Fed pauses rate increases but indicates more to come

Nick Beams

The US Federal Reserve decided not to lift interest rates at its meeting yesterday, in line with market expectations. However, it signaled it could raise them again in at least one of its two scheduled meetings remaining for this year.

Federal Reserve Chairman Jerome Powell at news conference following the Federal Open Market Committee meeting, Wednesday, Sept. 20, 2023, in Washington. [AP Photo/Jacquelyn Martin]

After instituting a steep climb in rates, from near zero in March 2022 to their present level of 5.5 percent today, the statement issued by the Federal Open Mark Committee (FOMC) said tighter credit conditions were likely to weigh on economic activity, hiring and inflation. The extent of these effects was uncertain and it remained “highly attentive to inflation risks.”

While it is not officially stated, the biggest “inflation risk” is that workers break out of the straitjacket, to which they have so far been confined by the trade union bureaucracy, and undertake a unified struggle for wage increases to compensate for the decades-long reduction in their living standards.

As the meeting was taking place, that prospect was in evidence in the struggle of auto workers and the mounting anger over the efforts of the United Auto Workers union to atomise their struggle.

In his prepared remarks to a press conference following the meeting, Fed chair Jerome Powell again insisted that the “labour market remains tight.” Although the jobs to workers gap had narrowed, labour demand still exceeded the available supply—a situation the Fed is out to reverse.

It wants the unemployment rate to rise, with projections by members of the FOMC—the so-called dot plot—putting the jobless rate at 4.1 percent next year, up from its present level of 3.8 percent.

“FOMC participants expect the rebalancing in the labour markets to continue, easing upward pressures on inflation,” Powell said. His comment made that the central target in the “fight” against inflation is the wage demands of the working class.

Signaling that the decision not to lift rates, characterised as a “hawkish pause,” did not mean the end of hikes, Powell said that “the process of getting inflation down sustainably to 2 percent has a long way to go.”

The decision to hold rates steady did not mean that policymakers had decided that monetary policy was sufficiently restrictive, he added.

Pointing to the dot plot projections, Powell said: “You will see that a majority of participants believe that it is more likely than not… it will be appropriate for us to raise rates one more time in the two remaining meetings this year.”

In a revealing comment he said that a so-called soft landing for the US economy was not yet his baseline view.

“It’s a good thing that the economy has been able to hold up under the tightening that we’ve done… if the economy comes in stronger than expected, that just means we’ll have to do more in terms of monetary policy to get back to 2 percent.”

This comment expresses the perversity of capitalist economics from the standpoint the mass of the population.

The stronger the economy, the more job opportunities there are and the greater the possibility for an increase in living standards. However, as far as the Fed is concerned that is the great danger.

This perversity is not the product of a faulty mindset or thinking. It is an expression of the essential class logic of the profit system and the Fed’s policy. Economic growth must be repressed by monetary policy because it puts workers in a stronger position to fight to increase their living standards by clawing back some of the vast profits extracted from their labour.

In its statement on the latest decision, the FOMC said in determining future policy it would take into account a wide range of information including “financial and international developments.”

In these areas, there are growing problems. Over the past month, reports by three major organisations—the Fed, the Financial Stability Board, and the Bank for International Settlements—have pointed to the return of risky speculative bets by hedge funds in the US Treasury market. In March 2020 this led to a freeze in its operations.

The potential for further financial turmoil is being increased by rising global debt. This week the Institute for International Finance (IIF) reported that global debt had hit a new record high of $307 trillion in the first six months of the year after rising by $10 trillion.

Besides creating the conditions for turbulence in financial markets, the rise in debt has major social implications because it is being accompanied by rising interest rates. The US is a significant contributor, with the national debt hitting $33 trillion this week.

According to Emre Tiftik, the lead author of the IIF report: “Our concern is that countries will have to allocate more and more to interest expenses.”

In other words, in developed and less developed countries alike, spending on social services, health, education and other necessary facilities will have to be cut to meet the demands of bond holders. Already in many countries, interest payments, along with increased military outlays, are becoming the fastest growing area of government spending.

The attacks on the wages and social position of working class via the interest rate rises, spearheaded by the Fed, is taking place under conditions of a marked slowdown in the global economy.

In a report this week, the Organisation for Economic Cooperation and Development (OECD), covering 38 developed economies, insisted that interest rates had to remain high even as there were signs of stress in the world economy.

That report said global growth would remain subpar, around 3 percent this year, falling to 2.7 percent in 2024 with some areas slowing to a crawl, especially in Europe where the German economy is set to contract this year.

No matter what the cost, all the representatives of the peak capitalist economic bodies insist that the monetary policy war against the working class must continue.

Speaking to its latest report, OECD chief economist Clare Lombardelli said: “We’re seeing monetary policy have an impact. It’s reining in demand—that’s necessary to tackle this inflation challenge—but it means we have lower growth.”

Africa’s Water and Sanitation Crisis

Cesar Chelala

Image of three women in Africa walking on a dirt road.

Image by Ninno JackJr.

One of the most notable changes in modern times is the rapid urbanization of our planet, which began in the 19th century. While in 1950, 29 percent of the global population lived in cities, that figure is estimated now at around 50 percent, and by 2030 it will reach 61 percent.

It is estimated that, by 2030, 54 percent of the population on that continent will be living in cities. Not only are more people living in cities but the cities themselves are becoming larger and more densely populated. This situation poses unique problems related to the provision of water, sanitation, and a healthy environment.

Since 1990, the number of cities in Africa has increased from 3 000 to 7 600, and their population has increased by 500 million people. Africa has now 19 cities with populations of more than 1 million inhabitants. Because of slow economic growth, lack of effective development policies, and limited resources, the development of infrastructure has not kept up with the increasing needs for shelter and services in growing urban populations.

This is the case for many African cities, where local governments have been unable to keep pace with change and, as a consequence, have been unable to provide dwellers with proper infrastructure related to the provision of potable water and the collection, transportation, processing, and disposal of waste materials.

In addition to the problems caused by insufficient lack of potable water, in developing countries with economies under stress, waste management is a problem that often endangers health and the environment. This situation is given low priority by governments often besieged by other problems such as poverty, hunger, children’s malnutrition, unemployment, and war.

Poor hygiene, inadequate management of liquid or solid waste, and lack of sanitation facilities are contributing factors in the death of millions of people in the developing world due to diseases that are easily preventable. In addition, people living in un-serviced or poorly serviced areas value the increased convenience and privacy associated with improved sanitation.

Lack of sanitation and inadequate disposal or storage of waste near houses can provide habitats for vectors responsible for several infectious diseases such as amebiasis, typhoid fever, and diarrhea. Uncontrolled and inadequate landfills are a danger to the environment and a health risk to the population since they may lead to contamination of water and soil. The health risks associated with poor sanitation tend to be higher in densely populated low-income urban areas. At a global level, more than 5 million people die each year from diseases related to inadequate waste disposal systems.

Contamination of water leads to a whole range of diarrheal diseases, such as cholera, that kill 1.8 million people annually worldwide. An estimated 90 percent among them are children below 5, mainly from developing countries. Most of the burden can be attributed to unsafe drinking water, inadequate sanitation, and poor hygiene practices.

The children that are affected the most are those living in low-income urban areas. According to UNICEF, infant mortality rates (IMRs) are almost always higher in poor urban areas than the national average and than those in rural areas. A great proportion of the high mortality among the children of the urban poor can be attributed to diseases common in urban areas such as diarrhea, tuberculosis, and parasitic diseases (intestinal worms) that are frequently associated with lack of safe water and sanitation. Malnutrition in children is often a consequence and a complicating factor.

Microbes, particularly those present in water, food, or on dirty hands are the most frequent cause of sickness worldwide. Although lack of safe water and sanitary facilities are significant problems, they are made even worse by ignorance in the general population, particularly mothers, about the connection between dirt, microbes, and childhood diarrhea.

Several naturally occurring and human-made chemical substances present in drinking water can have a serious effect on health, particularly in high concentrations. Among chemicals that can be dangerous at elevated levels are fluoride, arsenic, lead, cadmium, mercury, nitrates, and pesticides.

All these factors stress the need to implement policies that ensure the provision of safe water to the population, particularly in marginal areas lacking basic health and social services.

Africa has the lowest water supply and sanitation coverage of any region in the world. It is estimated that one in three Africans has no access to improved water or to sanitation facilities and the number of people lacking those basic services is increasing. The majority of those lacking basic services live in informal or suburban areas and rural communities.

It is necessary to overcome the lack of integration between the various components of environmental sanitation: excreta, domestic and industrial wastewater, solid waste, and storm water, which are often run by separate agencies or institutions. Better use of synergies can lead to more sustainable and cost-effective solutions.

New strain fueling rising COVID infection in UK

Paul Bond

COVID infection rates are rising again in Britain, which has recorded more than a third of internationally sequenced cases of the new BA.2.86 (Pirola) variant. Last week saw a week-on-week jump of 15 percent in new cases. On September 10, the Zoe Health Study reported a daily total of 100,516 new cases.

The government’s latest fortnightly flu and COVID-19 surveillance figures issued September 14 also report increased infection and hospitalisation rates.

Overall, the current COVID-19 hospital admission rate is 4.56 per 100,000 population, up from 3.37 the previous fortnight—the highest rate since April. Hospital admission rates have increased in all age groups except 15-24. For those aged over 85, the rate is 51.08 per 100,000, up from 34.15 in the previous report. ICU admission rates remain relatively stable, at 0.11 per 100,000.

Eric Feigl-Ding, a US epidemiologist, posted on X/Twitter: “This is quite shocking. 7-day hospitalizations in England for #COVID19 in kids age 0-5 has surged—spiking up by 47% in just one week, near annual high. Kids in UK are also among the least vaccinated. Don’t ignore the worrisome data.”

Testing figures also show increases in the circulation of the disease. Of 3,297 respiratory specimens reported through the Respiratory DataMart System, 10.2 percent were identified as COVID-19. This compares to 9.7 percent of the 4,288 specimens in the previous report. Positivity for pillar one (swab testing) laboratory confirmed cases has risen to 16.0 per 100,000 population from 12.5 in the previous period.

At the beginning of July, no area had a case rate of more than nine per 100,000. By the week ending September 9 (the latest available), the government’s interactive map of case rates shows most of the UK experiencing 10-49 cases per 100,000. In the area west of Glasgow, this rises to 50-99 cases per 100,000.

These figures almost certainly underestimate the real situation, as the government has eroded basic public health surveillance measures. Testing for COVID is now at its lowest point since the beginning of the pandemic.

Duncan Robertson, senior lecturer in management sciences at Loughborough Business School, told the press, “The UK’s ability to detect new variants has been compromised by the effective ending of the Office for National Statistics Coronavirus Infection Survey” which “allowed the proportions of variants… to be estimated, which could have meant that the emergence of BA.2.86 could have been better tracked.”

Leeds University virologist Professor Stephen Griffin, a member the Independent Sage scientific committee, has warned, “Lessons learned during the early part of the pandemic and before do seem to have been forgotten.”

The UK Health Security Agency (UKHSA) has brought forward its autumn vaccination programme by three weeks in response to the spread of the Pirola variant, and said it will also scale up testing, although Griffin comments that “details at the moment are scant.” University College London (UCL)’s Professor Christina Pagel, also of Independent Sage, recently warned that Britain is close to “flying blind” in light of testing failures.

The Pirola strain has been detected in 15 countries since it was identified in Denmark in late July. Britain had recorded 37 cases of the variant by September 11, up three on the previous week, with UKHSA Incident Director Bindra suggesting “some degree of widespread community transmission.” Other cases have been reported from South Africa (17), Denmark (13), the USA (seven), France (seven), Sweden (five), Spain (four), Israel (three), Canada (two), and Australia, Germany, Japan and South Korea (one each).

Pirola has not yet been classified as more dangerous than previous variants, or as a Variant of Concern, but scientists have identified 34 mutations on its spike protein. Francois Balloux, director of the UCL Genetics Institute, described Pirola as “the most striking Sars-CoV-2 strain the world has witnessed since the emergence of Omicron.”

The World Health Organization (WHO) has said that “More data are needed to understand this… variant and the extent of its spread. But the number of mutations warrants attention.”

Pfizer and Moderna report their vaccine boosters offer “strong responses” to the targeted spike protein. However, Professor Griffin noted the “multiple preprint studies… by reputable labs” showing Pirola to be “equally, or perhaps more, antibody-evasive compared to the XBB [strains].” The XBBs, he said, are “among the most antibody-evasive strains ever encountered.”

The UK government having to accelerate its booster programme in response to the spread of another concerning variant exposes the lies of the Conservative and Labour parties which proclaimed as far back as February 2022 that the pandemic was over, and all could “live with COVID.”

Warnings are also being raised of a “twindemic” with the seasonal winter flu surge. Professor Susan Michie, professor of health psychology at UCL said in the Guardian, “We are at the start of a wave; how serious it’s going to be, we don’t know,” adding that it was unclear whether COVID is becoming seasonal. Given the existence of prior seasonal viruses such as flu and RSV, she warned that the impact on a stretched National Health Service (NHS) is “potentially dangerous.”

An outbreak in a Norfolk care home earlier this month gave a horrible snapshot of the dangers, prompting the sort of wholesale systematic testing which is no longer being carried out generally.

Testing revealed that 33 of the 38 residents of Shipdham Manor in Dereham and 12 members of staff had contracted COVID. Of these, 28 cases were confirmed as Pirola. One resident required hospitalisation.

The rise in COVID cases, in Britain as everywhere, is the inevitable result of the decision not to control the spread of the virus. The refusal to implement systematic monitoring and public health measures has allowed COVID-19 free rein to mutate, potentially beyond the ability of current vaccines to control. The Eris variant, EG.5.1, first identified by the WHO last month, is now the second most prevalent variant in the UK after Arcturus (XBB.1.16), and the most common variant in the US.

Eris was first flagged early in July after increased detection internationally. Virology Professor Lawrence Young noted that its key difference from other Omicron variants was an additional mutation in the spike protein “which might account for its ability to evade the neutralising antibody response from previous Omicron infections.”

A third new variant, Pi (BA.6) is also a variant of Omicron. Pi has not yet been widely sequenced, with records only from Denmark and Israel. Christina Pagel commented that although it is “very, very early days,” Pi has “a lot of new mutations that make it very different to previous Omicron strains.” 

A section of the 500-metre-long National Covid Memorial Wall in May 2021, which had 150,000 hearts on representing the number of people who have lost their lives to COVID. The wall is opposite the Houses of Parliament in London. In the months since the UK death toll has risen to above 200,000.

Professor Young told The Independent the new variants are “competing with each other and are continuing to change as they spread.” Pointing to the “rise in symptomatic… infections” and the “small but significant increase in hospitalisations due to COVID,” he warned that it is “very likely that we will see waves of infection over the winter.”

Griffin criticised a continuation of the government’s “vaccine-only strategy,” which “fails to recognise and account for airborne Sars-CoV-2 transmission, including in healthcare settings” as well as the “long-term consequences of COVID.”

The vaccine-only strategy in any case only applies to a shrinking minority of the population. Last month, the government’s Joint Committee on Vaccination and Immunisation issued guidance to the NHS barring 12 million people who had previously been eligible from receiving a free COVID vaccine. Britons between the ages of 50 and 64, except those classed as “vulnerable”, will not receive an additional booster dose. The same 12 million people are to be deprived of a free flu vaccine.

According to the governments’ own figures, over 229,000 people have been killed by COVID in Britain. The Economist magazine’s more accurate Estimated Excess Deaths tracker suggests a death toll in the range of 240,000 to 250,000.

VW in Germany cuts at least 2,200 jobs at its Zwickau plant and threatens other sites

Ludwig Weller

At a factory meeting last week at the Zwickau plant in Germany, management of Volkswagen Saxony announced that 269 workers would immediately lose their temporary jobs. About 2,200 of the total 11,000 employees in Zwickau have fixed-term contracts. In view of the rapid decline in demand for VW’s expensive electric cars, at least these 2,200 workers must expect that their contracts, which expire next year, will not be renewed in the coming weeks and months. It has not been announced whether more jobs are on the list to be cut.

VW plant in Wolfsburg

Three years ago, the Zwickau plant was converted into Europe’s first purely electric car factory. In addition to VW models ID.3, ID.4 and ID.5, the Audi Q4 e-tron and Q4 Sportback e-tron as well as the Cupra Born are produced there. At the time, VW, the state government and the IG Metall union claimed that secure jobs would be created and a prosperous future of climate-friendly mobility was on the horizon.

For weeks, the IG Metall works council representatives have been negotiating with VW managers behind closed doors about the extent to which shifts will be cut, and when and how many workers will see their jobs cut. The workforce and the workers concerned are to be presented with a fait accompli, so that it is too late for them to act against it.

Saxony’s state Minister of Economic Affairs, Martin Dulig (Social Democrat, SPD), unintentionally admitted that the workforce was being deceived by politics and trade unions. “It is a serious situation,” he said, adding he had been in contact with the works council and his Lower Saxon counterpart Olaf Lies (SPD) for several weeks.

These intrigues against the interests of the workforce must not be allowed to continue! Workers have the right to know what the future holds for them. All restructuring and downsizing plans must be disclosed immediately.

VW cites “the current market situation” as the reason for the cuts. High inflation and declining subsidies meant electric vehicle buyers were holding back. Since the state-funded subsidies have been sharply reduced, and in some cases completely abolished, new orders have been falling rapidly. Nearly 70 percent of newly registered electric cars were for commercial customers.

At the factory meeting in Zwickau, VW management sought to placate workers, claiming sales figures would rise again next year. Workers we spoke to do not share this optimism. Since even the smallest VW electric model, the ID.3, costs a good €40,000, it is unaffordable for most buyers.

Under these conditions, to achieve the profit increases recently decided by VW would require a veritable massacre of jobs, wages and working conditions. There is no way this can be achieved by further state subsidies alone, which VW is demanding. Such measures are rather meant to keep the workforce quiet.

In reality, the VW group, just like the other car companies, is using the conversion from combustion to electric vehicles as a welcome opportunity to drastically reduce costs and cut tens of thousands of jobs.

VW wants to earn €10 billion more in 2026 than this year, as brand boss Thomas Schäfer announced at the factory meeting in Wolfsburg in June. The performance programme of VW and IG Metall envisages a doubling to tripling of the current returns.

The workforce has not yet received any information on how many and which jobs are to fall victim to the cuts programme. However, the events of the last weeks show where the journey at VW is going. Jobs are not only being cut in Zwickau and Dresden. Production of electric cars ID.4 and ID.7 has been shut down at the Emden plant as well. Three hundred of 1,500 temporary workers will no longer be employed from August, and short-time work has become the norm.

In a number of locations, VW has imposed short-time work or stopped production altogether because a supplier plant could no longer deliver due to the floods in Slovenia. There is a shortage of gear rims everywhere, which are urgently needed for the drive train in combustion engines.

VW workers from Zwickau, as well as from Emden, were sent to Slovenia for support, a VW worker told the WSWS. He was told by his colleagues that the Emden workers received €135 a day, the Zwickau colleagues only €35 a day. This is another way of maintaining the division of the workforces even at the smallest possible level.

Although neither the workers of the Slovenian Volkswagen plant nor the workforces of the VW plants concerned bear the slightest responsibility for the delivery bottlenecks, they are the ones who have to pay bitterly for it through wage cuts or loss of wages. And here, too, the VW works council representatives are completely on the side of the management. A VW spokeswoman succinctly stated: “Due to the volatile situation, the company decides on the further course of action together with the works council.”

There is no plant that is not currently affected by changes. At VW’s Kassel plant in Baunatal, the assembly lines are partially shut down, affecting almost 3,500 workers. Shifts are also being cancelled in Osnabrück.

At VW’s Autoeuropa plant in Portugal, a nine-week production freeze has been imposed since last week. As a result, 300 temporary workers and those on fixed-term contracts have already lost their jobs: 100 of them directly from the VW plant and 200 from other companies. Thousands of workers in supplier companies in the industrial area in Palmelavon are now dependent on welfare benefits because the VW group is not paying them any wage compensation.

At VW’s main plant in Wolfsburg, where mainly Golf and Tiguan models are built, short-time work has been introduced until September 29. According to a VW spokesperson, all four assembly lines are affected. There are media reports suggesting that the Wolfsburg plant could even come to a complete standstill in October.

Last Wednesday, CEO Oliver Blume announced that the originally planned state-of-the-art dedicated factory for the Trinity series at the headquarters in Wolfsburg will not come about. The Trinity is to be built at VW’s existing main plant in Wolfsburg, but not for several years.

Using existing capacity at the Wolfsburg plant, which is currently being converted to parallel e-car production, is therefore by no means certain. The question also arises whether priority is being given to Wolfsburg at the expense of the Zwickau plant. Remarkably, despite low capacity utilisation at the Zwickau e-car plant, production of the Audi Q4 e-tron is to be extended to the Brussels plant and the VW ID.3 to Wolfsburg.

The question arises whether there are plans to close the plants in Zwickau or in Emden. Why are the works councils and IG Metall silent? What do they know, or have they already decided?

The IG Metall is significantly involved in the development and implementation of the concrete plans for the cuts at VW. The most important representatives of the major shareholders sit “in the presidium of the supervisory board, where all fundamental decisions on corporate strategy as well as on the plants and models of Europe’s largest car manufacturer are made,” is how Manager Magazin describes this powerful body. The body includes the chairman of the supervisory board Hans Dieter Pötsch, the two heads of the family clans with major VW shareholdings, Dr. Hans Michel Piëch and Dr. Wolfgang Porsche, as well as Lower Saxony’s Minister President Stephan Weil (SPD), since the state owns 20 percent of VW shares.

Four highly paid IG Metall bureaucrats also sit on this powerful presidium: IG Metall boss Jörg Hofmann; the chairwoman of the VW general and group works council, Daniela Cavallo; the chair of the general works council of AUDI, Peter Mosch; and Jens Rothe, who was chair of the works council of VW in Zwickau and the general works council in Saxony until February 2023—and is now head of human resources at VW in Dresden.

In the spring, when the Federal Court of Justice rejected the VW works council representatives’ demands to receive salaries at the level of managers, the long-serving head of the works council moved directly to VW management without further ado. As head of human resources at the glass factory in Dresden, he was to promote “the strategic reorientation of the site,” according to a VW press release.

In no other German company is the collaboration between management and trade union as sophisticated as at Volkswagen. With an army of full-time functionaries, IG Metall and the works councils ensure that the group’s decisions are implemented smoothly and that there is no resistance to them.

They are regularly “rewarded” for this. Bernd Osterloh, Cavallo’s predecessor, received up to €750,000 a year in his best years as a works council member. As personnel director at the truck subsidiary Tratonhe he is now enhancing his retirement pot as personnel director at the truck subsidiary Traton, thanks to an annual salary of €2 million.

This follows a definite method. Gunnar Kilian, ex-general secretary of the VW works council, is VW’s current head of human resources, with an annual salary of €6.8 million in 2022. All his predecessors in this post were previously long-time SPD and IG Metall bureaucrats.

Niger, Mali and Burkina Faso form alliance against French invasion threat

Athiyan Silva

The Sahel countries of Mali, Burkina Faso and Niger signed a defense pact on September 16, establishing a military alliance called the Alliance of Sahel States (AES in French). The three heads of state—Assimi Goita of Mali, Ibrahim Traoré of Burkina Faso and Abdourahamane Tiani of Niger—met in the capital of Mali, Bamako, to sign the AES charter.

Soldiers from Burkina Faso before deployment to an exercise in Mali [Photo: DoD photo by Master Sgt. Jeremiah Erickson, U.S. Air Force/Released]

Named after a region shared by the three countries, the “Charter of Liptako-Gourma” pledges “to establish an architecture of collective defense and mutual assistance for the benefit of our populations. Any attack on the sovereignty and territorial integrity of one or more contracting parties shall be considered as an aggression against the other parties and shall give rise to a duty of assistance and relief of all parties, individually or collectively, including the use of armed force to restore and ensure security within the area covered by the Alliance.”

The alliance is aimed against the threat that nearby countries in the Economic Community of West African States (ECOWAS) could invade AES countries with French support. After a decade-long French war in Mali that led to bloodshed across the Sahel, mass protests and military coups forced out French-backed governments in the three countries, which are all former French colonies. French officials have retaliated by threatening to support a military intervention by ECOWAS states such as Nigeria, Ivory Coast, Ghana and Togo.

The AES treaty points to the growing danger that the NATO-Russia war in Ukraine could spread into large-scale warfare across Africa. Indeed, the AES states have all sought closer military ties and advice from Russia or Russian forces like the Wagner militia group after cutting off military ties to France. The threat of an AES-ECOWAS war is therefore rising in line with the broader tensions internationally between France and NATO, on the one hand, and Russia on the other.

The junta that seized power in Niger on July 26 set a deadline for the end of August for French troops, as well as the French ambassador, to leave the country. French President Emmanuel Macron, acting with unabashed neocolonial arrogance, has persistently refused to do this. Macron also refuses to recognize the Nigerien military junta that toppled President Mohamed Bazoum.

West Africa [Photo by PirateShip6 / CC BY-SA 4.0]

Macron has consistently insisted that the discredited French puppet President Bazoum and the presence of the French military in Niger are legitimate, despite mass protests by working people and youth against French and NATO troops in Niger and across the region.

Niger’s military junta has also accused France of sending troops and military equipment to the West African countries of Benin, Ivory Coast and Senegal to invade Niger and overthrow the military regimes in Niger, Burkina Faso and Mali.

“As part of war preparations for aggression against Niger, France continues to deploy its forces in several ECOWAS countries and is considering it in collaboration with this organization,” declared the spokesman of Niger's military regime, Colonel-Major Amadou Abdramane.

Rejecting these accusations, French President Emmanuel Macron issued a bellicose statement saying, “We do not recognize any legitimacy in the statements of the junta in Niger.”

The military juntas that rule the AES do not oppose imperialism or the NATO alliance, despite the explosive anger among workers and youth against imperialism. Amid mass protests, the juntas have selectively criticized France, the former colonial power implicated in much of the bloodshed in the region. But Washington has negotiated an agreement with Niger's military junta and resumed fighter and drone air operations in Niger from Air Base 201, located in the northern city of Agadez. This places US forces close to Niger’s strategic uranium mines.

The policy of the juntas in the AES countries, of criticizing France but cutting back-channel deals with NATO, aims to block the emergence of an independent movement in the working class and youth that would oppose both imperialism and its allies in the African bourgeoisie. This bankrupt and reactionary policy is in fact only dragging the Sahel and all of Africa deeper into the maelstrom of the growing global war.

Paris, Washington and the entire NATO alliance are increasingly angry at the limited diplomatic overtures to Moscow made by the juntas in the three AES states. As they wage war against Russia in Ukraine, the NATO imperialist powers are moving towards ever more drastic and bloody methods to crush Russian influence around the world.

Currently, the three Sahel countries are suspended from ECOWAS and face draconian sanctions imposed by wealthier ECOWAS states, led by Nigeria. Border closures and economic sanctions against these landlocked countries are driving millions into poverty. 

The three AES member states have resolved not to resort to threats or aggression against each other—specifically, not to blockade each other’s ports, roads, coasts or strategic infrastructure. “Our priority is the fight against terrorism in the three countries,” Mali's Defense Minister Abdoulaye Diop told reporters about the deal.

The Liptako-Gourma region, where the borders of Mali, Burkina Faso and Niger meet, has been hit by Islamist terror attacks in recent years. It is well known in this region that NATO armed Islamist militias as its proxy forces in its 2011 war in Libya. Officials in the AES countries have accused France of secretly aiding Islamist groups in the Sahel, in that way creating a pretext to keep French troops in the region in the name of fighting Islamist terrorism.

The Malian military junta is continuing to criticize the Macron government along these lines. Last year, in a letter to the head of the United Nations Security Council, Mali's foreign affairs minister, Abdoulaye Diop, said Mali’s “airspace has been breached more than 50 times this year, mostly by French forces using drones, military helicopters and fighter jets. These flagrant violations of Malian airspace were used by France to collect information for terrorist groups operating in the Sahel and to drop arms and ammunition to them.’’

Abdoulaye Diop finally warned that Mali reserves the right to defend itself if this strategy continues, which undermines the stability and security of the country.

Another warning on US Treasury market instability

Nick Beams

The Bank for International Settlements has warned that the $22 trillion US Treasury market could be headed for another episode of major turbulence because of highly leveraged hedge fund bets.

“Speculative positions by leveraged investors are back,” it said. Bets by hedge funds were creating conditions similar to those which led to turbulence in September 2019 and a major crisis in March 2020.

Bank for International Settlements (BIZ) in Basel, Switzerland [Photo by Wladyslaw Sojka (Free Art License 1.3)]

The warning, set out in the BIS quarterly review issued on Tuesday, is the third to come from a major regulatory body in the past weeks.

In a report last month, the US Federal Reserve said there had been a build-up in the so-called “basis trade” which seeks to exploit the very small differences between the price of Treasury bonds and their price in futures markets.

The Financial Stability Board, a global watchdog consisting of the world’s major finance ministers and central bankers, issued a report to the recent G20 meeting. It warned that hedge funds with large levels of debt created using derivatives had the potential to create market instability.

Adding its voice to these warnings, the BIS said: “The current build-up of leveraged short positions in US Treasury is a financial vulnerability worth monitoring because of the margin spirals it could potentially trigger.”

This refers to a situation in which lenders call for an increase in cash from the hedge funds to which they have lent money—a margin call—because the value of the underlying asset on which the loan is based has fallen. This can trigger a sell-off of assets to meet the call, and a downward spiral, as borrowers seek to meet the demand for additional cash.

“Margin deleveraging, if disorderly, has the potential to dislocate core fixed income markets,” it said.

The source of the potential turbulence lies not in the periphery but at the very centre of the global financial system. The US Treasury market forms the foundation of the global financial system.

In September 2019 there was major turbulence in the repurchase or repo market in which traders receive money, sometimes merely overnight, on the basis of bonds which they agree to repurchase. Repo interest rates underwent wild swings, sometimes reaching record highs, forcing to the Federal Reserve to intervene to restore stability.

This was the prelude to a much bigger crisis in March 2020, at the start of the pandemic. The Treasury market froze. For several days no buyers could be found for US government debt, supposedly the safest financial asset in the world. As a result, the Fed had to intervene to the tune of trillions of dollars.

The potential for extreme market volatility lies in the nature of the trades being carried out. The difference in the price of Treasury bonds and their price in futures markets is miniscule and so large amounts of money must be outlaid to make a profit.

The hedge funds do not spend their own money but borrow heavily in order to leverage their profits.

However, if market conditions turn in an unanticipated way, then highly leveraged funds can be forced to liquidate their positions and trigger a broad market sell-off.

Adding to the potential market instability is uncertainty over the direction of the Fed’s interest rate policy. After hiking interest rates by 5.25 percentage points over the past year and a half, the question is whether it will continue to increase or announce a pause, possibly at the meeting scheduled today.

So far this year investors have put $1 trillion into short-term money market funds, where they receive a return of around 5 percent because they are unsure of where the Fed is heading.

According to analysts at the Bank of America, the flood of cash into lower-risk market funds is an expression of “one trillion dollars of doubt.”

“The inflows to cash reflect a tremendous amount of doubt as to whether it’s a soft or hard landing, whether the Fed’s done or not done, whether it’s a bull market or still a bear market,” Michael Hartnett, a BofA investment strategist wrote.

The uncertainty means that even more attention than usual will be paid to the Fed’s summary projections of its members—the so-called dot plot—that will be released when it announces its interest rate decision today.

Apart from the immediate market movements, there are deeper processes at work.

Writing in the Financial Times earlier this month, Vinod Thomas, a former vice-president at the World Bank, likened the global financial system to the Titanic, which was assumed to be unsinkable.

“A similar assumption underpins today’s international financial architecture in the face of a polycrisis: runway climate change, financial faultlines, the health pandemic, geopolitical dangers, the next generation of artificial intelligence and global water and food shortages.”

He warned that the interplay of the climate crisis with financial fragility alone threatened “potentially insurmountable dangers unless immediate action is taken.” As a result of the effects of climate change, “insurance companies would face unprecedented claims and a decimated investment portfolio, wiping out their capital bases.”

Banks would then be “knocking on central bank doors to fend off the impact of insurance company defaults.”

Thomas noted that global debt had reached “unprecedented levels” under conditions where, following the global financial crisis of 2008, a shadow banking system of non-bank financial intermediaries (NBFI) dominates about half of global financing. The amount of unregulated financing attributable to NBFIs is about $240 trillion.

Moreover, financial authorities, as has been made clear in numerous reports, including from the International Monetary Fund, have little or no idea about the connections of much of the NBFI operations with the broader banking system.

Highlighting the mounting debt crisis of the global capitalist system, was the announcement on Tuesday that US national debt had gone over $33 trillion. A little more than a year and a half ago when it passed $30 trillion the New York Times characterised it as an “ominous fiscal milestone” that underscored the fragility of the long-term health of the US economy.

Now it has zoomed past that milestone and is set to go further, above all because of increased military spending.

After protests in flood-hit Derna, Libyan officials order journalists to leave

Alex Lantier

Protests erupted in Derna on Monday, as anger exploded among workers in the city against authorities who failed to take critical measures to protect it from flooding. When Storm Daniel hit the region, Derna’s poorly maintained dams burst, and a massive wall of water descended on the city, killing an estimated 10,000 to 20,000 people. 

Rescuers and relatives sit in front of collapsed buildings after recent flooding caused by Mediterranean storm Daniel, in Derna, Libya, Monday, Sept. 18, 2023. [AP Photo/Muhammad J. Elalwany]

The response to the protests of officials in eastern Libya, where Derna is located, underscores the complete contempt of the Libyan authorities and their NATO backers for the population. They have ordered journalists to leave the area and are blocking access to foreign search-and-rescue teams. The few reports available from the area speak of mounting fear that the eastern Libyan authorities, which have longstanding ties to NATO, are preparing a bloody crackdown in Derna. 

The protest revealed the growing mass opposition to the corrupt patchwork of militias and local warlords put in power by the NATO war in Libya in 2011 that destroyed the regime of Colonel Muammar Gaddafi. 

On Monday, protesters gathered in front of Derna’s Al Sahaba mosque and denounced the eastern Libyan regime led by former CIA asset General Khalifa Haftar, and especially the speaker of the eastern Libyan parliament, Aguilah Saleh. They chanted slogans like: “The people want parliament to fall,” “Aguila is the enemy of God,” “Thieves and betrayers must hang” and “The bloody of martyrs must not be shed in vain.”

They also chanted slogans against the decade-long civil war in Libya that followed the NATO victory in the 2011 war: “Aguila we don’t want you, all Libyans are brothers.”

Aguila had provoked outrage last week by declaring that Libyans should not “exchange accusations” over who is responsible for the deaths, as “The disaster that struck the country is a natural one. … It is in God’s hand.”

Protesters in Derna also read out a statement listing their demands against the Haftar-Aguilah regime. They called for “a speedy investigation and legal action against those responsible for the disaster.” They also called for a probe of Derna’s present and previous budgets, the opening of a UN office in the city, and the launching of its “reconstruction, with compensation for affected residents.”

Later, on Monday night, protesters gathered outside the house of Derna Mayor Abdulmenam al-Ghaithi, stormed it and burned it down.

At 1:00 a.m. on Tuesday morning, mobile phone networks in Derna all suddenly shut off. The Libyan Post Telecommunications & Information Technology Company (LIPTIC), which operates these networks, attributed it to a “rupture in the optical fiber” link in Derna. LIPTIC added that it “could be the result of a deliberate act of sabotage” and added: “our teams are working to repair it as quickly as possible.”

Throughout the day Tuesday, eastern Libyan authorities took sweeping measures to prevent reports of events in Derna from reaching the outside world and limit the number of foreign rescue teams working in the city.

Initially, the eastern Libyan government declared that “health reasons” meant it was dangerous for journalists to remain in Derna. After Libyan health authorities confirmed that there were no health advisories currently in effect for Derna, the government changed its reason for telling journalists to leave. It said the large number of reporters was “hindering the work of the rescue teams.”

As it claimed to be doing everything it could to help the rescue teams to justify making reporters leave, however, the eastern Libyan government asked a number of international rescue teams to leave Derna and blocked others from arriving. 

Spanish and Maltese rescue teams have already left the city, and UN officials have said that the eastern Libyan authorities are blocking their teams from reaching Derna. “We can confirm that search and rescue teams, emergency medical teams and UN colleagues who are already in Derna continue to operate,” UN spokesperson Najwa Mekki told Reuters. “However, a UN team was due to travel from Benghazi to Derna today but were not authorized to proceed.”

This has led to a number of reports on social media, largely from diplomatic or security personnel working for think-tanks with connections to Libya, that a crackdown is being prepared, and that Derna is bracing for an attack from Haftar’s forces.

On Twitter/X, Emadeddin Badi of the Atlantic Council wrote: “Media blackout on Derna now in place, (communications) off since dawn. Make no mistake about it, this isn’t about health or safety, but punishing the Dernawis for protesting. Turkey and Algeria’s Search and Rescue teams, journalists and Tripolitania’s medical teams have been given orders to leave” by the Libyan Arab Armed Forces (LAAF), Haftar’s military force.

Similarly, Tarek Magrisi of the European Council on Foreign Relations tweeted: “Extremely dark news from a Derna still reeling from horrific floods. The city’s communications are shut down with Libyan and international aid teams kicked out. Locals are now terrified of an impending military crackdown as collective punishment for yesterday’s protests and demands.”

The catastrophe in Derna is a devastating exposure of the consequences of the 2011 NATO war and of the subsequent decade of civil war into which it plunged Libya. NATO countries’ banks and oil companies were able to loot Libya, which was once Africa’s wealthiest country per capita and with its longest life expectancy. The local administrations that emerged after 2011 under the neo-colonial regime in Libya rule with utter contempt for working people. 

Significantly, among the many pseudo-left academics who agitated for the NATO war in Libya 12 years ago, one particularly popular argument was that NATO intervention was necessary to keep Gaddafi from possibly massacring protesters in eastern Libya. 

Professor Gilbert Achcar, a member of France’s Pabloite New Anti-capitalist Party (NPA) who has now been exposed as a paid adviser to the British army, denounced left-wing opposition to NATO’s imperialist war in Libya, asserting: “Here is a case where a population is truly in danger, and where there is no plausible alternative that could protect it. The attack by Gaddafi’s forces was hours or at most days away. You can’t in the name of anti-imperialist principles oppose an action that will prevent the massacre of civilians.”

This potential massacre by Gaddafi’s forces in 2011 did not materialize. Now, however, there is mounting evidence that the eastern Libyan regime set up by the NATO war is preparing a very real crackdown in Derna. In its latest report on Libya, Amnesty International explained how Haftar’s regime treats protesters who challenge its authority, writing:

Militias and armed groups used unlawful force to repress peaceful protests across the country. Dozens of people were arrested, prosecuted and/or sentenced to lengthy imprisonment or death. … Militias and armed groups systematically tortured and otherwise ill-treated detainees with impunity. Beatings, electric shocks, mock executions, flogging, waterboarding, suspension in contorted positions and sexual violence were reported by relatives and prisoners...

Amelia Earhart Fellowship 2024

Application deadline: 15th November 2023

Offered annually? Yes

Eligible Countries: Women from Any Country

To be taken at (country): Any University or College offering Accredited Degrees in any country.

Subject Areas: PhD/Doctoral degrees in Aerospace-related Sciences and Aerospace-related Engineering

About the Award: Zonta International established the Amelia Earhart Fellowship in 1938 in honor of legendary pilot and Zontian, Amelia Earhart. Today, the Fellowship of US$10,000 is awarded annually to 35 talented women, pursuing Ph.D./doctoral degrees in aerospace-related sciences or aerospace-related engineering around the globe.

Offered Since: 1938

Type: PhD/Doctoral

Eligibility

• Women of any nationality pursuing a Ph.D./doctoral degree who demonstrate a superior academic record in the field of aerospace-applied sciences or aerospace-applied engineering are eligible.
• Students must be registered in a full-time Ph.D./doctoral program and completed at least one year of that program or have received a master’s degree in an aerospace-applied field at the time the application is submitted.
• Applicants must not graduate from their Ph.D. or doctoral program before April 2024.
• Please note that post-doctoral research programs are not eligible for the Fellowship.
• Members and employees of Zonta International or the Zonta International Foundation are also not eligible to apply for the Fellowship.
• Note that previous Amelia Earhart Fellows are not eligible to apply to renew the Fellowship for a second year.

Number of Awards: Not specified

Benefits of Fellowship:

• Fellowship of US$10,000 is awarded annually
• The Fellowship enables these women to invest in state-of-the-art computers to conduct their research, purchase expensive books and resource materials, and participate in specialized studies around the globe.
• Amelia Earhart Fellows have gone on to become astronauts, aerospace engineers, astronomers, professors, geologists, business owners, heads of companies, even Secretary of the US Air Force.

Duration of Fellowship: One year (current fellows can reapply to renew the fellowship each year)

How to Apply: The Zonta International Amelia Earhart Fellowship Committee reviews the applications and recommends recipients to the Zonta International Board of Directors. All applicants will be notified of their status by the end of April.

Apply Now

Visit Scholarship Webpage for details

Important Note: Please note that post-doctoral research programs are not eligible for the Fellowship. Members and employees of Zonta International or the Zonta International Foundation are also not eligible to apply for the Fellowship.