14 Jan 2021

Warning that Wall Street bubble may burst

Nick Beams


The Wall Street surge, which last year saw hundreds of billions of dollars poured into the coffers of the financial oligarchy making Tesla chief Elon Musk the world’s richest man, has continued into the new year. So far this month the Dow has hit a record high three times.

Not even the events of January 6, when fascist forces at the urging of President Trump stormed the Capitol building in the attempt to carry out a coup, could halt its rise.

Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

Amid the rising death and infection toll from the COVID-19 pandemic, the chief reason for the market surge, since the market plunged in mid-March, is the knowledge that any serious downturn will see the Fed intervene with billions of dollars to prop it up. The Fed has is already pumping in $120 billion a month—more than $1.4 trillion a year—and has pledged to keep interest rates at near-zero for the indefinite future.

A new factor has now entered into market calculations. It is anticipated that a Biden administration, assuming it takes office, will provide a further boost with increased stimulus packages to aid the corporations.

The nomination of former Fed chief Janet Yellen as Treasury secretary, regarded as a friend of Wall Street in her time at the central bank and the recipient of more than $7 million in speaking fees from major financial firms in 2018 and 2019, has been another boost for markets.

But concerns are starting to be voiced that the orgy of speculation, literally feeding off the death and destruction of the pandemic because of the actions of the Fed, could end in a major crash.

There has been commentary in the financial media over the warnings issued by Jeremy Grantham head of the investment firm GMO that the speculative bubble could be about to burst.

In a comment posted on January 5, he wrote: “The long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme over-valuation, explosive price increases, frenzied issuance, and hysterically speculative investment behaviour, I believe this event will be regarded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929 and 2000.”

Grantham pointed to a number of indicators in support of his warning. He noted that one of the features the last stages of all previous bubbles was “really crazy behaviour.” In the first ten years of the latest bull-run “we lacked such wild speculation” but “now we have it in record amounts.”

Another indicator is the record number of initial public offerings (IPOs) this year as start-up companies seek to jump on the stock market escalator by going public. In 2020 there were 480 IPOs, compared to 406 in 2019. One of the most significant features was that 249 of these were special purpose acquisition companies (SPACs). These are shell companies set up to take over another company which is looking to come onto the share market, enabling it to bypass the usual, sometimes lengthy procedures involved in a traditional IPO.

An even better measure of “speculative intensity” than the prevalence of SPACs, he wrote, was the character of the present bull market, which made it totally different from any previous bubble that all took place when the underlying economy appeared to be enjoying rapid growth.

The present-day “wounded economy” was “only partly recovered, possibly facing a double-dip, probably facing a slowdown, and certainly facing a very high degree of uncertainty.”

While the price-earnings ratio in the stock market is in the top few percent of the historical range, he noted, the economy is in the worst few percent. “This time, more than in any previous bubble, investors are relying on accommodative monetary conditions and zero real [interest] rates extrapolated indefinitely.”

While the markets have received a boost from the prospect of increased spending from a Biden administration, this is something of a two-edged sword. Increased government spending means an increased issuance of government bonds thereby tending to bring about a fall in their price and a rise in their yield or interest rate.

There are signs of this phenomenon with the interest rate on the 10-year US Treasury bond rising to above 1 percent for the first time in months.

This is being hailed in some quarters as evidence that investors expect there will be a revival of economic growth and profits. That might have been the case in days gone by when financial markets bore some relation to the underlying real economy. But this is not the case now because corporate profit is increasingly dependent on the maintenance of ultra-low interest rates to prevent a rise in their debt burden and to finance their increasingly speculative operations such as share buybacks.

If the yield on 10-year Treasuries continues to rise, pushing up the cost of money throughout the economy, the Fed will move to intervene with further bond purchases, lifting their price, and keeping interest rates down. It has already been discussing so-called yield curve targeting in which it intervenes to keep the interest on selected bonds within a target range.

The massive increase in debt, both corporate and government, has meant that financial markets are extremely sensitive to even small rises in interest rates. According to one estimate, a 1 percentage point rise in interest rates today would have the same impact as a 3 to 4 percentage point rise of 20 years ago.

The only way that further money can be handed out to the corporations, without provoking an interest rate rise, is for the Fed to buy up the new government debt as it is issued—a further stateisation of the economy and the financial system for the benefit of speculators and the super-rich.

The present situation is the outcome of long-term trends in US economy. As the editor of the Financial Times, Rana Foroohar, noted in a recent comment: “Low interest rates have encouraged a massive flood of debt, little of which is productive. Since 1980, total US debt rose from 142 percent of gross domestic product to 254 percent in 2019.”

She cited research by economist Atif Mifan who noted that, if all this additional credit had been used for productive purposes, “we should have seen an explosion of investment. Instead, the investment share of national output declined from an average of 24 percent during the 1980s to 21 percent during the 2010s.”

This signifies that an increasing amount of debt has been used for speculative purposes such as share buy backs, once regarded as rigging the market but now standard practice for major banks and corporations, as well as the financing of mergers and acquisitions.

Mifan also noted that the rise in finance despite stagnation could “only be understood in light of arguably the most important ‘structural break’ in American society: the rising share of income going to the top 1 percent.”

That is, the financial house of cards is the outcome of the institutionalisation of financial mechanisms through which increasing amounts of the wealth of society is transferred to its upper echelons.

Herein lie the objective roots of the fascist coup attempt launched by Trump and the Republican party. As the WSWS perspective of January 7 explained: “Above all, workers must understand that the disintegration of American democracy is rooted in the crisis of capitalism. In a society riven by staggering levels of social inequality, it is impossible to preserve democracy.”

Democracy can therefore only be maintained through the mobilisation of the working class on the basis of a socialist program as the only antidote to the growing fascist threat.

Over 600,000 dead from coronavirus in Europe

Will Morrow


More than 600,000 people have died of coronavirus in Europe, according to the official statistics tabulated by Worldometer, which includes Russia in its count. The continent surpassed the horrific marker earlier this week.

Every three weeks another approximately 100,000 people are dying from the virus on the continent. The total of 300,000 deaths was passed near November 10; 400,000 at the end of that month; and half a million three days before Christmas.

A woman wearing a face mask to help curb the spread of the coronavirus rides a subway car in Moscow, Russia, Monday, Jan. 11, 2021. (AP Photo/Alexander Zemlianichenko)

More than one in 1,000 people alive in Europe at the beginning of 2020 have died from the coronavirus. Per million people in the population, the number of dead is over 1,700 in Belgium, 1,477 in Slovenia, 1,330 in Italy, 1,245 in the UK, 1,131 in Spain. Another 1,060 people were reported dead in Germany in the past 24 hours, bringing the country’s death toll to 43,203.

These numbers are a significant underestimate of the real number. In Spain, the official death toll is 52,878, but the number of “excess deaths” above the historical norm—a better indication of deaths due to the pandemic—is 83,700.

Yet scientists are warning that the pandemic is entering into an even more catastrophic stage than anything that has preceded it. It is propelled by the rapid spread of the new, more contagious variant identified in September in the UK, and consciously facilitated by the criminal policies of European governments. Even as health care systems are being overwhelmed, schools and non-essential workplaces are being kept open, despite their role as transmitters of the virus, to ensure that no amount of death prevents the smooth and profitable functioning of business.

The clearest warning of what is being prepared can be seen in the UK. Yesterday set a new record of 1,564 deaths. In a country the size of the United States, this would have meant more than 7,700 deaths in 24 hours. Another 47,525 new cases were reported over the same period.

The new strain of the virus is now the dominant one in the UK. In Ireland, where the new variant was first detected for the first time on Christmas Day, new cases have skyrocketed from 250 confirmed cases per million people at the beginning of the year to over 1,200 now, a five-fold increase in the space of two weeks.

Across Europe, variants identified in the UK, South Africa and Brazil have been detected in over a dozen countries, yet it remains unknown to what extent it has already established itself throughout the population.

France gives a particularly clear example of the authorities’ failure to track the spread. The first case of the UK variant was detected in Tours at the end of December. As late as the second week of January, media reports on the number of detected cases indicated that there were between 10 and 20 confirmed such cases. On January 12, Olivier Véran, the health minister, spoke before the National Assembly and reported that the new strain contributed to “approximately one percent of the 100,000 tests conducted in France.”

Yet this appears to be a significant underestimate, and varies greatly according to location. Patrice Hérisson, regional director of the medical laboratory Cerballiance in Saint Denis, near Paris, told Le Parisien on Tuesday that “10 to 15 percent of our positive cases in Île-de-France are identified as suspected English variants.”

Laurent Kbaier, a biologist with the testing lab Biogroup, told the daily that “out of 826 positive PCR tests on Thursday and Friday at our laboratories in Ile-de-France, we found 74 suspected cases of the English mutant,” slightly less than 10 percent.

Philippe Froguel, a professor of genomics at Imperial College London and in Lille, France, told the Financial Times Monday that it was likely the variant was well established in France. He said that by February, “I’m afraid we’ll be in exactly the same situation as the UK with 50-60,000 new cases a day and a large number of dead.”

The variant has also been detected in Belgium, which saw a 76 percent increase in the seven-day case total to last Thursday compared to the previous week in the capital Brussels.

In Valencia, Spain, two patients with no connections to the UK were tested positive for the variant last week, demonstrating that community transmission is taking place. “It’s clear that there is community transmission, but we don’t know at what level,” Fernando González Candelas, a genetics researcher in Valencia, told the FT.

On Wednesday, EU health commissioner Stella Kyrikides declared that Europe “cannot be complacent” toward the new strain. “We cannot let it get out of hand. So we are ready to help member states in the area of genomic sequencing of samples. There is no way around this.”

Yet not only have European governments allowed the virus to develop “out of hand,” they are consciously pursuing policies that will allow a further uncontrolled spread of the virus. They are determined to keep schools open in order to allow parents to continue to work. Wherever schools have been forced to close, as in the UK, it has only been due to the action of educators or the government’s fear of popular opposition of teachers, parents and students to the de-facto policy of herd immunity.

In France, schools remain open, even though scientists have warned that the new strain appears to be particularly contagious among youth. On social media, French teachers have reported that even when there is a confirmed case among students, they cannot send children home for testing. “We can’t send them home if they are a contact case to get tested,” Laeti commented on the “Stylos Rouges” Facebook page. “For us children under 11 years old are not considered as at-risk contacts,” added Jucilou.

Yesterday, the Portuguese government announced a general lock-down, which it said would be the same as that imposed in April, with the exception that all schools are to remain open.

Last week, in the Westphalien town of Kamen, a 44-year-old educator died following an outbreak in a daycare centre. According to the Robert Koch institute, five educators have died from coronavirus since December in Germany.

If left in the hands of the capitalist governments across Europe, the result will be hundreds of thousands of further unnecessary deaths. Their policy of death must be countered by the unified struggle of the working class across Europe. Schools and non-essential workplaces must be closed, with living wages provided to everyone, and full compensation provided to small businesses.

Trump administration fuels tensions with China over Taiwan

Peter Symonds


Amid the ongoing coup threat and political turmoil in Washington, Secretary of State Mike Pompeo, a loyal Trump supporter, has provocatively ramped up tensions with China over Taiwan, one of the most dangerous flashpoints in Asia.

Last weekend, Pompeo announced a sweeping shift in diplomatic protocols in dealing with Taiwan, giving the green light for lifting all restrictions on contact between Washington and Taipei. The move is another step to overturning the One China policy under which the US has de facto recognized Beijing as the legitimate government of all China, including the island of Taiwan, and has limited contact with Taipei.

Taiwanese President Tsai Ing-wen, center, walks to her inauguration ceremony in Taipei, Taiwan, Wednesday, May 20, 2020 (Taiwan Presidential Office via AP)

In his statement, Pompeo called Taiwan “a vibrant democracy and reliable partner” of the US and declared that interaction with Taipei was hamstrung by “complex internal restrictions.” He announced the lifting of “all of these self-imposed restrictions,” which he claimed were “an attempt to appease the Communist regime in Beijing.” All “contact guidelines” issued by the State Department were “to be null and void.”

What Pompeo described as the appeasement of Beijing flowed in fact from the shift in US foreign policy that was marked by President Richard Nixon’s visit to China in 1971. The rapprochement with the Chinese Communist Party was a quasi-alliance aimed at isolating and confronting the Soviet Union that also laid the basis for the subsequent restoration of capitalism in China. The establishment of diplomatic relations between Washington and Beijing in 1979 was based on the One China policy, although the US continued to oppose any forcible Chinese takeover of Taiwan and continued to supply it with arms.

Over the past decade, first under the Obama administration and since intensified under Trump, the US has mounted an aggressive, across-the-board effort to undermine China diplomatically and economically, and has engaged in a massive military build-up throughout the Indo-Pacific region. No longer regarded in Washington as a useful strategic partner, China is now viewed as its chief rival and threat to US global domination.

From the outset of his administration, Trump openly called the One China policy into question, declaring that he would overturn it if China did not bow to his trade demands. Trump’s administration has ratcheted up tensions with Beijing across a range of issues from US naval provocations in the South China Sea and the Taiwan Strait, to trade war measures. This has included the development of closer military and diplomatic ties with Taiwan, which is regarded by the Pentagon as a critical element of any US war with China.

In a landmark speech last July, Pompeo effectively overturned three decades of US foreign policy, declaring that “the old paradigm of blind engagement with China” had to be replaced by a strategy whereby “the free world must triumph over this new tyranny.” Most significantly, he ruled out any return to the Cold War policy of “containment,” thus implying that all means, including war, were to be used in combating China.

The significance of Pompeo’s abrogation of previous US diplomatic protocols with Taiwan was not lost in Beijing. “Any actions which harm China’s core interests will be met with a firm counter-attack and will not succeed,” foreign ministry spokesman Lijian Zhao told reporters on Monday.

The US had already announced that its ambassador to the UN, Kelly Craft, would make a three-day trip to Taipei this week. Craft herself publicly lunched last September with James K.J. Lee, director of the Taipei Economic and Cultural Office in New York, Taiwan’s de facto embassy, and described the meeting as “historic.”

In a statement last week, the Chinese mission to the UN warned that the US “will pay a heavy price for its wrong action,” referring to the trip. “China strongly urges the United States to stop its crazy provocation, stop creating new difficulties for China-US relations… and stop going further on the wrong path,” it stated.

On Monday, the US ambassador in the Netherlands, Pete Hoekstra, pointedly hosted Taiwan’s representative to the country at the US embassy, in the first such contact since Pompeo announced the end of restrictions. In a tweet, Hoekstra boasted: “Made some history today: Welcomed Taiwan Representative Chen to our Embassy,” accompanied by pictures of the two of them.

However, with Craft due to fly to Taipei yesterday, the trip was called off at the last minute, along with a planned visit by Pompeo to Europe. Craft would have been the third high-level US official to visit in recent months. US Health Secretary Alex Azar visited Taipei last August, becoming the most senior American official to do so in over three decades.

State Department spokeswoman Morgan Ortagus declared in a statement that all planned travel had been cancelled citing the need to plan for the transition to a new Biden administration next week. The cancellation of trips undoubtedly has much more to do with the political chaos in Washington, under conditions where Trump refuses to declare defeat, sections of the Republican Party still falsely claim that the election was stolen and fascistic Trump supporters continue to plot to keep him in power.

Pompeo’s trip was called off amid concerns that he would receive a very cold welcome in Europe. One of the legs of the trip was to be Luxembourg whose foreign minister Jean Asselborn had declared on RTL radio that Trump was “a criminal” and a “political pyromaniac who must be brought before a court.” Citing unnamed US officials, Reuters reported that Pompeo’s visits to Brussels and Luxembourg were called off after Asselborn and EU officials refused to schedule meetings with him.

The Taiwanese government was publicly supportive of Craft’s trip, which under other circumstances would have been hailed as a diplomatic victory over Beijing. However, given the uncertainty over who will occupy the White House next week, the visit could potentially complicate relations with the US if Biden is finally installed.

While tactics might change under a Biden administration, there will be no let-up in the US confrontation with China. Biden, who served as vice president in the Obama administration, was a crucial element of its bellicose “pivot to Asia” against China that laid the foundations of Trump’s trade war and provocations against Beijing. Biden has already indicated that he will not immediately reverse the sweeping US trade sanctions on China.

In a further indication of his stance towards China, as reported in the Financial Times, Biden is to appoint Kurt Campbell to a powerful, newly-created position of Asia policy coordinator. Campbell, as assistant secretary of state of Asia and the Pacific in the Obama administration, played a central role in planning and implementing the “pivot to Asia” and will undoubtedly pursue an aggressive course towards China.

Australia: Highly infectious strain of COVID spreads in Queensland hotel quarantine

Oscar Grenfell


Over the past day, four new cases of the highly-infectious B117 variant of COVID-19 have been discovered among returned travelers in Brisbane hotels, sparking fears of a broader spread of the virus and again highlighting the inadequate character of the quarantine system in Queensland and across the country.

Last week, Queensland authorities revealed that a young cleaner who worked in the quarantine at Brisbane’s Hotel Grand Chancellor had contracted the new iteration of the virus. BII7 is up to 70 percent more infectious than other forms of COVID-19, and has driven the massive surge of cases and deaths in Britain that threatens to overwhelm that country’s hospital system.

Ambulances outside Brisbane's Grand Hotel Grand Chancellor this week (Credit: ABC News. Marc Smith)

The Queensland Labor government responded to the emergence of BII7 by instituting a three-day lockdown of greater Brisbane that spanned from Friday to Sunday evening.

Given that the coronavirus incubation period is 14 days, the measure was manifestly inadequate. It was timed not to include any business days, so as to ensure the minimum impact on profit-making operations. The lockdown was concluded as scheduled, even as medical experts warned that the new strain could be circulating in the community, without yet being detected.

Shortly after the minimal restrictions were lifted, the cleaner’s partner tested positive, having previously returned a false negative. Then yesterday, a further four cases at the Hotel Grand Chancellor were identified among returned travelers.

While the numbers are low, chains of transmission have not been determined and hundreds have potentially been exposed. It is still not known how the cleaner initially contracted COVID-19. Health authorities have said it is likely there is a direct link between her infection and those of the returned travelers, but have been unable to definitively confirm this.

The result has been a shambles. People who had left the hotel since December 30 were suddenly instructed to get tested and to return to quarantine for another 14 days of isolation. The figure of those affected was initially placed at 250 but was revised down today to 147.

At least ten of them had already returned to the neighbouring state of New South Wales, which has been hit by a series of clusters over the past month centred in Sydney. Another 18 had travelled to Victoria, which in July was struck by the largest surge of the pandemic in Australia to date, resulting in more than 750 deaths and a months-long lockdown.

Those who were set to leave the Hotel Grand Chancellor will also be compelled to begin their two-week period anew. Some 220 staff have also been sent into isolation as the facility has been closed for deep cleaning and its occupants moved to other hotels.

Travelers said that yesterday, before they were moved out of the Grand Chancellor, the hotel was surrounded by dozens of police officers. They told the media that they were provided with hardly any information ahead of time.

A further four cases were announced today by Queensland authorities among returned travelers from South Africa and the United States. Indicating the stain that is being placed on the broader quarantine system, they are reportedly not linked to the Grand Chancellor and were identified at other hotels.

The infections, and the possibility of broader transmission, have shown that a year into the pandemic, hotel quarantines continue to be grossly inadequate.

The quarantine program in Victoria was one of the drivers of the July outbreak. Its operation was outsourced to private security companies, who employed low-paid casual workers without any medical training or expertise.

While governments proclaimed that the lessons of that debacle would be learnt, it is clear that many of the practices that contributed to the Victorian wave persist. Today, it was confirmed that hotel quarantine staff in Queensland are permitted to work multiple jobs, meaning that infections can be spread between hotels and into the broader community. This is clearly not best medical practice. Its sole purpose is to ensure that contractors can employ workers on a precarious contract or casual basis to slash their costs.

For months, epidemiologists have warned against placing private hotels, which are not equipped for major medical operations, on the frontlines of the pandemic.

In every state, the facilities chosen have been in the centre of the largest urban population centres, meaning that breaches threaten entire cities. The maintenance of the program has been dictated by the refusal of governments to devise safer alternatives because they would be more expensive. It has also ensured a continuous stream of income for major hotel chains that otherwise would have been hit by the decline in travel, first from government subsidies, and then for most of the past six months from returnees who have been compelled to pay for their own quarantine.

Moreover, only last Friday, at a meeting of the national cabinet, did state and federal government leaders institute basic safeguards, including a requirement for oversees travelers to be tested before departure and to wear a mask during their travel, and for hotel quarantine staff to be regularly tested.

Pointing to the limited character of infection controls in the hotels, Queensland Labor Premier Annastacia Palaszczuk said yesterday, regarding the source of the Grand Chancellor outbreak: “Was it in the air conditioning? Was it movement? Was it picking up something? We just don't know those answers yet.”

The dangers of airborne transmission, compounded by inadequate ventilation, have been known about for months.

Professor Marylouise McLaws, an infectious disease expert at the University of New South Wales, told the Australian Financial Review that “Quarantine hotels are not designed as hospital wards, which demand high 100 percent hourly fresh airflow change at a World Health Organisation-recommended rate of 12 full changes per hour.” The rate in a hotel would likely be closer to four-to-six airflow changes an hour, “So this is low if there is a COVID-infected traveler in a room or several of them on a floor.”

Only now has the Queensland Labor government indicated that it is looking at alternatives, including a possible transfer of quarantines to work camps in regional and rural areas. Details, however, have still not been provided, meaning it is possible that nothing has been concretely planned.

At the same time, police are involved in the investigation into the Grand Chancellor outbreak. During each rapid spread of the virus, governments have sought to scapegoat ordinary people, by insinuating or openly claiming that guidelines have been breached, often without any evidence.

The quarantine crisis, and the potential spread of the new strain into New South Wales and Queensland, comes as politicians and the corporate press again seek to minimise the dangers of the pandemic.

The New South Wales Liberal government has claimed that it is now “mopping up” the remnants of a cluster that originated in Sydney’s Northern Beaches, in an attempt to present the threat of last month’s outbreak as a thing of the past. New infections are continuing to be identified across Sydney’s working-class suburbs and in the inner-west, along with dozens of possible exposure sites.

NSW Premier Gladys Berejiklian, whose government has rejected calls for lockdowns amid the current outbreak, again denounced any strategy aimed at eliminating COVID-19 transmission in response to the new variant. Such attempts were “not realistic” for a “trading nation,” and it was necessary to “live with the virus.” Editorials in the financial press similarly railed against the “cult of elimination.”

Innes Willox, head of the Australian Industry Group, declared that “total elimination strategies only serve to crush and kill investment and job creation… With many businesses now returning to full operations after the holidays, there is an urgent need for state governments to resist broad lockdown options.”

The comments, featured in the Murdoch-owned Australian newspaper, were directed against the Victorian government’s maintenance of some border restrictions, including an ongoing block on travel from Sydney to Melbourne, under a new “traffic light system.”

Those measures have been accompanied by calls from some premiers, including Western Australian Labor leader Mark McGowan, for a greater bid to prevent transmission in New South Wales, amid the emergence of the more virulent strain. McGowan and others who have echoed his calls are speaking for sections of the establishment fearful of the political and economic consequences of a possible mass outbreak, as in Europe or the US.

The response from Berejiklian and the business press again demonstrates that the dominant layers of the ruling elite are committed to preventing lockdown measures, however minimal and necessary, if they in any way impede the operations of the largest businesses. The same calculations that have led to disaster abroad, based on the subordination of health and safety to workers’ safety and lives, are at work in Australia.

13 Jan 2021

Global food prices rise could spark social unrest, UN warns

Jean Shaoul


December saw global food prices reach a six year high, with analysts expecting prices to continue to rise in 2021, fueling inflation and adding to the pressure on families as hunger surges throughout the world.

This is particularly acute for the world’s poorest countries that are teetering on the brink of debt default, have no money to buy or subsidise food and little or no social safety net to cushion the blow to family budgets.

The United Nation’s Food and Agriculture Organisation’s (FAO) food price index has risen 18 percent since May as dry weather has affected crops around the world; conflicts and the pandemic have impeded food production and distribution; governments stockpile supplies; hedge funds and other speculators have bought food commodities and demand rises with the reopening of the economy.

Abdolreza Abbassian, a senior economist at the United Nation’s Food and Agriculture Organisation (source: FAOVideo-YouTube)

Abdolreza Abbassian, a senior economist at the FAO, said, “Food inflation is a reality. While people have lost income, they are as we speak going through a tremendously difficult hardship… The real impact is the access to food. People have lost their income. There are a lot of unhappy people and this is a recipe for social unrest.”

While prices have not yet reached the levels that in 2008 led to people dying of starvation and food riots, brought down the Haitian government and contributed to the 2011 Arab Spring, the upward trend in prices for basic food staples has potentially revolutionary implications amid a growing social, economic and political crisis of global dimensions.

Abbassian said, “If [people] realise the vaccine won’t solve the problems in the near term and they don’t have food, then things could get out of control. Although I still doubt we will hit those [previous] peaks, we will see volatility in the coming year.”

The world grows enough food to feed more than 9 billion people, far more than the current population of 7.6 billion, although up to one third is wasted through harvesting, distribution, storage and transportation. The threat comes from the “free market” and rising prices.

Soya beans, crucial for livestock feed and vegetable oil, are trading at $13 a bushel and palm oil, used in about half of all supermarket goods, is seeing its highest price in nearly 10 years. Corn is at a six-year high, while wheat is trading at more than $6 a bushel, due to dry weather in Russia, the world’s leading wheat exporter, and restrictions on grain export to limit domestic food inflation. Grain prices have risen in South America where Brazil and Argentina have been hit by hot dry weather, prompting the Argentinian government to suspend corn-export licences.

Tunis’ Central Market (credit: photo by Christopher Rose, flickr)

Rice prices have also risen after south east Asian countries threatened to limit exports as the pandemic hit production, while congestion at ports and a shortage of shipping containers as many remain stranded in the wake of the pandemic have caused some shipping durations to double and freight prices to soar.

Such is the anarchy of the market and the indifference of the financial oligarchs to anything other than their own interests that governments that have been able to do so have been shoring up their food supplies, setting in motion a ferocious national competition, adding to demand and fueling price rises. To cite one example, after releasing its grain and rice reserves to limit price increases during the pandemic, China has been restocking leading to forecasts that its imports for 2020-21 will triple from 7 million tonnes to 22 million.

Even before COVID-19 pandemic slashed incomes and disrupted supply chains, chronic and acute hunger were widespread and rising. In 2019, the number of severely undernourished people was nearly 750 million, or almost one in ten people on the planet, the majority living in South Asia and Sub-Saharan Africa. This number rises to nearly 2 billion if those “moderately” undernourished are included.

While the UN had predicted hunger rising to 841 million people by 2030, this is expected to be closer to 909 million in the wake of the pandemic. This last year has seen a huge increase in global food insecurity, affecting the poorest and most vulnerable households in almost every country, including the richest.

According to a US Department of Agriculture survey last April, at the start of the pandemic as food supplies were disrupted and tens of millions lost their jobs or were temporarily laid off, more than 17 percent of mothers with young children said their children weren’t getting enough to eat because they couldn’t afford the food. Feeding America, the US’s largest hunger-relief organisation, estimated that more than 50 million people could experience food insecurity, or one in six Americans and one in four children—nearly a 50 percent increase from 2019—by the end of 2020.

Food insecurity in Asia, Africa, the Middle East and Latin America has increased, with UNICEF, the UN agency responsible for providing humanitarian and developmental aid to children worldwide, predicting that 10 million people will experience acute malnutrition this year. Food costs had increased by more than 10 percent in some countries as the COVID-19 pandemic disrupted supply chains and food production.

UNICEF warned that acute malnutrition for children will escalate in the Sahel, the Democratic Republic of the Congo, north-east Nigeria, Yemen and South Sudan and appealed for $1 billion more to tackle malnutrition in 2021.

The UN’s World Food Programme (WFP) predicted that the pandemic would cause food insecurity to increase by 80 percent, affecting 270 million, more than the entire population of Western Europe, meaning they were on the brink of starvation.

Its Cost of a Plate of Food 2020 Report estimated per capita average income across 36 countries and calculated the percentage of income people must spend for a basic meal, some beans or lentils for example, and a carbohydrate matching local preferences and compared the price someone in New York might pay with the price in a so-called developing country.

The WPF found that since the start of the pandemic, the daily income spent on food by someone living in South Sudan has risen 27 points to a staggering 186 percent of income. This takes place in the wake of the pandemic and the conflict in the east that has displaced more than 60,000 people and is crippling harvests and livelihoods that together have created the threat of famine. If New Yorkers paid the same proportion of their income on a similar basic meal, it would cost US$393. Seventeen of the top 20 countries paying the most are in sub-Saharan Africa.

David Beasley, the WPF’s executive director, said, “People in urban areas are now highly susceptible too, with COVID-19 leading to huge rises in unemployment, rendering people powerless to use the markets they depend on for food. For millions of people, missing a day’s wages means missing a day’s worth of food, for themselves and their children. This can also cause rising social tensions and instability.”

Food deprivation on such a massive scale exists alongside unprecedented wealth concentrated at the heights of society. Since the beginning of the pandemic, the world’s 500 richest individuals have increased their wealth by $1.8 trillion, while the world’s billionaires now control more than $10 trillion dollars in wealth. The WPF requires $13 billion to deliver food in 83 countries but has a shortfall of $4.9 billion for the rest of the year, a sum that would save 30 million people from famine.

The response of the working class must be to develop an independent political movement to expropriate this wealth and use it in the interests of society, instead of the selfish interests of the ruling class. This is the programme of socialism.

Pakistan: Eleven miners killed in sectarian attack buried following week of protests

Sampath Perera


Eleven coal miners from Pakistan’s Shiite Hazara minority were brutally killed in a sectarian attack Sunday, January 3.

The latest atrocity against this oppressed minority triggered protests in Quetta and Karachi, while the families of the miners refused to bury their dead for an entire week. They demanded that Pakistan Prime Minister Imran Khan meet with them and end Islamabad’s indifference towards widespread violence against the Hazara.

In a demonstration of pent-up frustration and anger, the Hazara protesters in Quetta kept the miners’ coffins on a highway despite the Muslim tradition of burial within 24 hours. Following week-long continuous protests amid bitterly cold temperatures, the miners’ funerals were held on Saturday after Prime Minister Imran Khan agreed to meet the protesters the same day.

People attend the funeral prayer of coal mine workers who were killed by gunmen near the Mach coal field in Quetta, Pakistan, Saturday, Jan. 9, 2021. (AP Photo/Arshad Butt)

The heinous crime took place in Mach, a mining town about 30 miles southeast of Quetta, the provincial capital of Balochistan. In the early hours of January 3, gunmen woke up sleeping miners in a shared residence room near a coal mine, identified and separated the Shiite Hazara workers among them, blindfolded and tied their hands and feet, then slit their throats and shot them. Six died on the scene, while the others succumbed before they could reach a local hospital.

The Islamic State has claimed responsibility for the barbaric attack, which was aimed at terrorizing the Shiite Hazara community and intimidating other minorities in Pakistan.

However, they are far from the only culprits. If sectarian attacks on minorities, some of which have claimed the lives of scores, even hundreds, of people including women and children, are a regular occurrence in Pakistan, it is due to the longstanding promotion of communal animosity and Islamist reaction by the country’s venal ruling elite. Moreover, this is inextricably bound up with Pakistan’s reactionary partnership with US imperialism.

The Hazaras are an impoverished and persecuted minority in both Pakistan and Afghanistan. In Balochistan, because of repeated deadly attacks they are largely forced to reside in two fortified ghettos in Quetta.

The miners’ killings predictably became the occasion for routine condemnations of Islamist terrorism by the political establishment in Islamabad. Khan condemned it as “yet another cowardly inhumane act of terrorism,” in a Twitter message. Balochistan Chief Minister Jam Kamal Khan received numerous angry complaints after he posted a crudely crafted message, consisting of only a few words, which condemned the incident, but denied any responsibility for the state’s failure to protect the Hazara. Many of those who responded demanded that he step down.

On Friday, while the protesters were continuing to blockade the highway and refusing to bury their dead, Imran Khan issued a testy warning to the protesters not to “blackmail” him.

In response to Khan’s arrogant remarks, Amna Bibi, who lost both her son and brother in the attack, told Al Jazeera, “We are only calling him to come here and look at our martyrs’ bodies so he can understand that every year we have more martyrs. That’s the only reason. Because we voted for him, this is our right,”

When Khan arrived in Quetta on Saturday, family members and community leaders complained to him about their precarious existence, living under constant threat of attack. “This time you will see that it is different,” Khan assured them. He promised his government would “look after” the impacted families and provide security to the community.

Those responsible for previous attacks have hardly faced any consequences. In this case, as in many others, no arrests have been made. In May 2018, Army Chief General Qamar Javed Bajwa promised enhanced security for Hazara in Quetta. Bajwa was attempting to appease protests that continued for five consecutive days following a series of targeted killings of Hazara. However, neither targeted killings, nor large-scale attacks ceased. In April 2019, for example, 20 people were killed and 48 injured in Quetta in a bomb attack targeting Hazara.

Leaders of the two main opposition parties, the Pakistan People’s Party (PPP) and Pakistan Muslim League-Nawaz (PML-N), also issued pro forma condemnations of the miners’ murder. In addition, they exploited Khan’s “blackmail” remark to claim that a government headed by their parties would be different. In reality, the PPP and PLM-N are long-standing representatives of Pakistan’s bourgeoisie, having held office for multiple terms prior to Khan’s Tehrik-e-Insaaf (PTI) coming to power in 2018. They have a long record of promoting and conniving with communalist forces and are staunch supporters of the partnership between the military and Washington, and thus share responsibility for the plight of the Hazara and other minorities in the country.

A report by the National Commission for Human Rights in Pakistan in 2018 revealed that 509 Hazara were killed and 627 injured in sectarian attacks between January 2012 and December 2017. The PML-N and PPP’s newfound concerns for Hazara can only be understood in the context of their ongoing efforts to force Khan to step down and call new elections.

Khan himself is a right-wing Islamist. He has been a champion of Pakistan’s draconian blasphemy laws and supported the disenfranchisement of the several-million-strong Ahmadi religious minority. Soon after assuming office, his government bowed to violent protests led by the Tehreek-e-Labbaik Pakistan (TLP) against the overturning of the death sentence imposed on Asia Bibi, an impoverished Catholic woman, for blasphemy. The government appealed the ruling to the country’s highest court.

The TLP, tacitly supported by the military, successfully secured the resignation of the previous PML-N government’s minister for law and justice, Zahid Hamid, after he attempted to amend the religious oath taken by election candidates.

Balochistan is occupied by the military as part of its brutal repression of Balochi separatist nationalist militias. Any opposition to its domination is met with enforced disappearances, torture and extra-judicial killings. However, the Islamist fundamentalists have been able to carry out attacks, including in Quetta.

The widely read English-language daily Dawn in its editorial on January 5 observed that “the state has long abandoned” the Shiite Hazara. Seeking to explain their plight, the editorial noted, “In a cynically calculated move, it [the state] decided to turn a blind eye to violent extremists’ depredations against the [Hazara] community in the province as long as these murderous groups also served to counter the Baloch insurgency that began during [General Pervez] Musharraf’s regime.”

While Dawn was compelled to acknowledge the criminal indifference of Islamabad towards the fate of the Shiite Hazara and its equally criminal security policies, the editorial nevertheless covered up Islamabad’s chief responsibility for the flaring up of sectarian violence in the country. This process is inseparable from its reactionary partnership with US imperialism.

On Sunday, Khan sought to shift responsibility for the attack on the miners away from the Pakistani elite and its promotion of sectarianism and Islamic reaction. Instead, he pointed the finger of blame at Pakistan’s arch-rival India. Boosted by its ever-deepening “global strategic partnership with Washington, New Delhi has intensified military pressure on Pakistan in recent years, including twice mounting provocative “surgical strikes” inside Pakistan.

Khan said that the “opinion” of his government and Pakistan’s security agencies is that “India is backing” the Islamic State. He claimed he had received intelligence as long ago as last March demonstrating that India wants to “inflame sectarianism” in Pakistan.

The Pakistani bourgeoisie has always sought to gain financial benefits and geopolitical influence by serving imperialist interests, while at the same time fostering communalism and religious fundamentalism to divert popular anger over its inability to meet the basic needs of the working class and toilers into reactionary channels. This pedigree is rooted in Pakistan’s very creation in 1947 as an explicitly Muslim state though the communal division of South Asia.

The coming to power of the US-backed dictator Zia-ul-Haq in 1977 marked a turning point, as he shifted politics sharply to the right during the 1980s under his policy of “Islamization” and, at Washington’s behest, extended logistical and political support to the Islamist Mujahideen in Afghanistan. This turn right rested on the foundation laid by the PPP government of Zulfiqar Ali Bhutto. Its 1973 constitution had granted significant concessions to the religious right, such as the declaration of the Ahmadis as non-Muslims, making the Muslim Sabbath a holiday, and outlawing alcohol.

A servile tool of US imperialism, Zia made Pakistan the linchpin of Washington and Riyadh’s efforts to nurture and arm the Mujahideen to fight the Soviet-backed government in Afghanistan. Not only did this result in the spawning of Al Qaeda and the Taliban, but also, under Islamabad’s patronage, in the growth of Islamist fundamentalist networks and militia within Pakistan, which were subsequently used as pawns in its geo-political maneuvers and to push politics domestically far to the right. The Islamists served as a bulwark against worker opposition to privatization and other pro-market reforms, and they were mobilized to attack the rights of women and push through the draconian, anti-minority “blasphemy” laws.

The US invasion and occupation of Afghanistan beginning in October 2001, together with Pakistan’s launching of war in the semi-autonomous Federally Administered Tribal Areas (FATA) along the northwest border with Afghanistan, had an explosive impact on simmering sectarian tensions. Like the US and its allies in Afghanistan, the Pakistani state used carpet-bombing, colonial-style collective punishments, kidnappings and extra-judicial killings to suppress pro-Taliban elements, while US forces terrorized the people of FATA with its own Predator-drone war.

Islamist fundamentalists sought revenge by turning their weapons on minorities, especially Shiite Hazara and Christians. The Tehrik-i-Taliban Pakistan emerged in FATA as a product of these wars and continues to fight the Pakistan military to this day. It has mounted some of the bloodiest attacks on minorities.

Sectarian tensions in Balochistan intensified when its geo-strategic importance was significantly boosted by the launch of the US$60 billion China-Pakistan Economic Corridor, centered around the Arabian Sea port of Gwadar. Balochi nationalist militants, oriented to gaining the support of US imperialism and the Indian bourgeoisie for their reactionary struggle to create a separate Balochi state, have also mounted violent attacks on Pashtun workers and other non-Balochi residents in Balochistan.

The slain Hazara workers shared a brutal working regime with tens of thousands of miners and equally oppressed workers across Balochistan. Mach alone is estimated to be home to 10,000 to 20,000 mine workers, including many children forced to work in the mines due to abject poverty. According to a February 2020 Guardian report, an adult worker makes about US$6.75 a day while a child makes only US$2.50. The mines are notorious for safety violations. One hundred to two hundred miners die in accidents across Pakistan every year.

Before it begins, COVID-19 vaccination in Turkey already a fiasco

Barış Demir


Even before its vaccination campaign has begun, Turkish President Recep Tayyip Erdoğan’s government and its murderous “herd immunity” policy are leading to a fiasco.

It was previously announced that vaccination would begin at the end of December, and that 20 million doses of vaccine would be available by the end of January. Health Minister Fahrettin Koca stated on January 7 that the government had made a definitive agreement for “50 million doses of inactivated vaccine” for a country of 83 million. He added that only a “first part of 3 million doses was delivered to the warehouses.”

After a cabinet meeting Monday, President Erdoğan declared that vaccinations would start on Thursday or Friday, but did not give any explanation why vaccination had not started yet.

Three million Sinovac vaccine doses, coming from China, have already arrived and will be Turkey’s main vaccine supply. As the WSWS recently pointed out, “Initial findings in a small study in Turkey show an effectiveness of 91.25 percent after a trial of 7,000 volunteers, and 78 percent in Brazil from a trial of 12,000.” On Monday, Indonesian officials announced 65 percent effectiveness for Sinovac trials in that country.

Minister Koca also said on January 8, “We held a meeting again today for a mRNA-based vaccine and reviewed the new supply plan. We have signed a deal for 4.5 million doses of guarantee and up to 30 million doses.” While it is believed that the mRNA-based vaccine in question is that of Pfizer/BioNTech, he did not state when the vaccine is to be delivered. Turkey has not made any deal with other vaccine producers whose products have been already started to use in many countries.

Thus, while Turkey needs about 160 million doses, it has ordered only 80 million. As of now, just three million doses have been supplied, and a mass vaccination process has not begun yet. Moreover, in the statements made by top government officials, there is no certain information when, how many doses, and for whom the vaccine will be available in Turkey.

Under these conditions, the vaccination of a pro-government singer named Alişan in a live broadcast caused great anger on social media. Professor Çağhan Kızıl, who works in the German Center for Neurodegenerative Diseases, tweeted: “In which ‘priority’ group is this person with a microphone in hand, while healthcare workers and those over 65 are not fully vaccinated yet? Which vaccine did he have?”

With the pandemic still out of control, as all over the world, experts and scientists in Turkey warn that COVID-19 will continue to be a danger for a long time. It is necessary to take full lockdown measures with full compensations to avert tens of thousands of unnecessary deaths before the vaccinations can take effect.

It is increasingly apparent that the announcement of an early launch of the vaccination campaign was made to provide justifications for relaxing or eliminating outright the limited restriction or lock-down measures taken in Turkey. The banks and the government would like to remove all such restrictions and reopen schools on February 15, as the semester begins, to force parents back to work.

Despite a dip in official figures following the lock-down measures, infections and deaths remain at an appallingly high level in Turkey. The daily number of cases has fallen to around 10,000 in recent days, down from 30,000. The official daily death toll also fell from a record 259 on December 23 to around 180.

To be blunt, however, there is no reason to trust figures from the now-discredited Health Ministry. Until recently, it refused to give accurate pandemic data, making an arbitrary, unscientific distinction between “cases” and “patients” to avoid reporting asymptomatic or lightly symptomatic cases as COVID-19 infections. Growing popular anger at this cover-up forced the state to announce a figure it claimed represented total cases starting in November.

The research team at London-based TotalAnalysis, which has been monitoring official COVID-19 data from over 200 countries since the outbreak of the pandemic, published the Covid Data Transparency Index (CDTI). On this Index Turkey is ranked 97th of 100 countries, after Serbia, Turkmenistan and North Korea.

It stated that “despite recent improvements, Turkey’s data does not correspond to international standards so it is difficult for the general public to draw meaningful comparisons—for example, the table includes a daily ‘rate of pneumonia in patients’ but excludes global ratios such as positivity and fatality rates.”

With the priority of governments internationally concentrated on saving profits, not human lives, vaccine roll-outs are marred by chaos and incompetence all over. As the WSWS stated before, “As the coronavirus pandemic continues to spread out of control throughout the European continent, the program of vaccination organized by the European Union is already widely recognized to be a debacle.”

As of January 5, France has vaccinated only 5,000; Italy, 260,000; Spain, 139,000; and Denmark, 63,000. The situation is similar in the United States, where the vaccine roll-out is mired in delays. In Turkey itself, to cover up the failed response to the pandemic and vaccination policies and to divert the mounting public anger, the Turkish ruling class and government are mounting a phony, nationalist media campaign on the vaccine.

Prof. Dr. Uğur Şahin and Dr. Özlem Türeci, the founders of German firm BioNTech, are regularly hailed as a Turkish success story in the media. Şahin and Türeci first were placed on the cover of Der Spiegel and then Time magazine. Şahin, who is the CEO of BioNTech and a Turkish national, has made a quick entrance onto the Forbes’ list of billionaires. With a net wealth of $4.2 billion, he is a leading German billionaire.

The billionaires’ pandemic profiteering is the other side of a vaccine fiasco that is seeing hundreds of thousands dying preventable deaths while vaccine roll-outs stagnate.

This is creating broad anger in the working class and on social media, where Boston College biology Professor Emrah Altındiş recalled the precedent of Jonas Salk, who consciously decided not to patent his vaccine for polio and stated: “the patent of this vaccine belongs to humanity. Could you patent the sun?” Altındiş added: “Billions of people will not be able to reach this Pfizer vaccine with 95 percent protection due to a) the company’s production capacity limit b) patent rights and c) the cost of the vaccine.”

The article “Pandemic profiteers: Forbes adds 50 health care moguls to its list of global billionaires,” shared under these comments on Twitter, received a powerful response, because the only article exposing these profiteers in Turkish was written by the WSWS.

It is urgent for the working class to mobilize and impose measures to contain the pandemic before millions more die for the sake of capitalist profit. This requires the use of science for the benefit of humanity, not for private profit. For this, the international working class must be mobilized to transform the pharmaceutical giants and every major industry sector into publicly-owned and democratically-controlled utilities to serve social needs, as part of a struggle for socialism.