China’s Rise Hits a Wall

Mel Gurtov

Over the last decade or so, the tendency among China watchers has been to see China’s rise as an endless upward progression. Just as happened during the Cold War when the Soviet Union was viewed as a colossus that in fact had feet of clay, China’s economic and diplomatic successes are significant but often have been exaggerated, while its weaknesses have been ignored or underestimated. Only now, amidst bad news for China’s economy, have observers awakened to certain Chinese realities.

Chinese Realities

The first reality is that China’s post-COVID economy is sputtering. It faces deflation—falling prices amidst stagnant domestic demand for goods, a collapsing real estate market, declining exports and imports, and very high government debt.

For a regime that relies on domestic strength as the foundation of foreign policy success, this economic weakness has to be troubling. Xi Jinping has made internal security the hallmark of his administration, and if the economy isn’t delivering growth with equity, political trouble may lie ahead—which helps explain efforts to reinforce communist party discipline in the military, double down on repression in Xinjiang, Hong Kong, and Tibet, and deal harshly with dissidence among lawyers and human-rights activists. In short, there’s considerable unrest and uncertainty in the empire.

The second reality is abroad. China’s principal partners, Russia and North Korea, are liabilities as well as assets. Putin’s war on Ukraine undermines Chinese diplomacy in Europe and adds to China’s America problems, while North Korea’s nuclear and missile threats bring a dangerous instability to the Korean peninsula.

In Central Asia, China is competing with, and actually out-competing, Russia in relations with the former Soviet republics: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

In South and Southeast Asia, China inspires both fear and awe. Most countries accept the need to accommodate China, which is their dominant trade partner. But while China has predominant political influence in Laos, Cambodia, and Myanmar (Burma), other governments, including India, Vietnam, Indonesia, and Thailand, look to the US as a balancing power against China. Polling of citizens and elites in Southeast Asia points to more positive feelings toward the US than toward China.

Before the Ukraine war, even the closest US allies, Japan, South Korea, and Australia, were willing to accommodate China: Japan, by refusing to commit to defending Taiwan in case of war and by restraining its military capabilities; South Korea, by forging a close trade relationship and not fully embracing THAAD, a missile defense system aimed at both North Korea and China.

But now, all three have re-committed to tight security ties with the US and with each other. Japan and South Korea concluded their first summit in twelve years in March, and this weekend at Camp David, they joined the first summit hosted by a US president, where the three countries agreed to respond as one to regional threats—meaning, of course, from North Korea and China.

Korea and Japan are also imposing export controls on high-end computer chips normally sent to China. Japan has also embarked on a military buildup aimed directly at China. Australia and India have followed suit, becoming part of the Quad security dialogue and the AUKUS group.

Money Doesn’t Always Talk

China’s chief calling card is money, specifically, its Belt and Road Initiative (BRI) loan program that has spent hundreds of billions of dollars globally, mainly to developing countries. Most Asia-Pacific countries have joined the BRI.

Some analysts think the BRI is a very successful effort to meet developing countries’ needs without imposing onerous conditions (in contrast with loans from the World Bank and IMF). Others see BRI as a debt trap that creates dependence on China, leading to sacrifices of sovereignty such as control of ports. Serious studies of the BRI show that it is neither all one nor all the other. But one thing is clear: the BRI has become a Chinese debt burden, and given China’s economic woes, chances are good that Beijing will not be nearly as generous as in the past.

Some Chinese actions are undermining the BRI’s appeal.

Take the Southeast Asian neighbors that rely on the Mekong River for fishing. Chinese dams are taking a large bite out of their fishing industry, arousing anger. Mongolia, long economically dependent on China, is now reaching out to the US for trade and has just struck a major deal with Google for computer assistance.

Competing territorial claims in the South China Sea have put China at odds with Vietnam and the Philippines. Vietnam and the US have just agreed to a strategic partnership, and President Biden will visit Vietnam September 9.

The Philippines, which under Rodrigo Duterte had accommodated China, now, under Ferdinand Marcos Jr., has reverted to a strategic partnership with the US in response to Chinese pressure in the South China Sea. Most recently, a heavily armed Chinese coast guard vessel tried to block a Philippines supply boat from reaching a beached ship that marks its claimed territory in Mischief Reef.

The Philippines is opening four additional military bases to the US, and is restarting joint naval patrols with the US. But it has rejected a Chinese invitation to conduct joint patrols—a strange request considering that China still uses its nine-dash line to claim a vast swatch of the South China Sea.

In sum, if you’re looking at the world through the eyes of Chinese leaders, you see obstacles on the home front that demand attention and resources at the very time a new Cold War looms over Asia, with the US massing its allies to contain the presumed China threat.

What Xi Jinping has found, just as Chairman Mao did, is that domestic weaknesses constrain Chinese actions abroad. Chinese leaders will always give priority to security at home over priorities abroad. Xi Jinping’s concept of “comprehensive security” makes that plain. That perspective should inform the analysis of China hawks in Washington.

Poland’s school system on the brink of collapse

Martin Nowak

On August 31 summer school holidays ended across Poland, at the same time as new figures reveal the dilapidated state of the country’s educational system. Some 26,000 teachers were sought by headmasters of private and state schools on the official website of the education authority in July. That is a 30 percent increase compared to last year and continues a protracted negative trend.

Students protest in Warsaw in support of striking teachers

The Polish Education Minister Przemysław Czarnek and the government are playing down the latest figures. They say that these relate to normal staff changes between school years and that only a small percentage of the country’s 700,000 teachers is lacking.

However, the fact that the official figures are deceptive has been demonstrated for several years by the teachers’ initiative “Dealerzy Wiedzy,” which has compiled its own long-term database. One of its founders, Robert Górniak, an English teacher and deputy headmaster at a private school in Sosnowiec, explained the mechanism of official job advertisements in an interview with Gazetta Wyborcza.

For example, the advertisements placed simply disappear after an automated expiry date in the middle or at the end of the month. That is why the number dropped by 6,000 at the end of July and 4,000 were added at the beginning of August. However, it remains unclear how many positions have been filled and in which cases school headmasters have simply given up hope of finding teachers at short notice. But even these official figures increase by 30 percent from year to year, as Górniak makes clear.

The main reason for the difficulty in hiring is the meagre wage paid to teachers. Linguists, psychologists and computer scientists can earn much more in business than in a school. Basic salaries for new entrants, for example, are 3,690 Złoty gross (around 800 euros [$US863]), i.e., a minimum wage level, and increase only slightly over time to the equivalent of 1,000 euros.

In big cities, where rents are comparable to Western Europe, the problem is particularly evident. “About half of all job offers come from Warsaw. This is not surprising: the [pay] rates for teachers are the same in every city while the cost of living and rent varies significantly between big city Warsaw and a village in the Carpathian foothills,” says Górniak.

The same problem exists in pre-schools and kindergartens, where there is a shortage of over 500 teachers for the coming school year in Warsaw alone. The city administration has reacted by paying education allowances equivalent to the amount paid to class teachers from September 1. However, this sum of 84 euros (380 Złoty) is just a drop in the ocean.

Behind this trend is a fundamental development. The Polish state has increasingly offloaded the costs of schooling onto the municipalities. In the early 1990s, for example, the share of municipal subsidies averaged 20 percent, but last year, the municipalities had to cover 60 percent of education costs.

Now, once again the government has decided to pay out similar shabby handouts. One day before the forthcoming parliamentary election, every teacher will receive a one-time payment of 1,125 Złoty (about 250 euros). In view of a salary increase of only 7.8 percent this year while inflation was twice as high, many teachers feel the offer is an insult.

“A trainee teacher earns a little more than 2,800 Złoty,” says Magdalena Kaszulanis of the teachers’ union ZNP, “and that often means he or she won’t be able to make a living in the city where they studied.” According to ZNP, there are as many as 40,000 teacher vacancies, and each teacher works an average of 3.3 hours of overtime per week.

In rural areas, the cost of living is lower, but the small schools do not have enough weekly hours, especially for subject teachers, to employ them full-time. So teachers have to commute from school to school. Last year, the case of a headmistress from Krynica Morska came to light, who drew up joint timetables with six other schools because they all employed the same teachers. At the same time, teachers often look for side jobs, especially during the holidays.

According to the professional journal Głos Nauczycielski (Teachers’ Voice), every fifth teacher has a part-time job. The news portal wydarzenia.interia reports about a teacher who has been working as a kitchen assistant for six days a week in summer for six years. “All this so that I can pay for electricity and fuel in winter. It’s not possible on a rural teacher’s salary.”

Another teacher, Dagmara, explains she has been a trainer and sports teacher for over 20 years. “For as long as I can remember, I have been working on the holidays. When I started working in this profession, it was an absolute necessity because the salary was so meagre that I would not have been able to make a living without the help of my parents and extra work.”

Even teachers at private schools are hardly better off in terms of salaries. The flight of the urban middle classes to private schools has caused their classes to overflow just as much as those of state schools. In Warsaw, for example, every fifth pupil now goes to a private school. Their parents face the same problem despite paying between1,000 to over 3,000 Złoty per month: lessons in assembly line mode. “Just the thought of going back to school makes me cringe. My stomach turns, my throat tightens,” one teacher told Gazetta Wyborcza.

In a survey conducted by Głos Nauczycielski at the beginning of the school year among 33,000 teachers, only 4 percent said they started the school year rested and positive; 46 percent chose the answer, “I feel despair, fatigue and burnout.” Some 27 percent answered, “I’m scared, I’m very worried about the changes in education.”

While the opposition wants to blame the country’s right-wing PiS (Law and Justice) government for the problems confronting schools and teachers, the fact is that Polish schools have long been being cut to the bone. With the massive rearmament for the Ukraine war, which is supported by the opposition Civic Platform (PO), social cuts are now escalating. “This is the biggest staff collapse I can remember, and I’ve worked in education for 20 years,” Gazetta quoted school headmaster Beata Molik.

Like workers in other countries, Polish teachers can only wage a successful struggle in opposition to the country’s corporatist unions. In 2019, the ZNP teachers’ union declared a 17-day strike with more than 300,000 participants, but none of the strikers’ demands were met. It was the first national strike since 1993. The sellout of the strike was accompanied by phrases like: “We are suspending the strike, but the struggle continues to the end!” Now the ZNP has organised another harmless protest in front of the Ministry of Education on September 1.

Last year it limited protests to an “education village” in front of the ministry. It thus followed the example of the medical unions, which in 2021 dissipated the fighting spirit of 40,000 nurses, caregivers, pharmacists, physiotherapists, hospital technicians and paramedics after a powerful protest for higher wages and better working conditions developed in Warsaw in the “Białe miasteczko” (White City), where workshops and numerous rounds of talks with politicians and the media led nowhere.

In view of the unresolved problems, exacerbated by the COVID-19 pandemic that killed over 100,000 people, the medical unions also held a day of protest on September 30–to “initiate a social debate,” as Sebastian Goncerz, head of the PR OZZL union, said.” We don’t currently expect to force the current government to do anything. But we want to make sure that the new government—whoever comes to power—takes the problems of the health system seriously, and more seriously than before.”

In other words, the trade unions are organising symbolic actions six weeks before the general election on October 15 to dissipate workers’ anger and align themselves as partners with the future ruling party. In the election campaign, the ruling PiS party and the opposition PO are outbidding each other with demands for more rearmament, nationalism, racism and anti-Russian war hysteria.

The trade unions are the extended arm of these reactionary parties and act as stooges of the super-rich, who have profited from the looting of the former state property of the Stalinist People’s Republic of Poland and now also from the Ukraine war.

For example, Wiesław Klimkowski, president of the chemical company PCC Rokita, set a new gigantic record last year with annual earnings of 43.3 million złoty (9.7 million euros). PCC Rokita profited from exploding world market prices for caustic soda as a result of the Ukraine war. A Polish worker would have to work 488 years to earn Klimkowski’s income for one year.

The evolution of the Omicron variants and the policy of forever COVID

Benjamin Mateus

Allowing the SARS-CoV-2 virus unimpeded access to billions of people has raised the alarm among scientists that viral evolution will most likely lead to another event similar to the one experienced in late 2021 with the emergence of the Omicron BA.1 variant that harbored 35 distinct mutations in its spike protein from the original wild-type variant that emerged in Wuhan, China, in late 2019.

The unprecedented global wave of infections with BA.1 at that time, with estimates of 125 million daily COVID infections in mid-January 2022, resulted in an excess death count of over three million worldwide in just three months. And since that massive wave, viral evolution has spawned numerous versions of the Omicron lineage that number in the hundreds, with multiple waves of global infections by those that have become dominant. These have become hallmarks of the policy of the ruling elites to acclimatize the population to endless infections with COVID-19, as the pandemic now approaches the end of its fourth year.

In particular, the latest Omicron subvariants are developing much more complex immune-evasive characteristics and improved transmission capabilities. For instance, the new BA.2.86 variant (dubbed Pirola), first detected in Denmark on July 24, 2023, and later classified by the World Health Organization (WHO) as a Variant Under Monitoring on August 16, based on just four sequences, has 34 distinct mutations in its spike protein compared to its immediate ancestor, BA.2. It has 36 mutations relative to XBB.1.5, the strain used for the latest iteration of the COVID vaccine, and 58 mutations relative to the early Wuhan strain.

This undated, colorized electron microscope image made available by the U.S. National Institutes of Health in February 2020 shows the Novel Coronavirus SARS-CoV-2, indicated in yellow, emerging from the surface of cells, indicated in blue/pink, cultured in a laboratory. [AP Photo/NIAID-RML]

As of this writing, the Pirola strain has now been detected in 14 countries across the globe where some semblance of viral sequencing remains in place. In the US, as of September 1, five states—Michigan, New York, Virginia, Ohio and now Texas—have reported this variant, which means it is already widespread regardless of the small number of cases so far detected.

Preventive medicine and infectious disease expert at Vanderbilt University Medical Center, Dr. William Schaffner, told ABC News, “It is starting to spread here in the United States, as well as in other parts of the world. It’s clearly contagious, as are all of these subvariants of Omicron. As we all know, these COVID viruses are not localized just to one country or another. They don’t need a passport. They’re capable of spreading… and can spread rapidly around the world.”

Recent analysis done by Dr. Yunlong Richard Cao and his team at Peking University BIOPIC on the Priola variant showed that although it has a lower infectivity than XBB.1.5 (Kraken) and EG.5 (Eris), it has significant ability to escape immunity derived from XBB infection or vaccination. Cao remarked on social media, “Indeed, BA.2.86 can induce significant antibody evasion of plasma isolated from convalescents who experienced XBB breakthrough infection or reinfections. BA.2.86’s immune evasion capability even exceeds EG.5 and is comparable to ‘FLip’ variants (XBB.1.5 + L455f&F456L).”

Although the Pirola variant’s infectivity appears to be lower, which may dampen its transmission potential, its antigenically distinct features may mean that a variant has emerged that can infect concurrently with the other variants. In other words, it might complement their ability to transmit their genetic materials, which poses the risk of simultaneous infections which might lead to recombinant features where virulence, immune-escape, and receptor binding can be further enhanced.

As University of Guelph evolutionary biologist T. Ryan Gregory warned following the publication of Cao’s results, “Remember XBB (immune evasive but compromised ACE2 binding, didn’t do much) vs XBB.1.5 (restored ACE2 binding, became globally dominant). It’s the descendants we need to think about as much as the current variant.”

Unsurprisingly, excess deaths have remained stubbornly elevated, hovering around 8,000 to 10,000 daily deaths above what is expected, despite attempts to cover for these policies through the purposeful dismantling of nearly all necessary epidemiologic data on the ongoing pandemic.

Yale immunologist and Long COVID researcher Dr. Akiko Iwasaki, who has described the mass disabling event of Long COVID as a “pandemic in a pandemic,” recently told Austrian media outlet Der Standard that the conservative estimate that 65 million people could be suffering from Long COVID “may be too low.”

Iwasaki noted that “the fact that the pandemic is no longer defined as a public health emergency does not mean that the virus is gone… I understand that it is important for society and for economic reasons to reopen. But wearing masks in crowded spaces or improving ventilation to make workplaces and other indoor spaces safer must continue.”

She added, “Long COVID is one of the post-acute episodes of COVID. But there is also an increased risk of other consequences such as heart failure, stroke, or diabetes. We may see in ten years that other risks will also increase after a SARS-CoV-2 infection: autoimmune diseases, neurocognitive or neurodegenerative disease... If we could avoid infections altogether, that would be a solution to all these problems.”

At present, due to the dismantling of surveillance systems globally, wastewater levels of SARS-CoV-2 genetic material provides the only means of assessing the current surge of the pandemic. This global wave, as characterized by accessing data for the US through Biobot Analytics’ COVID-19 wastewater monitoring, the only comprehensive platform available to the public, indicates that the summer surge that began in late June is only continuing to build. Since the return to public schools and universities by tens of millions of children, adolescents and young adults, the surge is beginning to accelerate. For the US, this translates into almost 622,000 daily COVID infections, with 1.9 percent of the population, or 6.3 million people, currently infected with COVID-19.

Last week, Dr. Deborah Birx, former White House Coronavirus Response Coordinator under Donald Trump, commented on the Biden administration and the Centers for Disease Control and Prevention’s (CDC) policy of allowing mass infections to run rampant in the US, without an inkling of concern about the implications posed by this anti-scientific and anti-public-health strategy.

Birx explained, “We’re living in this, a bit of a fantasy world, where we’re pretending that COVID is not relevant. But I can tell you, if you can hear my voice and you know two to three people who have COVID, that means that 5 to 10 percent of your friends already have COVID. That means that there is a lot of COVID out there, and we’re not testing for it and we’re not telling people to get tested.”

Responding to a question regarding the promise of the as of yet unmaterialized fall boosters, Brix said:

The important thing is, this is the booster that would have been appropriate for the summer wave. This booster is most likely not going to work with the winter wave, because we already have a pretty significant escape mutant or escape variant out there that’s beginning, just like the current variant, began like eight weeks ago. We are already beginning to see some evidence of a new variant for which the vaccine probably is not well matched.

Birx suggested that the administration and CDC should be preparing and making COVID vaccines that target the Priola variant for December, in order to combat the expected winter wave in January. Birx then admitted that unfortunately immunity derived from infections and vaccines is “short-lived,” where in some cases people are susceptible within four weeks or as late as three to six months. These have significant implications for immunocompromised people, numbering in the tens of millions, who may have to be on a more intensive vaccine schedule, taking into account the latest variants, to ensure the vaccines are appropriately selected.

The scientific and epidemiological realities of the capitalist “forever COVID” policy, which is now a global social phenomenon, demonstrates the real meaning of the CDC’s reactionary policies on infection controls and masking, as well as the recent comments by former director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci, where he declared that older people, the ill and disabled, “will fall by the wayside” during the current surge.

The supposedly “mild” Omicron has a lethality up to four times higher than the flu, and is far more transmissible and omnipresent regardless of the seasons. It remains one of the top five leading causes of death in the US.

This viral Frankenstein’s monster has been created by capitalism’s diktat that profits will always supersede considerations of the population’s well-being and life. Public health as a democratic and social right of every person has been completely uncoupled from the social functioning of the state’s responsibility.

The speed with which the virus is moving ahead seems to have caused a paralysis of will, like watching the fires run ablaze across a town, a building, or the countryside. This is not a problem of individual policy-makers, however, but an expression of the dead end of the capitalist system which demands adherence to the requirements of “the economy,” i.e., profits, even at the expense of human survival.

US student debt crisis deepens as federal loan interest accrual resumes

Kevin Reed

Interest accrual on US federal student loan debt resumed on September 1, impacting 43 million borrowers who owe more than $1.7 trillion through various Department of Education lending programs.

On October 1, student loan holders are due to resume payments, after 42 months of pandemic forbearance first enacted in March 2020 by then-President Donald Trump and extended multiple times by both the Trump and Biden administrations.

Student debt relief advocates gather outside the Supreme Court on Capitol Hill in Washington, Tuesday, Feb. 28, 2023, as the court hears arguments over President Joe Biden's student debt relief plan. [AP Photo/Patrick Semansky]

At the beginning of June, as part of the political horse-trading between President Biden and Republican House Speaker McCarthy over a deal raising the federal debt ceiling, the White House agreed to end the pandemic student loan holiday as of August 30.

At the time of the debt ceiling deal, Biden claimed he was working on a new student debt forgiveness program. His initial proposal, announced in August 2022, would have forgiven up to $20,000 in debt per student and reduced loan balances to zero for 20 million borrowers. It was struck down by the Supreme Court in a 6-3 ruling this past June.

The court ruled that Biden did not have the executive authority to cancel $400 billion in student loan debt, saying the plan amounted to “seizing the power of the Legislature” in violation of Congress’ “control of the purse.”

The corporate-financial elite, which dictated the decision to scrap Biden’s loan relief scheme—itself wholly inadequate to rescue millions from a lifetime of debt—is well aware that many student loan borrowers have no means of making their payments. With the average debt per student loan holder at $37,338, the combination of inflation-driven increases in the cost of living and declining real wages, even for those with a college degree, has put borrowers in an impossible financial situation.

The volume of student loan debt in the US stood at $1.766 trillion as of the second quarter of 2023, according to data maintained by the Federal Reserve Board. This is greater than the total amount of US credit card debt ($1.031 trillion) or US auto loan debt ($1.56 trillion).

According to the Consumer Financial Protection Bureau (CFPB), approximately one in five student loan borrowers has “financial risk factors that could cause them to struggle when their payments resume in the fall.” The CFPB reported that one in 13 holders of federal student loans was already behind on other payment obligations in advance of the end of the repayment pause.

As of March, around 2.5 million people with student debt were delinquent on another of their loans or payments, an increase of 200,000 compared to data collected in September 2022. Kentia Elbaum, a spokesperson for the CFPB, told CNBC in June, “These borrowers might be unable to make payments on their student loans if they are already missing payments on their credit cards or auto loans, which research suggests people often prioritize over their student loans.”

The likelihood that a significant percentage of student loan borrowers will not begin repayments in October is very high. According to a survey conducted in August by the research company Intelligent.com, 62 percent of respondents say they are unlikely to start repaying, and approximately one half believe that a payment boycott will lead to total forgiveness of their debt.

Another survey conducted by the consumer financial services company Bankrate showed that 48 percent of borrowers see student debt as a national crisis. The Bankrate study said most households with student debt “have had to put off major financial decisions and milestones because of their loans.” It added, “They’re delaying buying a house, having children or getting married, and are saving less for retirement or emergencies.”

The Biden administration, concerned about the potential economic and political impact, has been working with the corporate media to communicate its yearlong “on-ramp” program. Under this scheme, any payments missed between October 1, 2023 and September 3, 2024 will not be considered delinquent and will not impact credit scores. According to the New York Times, “Your loan servicer will automatically put any missed payments in forbearance, which, in this case, means they will be tacked on to the end of your loan term.”

In other words, for an entire year, loans without payments will increase in size because interest will continue to accrue on them, putting borrowers further in the hole.

The public relations campaign by the corporate media points out that borrowers who were already in default will be getting a “fresh start” if they are at least 270 days behind in their payments. The borrowers will first have to call the US Department of Education’s Default Resolution Group and have their loans put into a special program.

Another promotion by the corporate media concerns a March 2020 government rule change that permits employers to offer educational assistance by repaying up to $5,250 per year of employee student loans, tax-free.

In a statement, IRS Commissioner Danny Werfel said: “The IRS wants to remind both employers and employees about this special feature that can help with student loans. There is a limited window of time [until December 31, 2025] for this educational assistance program, and the IRS wants to make sure employers don’t overlook this option that can help businesses attract and retain workers.”

These paltry offerings do not address the financial disaster facing young people and their families from the soaring cost of a college or university education and the consequent necessity for tens of millions to borrow enormous amounts of money to have access to higher education—something that should be available and free for everyone.

No one can seriously claim with a straight face that “there is no money” to finance this basic social right when the government allots $1 trillion a year for the military, spends billions each month on the proxy war against Russia in Ukraine, comes up with hundreds of billions to bail out bankers and rich depositors, and maintains an economic system that funnels ever greater fortunes to the wealthy elite while further impoverishing the working class.

As the World Socialist Web Site explained in a previous report on the Biden administration’s failed attempt to provide limited forgiveness to student borrowers, Wall Street is feasting off of student loan debt through the securitization of loans, made possible by the government’s use of third-party “loan servicers.”

Companies such as the recently created AidVantage are packaging what are known as Student Loan Asset-Backed Securities (SLABS) and selling them to investment banks and other financial organizations.

As a 2019 article titled “Wall Street has been gambling with student loan debt for decades,” published by OpenDemocracy.net, explained:

These companies [loan servicers] also issue Student Loan Asset-Backed Securities (SLABS) in collaboration with major financial institutions like Wells Fargo, JP Morgan and Goldman Sachs. For these firms and their creditors, debt isn’t just an asset, it’s their bottom line.

Investors holding SLABS are entitled to coupon payments at regular intervals until the security reaches final maturity, or they can trade the assets in speculative secondary markets...

Yet the financialization of student debt is almost never reported on in the media. There is little public awareness that when student borrowers sign their Master Promissory Notes (affirming that they will repay their loans and “reasonable collection costs”), their debts may be securitized and sold to investors.

Deteriorating economic forecasts ahead of New Zealand election

John Braddock

As New Zealand heads into a crisis election on October 14 with the Labour government and the opposition National Party both deeply unpopular, deteriorating economic conditions portend intensifying attacks on the social conditions of the working class, whoever takes office.

New Zealand Finance Minister Grant Robertson outside parliament on May 18, 2023. [Photo: Grant Robertson Facebook]

Last week the International Monetary Fund (IMF) issued a blunt warning on behalf of international finance capital. In its final “report card” on the country’s economy, the IMF said that New Zealand is at risk of falling into a deeper recession. The coming quarter is already heading towards a downturn after a previous recession from October 2022 to March 2023.

According to the IMF, New Zealand’s economic growth rate next year will be the lowest in the Asia Pacific region and among the lowest in the world. The economy will slow to near 1 percent growth in 2023 and 0.8 percent 2024, led by “weakness” in private spending. The jobless rate, currently at 3.4 percent, will rise to 5 percent by 2024.

The NZ Reserve Bank told a parliamentary committee last November that it was deliberately engineering a recession. In May, the central bank raised the official cash rate by 25 basis points to 5.5 percent, the latest in 12 consecutive rate rises since October 2021. Last month it warned the rate would need to remain “restrictive” for the foreseeable future, with the likelihood of a further hike in the fourth quarter.

To bring about a “necessary slowdown,” the IMF said the government needed to slash spending, warning that high inflation could last until 2025. According to the report, the economy had slowed, but significant “labour market restraints” had put upward pressure on wages.

The IMF is demanding an intensification of the same class war policies imposed by the US Federal Reserve and other central banks. The “necessary slowdown” means an escalating assault on the working class, placing increasing pressure on jobs, pay and conditions by driving up unemployment to beat back an emerging movement for substantial wage increases to make up for years of below-inflation pay deals.

The IMF’s mission chief to New Zealand flatly advised against a Labour policy to remove GST from fruit and vegetables—which would only save the average household about $5 a week—and reiterated that cuts to the punishing interest rate regime should be off the table. It declared that any cost-of-living support for “vulnerable groups” should be “targeted and temporary” and implemented using means testing—in other words, as meagre and insubstantial as possible.

Separately, global credit rating agency Fitch reaffirmed the country’s AA+ rating but warned that high household debt and a large current account deficit are “risks.” The rating is the agency’s second highest, which it said reflected the government’s commitment to “fiscal discipline” including returning to budget surpluses and reducing the debt-to-GDP ratio.

Fitch warned the economic outlook was “challenging” with growth falling because of worsening trade, higher debt servicing costs and weak consumer sentiment, with a fall in house prices and an “easing” labour market.

In August the NZ dollar dropped to a seven-year low against the British pound and a six-month low against the US dollar. Bank of New Zealand market strategist Jason Wong said the dollar was likely to remain under pressure, while problems in China’s economy had driven down commodity prices to three-year lows. A low NZ dollar exchange rate usually benefits exporters but any gains would be more than offset by weak commodity prices and increasing inflationary pressures, he told Radio NZ.

New Zealand is highly exposed to the downturn in China. The world’s second largest economy accounts for over a quarter of New Zealand’s exports, primarily dairy products, valued at $NZ21.45 billion and $3.4 billion in services. Two-way trade totaled $40.31 billion in the year ending December 2022, making China the country’s largest trading partner.

Market analyst Rodney Jones told TVNZ on August 27 that the outlook for the rural sector, in particular, is “dire” with all the indicators “pointing the wrong way.” “We’ve remained a bulk-commodity exporter,” Jones said “and you look at those auctions, Chinese demand is important, and they’re not turning up. We’ve done well in terms of exporting over the last few years—that’s starting to change.”

Jones warned there were no guarantees dairy prices would not go lower and that NZ was in the “front line” of any shock. Dairy prices slumped by 7.4 percent at last month’s Global Dairy Trade auction, led by a 10.9 percent fall in whole milk powder to $US2,548 a tonne, its lowest point in almost five years. Major companies Fonterra and Synlait cut their forecast milk price to $7 per kilogram of milk solids, which will remove around $5 billion from the economy.

With formal election campaigning now under way, the major parties have turned the “debate” into who will slash government spending the most. Labour’s Prime Minister Chris Hipkins has ruled out any wealth or capital gains taxes to increase revenue.

On August 28 Hipkins announced spending cuts of $NZ4 billion over the next four years, on top of $4 billion in cuts announced in the May budget. The government will reduce contractors and consultants, spending allowances and slash more than $1.4 billion in operating and capital savings. Included is a $236 million cut from climate initiatives.

The cuts will intensify the crisis in the public sector. Health and education are dealing with severe understaffing, years of under-funding and regular emergencies.

The unions rushed to endorse the move. The Public Service Association released a craven statement which declared: “…we understand as revenue falls during challenging economic times, savings need to be found.”

Last week the opposition National Party released a tax package which it claimed would address the precarious financial plight of the “squeezed” middle class. It offers tax cuts that will mainly benefit the rich, paid for by increased costs for basic necessities, including prescription charges and public transport fares. Meanwhile, a proposal to lift restrictions on the purchase of homes by wealthy foreign investors, which will attract a new tax, threatens to re-inflate the overheated housing market.

The far-right ACT Party, which could join National in a governing coalition, is setting the agenda for sweeping attacks. It calls for increased privatisation of the health system and the reintroduction of privately-run charter schools; massive tax cuts for the rich; $9 billion in cuts to annual government spending, including slashing the public service workforce by 30 percent; and measures to push people off welfare.

The one area that will remain untouched by any of the main parties is defence. Labour aims to increase defence spending from 1.4 percent to 2 percent of GDP, as the government continues to help train Ukrainian forces for the US-NATO war against Russia and prepares for an even more calamitous confrontation with China. The country’s ruling elite is unified in its commitment to this course.

Mass protests in Niger demand withdrawal of French troops

Alex Lantier

On Saturday, tens of thousands of people marched outside the French military base in Niger’s capital, Niamey, to demand French troops withdraw from Niger.

French President Emmanuel Macron has refused to withdraw from this former French colony, on the pretext that the Nigerien regime demanding it came to power in a coup, on July 26. Macron poses as a defender of democracy against the coup that toppled French-backed Nigerien President Mohamed Bazoum. On this basis, Macron is keeping French troops in Niger and refusing the Nigerien regime’s demand that he replace French Ambassador to Niger Sylvain Itté.

The mass protest in Niamey exposed the fraud of Macron’s neocolonial arguments. In reality, it is above all the Nigerien people, and not the Nigerien military junta, that wants an end to the French military presence in Niger and across the Sahel. As in neighboring Mali and Burkina Faso, both of which French troops have left within the last year after waging a bloody nine-year war in those countries, there is explosive anger against French imperialism and its NATO allies.

Demonstrators rallied on Escadrille square in Niamey, in front of the French military base, after smaller protests on Thursday and Friday. They shouted slogans calling on French troops to immediately leave Niger, a leading supplier of uranium and other critical raw materials for major French corporations. They held up signs that said: “France is a leech that sucks the blood of Nigeriens,” “Niger for Nigeriens, Africa for Africans,” and “Brave People of Africa, Nothing Can Ever Stop Us Again.”

“We are ready to sacrifice ourselves today, because we are proud,” demonstrator Yacouba Issoufou told Reuters. “They plundered our resources and we became aware. So they are going to get out.”

Another protester in Niamey, Mariama Amadou, told the Hindustan Times: “Our only request, our ultimate request, is the departure, the departure, the departure of the French who are on Nigerien territory. We don’t need these people here, we don’t need them, and we repeat: we are ready to die to defend our country. We are ready to die to make them leave. They must leave, we do not need them here.”

The protest in Niamey came amid mounting opposition and protests across West Africa against imperialist-driven economic sanctions and plans for an invasion by the Economic Community of West African States (ECOWAS) countries of Niger, Mali and Burkina Faso.

Macron has called for such an invasion, aiming to use ECOWAS troops as cannon fodder for a French-led campaign to reconquer countries French troops were forced to leave. The regimes of Nigeria, Ivory Coast, Senegal and Benin have expressed willingness to send troops to Niger.

ECOWAS sanctions have already had a devastating effect on Niger, leading to electricity cutoffs and halting trade in key pharmaceutical products, food and other essential goods. The sanctions are costing an estimated 13 billion nairas (€15 million) in weekly trade between Niger and Nigera alone.

Last month, protests against plans for war with Niger shook the city of Kano in the north of Nigeria. Protesters bore signs saying “War against Niger is injustice,” “It is the handiwork of America”, “It is justice we want,” and “Niger is ours.” The Nigerian daily Vanguard noted that the planned ECOWAS military mission “has been largely opposed by most Nigerians.”

Even within ruling circles in Nigeria, there is growing concern at the prospect of an all-out war. ECOWAS parliamentarian Idris Wase said: “We should be careful not to start what we can’t finish. When the Russia – Ukraine war started, people thought it was to be a sharp war. A year after, the war is still lingering on … [Nigerian] subregional military chiefs know what they stand to benefit economically. That’s why they’re eager to militarily intervene in Niger. Most of them are corrupt. Any war on Niger will have adverse effects on 60 percent of Nigeria, especially northern Nigeria.”

Nigerien workers in Senegal also spoke to Radio France Internationale to voice their opposition to the ECOWAS sanctions and war plans. Tassiou, a worker in Dakar, said: “We live abroad, we cannot take land routes, we cannot take air travel to go back home. If we need to send money via the banks, it is no longer possible, so commerce is blocked. Sending money to help our families is blocked.”

Abdourahmane, a Nigerien working in the finance sector in Senegal, denounced a potential ECOWAS military intervention, stating: “Senegalese people with whom I speak at the office generally do not support this military intervention. And I think that any African, today, should not defend this intervention, because it would be a battle between Africans.”

The danger of war is, however, rapidly growing. In particular because the conflict in Africa is becoming bound up with NATO’s fast-escalating war with Russia in Ukraine, as well as plans for a US military confrontation with China. The military juntas in Niger, Mali and Burkina Faso have all sought ties with the Russian private military contractors of the Wagner Group, or with Russian military officials directly.

China, whose firms in Niger are working on a oil pipeline to Benin and building food-processing plants, faces the risk that French-backed sanctions will block its industrial plans. It has cautiously signaled its support for the junta in Niamey. On Friday, Chinese Ambassador to Niger Jiang Feng met Nigerien Defense Minister Salifou Mody. Jiang told Mody that Niger’s government has the “support” of China, the Agence Nigériane de Presse reported.

The Turkish, Egyptian and Algerian governments have all criticized calls for an ECOWAS intervention as well. The Turkish government is reportedly selling Bayraktar drones, which it is also sending to Ukraine amid the NATO war on Russia, to Niger in case ECOWAS tries to invade it.

None of these capitalist regimes are friends of the working class or consistent opponents of imperialism, however. While the Algerian military regime opened its airspace to French bombers during the Mali war before closing it this year, the Egyptian regime is infamous for working closely with Washington to drown the revolutionary struggles of the Egyptian working class in blood during General Abdel Fattah al-Sisi’s 2013 putsch.

The strategy of all of these regimes—trying to negotiate a deal with imperialism and avoid mobilizing the revolutionary sentiment among African workers—emerged in the remarks last month of Russian Foreign Ministry spokeswoman Maria Zakharova. Shortly after the coup, she called for “re-establishing civil peace, ensuring law and order” in Niger. She also called on “the African Union and regional organizations,” like ECOWAS, to resolve the conflict.

Schlumberger Foundation Faculty For The Future Fellowship 2024/2025

Application Deadline: 10th November 2023

Offered annually? Yes

Eligible Countries: Developing Countries and Emerging Economies

To be taken at: Top universities abroad

Accepted Subject Areas: Physical sciences and related disciplines

About Schlumberger Foundation Faculty for the Future Fellowship: Each year, The Faculty for the Future fellowships, Launched by the Schlumberger Foundation, are awarded to women from developing and emerging economies who are preparing for PhD or post-doctoral study in the physical sciences and related disciplines at top universities for their disciplines abroad. Grant recipients are selected for their leadership capabilities as for their scientific talents, and are expected to return to their home countries to continue their academic careers and inspire other young women.

Offered Since: 2004

Type: PhD/PostDoctoral, Fellowship

Selection Criteria: A successful application will have gone through four selection rounds, with the reviewers paying particular attention to the following criteria:

• Academic performance;
• Quality of references;
• Quality of host country university;
• Level of commitment to return to home country;
• Commitment to teaching;
• Relevance of research to home country;
• Commitment to inspiring young women into the sciences.

Eligibility: Applicants must meet all the following criteria:

• Be a woman;
• Be a citizen of a developing country or emerging economy;
• Wish to pursue a PhD degree or Post-doctoral research in the physical sciences or related disciplines;
• Have applied to, have been admitted to, or are currently enrolled in a university/research institute abroad;
• Wish to return to their home country to continue their academic career upon completion of their studies;
• Be very committed to teaching and demonstrate active participation in faculty life and outreach work to encourage young women into the sciences;
• Hold an excellent academic record.

Number of fellowships: Several

Value of Schlumberger Foundation Faculty for the Future Fellowship: Faculty for the Future grants are awarded based on the actual costs of studying and living in the chosen location, and is worth USD 50,000 for PhDs and USD 40,000 for Post-doctoral study. Grants may be renewed through to completion of studies subject to performance, self-evaluation and recommendations from supervisors.

How to Apply: Interested candidates may Apply below

Visit Scholarship Webpage for Details