The Problem With Boycotts

David Macaray

One of the difficulties in mounting a boycott is not knowing in advance whom you’re going to hurt. While the whole point is to influence the behavior (e.g., hiring practices, working conditions, wages and benefits) of a retailer or manufacturer by threatening to limit their profits if they don’t become more “enlightened,” there are risks involved. Instead of hurting an employer, a boycott can punish the very employees it’s trying to help.

Boycotting Wal-Mart qualifies as a “good” boycott. Obviously, because Wal-Mart can afford better wages and bennies, a big, splashy national boycott (coupled with employee protests) could just be the public relations tool to influence them. Given Wal-Mart’s aversion to organized labor, increasing employee compensation in order to keep the unions out would be viewed by the giant retailer as the lesser of two evils.

Another example of a “good” boycott, was the one directed at the Coors Brewing Company, back in the 1970s. Because Coors had such vehement, anti-union sentiments (some of which were deemed “illegal”), and had been accused of discriminating against African-Americans, Latinos, women, and gays in its hiring practices, the AFL-CIO called for a national boycott in 1977.

By all accounts, the Coors boycott was moderately successful. In addition to actor Paul Newman, in a show of solidarity, making a dramatic announcement that he was switching from Coors to Budweiser, a wide-scale public relations campaign was launched.

Accordingly, sales of Coors in California dropped from 40-percent in 1977, to 14-percent in 1984. It was reported that every union hall and every gay bar in California had stopped serving Coors. The AFL-CIO’s national boycott was called off in 1987.

Conversely, an example of what is probably a “bad” boycott is the one aimed at Third World textile manufacturers, specifically textiles made in Bangladesh. After a disastrous fire, in 2012, that killed more than 120 workers, people began calling for a boycott, one that would pressure textile factory owners to improve employee safety and general working conditions.

The problem with a textile boycott is that it would cause poor Bangladeshis to become even poorer. Textiles aren’t just important, they’re the basis of its economy. Bangladesh (population: 157 million in an area smaller than West Virginia) is the world’s second-leading exporter of apparel (behind China). A “successful” boycott would not only cripple the industry, it would basically ruin the country.

As for working conditions, the bitter truth is this: Countries (including the early 20th century U.S.) that move from an agricultural economy to an industrial economy go through a messy stage. They don’t enter the industrial arena by resembling a sleek, state-of-the-art production facility in Detroit, Michigan. They enter it by resembling a “sweatshop.”

And not to be glib, but historically, the institution that was clearly the most effective in improving the working conditions and welfare of employees during this “messy” transitional period wasn’t the government or the church or the media or charities. It was organized labor.

It’s a fact. American sweatshops didn’t begin to improve significantly until labor unions began representing their workers. Accordingly, if we truly wish to help Bangladeshi textile workers, it won’t be by refusing to purchase the apparel they produce. All that will do is destroy their livelihoods.

Rather, the goal should be to promote the Bangladeshi labor movement. Keep the marketplace healthy, but let labor do what labor does best: represent the interests of the workers. Another fact: Child labor in the U.S. was abolished through the efforts of labor unions, not politicians. If you don’t believe it, look it up.

Suppressed at Home, Neglected Abroad

Graham Peebles

The first duty of any government is to protect its citizens from harm, at home and abroad – no matter who they are, or where they are. This is the primary moral and constitutional responsibility of the EPRDF government of Ethiopia, which, as with a vast array of such obligations, they fail to meet, or even acknowledge.

In recent weeks a plethora of atrocities have befallen Ethiopians abroad: in Libya 30 Ethiopian Christians (whom we know of) were murdered (their beheadings shown on video) by demented, Islamic jihadists, marching under a black flag of hate and violence; hundreds of others shiver in fear of being discovered. Earlier this month Ethiopians (together with other African migrants) living in South Africa were dragged through the streets by gangs: burnt alive, beaten, their homes and businesses destroyed, their children attacked. Thousands of Ethiopian men and women are trapped and frightened inside Yemen as that country descends into civil war; hundreds more are amongst the thousands of desperate men and women trying to cross the Mediterranean into Europe from Libya. And in the Middle East and Gulf States (MENA), Ethiopian girls, working as domestic workers, are routinely mistreated by employers; many are sexually abused, most suffer psychological violence, all are trapped into domestic slavery.

To each and every one of those Ethiopians suffering upon foreign soil, the ruling regime has offered little or no support. Not content with suppressing the people at home, violating their basic human rights and denying them freedom and justice, the EPRDF government ignores their cries for help. Unlike other nation states (Malaya, Sri Lanka, the Phillipines, for example) they provide no consular support to the vulnerable young workers in the Gulf countries; have failed to organise any major airlifts for those hiding in Yemen, have done nothing to protect migrants in Durban and Johannesburg; and have taken no significant action, save prime ministerial platitudes, to safeguard Ethiopian Christians in Libya.

The government’s neglect is shameful but not surprising, and has enraged the people, who took to the streets of Addis Ababa recently in huge numbers in a powerful display of collective grief and anger. Their peaceful protest was met – again not surprisingly, given the governments intolerance of public assembly – by baton wielding security personnel, who beat men, women and girls indiscriminately and broke up the demonstrations. According to constitutional principle demonstrations are allowed, but in practice they are all but outlawed, as are all types of free expression. The regime is paranoid, as all such totalitarian groups are.

Neither Home Nor Country

The need for a quiet centre from where to face the world is common to us all. For many that haven of security is our country of birth, it comforts and reassures us, holds us gently in its sure embrace, protecting us from the uncertainties and dangers of life. Home is where we feel safe, secure and loved. A wooden hut or a Modernist mansion, home is the refuge we turn to in times of difficulty.

For the thousands of Ethiopian migrants abroad, they have neither home nor country. Abandoned by their government they are homeless, vulnerable and alone; they make easy prey for criminals: the traffickers and the gangs of rapists, kidnappers, jihadists and thugs who patrol the pathways along which the migrants walk.

To the untrained eye, the economy of Ethiopia appears to be developing, and the country gives the appearance of stability in a region of almost total instability. But this is a misleading image of development and hides deep-seated inequalities, endemic corruption, widespread bitterness and simmering fury towards the ruling party. Ethiopia remains one of the poorest countries in the world: it is ranked 173rd out of 187 countries in the UN human development index, and unprecedented numbers of its citizens are migrating in search of opportunity and freedom.

They travel north to Egypt and Libya – hoping to make it to Europe; south to Kenya and South Africa; east to Yemen, where some stay, others continue to try to crawl into Saudi Arabia. Many head to the other Gulf states, Lebanon, Kuwait, United Arab Emirates; countries with virtually no domestic labour laws, endemic racism and sexism, where naïve, uneducated young girls from rural Ethiopia enter into contracts (the Kafala system) with employers that trap them into domestic servitude, and, for many, sexual and psychological torture. Over two thirds make the journey out of the country illegally, entrusting their lives to human traffickers.

They migrate for one of two reasons, economical or political, or should we say humanitarian, for it is the violations of their basic human rights that drive many from their homeland.

Many see no way to build a decent life for themselves and their families: others, particularly journalists and political activists see no hope of freedom from tyranny and are persecuted by the security forces for holding views that differ from the government. For them Libya, Yemen or the Mediterranean are no more dangerous than Ethiopia, Islamic state no greater a threat than the police or military, and so they too step onto the migrant road of uncertainty, in search of a new home in a more peaceful place; a place where there are economic opportunities, better education, and where democracy, justice and freedom exist. All of which, despite the duplicitous, political rhetoric from the EPRDF government, are totally absent in Ethiopia.

The regime systematically violates fundamental human rights, silences all dissenting voices and rules the country in a suppressive violent fashion which is causing untold suffering to millions of people. The upcoming May election, contrary to US Under Secretary of State Wendy Sherman’s ignorant, misjudged and widely criticised comments (that “Ethiopia is a democracy that is moving forward in an election that we expect to be free, fair and credible and open and inclusive”), is a hollow piece of democratic theatre; a total sham, with no credibility whatsoever. The result, as everyone in the country and amongst the diaspora knows, is a forgone conclusion.

The government of Ethiopia neglects and suppresses the people at home, ignores and abandons them abroad. They are in violation of a plethora of international covenants, as well as their own constitution, but perhaps more fundamentally they are in violation of their primary moral duty: To care for and protect their citizens, wherever they face intimidation, violence and abuse.

Trial-by-Fire in Syria

Louis Proyect

Recently published by Verso Press, Jonathan Littell’s “Syrian Notebooks: Inside the Homs Uprising” is welcome both as an important document of Syria’s trial by fire as well as an indication of this august publisher’s willingness to break with the pro-Assad consensus that prevails on the left. Although Littell’s chronicle is hardly the work of an FSA partisan, he at least puts a human face on a movement that so many were willing to reduce to one fighter’s shocking act–eating the heart of a fallen Baathist soldier.

Written between January 16 and February 2, 2012, Littell’s notebooks are literally that, a day by day diary of what he saw and what he did in Homs, a city that was a citadel of resistance to Bashar al-Assad, particularly in the working-class neighborhood of Baba ‘Amr, where Littell spent most of his time.

Littell came to Syria in order to gather material for articles in Le Monde. In effect, the book is the rough cut for the finished articles. In his preface, Littell states that the book is a document and not a “work of literature”. While this is obviously true, there is a literary command of the material that one might expect from a novelist who won the Goncourt Prize for his second novel “The Kindly Ones”, a 992-page work about the horrors of WWII written from the point of view of its main character, a Nazi SS officer.

Before he began writing fiction, Littell worked in the Congo, Bosnia, Chechnya and Afghanistan on behalf of Action against Hunger, a humanitarian aid project. So in effect the notebook, the novel and that job are united by a commitment to both understanding and acting on the horrors of modern warfare, so often suffered disproportionately by civilians. This was an everyday occurrence in Homs, where Baathist snipers fired on people shopping for groceries or watering an olive tree in the streets of Baba ‘Amr as if they were terrorists. Indeed, the primary feeling you are left with after reading over two hundred pages of such wanton and senseless slaughter is that Homs was not much different than Gaza, where the distinction between “terrorist” and ordinary citizen was vanishingly thin. Even less so, as this case illustrates:

The child’s name was Muhammad N. and he was thirteen, not twelve. It’s the father who tells us the story. He was breaking wood for the sobia [a wooden pyramid-shaped device that butchers use to clean and cut meat] in front of the house, last night around 11:00 PM. He had a little light and the sniper shot him. I ask if we can publish his name: “We’ve lost the dearest thing we had, it doesn’t matter now.” The child didn’t die right away, they tried to bring him to the clinic, he bled to death.

The father, surrounded by friends, dignified, is keeping everything in. Only his eyes, humid and swollen.

Their house is shot at all the time. Riddled with holes. The sniper also killed a mentally handicapped person, another child of fifteen, ten days ago. On the phone of one of the people around us, video of the washing of the corpse of an older man, killed by a bullet to the head by another sniper. He was the brother of the man showing me the video. His eleven-year-old son, on a bike, got hit in the shoulder, he rushed to save him and the sniper shot him. Probably a shabbiha, the shooting came from the Alawite neighborhood of Nezha, from a checkpoint.

Understandably many leftists were horrified by the worshipful treatment of American Sniper Chris Kyle in the mainstream media, and the arguably much less so portrait of Clint Eastwood’s film, but what does one make of a trained Baathist combatant taking potshots at a kid on a bike? Is such behavior more elevated than taking the bite of a dead enemy’s heart, especially when it is planned out and sanctioned by the officer corps?

In early 2012, the Syrian civil war had not yet turned into a sectarian war. But this was certainly in the offing as Littell reports on debates between various FSA fighters who were by no means ideologically unified. Some growing increasingly angry over Alawite attacks were ready to declare jihad and appeal for foreign fighters. Since many of the working-class residents of Homs who had recently arrived from the countryside due to the economic collapse of the agricultural sector were socially conservative, it was not surprising that they were susceptible to Sunni particularism.

In a valuable introduction to the notebooks, Littell reveals how Bashar al-Assad accelerated the sectarian tendencies by playing the “Chechen card”. In 1998, after Chechnya had settled into a state of relative independence after defeating Yeltsin’s invasion, the Russian secret police funded an Islamist militant named Arbi Barayev who had adopted the horrific tactics we now associate with ISIS: beheading “un-Islamic” civilians, kidnapping journalists and aid workers, etc. Barayev was able to drive through Russian checkpoints and generally had carte blanche.

With his close ties to Putin, the leading light of the “axis of resistance” according to some on the left, al-Assad must have decided that what worked in Chechnya would also work in Syria. By giving surreptitious aid to the most bloodthirsty Islamists, he was able to represent himself as defending civilized values against the barbarian, even if that included killing thirteen-year-old boys chopping wood. Littell reports:

The appearance in the Syrian theater of several Chechen brigades, aligned either with Jabhat al-Nusra or Da`esh, has gained quite a bit of media attention, as has the main “Chechen” commander `Umar al-Shishani, now a military emir of Da`esh, who is in fact a former Georgian special forces officer of mixed Christian-Muslim descent whose real name is Tarkhan Batirashvili. Less well known, however, is the fact that behind Omar al-Shishani stands a certain Isa Umarov, who left Chechnya to join him in Da`esh territory and has given him his daughter in marriage. Umarov, one of the oldest and most influential (albeit highly discrete) Chechen Islamist leaders, whose links to the KGB go all the way back to the 1980s when he was one of the founders of the Islamic Rebirth Party, the first anti-Soviet Islamist organization, is a man who played a key role in the interaction between the Russian services and the Islamists he godfathered all through the two Chechen wars; and his role within Da`esh certainly raises interesting questions. But as a Syrian friend pointed out to me, the mukhabarat [military intelligence] too are old hands at these games, and have no need of lessons from their Russian patrons. Their strategic philosophy is explicitly stated in graffiti now very common around Damascus: “Assad or we burn the country.”

“Syrian Notebooks: Inside the Homs Uprising” was written at the very time when the filmmakers behind “Return to Homs” were making a documentary covering the same desperate struggle. The film can now be seen on Vimeo for only $3.99 and is well worth the price for those who are trying to understand events in Syria. Even if you continue to believe that Bashar al-Assad is the best hope for the country, you owe it to yourself to get an alternative view, either from the very fine Verso book or this powerful documentary.

In the opening scenes of “Return to Homs”, we meet the two young principals, star soccer goalkeeper Abdul Basset Saroot and media activist Ossama al Homsi. Both are paradigmatic figures. Basset leads mass rallies in the spring of 2011 in the streets of Homs using the distinctive Syrian call-and-response style. Meanwhile, Ossama is everywhere with his Sony video camera capturing the people as they dodge the snipers’ bullets while protesting peacefully. One might easily surmise that Ossama was a member of a Local Coordinating Committee, a grass roots network of young activists who used Youtube and social media to get the word out.

After Baathist killers cut down one too many peaceful protesters, the young men in Basset and Ossama’s circle decide to arm themselves and defend the movement. Ossama, however, feels that this is a mistake. Peaceful protest must prevail against all difficulties. Basset makes the case that most Syrians made, however. Even though taking up arms created its own risks, it was being forced upon them. They had no choice.

Once that decision was made, Homs became a living hell. Armed with nothing more powerful than AK-47’s and RPG’s, Basset and his comrades stood off tanks, jets, and heavy artillery. In excruciating detail, we see entire blocks of apartment houses turned into rubble, including those of Basset and Ossama. We see them in their former living rooms and kitchens, gazing at the wreckage. Ossama looks in vain for a filter for his Sony and only manages to retrieve a coffee mug. Both young men find themselves on the run as the siege of Homs tightens it grip. A sense of desperation develops even though Basset and the other young fighters vow to fight on despite all odds. In thinking about an analogy for their situation, cities like Leningrad and Stalingrad during WWII, when Hitler’s forces killed both by bullet and by starvation, came to mind.

Eventually Homs fell because of overwhelming Baathist firepower and because a state of siege had left its residents without food, water or medical help. Today Homs remains under Syrian military control, a city that along with Damascus is seen as of key strategic value along the more heavily populated west coast of the country.

In a war that sometimes feels like it has gone on for decades, the momentum has begun to shift away from the Baathists. A coalition of mostly Islamist brigades has taken control of Idlib province and attempts to drive the rebels from Aleppo have failed.

A number of reports have described the Syrian army as groaning under the strains of a war of attrition that has bled the country dry economically and cost the lives of over 200,000 of its citizens. In the U.S. such losses would be equivalent to 3 million souls.

It is difficult to imagine anything coming out of the struggle that will correspond to one’s utopian ideals. Since Bashar al-Assad was spectacularly successful at turning what was once a hopeful struggle for freedom and equality into a horrific sectarian slaughter, the expectations for a post-Assad Syria are guarded at best particularly in light of the failed state that exists in Libya.

Perhaps the best possible outcome would be one in which differences are settled by arguments rather than bullets and that the arguments would be of a political and economic nature rather than which sect is the legitimate heir of Muhammad’s teachings. In trying to understand the future of Syria, it is mandatory to start with its past. As documents of the recent past, when things began to go off the rails, Jonathan Littell’s “Syrian Notebooks: Inside the Homs Uprising” and “Return to Homs” are very good places to start.

Endeavour Postgraduate Scholarships in Australia for International Students

Brief description:

The Endeavour Postgraduate Awards provide full financial support for international students to undertake a postgraduate qualification at a Masters (up to 2 years) or PhD level (up to 4 years) either by coursework or research in any field of study in Australia.

Host Institution(s):

Universities or Higher Educations Institutions in Australia.

Field(s) of Study:

Masters or PhD level coursework or research in any field of study in Australia.

Number of Awards:

Not specified.

Target group:

Americas: Argentina, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Ecuador, El Salvador, French Guiana, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, United States, Uruguay, Venezuela.

Asia: Bangladesh, Bhutan, Brunei Darussalam, Burma (Myanmar), Cambodia, China (People’s Republic), Hong Kong SAR, India, Indonesia, Japan, Korea (Republic of Korea – South), Laos, Macau, Malaysia, Maldives, Mongolia, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, Timor-Leste, Vietnam.

The Caribbean: Antigua and Barbuda, Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guadeloupe, Guyana, Haiti, Jamaica, Martinique, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago.

Europe: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France (including Reunion), Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom (including Northern Ireland).

Middle East: Afghanistan, Bahrain, Iran, Iraq, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, Yemen.

Pacific: Fiji, French Polynesia, Kiribati, Marshall Islands, Micronesia (Federated states), Nauru, New Caledonia, New Zealand* (including Cook Islands, Niue and Tokelau), Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu, Wallis and Futuna.

Scholarship value/inclusions:

The scholarships include travel allowance ($AUD 3,000), establishment allowance ($AUD 4,000), monthly stipend ($AUD 3,000; up to maximum programme duration on a pro-rata basis).  Health and travel insurance will also be provided.

Endeavour Scholarship recipients will also receive tuition fees paid up to the maximum study/research duration on a pro-rata basis. Tuition includes student service and amenities fees.

Eligibility:

To be eligible to receive an Endeavour Postgraduate Scholarship, applicants must:

•  be aged 18 years or over at the commencement of their programme

•  be a citizen and/or permanent resident of a participating country (see above)

•  commence their proposed programme after 1 January 2016 and no later than 30 November 2016. Applicants who have already commenced or will commence their intended programme prior to 2016 are not eligible to apply

•  provide all relevant supporting documentation

• not currently hold or have completed, since 1 January 2014, an Australian Government sponsored scholarship and/or fellowship (directly administered to recipients by the Australian Government)

•  not apply for a category in which they have already completed an Endeavour Scholarship or Fellowship.

Application instructions:

Endeavour Postgraduate Scholarship international applicants must provide either (a) letter of admission for a PhD course at an Australian university for the 2016 academic year or (b) letter of admission/ for a Masters or Graduate Diploma leading into a Masters course at an Australian university for the 2016 academic year.

Applications must be submitted using the Endeavour Online application system. Deadline for applications is 30 June 2015.

It is important to read the 2016 Application Guidelines and visit the official website (link found below) for detailed information on how to apply for this scholarship.

Website:

Official Scholarship Website: https://internationaleducation.gov.au/Endeavour%20program/Scholarships-and-Fellowships/Pages/default.aspx

DAAD Scholarships in Germany for Development-Related Postgraduate Courses

Brief description:

The German Academic Exchange Service (DAAD) provides scholarships in Germany for international students for a range of postgraduate courses at German Universities which aim at providing academically educated young professionals from developing countries with further specialized studies.

Host Institution(s):

German Universities offering development-related postgraduate courses

Field(s) of Study:

The scholarship are towards eligible development-related courses. See the list of eligible postgraduate courses for 2016/2017.

Number of Scholarships:

Limited

Target group:

International students from developing countries (on the DAC List of the OECD)

Scholarship value/inclusions:

Full and partial DAAD scholarships are available.

Eligibility:

• Works either for a public authority or a state or private company in a developing country and, as such, is engaged in the planning and execution of directives and projects with emphasis on development policies having a bearing on technological, economic or social areas
• Holds a Bachelor’s degree (normally four years) in a related subject.
• Has completed an academic degree with far above average results (upper third) and at least two years of related professional experience
• His/her academic degrees should normally not be more than six years old
• For courses in German: DSH 2 or TestDaF 4; at time of application German skills at completed level A2 are required. In addition, German language courses at level A2 or B1 are highly recommended
• For courses in English: IELTS (Band 6) certifi cate or TOEFL (minimum score: 550 paper based, 213 computer based, 80 internet based).

Please also see if you meet the eligibility requirements of the programme you are applying to.

Application instructions:

Applications must be made directly to the respective course except for Cameroon and Nigeria where applications must be submitted via the German Embassy. Please refer to the respective websites of the Universities for the application procedure, the application deadline, and the documents to be submitted. Deadline varies depending on the course/university but is usually around August-October 2015.

It is important to visit the official website to access the application form and for complete information on how to apply for this scholarship.

Website:

Official Scholarship Website:http://www.daad.de/entwicklung/studierende_und_alumni/bildung_postgradual/ast/08492.en.html

Mexican Government Scholarships for Foreign Students

Brief description:

On behalf of the Ministry of Foreign Affairs, the Mexican Agency for International Development Cooperation (AMEXCID) invites foreign citizens who are interested in studying for a specialization, master’s degree or doctorate, conducting graduate or postdoctoral research, or taking part in an undergraduate or graduate-level academic mobility program, to participate in the 2016 Mexican Government Scholarship Program for International Students.

Scholarships are not granted for direct Ph.D. programs (combined M.A. and Ph.D. programs), distance learning programs, open or online education.

Host Institution/Eligible Programs:

The following institutions and academic programs are included at this link.  The following academic programs are NOT eligible for scholarships: business administration, plastic surgery, accounting, marketing, dentistry and advertising, and related areas.

Number of Scholarships:

Not specified.

Target group:

The scholarships are offered to students from these countries.

Scholarship value/inclusions:

The scholarship includes monthly stipend, registration fees and tuition, health insurance, round-trip international airfare, and transportation to and from Mexico City.

Read the complete scholarship benefits at the 2016 Scholarship Terms and Conditions (link found below).

Eligibility:

Requirements for all applicants:

• Bachelor’s, Master’s, or PhD Degree, as required by the program for which the scholarship is requested.

• Minimum grade point average of eight (8.0) on a scale of 0 to 10, or the equivalent, for the last academic degree received.

•  Be accepted to or currently enrolled in a program at one of the participating Mexican institutions.

Application instructions:

No applications will be accepted directly from the applicants. The entire scholarship application process must be done at the Mexican or concurrent  embassy for the applicant’s country. Applications for the scholarships will be accepted until 31 August 2015.

It is important to read the 2016 Scholarship Terms and Conditions and visit the official website (link found below) for detailed information on how to apply for this scholarship.

Website:

Official Scholarship Website:  http://amexcid.gob.mx/index.php/oferta-de-becas-para-extranjeros

Deutsche Bank: Union trades jobs for speculation

Gustav Kemper & Peter Schwarz

Deutsche Bank, Germany’s largest financial institution, announced a fundamental shift in its strategic orientation on Friday. Deutsche Bank is now concentrating on international speculation—or investment banking—and substantially diminishing its business with smaller customers.

Postbank, with 14 million customers and 15,000 employees, which was taken over by Deutsche Bank between 2008 and 2010, will now be sold once again. Of the 750 subsidiaries of Deutsche Bank, a third will be shut down, costing between 5,000 and 7,000 jobs. The bank is aiming for an increase in the after-tax return on investments from 3 to 10 percent.

All 10 employee representatives on the supervisory board of Deutsche Bank AG, above all Verdi union leader, Frank Bsirske, agreed to the decision. They therefore take on direct responsibility for the destruction of thousands of positions, including jobs outside of the Deutsche Bank itself.

Once Postbank is sold, the job cuts will start there as well. Stefan Krause, the executive board member responsible for the reorganization, emphasized that both a public offering and the sale of the bank to a competitor are possibilities. The remaining small shareholders, who still own 3.2 percent of Postbank stocks, will be “squeezed out” with a forced settlement.

Commerzbank, the Spanish Santander Bank and the Dutch ING Group are currently among the interested buyers, all of whom have access to their own distribution networks in Germany. If they purchase Postbank, this will lead to a further consolidation of local branch offices with corresponding layoffs. The business at branch offices is in any case viewed as less profitable due to online banking and the low interest rates of savings accounts and other services.

Verdi did not stop at giving its blessing to the job cuts. The union also organized a cynical farce in order to sabotage any opposition.

In the first half of April, Verdi organized a strike vote of the concerned Postbank employees. The union arranged a vote on the demand for a contractually-guaranteed protection against dismissal until 2020, as well as a wage increase of 5 percent. Ninety-five percent of the membership voted to strike. On April 20, Verdi called an indefinite strike, but only at selected locations.

On Monday, three days after their vote to destroy thousands of jobs, Verdi made the surprising announcement that it had reached an agreement with Postbank. It was evidently part of the deal that included the agreement to the mass layoffs. Postbank agreed to the protection against dismissal, but just until June 30, 2017, not 2020.

Postbank negotiations chief Ralf Stemmer praised the agreement, saying, “In this way, the Postbank employees will get the needed stability for the upcoming process of change.” In reality, it is not the employees who are getting “the necessary stability,” but Deutsche Bank and its shareholders.

Postbank will be sold by the end of 2016, long before June 30, 2017. The agreement is meant to ensure that the sale negotiations go forward undisturbed. Once Postbank has a new owner the agreement will no longer be binding.

In addition, the agreement is supposed to keep the employees quiet while their coworkers at Deutsche Bank are being laid off. Verdi is quite consciously playing the employees of the two banks against one another in order to prevent the emergence of any opposition to the layoffs.

Moreover, the protections against dismissal will not prevent Postbank from cutting jobs. The agreement only forbids layoffs for operational reasons. It will still be possible for the bank to leave vacated positions unoccupied and pressure employees into “voluntary” layoffs.

The agreed wage increase also benefits the bank. Instead of 5 percent for 12 months, Postbank employees will only receive a 2.1 percent increase starting in April and an additional 2 percent in one year, for a period totaling 27 months. Union secretary Christina Förster called this an “acceptable compromise.”

To call this a “betrayal” by the union would be an understatement. Verdi is an integral component of company management that has taken on the task of duping employees, playing them off against one another, and intimidating them.

One reason for this is all-pervasive corruption. The union and supervisory board functionaries receive salaries, attendance fees and various other forms of compensation that is many times greater than the pay of a typical bank employee. This is, however, not the only reason. Verdi’s behavior demonstrates above all the bankruptcy of the nationalist perspective on which all unions are based.

For the German ruling elite, which is once again striving for a leading role in Europe and the world, Deutsche Bank plays an important strategic role. It is the only German bank with international standing.

The Frankfurter Allgemeine Zeitung, the flagship newspaper of the German financial sector, stated it clearly: “For political and strategic reasons, the German companies that play a leading role in the world need a partner bank that can accompany them everywhere. Therefore, one should not leave business in the capital markets to the American banks alone.”

When the current top management of Deutsche Bank—president of the supervisory board, Paul Achleitner, and both presidents of the executive board, Anshu Jain and Jürgen Fitschen—assumed their posts three years ago, they announced their goal of transforming the institution into a leading global universal bank and one of the biggest banks in the world. They have failed at this. While Deutsche Bank is one of the leading banks worldwide involved in speculative investment in loans, currencies and derivatives, measured in terms of market value, it barely makes 50th place.

One reason for this is its small equity share. With its ratio of equity to balance sum of 3.4 percent, Deutsche Bank does not achieve the ratio of 5 percent that the big American banks, and soon European banks, demand. For this reason it is trying to sell off its private customer branch.

Because of the low share prices it is also difficult for the bank to get its hands on new capital. The €12 billion that it raised in two capital increases have been completely absorbed as a consequence of the criminal activities that led to the global financial crisis in 2008 in which Deutsche Bank was heavily involved. The bank has had to pay out in legal disputes, accept losses from toxic assets and pay fines for fraud or manipulation all over the world.

Last week, Deutsche Bank was told by American and British authorities that it would also have to pay out $2.5 billion because of its role in the manipulation of the Libor interest rates. Anshu Jain, who is now head of the executive board and was at that time responsible for the investment branch, openly admits to his role. “The behavior of these people was reprehensible and I was their leader. One cannot make excuses for that,” he said at a press conference.

Now bank employees have to pay the price for the criminal activities of the bank while Verdi stifles any resistance. Verdi and all other unions view the world completely from the perspective of the German corporations and banks. In the struggle for profits, export markets and influence, the unions stand firmly on the side of management.

Britain’s super-rich have doubled their wealth since 2009

Robert Stevens

The annual Sunday Times Rich List reveals that the UK has more billionaires per head of population than any other country. There are now a record 117 billionaires among the country’s top 1,000 richest people.

The total wealth of just the billionaires on the list is a staggering £325.131 billion. Within the space of a year, the top 1,000, as a whole, have increased their total wealth by 5.4 percent to a record £547.126 billion. Last year, the figure stood at 104 billionaires and £519 billion—one third of the country’s GDP.

The Rich List, first published in 1989, but in its 18th year in its current form, is always an underestimation of the wealth of the super-rich as it includes land, property, assets, and significant shares but excludes cash in bank accounts.

This year’s list reveals the extent to which the global financial elite ensured that the world’s population has been forced to bear the entire burden of the 2008 financial crash. In the years since, the super-rich in the UK have more than doubled their wealth, which stood at £258 billion in 2009 (an increase of 112 percent). The number of billionaires has grown by 12 percent in the last year, by 172 percent since 2009, and, as the Sunday Times notes, they “are far wealthier than many of them dared to hope seven years ago”.

The list, writes the Times, “confirms that Britain is more attractive to the global super-rich than any country except America. There are so many billionaires based here now, they outnumber those in mainland China, whose economy is four times larger than ours.”

It notes, “Mainland China is home to 115 sterling billionaires, who are collectively worth £24bn less.”

It continues, “Although the United States has the highest overall number of sterling billionaires of any country at 384, Britain’s smaller population means it boasts more per head than any other country in the G20 group of the world’s biggest economies—one billionaire for every 547,000 Britons, compared with one for every 833,000 Americans. London, where most of Britain’s billionaires are based, has more than any other city—80—who enjoy a collective wealth of £258bn. The capital’s nearest European rival, Paris, has just 21.”

The Times ’ front page article on the Rich List began “Recession? What recession? Britain’s super-rich have powered through the economic crisis and are now more than twice as rich as they were in 2009 when the economy was on the rocks…”

In the same period workers, pensioners and young people have suffered the impact of brutal austerity, with tens of billions of pounds slashed from public spending. In comparison, the income of the super-rich only fell once during that period (in 2009 when it fell by 37 percent to £258 billion) and their wealth is now growing at a record rate. The Sunday Times notes, “The rise has been greatest in the past 12 months. You need £100m to get on the list this year. That is £45m more than in 2009 and £15m more than last year…”

Vast amounts of the wealth accumulated by the super-rich are the product of speculation and outright criminality, with London being one of the world’s leading centres of financial swindling. The Sunday Times notes, “Most of the billionaires based in London are from abroad, but choose to live or base their businesses in the capital. London is a magnet for the super-rich because of its low taxes (for now)… The rise in the wealth of the top 1,000 is so sharp this year thanks to booming stock markets. Both the FTSE 100 and the Dow Jones Industrial Average have hit record highs in the past 12 months.”

The rapid emergence of this layer is illustrated by the fact that the queen, who was listed as the richest individual in 1989, is now not even among the top 300. The Times notes that although her wealth increased by £10 million this year to £340 million, she represents “old money.”

The richest individual on the list is the Ukrainian-born and Harvard-trained Len Blavatnik, who has investments in industry, music, and media, and is worth £13.17 billion, up £3.17 billion on 2014. Among the firms Blavatnik has investments in is LyondellBasell, one of the oil refinery companies with which workers in the United States were recently involved in a bitter struggle.

In the case of individuals such as Blavatnik, who made his initial fortune by participating in the pillage of the nationalised state assets of the Soviet Union following its dissolution in 1991, the adage of Balzac that “behind every great fortune there is a great crime” was never more apt.

A Forbes article last year noted, “In the history of Wall Street there haven’t been too many moneymaking machines quite like LyondellBasell, which has seen its shares return 500 percent since it emerged from bankruptcy four years ago. And that’s been especially lucrative for Blavatnik, 57, who cobbled the company together, saw it fail and plunge into bankruptcy court, and then doubled down on the same assets, personally investing another $2.37 billion in LyondellBasell the second time around. His investment is now worth more than $10 billion, generating $8 billion in mostly unrealized personal profits.”

The World Socialist Web Site noted, “These vast sums have been made through the brutal exploitation of oil workers facilitated by the [United Steel Workers] and other unions in the global industry.”

Another oligarch, placed at number four on the list, is the Uzbekistan-born Alisher Usmanov, who owns a stake of almost 30 percent in the leading London Premier League team, Arsenal FC. Usmanov is worth £9.8 billion, even though the value of his mining and other interests fell by £850 million over the past year, partly because of the West’s sanctions against Russia and collapse of the rouble.

So rich is this miniscule layer of parasites that servicing their whims is a lucrative industry in itself. The Daily Telegraph commented on Ten Group, “which has two million high-net-worth members worldwide” and “has spent around £36.5m of its clients’ money in the past 12 months.”

Reading the media’s commentary, one is left with the distinct impression that they consider the existence of this fetid, anti-social layer to be so entrenched and “normal” that it is barely worth discussing anymore. The BBC’s article on the list totalled just 270 words.

In its front-page article, the Sunday Times itself refers to a “wealth gap” that “has become a chasm.” But the gap it refers to is the disparity between the number of billionaires in the “capital and the rest of the country”! It commented that “there are only 37 billionaires based outside London and their collective wealth is £67bn—£191bn less than the London total of £258bn.”

The grotesque levels of wealth recorded in the Rich List speak to the enormous gulf between the super-rich and everyone else. But that is no longer considered a subject of journalistic comment.

Major shake-up in Saudi monarchy

Patrick Martin

In the biggest shake-up in Saudi Arabia in many decades, King Salman, who assumed power only three months ago on the death of King Abdullah, has fired the crown prince and the foreign minister, moving figures more closely tied to Washington into top positions.

The crisis atmosphere in ruling circles was expressed in the timing of the changes, announced in a communiqué issued at 4 a.m. local time in Riyadh, the capital city.

The 79-year-old king removed his 69-year-old half-brother, Prince Muqrin bin Abdulaziz, replacing him with his nephew, Deputy Crown Prince Mohammed bin Nayef, who is the interior minister and head of security for the regime. He will be the first member of the generation of grandsons of the Saudi kingdom’s, Abdulaziz ibn Saud, to be placed first in the line of succession to the throne.

Mohammed bin Nayef has emerged as the strongman of the regime, spearheading crackdowns on both Islamic fundamentalists opposed to the ruling family, and dissidents of every kind, from liberals to the Shiite minority to the vast immigrant workforce that performs most of the country’s labor.

Perhaps more importantly, from the standpoint of the internecine struggle within the dynasty, the 55-year-old prince has no sons, making the position of deputy crown prince that much more important. Here Salman chose his own son, Mohammed bin Salman, who is only 34 years old, jumping him ahead of hundreds of more senior princes of his generation.

Mohammed bin Salman was named secretary of the royal court and the defense minister when his father succeeded to the throne in late January. In the latter position, he is responsible for both theaters of war in which Saudi armed forces are engaged: the bombing of Yemen, which could become a ground invasion; and the bombing of ISIS targets in Syria, where warplanes from Saudi Arabia and other Persian Gulf monarchies play a role in support of the predominately American military operation.

Press reports suggested that Prince Muqrin, who formerly headed Saudi intelligence operations, was removed at least in part because of opposition to the ongoing Saudi military campaign against Houthi rebels in Yemen.

King Salman also removed Foreign Minister Saud Al Faisal, a 75-year-old prince who has held the position for 40 years (he took office when Gerald Ford was president of the United States, Leonid Brezhnev headed the USSR, and Mao Zedong ruled China). His replacement is the Saudi ambassador to the United States, Adel al-Jubeir, 53, who is the first non-member of the royal family to hold the position since 1962.

The new occupants of the top offices, Mohammed bin Nayef as crown prince, Mohammed bin Salman as deputy crown prince, and Adel al-Jubeir as foreign minister, are all known for their close ties to US imperialism. The new crown prince is US-educated and has made frequent trips to Washington for consultations on counter-terrorism operations.

He is identified with a more aggressive and interventionist Saudi foreign policy throughout the Middle East, heavily backing the Egyptian military junta of General Sisi, and joining with it to demand the destruction of the Muslim Brotherhood, the conservative bourgeois party that ruled Egypt for one year before the 2013 military coup, whose offshoots play a significant role in many Arab countries.

The two princes will also retain their positions as interior minister and defense minister, respectively, further cementing the ties between King Salman’s wing of the royal family and the security forces. In a further effort to bolster the regime, the king ordered a bonus of one month’s salary paid to each member of the armed forces and the security police.

King Salman foreshadowed the latest changes immediately upon taking the throne in January, when he abolished more than a dozen advisory councils established by his predecessors and consolidated authority into two new councils. Prince Mohammed bin Nayef was named head of the Council of Political and Security Affairs, while Prince Mohammed bin Salman was named head of the Council of Economic and Development Affairs, effectively sharing top-level executive power within the kingdom.

The rapid elevation of the younger prince is tell-tale sign of the decay and crisis of the reactionary Saudi regime. Mohammed bin Salman is one of a handful of the 600 princes of his generation to be educated entirely within the country. He is variously reported to be between 27 and 35, and has no military experience, but heads an agency that was the third-largest purchaser of weapons in the world, behind only the United States and China.

The Saudi press has promoted him heavily as the leader and director of the current intervention in Yemen, a campaign of glorification that has set the stage for his elevation to second in line for the throne. It was Mohammed bin Salman who met Yemeni president Abdurabuh Mansur Hadi at the airport in Riyadh, when he came to seek continuing Saudi support after Houthi rebels forced him to flee the country.

As secretary of the royal court, as well as defense minister, the prince controls access to his 79-year-old father, King Salman, making him the focal point of palace intrigue. There is little doubt that he is also the focal point of animosity from the disfavored branches of the royal family, which have on more than one occasion resorted to violence to settle disputes over positions of power and control of the vast wealth of the oil-rich kingdom.

US economy stalled in first quarter

Andre Damon

The US economy grew at a rate of just 0.2 percent in the first quarter of this year, marking a sharp slowdown from the previous quarter, in which the growth rate was 2.2 percent.

The mounting signs of an economic slump in the US prompted the Federal Reserve to downgrade its view of the US economy in its latest policy statement, issued Wednesday. The Fed declared that economic growth had “slowed during the winter,” whereas its previous statement claimed that growth had “moderated somewhat.”

The first quarter gross domestic product figures, released Wednesday by the Commerce Department, were far lower than even the meager 1.0 percent growth rate predicted by economists. It was the slowest quarterly growth for the US economy in a year.

The fall-off in economic activity was led by a collapse in business fixed investment, which fell by 3.4 percent. Exports plunged by 7.2 percent, compared with an increase of 4.5 percent in the fourth quarter. On the whole, government spending shrank, led by a fall of 1.5 percent in state and local spending.

The collapse in investment takes place amid a speculative frenzy whipped up by the trillions of dollars injected into the financial system by the Federal Reserve and other central banks. Mergers and acquisitions are occurring at a near-record pace, while US corporations, sitting on a cash hoard of $1.4 trillion, have engaged in share buy-backs and dividend increases to further enrich their wealthy shareholders.

These record mergers, acquisitions, and share buy-backs have been accompanied by mass layoffs.

* On Tuesday, helicopter maker Bell Helicopter announced 1,100 layoffs at its facility in Lafayette, Indiana.

* On Friday, Pennsylvania-based software developer Unisys announced plans to slash 8 percent of its global workforce, including 1,800 workers in North America.

* On April 24, pharmaceutical company Procter & Gamble announced that it would eliminate up to 6,000 office jobs worldwide. Since 2012, the company has slashed more than 20,000 office and manufacturing jobs.

* On April 20, United States Steel Corp. issued layoffs to 1,404 employees, concentrated mostly in Texas. Since June, the company has announced plans to eliminate 7,800 US positions, according to the Pittsburgh Business Times.

* That same day, oilfield services company Halliburton said it had cut 9,000 jobs, amounting to over ten percent of its workforce.

* On April 16, Halliburton's rival Schlumberger announced another 11,000 job cuts, on top of the 9,000 it implemented in January.

The negative figures follow the announcement by the Labor Department earlier this month that the US economy added only 126,000 jobs in March, the smallest job growth since 2013. The March figure was half the number predicted by economists.

Since the beginning of the economic "recovery" in 2009, the US economy has grown at an average annual rate of only 2.2 percent, compared to an average growth rate of 3.2 percent during the 1990s.

Beyond the collapse in business investment, the negative growth figures for the first quarter were the result of a confluence of factors, each pointing to the precarious state of the US and global economy.

Worldwide demand for US goods remains stagnant amid a global slump, with the International Monetary Fund declaring this month that “potential growth in advanced economies is likely to remain below pre-crisis rates, while it is expected to decrease further in emerging market economies in the medium term.”

Weak demand from overseas has been compounded by the ongoing rise in the value of the dollar, shrinking demand for US manufacturing exports overseas.

Oil prices, meanwhile, have fallen by more than half over the past year, prompting tens of thousands of layoffs in the US, particularly in high-cost hydraulic fracturing operations.

US corporations in recent months stepped up their demands for the Federal Reserve to keep interest rates near zero in order to lower the value of the dollar and prop up their profits through cheap credit.

Speaking in San Francisco earlier this month, US Fed Chair Janet Yellen stressed the need to be “patient” in raising rates, while Fed officials lowered their estimate for where the federal funds rate will be at the end of this year to 0.625 percent, sharply lower than their December estimate of 1.125 percent.

In its Wednesday statement, the Federal Reserve hinted at a further delay in rate increases this year by downgrading its view of the economy while eliminating any reference to a specific timetable for raising rates.

Last week, William C. Dudley, the president of the Federal Reserve Bank of New York, made clear that the Fed is seriously considering pushing back its plans to raise interest rates till next year, declaring that “hopefully” economic growth will pick up enough for the Fed to raise rates this year.

The continuation of near-zero interest rates will not bring about any meaningful increase in investment and hiring. Rather, it will sustain the massive run-up of stock prices, which have tripled since 2009, further enriching the financial oligarchy at the expense of the working class.

The financial elite has made no effort to hide its appreciation for the Fed’s easy money policies. Earlier this month, former Federal Reserve Chairman Ben Bernanke, who funneled trillions of dollars in government funds to Wall Street in the post-2008 bank bailout, announced that he had been hired by Chicago-based hedge fund Citadel LLC. On Wednesday, bond trading firm Pimco announced that it had simultaneously hired Bernanke as an adviser.

Bernanke’s multi-million-dollar salary at these posts amount to a payoff for services rendered.