Fuel price hikes in Brazil provoke protests by truckers and oil workers

Miguel Andrade

Yesterday, Brazil’s state-run oil giant Petrobras announced it would increase gasoline prices by 8.8 percent, and diesel by 5.5 percent, in order to bring national prices into alignment with international rates. It was the sixth time in 2021 alone that the company has announced price hikes.

Fuel price hikes of 50 percent for gasoline and 40 percent for diesel since the beginning of the year are fueling growing social unrest in Brazil and deepening the crisis of the government of fascistic President Jair Bolsonaro. The fuel hikes come against the backdrop of a 30 percent plunge in the value of the national currency, the Real, against the dollar since the beginning of 2020—the sixth worst performance on the globe.

Rising fuel prices are also expected to have a catastrophic effect on food prices in a country where 82 percent of goods are carried by truck. Food prices had already gone up 14 percent in 2020, much above the general inflation rate, which accelerated to 4.52 percent in 2020. Staples have gone up by more than 60 percent and in some cases prices have doubled as large producers choose to export production to increase profits. Rice and beans, the most basic staples of Brazilian families, have gone up more than 70 percent. Cooking oil, usually made of soybean, went up 104 percent, and meat prices were on average 15 percent higher in the last year. Meanwhile, the price of cylinders of liquefied petroleum gas (LPG), used by most working class families in Brazil for cooking and hot water, has gone up 10 percent on average.

Striking workers at the Landulpho Alves refinery (RLAM) in Bahia, Brazil (Twitter)

Concerns within the Brazilian ruling class over the fuel price hikes, particularly amid the plunging Real and major food price increases, are highlighted by a February 28 Bloomberg news report titled “The Five Hotspots Where Food Prices Are Getting People Worried.” It singled out Brazil as one of five countries, along with Russia, Nigeria, Turkey and India, where rising food prices are expected to bring major social unrest.

Rising inflation comes against the backdrop of a general unemployment rate of 14 percent and a per capita GDP drop of 4.8 percent, the largest in Brazil since 1981, at the height of the momentous working class struggles that brought down the 1964-1985 US-backed military dictatorship constantly eulogized by Bolsonaro.

This scenario has made the popularity of Bolsonaro fall to its lowest level since his inauguration, 28 percent, according to a poll taken from 18 to 23 of February by Idec. According to Idec, the poll wasn’t able to evaluate the reaction of the public to the latest actions of the Bolsonaro government to further its herd immunity policy towards the COVID-19 pandemic.

Brazil is confronting its worst moment thus far in the pandemic. A surge in COVID-19 cases has brought the health care system to the brink of collapse. The daily number of recorded deaths climbed to 1,910 last week, with the seven-day average now 30 percent higher than during the peak of the pandemic’s first wave last July. With over 260,000 confirmed COVID-19 deaths, Brazil trails only the US in total number of fatalities.

Meanwhile, Bolsonaro is inciting his supporters to protest against any restraint on economic activity and even the mandatory use of masks. He recently told Brazilians they should stop “whining” about the mass death and get back to work, while shouting at a protestor in the street that he should go look for a vaccine “at his mother’s house.”

The immediate risk being closely followed by the government is that the latest fuel price hikes could spark a renewed movement by truckers, like the million-strong 2018 strike that brought the country to a halt, and trigger a far wider revolt over the criminal response to the pandemic.

On February 18, Kaique Vasconcellos, the head of the leading hedge fund, Helius Capital, told the financial daily Valor that a truckers strike remains a “sword over the head” of the country. However, he minimized the risk of a major strike in the next weeks by declaring that most regions of the country are in the middle of a belated harvest due to low rains, and truckers are trying to recover losses of the last year by working extra hours.

But those reassurances are belied by the growing number of scattered, spontaneous protests by truckers, which have already hit at least seven states in the last week, including some of the leading agribusiness producers, such as Paraná, Rio Grande do Sul, São Paulo and Minas Gerais. Valor reported on March 1 that there was growing activity on truckers’ WhatsApp groups, which were the main means for the organization of the 2018 strike, in opposition to the leadership of the unions.

In at least two states, Rio Grande do Sul and Rio de Janeiro, Uber drivers went to the company’s headquarters to demand higher payments to compensate for fuel prices. Yesterday, in São Paulo, dozens of delivery workers for companies such as iFood paraded throughout the western and northern sector with the same demand.

Most significantly, on a number of occasions protesters have headed to oil refineries. Under pressure from oil workers, the national FUP oil workers union called a demonstration in 14 states last Thursday in which workers sold gasoline and LPG cylinders to transport workers below market prices.

The next day, the FUP announced that workers in refineries belonging to the state-run Petrobras would go on strike in six states against speedups, rising COVID-19 infections in the plants and scheduled privatizations, which are expected to lead to a jobs bloodbath.

The epicenter of the strike movement is the Landulpho Alves refinery (RLAM), the oldest in the country. Located at the petrochemical hub of Camaçari, in the state of Bahia, the refinery’s 1,600 workers are on strike. Camaçari is suffering an unprecedented social crisis with the recent shutdown of a Ford plant destroying 4,600 jobs and slashing city revenues by 10 percent. The RLAM refinery was sold to Mubadala Capital, based in Abu Dhabi, as part of a wider plan by Petrobras to pull out of refining activities and attract private capital to the business.

The FUP is doing everything in its power to isolate six simultaneous strikes, openly declaring each plant has its own demands and rejecting any national strike call. Nonetheless, the perception that mass social unrest could erupt due to food price inflation, the impoverishment of transport workers due to high fuel prices and the protests by oil workers is evident from the reaction of the Bolsonaro administration to the crisis.

In an unexpected move on Friday, February 19, after the stock exchange had closed, Bolsonaro made public his decision to sack the Petrobras CEO, Roberto Castello Branco, blaming the company’s board for the fuel crisis. Bolsonaro himself had appointed Castello Branco shortly after his inauguration in 2019. He was reportedly a personal choice of Finance Minister Paulo Guedes, an ultra-neoliberal trained in Chicago, seen as a token of the new administration’s commitment to the interests of finance capital.

Replacing Castello Branco is Gen. Joaquim Silva e Luna, the former defense minister of President Michel Temer, Bolsonaro’s predecessor. Silva e Luna is one of the more than 6,000 military personnel appointed by Bolsonaro to positions in the federal administration and state companies, the highest number in history.

The Monday after the replacement of the Petrobras CEO, the company’s stocks plunged 20 percent, the second worst fall in history, pulling down the São Paulo stock exchange (B3) by 5 percent. While the received wisdom in financial markets is that the company’s regulations would not allow the federal government to intervene in its price policy—using its balance to compensate for short-term international price hikes—these reassurances were belied by the mass resignation of government-appointed board members on March 3.

The resignations were announced out of fear that US-based law firms representing owners of Petrobras shares traded on the New York Stock Exchange would sue the company and its board. Former CEO under Workers Party (PT) President Dilma Rousseff, Graça Foster, and Rousseff’s former Finance Minister Guido Mantega were charged with mismanagement for using the company’s balance to finance a delay in fuel price hikes at the end of Rousseff’s term.

In part as a result of the fuel hike crisis, foreign capital is pulling out of the B3 stock exchange at a pace six times higher than in 2020, when the B3’s Ibovespa index fell 10 percent. That was the worst performance since 2015, the last full year of the Rousseff administration and the first year of the economic crisis that has engulfed Brazil ever since.

In an attempt to defuse the crisis, a day after the Petrobras stock crash Bolsonaro presented Congress with advanced plans to privatize two of the most prized Brazilian public companies, the Post Office (Correios) and the Eletrobras power generation company, responsible for the largest share of electrical output in Latin America.

The reaction of the self-described political opposition led by the Workers Party to these events has been nothing less than politically criminal. Former Rousseff chief of staff Aloizio Mercadante, the head of the PT think tank Perseu Abramo Foundation, welcomed the appointment of Silva e Luna as a “nationalist military man” and called for the government to halt privatizations. The FUP union called Castello Branco’s sacking an “opportunity” for the company to “reenact its role as the country’s powerhouse.” The union’s representative on the company’s 11-member board voted with the government to begin the month-long process for Silva e Luna’s nomination.

This joining in a common front with Bolsonaro on “nationalist” and “anti-neoliberal” grounds, exposes the overriding concern behind the PT’s nationalist rhetoric and feigned opposition to Bolsonaro: stopping a mass movement against the fascistic president from challenging the capitalist order in Brazil. The PT and the unions seek to channel this movement behind dissatisfied factions within the ruling class and the military itself, in the process, providing a fraudulent nationalist cover for Bolsonaro precisely at a moment when working class opposition is growing rapidly to the murderous herd immunity policies of Brazil’s fascistic president.

Arts education on the “endangered” list in Australia

Kaye Tucker

As a result of COVID-19 restrictions, most planned arts activities in Australia were cancelled or severely modified to the point of being unrecognisable in 2020. This was across the board, affecting all modes of artistic expression. By the end of April, more than $340 million in lost work had been reported to the ilostmygig website.

As many in the arts sector are painfully aware, the federal, state and territory governments offered little or no assistance, leaving many thousands of arts and entertainment workers on sub-poverty dole payments. This has been an extraordinarily long and difficult time for artistic communities to survive.

Students protest the closure of Sydney College of the Arts in 2016 (WSWS Media)

A dire situation has also developed in Arts education, seen in closures of arts-related degrees across educational institutions. The official response to the pandemic has accelerated and deepened a protracted attack on the arts and humanities.

From this year, arts and the humanities degrees will become almost as expensive as law degrees, and the following cuts and mergers are scheduled:

• Monash University in Melbourne will cut its theatre studies and musicology programs.
  
  
• Newcastle and La Trobe Universities will abolish their drama departments.
  
  
• Griffith University’s Queensland College of the Arts will cut courses in fine arts, photography and design.
  
  
• Flinders University in South Australia will have a “temporary pause” in enrolling students in its acting degree.
  
  
• The Australian National University in Canberra proposes to downgrade its arts schools with the possible cancellation of Furniture, Jewellery and Object workshops and a restructuring of Glass and Ceramics Workshops.
  
  
• The University of NSW’s Faculty of Art & Design in Sydney will become part of a school within a larger faculty that will see the merging of Arts & Social Sciences with Art & Design and Built Environment.
  
  
• The University of Tasmania is cutting courses, including arts and humanities, from 514 to about 120.

Jo Caust (Photo jocaustarts.com)

Writing in the Conversation, Jo Caust, an associate professor in the School of Culture and Communication at the University of Melbourne, commented: “Being ignored was one thing, but the federal government decided it should ensure there was no future in the arts by decreeing an education in the arts and the humanities to be effectively an indulgence.

“There is a dreadful feeling this is just the beginning, and there will be many more to follow across the country,” Caust noted. “When universities focus on being businesses first and educational institutions second, they are willing collaborators in the degradation of Australian’s arts and culture… The capacity for the country to continue to train a range of future performers, directors, musicians, artists, writers and curators will be dramatically affected.” This was “creating a bleak and uninspiring future for our young people.”

Many educators are concerned that the loss of teaching capacity and specialisation in the arts will cause irreparable damage. A current exhibition, entitled Space YZ, displays work by alumni from the Western Sydney University art school before its closure 12 years ago.

Presented by Campbelltown Arts Centre for the Sydney Festival 2021 (7 January–14 March), the exhibition raises the question of the impact of the closure of an art school. Curator Daniel Mudie Cunningham wrote in Arts Hub: “We don’t often define art history based on art schools, with some iconic exceptions, like the Bauhaus. I started thinking about what happens to that art history when an art school disappears?”

Cunningham said people often remembered the Western Sydney University art school “with a lot of affection… They remember it being quite different; people use adjectives like ‘radical’ and ‘experimental,’ things like that. And it was very different. What set it apart was the pedagogy and the commitment from artist lecturers who made it very much their mission to teach differently and make students think differently.

“Over the past two decades, I have seen art schools shrink and close as they don’t neatly fit within the university framework. As a result, younger people in the area have experienced a deficit in art education.”

Dr Nigel Helyer, former Head of the Sculpture, Performance and Installation Studio at Sydney College of the Arts, commented: “In Sydney, there is only one dedicated art school left, which is the fee paying National Art School. UNSW is basically a design school, Sydney College of the Arts is being absorbed into the fabric of Sydney Uni with a reduced range of studio practice.”

Dr Cecelia Cmielewksi (Photo: Western Sydney University)

Dr Cecelia Cmielewski, research officer at Western Sydney University’s Institute for Culture and Society, said: “COVID has, in a way, given many universities an excuse to downsize dramatically, as has the federal government’s recent fee increases for the humanities… they’re just looking at their bottom line.” This was compounded, “because there is no arts policy in Australia––which sends the message that the arts aren’t valued.”

Clearly, in 2021 arts education is on the brink of a collapse. There must be a struggle against the business models that are wreaking havoc on arts courses, specialisations and modes of fostering young artists.

Waves of job cuts and course closures are hitting university workers and students around Australia. Despite widespread outrage, these cuts are being imposed with the assistance of the National Tertiary Education Union, which has isolated each struggle.

As the WSWS has warned: “Humanities, arts and language courses are among the worst-affected, adding to the intellectual and cultural impact of the offensive being conducted by the federal government and university managements. This restructuring is further transforming the 39 public universities into corporatised facilities for churning out ‘job ready’ graduates to serve the needs of the corporate elite.”

The Socialist Equality Party and the Committee for Public Education are urging arts educators, university workers and students to draw the essential conclusion—the need to form genuine new working class organisations, rank-and-file committees, completely independent of the trade unions.

These committees would seek to organise a nationwide, unified struggle to defend educational programs for the arts and humanities, to secure well-paid jobs and basic rights, protect staff and students from unsafe COVID-19 conditions and link up with educators nationally and internationally who are facing similar critical struggles.

That requires challenging the dictates of the capitalist profit system and turning to a revolutionary socialist perspective based on the working class taking power in order to totally reorganise society in the interests of all, instead of the financial elite.

Widespread work stoppages in Myanmar against February 1 military coup

Peter Symonds

Large protests took place yesterday in Myanmar’s major cities, including Yangon and Mandalay, and towns across the country, demanding an end to military rule. Shops, businesses, factories and government offices remained shut following a call for an extended nationwide work stoppage. Thousands joined the demonstrations despite bloody repression by the army and police over the past week that has claimed at least 60 lives.

Protesters take positions behind a makeshift barricade as armed riot policemen gather in Yangon, Myanmar, Monday, March 8, 2021. (AP Photo)

On Sunday night, security forces occupied at least 20 government universities, schools and hospitals, including in Yangon, Mandalay, Magway, Monywa and Ayeyarwady. According to the Irrawaddy, police and soldiers opened fire and used percussion grenades in a bid to intimidate people who had gathered outside a teaching hospital in the North Oakkalapa Township of Yangon to oppose its use by the military.

Under conditions of heavy censorship, including the detention of dozens of journalists since the February 1 coup, details of yesterday’s strikes and protests are sketchy.

The Bangkok Post reported: “From Monday morning, workers and other protesters marched in the streets of such major cities as Yangon and Mandalay, according to local media. Most banks remained closed even though Myanmar’s central bank had urged them to resume operations.”

According to Nikkei Asia: “Most banks and businesses [in Yangon] were closed on Monday and transport remained largely suspended as more companies, local and foreign, said they were halting their operations. Danish shipping giant A.P. Moller-Maersk, which handles significant cargo in and out of Yangon, said it had suspended all operations for at least a week until March 14.”

France 24 reported that two protesters had been killed when security forces fired stun grenades, tear gas and live rounds in the northern town of Myitkyina. A witness told Reuters that the two had been shot in the head and died on the spot. A third person was killed during a protest in the town of Phyar Pon in the Irrawaddy Delta, according to local media.

France 24 cited witnesses in Yangon who reported that “only a few small tea-shops were open… Major shopping centres were closed and there was no work going on at factories.” It also reported that protests in the southern town of Dawei took place under the protection of the Karen National Union, one of the country’s armed ethnic groups that have been engaged in long-running conflicts with the military.

A grouping of 18 trade union federations and workers’ associations issued a joint call on Sunday for “an extended nationwide work stoppage to save our democracy.” The unions covering industrial, agricultural, garment, transport, railway, mining and energy workers appealed to civic leaders and workers, union and non-union, to join the strikes.

“To continue economic and business activities as usual, and to delay a general work-stoppage, will only benefit the military as they repress the energy of the Myanmar people. The time to take action in defense of our democracy is now,” the statement declared. It called for an expansion of the widespread Civil Disobedience Movement (CDM) to implement a “full extended shutdown of the Myanmar economy.”

The CDM, which began among government teachers, medical staff and civil servants, has impacted on the ability of the junta to operate. A Frontier Myanmar article published yesterday explained that although the CDM “has come to encompass street protests and public boycotts of military-owned products, at its core is a strike by tens of thousands of public servants, which began among medics two days after the coup.

“Across the country, doctors, nurses, teachers, railway workers and staff from a range of government ministries and enterprises have been refusing to go to work, in order to make it impossible for the new junta to govern. They have been joined by private sector employees in sectors such as banking and transport that are considered crucial to the regime’s survival.”

The article explained that the movement had been partly inspired by uprisings internationally, particular in Tunisia in 2010 and 2011. While difficult to gauge the overall extent of participation, a deputy director general at the Ministry of Electricity and Energy told Frontier Myanmar that between 50 and 90 percent of all staff across the ministry’s 11 departments had joined the CDM, which may have contributed to a nationwide power cut on March 5.

The junta, which is desperate to end the rebellion among civil servants, issued another threat over the weekend to sack anyone who did not turn up to work on Monday. A physician told Frontier Myanmar: “I don’t care if I face action for my decision; I’m ready to face the worst. The goal is to fight for the return of an elected government. We will continue with CDM until that happens.”

The widespread stoppages reported yesterday were testimony to the determination of the working class to resist military rule in the face of increasingly brutal repression. Protesters are being shot and killed or injured in the streets, while the security forces conduct nightly raids and arrests of activists. On Sunday, a local official for the ousted National League for Democracy (NLD), Khin Maung Latt, died in police custody from injuries that strongly suggested that he had been severely tortured.

Workers and young people have displayed considerable courage in the face of heavily armed police and troops, as has been the case in the previous revolts against military rule. The fatal weaknesses of the past protest movements has been their political domination by the NLD and its leader Aung San Suu Kyi, who fears the threat posed by a mass movement of the working class to bourgeois rule more than she does the Burmese generals.

In 1988, a huge strike movement brought the military junta, which had ruled the country for decades, to its knees. Suu Kyi, hailed in the West as a “democracy icon,” played the crucial role allowing the military to suppress the working class. At the high point of the movement, Suu Kyi intervened to urge protesters to put their faith in the military’s promise of elections and “not to lose their affection for the army.” Her actions provided the military with a much-needed breathing space to prepare a savage crackdown in which thousands were killed. Having stabilised its rule, the military ignored the results of the 1990 election and arrested Suu Kyi and other NLD leaders.

For the past decade, after a US-engineered deal with the military, Suu Kyi and the NLD have functioned as the political front for the military. While nominally the NLD formed the government after the 2016 election, the military retained the levers of power—by stacking the parliament with its appointees and retaining control of key ministries including defence, the police and borders. Suu Kyi infamously defended the army’s atrocities against the Muslim Rohingya minority.

Workers can place no faith in Suu Kyi and her NLD, which represent a rival faction of the bourgeoisie to the military, nor for that matter the trade unions, which, while opposed to the junta, are seeking to divert the rising tide of opposition into the arms of the NLD. The fight for genuine democratic rights is bound up with the struggle for the social rights of the working class, which confronts a deepening economic and social crisis exacerbated by the COVID-19 pandemic. This requires the building of independent organisations of the working class and a fight for socialism in Myanmar and internationally.

The demise of Greensill: Another expression of financial rot and decay

Nick Beams

The demise of the financial firm Greensill Capital, which is set to be taken into administration, is further evidence of the fact that, notwithstanding all talk of the need for greater prudential regulation, rampant speculation within the global financial system continues unabated.

Lex Greensill (Source: Greensill Capital)

Two years ago Greensill, which began operations in 2011 by financing global supply chains, was estimated to have a value of $4 billion. Currently in discussions over its winding up with Apollo Global Management, its value is estimated to be around $100 million, according to the Wall Street Journal.

The story of Greensill’s rise and fall is a combination of all the ingredients that have been the hallmark of the continuing shocks delivered to the global financial system: hype on the part of the founder, support from high levels of the political establishment, complex financial practices that seemingly promise large returns and dubious accounting procedures.

The company was set up by a former London-based Morgan Stanley financier Lex Greensill who decided to set up his own firm to engage in supply chain financing.

Hailing from the Queensland, Australia, city of Bundaberg, where his parents had a sugar cane and melon farm, Lex Greensill said his company had begun from “humble beginnings to revolutionary thinking” in overcoming inefficiencies in the payment of small companies for the goods and services they supplied.

The company claimed it was “making finance fairer” and “democratising capital.”

Greensill’s business model was based on a long-established system under which small companies receive faster payment for the goods they have supplied to larger entities. Instead of waiting for 30, or sometimes 60 days to be paid, they could receive cash more rapidly by obtaining money from Greensill, at a discount. Greensill would receive the full amount when it became due.

The advantage for the company using supply chain finance is that the money it owes to the finance institution does not appear as a debt on its books but is recorded along other bills in the accounts payable section.

For its part, Greensill packaged the money it was owed into a security which was then sold off. Its main financial backer was Credit Suisse, which bought these securities and then sold them off to insurance companies and investors classifying them as low-risk.

Greensill received assistance on its way up. In 2017 its founder received a CBE from Prince Charles for “services to the economy” and the following year former British prime minister David Cameron signed on as adviser to the company.

Greensill was closely associated with the rise of Sanjeev Gupta from a relatively unknown commodities trader into the owner of Europe’s fourth biggest steelmaking firm with significant interests in the UK. Greensill enabled Gupta’s firm to buy up distressed aluminium and steel firms from Whyalla in South Australia to Newport in Wales as well as in Scotland.

One of Greensill’s biggest operations has been the financing of Gupta’s company Liberty Steel which purchased Arcelor Steel. According to a report in the London Sunday Times Greensill’s “exposure to Gupta is huge.” It lent him about $3.4 billion using what it termed “a particularly exotic form of finance, extending cash to Liberty based on ‘future receivables’ up to three years ahead––so the sale of steel that was still iron ore and coal in the ground.”

Greensill has maintained that it works with a range of customers, numbering millions, and had partnerships with dozens of banks, insurers and companies.

However, according to a report in the Wall Street Journal, a “handful of companies had become crucial to Greensill in recent years.” During most of 2019 some 90 percent of its revenue came from just five clients and last year the figure was 70 percent.

The Financial Times reported on what it called the secret behind Greensill’s sudden rise in 2017 when its profits nearly tripled. Some $70 million of the company’s net revenue for that year was derived from Gupta’s companies.

The Greensill operation began to unravel last week when the German financial regulatory authority, BaFin, filed a complaint against Greensill Bank’s management for suspected balance sheet manipulation. BaFin said an audit was unable to provide evidence of receivables purchased from Gupta’s GFG Alliance.

The company’s collapse was triggered when an insurer, Tokio Marine, withdrew cover for it. Greensill responded by seeking an injunction in an Australian court to prevent the removal; but this was denied.

The company’s lawyers said if insurance policies covering loans to companies were not renewed, Greensill Bank would be “unable to provide further funding for working capital of Greensill’s clients.” Some of them were “likely to become insolvent, defaulting on their existing facilities” and there would be up to 50,000 jobs lost.

The action by Tokio Marine set off a chain reaction. Credit Suisse suspended $10 billion of investment funds setting off the move to place the company in administration. The British Business Bank ended the guarantee it had given on loans to Gupta and the Bank of England’s Prudential Regulation Authority forced Wyeland, Gupta’s bank, to hand back deposits to savers.

So far the prevailing view in financial and media circles is that while the demise of Greensill is serious it will not precipitate a broader financial crisis. But its collapse does have significant implications.

The Financial Times reported that the insurance industry, which was a “key cog in Greensill’s machine,” was watching events with a “nervous eye” with one observer noting: “This is similar to what blew up AIG in 2008.”

The impending collapse of the US insurance Group, AIG, following the bankruptcy of Lehman Brothers, prompted the intervention by the Fed to bail out the Wall Street banks.

Long-time Financial Times commentator John Plender wrote that while Greensill’s demise appeared to pose no “systemic threat” or the need for a central bank bailout, its “rapid passage from hubris to nemesis raises disquieting questions about the evolution of the global financial system” and “the capacity of shadow banking to spring more dangerous systemic shocks should not be underestimated.”

The whole affair has decisive implications for the working class. The collapse of Greensill is not an isolated incident or an aberration. It is yet another expression of the rot and decay at the very heart of the global financial system, which threatens the jobs and livelihoods of millions of workers around the world.

That threat will not be removed by empty promises of increased regulation or other so-called reforms—the ruling classes and their vast fortunes derive from the very same financial alchemy that characterised Greensill. It can only be ended by the political struggle for a socialist economic program, starting with bringing the entire financial system into public ownership under democratic control.

Nine activists murdered by police in Bloody Sunday raids in the Philippines

John Malvar

Police in the Philippines executed nine unarmed activists, whom they accused of being “Communist terrorists,” in a series of pre-dawn raids conducted on Sunday morning. The police killings, which are now being referred to in the press as “bloody Sunday,” took place two days after President Rodrigo Duterte delivered a speech in which he instructed the military and police to “kill all communists and don’t mind human rights.”

Philippines President Rodrigo Duterte (Presidential Communications Operations Office/Wikipedia)

The murdered activists were all members of legal organizations in the Southern Tagalog region of Luzon. They were community organizers, union leaders, and human rights activists. The majority were killed in their own homes.

The details of what happened are still emerging. The broad outline, however, is clear, and it is horrifying.

Manny Asuncion was an organizer for Bagong Alyansang Makabayan (BAYAN, New Nationalist Alliance). A spokesperson for Anakbayan Southern Tagalog, a youth organization tied to BAYAN, recounted that about 30 police barged into his home at 5.30 in the morning. They ordered his wife and associate to leave.

Asuncion’s wife reported that she heard about 10 shots and then saw his body “being dragged down the stairs. There was not even a stretcher.” Photos of the bloody trail left by Asuncion’s corpse featured prominently in the press. Six bullets were recovered from his body, three entered from the front and three from the back.

A separate raid killed Anna Marie Evangelista and Ariel Evangelista, a couple who organized the fishing communities around Nasugbu, Batangas. Their ten-year-old son was later found by neighbors hiding under a bed in the house.

The police claim that they were operating on informant tips, that the accused were “communist terrorists,” and that the warrants with which they had been issued were to search for illegal firearms and grenades.

The raids killed nine and arrested only six. All of those killed were alleged by the police to have resisted arrest, “nanlaban,” a phrase used by the Philippine National Police to justify its campaign of mass murder against the poor over the past four years in the name of a “war on drugs.”

Presidential spokesperson Harry Roque was compelled to admit that none of the activists killed were carrying guns. Under the rule of terror now exercised by Duterte, allegations of unarmed resistance are enough of a pretext to warrant summary execution by the police.

The Duterte administration’s “war on drugs” has brought the murderous might of the state to bear on the poorest and most vulnerable layers of Philippine society. The death toll from this campaign waged by the police, military, and paramilitary organizations is now more than 30,000 people killed in just over four years. Duterte is attempting to implement an apparatus of authoritarian rule through a genocidal campaign against the poor.

Over the past year the crisis of world capitalism under conditions of global pandemic has sharpened the social crisis in the Philippines to the breaking point. Working Filipinos are suffering under the worst conditions of malnutrition and poverty since the brutal period of the Japanese occupation in 1945.

Looking to prevent organized unrest, Duterte has used anti-Communism to reorient the war on drugs to target political dissent. Activists and organizers have been killed by police in raids and arrested on trumped-up charges. The only thing that distinguishes “Bloody Sunday” from events of the past year is that the nine people were executed simultaneously. If the events had been spread out over a week and a half they likely would not have made the front page of the national news.

With the assistance of a super-majority in the Philippine legislature, Duterte secured the passage of the draconian Anti-Terror Law in July last year. The new law authorizes warrantless wiretapping, surveillance, and arrests for up to 24 days of anyone deemed by a presidential commission to be a terrorist. The law is currently being reviewed by the Supreme Court.

The apparatus of repression is organized through the newly created National Task Force to End Local Communist Armed Conflict (NTF-ELCAC). The NTF-ELCAC, funded with a staggering 20 billion Philippine pesos ($US415 million), brings together a panel of government, military and police forces for an organized violent campaign against political dissent, which it labels “Communist.”

The trigger for the simultaneous executions of Sunday morning was a speech delivered by Duterte on Friday in the city of Cagayan de Oro. Speaking to a meeting of the NTF-ELCAC, he told the military and police, “If there’s an encounter and you see them armed, kill! Kill them! Don’t mind human rights! I will be the one to go to prison, I don’t have any qualms.” He continued, “make sure you really kill them, and finish them off if they are alive.”

Within less than 48 hours, the police had followed his instructions to the letter.

It is not an accident that the raids were conducted in the Southern Tagalog region, which is known as Calabarzon. Calabarzon is under the jurisdiction of Lt. Gen Antonio Parlade Jr. who heads the AFP Southern Luzon Command. Parlade speaks as a deranged anti-Communist, and is at the center of the NTF-ELCAC. He has denounced anyone with a dissenting political opinion, including journalists and beauty queens, as “Communists.”

In late January Parlade publicly threatened opponents of the Anti-Terror Law on Facebook, writing: “The Day of Judgment is upon you… Very soon, blood debts will be settled.”

Phil Robertson, deputy Asian director at Human Rights Watch, issued a statement declaring, “The fundamental problem is this campaign no longer makes any distinction between armed rebels and non-combatant activists, labor leaders and rights defenders.”

Vice President Leni Robredo, head of the minority bourgeois opposition to Duterte, declared, “There is no other way to describe this: It was a massacre.… We strongly condemn the killings in Calabarzon, in the same way we condemn the killings of so many innocent people under this administration.” She termed the Duterte administration a “murderous regime.”

The statement was a marked escalation in the rhetoric of the vice president, who has generally been fairly reserved in her criticisms, and indicates the advanced state of the crisis of elite rule in the country.

Political responsibility for the endangered lives of activists and grassroots organizers rests with the leadership of the Stalinist Communist Party of the Philippines (CPP). Jose Maria Sison, founder and ideological leader of the party, led the CPP and the various organizations that follow its political line to support and enthusiastically endorse the rise of Duterte to the presidency in 2016.

Relations between Duterte and the CPP soured in 2017 as a result of the intervention of the Philippine military, which threatened to carry out a coup d’état should the ties with the CPP persist. When it became apparent that it was no longer possible to cultivate profitable relations with Duterte, Sison and the CPP leadership began denouncing him as “a fascist.”

By early 2020 Sison was reaching out to what he termed “pro-US and patriotic” sections of the military leadership to carry out a coup, withdrawing support from Duterte and installing Robredo as president. The party is looking to ally with a rival faction of the elite.

There is no section of the ruling class that has any interest in defending democracy. Confronted with the crisis of capitalism and the growing threat of mass unrest, they are all turning to authoritarian forms of rule.

The faction around Robredo, which is organized in the Liberal Party and with whom the CPP is cultivating ties, are opposed to Duterte as a means of reorienting Philippine foreign policy away from China and back towards Washington. They are not a democratic force.

It was in fact the Liberal Party, which in the elections of 2010 and 2013 under then President Benigno Aquino III, transformed Duterte into a national political figure when he was a member of their party.

Far from defending democratic rights, the CPP welcomes the repression.

On February 28, the week before the events of Bloody Sunday, Sison delivered an online lecture to Anakbayan in which he told his audience of young activists, “The best thing that can happen for the revolution is for Duterte to impose fascist dictatorship on the people. He’ll be finished in one or two years.”

The Stalinist Communist Party depicts state repression as the mechanism for the building of the armed struggle. The armed struggle in turn is the party’s leverage in negotiating ties with the bourgeoisie.

In response to the Bloody Sunday massacre, CPP chief information officer, Marco Valbuena, published a statement that “the targets of Duterte’s state terrorism can be absorbed by NPA units or provided safe haven within the NPA’s guerrilla base areas.”

Rather than organizing the working class for the defense of democracy in the fight for socialism, the CPP is attempting to channel all political dissent into the countryside, while the leadership arranges new ties with a section of the ruling class.

The preparations for dictatorial rule in the Philippines are far advanced. The mass murder of the poor and suppression of political dissent is being codified into the laws of the country. None of this will stop simply by replacing Duterte with Robredo or another representative of the elite. It is driven not by the personal brutality of the president, but by the crisis of global capitalism.

The only way that workers, peasants and the poor can defend themselves against dictatorship and fascism is through their own independent fight for socialism. The critical first step to be made is a complete break with the Stalinist nationalism of Sison and the CPP which made possible the rise of Duterte and now welcomes the possibility of dictatorship.

Sri Lanka’s National Security Council to discuss “violence” in estates

W. A. Sunil & K. Ratnayake

Public Security Minister Sarath Weerasekara, an ex-rear admiral, told the Sunday Times last weekend that Sri Lanka’s National Security Council (NSC) will today discuss “security issues” in the plantations. His statement was in response to claims by planters and the police that workers are unleashing “violence” in the estates.

Uda Rathalla Estate workers picketing last September against austerity measures (WSWS)

The NSC is headed by President Gotabhaya Rajapakse and includes Prime Minister Mahinda Rajapakse, key ministers, senior officials from the armed forces, police and intelligence, and other leading state bureaucrats. That the NSC is discussing so-called estate violence as a top priority is a serious threat against plantation workers, who are involved in a long and bitter struggle for higher wages, improved social conditions and democratic rights.

On March 3, hundreds of estate superintendents staged a provocative demonstration in Hatton demanding weapons and weapons training to defend themselves from physical threats by plantation workers.

Ceylon Planters’ Society (CPS) President Dayal Kumarage told the media that his organisation wanted a meeting with the president, prime minister and defense secretary to discuss “security matters.” He called for authorities to “provide adequate security and, if possible, to patrol the estates as well.”

Weerasekera told the Sunday Times that the government would not provide managers with weapons because that would produce more unrest among workers. He made it clear however, that the NSC meeting would “take up” the concerns of regional plantation companies [RPCs] and “ensure security was provided to estate management.”

Provocative protest by estate managers outside Hatton court (Photo credit K. Kishanthan)

The March 3 protest by planters was initiated in response to so-called violence against Alton tea estate superintendent Subash Narayanan in Maskeliya. The planters claimed that a group of workers physically attacked Narayanan, who had to be hospitalised for several days. The CPS also alleged that attacks have occurred in two other estates.

Police, with the active assistance of Ceylon Workers’ Congress (CWC) officials, have arrested 10 Alton workers—eight on February 23 and two more on March 1—claiming they were involved in the alleged assault.

The CWC, the main plantation trade union, is part of the Rajapakse government. CWC leader Jeevan Thondaman is minister of estate infrastructure. The CWC and all the other estate unions have a long and sordid history of collaborating with the government, the plantation companies and the police against plantation workers.

On March 3, when the 10 arrested Alton workers appeared at the Hatton magistrate court, the planters’ lawyer accused them of violence and declared: “This is how terrorism emerges.” Defence lawyers rejected the outrageous claim, describing it as an insult against the hard-working plantation workforce.

The magistrate refused bail and remanded the arrested to Kandy prison until March 10. All the arrested workers have rejected the company-police allegations.

Deepening its treachery against the estate workers, the CWC has said it will bring 16 additional workers before the Hatton magistrates. A spokesman for the UpCountry Federation of Civil Organisation (UFCO) revealed yesterday that CWC lawyer Perumal Rajadurai, on the instructions of Thondaman, would present these workers to the courts on March 10. The UFCO is an NGO that works closely with the unions.

These latest 16 “suspects” and the 10 jailed Alton workers are the victims of a company-police conspiracy to break indefinite strike action at the estate that began on February 2, fighting for higher wages and against management threats.

A manager physically assaulted Alton workers, injuring one female employee, after the strikers blocked the transport of processed tea from the estate on the first day of their walkout. The Alton strike began three days before a February 5 national estate strike called by the CWC for a long-demanded 1,000-rupee ($US5.12) daily basic wage.

The union’s national strike was an attempt to dissipate plantation workers’ anger over their declining living conditions. The 1,000-rupee daily wage claim was originally raised six years ago, in 2015, but the CWC and the other plantation unions have consistently betrayed workers’ strikes and protests over this issue.

On February 17, Alton workers demonstrated outside the manager’s bungalow in protest against his strike-breaking activities. This is the incident that the company alleges was estate workers’ “violence.”

On March 1, the Rajapakse government, nervous about the eruption of mass action by estate workers—and walkouts by other sections of the working class—gazetted a 1,000-rupee daily wage for plantation workers. This consists of 900-rupee basic wage and a 100-rupee cost of living allowance payment.

The RPCs, however, have not agreed to this grossly inadequate increase. Instead, they have threatened to abrogate previous collective agreements, including clauses providing employees with 300 working days per year for a guaranteed minimum income.

The RPCs claim they cannot increase wages because maintenance costs are higher. They insist productivity must be driven up and other cost-cutting measures imposed in order to be internationally competitive.

This is the background to the allegations of “estate violence” and the government’s decision to treat this as a national security issue. More repressive measures will be unleashed to crush estate workers’ unrest and impose plantation owners’ demands, including the restructuring and privatisation of “unproductive” estates.

In recent days, a police jeep has been patrolling the Alton estate, with no opposition from the unions, in a foretaste of the sort of violent operations being prepared.

These developments vindicate the warnings made by the Socialist Equality Party in its March 1 statement, “Release jailed Sri Lankan estate workers! Defend all workers from company-police conspiracies!”

The statement urged plantation workers to form their own action committees, independent of the unions, to demand the release of the Alton estate workers and discuss the class actions and political program required to defend the social and democratic rights of all workers.

The employer-state and trade union conspiracy now being unleashed against the Alton estate workers is an attack on the entire working class. It is yet another indication that the Rajapakse government will attempt to crush all opposition to its austerity attacks on the working class, amid a sharp economic crisis that the COVID-19 pandemic has intensified.

The Rajapakse government came to power promising the capitalist class it would boost profits and impose the burden of the rising foreign debt and falling export earnings on the working class. In order to carry out this agenda, it is whipping up racial and religious tensions against Tamils and Muslims to divide and weaken working class and preparing a presidential dictatorship based on the military.

Somalia: a Knotted Web of Causes

John Clamp

In one translation of Seneca’s Oedipus Rex, the unfortunate (anti)hero laments his dark fate by complaining of being ‘tangled in the knotted web of causes’. The words have an aptness far beyond their origin. Somalia is a perfect expression of the metaphor. Its dysfunction has so many potential—nay, likely—causative factors that who the hell knows why the country is such a goddamned mess?

Could the source lie in the complete idiocy of the Italian colonial ‘masters’? How about the fissiparous constellation of sultanates? Or, better yet, let’s blame it on Cold War eye-pokery, with the Soviets backing the frankly disgusting dictator Mohammed Siad Barre to the hilt. Maybe it’s U.S. support for favoured post-Barre warlords that led to the current assholery. Or the total lack of functional state institutions. The secessionist dreams of Somaliland and Puntland? Could the Saudis have a shine for fundamentalists Al-Shabaab? It might make sense if you want control over the vital Gulf of Aden.

No answer comes: the web of potential causes is too knotted. Al-Shabaab has control of much of the countryside. And that means these days that it’s a free-fire drone zone, with multiple platforms aloft and killing people at any given time of day. It’s such a ‘rich target environment’ that the CIA’s drones are all over, flying off aircraft carriers or from the surprisingly numerous regional U.S. bases, including a secret one in Mogadishu reported on by the indefatigable Jeremy Scahill.

Somalia, blessed with the longest continental coastline, was once a famed medieval entrepôt (the northeastern region of Somalia, known as Puntland, is incredibly strategically placed along the southern flank of the Gulf). Yet its riches have evaporated. These days, it’s a civic desert, with barely a functional institution. The ‘country’ has a population of 16m, with anywhere between 1,500,000 and 2,000,000 internally displaced, mostly by the random violence of either Al-Shabaab or state forces trying to mess up Al-Shabaab. Or drones.

It’s a particularly knotty version of African basket-casery, that’s for sure. Up to a million or more refugees have fled the region outright. Many hundreds of thousands have been forced to seek refuge in Somalia’s neighboring countries (Djibouti, Ethiopia, and Kenya) since 1991, when Barre was assassinated and the current round of inhumanity started. That’s 30 years, counted in Somali blood.

Today’s problematics are borne of a very sorry set of circumstances. No factor, no vector has held promise. The superpowers suspended Somalia in aspic, and Barre deluged the country with corruption and iniquity. These days, the republic is fraying, central authority is a rose-tinted dream, and violence abounds.

Opposition presidential candidates now shorn of an election are pissed. They say the incumbent president, Mohamed Abdullahi Mohamed sabotaged the election process to extend his overlordship.As always, it’s complex. But ordinary people, poverty-stricken before, are now eking out a terror-stricken living in marginal conditions in the region. They’ve been plagued with war, then locusts, then drought. It’s been a living hell. A solution is nowhere after 30 years.

Russia Foreign Minister’s Gulf tour: A bellwether of US-Saudi relations

James M. Dorsey

As Russian Foreign Minister Sergei Lavrov embarks on a four-day visit to the Gulf, Middle Eastern leaders are either struggling to get a grip on Joe Biden’s recalibration of US policy in the region or signaling their refusal to adapt to the president’s approach.

Mr. Lavrov’s visit to Saudi Arabia, the United Arab Emirates and Qatar comes a week after the United States released an intelligence report that pointed fingers at Saudi Crown Prince Mohammed bin Salman for allegedly ordering the 2018 killing of journalist Jamal Khashoggi.

Earlier, the United States halted the sale of weapons to the kingdom that could be deployed in its six-year-long devastating offensive in Yemen.

Even though he is not stopping in Istanbul and Jerusalem, Mr. Lavrov is travelling in the region as Turkish President Recep Tayyip Erdogan is still waiting for a phone call from Mr. Biden and Israel is suggesting that it may not engage with US efforts to revive the 2015 international agreement that curbed Iran’s nuclear program and could act on its own more aggressively to counter the Islamic republic’s nuclear ambitions.

Mr. Lavrov is certain to want to capitalize on Mr. Biden’s rattling of Middle Eastern cages amid perceptions that recalibration of relations with Saudi Arabia and delayed phone calls suggest that the United States is downgrading the Middle East’s importance in its global strategy, reducing its security commitments, and potentially considering a withdrawal.

There is little doubt that the United States wants a restructuring of its commitments through greater burden-sharing and regional cooperation but is unlikely to abandon the Middle East altogether.

The question is whether Mr. Biden’s rattling of cages constitutes simply signaling US intentions or a deliberate attempt to let problematic allies and partners stew in uncertainty in a bid to increase the administration’s leverage.

Potentially the longer-term strategy may be an unintended yet beneficial consequence of the administration’s conviction that addressing domestic emergencies such as the pandemic and economic crisis as well as repairing relations with America’s traditional allies in Europe and Asia is a pre-requisite for restoring US influence and leverage that was damaged by former President Donald J. Trump.

If so, Mr. Lavrov may unwittingly be doing the Biden administration a favour by attempting to exploit perceived daylight between the United States and its allies to push a Russian plan for a restructured security architecture.

That plan envisions a Middle Eastern security conference modelled on the Organization for Security and Co-operation in Europe (OSCE) and a regional non-aggression pact that would be guaranteed by the United States, China, Russia, and India.

In doing so, Mr. Lavrov would be preparing the ground for debate about a concept that has been discussed in different forms at various points by US officials, in which a United States that credibly is getting its house in order would retain its dominant position as the military backbone of a new security architecture.

It would also drive home the point that neither Russia nor China are willing or capable of replacing the United States and that Middle Eastern countries are likely to benefit most from an architecture that allows them to diversify their relationships and potentially play one against the other.

It is early days, but so far, Saudi Arabia has insisted “that the partnership between the Kingdom of Saudi Arabia and the United States of America is a robust and enduring partnership” even though it rejected in the same statement the US intelligence report as” negative, false and unacceptable.”

For now, Saudi Arabia appears determined to counter strong winds in the White House as well as Congress rather than rush to Moscow and Beijing in a realignment of its geopolitical and security relationships.

To do so, the kingdom, in the run-up to the release of the report, has broadened its public relations and lobbying campaign to focus beyond Washington’s Beltway politics on America’s heartland where fewer people are likely to follow the grim reality of the war in Yemen, a country that the Saudi-led bombing campaign has turned into world’s worst humanitarian crisis or the gruesome details of Mr. Khashoggi’s killing.

The campaign appears designed to create grassroots empathy for Saudi Arabia across the United States that would filter back from constituents to members of Congress.

“We recognize that Americans outside Washington are interested in developments in Saudi Arabia and many, including the business community, academic institutions and various civil society groups, are keen on maintaining long-standing relations with the kingdom or cultivating new ones,” said Fahad Nazer, a spokesman for the Saudi embassy in Washington.

Filings show that companies lobbying on behalf of Saudi Arabia reported that half of their  2,000 lobbying contacts in the last year were with individuals and groups outside of Washington.

Working with local and regional companies outside the US capital, including Larson Shannahan Slifka Group (LS2 Group) in Iowa and its subcontractors in Maine, Georgia, North Carolina and other states, Saudi lobbyists contacted local chambers of commerce, media, women’s groups, and faith communities among which synagogues.

The lobbyists distributed materials touting the benefits to women in sports and other sectors accrued from Prince Mohammed’s social reforms in a country that banned women from driving as recently as three years ago.

The Saudi focus is unlikely to deter Mr. Lavrov from peddling Russian military hardware during his tour of the Gulf, including the S-400 anti-missile defence system that Saudi Arabia expressed interest in long before the US election that swept Mr. Biden into the White House.

The kingdom has so far not taken its interest any further. Whether it does so during this week’s visit by Mr. Lavrov will serve as a bellwether of whether Saudi Arabia will turn towards Russia and China in a significant way.

So far US analysts appear to be unconcerned.

Said former US intelligence official Paul Pillar, a frequent commentator on Middle East affairs: “The attractiveness of doing business with the United States will remain without the coddling, as is true of Saudi choices regarding arms purchases, given that their defences have been built largely around US hardware.”