Britain’s Labour government announces savage welfare cuts targeting sick and disabled

Robert Stevens

The Labour government’s work and pensions minister Liz Kendall has laid out a savage programme of attacks on welfare recipients, aimed at saving more than £5 billion. 

They are the most brutal cuts to welfare carried out by any post-war government, Conservative or Labour, removing disability and incapacity benefits from hundreds of thousands of people. Kendall, a leading Blairite, gleefully outlined her key proposals from the government’s 80-page Green Paper in the House of Commons on Tuesday.

Liz Kendall, the Secretary of State for Work and Pensions announcing welfare cuts in Parliament, March 18, 2025 [Photo by House of Commons/Flickr / CC BY-NC-ND 4.0]

The Starmer government aims to legislate its Dickensian onslaught before the summer recess using Labour’s substantial majority.

Access to disability benefits known as Personal Independence Payments (PIP), covering living costs and mobility costs, will be severely restricted.

Only a small minority of PIP recipients, those deemed unfit to ever work again, will retain their claim. The first of hundreds of thousands of current PIP recipients will lose their entire £70 a week payment in November 2026.

The government’s torching of disability payments was trailed over several days, with its plans leaked for a multiyear freeze on the value of PIP, a real-terms cut of £600 million in 2026-27, rising to £3.3 billion by 2029.

Over the weekend media outlets including the Guardian reported a (non-existent) “rebellion” by a handful of Labour MPs, claiming this had forced the government to backtrack. But the Financial Times cited a “senior MP” saying government leaks about a PIP freeze “was a classic ‘bleeding stump’ tactic… To make it look like they’ve made concessions and the actual cuts aren’t as bad.”

In fact, Kendall’s welfare cuts go way beyond the leaked measures.

An estimated around one million people will lose their entitlement to disability benefits altogether. To qualify for PIP in future, a minimum of four points under the “daily living” component will be required under the draconian Work Capability Assessment (WCA). People struggling with washing, eating and dressing themselves will not qualify.  

Those too ill to work receive a health “top-up” currently through a Universal Credit payment, which is twice as much as that paid to job-seekers who are not ill. The new regime will freeze this health top-up for existing claimants, and it will be slashed for new claimants also, by £47 a week (£2,444 a year).

As part of Labour’s demonising the disabled as work-shy, Kendall announced a “Right to Try” scheme “giving people the confidence to take the plunge and try work without the fear this will put their benefits at risk”. This measure will create a ready-made pool of ill and vulnerable people who will be pressured into jobs, while eligibility for health-related benefits is drastically narrowed.

Kendall announced the WCA will be scrapped from 2028, due to it being “complex, time-consuming and often stressful for claimants”. But the Kafkaesque WCA will be replaced by increased face-to-face assessments, with Kendall attacking previous Conservative governments for allowing a fall in the number of claimants assessed, from seven in 10 to only one in 10 currently.

One of Labour’s first measures on taking office in July last year was the axing of winter fuel payments to 10 million pensioners. But the £1.3 billion saved annually was ridiculed by corporate media outlets as chickenfeed. They demanded far harsher attacks on welfare to pay for military spending.

Starmer’s government is on message. In parliament today, Kendall railed against the disabled and sick, vilifying the “1 in 10 people of working age now claiming a sickness or disability benefit… 2.8 million out of work due to long term sickness… And the number of people claiming Personal Independence Payments set to double this decade, from 2 to 4.3 million… with the growth in claims rising faster among young people and mental health conditions.” 

Following her sickening performance in the Commons, the media faithfully regurgitated her talking points. BBC News displayed graphs showing “the UK is an outlier in terms of the percentage of the population claiming sickness benefits”. Kendall had earlier railed at “taxpayers paying millions more on the costs of failure” with “working age sickness and disability benefits up £20 billion since the pandemic, set to rise by a further £18 billion by the end of this Parliament to £70 billion a year.”

Such a massive toll of illness and disability is a direct outcome of decades of austerity. Boris Johnson’s declaration, “Let the bodies pile high in their thousands”, expressed the homicidal attitude of the ruling class toward the working class. Almost 250,000 people have died from COVID-19 in Britain, millions have suffered the effects of Long COVID, while the entire hospital system is on life support.

Labour’s welfare cuts were denounced by disability rights groups.

Richard Kramer, former Chief Executive of Sense, posted on X, “The government has announced the biggest cuts to disability benefits on record. These cuts are wrong and punitive and affect the poorest and most marginalised individuals in the country. Cutting the income of disabled people will not help them return to work.”

Dr. Jay Watts, a consultant clinical psychologist, posted: “Can we take a moment for the sheer cruelty of increasing reassessments & face-to-face assessments—when terror of them has been explicitly linked to suicide & self-harm in Prevention of Future Deaths reports? Labour knows this. Yet here we are.”

Sam The Long Covid Unicorn wrote: “Liz Kendall’s bullying and cruel #DisabilityBenefits cuts are worse than anything the Tories have ever done. Watching Liz Kendall’s gruesome hate-filled expression was genuinely upsetting and unsettling for me. Labour is a fascist endeavour.”

Outrage and disgust was summed up by a photoshopped image of an incapacitated woman hauling a trailer-load of bricks underneath the Nazi concentration camp slogan, “Work sets you free”.

Labour’s assault on welfare follows last week’s announcement axing NHS England, part of Labour’s plans to privatise the National Health Service. Labour is emulating the Trump administration’s Department of Government Efficiency headed by fascist oligarch Elon Musk. Starmer’s operation has been dubbed “Project Chainsaw”, mimicking the tool Musk wielded in the air, symbolising his plans to slash $2 trillion from government spending.

Starmer began this week with an op-ed statement in business newspaper City A.M. saying of Labour’s deregulation and cuts agenda: “It will take years of discipline, focus and a willingness to make tough choices. But my government is taking on that challenge to bring back the animal spirits of the private sector, and to make Britain the best place in the world to start and build a business.”

Starmer has explicitly linked the gutting of public spending and the destruction of the welfare state with preparation for war and the government’s massive increase in military spending, declaring “now more than ever, national security is economic security… And you’re not strong if you lose control of your public finances.”

Today’s Telegraph carried an article by its Senior Economics Reporter Eir Nolsøe headlined, “Britain can’t afford to defend itself—the expanding welfare state is to blame”, stating bluntly, “The UK’s ballooning benefits bill threatens the Government’s ambitions to rearm”.

Germany: Thousands protest in Cologne against massacre of Alawites in Syria

Dietmar Gaisenkersting

Demonstration in Cologne against the massacre of Alawites in Syria, March 15, 2025

On Saturday March 15, several thousand people protested in the German city of Cologne against the recent massacres of members of the Alawite minority in Syria.

Several Alawite associations had called for the rally under the slogan “Stop the genocide of the Alawite population in Syria.” The protest was directed against the massacres recently perpetrated by the Western-backed Islamist militia Haiat Tahrir al-Sham (HTS) against the Alawite population.

The violence began after residents of the village of Beit Ana refused to hand over a suspect to the security forces on March 6. Fighting quickly spread from there between former soldiers of the Syrian army under Bashar al-Assad and troops of the HTS government led by Abu Mohammad al-Jolani (real name Ahmed al-Scharaa). In response, the HTS troops launched a large-scale operation.

Within two days, at least 745 civilians were killed. Soldiers of the new government executed Alawite men who had served in the security forces under the Assad regime. Several Alawite villages were looted and burned, and their inhabitants shot.

The president of the umbrella organisation of the Alevi community in Germany (AABF), Hüseyin Mat, opened the rally by accusing the international community and regional actors of simply ignoring the mass murder of the Alawite community that had taken place on the Syrian coast between Latakia and Tartus.

One poster addressed the complicity of the German government. It showed HTS founder and Syrian transitional president al-Sharaa with the Green Party Foreign Minister Annalena Baerbock. After the fall of Bashar al-Assad, the German government promised the HTS regime aid projects worth over €60 million. On Monday, during a meeting of EU foreign ministers in Brussels, Baerbock pledged a further €300 million in aid. The poster at the demonstration demanded the “Immediate arrest of Syrian’s IS founder—I don’t want to finance terrorism with my taxes.”

Poster against the German government's complicity with the Islamist militia Haiat Tahrir al-Sham (HTS) in Syria

At the rally, Süleyman Serhan Narlı from the Federation of Arab Alevis in Europe (AAAF) stated: “Since the beginning of the latest massacres, more than 7,000 civilians have been killed on the Syrian Mediterranean coast solely for their beliefs, according to our information.” He calls for the establishment of a humanitarian corridor from Hatay in southern Turkey to Latakia to evacuate the Alawite population if necessary and to deliver aid. “The systematic extermination of Alawites in the region must be stopped,” he demanded.

Many participants carried their own placards with photos of their family members and friends who have been murdered by the HTS militia. Lara and Adam, two hospital doctors who came to Germany a few years ago, are among them. They carried several signs and expressed their despair at having already lost many friends and acquaintances. They fear for their families and friends in Syria.

“We are from Latakia,” said Lara. “They have not only carried out these massacres in Latakia, but also in Tartus. The victims are civilians, both women and men, who we know, with whom we studied.” She points to a photo on her placard. “That’s the sister of a colleague of ours. He’s also a doctor. We studied together and worked together. And that’s his mother and his father.” The terrorists had entered the family home and “They killed his mother and sister. His father survived because he was at work in the hospital at the time. It wasn’t a fight. They entered the home of civilians and shot them all dead.”

Posters of participants in the Cologne rally with photos of their family members and friends murdered by HTS militiamen

She pointed excitedly to another photo. “And this one here is a pharmacist.” Adam added, “He is a pharmacist and also our colleague. First they killed him and then the next day they killed his pregnant wife. They killed them in cold blood. They killed the whole village.” He immediately pointed to another photo. “Here, too. Dead. They’re innocent people—civilians, unarmed people, doctors.” Lara adds, pointing to a picture of a young person, “And that’s a child.” The boy had nothing to do with the Assad regime, Adam said.

“This family,” he continued, “are relatives of a friend of ours.” He is a doctor in Syria and Adam related how his relatives were killed. “And there are thousands of these reports, thousands,” he said.

“Here is our friend,” he says, bursting with emotion. “His name is Brahim and he is a trauma surgeon. These are two pharmacists, a husband and wife. They never had anything to do with the war, they never fought. They were happy that Assad had gone and thought that peace had finally come.” Instead, they were killed.

He then told of another tragedy. He points to a photo of a little girl. “There were groups that only took the men and boys out of their apartments and shot them.” The girl’s father took his son and fled, believing this to be the case. He left his wife and little daughter behind. “He thought they would never kill his wife and daughter. But they did that too. Both are dead. The little girl was three or four years old.”

It was important for Lara to address the media reports in Germany: “The media reports that this is just a fight between Assad supporters and the army and the new government. Yes, there was fighting and as a result, there were also victims on both sides who died. But what are we talking about now? Civilians.” They had nothing to do with the fighting. “Nobody is saying that thousands of civilians have been executed in cold blood.” The massacres lasted three days.

“We saw it here in Germany on Instagram,” said Lara, “a video of the jihadists gathering and saying, “We’re coming to your village and we’re going to kill you all.” We thought it was just a threat to spread fear. But no, they went to the villages, one after the other, and killed the inhabitants. People asked us on social media to do something. To make it stop! But there was nothing we could do.”

“We are sitting here in Germany and have to watch helplessly,” said Adam. Lara continued, “It’s not over yet. They stole the mobile phones of those killed. And they call every number and say: “We know your name, we know where you live, and you’re next.” The people who are still alive, who have survived, are paralysed with fear, and we can’t do anything from here. That’s why we’re here, to show and tell people what’s going on. That’s all we can do.”

At least 59 lives lost in nightclub fire in Kočani, North Macedonia

Katerina Selin

Police officers hold plastic bags on the site of a nightclub in the town of Kocani, North Macedonia, Sunday, March 16, 2025, following a massive fire in the nightclub early Sunday. [AP Photo/Visar Kryeziu]

In the early hours of Sunday morning, a devastating fire broke out in a club in Kočani, North Macedonia, killing at least 59 young people. A further 155 had to be treated in hospital for burns or smoke inhalation.

The victims are aged between 14 and 24. According to the North Macedonian health minister, the number could still rise, as at least 20 of the injured are in critical condition.

Around 1,500 partygoers were dancing at a concert by the popular North Macedonian hip-hop band DNK at Club Pulse when the ceiling went up in flames at around 2:30 a.m. During a stage show with pyrotechnics, sparks leapt onto the ceiling paneling, which was made of highly flammable material and immediately caught fire. The club burnt out completely and parts of the roof caved in. Many young people tried to escape through the windows.

This tragic disaster could have been avoided. More and more information is coming to light which makes it clear that the fire was the result of criminal neglect of all safety precautions.

The operator did not have a legal operating licence, but a fake one, as Interior Minister Panče Toškovski announced, and ordered an investigation into possible “bribery and corruption.” The club, which had a capacity of around 250, was completely overcrowded with over a thousand people. There were too few fire extinguishers and only one emergency exit, which was locked at the time of the concert. Also, no ambulances were available for emergencies, as is mandatory. According to the BBC, the building was a carpet warehouse before it was converted into a club.

Several band members died in the inferno, including the second frontman, Andrej Gjordjieski. As reported by local media, he is said to have returned to the club and tried to save other injured before succumbing to his own burns. The 43-year-old musician had studied at the music academy in the capital, Skopje, and is survived by his wife and daughter.

The victims also include backing singer Sara Projkovska, a single mother of two who taught piano at the music academy in Skopje, drummer Gorgi Gorgiev, keyboard player Filip Stevanovski and guitarist Aleksandar Kolarov. Co-founder and lead singer Vladimir Blazev, known as Pancho, was hospitalised with injuries.

Based on North Macedonian accounts, Der Spiegel reports how desperate parents searched for their children on social media. “Citizens helped out by using their own cars and following the ambulances to take the seriously injured to hospitals.” The hospital in Kočani was overwhelmed by the number of emergencies, meaning that the injured had to be transferred to other cities or abroad. Kočani, a city of 25,000, is located in the northeast of the country, not far from the border with Bulgaria.

While relatives and the population are in shock and mourning, the government is in damage control mode. At least 15 people have been arrested, including officials from the Economics Ministry who are said to have issued a licence for the club, and the club owner. The government under right-wing conservative Prime Minister Hristijan Mickoski, which has been in office since June 2024, accuses the previous government of corruption.

In a speech to the nation on Sunday, President Gordana Davkova Siljanovska said: “None of those responsible should escape the law, justice and punishment.”

The government is obviously worried that anger will follow mourning. German broadcaster ZDF quotes a 19-year-old student speaking on the sidelines of yesterday’s funeral service: “This was not an accident, but literally murder, with all the security breaches in this country. We cannot remain silent about this, even if we are afraid.”

The ruling class must fear that such a disaster will trigger widespread protests, as happened recently in neighboring Greece after the Tempi train crash in 2023 and in Serbia after the collapse of a station roof in Novi Sad in 2024.

Regardless of what else is known about the background to the accident, it is already clear that the trail of clues leads into the highest circles of North Macedonian politics. It is obvious that entrepreneurs and politicians have stopped at nothing in pursuing their profit interests.

What is usually dismissed and covered up in North Macedonia, like in all Balkan countries, as individual “corruption,” has been systematic for years and decades. The destruction of Yugoslavia as a result of the NATO wars in the 1990s has created small mini-states torn by ethnic and political conflicts, where naked capitalist greed reigns.

North Macedonia, which declared independence in 1991, has a population of 1.8 million. Until 2001, civil war-like conflicts escalated between the Slav-Macedonian majority (58.4 percent) and the Albanian minority (approx. 24.3 percent).

Poverty, social inequality and a lack of prospects characterise everyday life for the working class. Although unemployment has fallen slightly in recent years, it still stands at 13.2 percent, with youth unemployment double that figure at 27.2 percent,.

North Macedonia has been a candidate for accession to the European Union (EU) since 2005. German companies in particular benefit from the country’s low-cost labour and production conditions. Some 47 percent of all the country’s exports go to Germany, one of its main trading partners.

According to a report published in December 2024 by GTAI (Germany Trade and Invest, the federally-owned marketing agency for German business), North Macedonia is closely integrated into the supply chains of carmakers. As a result, the local supply industry is now also feeling the effects of the German auto crisis. At the same time, foreign direct investment has increased significantly. German companies are the largest investors, including automotive suppliers, electronics manufacturers, Deutsche Telekom and the discount supermarket chain Lidl.

As in all European countries, military expenditure is also increasing in North Macedonia—at the expense of social spending. Since North Macedonia joined NATO in March 2020, military spending has risen sharply more than doubling from $119.6 million in 2018 to a record high of $266.6 million in 2023, according to the Stockholm International Peace Research Institute (SIPRI).

It was the Greek government under the pseudo-left Syriza that cleared the way for North Macedonia’s admission to NATO. In the 2019 Prespes Agreement, Greek Prime Minister Alexis Tsipras agreed to the renaming of the Former Yugoslav Republic of Macedonia (FYROM) as North Macedonia. This settled the decades-long dispute between Greece and Macedonia over the territory’s name.

While the Prespes Agreement was celebrated as a major step forward by the bourgeois media and pseudo-left organisations, the World Socialist Web Site emphasised that it primarily serves reactionary goals. The renaming was a step towards the rapid integration of the small Balkan state into NATO and imperialist war planning.

The Balkan region is regarded by Germany and the EU as an important geopolitical sphere of influence and is exploited as a low-wage platform, which promotes corruption and benefits from low safety standards. As the Greek train crash at Tempi (57 dead), the collapse of the roof of the Novi Sad railway station (15 dead) and the fire disaster in the Grand Kartal Hotel in Turkey (78 dead) also show, the fire at Kočani shows that under capitalism a human life is worth very little.

Gold hits $3,000 per ounce in another expression of dollar turmoil

Nick Beams

The price of gold hit a new record high last week, passing the $3,000 mark, in a sign of the growing uncertainty surrounding the stability of the dollar—the result both of long-term trends and the consequences of the economic policies of the Trump administration.

Gold bars are shown stacked in a vault at the United States Mint on July 22, 2014 in West Point, New York [AP Photo/Mike Groll]

So far this year the price of gold has increased by 14 percent, with all indications that its rise will continue as both institutional and private investors look for a safe haven as global economic and financial turbulence intensifies.

Since 2000 gold has risen ten-fold amid a series of crises which have centred on the US financial system and raised the question of the long-term viability of the international financial system based on a fiat currency, the dollar, which is not backed by any real value but is dependent on the waning economic power of the US state.

Gold passed the $1,000 mark in March 2008 when the US financial system was showing signs of turbulence, starting in the sub-prime mortgage market, which lead to the global financial crisis of 2008 when major US financial institutions as well has corporations had to be bailed out by the US government and the Federal Reserve.

The price of gold went past $2,000 in August 2020 in the wake of the financial crisis at the start of the pandemic when the US Treasury market, a foundation of the global financial system, froze and the Fed had to intervene to the tune of trillions of dollars.

One of the sources of the latest surge in the gold price has been increased buying by central banks in so-called emerging markets and China which have bought more than 1,000 tonnes of gold in each of the last three years.

This has been coupled with efforts by the BRICS group of countries—Brazil, Russia, India, China and South Africa, now being joined by others—to develop alternative systems of payments outside the US dollar.

The decision the major powers, led by the US, to freeze Russian central bank assets at the start of the Ukraine war in February and the exclusion of Russia from the SWIFT international payments system has been a major impetus for these moves because of the fear that what was done to Russia could be done to any country which crossed the US path.

Another major impetus has been the rapid rise in US government debt resulting from increased military spending, government spending to bolster corporations in the COVID crisis, and the rise in interest rate since 2022.

The US debt has now risen to $36 trillion with the interest bill running at an annual rate of $1 trillion a year—a situation which is acknowledged to be unsustainable, including by the Fed.

As John Ciampaglia, chief executive of Sprott Asset Management, a firm which specialises in precious metals and critical minerals, told the Financial Times one of the biggest drivers of the gold price since 2000 has been the growth of government debt.

“Global levels of debt have exploded over the past 25 years, they are starting to really weigh in economies and budgets,” he said.

The US is at the centre of this growing crisis. It has only been able to sustain its debt because of the role of the US dollar as the global reserve currency, but in the long run an international financial system based on the currency of the most indebted country in the world is unviable.

All of these longer-term trends are now being exacerbated by the economic war being waged by the Trump administration, at this stage chiefly via tariffs but set to extend, against the rest of the world.

There are two contradictory positions being advanced from within the administration. On the one hand it is asserted that the reason for the US trade deficit with most of the rest of the world is the result of the high value of the US dollar which is pricing US exports out of global markets.

At the same time the administration is determined to maintain the position of the dollar as the global reserve currency. Trump has said that losing that status would be the equivalent of losing a war and has threatened a tariff war against the BRICS group or anyone else which seeks to replace it.

One of the reasons for the higher dollar is that surplus countries invest in US financial assets, in particular US government debt, which is around one-third foreign owned.

Various positions are being discussed within the economic environs of the administration which are gaining the attention of sections of the financial press.

An article last week by FT columnist Gillian Tett pointed to some of the issues under consideration. She began by noting that with the intensification of the Trump tariff war “indices of economic uncertainty have skyrocketed above even the 2020 pandemic or the global financial crisis of 2008.”

“But the uncertainty could get worse. For all the tariff shocks, there is another question hovering: could Trump’s assault on free trade lead to attacks on capital flows too? Might tariffs on goods be a prelude to tariffs on money?”

That idea, she continued, until recently might have seemed “crazy” because of the role played by capital inflows in sustaining the burgeoning government debt, but it is now gaining currency. Last month, American Compass, a right-wing think tank, said to be close to vice president J D Vance, declared that taxes on capital inflows could raise $2 trillion over the next decade.

Various proposals were advanced in a paper published by economist Stephen Miran last November on restructuring the global trading system. Miran has since been confirmed as the chair of the White Council of Economic Advisers and as the Wall Street Journal noted in a recent article “some on Wall Street” are starting to take his ideas seriously.

Aside from a tax on capital inflows, Miran has proposed a revised version of the Plaza Accord of 1985 in which the US, Japan, Germany, the UK and France agreed to lower the value of the American dollar to reduce trade imbalances.

Miran has said a repeat is needed to correct “persistent dollar overvaluation that prevents a balancing of international trade” which has been dubbed a Mar-a-Lago accord.

Under present conditions, in which Trump is waging economic war against them, there is no way that the other major powers would voluntarily agree to such an accord.

As Michael Strain of the right-wing American Enterprise Institute told the FT: “Europe is not going to rejigger its savings and investments balance or take other big macroeconomic steps in order to revalue its currency just because the Trump administration wants it to.”

Moreover, in the 40 years since the Plaza Accord the world economy has been transformed by the growth of other economies such as China and Brazil.

But the Miran proposals go far beyond a Plaza-type agreement. They include a restructuring of US debt in which US Treasury bonds would be transformed into perpetual bonds. That is, they would continue to pay interest, but the principal would never be returned. The new system would be akin to the debt for equity swap sometimes employed by corporations when they cannot repay loans.

In exchange for their agreement foreign governments would remain under the US “defence umbrella” and not have punitive tariffs imposed on them.

In a column published today the FT economics commentator Martin Wolf wrote: “In a precise sense, this might be viewed as a ‘protection racket.’”

At this stage, such proposals are generally regarded as implausible not least because the rating agencies would almost certainly regard them as a default by the US on its debt, calling into question the position of the dollar as the reserve currency. In the words of the FT, it would be an event “so dramatic that the impact would be nearly impossible to predict.”

The fact they are even being discussed reveals the enormous crisis confronting US imperialism and its financial system.

Summing up the growing contradictions, Steven Englander of the Standard and Chartered Bank wrote in a note last month: “The problem for the new administration is that it simultaneously wants a weaker dollar, a reduced trade deficit, capital inflows and the [dollar] to remain the key currency in international reserves and payments.”

Whatever economic and financial measures are adopted, the contradictions of the capitalist system are always fought out in the form of conflict between the major imperialist powers—economic war and ultimately military conflict—and the class struggle at home.

Amid the apparent chaos of the Trump administration there is a clear logic at work: increased bellicosity against friend and foe alike and deepening attacks on the working class.

The mounting debt and dollar crisis, reflected in the rising price of gold, is not going to be resolved through some economic and financial rejigging. The debt accumulated by the US in its endless wars and bailouts for the corporate oligarchy requires a massive transfer of wealth from the working class.

This is why the Trump administration, starting with the chainsaw of DOGE, has placed front and centre attacks on governments spending which in any way benefit the working class, which it designates as “waste.”

But it knows that such measures will produce and are already producing an upsurge in the working class and cannot be imposed peacefully. This is why its economic agenda is being accompanied by a full-scale attack on democratic rights and the ongoing construction of a fascist state.

Sri Lankan government expedites privatisation of state-owned enterprises, axing thousands of jobs

W. A. Sunil

In line with International Monetary Fund dictates, the Janatha Vimukthi Peramuna/National People’s Power (JVP/NPP) government has decided to establish a state holding company to accelerate its restructuring of state-owned enterprises (SOEs).

Ceylon Electricity Board workers protesting against privatisation in Colombo on January 4, 2024.

President Anura Kumara Dissanayake announced the policy at a recent economic forum organised by the Ceylon Chamber of Commerce. He confirmed that the stock company will be listed on the Colombo Stock Exchange. 

The “super-holding company,” he said, will resemble models established in countries like Malaysia and Singapore, opening the door for both local and foreign private investors. It follows Dissanayake’s budget, which was presented to parliament on February 17, and is based on implementing the International Monetary Fund’s (IMF) demands.

The IMF has repeatedly insisted that the Sri Lankan government restructure its SOEs and avert a “financial burden” on the state treasury. A report issued by the IMF in September, 2023, titled Sri Lanka: Technical Assistance Report-Governance, strongly recommended the formation of a state holding company. It also called for all commercial SOEs to be registered under the Companies Act, to comply with the principles of Good Corporate Governance, and to compete with market competitors.

The previous Wickremesinghe government had already begun implementing these recommendations for SOE restructuring. 

During last year’s election campaigns, President Dissanayake and the JVP/NPP cynically promised to renegotiate the Wickremesinghe government’s agreement with the IMF. Claiming it would modify some of the harsher provisions, the JVP/NPP government is now fully implementing the IMF’s austerity demands. 

Forming a holding company and restructuring SOEs are part of this process, marking the first step toward the privatisation of SOEs.

On December 31, Cabinet spokesman and Health Minister Nalinda Jayatissa told a press briefing, “Our first effort is to keep these institutions under government control and make them contribute to the country’s development. If that effort fails, only then will we consider privatisation.”

On March 1, Labour Minister and Deputy Economic Development Minister Anil Jayantha stated that the government had appointed a committee to review all SOEs and decide how best to manage them without burdening the treasury and by improving efficiency.

The restructuring and privatisation of SOEs will lead to mass job losses, reduced wages and benefits for workers, as well as increased utility prices, such as for electricity and water, in order to make them “profitable” and “not a burden on the treasury.”

Following the third review of the IMF program and the release of the fourth instalment of its $3 billion bailout loan to Sri Lanka, the IMF further stressed the necessity of restructuring or privatising the country’s 430 SOEs.

As part of this process, the government has decided to amend the Wickremesinghe government’s 2024 electricity reform bill to restructure the state-owned Ceylon Electricity Board (CEB). 

The Power Sector Reforms Process Committee (PSRPC) of the Power and Energy Ministry will create three state-owned companies for the CEB, which will hold shares in fully unbundled electricity generation, transmission and distribution companies instead of the previously proposed 12 companies. The finance ministry has also directed the power ministry to consult with development financiers such as the Asian Development Bank (ADB) and the World Bank (WB).

An article published in the Sunday Times on March 9 cited a finance ministry document revealing that the ADB and WB are supporting Sri Lanka’s reform agenda through the Power Sector Reforms and Financial Sustainability Program. This focuses on restructuring the CEB and the Lanka Electricity Company (LECO), implementing electricity pricing reforms, and promoting renewable energy development.

According to the finance ministry letter quoted by the newspaper, “The World Bank and ADB will closely monitor progress, with adherence to agreed actions being critical for future budget support… Therefore, wider stakeholder consultation is recommended, including the aforementioned parties.”

The trade unions have backed these moves. Last year, tens of thousands of workers, including CEB employees, protested against SOE restructuring and privatisation. Thousands of CEB workers stopped work between January 3 and 5, demonstrating outside the CEB’s head office in Colombo.

The Wickremesinghe government responded by suspending 62 CEB employees for participating in the protest. The CEB unions, however, did not mobilise other workers to defend the victimised employees. Instead, leaders of the CEB trade union alliance, headed by the JVP-controlled Lanka Electricity Workers Union, held round table discussions with then Power and Energy Minister Kanchana Wijesekara to discuss restructuring measures, including the reduction of the CEB workforce by 5,000.

While the suspended workers were reinstated in December after the JVP/NPP government came to power, the issue of ongoing privatisation remains unresolved for CEB workers and others.

The trade unions limited protests against the Wickremesinghe government, claiming it could be pressured. They pushed workers toward the opposition parliamentary parties, including the right-wing Samagi Jana Balawegaya and the JVP, which are fully committed to implementing the IMF program.

In July last year, the JVP suppressed nearly all of its trade union protests against the IMF’s austerity measures, sending a clear signal that they were ready to implement these policies once in office. Other unions followed suit by halting any industrial action against IMF austerity. Now, they continue to support the JVP/NPP government’s efforts to unbundle and privatise the CEB.

Spain’s PSOE-Sumar government calls for record military spending without parliamentary debate

Santiago Guillen & Alejandro López

Spain’s ruling Socialist Party (PSOE) and the pseudo-left Sumar party are finalising plans to raise military spending to 2 percent of GDP, the largest increase in military spending in history, including that under General Francisco Franco’s 1939-1975 fascist dictatorship. While this increase was planned for 2029, the PSOE-Sumar government sped up the timeline amid escalating tensions between the European powers, the United States and Russia.

Spain's Prime Minister Pedro Sanchez attends a press conference after the "Support Ukraine" summit in Kyiv, Ukraine, February 24, 2025. [AP Photo/Gleb Garanich]

Prime Minister Pedro Sánchez has already announced his intention to bypass parliament and impose the spending increase by decree in the Council of Ministers, with the full support of Sumar’s five ministers.

On Thursday, Sánchez convened Spain’s parliamentary parties to discuss behind closed doors his plans to increase defence spending. He met with the leader of the right-wing opposition Popular Party (PP), Alberto Núñez Feijóo, who declared: “Europe must rearm. Spain must do so as well.” Feijóo said the PSOE-Sumar government should carry out “serious and clean negotiations” and hold a parliamentary vote to receive PP support.

Sánchez is not refusing to hold a vote due to lack of parliamentary support. The PSOE-Sumar minority government could rely on the PP to support the measure. This would however expose the PSOE’s alliance with its pseudo-left allies like Sumar and Podemos, who are implementing policies compatible with the PP. To somewhat conceal the right-wing character of their militarist agenda, the PSOE and Sumar are now trying to approve the spending hike by bypassing a parliamentary vote and imposing it by decree.

Above all, the social democrats and Sumar want to avoid any public debate. There is deep opposition to increasing defence budgets. According to the Center for Sociological Research (CIS) survey conducted in November 2024, only 14.2 percent of respondents supported the state spending “much more” on defence. This contrasted with 50 percent of the population supporting a significant increase in healthcare and 42 percent for education.

Sánchez has therefore tried to justify the increase in military spending by whipping up unfounded fears of a Russian invasion of Europe. He said:

Spain is prepared to meet the 2 percent target, out of commitment to Europe and solidarity with the countries that are asking for the same help. … Today, they are asking for that same solidarity so that together we can prevent the threat of Putin’s Russia.

These statements are absurd. After three years of war, Russia remains bogged down in Ukraine in a costly and bloody conflict. The increase of defence spending is not aimed at so-called “Russian aggression” but at preparing wars of aggression.

Sánchez also lied, claiming: “Not a single euro will be cut from social policies to meet this commitment to Europe on security and defence.” Spain is staggering under an unsustainable debt burden equivalent to 104 percent of its Gross Domestic Product (GDP). Wherever its cash-strapped government initially finds the funding for its war plans, workers will pay for it through deep cuts in basic social services.

Sánchez also met with the right-wing Basque Nationalist Party leader, Aitor Esteban. Esteban pledged support for the military build-up, declaring that his party “will not engage in domestic political maneuvering on such a serious issue.” Meanwhile, the Catalan nationalist Junts party conditioned its support for increased defence spending on greater investment in the Catalan arms industry.

The Catalan and Basque bourgeoisie thus continue their long-standing support for Spanish imperialism—from the plundering of South America and Morocco in the 19th and 20th centuries to their role in securing Spain’s entry into the European Union and NATO, and their backing of US-led neo-colonial wars in Afghanistan, Iraq, the Balkans, Libya and Syria. Their complicity extends to supporting Israel’s genocide against Palestinians and NATO’s war against Russia in Ukraine.

Other Catalan and Basque nationalist parties are keeping the door open to supporting the measure. The Republican Left of Catalonia (ERC) tried to appear critical while signaling its readiness to compromise. Although the ERC initially postured as opponents of the increase, its spokesperson, Gabriel Rufián, quickly softened his stance, declaring: “The war is here; we must be responsible and go beyond the banner.”

The Basque Bildu party issued a vague communiqué pledging to “analyse and debate the new scenario with the depth and seriousness it deserves in order to take a comprehensive position based on our own vision.”

Both ERC and Bildu have a record of supporting defence budget increases. Both backed the 2023 budget adopted by the PSOE-Podemos government, which featured what was until now the largest increase in military spending in the country’s history.

Sánchez also met with the pseudo-left Podemos party, who ruled together with the PSOE from 2019 to 2023 and still supports the government in parliament. Podemos General Secretary Ione Belarra wore a “no to war” T-shirt and said the increase in defence spending is “a catastrophic mistake.” Two days later, she said she was “deeply concerned” by the decisions of Sánchez’s government and, addressing Sánchez and other European leaders, said: “Do you like war? Let your children go.”

Podemos displays endless hypocrisy. Its supposed pacifism is nothing more than a cynical attempt to distance itself from their split-off, Sumar, to try to regain some of the support it lost while in government. In reality, Podemos is a pro-imperialist and pro-militarist party.

In government, Podemos championed military spending. With its support, the Ministry of Defense’s budget went from 1 percent of GDP (€10.2 billion) to 1.3 percent (€19.7 billion) between 2020 and 2023. In 2023, 30 percent of the PSOE-Podemos government’s investment budget was allocated to weapons.

Podemos backed NATO-led operations, recruiting General Julio Rodríguez Fernández, who commanded Spain’s forces in the 2011 NATO war in Libya. In government, it endorsed the decision to send Leopard 2 tanks and rocket launchers to Ukraine, joining in NATO’s war with Russia. It was also complicit in Israel’s genocide of Palestinians in Gaza. Spain’s arms trade with Israel expanded under the PSOE-Podemos government, including by purchasing Spike missiles.

As Sumar has already committed to backing the PSOE’s military spending, Sánchez thanked it for “respecting commitments to Europe and standing firm in this government.”

The neo-fascist Vox party was not invited for talks with Sánchez. The PSOE attacks Vox as a pro-Trump party that undercuts plans for war with Russia and military autonomy from Washington.

If Vox has criticized calls for a European military deployment to Ukraine, it does not oppose war or militarism. It glorifies the legacy of General Francisco Franco, who led a coup and commanded fascist forces during the Civil War, massacring hundreds of thousands of workers. It also defends Spain’s colonial wars and has fielded multiple former Spanish NATO generals involved in interventions in Afghanistan, Iraq, Lebanon and the Balkans.

Vox Vice President Ignacio Garriga said it “has always defended the need to increase defence spending,” calling it not an expense but an “investment.”

The PSOE-Sumar government’s push for record military spending without public debate underscores its deep integration into the imperialist war plans of NATO and the European Union. No faction of the political establishment opposes war and militarism. PSOE, Sumar, Podemos or the Catalan and Basque nationalist parties are united in backing the Spanish bourgeoisie’s warmongering.

Indonesian government’s austerity measures provoke student protests

Owen Howell

The Indonesian government of President Prabowo Subianto has begun to implement major budget cuts targeting education, health, infrastructure and the public service. These severe austerity measures have sparked an ongoing student protest movement across the archipelago.

Indonesian students rally against austerity measures implemented by President Prabowo Subianto, in Jakarta, Indonesia, Friday, Feb. 21, 2025. [AP Photo/Achmad Ibrahim]

Announced in January, the cost-cutting drive initially totaled $19 billion in cuts, ostensibly to “free up funds” to pay for Prabowo’s free meal program. The program, set to cost $28 billion annually, is aimed at providing free daily meals to 83 million schoolchildren and pregnant mothers. This populist measure was one of the central pillars of Prabowo’s election campaign and a factor in his victory last October, winning 59 percent of the national vote, amid rising poverty and malnutrition.

In order to pay for this election promise, Prabowo has taken an axe to vital public services under the fraudulent pretext of combatting “inefficiency,” seeking to emulate the policies of the Trump administration in the US.

The budgets of several government ministries were slashed. The government claimed the cuts only affect federal workers’ travel, office supplies and electricity use. The cuts, however, are significant: a 70 percent reduction for public works, 52 percent for economic affairs and 40 percent for investment. The measures have also included the scrapping of numerous infrastructure projects and impacted on building maintenance.

“I continuously demand savings, efficiency,” Prabowo said. “I demand the courage to cut down non-essential items.”

In February, Prabowo escalated this drive when the targeted cuts were raised to $44 billion, or over 15 percent of the state budget.

Undercutting Prabowo’s professed concern for schoolchildren, funding for primary and secondary education was reduced by $480 million, while the higher education ministry’s budget was slashed by 25 percent, down to $2.6 billion.

The attacks on education sparked outrage on social media among students and young people, concerned that the cuts would mean rising university fees, the cancellation of scholarships and worsening teacher welfare. This led to large student demonstrations in every major city across the nation.

The protest movement has been dubbed “Dark Indonesia,” referring to the country’s social crisis and lack of prospects for youth. The name is a reference to “Golden Indonesia,” one of Prabowo’s election campaign slogans last year.

The protests, organised by the All-Indonesian Students’ Union, were led by university student councils and convened outside city government offices, where a list of demands was presented. Rallies were held in capital city Jakarta, Surabaya, Medan, Banda Aceh, Makassar and Samarinda, among dozens of other cities.

The largest demonstration, outside the Jakarta presidential palace on February 20, drew thousands of students. Protesters brandished signs reading “RIP education,” “education emergency in Indonesia” and “the government consists of dumb people.” Protests continue to be organised, but numbers are smaller than at those in late February.

In West Papua, high school students called for free education and an upgrade to school facilities instead of free meals. They also condemned the program’s use of soldiers in distributing the free meals and growing militarisation within their schools.

Some protests escalated into near clashes with the police. In Jakarta, police used tear gas and water cannon to disperse the crowds, according to the Jakarta Post. In Surabaya, authorities reportedly used water cannon and arrested five students.

While opposing the austerity measures, students also raised broader economic and social issues: the rising cost of living, skyrocketing food and fuel prices, lack of subsidised cooking gas and growing social inequality. In that sense, the protests, although populated by students, reflected far wider anger over declining living standards.

The students’ list of demands included a reassessment of the budget cuts and the free meal program, as well as “free, scientific and democratic education” and an end to state corruption and the military’s dominant role in the government. The protests called for the implementation of “pro-people policies” to protect education, health and social welfare.

Cleorisa, 20, a protester studying at Jakarta’s National University, told the Financial Times the free meals program is “not effective because it sacrifices education… What the public needs is education and healthcare… we need proper education to get proper jobs.”

Protest leader Herianto told the Australian Broadcasting Corporation: “The free meals aren’t, as promised, being delivered in all areas of the country, so millions of children aren’t even receiving them… Our demands reflect how dark the social-economic situation in Indonesia is, and how hard life in Indonesia is for young people.”

The dire conditions for Indonesian youth have prompted the social media hashtag #KaburAjaDulu (“Just Leave First”), which has been circulated widely during the protests and promotes the idea of leaving the country to seek job opportunities abroad.

Unemployment in Indonesia is dominated by Generation Z, or those aged 15-24, which makes up 16 percent of the country’s increasingly young population. According to the latest official data, the unemployment rate in this age cohort was 17.3 percent last August, far higher than the national rate of 4.9 percent, and particularly high among university graduates and those with vocational college diplomas. 

While it is understandable that some students may want to flee Indonesia to escape these problems, it is certainly not a solution for many students who do not have the financial means to do so. Nor is it a solution for the Indonesian working class and rural poor, who live under increasingly impoverished conditions and are bearing the brunt of the government’s pro-business austerity policies.

In response to the protests and #KaburAjaDulu, several government ministers denounced students. Deputy manpower minister Immanuel Ebenezer said, “If they want to run away, just run. Do not return, if necessary.”

Prabowo remained silent for a week after the protests began. Then, on February 25, he publicly slammed the protesters and the idea of a “dark” future, citing predictions by investment firm Goldman Sachs from three years ago that Indonesia would be the world’s fourth-largest economy by 2050.

Since coming into office, Prabowo has claimed he will boost Indonesia’s annual growth to 8 percent, up from around 5 percent currently. However, Bank Indonesia cut its 2025 growth forecast in January down to a potential 4.7 percent, pointing to a weaker economic outlook and sluggish domestic consumption.

The government recently revealed that nearly half of the funds from budget cuts, $20 billion, will be diverted to a newly launched sovereign wealth fund, called Danantara. Prabowo has said this will help reach the 8 percent growth target, and will be used to invest in lucrative projects such as food estates, renewables and the nickel industry. In other words, he has effectively taken personal control of a significant portion of the country’s assets.

Prabowo’s austerity cuts are being undertaken amid heightened global economic instability, fueled by the Trump administration’s trade war measures, aimed in particular at China. The Indonesian ruling class, as with its global counterparts, is seeking to escalate austerity and attack the living standards of the working class.

This is the agenda Prabowo has been tasked with enacting, on behalf of the financial elite he represents. He has been promoted by the Indonesian political establishment as the right person to suppress social tensions amid rising economic turmoil.

It should be remembered that Prabowo himself, a former general in the Suharto military dictatorship, was responsible for torturing and “disappearing” 22 student protest leaders in the 1998 mass protests against the Suharto regime, which collapsed amid the Asian economic crisis. That is just one element of his blood-soaked record as an operative for the military junta, personally responsible for countless atrocities. Today, he will not hesitate to use state repression as opposition towards his policies mounts.

That such a monstrous figure has returned to power is a total refutation of the notion of reformasi—that Indonesia would undergo a democratic transformation after the fall of Suharto. All the “democratic” political parties of the Indonesian ruling elite, including the PDIP, helped to rehabilitate and whitewash Prabowo as a legitimate politician.