18 May 2018

Dangerous Liaison: Industrial Agriculture and the Reductionist Mindset

Colin Todhunter


Food and agriculture across the world is in crisis. Food is becoming denutrified and unhealthy and diets less diverse. There is a loss of biodiversity, which threatens food security, soils are being degraded, water sources polluted and depleted and smallholder farmers, so vital to global food production, are being squeezed off their land and out of farming.
A minority of the global population has access to so much food than it can afford to waste much of it, while food insecurity has become a fact of life for hundreds of millions. This crisis stems from food and agriculture being wedded to power structures that serve the interests of the powerful global agribusiness corporations.
Over the last 60 years, agriculture has become increasingly industrialised, globalised and tied to an international system of trade based on export-oriented mono-cropping, commodity production for the international market, indebtedness to international financial institutions (IMF/World Bank).
This has resulted in food surplus and food deficit areas, of which the latter have become dependent on (US) agricultural imports and strings-attached aid. Food deficits in the Global South mirror food surpluses in the North, based on a ‘stuffed and starved’ strategy.
Whether through IMF-World Bank structural adjustment programmes related to debt repayment as occurred in Africa (as a continent Africa has been transformed from a net exporter to a net importer of food), bilateral trade agreements like NAFTA and its impact on Mexico or, more generally, deregulated global trade rules, the outcome has been similar: the devastation of traditional, indigenous agriculture.
Integral to all of this has been the imposition of the ‘Green Revolution’. Farmers were encouraged to purchase hybrid seeds from corporations that were dependent on chemical fertilisers and pesticides to boost yields. They required loans to purchase these corporate inputs and governments borrowed to finance irrigation and dam building projects for what was a water-intensive model.
While the Green Revolution was sold to governments and farmers on the basis it would increase productivity and earnings and would be more efficient, we now have nations and farmers incorporated into a system of international capitalism based on dependency, deregulated and manipulated commodity markets, unfair subsidies and inherent food insecurity.
As part of a wider ‘development’ plan for the Global South, millions of farmers have been forced out of agriculture to become cheap factory labour (for outsourced units from the West) or, as is increasingly the case, unemployed or underemployed slum dwellers.
In India, under the banner of a bogus notion of ‘development’, farmers are being whipped into subservience on behalf of global capital: they find themselves steadily squeezed out as farming due to falling incomes, the impact of cheap imports and policies deliberately designed to run down smallholder agriculture for the benefit of global agribusiness corporations.
Aside from the geopolitical shift in favour of the Western nations resulting from the programmed destruction of traditional agriculture across the world, the Green Revolution has adversely impacted the nature of food, soil, human health and the environment.
Sold on the premise of increased yields, improved food security and better farm incomes, the benefits of the Green Revolution have been overstated. And the often stated ‘humanitarian’ intent and outcome (‘millions of lives saved’) has had more to do with PR and cold commercial interest.
However, even when the Green Revolution did increase yields (or similarly, if claims about GMO agriculture – the second coming of the Green Revolution – improving output are to be accepted at face value), Canadian environmentalist Jodi Koberinski says pertinent questions need to be asked: what has been the cost of any increased yield of commodities in terms of local food security and local caloric production, nutrition per acre, water tables, soil structure and new pests and disease pressures?
We may also ask what the effects on rural communities and economies have been; on birds, insects and biodiversity in general; on the climate as a result of new technologies, inputs or changes to farming practices; and what have been the effects of shifting towards globalised production chains, not least in terms of transportation and fossil fuel consumption.
Moreover, if the Green Revolution found farmers in the Global South increasingly at the mercy of a US-centric system of trade and agriculture, at home they were also having to fit in with development policies that pushed for urbanisation and had to cater to the needs of a distant and expanding urban population whose food requirements were different to local rural-based communities. In addition to a focus on export-oriented farming, crops were also being grown for the urban market, regardless of farmers’ needs or the dietary requirements of local rural markets.
Destroying indigenous systems
In an open letter written in 2006 to policy makers in India, farmer and campaigner Bhaskar Save offered answers to some of these questions. He argued that the actual reason for pushing the Green Revolution was the much narrower goal of increasing marketable surplus of a few relatively less perishable cereals to fuel the urban-industrial expansion favoured by the government and a few industries at the expense of a more diverse and nutrient-sufficient agriculture, which rural folk – who make up the bulk of India’s population – had long benefited from.
Before, Indian farmers had been largely self-sufficient and even produced surpluses, though generally smaller quantities of many more items. These, particularly perishables, were tougher to supply urban markets. And so, the nation’s farmers were steered to grow chemically cultivated monocultures of a few cash-crops like wheat, rice, or sugar, rather than their traditional polycultures that needed no purchased inputs.
Tall, indigenous varieties of grain provided more biomass, shaded the soil from the sun and protected against its erosion under heavy monsoon rains, but these very replaced with dwarf varieties, which led to more vigorous growth of weeds and were able to compete successfully with the new stunted crops for sunlight.
As a result, the farmer had to spend more labour and money in weeding, or spraying herbicides. Furthermore, straw growth with the dwarf grain crops fell and much less organic matter was locally available to recycle the fertility of the soil, leading to an artificial need for externally procured inputs. Inevitably, the farmers resorted to use more chemicals and soil degradation and erosion set in.
The exotic varieties, grown with chemical fertilisers, were more susceptible to ‘pests and diseases’, leading to yet more chemicals being poured. But the attacked insect species developed resistance and reproduced prolifically. Their predators – spiders, frogs, etc. – that fed on these insects and controlled their populations were exterminated. So were many beneficial species like the earthworms and bees.
Save noted that India, next to South America, receives the highest rainfall in the world. Where thick vegetation covers the ground, the soil is alive and porous and at least half of the rain is soaked and stored in the soil and sub-soil strata.
A good amount then percolates deeper to recharge aquifers or groundwater tables. The living soil and its underlying aquifers thus serve as gigantic, ready-made reservoirs. Half a century ago, most parts of India had enough fresh water all year round, long after the rains had stopped and gone. But clear the forests, and the capacity of the earth to soak the rain, drops drastically. Streams and wells run dry.
While the recharge of groundwater has greatly reduced, its extraction has been mounting. India is presently mining over 20 times more groundwater each day than it did in 1950. But most of India’s people – living on hand-drawn or hand-pumped water in villages and practising only rain-fed farming – continue to use the same amount of ground water per person, as they did generations ago.
More than 80% of India’s water consumption is for irrigation, with the largest share hogged by chemically cultivated cash crops. For example, one acre of chemically grown sugarcane requires as much water as would suffice 25 acres of jowar, bajra or maize. The sugar factories too consume huge quantities.
From cultivation to processing, each kilo of refined sugar needs two to three tonnes of water. Save argued this could be used to grow, by the traditional, organic way, about 150 to 200 kg of nutritious jowar or bajra (native millets).
If Bhaskar Save helped open people’s eyes to what has happened on the farm, to farmers and to ecology in India, a 2015 report by GRAIN provides an overview of how US agribusiness has hijacked an entire nation’s food and agriculture under the banner of ‘free trade’ to the detriment of the environment, health and farmers.
In 2012, Mexico’s National Institute for Public Health released the results of a national survey of food security and nutrition. Between 1988 and 2012, the proportion of overweight women between the ages of 20 and 49 increased from 25% to 35% and the number of obese women in this age group increased from 9% to 37%.
Some 29% of Mexican children between the ages of 5 and 11 were found to be overweight, as were 35% of youngsters between 11 and 19, while one in 10 school age children suffered from anemia. The Mexican Diabetes Federation says that more than 7% of the Mexican population has diabetes. Diabetes is now the third most common cause of death in Mexico, directly or indirectly.
The various free trade agreements that Mexico has signed over the past two decades have had a profound impact on the country’s food system and people’s health. After his mission to Mexico in 2012, the then Special Rapporteur on the Right to Food, Olivier De Schutter, concluded that the trade policies in place favour greater reliance on heavily processed and refined foods with a long shelf life rather than on the consumption of fresh and more perishable foods, particularly fruit and vegetables.
He added that the overweight and obesity emergency that Mexico is facing could have been avoided, or largely mitigated, if the health concerns linked to shifting diets had been integrated into the design of those policies.
The North America Free Trade Agreement led to the direct investment in food processing and a change in the retail structure (notably the advent of supermarkets and convenience stores) as well as the emergence of global agribusiness and transnational food companies in Mexico.
The country has witnessed an explosive growth of chain supermarkets, discounters and convenience stores. Local small-scale vendors have been replaced by corporate retailers that offer the processed food companies greater opportunities for sales and profits. Oxxo (owned by Coca-cola subsidiary Femsa) tripled its stores to 3,500 between 1999 and 2004. It was scheduled to open its 14,000th store sometime during 2015.
In Mexico, the loss of food sovereignty has induced catastrophic changes in the nation’s diet and has had dire consequences for agricultural workers who lost their jobs and for the nation in general. Those who have benefited include US food and agribusiness interests, drug cartels and US banks and arms manufacturers.
More of the same: a bogus ‘solution’
Transnational agribusiness has lobbied for, directed and profited from the very policies that have caused much of the above. And what we now see is these corporations (and their supporters) espousing cynical and fake concern for the plight of the poor and hungry.
GMO patented seeds represent the final stranglehold of transnational agribusiness over the control of agriculture and food. The misrepresentation of the plight of the indigenous edible oils sector in India indicates encapsulates the duplicity at work surrounding the GM project.
After trade rules and cheap imports conspired to destroy farmers and the jobs of people involved in local food processing activities for the benefit of global agribusiness, including commodity trading and food processor companies ADM and Cargill, there is now a campaign to force GM into India on the basis that Indian agriculture is unproductive and thus the country has to rely on imports. This conveniently ignores the fact that prior to neoliberal trade rules in the mid-1990s, India was almost self-sufficient in edible oils.
In collusion with the Gates Foundation, corporate interests are also seeking to secure full spectrum dominance throughout much of Africa as well. Western seed, fertiliser and pesticide manufacturers and dealers and food processing companies are in the process of securing changes to legislation and are building up logistics and infrastructure to allow them to recast food and farming in their own images.
Today, governments continue to collude with big agribusiness corporations. These companies are being allowed to shape government policy by being granted a strategic role in trade negotiations and are increasingly framing the policy/knowledge agenda by funding and determining the nature of research carried out in public universities and institutes.
As Bhaskar Save wrote about India: “This country has more than 150 agricultural universities. But every year, each churns out several hundred ‘educated’ unemployables, trained only in misguiding farmers and spreading ecological degradation. In all the six years a student spends for an M.Sc. in agriculture, the only goal is short-term – and narrowly perceived – ‘productivity’. For this, the farmer is urged to do and buy a hundred things. But not a thought is spared to what a farmer must never do so that the land remains unharmed for future generations and other creatures. It is time our people and government wake up to the realisation that this industry-driven way of farming – promoted by our institutions – is inherently criminal and suicidal!”
Save is referring to the 300,000-plus farmer suicides that have taken place in India over the past two decades due to economic distress resulting from debt, a shift to (GM)cash crops and economic ‘liberalisation (see this report about a peer-reviewed study, which directly links suicides to GM cotton).
The current global system of chemical-industrial agriculture, World Trade Organisation rules and bilateral trade agreements that agritech companies helped draw up are a major cause of food insecurity and environmental destruction. The system is not set up to ‘feed the world’ despite the proclamations of its supporters.
However, this model has become central to the dominant notion of ‘development’ in the Global South: unnecessary urbanisation, the commercialisation and emptying out of the countryside at the behest of the World Bank, the displacement of existing systems of food and agricultural production with one dominated by Monsanto-Bayer, Cargill and the like and a one-dimensional pursuit of GDP growth as a measure of ‘progress’ with little concern for the costs and implications – mirroring the narrow, reductionist ‘output-yield’ paradigm of industrial agriculture itself.
Agroecology offers a genuine solution
Across the world, we are seeing farmers and communities pushing back and resisting the corporate takeover of seeds, soils, land, water and food. And we are also witnessing inspiring stories about the successes of agroecology.
Reflecting what Bhaskar Save achieved on his farm in Gujarat, agroecology combines sound ecological management, including minimising the use of toxic inputs, by using on-farm renewable resources and privileging natural solutions to manage pests and disease, with an approach that upholds and secures farmers’ livelihoods.
Agroecology is based on scientific research grounded in the natural sciences but marries this with farmer-generated knowledge and grassroots participation that challenges top-down approaches to research and policy making. However, it can also involve moving beyond the dynamics of the farm itself to become part of a wider agenda, which addresses the broader political and economic issues that impact farmers and agriculture (see this description of the various modes of thought that underpin agroecolgy).
Jodi Koberisnki’s nod to ‘systems thinking’ lends credence to agroecology, which recognises the potential of agriculture to properly address concerns about local food security and sovereignty as well as social, ecological and health issues. In this respect, agroecology is a refreshing point of departure from the reductionist approach to farming which emphasises securing maximum yield and corporate profit to the detriment of all else.
Wei Zhang – an economist focusing on ecosystem services, agriculture and the environment – says that ‘worldview’ is important “to how you conceptualise issues and develop or choose tools to address those issues. Using systems thinking requires a shift in fundamental beliefs and assumptions that constitute our worldviews. These are the intellectual and moral foundations for the way we view and interpret reality, as well as our beliefs about the nature of knowledge and the processes of knowing. Systems thinking can help by changing the dominant mindset and by addressing resistance to more integrated approaches.”
Agroecology requires that shift in fundamental beliefs.
A few years ago, the Oakland Institute released a report on 33 case studies which highlighted the success of agroecological agriculture across Africa in the face of climate change, hunger and poverty. The studies provide facts and figures on how agricultural transformation can yield immense economic, social, and food security benefits while ensuring climate justice and restoring soils and the environment.
The research highlights the multiple benefits of agroecology, including affordable and sustainable ways to boost agricultural yields while increasing farmers’ incomes, food security and crop resilience.
The report described how agroecology uses a wide variety of techniques and practices, including plant diversification, intercropping, the application of mulch, manure or compost for soil fertility, the natural management of pests and diseases, agroforestry and the construction of water management structures.
There are many other examples of successful agroecology and of farmers abandoning Green Revolution thought and practices to embrace it (see this report about El Salvador and this interview from South India).
In a recent interview appearing on the Farming Matters website, Million Belay sheds light on how agroecological agriculture is the best model of agriculture for Africa. Belay explains that one of the greatest agroecological initiatives started in 1995 in Tigray, Northern Ethiopia, and continues today. It began with four villages and after good results, it was scaled up to 83 villages and finally to the whole Tigray Region. It was recommended to the Ministry of Agriculture to be scaled up at the national level. The project has now expanded to six regions of Ethiopia.
The fact that it was supported with research by the Ethiopian University at Mekele has proved to be critical in convincing decision makers that these practices work and are better for both the farmers and the land.
Bellay describes another agroecological practice that spread widely across East Africa – ‘push-pull’. This method manages pests through selective intercropping with important fodder species and wild grass relatives, in which pests are simultaneously repelled – or pushed – from the system by one or more plants and are attracted to – or pulled – toward ‘decoy’ plants, thereby protecting the crop from infestation. Push-pull has proved to be very effective at biologically controlling pest populations in fields, reducing significantly the need for pesticides, increasing production, especially for maize, increasing income to farmers, increasing fodder for animals and, due to that, increasing milk production, and improving soil fertility.
By 2015, the number of farmers using this practice increased to 95,000. One of the bedrocks of success is the incorporation of cutting edge science through the collaboration of the International Center of Insect Physiology and Ecology (ICIPE) and the Rothamsted Research Station (UK) who have worked in East Africa for the last 15 years on an effective ecologically-based pest management solution for stem borers and striga.
But agroecology should not just be regarded something for the Global South. Food First Executive Director Eric Holtz-Gimenez argues that it offers concrete, practical solutions to many of the world’s problems that move beyond (but which are linked to) agriculture. In doing so, it challenges – and offers alternatives to – prevailing moribund doctrinaire economics and the outright plunder of neoliberalism.
The scaling up of agroecology can tackle hunger, malnutrition, environmental degradation and climate change. By creating securely paid labour-intensive agricultural work, it can also address the interrelated links between labour offshoring by rich countries and the removal of rural populations elsewhere who end up in sweat shops to carry out the outsourced jobs.
Thick legitimacy
Various official reports have argued that to feed the hungry and secure food security in low income regions we need to support small farms and diverse, sustainable agroecological methods of farming and strengthen local food economies (see this report on the right to food and this (IAASTD) peer-reviewed report).
Olivier De Schutter says: “To feed 9 billion people in 2050, we urgently need to adopt the most efficient farming techniques available. Today’s scientific evidence demonstrates that agroecological methods outperform the use of chemical fertilizers in boosting food production where the hungry live, especially in unfavorable environments.”
De Schutter indicates that small-scale farmers can double food production within 10 years in critical regions by using ecological methods. Based on an extensive review of scientific literature, the study he was involved in calls for a fundamental shift towards agroecology as a way to boost food production and improve the situation of the poorest. The report calls on states to implement a fundamental shift towards agroecology.
The success stories of agroecology indicate what can be achieved when development is placed firmly in the hands of farmers themselves. The expansion of agroecological practices can generate a rapid, fair and inclusive development that can be sustained for future generations. This model entails policies and activities that come from the bottom-up and which the state can then invest in and facilitate.
A decentralised system of food production with access to local markets supported by proper roads, storage and other infrastructure must take priority ahead of exploitative international markets dominated and designed to serve the needs of global capital.
It has long been established that Small farms are per area more productive than large-scale industrial farms and create a more resilient, diverse food system. If policy makers were to prioritise this sector and promote agroecology to the extent Green Revolution practices and technology have been pushed, many of the problems surrounding poverty, unemployment and urban migration could be solved.
However, the biggest challenge for upscaling agroecology lies in the push by big business for commercial agriculture and attempts to marginalise agroecology. Unfortunately, global agribusiness concerns have secured the status of ‘thick legitimacy’ based on an intricate web of processes successfully spun in the scientific, policy and political arenas. This allows its model to persist and appear normal and necessary. This perceived legitimacy derives from the lobbying, financial clout and political power of agribusiness conglomerates which set out to capture or shape government departments, public institutions, the agricultural research paradigm, international trade and the cultural narrative concerning food and agriculture.
Critics of this system are immediately attacked for being anti-science, for forwarding unrealistic alternatives, for endangering the lives of billions who would starve to death and for being driven by ideology and emotion. Strategically placed industry mouthpieces like Jon Entine, Owen Paterson and Henry Miller perpetuate such messages in the media and influential industry-backed bodies like the Science Media Centre feed journalists with agribusiness spin.
When some people hurl such accusations, it might not just simply be spin: it may be the case that some actually believe critics are guilty of such things. If that is so, it is a result of their failure to think along the lines Zhang outlines: they are limited by their own reductionist logic and worldview.
The worrying thing is that too many policy makers may also be blinded by such a view because so many governments are working hand-in-glove with the industry to promote its technology over the heads of the public. A network of scientific bodies and regulatory agencies that supposedly serve the public interest have been subverted by the presence of key figures with industry links, while the powerful industry lobby hold sway over bureaucrats and politicians.
The World Bank is pushing a corporate-led industrial model of agriculture via its ‘enabling the business of agriculture’ strategy and corporations are given free rein to write policies. Monsanto played a key part in drafting the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights to create seed monopolies and the global food processing industry had a leading role in shaping the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (see this). From Codex, the Knowledge Initiative on Agriculture aimed at restructuring Indian agriculture to the currently on-hold US-EU trade deal (TTIP), the powerful agribusiness lobby has secured privileged access to policy makers to ensure its model of agriculture prevails.
The ultimate coup d’etat by the transnational agribusiness conglomerates is that government officials, scientists and journalists take as given that profit-driven Fortune 500 corporations have a legitimate claim to be custodians of natural assets. These corporations have convinced so many that they have the ultimate legitimacy to own and control what is essentially humanity’s common wealth. There is the premise that water, food, soil, land and agriculture should be handed over to powerful transnational corporations to milk for profit, under the pretence these entities are somehow serving the needs of humanity.
Corporations which promote industrial agriculture have embedded themselves deeply within the policy-making machinery on both national and international levels. From the overall narrative that industrial agriculture is necessary to feed the world to providing lavish research grants and the capture of important policy-making institutions, global agribusiness has secured a perceived thick legitimacy within policymakers’ mindsets and mainstream discourse.
It gets to the point whereby if you – as a key figure in a public body – believe that your institution and society’s main institutions and the influence of corporations on them are basically sound, then you are probably not going to challenge or question the overall status quo. Once you have indicated an allegiance to these institutions and corporate power, it is ‘irrational’ to oppose their policies, the very ones you are there to promote. And it becomes quite ‘natural’ to oppose any research findings, analyses or questions which question the system and by implication your role in it.
But how long can the ‘legitimacy’ of a system persist given that it merely produces bad food, creates food deficit regions globally, destroys health, impoverishes small farms, leads to less diverse diets and less nutritious food, is less productive than small farms, creates water scarcity, destroys soil and fuels/benefits from World Bank/WTO policies that create dependency and debt.
The more that agroecology is seen to work, the more policy makers see the failings of the current system and the more they become open to holistic approaches to agriculture – as practitioners and supporters of agroecology create their own thick legitimacy –  they more willing officials might be to give space to a model that has great potential to help deal with some of the world’s most pressing problems. It has happened to a certain extent in Ethiopia, for example. That is hopeful.
Of course, global agribusiness nor the system of capitalism it helps to uphold and benefits from are not going to disappear overnight and politicians (even governments) who oppose or challenge private capital tend to be replaced or subverted.
Powerful agribusiness corporations can only operate as they do because of a framework designed to allow them to capture governments and regulatory bodies, to use the WTO and bilateral trade deals to lever global influence, to profit on the back of US militarism (Iraq) and destabilisations (Ukraine), to exert undue influence over science and politics and to rake in enormous profits.
The World Bank’s ongoing commitment to global agribusiness and a wholly corrupt and rigged model of globalisation is a further recipe for plunder. Whether it involves Monsanto, Cargill or the type of corporate power grab of African agriculture that Bill Gates is helping to spearhead, private capital will continue to ensure this happens while hiding behind platitudes about ‘free trade’ and ‘development’.
Brazil and Indonesia are subsidising private corporations to effectively destroy the environment through their practices. Canada and the UK are working with the GMO biotech sector to facilitate its needs. And India is facilitating the destruction of its agrarian base according to World Bank directives for the benefit of the likes of Monsanto, Bayer and Cargill.
If myths about the necessity for perpetuating the stranglehold of capitalism go unchallenged and real alternatives are not supported by mass movements across continents, agroecology will remain on the periphery.

17 May 2018

Sri Lankan government imposes IMF-dictated increases on essential items

Saman Gunadasa 

Over the past three weeks, the Sri Lankan government has imposed brutal price hikes on essential items, further reducing the living conditions of working people and the rural poor.
* Petrol and diesel prices have been increase by 17 percent and 15 percent, to 137 rupees per litre ($US0.87) and 109 rupees per litre respectively. The cost of kerosene was lifted by 130 percent to 101 rupees per litre.
* A kilogram of milk powder has gone up by 50 rupees.
* Taxes on potatoes and onions have been risen by 10 rupees and 1 one rupee per kilogram respectively.
* The tax on dhal increased by 3 rupees to 12 rupees per kilo.
* Late last month, the cost of a 12-litre tank of cooking gas was hiked by 17 percent to 1,676 rupees per litre.
Addressing a May 10 press conference to announce the fuel price increases, Finance Minister Mangala Samaraweera said it was “unfair” to claim that the rises were the result of an IMF deadline. “We did it for the benefit of the people of this country and for the economy,” he claimed.
This is a patent lie. On April 20, IMF mission chief for Sri Lanka Manuela Goretti stated that the IMF loan installment was “subject to cabinet approval of an automatic fuel pricing mechanism.”
Sri Lanka’s fuel prices will now be adjusted every two months, according to the world crude oil prices and the rupee exchange rate. International oil prices are expected to increase further due to US President Donald Trump’s provocations against Iran and the danger of all-out war in the Middle East.
Kerosene and diesel are extensively used by fishermen to power their vessels. The rural poor and plantation workers use kerosene for cooking and lighting.
Samaraweera also falsely claimed that if oil prices were not increased, the government would have to cut funds “for the country’s development, health and education sectors.”
The Sirisena-Wickremesinghe government is already ruthlessly slashing subsidies to health, education and other services.
Government expenditure on health and education is just 1.5 percent and 1.9 percent of Gross Domestic Product (GDP), respectively. In 2017, there were 3,148 government schools with fewer than 10 teachers and only 3.6 beds per 1,000 people available in state hospitals, according to the Central Bank’s 2017 annual report.
The latest price increases come on top of already declining living standards and social conditions.
According to the Central Bank report, the real wages of formal private sector workers, the largest section of the Sri Lanka workforce, are continuously falling. Real wages declined by 3.6 percent in 2016 and 5.9 percent in 2017. State sector workers’ wages have been stagnating since 2015.
The Sri Lankan rupee is also rapidly depreciating. Last year it fell by 2.5 percent against the US dollar. So far this year, the rupee has dropped 3.3 percent. Sri Lankan economic growth last year fell to 3.1 percent, a 16-year low.
The IMF has advised Sri Lankan government authorities not to spend foreign currency reserves to prop up the rupee and is demanding that the budget deficit be reduced to 3.5 percent of GDP by 2020. This can only be achieved by wiping out remaining subsidies for the working masses and the poor.
Other “reform” measures demanded by the IMF include the privatisation and commercialisation of the Ceylon Electricity Board, the Water Board, state banks, ports and other state-owned enterprises.
Sri Lankan government debts are the result of loans obtained for Colombo’s war against the separatist Liberation Tigers of Tamil Eelam and to address the balance of payment deficit caused by falling exports.
The Central Bank notes that Sri Lanka’s total debt stock rose to 10,313 billion rupees in 2017. Of this, 4,718 billion rupees ($US51.8 billion) is foreign debt. According to one estimate, the Sri Lankan government will need $17.8 billion to service the country’s debt from this year to 2022.
Sri Lanka’s trade deficit has grown from $US8.9 billion in 2016 to $US9.6 billion in 2017, despite a moderate export growth through the GSP+ (General System Preference+) tariff concession given by the European Union, along with other concessions.
The escalating attacks on Sri Lankan workers and the rural poor are in line with the austerity measures imposed on the Spanish, Portuguese and Greek working class by the European Central Bank, the European Union and the IMF.
Growing protests, demonstrations and industrial action by Sri Lankan working people will bring them into direct confrontation with the Sirisena-Wickremesinghe government and other representatives of the ruling elite.

German Chancellor Merkel announces major rearmament program

Christoph Vandreier

Facing a deepening conflict with the United States, Berlin is massively upgrading its military capacity to enable Germany to use its armed forces to pursue its economic and geo-strategic interests around the world. Chancellor Angela Merkel and Defence Minister Ursula von der Leyen made this clear on Monday at the Bundeswehr (Armed Forces) conference in Berlin.
The biennial gathering saw the civilian and military leaders of the Bundeswehr meet with representatives from politics and business to discuss the strategic direction of the army. For the first time in six years, the Chancellor took part in the discussion.
Merkel used her opening speech to announce a massive rearmament programme and campaign for new and brutal wars. She justified this by referring to the growing conflicts between the US and the European powers. She described the unilateral termination of the Iran agreement, the US exit from the Framework Convention on Climate Change and the “rise in protectionism” as the expression of a “crisis-ridden multilateralism.”
It is therefore more important that Germany comply with its commitment to NATO and increase defence spending by 2024 to two percent of its gross domestic product, said Merkel. That would amount to an increase from the current total of 37 billion to between 70 and 75 billion euros, and would far exceed the increase of 5.5 billion euros previously set in the budget over the next four years. This is the biggest expansion of German military spending since the end of World War II.
Merkel emphasized that “the fulfilment of the tasks—our international operations plus alliance and national defence—makes this value necessary.” For the Bundeswehr to function, it needs more equipment. “That’s just the truth,” said Merkel. In her speech, the defence minister also advocated a massive rearmament and declared that “operationally ready forces,” i.e., military power, was the “central instrument enabling us to act in foreign and security policy.”
Merkel elaborated further on this claim in her speech. She invoked the role of the Bundeswehr as an international army of intervention, enforcing German interests across the globe. The civil war in Syria has developed into a “conflict over spheres of influence in a strategically extremely important region,” from which Germany cannot disengage, said the chancellor.
She celebrated the brutal campaign against Afghanistan, which cost tens of thousands of civilian lives and which has pushed the country into poverty and chaos, as a shining example for further wars. Germany can be proud of its involvement in that conflict, Merkel declared. The Bundeswehr is already involved in twelve foreign missions with 7,100 troops, and Merkel and von der Leyen are seeking to massively expand these deployments.
Under the euphemism of “national and alliance defence,” the chancellor spoke of a further confrontation with Russia. The Bundeswehr had made great progress. “For example, airspace control in the Baltic, reassurance in Poland and in the three Baltic states. We are leading the enhanced forward presence—these are all great words—and working as a framework nation in Lithuania.” What the chancellor calls “great words” is the preparation for a military confrontation with nuclear-armed Russia.
In addition to increasing the capacity of the Bundeswehr, Merkel wants to increasingly use mercenary troops in foreign countries to pursue German interests. She advocates not only training but also arming soldiers in Mali, Iraq and Afghanistan. Germany must also ensure that they get “decent pay.” Such involvement of local militias is a “very important aspect” of German foreign policy, Merkel said, suggesting that it could be funded through development aid rather than the military budget.
Von der Leyen made it clear that the Bundeswehr will use its own forces and such mercenaries around the world to defend the interests of the German ruling elite. According to the minister, the tasks of military operations also included the fight against “fake news campaigns”, i.e., the suppression of freedom of the press; against “the infiltration of irregular forces on the borders of the alliance territory; cyberattacks against critical infrastructure, government networks and our banking systems; the threat of missiles of any range and power; attacks on our trade routes at sea,” and “deployments of drone fleets against civilian targets.”
These goals can only be achieved through the massive military rearmament Merkel announced. Von der Leyen spelled out what this implies. She proudly reported that Germany had already undertaken a significant military upgrade in the last four years. Every year, more money had been spent than was allocated to the army at the beginning of the annual budget process.
The result was extensive new purchases, including 181 armoured personnel carriers, 51 armoured fighting vehicles, 31 combat helicopters, 16 transport aircraft, two submarines and 1,800 other military vehicles.
In addition to this upgrade, armaments investments totalling €31 billion have already been launched. “Of course, all this is not yet ready to roll—but much is already in sight,” said von der Leyen. Over the next four years, at least another 129 wheeled armoured vehicles, five new tanker aircraft, 15 marine helicopters, 50,000 suits of body armour, over 33,000 modern digital radios, and more than 70 armoured cranes are scheduled to be delivered to the German military.
But all this is still within previous budget planning, which the planned doubling of the military budget will put in the shade. The aim is to upgrade the Bundeswehr to a fully operational intervention and assault army, and at the same time to promote the “European Defence Union,” which Germany is seeking to direct. For the first time, the European Defence Fund means money from the European budget will be spent on the military.
The German government’s great-power ambitions are supported by all parties in the Bundestag (parliament). The Left Party has proven itself in recent weeks as among the most aggressive advocates of a policy of German imperialism independent of the United States.
This all-party coalition for great power politics confirms what the Sozialistische Gleichheitspartei (Socialist Equality Party, SGP) wrote earlier this year on the formation of the grand coalition of the Christian Democrats and Social Democrats. In February, the SGP declared that the coalition agreement was the “basis for the most right-wing German government since the downfall of the Nazi regime.” It is “the outcome of a conspiracy involving the banks, the employers’ associations, the military, the intelligence agencies and the bourgeois parties… [who] have spent four-and-a-half months negotiating and intriguing to bring a right-wing government to power.”
The SGP pointed out that workers not only have a right to know the contents of the coalition agreement, but also all the secret arrangements made in the course of the negotiations. The SGP pointed to NATO’s declared goal of rearmament and called for the disclosure of all agreements on the specific structuring of armaments projects and their financing. While cutbacks are being imposed on social spending, billions are being spent on armaments and war.
The correctness of this assessment has been confirmed in subsequent months. Merkel and her cabinet have drawn up very concrete plans for a massive military upgrade, which they now want to implement step by step. The conclusion drawn by the SGP in February—“The right-wing conspiracy, which is supported by all the parliamentary parties and large sections of the European bourgeoisie, can be stopped only by the independent political mobilisation of the working class on the basis of a socialist programme”—now acquires even greater significance.

European Union tries to salvage Iran nuclear accord from US unilateralism

Jean Shaoul

European Union foreign policy chief Federica Mogherini hosted meetings with the German, French and British foreign ministers, and Iran’s foreign minister, Mohammed Javad Zarif, in Brussels Tuesday in a desperate bid to salvage the Iran nuclear accord.
The meetings followed US President Donald Trump’s May 8 announcement unilaterally withdrawing from the accord that was signed in July 2015 by the US, Germany, France, Britain, Russia and China. Trump stated that the US would re-impose crippling economic sanctions on Iran.
US officials then demanded that the EU sever its trade relations with Iran.
National Security Advisor John Bolton declared, “No new contracts are permitted,” and gave European businesses 90 to 180 days to wind down operations in targeted sectors such as oil, energy, auto and shipping. Failure to comply would mean that the EU would face secondary sanctions.
The European powers, as well as the state and corporate media, condemned Trump’s action, calling for the treaty to be preserved and vowing to defend their business interests against Trump’s threats to impose the “highest level of economic sanctions against Iran.”
In the most immediate sense, the Europeans are concerned that Trump’s withdrawal from the deal cuts across their attempts to exploit Iran economically under conditions where the continent’s economy is slowing.
US trade with Iran was only $170 million in 2017, while EU-Iran trade was worth $25 billion. EU trade with Iran increased from €7.7 billion in 2015 to €21 billion last year, making the EU Iran’s third-largest trading partner, after China and the United Arab Emirates.
The European powers also fear that the re-imposition of sanctions presages a war with Iran, whose impact will be profoundly destabilising and include soaring oil prices and a further mass influx of refugees.
Whether through war or by engineering regime change in Iran, the US intends to consolidate its hegemony over the Middle East at the expense not only of China and Russia but also its European allies.
French Prime Minister Emanuel Macron and German Chancellor Angela Merkel both went to Washington last month to ask Trump not to jettison the Iran deal. British Foreign Secretary Boris Johnson followed to hold talks with Vice-President Pence and Secretary of State Pompeo.
In a bid to convince Trump to remain in the deal, the Europeans agreed to make a series of fresh demands on Tehran, but to no avail.
Since then, the US Treasury has announced more sanctions, including on Iran’s central bank governor and a deputy for allegedly assisting or providing support for Iran’s Islamic Revolutionary Guards Corps Quds Force and Hezbollah in Lebanon just minutes before the Brussels meeting began.
Tehran has promised to keep its side of the deal as long as Iran can sell its oil and has given the EU 60 days to guarantee the implementation of the nuclear deal. Further joint meetings are to be held next week in Vienna and an EU heads of state meeting in Sofia on Wednesday.
Speaking Tuesday evening, Mogherini pledged to keep the 2015 nuclear deal alive without the US by trying to keep trade and investment in Iran flowing, but admitted it would be difficult to provide the guarantees Tehran is demanding. The EU had agreed to find practical solutions and to continue buying Iran’s oil and gas products, maintain effective banking relations and protect European investments in Iran. But, she added, “I cannot talk about legal or economic guarantees…”
Zarif stressed, “We need to reach some sort of guarantee that these benefits can be guaranteed for Iran within that specified period of time … a few weeks.”
There was no disguising the Europeans’ political and economic impotence vis-à-vis the US. The European powers are seeking to pursue trade relations with Iran, under conditions where the EU’s trade and investment with the US is incomparably greater.
Some companies, including Danish shipping’s Maersk Tankers and Torm and German giant Siemens which has signed contracts worth more than $1.6 billion, have already announced they will cease trading with Iran. Airbus, which has a deal to deliver 100 jets to Iran, has yet to decide its course of action.
There have been various suggestions as to how the Europeans could evade “secondary sanctions,” which would mean an economic confrontation with the US. But none of them are very convincing.
One is the “blocking statute,” drawn up in 1996 in response to US sanctions against Cuba, which would make it illegal for EU companies to comply with laws with extraterritorial application. This would need amending for this situation and require the agreement of all 28 member-states.
Another is retaliatory measures such as a “clawback” clause that would allow for the recovery of costs incurred for US sanctions violations via tariffs on US exports to the EU. French Economy Minister Bruno Le Maire, citing the need for the EU to defend its own “economic sovereignty,” called for the creation of a European body with the power—similar to the US Justice Department—to punish foreign companies for their trade practices.
Others have called for the European investment banks to provide lines of credit to Tehran and facilitate loans or substitute the euro for the dollar in international trade.
While this might help medium-sized companies with no trade or investment ties with the US, it would be of no use to the European transnationals, such as automakers Peugeot and Daimler, and Danish pharma group Novo Nordisk, for whom the US is a major market. Most commentators suggest that banks would not be prepared to risk funding such ventures and incurring the wrath of the US.
All these measures risk exacerbating the already-embittered trade relations with the US, under conditions where Trump has threatened to impose trade tariffs on the import of European steel and aluminium.
The European powers are therefore pinning their hopes on an appeal to those factions in the US political establishment opposed to Trump’s decision on Iran, pointing out that it threatens not only trade relations with Europe, but political relations as well.
In addition, while the European powers are publicly putting forward a united front against the US on the Iran nuclear deal, there are clear divisions between them. Some of the smaller countries have little or no trade with Iran, while others, such as Britain, despite their opposition to Trump’s withdrawal from the accord, are deeply anxious to avoid alienating Washington.
Whatever the outcome of the talks, the rift between the US and Europe is deepening.
The EU’s promotion of its business interests in Iran and the broader Middle East is setting it on a collision course with Washington. The European powers defend interests no less reactionary than those advanced by Trump, including through illegal interventions in the Middle East like last month’s bombing of Syria by Washington, London and Paris—following years of covert action in the war-torn country. But the pursuit of a commercial and military policy independent of Washington will require a vast increase in military expenditure if they are to compete with the US.
Such a policy necessitates ramping up attacks on the working class to secure the hundreds of billions of euros needed to create a credible military rival to the Pentagon. This is the road which the European powers are intent on taking.

India’s BJP government creates new category of workers who can be fired at will

Kranti Kumara

India’s pro-big business, Hindu supremacist Bharatiya Janata Party (BJP) government recently expanded “fixed-term employment”—a form of contract-work under which employers can fire workers at will—to all sectors of the economy.
Hitherto, “fixed-term employment” had been restricted to the textile industry.
Under the “fixed-term” designation, Indian businesses can hire workers on a “non-permanent” basis, for any length of time of their choosing, whether for days, months, years, or the duration of a project. However, the “fixed-term” appellation is a complete misnomer, since an employer can terminate a worker’s contract at any time, claiming changed business conditions, and the laid-off worker is entitled to no severance pay or compensation whatsoever.
The BJP government implemented this sweeping regressive change to India’s labour laws by fiat in mid-March. Bypassing parliament, it issued a notification in the government Gazette that “Fixed Term Employment has now been introduced irrespective of the industry,” thereby amending the “Industrial Employment (Standing Order) Act, 1946.”
Indian big business has hailed this change and with good reason, since it fulfills one of their major demands. For years Indian and foreign investors have been complaining about labour law restrictions on the laying off of workers. Now in one fell swoop they have been provided a mechanism under which all future hires can be dismissed at will and without having to provide any financial compensation, even if they break the “fixed term” or the laid-off workers have been in their employ for years.
The rightwing Economic Times hailed the change, saying it would enhance India’s “ranking” in the World Bank’s “ease-of-doing-business” rankings and attract investment.
Federation of Indian Chambers of Commerce and Industry (FICCI) President Rashesh Shah joined Finance Minister Arun Jaitley and other government spokesmen in perversely touting this measure, which is aimed at enhancing employer-power and gutting any semblance of job security, as a boost to employment. “Since the provisions under the existing labour laws did not provide such flexibility,” said the FCCI head, “industry had inhibitions in engaging extra labour to discharge timely commitments like export orders. The amendment will certainly remove this hurdle and employment generation will receive an impetus in the coming months.”
In pitching his “Make in India” campaign to big business, Indian Prime Minister and reputed “Hindu strongman” Narendra Modi has boasted about his government’s devotion to boosting investor profits and the huge wage differential that now exists between India and China, where industrial workers earn on average at least four times more than their Indian counterparts.
But fearing a popular outcry, the BJP government has tried, however implausibly, to promote the expansion of “fixed-term employment” to all sectors of India’s economy as a pro-worker measure. In addition to claiming that “labour flexibility” will boost employment, it has made much of the fact that companies can now hire workers on short-term contracts without having to use outside labour-contractors and that workers hired on “fixed-term” contracts are supposed to receive the same wages and, on a pro-rata basis, the same benefits (except severance benefits) as permanent employees.
These claims are completely spurious. First, the government has not prohibited employers from using labour-contractors and temporary work-agencies to hire “temp” or “casual” workers and pay them wage and benefits far below those paid their regular workers; it has simply broadened employers’ options for hiring workers who can be easily dispensed with. Second, the Indian Labour Ministry is notorious for failing to enforce minimum wage, health and safety and other work standards, making the legal guarantees of equal pay essentially meaningless.
The trade unions, including the BJP-affiliated Bharatiya Mazdoor Sangh (Indian Workers’ Union), have all condemned the regulatory change. But the unions will mount no serious struggle against it—just as they have sabotaged any resistance to the proliferation of contract-labour across industry, including in the still large state-owned sector.
The unions’ biggest complaints have been that they were not properly “consulted” and that the government ran roughshod over democracy in using a “gazette-notification” to effectively put an end to permanent employment.
The latter is of course true. As for the unions’ complaints about lack of consultation, not only do they underscore their eagerness to collaborate with the BJP government. They are disingenuous.
The unions in fact knew long in advance that the government was preparing such a measure. Several of them, including the BMS and the Congress Party-affiliated Indian National Trades Union Congress or INTUC, presented a joint submission with employer groups to the government about the impending expansion of term-employment through the Industry-Trade Union Dialogue Forum.
This forum was set up with the support of the previous Congress Party-led government, to foster union-management cooperation and suppress working class resistance in the aftermath of the state-employer offensive against the Maruti Suzuki workers. That offensive climaxed with the purging of the entire workforce at Maruti-Suzuki’s Manesar, Haryana car assembly plant, which had emerged as a center of resistance to precarious cheap-labour jobs, and the imprisonment for life of 13 workers on frame-up murder charges. The thirteen included the entire elected leadership of the newly-formed Maruti Suzuki Workers Union.
Both of the principal Stalinist-led labour federations—the Communist Party of India (Marxist)-affiliated Center of Indian Trade Unions and the Communist Party of India’s All-India Trades Union Congress—are founding members of the Industry-Trade Union Dialogue Forum and continue to participate in it. However, they stopped participating in the forum’s discussions on “term employment” for fear of being identified with so reactionary a measure.
“I attended one meeting initially, but then I decided not to go as I found it to be an employer-centric platform,” CITU General-Secretary Tapan Sen told the Business Standard.
The Stalinists are well aware that there is seething discontent in the working class. While the corporate media and political establishment celebrate India’s purported “economic rise,” the mass of the population confronts mass poverty and harrowing economic insecurity.
The top 1 percent of India’s population appropriates almost a quarter of all income and owns 60 percent of the country’s total wealth. Meanwhile, the government’s most recent “Annual Employment & Unemployment Report,” that for 2013-14, found no more than 16.5 percent of India’s workers are in non-precarious type employment, earning a regular wage or salary.
Over the past decade-and-a-half, the Stalinist unions and parliamentary parties have routinely called one-day national protest strikes against the ruling elite’s neo-liberal agenda. But they themselves have played a decisive role in implementing this agenda. The Stalinists have propped up a succession of rightwing governments in parliament, implemented what they themselves call “pro-investor” policies in the states where the Left Front has held office, and systematically isolated and sabotaged worker struggles.
The Stalinists’ real attitude toward the growing resistance in the working class is exemplified by their complete abandonment of the jailed Maruti Suzuki workers.
On April 2, the Stalinist-led CITU and 15 other unions held a one-day general strike in the southern Indian-state of Kerala to protest the new fire-at-will regulation. The protest was actively supported by Kerala’s state government, which is led by the Stalinist Communist Party of India (Marxist).
According to press reports, the strike paralyzed economic activity and transport in the state. But while workers’ opposition was genuine, on the part of the Stalinists the strike was a political stunt aimed at boosting their tattered “left” credentials.
Only days later, at its triennial national congress, the Communist Party of India (Marxist) or CPM voted to remove all obstacles to forming an electoral alliance with the Congress Party, till recently the Indian bourgeoisie’s preferred party of government, in the 2019 national elections.
Big business, meanwhile, is urging the BJP government to press forward with its plans to further dismantle what little protections exist for Indian workers, in the name of streamlining several dozen national labour laws into just four. In its bi-annual world economic outlook, released last month, the IMF urged India’s government to further “ease labour market rigidities.”