southern Ukraine, though announced with grand fanfare on Monday, already seems to be faltering. 

In an unusually blunt commentary for the Washington Post, David Ignatius all but acknowledged that the imperialist backers of Ukraine do not even count on its success. The Biden administration has spent over $50 billion since February alone on arming Ukraine, including a package that will provide for weapons deliveries for at least another three years.

Ignatius wrote:

As Ukraine mounts a new counteroffensive in the southern part of the country, Zelensky’s bravado risks setting expectations too high. In truth, Ukraine probably won’t liberate its territory this year, or even next. Still, as Ukrainian forces push toward the Black Sea coast, Zelensky is delivering a defiant response to President Vladimir Putin’s claim that Ukraine is not a real country. Not only can Ukraine survive, it also can regain some of its occupied land.

Ignatius then went on to praise Ukraine’s ability to use US-delivered High Mobility Artillery Rocket Systems (HIMARS) and other precision weapons to hit Russian military headquarters, ammunition depots and other military infrastructure. Above all, however, he stressed the Ukrainian insurgency as a key component of this war, proudly acknowledging that it had been prepared for by Washington over a period of almost eight years. He wrote:

This partisan campaign, like the HIMARS precision fire, is a product of U.S. planning and training of Ukrainian forces. Since 2014, U.S. Special Operations forces have been teaching the Ukrainians how to fight an occupying army—using special units like the ones that were so effective against al-Qaeda and Islamic State fighters.

Ignatius then quoted from an interview with Gen. Richard Clarke, who is about to retire as head of the U.S. Special Operations Command: “What we did, starting in 2014, was set the conditions. When the Russians invaded in February, we’d been working with Ukrainian SOF for seven years. With our assistance, they built the capacity, so they grew and they grew in numbers, but more importantly, they built capability,” in both combat assaults and information operations.

According to Clarke, the SOF brigades were developed systematically in Kherson, Zaporizhzhia and the Donbas, in particular, all areas that are now at the center of the fighting. Ignatius boasted:

This guerrilla war has produced a grim body count among pro-Russian officials in the occupied areas. In the past few weeks, pro-Russian officials have been killed or injured by car bombs, roadside bombs, poison and shotguns.

In other words, the US is not concerned with any actual military “victory” of Ukraine in either this counteroffensive or the war as a whole. Rather, the calculation is that an incredibly high death toll from a protracted war and a US-armed and -trained insurgency will contribute to the destabilization of Russia, facilitating a long-planned regime change operation and the carve-up of the country itself. 

The Putin regime, which emerged out of the Soviet bureaucracy’s restoration of capitalism, is utterly incapable of responding to the threat posed by imperialism other than through a promotion of nationalism, militarism and class war at home against the working class. The invasion itself on February 24, while provoked by imperialism, was a bankrupt and desperate effort to increase its leverage in negotiations with the imperialist powers. But the opposite occurred. The invasion was seized upon by the imperialist powers as a much needed pretext to implement their long-held war plans against Russia and escalate their military build-up for a new imperialist redivision of the world.

In a remarkable essay for the think tank magazine Russia in Global Affairs, Sergei Karaganov, who has long functioned as a foreign policy mouthpiece of the Kremlin, effectively admitted that Moscow had no real plan for the war but now had to prepare for a protracted conflict with NATO. He wrote that the ultimate goals of Russia’s “special military operation” in Ukraine “remained to be determined.” 

In the same breath, he insisted that the officially declared goals of “demilitarizing” Ukraine and turning it into a “neutral state” in the conflict between Russia and NATO were still “realizable.” However, in order to achieve them, “Russia must be politically, morally and economically prepared for a protracted military operation, constantly teetering on the brink of an escalation with the West, including and up to a limited nuclear war.” 

Karaganov then went on to discuss at length the danger that such a protracted war could end, like the First World War, in a revolutionary movement among the masses, or, as he put it “the catastrophe of 1917.” He noted the devastating impact that the “economic war” waged by NATO had on the working population, warning that this could ultimately turn public sentiment against the war.

In order to prevent a repetition of the “catastrophe of 1917,” Karaganov insisted that there had to be a purge within Russia’s political and economic elite. He called for a “complete nationalization of the Russian elites, a pushing out of all comprador and pro-Western elements and sentiments,” as well as the establishment of maximum economic autarky. Russia, he insisted, had to be turned into a “fortress.” 

In a display of the same semi-delusional Great Russian chauvinism that now permeates the Russian state propaganda, Karaganov presented the war as the spearhead of Russia’s supposed mission to save civilization in an anti-Western crusade. He wrote, “We are the civilization of civilizations, the prop of the opposition to neo-colonialism, and the free development of civilizations and cultures.” 

How Mikhail Gorbachev Became the Most Reviled Man in Russia

Jeffrey Sommers

Gorbachev and Reagan at the signing of the INF Treaty. Photo: Reagan National Library.

Mikhail Gorbachev presented a figure of Greek tragedy proportions. Possessing good intentions and intellectual curiosity, Gorbachev nonetheless became the most reviled man in Russia, following the USSR’s demise. Yet, with Gorbachev, his worst qualities were connected to his best. Gorbachev was the wrong man at the wrong time to resolve the contradictions created by the Stalinist and then Brezhnev bureaucratic model of really-existing socialism in the Soviet Union. Increasingly hated at home, Gorbachev was beloved by world leaders in the “West” as the man who peacefully (at least by the comparative metrics of collapsing empires) unwound the USSR, even if trying to save its all-union character. Meanwhile, for China, Gorbachev delivered lessons in what not to do when reforming a sclerotic post-Stalinist system requiring economic reforms, if not transformation.

What happened when the USSR produced its first post-World War II leader untethered to Joseph Stalin (and those he appointed)? Answer: a liberalizing socialist seeking a return the origins of the USSR’s democratic anchoring in the spirit of the “Soviets.” Contra assertions of Friedrich Von Hayek that socialism represents the “road to serfdom,” the emergence of Gorbachev suggests the opposite. Terror and tyranny in the USSR arose more from war and the demands of state security services required to survive, and the paranoid politics it enabled, rather than any “inevitable” path from the socialist path taken. Once the USSR was passed the generation having gone through this trauma (and leaders linked to that generation), a communist party head emerged that sought a return to an ideology anchored in democratic socialism.

As with nearly all of the Soviet Union’s leadership, Gorbachev had provincial origins, in his case born in 1931 in Stavropol Krai just southeast of Ukraine. His maternal grandparents were ethnic Ukrainian. He rose through the party ranks with a reputation for hard work and finding solutions to vexing challenges. By 1979 he was in the USSR’s highest governing body, the Politburo, and by 1985, selected to the country’s highest post as General Secretary to lead the Soviet Union out of its economic stagnation.

Gorbachev was a serious Leninist, and not just a bureaucrat reciting historical materialist catechisms out of momentum or political expediency. Confirming what historian Stephen Kotkin asserted in his biographies of Stalin, Soviet party leaders were not party posers, but genuine believers in communism who often walked the talk. But, what many thought the USSR needed in its time of trouble was Lenin’s firm hand and not democratic socialist inspired experiments done on the fly.

Ironically, it was these aforementioned democratic characteristics, which ensured the failure of Gorbachev’s reforms.  For every crisis, Gorbachev encountered, his go to inspiration was to be found in Lenin’s writings. Like Lenin, a provincial figure that transformed Russia, he was nonetheless not Lenin. Gorbachev focused on Lenin’s democratic message for the future, but not his decisiveness, if not brutal ruthlessness that allowed him to carry off the Soviet Revolution. By contrast, Russia’s current leader, Vladimir Putin, possesses the other half of Lenin’s personality: his ruthlessness, but bereft of any democratic purpose.

Gorbachev was too much the provincial intellectual and too little the pragmatist as he sought to salvage the USSR. Rather than address practical material approaches to Russia’s economic challenges, e.g., such as his mentor Yuri Andropov’s sensible proposal to reduce waste and make transport more efficient across the USSR’s vast expanse by improving rail rolling stock, Gorbachev’s outlook was often philosophical, focusing on democratizing civic and political life in order to unleash the dynamic economic potential of its citizens. Gorbachev’s reforms let loose creative forces alright, just not ones making the economy more productive, but rather those that gave rise to the post-Soviet oligarch and later siloviki-dominated economy.

For example, Gorbachev’s Decree on State Enterprises in 1987 and Decree on Cooperatives in 1988 were conceived to unleash entrepreneurial energies and deliver greater autonomy to both managers of existing state companies as well as producing entrepreneurs. In practice, however, these measures provided structures permitting the raiding of state inventories of raw materials and often re-selling of finished goods by middlemen in cooperatives at higher prices. Worse, these decrees permitted the rise of commercial banks for the purpose of facilitating business with international customers. This gave cooperatives and state company directors the ability to create (and launder) money, which the government had to back up with real cash. This also created opportunities for early de facto privatizations of state assets. In aggregate, rather than adding new output, Gorbachev’s reforms mostly fueled even more theft. Moreover, they became the infrastructure for offshore banking and privatizations enabling the final feeding off the post-Soviet carcass during the Boris Yeltsin years. This utilization of offshore banking networks intersected with the larger global turn led by the US and the UK to financialize their economies to remain competitive in the face of global manufacturing competition. Utilizing the euro dollar offshore banking systems designed in the 1950s to avoid taxation of multinational companies in Europe, these systems were expanded in the late 1970s and 1980s for tax evasion by the rich generally. KGB trained in using these networks to move capital globally for various Soviet projects (e.g., transferring money to revolutionary movements, etc.), used their expertise in the late Gorbachev years and after to facilitate the theft of Soviet commodities by selling them at world prices and pocketing the arbitrage. All of this worked to the interests of New York and London, as their banks become the recipients of this torrent of cash. KGB agents under Gorbachev were tasked to assist Soviet cooperatives and state managers with establishing commercial banks and offshore accounts. Under Yeltsin, these businessmen created in the Gorbachev years, muscled out the KGB (Chekists). But, in the 21^st century, former Chekists (Siloviki) reasserted their power, grabbed the cash and assets of select oligarchs, and began using this wealth to rebuild Russia’s military. This represented an entropy, in which the system of offshore banking that served US and UK interests through exporting post-Soviet commodities and money to points West, eventually created challenges to Anglo-American power, exemplified in part by the war in Ukraine in 2022.

But, it was not only in the economic realm that Gorbachev’s reforms caused chaos. Liberated from decades of control from an overbearing state, Gorbachev’s perestroika untied the heretofore tightly wrapped package of nationalism that Lenin and Stalin previously contained. Nationalists in the republics came to hate Gorbachev for his attempt at retaining the USSR, even a democratized one with autonomous republics. Meanwhile, Great Russian chauvinists despised Gorbachev for letting the Soviet system unwind and failing to use state power to keep the empire intact. One notable exception on the latter was in Armenia, where protests were causing an uncontrolled opening of the Soviet border with Iran. Gorbachev’s spouse, Raisa, asserted the resulting deaths of 200 Armenian protestors in a crackdown ordered by Gorbachev left him tormented and never the same. Yet, this limited use of force in Armenia was largely the exception to Gorbachev’s refusal to use violence against protestors. The Balts were also having none of Gorbachev’s attempts to reform the Soviet system. Gorbachev’s reforms gave them an opening to bolt for the exit, and they ran. Ukrainian, along with Russian, nationalists also awoke under Gorbachev. Many in the Russian and Ukrainian republics also backed independence from the USSR for economic reasons. Why? Russians assumed they were rich and were held back by parasite Soviet republics draining their wealth. Likewise, Ukrainians pitched independence as the road to milk and honey. Ukraine’s vast black earth belt and formidable industry in the Donbas surely would make it rich once liberated from the Soviet Union, so they thought. Thus, the implication of this is that the nationalist project of the 19^th century which was held back by both Czarist Russia and the USSR could not be chained indefinitely, and thus, wasn’t. Add to this that many in the USSR believed they indeed were rich, but that their vast wealth was being taken by other republics, and dismemberment became compelling.

But, this begs the question of whether the USSR could have been reformed and salvaged in the 1990s under different leadership?  Likely not under the existing conditions. The Soviet workforce was already urbanized. There was no ultra-cheap rural reserve army of labor to tap, as in China. Moreover, the US convinced Saudi Arabia in the 1980s to open the oil spigot to depress energy prices, thus checking Soviet power. Without access to cash, the Soviets could neither fund a transition period while modernizing or buy the technology required to do it. Unable to integrate more rapidly into the world economy, pace China, the USSR would have at a minimum needed to maintain COMECON for many years in order to enter the global economy as a producer of goods beyond commodity exports. France lobbied for keeping COMECON in the newly emerging post-Soviet bloc. The US, however, vetoed it, both to further open Russia to foreign capital, but more importantly to see its vast store of natural resources exit to global markets. Low prices for Soviet commodities in the 1980s and post-Soviet 1990s, played a significant role in restoring global profit levels after the 1970s crisis of accumulation. The post-Soviet space was a key element preventing a return to the raw materials price inflation of the 1970s economic crisis. Additionally, the US was keen to break up the Soviet bloc economies to minimize the threat of the return of a developmental state, especially one of any red and/or brown character.

Regarding China, Gorbachev proved a study for their leaders in how not to reform. Deng Xiao Ping held Gorbachev and his reforms as a study in how not to transition China out of its old Stalinist economy. But, could Gorbachev have succeeded had he moved straight away to economic reforms and used the fist to enforce them as did China in 1987 at Tiananmen? The answer, I think, is no. China’s good relations with the United States were a necessary condition for its economic miracle. The US opened to China under Nixon to further split it off from the USSR. Next, China was perfectly positioned to help the US make its supply-side, neoliberal turn in the 1980s to address its crisis of profitability of the 1970s. Moreover, in the 1980s/90s China was at the beginning of its urbanization. Its massive reserve army of labor powered the offshoring and outsourcing of manufactured goods that applied downward wage pressures sought by capital in the US. Meanwhile, in the 1980s, the process of urbanization in the USSR was done. There was no huge rural labor force that could have been exploited to make the USSR competitive in global labor markets. Soviet wages were too high and its brownfield industries were mostly uncompetitive. And, where Soviet and Warsaw Pact industries were competitive, Western multinationals sought to either buy and operate them or purchase them in order to remove competition. Meanwhile, resource extraction and surviving heavy industry were seized by Russia’s new oligarchs in the 1990’s “loan for shares,” and under Putin slowly clawed back by the siloviki. China, by contrast, was an economic tabula rasa with ultra-low wages and a strong state that kept labor discipline intact while building modern infrastructure as needed. Unlike the USSR, China was at the right place at the right time with the right global conditions to develop. The United States needed exactly what China had, and China knew what to do with that need.

On foreign relations, Gorbachev is viewed fondly in the US as the figure who advanced nuclear disarmament, while dissolving the Soviet Bloc. But, Russians thought Gorbachev was naïve in his dealings with the United States. Gorbachev basked in the acclaim of his Western partners, and increasingly took refuge in them as his domestic situation deteriorated. As the disintegration of USSR accelerated, it became psychologically too easy to take shelter in the praise offered by the West while the storms of protest hit ever harder at home.

Gorbachev seized the initiative to advance nuclear arms reductions early on, thus catching both the US and his own people off guard. Yet, his Western counterparts eventually accepted some of these initiatives. Winding down the Cold War, Gorbachev became a cause celeb in the West. Gorbachev also eventually failed as a negotiator with his Western counterparts. Desperate for cash by 1989-91, Gorbachev went hat in hand to the US and Germans. Had he asked for more earlier in exchange for his troops exiting the Warsaw Pact, he would have received massive financial assistance. But, in asking too late, his Western counterparts, while sometimes sympathetic, were disinclined to help as the game was already largely over. Not asking for money after the Warsaw Pact was already dissolving erased whatever leverage Gorbachev had. As Gorbachev was too late in negotiating for money and security guarantees on NATO, he was too early in dismantling the powers of the central bank and state enterprises financing his government. But, it wasn’t only with foreigners that Gorbachev misplayed his hand, but at home with Boris Yeltsin as well. Boris Yeltsin consistently outmaneuvered, if not humiliated, Gorbachev. Meanwhile, by 1990/91, Gorbachev’s only remaining state power resided with the state security forces, which in the main he rejected use of.

Gorbachev went from leading the only country rivaling the United States in power, but when the edifice of the failed state quickly collapsed, he was left only with a foundation in his name. The Gorbachev Foundation carried some marginal weight in the 1990s, but really none by the 21^st century. The past two decades largely saw Gorbachev silent. At a few brief moments he pointed criticism at Vladimir Putin, but very rarely, and largely ignored. And, thus, by his death on August 30, 2022, he had been already quiet for many years.

Climate-change driven floods ravage Pakistan, killing more than 1,100 and threatening millions with hunger and disease

Sampath Perera

Heavy monsoon rains and climate-change induced glacier melting have produced catastrophic floods and landslides in three of Pakistan’s four provinces.

Pakistani authorities have attributed 1,136 deaths to the floods since June 14, including those of over 350 children. The true death toll is undoubtedly higher as rescue crews have been unable to gain access to many flooded areas. Speaking to reporters Sunday after a helicopter tour of the Swat Valley in the north of the country, Pakistani Prime Minister Shehbaz Sharif said, “Village after village has been wiped out.”    

Passengers wait by a damaged road next to floodwaters, in Bahrain, Pakistan, Tuesday, Aug. 30, 2022. (AP Photo/Naveed Ali)

The floods have also destroyed crops, drowned cattle herds and other livestock, swept away houses and devastated Pakistan’s already meagre, dilapidated infrastructure.

33 million people, about 15 percent of Pakistan’s population of 225 million, are said to have been directly impacted by the floods. With close to a million homes reported to have been destroyed or badly damaged, the numbers sleeping in the open air or tents has swelled into the high hundreds of thousands, possibly millions.  

Pakistan’s National Disaster Management Agency (NDMA) reported on Tuesday that the flash floods—which began in June, but have swelled to Biblical proportions over the past two weeks—have already destroyed 157 bridges, ruined 3,457 kilometres (about 2,200 miles) of roads, and inundated 2 million acres of agricultural land, killing crops and washing away top-soil.

Pakistan Planning Minister Ahsan Iqbal has estimated the cost of the flood damage at $10 billion, or more than a fifth of the country’s total annual budget of $47 billion.

Approximately a third of the country is currently under water, with Baluchistan, Sindh, and Khyber Pakhtunkhwa provinces worst affected.

As bad as the official tally of more than 1,100 deaths and 1,500 injuries is, the government figures are widely seen as gross underestimates of the true extent of the catastrophe.

A report published by the UN’s ReliefWeb on August 29 observed the “actual [casualty] figures are expected to be significantly higher.” It also warned of further impending rainfall, noting, “More devastation is expected in the coming days, which could be unprecedentedly severe.”

News reports paint a harrowing picture of social devastation and suffering.   

Rasheedan Sodhar, a 25-year-old teacher, told Al-Jazeera that she and 19 family members had fled her village near the Arabian Sea in the southern province of Sindh on Sunday as it was submerged by floodwaters. Their house was destroyed and livestock swept away. “We have nothing left. We are alive, but we are not able to live any more.”

The entire Sodhar family is now living in the open air in scorching heat in the nearby town of Mehar. “We barely get one meal a day,” said Rasheedan. “Our children are crying all day. [How] can you tell them to stop crying when there is no home for them?” 

Muhammad Fareed told BBC that his daughter was killed by the flooding of the Kunhar River, an Indus River tributary, in the northern province of Khyber Pakhtunkhwa. “She told me, ‘Daddy, I'm going to collect leaves for my goat.’ She went to the bank of the river and a gush of water followed and took her away.”

Pakistan has experienced weeks of heavy rainfall, and months of stifling heat since last spring. In March and April, temperatures regularly surpassed 45 degrees Celsius (113 Fahrenheit) and in some places 50 degrees. As of last week, according to the NDMA, Pakistan had experienced 2.87 times more rainfall than the national 30-year average, and in Baluchistan and Sindh more than five times.

Both the extreme heat and torrential rains are connected to climate change. High temperatures result in the retention in the air of more precipitation, which subsequently falls as rain. For every 1 degree Celsius increase in temperature, 7 percent more precipitation is captured in the air.

The extended heat wave has also accelerated long-term glacier melting in the Himalayas and Hindu Kush mountains. This has triggered a phenomenon known as glacial lake outburst floods, as lakes of newly unfrozen water surge down from the Himalayas to swamp large swathes of the country. More than 3,000 glacial lakes have formed in Gilgit-Baltistan and the Khyber Pakhtunkhwa regions, with dozens identified by the UN as posing an imminent threat of glacial lake outburst flooding

The vast majority of Pakistan’s population is impoverished. With millions displaced and their livelihoods destroyed, and much of the country inundated by potentially badly-contaminated flood water, there is a grave risk of mass hunger and disease. Both malaria and tuberculosis kill tens of thousands of Pakistanis each year. And as around the world, there is an ever-present threat of new waves of mass COVID-19 infections and deaths.

In a pretense that serves to highlight nothing so much as the ruling elite’s indifference to the Pakistani people, the government cynically maintains that just 30,500 people have died from COVID-19 during the more than two-and-a-half years of the pandemic. Studies based on science-based excess mortality projections place the true death toll between 700,000 and 900,000.

Earlier this week, the United Nations issued a “flash appeal” for a pitiful $160 million to provide food, sanitation, drinking water, and emergency education to flood victims in response to what it termed a “colossal crisis.”

“Pakistan is awash in suffering,” stated UN Secretary General Antonio Guterres. “The Pakistani people are facing a monsoon on steroids—the relentless impact of epochal levels of rain and flooding.”

Even assuming the UN meets its target, which is extremely doubtful given the pathetic sums pledged so far by the major powers, the “flash fund” would provide the equivalent of just $4.50 for each of the 33 million people impacted by the floods.

For its part, Pakistan’s government has announced a meagre 25,000-rupee ($112) assistance payment to each flood-affected family. As has been true in previous crises, due to corruption, mismanagement, and the wanton neglect of the authorities, it can be expected that only a fraction of those in need will receive even this tiny sum.

The hypocrisy of the imperialist powers, who never tire of proclaiming their commitment to human rights and democracy to justify one war after another, has been on full display amid the calamity in Pakistan. The United States has to date provided Pakistan a piddling $100,000 in assistance through USAID. This infinitesimal amount is a miniscule fraction of the additional $3 billion in military hardware Washington approved to wage war in Ukraine just last week, let alone the $50 billion US imperialism has pledged in weaponry and assistance to Ukraine since February.

Canada and the UK have pledged similarly derisory sums to Pakistan flood relief, $5 million and $1.5 million respectively.

The calamity unfolding in Pakistan is part of a rapidly escalating climate catastrophe around the world. Europe has been in the grip of one of its worst droughts in recorded history this summer, with crops failing en masse, and food and energy supply lines breaking down. In February and March, floods caused by unprecedented rainfall ravaged the coast of Queensland and New South Wales in Australia, killing 22 people and causing over $1 billion in damage to infrastructure. Dozens of people lost their lives in flooding in the US state of Kentucky earlier this month, while wildfires have raged across Alaska in the far north and near Yosemite National Park in California this summer.

These increasingly deadly events underscore the urgency of a global response to climate change. But as in the case of the COVID-19 pandemic, the profit and geo-strategic interests of the rival cliques of nationally-based capitalist elites, above all those of the United States and other imperialist powers, block the coordinated mobilization of the world’s resources necessary to address and reverse climate change. 

Underscoring the irrationality of capitalism, climate change has rapidly become a new source of intense inter-capitalist competition, as countries rush to lay claim to the sea lanes and resources of the Arctic Ocean, now made accessible by the melting of the polar ice cap; and to seize control of the natural resources vital for the production of electrical vehicles and other technologies that are essential for developing a carbon-neutral economy.

Indeed, a major aim of the war that the US and its NATO allies have instigated with Moscow over Ukraine is to subjugate Russia so as to gain unfettered access to its vast energy and mineral wealth. 

Pakistan’s flood catastrophe is also an indictment of all factions of its venal capitalist elite. Pakistan’s ruling class has looted and squandered the country’s resources in alliance with imperialism ever since its creation 75 years ago through the bloody communal partition of the subcontinent.

Countless billions have been squandered in funding Pakistan’s nuclear-armed military, always the linchpin of its reactionary alliance with Washington, and in pursuing its strategic conflict with India.

Decades of International Monetary Fund dictated “structural adjustment programs,” implemented with the aim of making Pakistan a magnet for global investment, have plunged tens of millions of Pakistanis into ever-deeper poverty and hobbled the country with decrepit public health care and education systems.   

The current interim coalition government headed by the Muslim League Nawaz (PML-N) and the Pakistan People’s Party (PPP) assumed office in March, with the military’s support, for the express purpose of implementing yet another round of IMF-dictated austerity.

On Tuesday, Planning Minister Iqbal, a top leader of the PML-N, and Sherry Rehman, the PPP climate change minister, pleaded for flood aid from the “international community.” In doing so, Iqbal made the argument that the industrialized, i.e., advanced capitalist, countries have produced the lion’s share of the greenhouse gases responsible for climate change.

None of this, of course, stood in the way of Pakistan’s government securing IMF approval on the very same day for the release of a $1.1 billion tranche of a suspended emergency bailout package that was conditional on the government imposing massive new burdens on the country’s workers and toilers at the behest of international capital. These include regressive tax increases, the elimination of energy price subsidies, and the accelerated privatization of state assets.

Dutifully enforcing the IMF’s demand that Pakistan’s federal and provincial governments record budget surpluses, the PPP-led Sindh provincial government is forcing government employees to finance its Fund Relief Program by deducting the equivalent of two days’ pay from lower-grade employees and five days’ pay from those in higher grades. Workers forced to pay the levy have remarked that they too are affected by the floods.

Speaking to the Financial Times this week, Cimate Change Minister Rehman claimed, “In living memory, we have not seen such a biblical flood come to Pakistan.” While it is true that climate change is contributing to the increased frequency and severity of extreme weather events, Rehman is well aware that this is a bald-faced lie. In 2010, when the PPP led Pakistan’s government and was similarly in the process of imposing IMF austerity, Pakistan suffered devastating floods that killed 2,000 people and inundated one fifth of the entire country. At the time, the UN characterized the floods as was “one of the worst humanitarian disasters in UN history.”

In the subsequent 12 years, nothing substantive was done to improve flood-preparedness or public health infrastructure.

In the budget for the financial year that started July 1, Pakistan’s government allocated a mere 100 million rupees ($0.457 million) to disaster response and emergencies, including the ongoing COVID-19 pandemic.

More than 30 killed as rival Shia groups struggle for power in Baghdad

Jean Shaoul

Fighters from the Saraya Salam (Peace Brigades) loyal to influential Shiite Iraqi cleric Muqtada al-Sadr deploy in Baghdad, Iraq, Tuesday, Aug. 30, 2022. (AP Photo/Murtadha Ridha) [AP Photo/Murtadha Ridha]

In the worst violence seen in Baghdad for years, at least 30 people have been killed and 380 injured in two days of violent clashes after supporters of Muqtadr al-Sadr, the Shia populist cleric, stormed government buildings and clashed with security forces and militia groups belonging to his Shia rivals in the Coordination Framework.

The violence erupted after al-Sadr announced his “final retirement” from politics. Hundreds of his supporters in his Sairoon movement took to the streets and broke through the concrete barriers of the heavily fortified Green Zone, where Iraq’s federal parliament and government buildings, as well as the US and other foreign embassies, are located.

Protests also broke out in Iraq’s southern provinces, where al-Sadr’s supporters burned tires and blocked roads in the oil-rich province of Basra, and hundreds demonstrated outside the governorate building in Missan.

The caretaker government of Prime Minister Mustafa al-Kadhimi imposed a dusk-to-dawn curfew, while Iran, which has sought to bring Iraq’s Shiite factions closer together, closed its borders with Iraq, as millions of Iranians prepared to visit Iraq for an annual pilgrimage to Shia sites.

On Monday night, al-Sadr said he was going on hunger strike until the violence and the use of weapons stopped. The next day, in a bid to disassociate himself from the violence, he apologised and called on his followers to leave the Green Zone and the camps where they have been protesting for the last four weeks, prompting many of his supporters to leave.

Al-Sadr’s retirement threat—the fourth this erratic and unprincipled politician has made over the last eight years—and the violence he knew it would unleash are bound up with his determination to take direct control of Iraq’s sectarian-ethnic political system at the expense of his Shia rivals in the Coordination Framework.

While al-Sadr, who comes from a leading Shia clerical family, led the main Shia resistance to the US occupation, he has no progressive answers to the enormous social problems confronting the Iraqi people. Posing as a nationalist opposed to foreign interference in Iraq, he has links to both Washington and Tehran. He has acted as kingmaker in forging ruling coalitions and placed his own supporters in key positions in the cabinet, the state-owned oil company, powerful ministries and local authorities. They take a cut of government contracts to pass on to his organisation, which runs a militia and provides jobs and social welfare for his impoverished supporters in Baghdad’s slums.

Al-Sadr’s announcement of his “final retirement” followed the resignation of the 83-year-old Grand Ayatollah Kadhim al-Haeri, a close associate of al-Sadr’s father and spiritual leader of the Sadrists, who challenged his right to act as the heir of his father, Mohammed Sadeq al-Sadr, saying, “You cannot lead by their names. In reality you are not a Sadrist even if you are from the family of Sadrists.” Haeri called on his followers to transfer their allegiance to Iran’s Ayatollah Ali Khamenei and “obey” Iran’s supreme leader as “the most worthy and competent [individual] to lead the [Muslim] nation.”

Al-Sadr’s Shia rivals—organised in the Coordination Framework under former premier Nuri al-Maliki’s party, the State of Law Coalition, and the pro-Iran Fatah Alliance, the political arm of the Shia-led former paramilitary group Hashed al-Shaabi—are equally corrupt and are widely despised.

The worsening political crisis in Washington’s puppet state, which is at the centre of regional and international political conflicts, threatens outright civil war between the rival Shia parties and their militias, and the breakup of the state, as Iraq’s venal politicians fight for control of the country’s oil wealth and the spoils of political office following last October’s elections.

It comes amid an ongoing political deadlock, with no new government in place more than 10 months after the elections. Al-Sadr’s Sairoon movement won the most votes in a dismal 41 percent voter turnout.

The elections came amid mounting hostility towards the entire political regime set up by Washington after its criminal invasion and occupation of Iraq in 2003. With no settlement between the country’s rival puppet masters in Washington and Tehran, Iraq’s political factions have been unable to agree on a new government.

Prime Minister Mustafa al-Kadhimi, a former intelligence officer with no political base, assumed the premiership with Washington’s support in May 2020 after the month-long mass social protests of October 2019. Those protests demanded jobs and an end to poverty, corruption and the entire ethno-sectarian political system, and led to the forced resignation of Prime Minister Adel Abdul Mahdi.

Mahdi’s government had sought to suppress the protests with lethal force, deploying the security forces and paramilitary groups to shoot down more than 600 protesters, further inflaming tensions until the pandemic and the accompanying restrictions emptied the streets.

Al-Kadhimi not only continued the economic and social policies of his predecessor, but also implemented new measures aimed at securing loans from the International Monetary Fund that have devastated workers’ incomes. He continued the repression of oppositionists and reneged on his pledges to investigate the killings by the security forces and to introduce legislation that would overturn Iraq’s sectarian political system, key demands of the protest movement.

With Iraq’s political factions set against any changes that would limit their privileges, patronage and wealth, al-Kadhimi has been unable to set a budget for 2022, despite the increase in oil prices, that could help alleviate the crushing social and economic conditions engulfing the vast majority of the Iraqi people.

Al-Sadr announced his intention of forming a government with the largest Sunni and Kurdish blocs, leaving the Iran-aligned Shia parties in opposition, in a break with the practice of including all the political parties in government. Refusing to be excluded from the patronage system, his Shia opponents in the Coordination Framework blocked his coalition-building process via a series of procedural and legal interventions, including using the Federal Supreme Court to block the nomination of a president and launching missile attacks on his Kurdish allies.

In June, al-Sadr withdrew his entire bloc from parliament, in a move aimed at forcing his rivals to agree to a new government and opening the door to street protests, counter-demonstrations and instability to force the dissolution of parliament and new elections. When the Coordination Framework, now the majority party in parliament, nominated Mohammed al-Sudani for the premiership, al-Sadr’s supporters stormed the parliament to prevent it selecting a president from the Kurdish parties, the first move in the process of nominating a premier, and have refused to move until their demands are met.

While the semi-autonomous Kurdistan Regional Government (KRG), ruled by the corrupt Barzani family, had originally backed al-Sadr’s bloc, with the Iraqi Federal Supreme Court’s February ruling that the KRG was not entitled to keep its oil and gas revenues, largely derived from sales to Turkey, the KRG began to push for a new constitutional arrangement that would cede more power to the Kurds and other ethnic constituencies, rupturing relations with al-Sadr.

Since the resignation of al-Sadr’s Sairoon bloc from parliament, al-Sadr has called for early elections, the dissolution of parliament and constitutional reforms. His supporters protested outside the Supreme Judicial Council in the Green Zone when it refused to order the dissolution of parliament, saying it had no authority to do so. Al-Sadr has refused to participate in Kadhimi’s efforts to set up a national dialogue of all Iraq’s political parties, the first session of which was held two weeks ago. While most of the political parties have agreed to hold early elections, they differ about the arrangements for holding them and who is to organize them.

It is clear that whatever the composition of a new government, if and when it is formed, it will only heap more hardship and suffering on top of the chronic shortages of electricity and water and the soaring cost of food and other essentials that have already created widespread hardship.

The lessons of the failed Egyptian Revolution are of enormous importance to the Iraqi working class. A mass movement of the working class brought down the hated military dictatorship of Hosni Mubarak in 2011.

However, because the mass movement was dominated by bourgeois opposition parties and sections of the affluent middle class, all of whom were bitterly opposed to any challenge to capitalist rule, the military, backed by US imperialism and its Gulf allies, seized the opportunity for a brutal crackdown, instituting a reign of terror under Abdel Fattah el-Sisi, Mubarak’s former general and deposed President Mohammed Morsi’s minister of defence.