The UN Crisis

John Feffer

Jair Bolsonaro gave a speech at the UN General Assembly this month. It was full of the usual misstatements and exaggerations for which the Brazilian leader has become notorious. But the most noteworthy part of the speech had nothing to do with its contents. It was Bolsonaro’s refusal of take a COVID-19 vaccine, despite New York City regulations on public gatherings and the UN’s urging of all world leaders to do so.

The planet faces enormous threats at the moment. The pandemic is still raging throughout the world. Climate change is an immediate risk. Wars continue to devastate Yemen, Ethiopia, and Syria.

Given these crises, the United Nations is needed more than ever. And yet the body could not compel Jair Bolsonaro to get vaccinated or risk the fallout of preventing him from speaking to the General Assembly.

This problem of rogue actors has long bedeviled the United Nations. But the rise of right-wing populists who insist on their sovereign (and often selfish) right to do whatever they please poses an additional challenge to the international community.

Nation-states frequently use the principle of sovereignty—the exclusive authority to determine the rules within national boundaries—as a justification for their actions. The COVID-19 pandemic is only the most recent example of the shortcomings of sovereignty. With little regard for the common good, the richest countries made sure to secure more than their fair share of vaccines. The World Health Organization, UNICEF, and the World Bank tried to ensure access to the vaccine for poorer countries by setting up the Vaccine Alliance (GAVI). It was supposed to distribute 2 billion doses by the end of 2021. So far, it has managed to distribute only 240 million.

The problem has largely been one of supply, given the huge purchases of the vaccine by richer countries. But there is also the challenge of delivering doses to countries where medical infrastructure is weak. As a result, the Global Dashboard for Vaccine Equity reports that, as of September 21, just 3.31 per cent of people in low-income countries have been vaccinated with at least one dose, compared to 61.51 per cent of people in high-income countries.

Let’s face it: the rich run the world, and the United Nations just doesn’t have the power to change that.

Nor has the UN risen to the challenge of climate change. Here the problem is one of brokering effective compromises. The UN Framework Convention on Climate Change is the body responsible for convening the Conference of the Parties (COP) meeting every year. In Paris, COP21 did manage to produce a binding treaty on climate change. But the commitments made by all the parties to the agreement were not sufficient to reduce carbon emissions fast enough to prevent a catastrophic increase in global temperatures.

Moreover, the commitments were voluntary. The U.S. delegation insisted on this because it feared that the U.S. Congress would reject any binding pledges.

It’s no surprise, then, that carbon emissions are expected to rise this year by 5 percent, the second largest increase in history.

The fault here again lies mostly with the richest countries—China, the United States, Japan, Germany, South Korea, Canada, Saudi Arabia—that have been the biggest emitters of carbon. But rich countries have also refused to provide enough money to help poorer countries transition to cleaner energy. In 2009, rich countries promised to mobilize $100 billion by 2020 for this transition. A dozen years later, the fund is still $20 billion short.

Of course, many countries face another deadly scourge: war. Imagine how many lives would be saved, how much reconstruction could take place, and how waves of refugees could be reduced if the UN were able to conduct a peacekeeping mission in Afghanistan, establish an on-the-ground presence in Syria, and separate warring parties in Tigray province in Ethiopia. Instead, the UN is relegated the task of providing humanitarian assistance. Its program in Syria, with a target of $4.2 billion a year, is the largest in the world.

But humanitarian assistance is a never-ending drain in the absence of security on the ground. Most of the peacekeeping budget of the UN goes to the existing 13 missions. The Biden administration has promised to pay down the over $1 billion peacekeeping bill it owes the UN, but the UN is going to need a lot more than that to play an effective role in bringing peace and security to the most conflict-torn areas of the world.

For one thing, the UN doesn’t have a capability to respond quickly to emergencies around the world. An Emergency Peace Service could fill that gap. It has some support internationally, and it’s even come up twice as bills in the U.S. Congress. Without a permanent, professional corps of emergency responders, the UN will constantly be one step behind in dealing with crises around the world.

This is not an easy time for the United Nations. It is underfunded. Proposals to reform its governance have largely gone nowhere. It has been forced to cobble together ad hoc responses to the world’s biggest problems.

But perhaps the biggest challenge to the UN is the refusal of nation-states to delegate sufficient authority to international institutions. Right-wing populists like Donald Trump and Jair Bolsonaro attacked “globalists” on a daily basis. They have done as much as possible to destroy international agreements, but they’re not alone. Russia’s Vladimir Putin and China’s Xi Jinping have insisted that they have the right to do whatever they want within their own national borders. Rodrigo Duterte of the Philippines is resisting any “interference” in his drug war as part of an investigation into his government’s human rights abuses. Daniel Ortega of Nicaragua has similarly pushed back against UN criticism of his human rights record. Most strong-arm leaders eye the UN skeptically.

Without a lot of money or institutional credibility and facing a strong anti-internationalist philosophy, the United Nations has a great deal of difficulty compelling its members to protect human rights, the environment, or the rule of law. Look how ineffectual it was in dealing with Jair Bolsonaro.

Without credible enforcement mechanisms, the UN will be incapable of making the Bolsonaros of the world behave responsibly. And unfortunately, the disease of Bolsonarism is spreading.

Australia: 2,000 StarTrack truck drivers strike over pay and job security

Jim Franklin

Around 2,000 truck drivers at StarTrack, a parcel, freight and logistics company owned by Australia Post (AP), held a 24-hour national strike on Thursday, September 23.

Striking StarTrack workers (Photo: Facebook/TWUAus)

As part of negotiations for a new enterprise agreement (EA), the workers are demanding a limit on outsourcing and for labour-hire casuals to receive the same pay and entitlements as permanent employees. According to the Transport Workers Union (TWU), outsourcing at some StarTrack facilities has reached as high as 70 percent.

The workers are also seeking a wage increase greater than the company’s current offer of 3 percent per annum. The union has not publicly specified what figure it is demanding, meaning that anything above 3 percent will likely be touted as a “victory,” even if it falls short of the recently announced official CPI increase of 3.8 percent.

The dispute takes place in an atmosphere of mounting anger throughout the trucking industry. Around 4,000 Toll drivers struck for 24 hours on August 27, and thousands of workers at Linfox, Bevchain have also recently voted in favour of protected industrial action. Another 3,000 workers at FedEx struck for 24 hours on Thursday.

These major transport companies are increasingly employing workers on short-term contracts, effectively creating a two-tier system to undermine the conditions of full-time drivers. This includes changes to shifts and the allocation of work to casuals and contractors, rather than giving overtime hours to full-time workers.

Despite the common grievances of workers throughout the transport industry, the TWU has isolated the strikes to one company at a time, minimising disruption to the supply chain. Although more than a month has passed since the Toll strike, and none of the issues have been resolved, the union has barely mentioned the company’s name and has presented no plan for further action at Toll.

Speaking outside StarTrack’s Minchinbury, Western Sydney facility, on September 23, TWU National Secretary Michael Kaine claimed that these attacks on workers’ conditions were the result of Australia’s major trucking companies coming under “incredible commercial pressure” from international competitors such as Amazon Flex.

Kaine continued: “These companies, like StarTrack and others, have traditionally been good companies. With these workers, they have built up good secure jobs.”

Highlighting the union’s close alignment with management, Kaine invited StarTrack to “go to the federal government together and fix this Amazon effect.” Kaine issued a similar invitation to Toll’s management during the August 27 strike.

The TWU’s campaign against Amazon has nothing to do with defending the rights of gig-economy workers—probably the most exploited layer in the transport industry—but is instead directed at shoring up the profitability of Australia’s multi-billion dollar trucking companies.

The nationalist line that “good” Australian companies must be defended against their overseas rivals serves only to pit Australian workers against their counterparts internationally. The struggle to defend pay and conditions at StarTrack, Toll and elsewhere will not be won through appeals to the Australian ruling class, but through a turn to the global working class.

Kaine was careful to reassure management that the union would continue to enforce the company’s use of casual and contract labour in “peak” periods. Kaine said: “Always in our agreements, there is the flexibility for the company to be able to hire more workers, truckies, sortation workers in to deal with those peaks.”

The reality is, the growth in online shopping due to COVID-19 lockdowns has seen StarTrack and AP operating at “peak” levels year round. Rather than responding to this surge with the creation of new full-time jobs, the companies have seized upon the pandemic as an opportunity to entrench the massively increased use of contractors, usually reserved for Christmas and Easter, as standard operating procedure. This is a direct product of the “flexibility” Kaine defends as an unquestionable feature of every EA enforced by the TWU.

This month AP announced annual profits of more than $100 million before tax and a 10.3 percent revenue increase to $8.27 billion. StarTrack’s volumes increased by 12.2 percent over this period, making it AP’s most profitable division.

Both the TWU and the Communication Electrical Plumbers Union (CEPU), which covers most AP workers, have signed sell-out EAs for years that have resulted in the decline of workers’ conditions and pay.

Last year, under the guise of the pandemic, the CEPU worked with AP management to implement restructuring by introducing the Alternative Delivery Model (ADM), which doubled the workload of postal workers. This model could only be introduced because the CEPU signed a Memorandum of Understanding behind workers’ backs. This agreement contained a no-strike clause and served as a guarantee that the union would enforce the ADM.

Last month, the CEPU rammed through another sell-out EA at AP which offered a meagre 3 percent per annum wage rise—really a pay cut in view of inflation and the fact that workers did not receive a pay rise at all in 2020—and committed workers to ongoing restructuring.

Along with the previous EAs, these deals have allowed management to increase the use of casuals and contractors to replace full-time jobs. Far from representing the interests of workers, the enterprise bargaining system implemented by the Hawke-Keating Labor governments has been a mechanism to divide workers and tie them to the demands of their employers.

The unions, which fully support this anti-worker system, have acted as an industrial police force, imposing this straitjacket on the working class.

This is highlighted at AP by the fact that the TWU and CEPU have refused to organise any joint action to defend workers’ conditions, even though AP workers and StarTrack drivers were undergoing EA negotiations simultaneously.

StarTrack management is seeking to drive a wedge between the workers and is trying to undermine the action by StarTrack drivers. It is using the fact that one section of the workforce, under the CEPU, has signed a new EA and is now receiving the first three percent wage rise, while those workers represented by the TWU have yet to do so and are therefore “missing out.”

This was highlighted in a flyer sent to employees by StarTrack management on August 31, the day after AP announced that workers had voted up the new EA.

The flyer stated: “Star Track has made it clear from the beginning that we will not be providing any greater pay offer than what we've offered to 30,000 Australia Post employees…. The TWU’s delays will cost you money and will hurt all Australians who are reliant on us at this challenging time…. Don’t let the TWU hold your pay rise to ransom over its industry campaign.”

The situation confronting StarTrack workers along with their brothers and sisters throughout the transport industry and AP is the product of decades of betrayals by the unions.

Jeff Bezos announces $1 billion biodiversity pledge

Nick Barrickman

Last month former Amazon CEO Jeff Bezos announced that he would allot $1 billion to a conservation campaign aimed at the preservation of 30 percent of the world’s biodiversity. Bezos, up until recently the world’s wealthiest individual, declared on September 19 that his Earth Fund philanthropy would fund conservation efforts “where there is significant need and opportunity, as well as where there is a strong political commitment to nature.”

The investment will be part of the “30 by 30” campaign which various conservation charities have announced. The campaign aims to protect 30 percent of the world’s habitats by 2030. The Earth Fund investment will target “areas that are important for biodiversity and carbon stocks and will give emphasis to the central role of local communities and Indigenous peoples in conservation efforts.”

Jeff Bezos (Credit: Wikimedia Commons)

The Fund will seek to develop regions in the Congo Basin of Africa, the tropical Andes as well as the tropical Pacific region, “where there is significant need and opportunity, as well as where there is a strong political commitment to nature.” Bezos did not announce what specific projects the money would be funneled toward.

He received immediate praise from politicians, such as British Prime Minister Boris Johnson and President Ivan Duque of Colombia. President Joe Biden’s special envoy for climate John Kerry declared that the pledge “comes at a pivotal moment as we seek to avoid the loss of irreplaceable biodiversity and further destabilization of the climate.”

The announcement marks the first tranche of funding offered by the Earth Fund. Founded in 2020, Bezos declared its aim was to “explore new ways of fighting the devastating impact of climate change on this planet.” To this end, the then-Amazon CEO pledged $10 billion of his vast wealth (calculated at $198 billion, according to the Bloomberg Billionaires Index).

The Earth Fund was unveiled amid the public health and social catastrophe which has accompanied the COVID-19 pandemic. Officially, over 4.7 million lives have been lost, while other sources have estimated the death toll to be several magnitudes higher. In the United States, the global epicenter of the pandemic, over 700,000 have lost their lives.

While Bezos professes his sympathy for various species of flora and fauna facing extinction, the giant corporation he founded has taken advantage of the extinction of large numbers of human beings in the course of the pandemic. Amazon specifically has profited enormously from the shelter-in-place and remote working conditions that many in the population have adopted because of coronavirus.

In 2020 the corporation raked in $21.3 billion in profits. In late July, the company posted a second quarter 2021 income of $7.8 billion, which was an increase of 50 percent from the same quarter in 2020. Amazon expects this year’s third quarter revenues to improve upon 2020’s numbers by “only” 10-16 percent, a slowing growth, which Variety explains is a product of “the laws of large numbers” and the abating “surge of online orders a year ago.”

The Fund follows other philanthropic efforts provided from the grotesque fortunes of America’s billionaires. The Washington Post, which is owned by Bezos, notes that its boss “remains among the world’s largest contributors to climate philanthropy.” Aside from his climate pursuits, Bezos has supported numerous charity initiatives, including funds for the homeless and preschool services for low-income children.

Other wealthy benefactors to the climate cause include former New York City mayor and Democratic Party presidential candidate Michael Bloomberg, “who has given more than $100 million to the Sierra Club’s Beyond Coal campaign,” and Bill Gates, who “has led a for-profit initiative, Breakthrough Energy Ventures, which runs a $1 billion fund focused on climate-mitigation technologies.”

While the Earth Fund’s investments may find their way to a few worthy causes, the vast wealth commanded by Bezos is a particularly crude expression of the degeneration of modern capitalist society, characterized by immense poverty and social inequality.

The World Socialist Web Site, describing the charity of one of Bezos’s fellow billionaires, wrote in 2010 that such initiatives represented “the return of the aristocratic principle.” Under this precept, “the population was essentially at the mercy of the great ones in society, who bestowed—or did not bestow—favors and gifts as they saw fit.”

The summer has been dominated by billionaire aristocrats venturing into space. Now, with the “green” ventures of Bezos and other billionaires, this principle has been extended to animal and plant life as well.

Due to criticism over Amazon’s own substantial contributions to global warming, the e-commerce giant introduced the Climate Pledge campaign in 2019. The campaign, which over 200 corporations have signed onto, boasts that its members account for “$1.8 trillion in global annual revenues and have more than 7 million employees across 26 industries in 21 countries.” The Post notes, “Bezos unveiled the initiative after Amazon, for years, resisted revealing its environmental impact through CDP, formerly known as the Carbon Disclosure Project—a widely used framework for corporate reporting.”

The fortune behind Bezos’s Earth Fund has been made possible by the backbreaking exploitation of the Amazon workforce throughout the pandemic and before. Amazon’s workforce has surged from fewer than 800,000 workers in 2019 to over 1.3 million today. According to Business Insider, 1 in 153 American workers currently works for Amazon.

At the same time, Bezos’s stock wealth grew by $75 billion in 2020 alone. According to Yahoo Finance, “$1.7 million for Jeff Bezos is the same as $1 for the average American.” Bezos rakes in an astonishing $3,715 per second, an amount which dwarfs the average American weekly income of $984.

The conditions in Amazon’s warehouses give lie to the American oligarch’s humanitarian pretensions. A Post review of Occupational Safety and Health Administration (OSHA) files since 2017 recently found that the retailer had more instances of injuries that “caused employees to miss work or be shifted to light-duty tasks” than other businesses in the warehousing industry.

In a recent exposure of Amazon’s abusive practices, the state of California recently passed laws which bar the company from demanding productivity from workers at rates which force them to forego state-mandated breaks and bathroom visits.

Rather than abiding by the oligarchic principle, the protection of biodiversity and the environment requires a massive redistribution of social wealth from the capitalist class to society’s producers. Only in a society in which social activity and life itself are freed from the intrusions of the profit system can a truly scientific response to climate change be mounted.

Right-wing Japanese ruling party elects new leader

Peter Symonds

The ruling Liberal Democratic Party (LDP) elected former foreign minister and defence minister Fumio Kishida as party leader on Wednesday to replace Yoshihide Suga. Suga stood down in early September amid widespread criticism of his handling of the COVID-19 pandemic and public opposition to his government’s decision to proceed with the Olympic Games.

Kishida won a second-round vote against Taro Kono, also a former foreign minister and defence minister, after none of the four candidates in the first round won a majority. He relied on the support of the LDP factions and parliamentarians to defeat Kono, who is reportedly more popular among the LDP rank and file. Kishida will almost certainly be confirmed as Japan’s new prime minister at a special session of the parliamentary Diet on Monday.

Fumio Kishida in October 2017. (Photo: Wikimedia commons)

Kishida is variously characterised in the international media as “a moderate,” “the establishment choice,” or as the Financial Times put it, “Mr Status Quo.” The LDP, however, is a right-wing party that shifted even further to the right under the eight-year prime ministership of Shinzo Abe who stood down for health reasons in 2020.

As foreign minister under Abe from 2012 to 2017, Kishida is closely identified with Abe’s militarist build-up and increasingly confrontationist stance against China, encouraged by US President Obama as part of his “pivot to Asia.” The Abe government further undermined the so-called Article 9 of the Japanese constitution that bars the country from having armed forces and renounces war as a sovereign right. It rammed through legislation in 2015 allowing for “collective self-defence”—that is, to take part in the wars with the US and its allies.

Successive Japanese governments have sought to pay lip-service to Article 9 by claiming that the country’s military forces are purely for self-defence and are armed only with defensive weapons. In an interview this month with the Wall Street Journal, Kishida advocated that the Japanese military be expanded to include missiles able to strike potential enemies like China and North Korea.

Kishida is supportive of the Quadrilateral Security Dialogue—a quasi-military alliance of the US, Japan, India and Australia—which held its first face-to-face leaders’ meeting in Washington last week. His comments to the Wall Street Journal mouthed the Biden’s administration’s propaganda that Asia is “the front line of the clash between authoritarianism and democracy,” even as all four governments ride roughshod over democratic rights and norms.

Like their counterparts in the US, the Japanese ruling elites are fearful that the economic rise of China will undermine their economic and strategic interests. Japan lost its position as the world’s second largest economy in 2010 when it was overtaken by China in GDP terms. By joining the Biden administration’s aggressive confrontation and military build-up in Asia, the LDP government is seeking to reverse its historic decline.

Like Biden, Kishida provocatively advocates the strengthening of ties with Taiwan—an island that both the US and Japan de facto recognise as part of China. In doing so, he is undermining diplomatic relations with Beijing, which are based on the “One China” policy, and deliberately stoking up tensions around this explosive flashpoint.

Kishida can be considered a “moderate” only as compared to fascistic layers within the LDP leadership exemplified by one of the other contenders for party leadership—Sanae Takaichi. A former internal affairs and communications minister, Takaichi is an admirer of Margaret Thatcher and gained notoriety for her endorsement of a 1994 book praising Adolf Hitler’s electoral tactics. She regularly visits the notorious Yasukuni Shrine that is a symbol of Japanese militarism.

Abe, who retains considerable influence within the LDP, called on its supporters to back either Kishida or Takaichi. When Takaichi was forced to withdraw after the first round, Abe’s forces ensured Kishida’s victory. Like Abe, Takaichi and many other leading LDP figures, Kishida belongs to the ultra-nationalist Nippon Kaigi parliamentary grouping, which campaigns for a new constitution, promotes militarism and patriotism, and seeks to whitewash the crimes of Japanese militarism in the 1930s and 1940s.

Kishida will shortly have to lead the LDP in lower house elections that are to be held before November 28. While the party is unlikely to lose the election, Kishida’s position would suffer if he presided over significant losses. That is undoubtedly why his statements on domestic issues in the lead-up this week’s leadership contest have had a populist tinge.

Kishida is well aware of the widespread public hostility to the government over its failure to stem the surge in COVID-19 infections and deaths, and its decision to proceed with the Olympics. He has promised tens of trillions of yen in economic subsidies and has called for a “new Japanese-style capitalism” that would address widening social inequality.

In his Wall Street Journal interview, Kishida declared: “If the profits from growth are monopolized by a few people, the gap will widen even further. It’s not just about growth, it’s about distribution. Distribution equals income.”

The widening gulf between rich and poor has increasingly become a public issue as successive governments have undermined the life-long employment system that guaranteed permanent jobs to significant sections of workers. Around 40 percent of workers are now in uncertain “non-regular” jobs with lower wages and poorer conditions.

More than 10 million people live on less than $US19,000 a year, while one in six lives in relative poverty on incomes less than half the national median. Last year under the impact of the pandemic, more than half a million workers lost their jobs. At the same time, Forbes Asia reported in April that the collective wealth of the country’s 50 richest people had surged by nearly 50 percent as compared to a year earlier.

Kishida’s calls for a new Japanese capitalist economy are nothing but empty election posturing. He was a loyal minister in the Abe government that pushed through the pro-market restructuring that exacerbated social inequality. He promises tens of trillions of yen in economic stimulus—most of which will flow into the pockets of big business—while at the same time advocating fiscal discipline, which means further inroads into social spending.

China’s Evergrande crisis has far-reaching implications

Nick Beams

The crisis surrounding the debt-laden Chinese property developer Evergrande has disappeared from “headline news”—at least for the moment—but its implications for the Chinese economy are coming more clearly into view.

Men on electric bikes wait for riders near the Evergrande headquarters, center, in Shenzhen, China, Friday, Sept. 24, 2021. Seeking to dispel fears of financial turmoil, some Chinese banks are disclosing what they are owed by a real estate developer that is struggling under $310 billion in debt, saying they can cope with a potential default. (AP Photo/Ng Han Guan)

The Evergrande crisis was sparked by a decision of the Chinese government in August to tighten the regulations on access to credit—the so-called three red lines—out of fear that the build-up of debt, particularly in the property sector, was threatening to create the conditions for major financial turbulence.

Evergrande was hit hard as the inflow of money needed to finance its business model dried up because it fell far short of the new requirements. But the problems confronting Evergrande, which has failed to meet interest payments on dollar-denominated loans, extend throughout the property sector.

This week Bloomberg published a list of 10 property companies, excluding Evergrande and others that had defaulted, now facing major issues.

First on the list was Fantasia Holdings, based in Shenzhen, which operates across China, including in the Guangdong province and Shanghai. On Monday Moody’s cut its rating for the company further, citing its “increased refinancing risks because of weakened funding access and sizable amount of maturing debt.”

A dollar bond maturing in 2024 issued by the company has fallen to 31 cents on the dollar compared to 98 cents when it was issued in March. Its share price on the Hong Kong stock market has plunged by 58 percent this year and it holds cash and cash equivalents of $4.2 billion compared to liabilities of $12.9 billion.

Other companies showed similar tendencies, though not quite as extreme.

A typical example was China South City Holdings, which is based in Hong Kong and has projects in Shenzhen and Nanchang. S&P Global revised its outlook for the company to negative this month saying it may need to “run down its cash buffers to meet large offshore maturities” and that it “may not be able to refinance at reasonable costs.” A 2023 bond which stood at 93 cents on the dollar when issued in March has fallen to 61 cents and the company’s share price has dropped 43 percent this year. And the list goes on.

The crisis in the property market has far-reaching implications for the Chinese economy as a whole because of the role property development and land sales have played in fueling economic growth.

An article this week in the Economist provided some facts and figures on how significant it has been, noting that the turbulence could imperil everything “from local-government and household finances to the country’s growth model.”

Residential investment makes up 15 percent of Chinese gross domestic product (GDP). But according to calculations by economists Kenneth Rogoff of Harvard University and Yuanchen Yang of Tsinghua University, once construction and related industries are added property development accounts for 29 percent of GDP.

Their article traced the origins of the crisis to changes made by the Chinese government in 1994 when the central government overhauled the tax system and local government authorities lost a large portion of their revenue. They were also prevented from directly raising debt, yet at the same time were charged with reaching high-growth targets, sometimes exceeding 10 percent a year.

Rogoff and Yang explained that “Selling land became one of the few things municipal officials could do to generate revenues, which would in turn finance roads and other public works. They could also set up companies that could borrow from banks and raise debt from other sources.”

“This arrangement,” the article continued, “meant economic growth was tightly bound to booming property” with Chinese leaders cheering on the process “for the best part of 30 years.”

According to the article, between 1999 and 2007 the quantity of rural land transferred to urban use increased at an annual average rate of almost 23 percent and public land sales rose by an average of 31 percent a year.

In 2008, the Chinese economy was dealt a major blow as some 23 million jobs were lost with the onset of the global financial crisis. Fearing the eruption of social struggles by the working class, the Chinese government undertook major stimulus measures, amounting to $586 billion, much of which came in the form of loans and shadow-banking funds for property developers. As a result, by 2010, land sales accounted for more than 70 percent of municipal revenues.

Over the past several years, Chinese authorities have been trying to rein in the growth of debt, fearing its consequences for the stability of the financial system. With previous sources of finance becoming more constricted, property development firms became increasingly reliant on pre-sales income where buyers paid for their apartments, sometimes in full, months or even years before completion.

According to calculations by the French bank Natixis, cited in the article, “between 2015 and July 2021 the share of pre-sale funds as a source of funding for developers rose from 39 percent to 54 percent.” In the case of Evergrande, thousands of buyers have paid out large amounts of money only to find that the apartment they bought may not be completed—a situation that has led to protests outside Evergrande offices.

Other commentary on the Evergrande crisis has pointed to its implications for the economy as a whole. A recent article in the Financial Times described it as the end of China’s “build, build, build model” and reported there is enough empty property in China to house more than 90 million people.

Because of their intimate connection with the property market, there is a financial crisis building up for local government authorities.

This week Bloomberg reported that, according to economists at Goldman Sachs, hidden local government debt had risen to an amount equivalent to more than half of China’s GDP.

The report said the total debt of local government financing vehicles rose to around 53 trillion yuan ($US8.2 trillion) at the end of last year, up from 16 trillion yuan in 2013. This is equal to 52 percent of GDP and more than outstanding government debt.

The feverish property development and build-up of debt have created the conditions for a major financial crisis. Their unravelling will also spur explosive social struggles by the working class against the Chinese Communist Party regime.

The Myth of a New “Cold War” Between the U.S. and China/Russia

Jeff Mackler

AUKUS, or the new and secretly negotiated $66 billion nuclear-powered submarine agreement between Australia, the United Kingdom and the U.S., has momentarily ruffled some political feathers around the world, particularly in France and China. Without consulting with France or its military-industrial corporations, AUKUS principals cancelled France’s huge contract with Australia to construct some dozen now deemed  “obsolete” diesel-powered submarines over the course of a decade. The $66 billion deal was transferred to U.S. and UK corporations, including Lockheed Martin, which contracted to build nuclear-powered but not nuclear-armed submarines. The former require qualitatively less refueling and thus facilitate Australian patrolling of the vast Pacific region in tandem with the already present U.S. Pacific fleet.

Outraged French President Emmanuel Macron denounced the Biden-approved agreement as blatant “Trumpism” and withdrew the French ambassador to the U.S., the first and only such termination of diplomatic relations with France in some 250 years. “Trumpism” has in recent years come to be defined as “America First” or “MAGA,” Make America Great Again, including the imposition of U.S. tariffs not only against China but against Western European nations and Canada. At the time Democrats and leading U.S. corporate think tanks, including the Council on Foreign Relations, pilloried Trump’s tariffs but the Biden administrations has largely maintained them all and indeed, expanded their scope and impact. No doubt, there are always major divisions within the U.S. ruling class – not to mention among and between their international counterparts – when their base economic interests are in conflict.

Pivot to Asia

The corporate media has characterized the AUKUS deal as new evidence of a U.S. “pivot to Asia,” and a new Cold War against China, if not a U.S. abandonment of NATO and a tilt to deepened economic and military relations with Boris Johnson’s UK, whose Brexit the U.S. supported while the main NATO nations, Germany, and France, especially, opposed it.

Behind the hoopla about a “new Cold War” however, is the unrelenting economic competition between the leading world capitalist-imperialist nations marked especially by the two major contenders, the declining and still leading U.S. imperialism and the rising imperialist giant, China. The former has military hegemony, with U.S. bases around the world aimed and maintaining and advancing U.S. imperial interests. The monopolized U.S. military-industrial complex also guarantees super profits. War is always good for, indeed necessary for, capitalist profits! China has but a single military base outside its borders, but its ever-modernizing industrial and financial capacities, including its Belt and Road infrastructure initiative and its founding of the Shanghai Cooperation Organization (SCO), in 2001, bitterly opposed by the U.S., make Chinese capital more attractive to poor nations previously unable to secure loans at rates less than U.S.-dominated financial institutions.

Today, the SCO includes eight member states, China, India, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan and Uzbekistan, as well as four “Observer States” interested in acceding to full membership (Afghanistan, Belarus, Iran, and Mongolia) and six “Dialogue Partners” (Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey). No doubt a serious U.S. “pivot to Asia” to challenge China’s increasing influence over capital markets and advantageous investment opportunities will include more than the future construction of a fleet of Australian submarines!

No serious player in the world capitalist system today acts on the premise that China is anything resembling a socialist society, its ruling Chinese Communist Party notwithstanding. Neither France nor Germany today favor a new “cold war” with China. Indeed, Germany’s trade with China surpasses its trade with the U.S. and all other nations, and France is not far behind. Both are heavily dependent on Russian fossil fuel imports and on exports to China’s burgeoning internal market for industrial and major consumer commodities aimed at China’s 400 million “middle class” consumers. Both opposed U.S. efforts to block new Russian pipelines from the East, preferring cheap Russian fossil fuel, Russia’s primary export, to the more costly distantly-shipped U.S. variant.

New Cold War or imperialist rivalry?

Few, if any, serious political thinkers believe that today’s so-called Cold War between the U.S. and China-Russia is in any way analogous to the post-WWII period. In that era the Soviet Union (in 1917) and its subsequent Eastern European allies, along with China, and later Cuba and Vietnam, had broken with capitalist exploitation, abolished private property and established nationalized and planned economies that prioritized human needs, not capitalist profits. They all established a state monopoly of foreign trade that blocked the penetration of their economies from cheaper U.S. and European goods that undermined their own development. These accomplishments were based on popular social revolutions that defeated wartime fascist/capitalist-led governments in Eastern Europe. Pro-Soviet Communist Parties in Western Europe led in the resistance to Hitler’s occupation when the French and Italian (Vichy and Mussolini) governments welcomed and allied with Hitler’s onslaught and wartime occupation. The Vietnamese defeated both the French imperialist efforts to retain their former colony and the U.S. ten-year genocidal war that murdered four million Vietnamese in that U.S. horror for U.S. neo-colonial domination.

The post WWII Eastern European pro-Soviet governments facilitated the construction of socialist-oriented societies characterized by a generalized social equality, including free education and health care for all and broad investments in housing and cultural endeavors. These combined to rip a huge section of the world out of the U.S.-dominated and exploitative capitalist orbit. The new workers’ states additionally threatened the imperialist world by providing a modicum of support to various anti-colonial national liberation movements around the world, usually to keep imperialist colonizers at bay, but insufficient to definitively break from capitalist rule. Indeed, the Stalinist policy toward various national liberation movements most often consisted in using these just struggles for self-determination and freedom as “bargaining chips” with imperialism to secure secretly negotiated deals with the U.S. and other imperialist powers to limit aid in return for concessions to the various Russian and Eastern European Stalinist bureaucrats, for whom the maintenance of their privilege superseded their interest in advancing socialist revolutions. The new East European workers’ states – however much they were bureaucratically deformed by their Stalinist leaderships, and devoid of even a semblance of workers’ democracy, were nevertheless the central reason for the U.S. imperialist-orchestrated Cold War, that focused on the near-total exclusion of these new societies from the world capitalist economy, including from all international financial and banking institutions. Their encirclement by military blocs, including NATO and SEATO (Southeast Asia Treaty Organization), with the future prospect of restoring capitalism, was their central objective.  In time, this included the establishment of 1,100 U.S. military bases in some 100 countries, all aimed at preserving and extending U.S. economic, political and military hegemony around the world and at bringing down the workers’ states, whose rapid economic growth and broad social welfare measures initially posed a serious alternative to the West.

Capitalist restoration in Russia and China

The Stalinist policy of  “peaceful co-existence,” that is, the subordination of support to social revolution around the world to negotiated deals with imperialism, in time and inevitably led to the disintegration of these workers’ states and the restoration of capitalism in the USSR in 1990-91 led by Stalinist bureaucrat head of state, Boris Yeltsin.

The restoration of capitalism in China began a decade earlier, but in a more controlled manner in 1979 led by the new Chinese Communist Party leader Deng Xiaoping, who signaled world imperialism that China was more than willing to re-open to imperialist penetration and plunder. Even prior to Deng, the Sino-Soviet “dispute” gave proof that Chinese Maoists were more than willing to side with U.S. imperialism on a world scale, having declared that the USSR was the “main danger.”  This included formal meetings between the Chinese leadership, culminating in the 1972 visit by U.S. President Richard Nixon to China during the Vietnam War when the U.S. was raining death and destruction on that beleaguered country. China’s subsequent recognition – the first in the world – of the 1973 U.S.-orchestrated military coup in Chile, where General Augusto Pinochet slaughtered some 60,000 leftists after overthrowing the Salvador Allende government, and then China’s 1979 U.S.-supported military invasion of Vietnam, signaled the Chinese Stalinist’s capacity for deadly alliances with U.S. imperialism. At that time China supported the genocidal Pol Pot Khmer Rouge government when Vietnam intervened to halt Pol Pot’s systematic murder of millions of Cambodians.

China enters the WTO

Convinced that capitalist restoration in China was on the order of the day in 2001, the U.S. ended all aspects of hostility toward China and presided over China’s admission to the World Trade Organization (WTO). The terms were simple enough; China would allow U.S. corporations to set up shop and employ endless numbers of Chinese workers at near slave wages laboring in state-of-the-art U.S. factories to produce unprecedented numbers of commodities for the U.S. and world marketplace. This super-exploitation of Chinese labor had the effect of temporarily boosting declining U.S. profit rates, closing non-competitive U.S. factories, and freezing or reducing U.S. wage rates – more than a 10-year bonanza for U.S. corporations, which happily shipped back to the U.S. Chinese-made commodities from U.S.-owned factories at near zero tariff rates. Indeed, U.S. tariff rates at some 1.5 percent or zero on most Chinese imports were among the lowest in the world. And why not? Why would corporate America tax Chinese made commodities manufactured by U.S, corporations?

China emerges as chief U.S. rival

In the 20 years since China was admitted to the WTO, China went from operating as one of the world’s lowest technology nations to today, when Chinese technology rivals or exceeds almost all other nations on earth. In the past 20-plus years China was transformed from providing “internal migrant” teenage girls from the countryside, producing garments in prison-like foreign-owned dormitory factories at six cents per hour and seven days a week, to a nation with some of the most modern Chinese-owned factories in the world, producing world-class industrial tools and machinery and state-of-the-art 5G (fifth generation) electronics and telecommunication products.

Super-high-tech 5G Chinese corporations like Huawei are today capable of challenging and exceeding the world’s most sophisticated operations. A 2017 Financial Times survey of the global mobile infrastructure market showed that Huawei had a world market share of 28 percent, with Sweden’s Ericsson at 27 percent, Finland’s Nokia at 23 percent and ZTE, another Chinese firm, at 13 percent. Japan’s Samsung had 3 percent. All the others, including the U.S. corporation, Cisco, had but 6 percent between them.

Chinese imperialism

Capitalist-imperialist China has come a long way since its 2001 entry into the WTO. China stands first in the world in the number of billionaires at 1,058 in 2021 compared to 696 U.S. billionaires. Most revealing, in 2020 the number of Chinese billionaires stood at only 626! As in the U.S., with the likes of billionaires Elon Musk and Jeff Bezos approaching trillionaire status via their skyrocketing investment portfolios, China’s super rich similarly use their fortunes in endless speculative ventures on the various Chinese and international stock exchanges.

As in the U.S., China’s super rich are pressed a bit, for public consumption, to “share the wealth,” as with Biden’s new proposals to increase corporate taxation. China’s President Xi Jinping’s recently announced plans to spread “common prosperity,” compelling some of the corporate elite to announce sizeable multi-billion dollar charitable contributions to education and health care – social measures that in China have long been banished as free government-mandated policy.

Chinese tax administrators have similarly pledged to crack down on tax dodgers, fining Zheng Shuang, for example, one of the country’s most popular actresses, $46 million for tax evasion. In China, as it is near official practice in the U.S., the corporate elite are largely free from taxation. A September 20 New York Times headlined story described how “The PwC,” the giant PricewaterhouseCoopers accounting firm, “helped the world’s largest companies avoid taxes.” PwC’s method was simple and described in detail by The Times. They placed PwC employees in various Treasury Department posts, where they concocted specific tax code loopholes for PwC patrons to avoid taxes. That is, they re-wrote and manipulated U.S. tax laws for the benefit of the corporate elite in much the same manner that is the norm with regard to all legislation produced by the U.S. Congress, including the present  “politicking” with President Biden’s ever-changing $3.5 trillion so-called infrastructure package.

China’s capitalist elite

The Chinese Supreme Court, weighed in on Xi’s “wealth sharing” and “common prosperity” rhetoric when it recently declared that the 72-hour work weeks common at many private-sector companies, were illegal. This corporate-enforced  “996 work hour system” derived its name from its requirement that employees work from 9:00 am to 9:00 pm, 6 days per week, that is, 72 hours per week.

Needless to say this massive intensification of labor, deemed by many as a Chinese system of modern-day slavery, along with massive tax evasion and stock market speculation, and the exploitation of workers around the world, accounts for the vast fortunes of the Chinese elite. That China presided over the construction of more coal-fired energy plants abroad than the rest of world combined informs us that here too China’s imperialist system knows no limits. But here too, to counter China’s horrendous reputation as the world’s largest green house gas polluter, President Xi recently announced that China planned to stop construction of all coal-fired plants abroad. Abroad! Yet, China is still constructing massive numbers of coal-fired power plants at home. Xi offered no accounting of either its domestic coal operations or its greenhouse gas emissions reduction targets. In 2020, China said it hoped to reach a “peak in green house emissions” by the end of this decade and reach net-zero emissions by 2060, a deadly scenario akin to world imperialism’s other major polluters, including the Pentagon, among the largest polluters on earth. Further, Xi’s recent UN pledge to end coal-fired plant production abroad, no doubt to burnish China’s image as COP26 UN climate talks begin in Glasgow in November, was not without its ambiguities. Was China ending the physical construction of coal plants abroad, but providing the financing for such construction? Would private Chinese companies be allowed to build coal plants abroad?

According to Credit Suisse Research Institute, China’s top 1 percent own nearly 31 percent of the country’s wealth, up from 21 percent in 2000. In the U.S. the top 1 percent own some 35 percent.

In 2016-17, monopoly capitalist-imperialist China, the world largest industrial producer, consumed 59 percent of the worlds’ total supply of cement, 47 per cent of its aluminum, 56 percent of nickel, 50 percent of coal, 50 percent of copper, 50 percent of steel, 27 percent of gold, 14 percent of oil, 31 percent of rice, 47 percent of pork, 23 percent of corn, and 83 percent of cotton. A large portion of all these commodities is supplied by Africa, Asia and Latin America, with whom China maintains classical imperialist relations centered on the massive extraction of surplus value, that is, super profits for Chinese capitalists.

China’s largest four banks, among the largest, if not the largest in the world, are significant shareholders-partners with major U.S. banks operating in China including CitiBank, Bank of America and JPMorgan Chase. All these U.S. mega banks operate in China under Chinese law, with Chinese capitalist hands in the till. How could it be otherwise?

Chinese “shadow banks,” private institutions operating with the barest of government regulation, are akin to their U.S. counterparts in leveraging massive debt in real estate speculation that today threatens to bring on a crash similar to the U.S. 2008-09 banking/real estate catastrophe.

Inter-imperialist competition

To conclude, there is no ”new Cold War” emerging between the U.S. and China, but rather the classic intensification of inter-imperialist competition and rivalry between the major world economic powers with the less powerful imperialist states, whose interests are continually undermined by their “bettors,” ever pressed to take sides in increasingly fruitless efforts to maintain their own interests and profits. No doubt, Chinese diplomats bitterly denounced the AUKUS nuclear-powered submarine deal, even though the planned subs are not scheduled to hit the high seas for perhaps a decade. AUKUS notwithstanding, the ever-deepening inter-imperialist competition for world markets, resources and the “right” to oppress and exploit poor nations and working people everywhere is the driving force behind the ever-deepening crises that humanity faces.

Globalized and predatory capitalism and its imperial superpowers have no solutions other than at the expense of the vast majority. Endless wars, bloated military budgets [wherein monopolized corporations reap super profit for manufacturing ever sophisticated instruments of death and destruction] racism, sexism and LGBTQI discrimination are all capitalism’s calling cards. The same is the case with fossil fuel-induced global warming and the resulting catastrophic climate horrors as well the current and future deadly pandemics. All are inherent in the capitalist-imperialist system.

Afghanistan’s Impoverished People Live Amid Enormous Riches

Vijay Prashad

On September 25, 2021, Afghanistan’s Economy Minister Qari Din Mohammad Hanif said that his government does not want “help and cooperation from the world like the previous government. The old system was supported by the international community for 20 years but still failed.” It is fair to say that Hanif has no experience in running a complex economy, since he has spent most of his career doing political and diplomatic work for the Taliban (both in Afghanistan and in Qatar). However, during the first Taliban government from 1996 to 2001, Hanif was the planning minister and in that position, dealt with economic affairs.

Hanif is right to point out that the governments of Presidents Hamid Karzai (2001-2014) and Ashraf Ghani (2014-2021), despite receiving billions of dollars in economic aid, failed to address the basic needs of the Afghan population. At the end of their rule—and 20 years of U.S. occupation—one in three people are facing hunger, 72 percent of the population lingers below the poverty line and 65 percent of the people have no access to electricity. No amount of bluster from the Western capitals can obscure the plain fact that support from the “international community” resulted in virtually no economic and social development in the country.

Poor North

Hanif, who is the only member of Afghanistan’s new cabinet who is from the country’s Tajik ethnic minority, comes from the northeastern Afghan province of Badakhshan. The northeastern provinces in Afghanistan are Tajik-dominated areas, and Badakhshan was the base from which the Northern Alliance swiftly moved under U.S. air cover to launch an attack against the Taliban in 2001. In early August 2021, the Taliban swept through these districts. “Why would we defend a government in Kabul that did nothing for us?” said a former official in Karzai’s government who lives in Badakhshan capital, Fayzabad.

Between 2009 and 2011, 80 percent of USAID funds that came into Afghanistan went to areas of the south and east, which had been the natural base of the Taliban. Even this money, a U.S. Senate report noted, went toward “short-term stabilization programs instead of longer-term development projects.” In 2014, Haji Abdul Wadood, then governor of the Argo district in Badakhshan, told Reuters, “Nobody has given money to spend on developmental projects. We do not have resources to spend in our district, our province is a remote one and attracts less attention.”

Hanif’s home province of Badakhshan—and its neighboring areas—suffer from great poverty, the rates upwards of 60 percent. When he talks about failure, Hanif has his home province in mind.

For thousands of years, the province of Badakhshan has been home to mines for gemstones such as lapis lazuli. In 2010, a U.S. military report estimated that there was at least $1 trillion worth of precious metals in Afghanistan; later that year, Afghanistan’s then Minister of Mines Wahidullah Shahrani told BBC radio that the actual figure could be three times as much. The impoverished north might not be so poor after all.

Thieves in the North

With opium production contributing a large chunk of Afghanistan’s gross domestic product, it is often a focus of global media coverage on the country’s economy and has partly financed the terrible wars that have wracked the country for the past several years. The gems of Badakhshan, meanwhile, provided the financing for Ahmad Shah Massoud’s Jamiat-e Islami faction in the 1980s; after 1992, when Massoud became the defense minister in Kabul, he made an alliance with a Polish company—Intercommerce—to sell the gems for an estimated $200 million per year. When the Taliban ejected Massoud from power, he returned to the Panjshir Valley and used the Badakhshan, Takhar, and Panjshir gems to finance his anti-Taliban resistance.

When the Northern Alliance—which included Massoud’s faction—came to power under U.S. bombardment in 2001, these mines became the property of the Northern Alliance commanders. Men such as Haji Abdul Malek, Zekria Sawda and Zulmai Mujadidi—all Northern Alliance politicians—controlled the mines. Mujadidi’s brother Asadullah Mujadidi was the militia commander of the Mining Protection Force, which protected the mines for these new elites.

In 2012, Afghanistan’s then Mining Minister Wahidullah Shahrani revealed the extent of corruption in the deals, which he had made clear to the U.S. Embassy in 2009. Shahrani’s attempt at transparency, however, was understood inside Afghanistan as a mechanism to delegitimize Afghan mining concerns and push through a new law that would allow international mining companies more freedom of access to the country’s resources. Various international entities—including Centar (United Kingdom) and the Polish billionaire Jan Kulczyk—attempted to access the gold, copper and gemstone mines of the province; Centar formed an alliance with the Afghanistan Gold and Minerals Company, headed by former Urban Development Minister Sadat Naderi. The consortium’s mining equipment has now been seized by the Taliban. Earlier this year, Shahrani was sentenced to 13 months’ jail time by the Afghan Supreme Court for misuse of authority.

What Will the Taliban Do?

Hanif has an impossible agenda. The IMF has suspended funds for Afghanistan, and the U.S. government continues to block access to the nearly $10 billion of Afghan external reserves held in the United States. Some humanitarian aid has now entered the country, but it will not be sufficient. The Taliban’s harsh social policy—particularly against women—will discourage many aid groups from returning to the country.

Officials at the Da Afghanistan Bank (DAB), the country’s central bank, tell me that the options before the government are minimal. Institutional control over the mining wealth has not been established. “What deals were cut profited a few individuals and not the country as a whole,” said one official. One major deal to develop the Mes Aynak copper mine made with the Metallurgical Corporation of China and with Jiangxi Copper has been sitting idle since 2008.

At the Shanghai Cooperation Organization (SCO) meeting in mid-September, Tajikistan’s President Emomali Rahmon spoke about the need to prevent terrorist groups from moving across the Afghan borders to disrupt Central Asia and western China. Rahmon positioned himself as a defender of the Tajik peoples, although poverty of the Tajik communities on both sides of the border should be as much a focus of attention as upholding the rights of the Tajiks as a minority in Afghanistan.

There is no public indication from the SCO that it would prevent not only cross-border terrorism, but also cross-border smuggling. The largest quantities of heroin and opium from northern Afghanistan go to Tajikistan; untold sums of money are made in the illegal movement of minerals, gemstones, and metals out of Afghanistan. Hanif has not raised this point directly, but officials at DAB say that unless Afghanistan better commandeers its own resources, something it has failed to do over the past two decades, the country will not be able to improve the living conditions of its people.