US Intervention and Capitalism Have Created a Monster in Honduras

W.T. Whitney Jr.

Chilean author and human rights advocate Ariel Dorfman recently memorialized Orlando Letelier, President Allende’s foreign minister. Agents of dictator Augusto Pinochet murdered Letelier in Washington in 1976. Dorfman noted that Chile and the United States were “on excellent, indeed obscenely excellent, terms (like they are today, shamefully, between the United States and the corrupt regime in Honduras).”

The Honduran government headed by president Juan Orlando Hernández does have excellent relations with the United States. The alliance is toxic, however, what with the continued hold of capitalism on an already unjust, dysfunctional society. Hondurans will choose a new president on November 28.

Honduras, a dependent nation, is subject to U.S. expectations. These center on free rein for businesses and multi-national corporations, large foreign investment, low-cost export goods, low wages, foreigners’ access to land holdings and sub-soil resources, and a weakened popular resistance.

Meanwhile, the U.S. government casts a blind eye on Hernández’s many failings. These include: fraud and violence marking his second-term electoral victory in 2017, an illegal second term but for an improvised constitutional amendment, testimony in a U.S. court naming him as “a key player in Honduras’ drug-trafficking industry” and, lastly, his designation by U.S.  prosecutors as a “co-conspirator” in the trial convicting his brother Tony on drug-trafficking charges.

Some 200 U.S. companies operate in Honduras. The United States accounted for 53% of Honduras’s $7.8 billion export total in 2019. U.S goods, led by petroleum products, made up 42.2 % of Honduran imports.

Honduras’s Economic Development and Employment Zones (ZEDE) reflect planners’ exuberant imagination. They envision privately owned and operated “autonomous cities and special investment districts” attracting foreign investment and welcoming tourist and real estate ventures, industrial parks, commercial and financial services, and mining and forestry activities.

Banks and corporations active in the ZEDEs will appoint administrative officers,  mostly from abroad and many from the United States. They, not Honduras’s government, will devise regulations and arrangements for taxation, courts, policing, education and healthcare for residents.

The first ZEDEs are taking shape now. The idea for them cropped up following the military coup in 2009 that removed president Manuel Zelaya’s progressive government. Hernández, as congressional leader and as president from 2014 on, led in promoting them. Honduras’s Congress in 2013 amended the Constitution to legitimize legislation establishing the ZEDEs. The recent end of litigation before the Supreme Court resulted in their final authorization.

For most Hondurans, who are treated as if they were disposable, capitalism has its downside.

Honduras’s poverty rate is 70%, up from 59.3% in 2019. Of formally employed workers, 70% work intermittently; 82.6% of Honduran workers participate in the informal sector. The Covid-19 pandemic led to more than 50,000 businesses closing and almost half a million Hondurans losing their jobs. Some 30,000 small businesses disappeared in 2020 owing to floods caused by hurricanes.

Violence at the hands of criminal gangs, narcotraffickers, and the police is pervasive and usually goes unpunished. Victims are rival gang members, political activists, journalists, members of the LGBT community, and miscellaneous young people.  According to insightcrime.org, Honduras was Latin America’s third most violent country in 2019 and a year later it registered the region’s third highest murder rate. Says Reuters: “Honduras has become a sophisticated state-sponsored narco-empire servicing Colombian cartels.”

Associated with indiscriminate violence, corruption, and narco-trafficking, Honduras’s police are dangerous. President Hernández eight years ago created “The Military Police for Public Order” (PMOP), the Interinstitutional National Security Force, and the “Tigres” (Tigers). These are police units staffed either by former soldiers or by “soldiers … specializing in police duties.” Police in Honduras numbered 13,752 in 2016 and 20,193 in 2020.

Honduras’s military has grown. Defense spending for 2019 grew by 5.3 %; troop numbers almost doubled. For Hernández, according to one commentator, “militarism has been his right arm for continuing at the head of the executive branch.”  The military forces, like the police, are corrupt, traffic illicit drugs, and are “detrimental” to human rights. The looming presence of security forces is intimidating as they interfere, often brutally, with voting, protest demonstrations, and strikes.

According to Amnesty International, “The government of … Hernández has adopted a policy of repression against those who protest in the streets … The use of military forces to control demonstrations across the country has had a deeply concerning toll on human rights.”

The U.S. government has provided training, supplies, and funding for Honduras’s police and military. Soto Cano, a large U.S. air base in eastern Honduras, periodically receives from 500 to 1500 troops who undertake short-term missions throughout the region, supposedly for humanitarian or drug-war purposes.

Not only does serious oppression exist, but, according to Reuters, severe drought over five years has decimated staple crops [and] … Nearly half a million Hondurans, many of them small farmers, are struggling to put food on the table.” The UN humanitarian affairs agency OCHA reports that as of February 2021, “The severity of acute food insecurity in Honduras has reached unprecedented levels.”

For the sake of survival, many Hondurans follow the path of family and friends: they leave. Among Central American countries, Honduras, followed by Guatemala and Mexico, registered the highest rate of emigration to wherever between 1990 and 2020. The rate increases were: 530%, 293%, and 154%, respectively. Between 2012 and 2019, family groups arriving from Honduras and apprehended at the U.S. border skyrocketed from 513 in 2012 to 188,368 in 2019.

The undoing of Honduras by U.S. imperialism follows a grim pattern, but is also a special case.  Rates of migration from Central American countries to the United States correlate directly with levels of oppression and deprivation in those countries. As regards hope, the correlation is reversed.

Differing rates of apprehension of Honduran and Nicaraguan migrants at the U.S. southern border are revealing. Capitalist-imbued Honduras specializes in oppression, while optimism is no stranger in a Nicaragua aspiring to socialism.

Department of Homeland Security figures show that between 2015 and 2018 the yearly average number of Nicaraguans apprehended at the border was 2292. The comparable figure for Hondurans was 63,741. Recently the number of Nicaraguan migrants has increased; 14,248 presented themselves at the border in 2019 – as did 268,992 Honduran refugees.

Recent reflections of Carlos Fonseca Terán, the FSLN international secretary, show why hope has persisted in Nicaragua. He points out that, since 2007, poverty, inequality, illiteracy, infant mortality, and murders have dropped precipitously. Citizens’ safety, electrification, renewable energy sources, women in government, healthcare funding, and the minimum wage have increased, markedly. Fonseca adds that the “percentage of GDP produced … under associative, cooperative, family and community ownership went from less than 40% to more than 50%.”

The UK and the Pandora papers: A cesspit of the super-rich

Thomas Scripps

No one in the UK needed to be told that the Johnson government is beholden to the interests of the super-rich. Indeed, it is a government significantly made up of the rich and the super-rich.

Chancellor Rishi Sunak has a reported personal wealth of £200 million, mostly in property. His wife has £430 million, mostly in shares in technology corporation Infosys, making her richer than the queen.

Leader of the House of Commons Jacob Rees-Mogg’s hedge fund has brought him a personal fortune of well over £100 million.

Some way behind, new Education Secretary Nadim Zahawi has an estimated property portfolio of £25 million. Health Secretary Sajid Javid clocks in at £8 million.

What the Pandora papers add to this picture are the sordid details of the world in which such fortunes and ones vastly larger are made, hoarded and hidden with the UK at the centre of a network of legalised criminality. They confirm the utterly parasitic character of a ruling class which lives by looting the rest of society, to the tune of billions of pounds, while tossing chump change to its “elected representatives” for favours.

Three major donors to the Conservative Party have come under particular scrutiny.

Corporate lawyer and businessman Mohammed Amersi has donated £525,000 since 2018. His partner, Nadezhda Rodicheva, donated £250,000 in 2017 and 2018.

Mohamed Amersi speaking at an online meeting of the Horasis think tank (Creative Commons)

The Pandora papers show that Amersi was working for Swedish telecoms company Telia during its involvement in one of Europe’s biggest corruption scandals, involving millions of pounds paid to Gulnara Karimova, daughter of the then president of Uzbekistan, through an offshore company to secure influence with the country’s mobile licensing regulator.

Amersi handled the negotiations with Karimova’s offshore company. A Telia invoice for “success fees” for “Project Uzbekistan” records a payment of £500,000.

BBC Panorama has seen internal Telia documents referring to a consultant named as “Mr XY” paid more than $65 million over six years, including between one and two million a year for “lavish corporate entertainment”. Former Telia executive Michaela Ahlberg told Panorama that the consultant was Amersi.

In 2006, according to the Financial Times, Amersi was accused of seeking to “extort” $2 billion from a businessman on behalf of a Russian oligarch. In 2005, he received $4 million dollars for helping First National Holding acquire St Petersburg-based telecoms company PeterStar. The deal involved the “misappropriation” of Russian state assets, according to a Swiss arbitration tribunal. First National Holding was owned by Leonid Reiman, then Russia’s telecoms minister.

Another donor exposed in the Pandora papers is Viktor Fedotov, a former oil executive, whose companies Aquind and Offshore Group Newcastle have donated £700,000 since 2016. His business partner at Aquind, Alexander Temerko, has also gifted £700,000.

The papers show that Fedotov was a secret owner, through layers of offshore companies, of VNIIST, which several years ago made millions from an allegedly corrupt deal with Russian state-owned oil and gas pipeline company Transneft. VNIIST’s two other owners were Transneft executives.

Aquind is currently seeking UK government approval to build a £1.2 billion undersea power interconnector between Portsmouth and France.

The third Tory party donor cited in the Pandora papers exposure is Lubov Chernukhin, who has given £2.1 million since 2012. Lubov is married to husband Vladimir, a billionaire Russian businessman who served as a deputy finance minister between 2000 and 2002. The pair organise their financial affairs through a huge network of offshore companies.

These exposures follow the revelations earlier this year that Conservative Party co-chairman Ben Elliot has built on the longstanding “Leaders Group” of elite Tory donors, who donate a minimum of £50,000 a year and are rewarded with regular private dinners with senior government ministers. Elliot’s innovation is an even more exclusive “Advisory Board”, open to those who pay £250,000 a year, given access to monthly meetings with Johnson and Sunak.

Elliot, a nephew of Prince Charles, has raised £70 million for the Tory party, including a record £37 million during the 2019 general election. He is named in the Pandora papers in connection with using an offshore company to help fund a cricket documentary he produced with Ben Goldsmith, brother of Tory minister Zac Goldsmith, both heirs to their father Sir James Goldsmith’s billion-pound fortune.

A hue and cry has gone up in the British media over the Pandora papers, “access capitalism”, the offshore industry and the government’s turning a blind eye to corruption. The Guardian, which played a leading role in breaking the story, has insisted on the need “to hold politicians and their backers to account” and expose “conflict of interest when it comes to reforming the offshore economy.”

But there is nothing remotely reformable about the world glimpsed through this latest scandal.

The Guardian cheers the fact that previous leaks, the Panama and Paradise papers, enabled “governments to recoup more than $1.36bn in back taxes and penalties.” But it acknowledges in the same editorial that tax havens cost the world’s governments “anywhere between $400bn and $800bn (£293bn to £586bn) every year”. That is previous devastating revelations of corruption and the supposedly remedial action of the world’s governments clawed back a maximum of 0.34 percent and a minimum of 0.17 percent of the estimated total loss of taxes from global offshore operations.

The paper notes throughout its coverage, “there was nothing illegal about the transaction” and “there is no suggestion of wrongdoing” in reference to the lawful loopholes used to dodge billions in tax and avoid public scrutiny.

The figures named in the Pandora papers are only individual manifestations of a criminal social order, in which theft is routine and what does not count as corruption only reflects the extent of the legal privileges available to corporations, financial institution and the super-rich.

Britain is at the centre of this global racket. More than two-thirds of the companies identified in the Pandora papers are registered in the British Virgin Islands. The Tax Justice Network reported last November that the UK and its “spider’s web” of Overseas Territories and Crown Dependencies were responsible for 29 percent of lost corporate tax worldwide. Including private taxes, the UK network is responsible for 37.4 percent of global tax losses.

Billions of pounds worth of dark money are invested in the UK’s property market. The Pandora papers revealed the owners of at least £4 billion worth of real estate held through offshore companies, including the King of Jordan and the president of Kenya.

Several million pounds of proceeds from Unaoil, run by the Ahsani brothers, fixers for multinationals in Asia, the Middle East and Africa involved in the “world’s biggest bribery scandal”, were also found to have been invested in property across the UK.

The family and associates of the president of Azerbaijan, repeatedly accused of corruption, have traded £400 million in UK property through offshore companies in the past 15 years. One £67 million building was sold to the queen’s Crown Estate.

Only a fraction of the truth has been revealed.

Over £170 billion of UK property is held overseas. Last December, a Home Office and Treasury Report moved the risk assessment for money laundering through the property market from “medium” to “high”. The document stated, “Corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise their corruption proceeds.”

This is undoubtedly true, but the largest single group of owners exposed by the Pandora papers, over a quarter, were British. Among them is Tina Green, wife of retail billionaire asset-stripper, pension-raider and tax-dodger Sir Phillip Green, who is listed as the beneficial owner of 47 different British Virgin Islands companies.

Also referred to is former Labour Prime Minister Tony Blair and his wife Cherie, who quite legally avoided paying £312,000 in stamp duty when purchasing a £6.45 million property in London as an office for her business. The Blairs were able to do this by purchasing the offshore firm that owned it.

Coming on the heels of a major corruption scandal involving former Tory Prime Minister David Cameron, Johnson and many of his senior ministers, the Pandora papers show the true face of capitalist “democracy”. An oligarchy gorging itself on the wealth of society, waited on by drooling politicians scrambling for a tip.

Russian COVID-19 deaths reach record highs while government does nothing

Andrea Peters

Coronavirus deaths in Russia are reaching all-time highs, as the federal government does nothing to control the pandemic. Over 970 people died in the country on Tuesday, surpassing the worst moments of the 2021 winter peak. According to the government agency Rosstat, 418,000 Russian citizens have now perished from COVID-19. The real numbers, however, are widely considered to be far higher.

Ambulances with patients suspected of having coronavirus stand near a hospital in Kommunarka, outside Moscow, Russia on October 11, 2021. (AP Photo/Alexander Zemlianichenko)

According to the latest numbers from the Federal State Statistics Service (Rosstat), Russia experienced a staggering 71.6 percent increase in mortality over the past 12 months, driven above all by the high mortality from COVID-19. Overall, between September 2020 and August 2021, 2.36 million people died in Russia, while only 1.4 million children were born. The natural population decline has now reached dimensions unseen in the country outside of war times.

Meanwhile, daily confirmed cases continue to climb, and had reached more than 28,000 a day as of Tuesday. Nationwide, there has been a 16 percent increase in infections over the last seven days, and in 11 regions of the country that number is 30 percent. On October 12, the Ministry of Health said the situation was worst in Orenburg, Bashkortostan, and Tatarstan, which are east of Moscow and north of the border with Kazakhstan, respectively.

Other areas are also being extremely hard hit. The republic of Mari El declared that it has no more hospital beds for COVID-19 patients, as did the city of Chelyabinsk. Hospitals in the Komi republic are 90 percent full, and in Vologda oblast 97 percent.

In Voronezh, a local chemical plant has suspended its tests of jet rockets in order to furnish the region’s hospitals with oxygen. It delivered 42 tons of the life-saving resource to medical facilities last week alone. Still, more supplies are being shipped into the region. Three hundred and ten doctors and 800 medical personnel have been dispatched to Adiga, and another 780 hospital beds brought online. But health officials are warning that even this may not be enough to handle the surge.

According to the head of Russia’s consumer protection agency, 605 schools in 25 regions and 117 childcare facilities in 22 regions are shuttered due to outbreaks. It is clear, however, when one reads local news outlets that these numbers are much higher.

The latest spike in cases and deaths followed by two weeks the nationwide reopening of schools in early September. The country does not report child COVID deaths, intentionally hiding the toll on the young.

Denis Protsenko, the head of Moscow’s central infectious disease hospital, Kommunarka, said on Tuesday that the surge is the anticipated outcome of the restart of the school year, with kids contracting the virus and bringing it home to adults in their households. He also added that his facility is filling with patients and its ICU is stretched.

With both the federal government and regional authorities unwilling to impose a lockdown, officials in hard hit areas are imposing rules requiring proof of vaccination, prior infection, or a negative COVID-19 test in order to enter everything from cafes to museums to stores to educational institutions.

In some areas, such as Saint Petersburg, they have set target vaccination rates for certain sectors of the workforce—public employees, service workers, educators, and those working in critical industries. Others regions currently being swamped by the virus—such as Sverdlovsk, Karelia, Novosibirsk—are taking similar measures. However in Russia’s two largest cities, Saint Petersburg and Moscow, coronavirus restrictions are essentially non-existent and mask mandates are poorly enforced, if at all.

The patchwork of limited efforts that vary from one place to the next cannot stem the tide of the spreading Delta variant, which can rip through even highly-vaccinated populations unless other essential public health measures are imposed. In Russia, just 29 percent of the population has received the two shots necessary to be considered fully vaccinated, despite the fact that supplies are abundant there. A total of only 33 percent have gotten at least one shot, a sign that the rate of those initiating vaccination remains very low.

Nonetheless, the Kremlin has made clear that it will do nothing else. On Tuesday, speaking to deputies of the Russian Duma, President Vladimir Putin made a pathetic appeal to the country’s parliamentary representatives to speak on mass media in support of vaccination. “People believe you and listen to your advice and recommendations.” The country’s extremely low vaccination rate demonstrates the preposterousness of this claim.

Lockdowns, along with other stringent measures, are absolutely essential in order to contain and eradicate the virus. But just as this approach has been abandoned in the United States, Europe, and elsewhere around the globe, so too has it been ruled out by the Russian ruling class. Elites everywhere view it as an intolerable limit on profit-making, both in terms of the extraction of surplus value from the working class and the cost of sustaining the population through the economic impact of the closure of all but essential workplaces.

Writing in response to an article in The Penza Post about the region’s appeal by its health minister for people to stay home and away from social areas with concentrations of people, one reader replied, “And is work a social area? And is the bus a social area? If everything is so bad, then close enterprises, pay people money, and then they will stay home.”

Austria gets a new chancellor but policies remain unchanged

Peter Schwarz

With almost 9 million inhabitants, Austria is not among the largest European countries. But the abyss of ruthlessness, corruption and crime that opened up with the recent government crisis in Vienna is symptomatic of the state of bourgeois democracy in all Western countries.

The new Federal Chancellor Alexander Schallenberg and predecessor Sebastian Kurz (Image: BKA/Wenzel/CC BY-SA 2.0)

Federal Chancellor Sebastian Kurz resigned last weekend after the Central Public Prosecutor’s Office searched the Federal Chancellery, the Ministry of Finance and the party headquarters of his conservative Austrian People’s Party (ÖVP) to prosecute white-collar crime and corruption. The prosecutor has accused the chancellor and his closest colleagues of serious disloyalty to the detriment of the Republic of Austria, corruption and making false statements.

Specifically, Kurz and his team are said to have bought manipulated opinion polls four years ago, placed embellished articles in the media outlets of tabloid publisher Wolfgang Fellner and financed the entire operation with funds from the budget of the Ministry of Finance to enable the then 31-year-old Kurz to secure the leadership of the ÖVP and the chancellery. Under Austrian law, such charges can result in a prison term of between 1 and 10 years.

Kurz denies all allegations, although they are factually well-documented. He also only resigned—or “stepped aside,” as he put it—when his Green Party coalition partner threatened to vote with the opposition to bring down the government.

Kurz still pulls the strings of government policy. He remains chairman of the ÖVP and after his resignation was also elected as club chairman (parliamentary group leader) of his party in the National Council. In this capacity, he continues to attend government meetings.

Kurz also personally selected his successor, the previous foreign minister, Alexander Schallenberg. Schallenberg, who was sworn in on Monday, has three advantages in the short term: firstly, he is one of Kurz’s loyal admirers and supporters; secondly, he has no domestic political experience; and thirdly, the career diplomat and offspring of an old noble family has good connections and a serious reputation.

Observers assume that Kurz will try a comeback if he survives the investigation, as he did two years ago. At that time, he was hit by the so-called Ibiza affair, but returned to the chancellery four months after resigning thanks to the support of the Greens.

The investigations of the public prosecutor’s office are based, among other things, on numerous chats that were found on the cell phone of Kurz confidante Thomas Schmid, which had been confiscated as part of another investigation. They provide the material for a novel by an author of the rank of Balzac, Zola or—to stay closer to Austria—Karl Kraus. They paint a picture of a conspiratorial troop who meticulously plan their promotion to the chancellery and do not shy away from any means to achieve their goal.

For example, although Kurz himself was a minister in the grand coalition of the Austrian Social Democrats (SPÖ) and ÖVP from 2013 to 2017, he intrigued against Chancellor Christian Kern (SPÖ) and Vice Chancellor and ÖVP Chairman Reinhold Mitterlehner to oust both of them. Among his closest confidants were the young ÖVP boss from Vienna, Gernot Blümel, and Thomas Schmid, who as a top functionary in the Ministry of Finance had access to the state budget. Schmid organised, among other things, the fake opinion polls and media reports that brought down Mitterlehner—the very same reports that the public prosecutor is now investigating.

Both enjoyed high-flying careers under Kurz’s chancellorship. Blümel first became head of the chancellery and then finance minister. Schmid was rewarded with the head post of the state holding company Öbag, which guaranteed him an annual income of between €400,000 and €610,000. The circumstances of his appointment as Öbag boss are now the subject of public prosecution investigations.

The chats of the conspirators at the time are hard to beat in terms of cynicism and vulgarity. After he had succeeded in loosening up tax money, Schmid cheered in a chat to Blümel, “Kurz can now shit money.” Mitterlehner is regularly referred to as “oasch” or “ass.” Efforts by Kern and Mitterlehner to agree on joint projects were sabotaged, especially if they had a social policy component.

When the two were planning to invest the proceeds from the bank levy into all-day schools and afternoon childcare, Schmid wrote to Kurz: “Mega explosives!” Kurz replied, “Not good at all! How can you stop that. Can I incite a federal state?” Schmid affirmed and added, “If Mitterlehner does that—€1.2 billion for Kern by yielding on all education points, that would be madness.” They were only concerned with political obstruction. According to Schmid, the programme is “just awesome.”

More interesting than this intrigue, about which publications like Der Standard, Der Spiegel, and Falter have reported in detail, is the question of why Kurz and his confidants were successful. After all, although their plans and machinations were criminal and perfidious, they were neither particularly original nor unknown. The left-liberal weekly newspaper Falter published a detailed article about the machinations of Kurz and his team under the title “Project Ballhausplatz” in September 2019, which was based on internal documents.

The answer to this question leads to the very heart of the problem: the rottenness of bourgeois democracy. If there were only one political party that represented the needs and interests of the working population to some extent, Kurz and his conspiratorial gang would quickly have reached their limits. But there is no such party in the established political spectrum. They are all far more afraid of a working-class movement than of the most right-wing politics.

When capitalism was reintroduced in Eastern Europe, the Soviet Union and China three decades ago, the media cheered the victory of “freedom” and “democracy”. Indeed, capital lost all inhibitions. In the East, oligarchs stole social property and brought regimes to power that are as corrupt as they are right-wing. In the West, a small minority enriched itself at the expense of the large majority. The gap between rich and poor has now reached dimensions that are no longer compatible with democratic forms.

All parties that defend capitalism are responding to growing social tensions with a sharp lurch to the right. Social Democracy, the dominant political force in Austria for decades, has, like the unions associated with it, become a tool of social counterrevolution. Since 1987, the SPÖ has only governed in coalitions with the ÖVP, until it was finally ousted from power entirely in 2017.

At that time, Kurz formed an alliance with the right-wing extremist Freedom Party (FPÖ) and implemented their policy. There was no resistance from the other parties. It was not until the Ibiza affair, which exposed Vice Chancellor and FPÖ boss Heinz-Christian Strache as a politician for sale, that the coalition with the FPÖ fell apart.

The Greens then stepped into the breach and helped Kurz return to power without changing his policies. In terms of refugee policy, Austria is on the extreme right wing in a Europe that is pervaded by hostility to refugees. Vienna maintains close ties with the right-wing Orbán regime in Hungary. Over 1.5 million people, or 17.5 percent of the country’s population, live in poverty. The unemployment rate is 10 percent. In its policy on COVID-19, Austria has repeatedly led the way in implementing premature and inhuman reopenings. As a result, 763,000 people have been infected and 11,100 died.

The shift from Kurz to Schallenberg will not change anything about these policies. So far, the new chancellor has only made a name for himself on one issue. When it comes to immigration, he is a “man of conviction,” he told the magazine Profil. As foreign minister, he denounced the rescue of children from the inhumane Greek camp Moria as “shouting about the distribution” of refugees.

Schallenberg emphasised in his first speech in parliament on Tuesday that he would continue to work closely with Kurz, adding that anything else would be absurd in terms of democratic politics. Kurz’s ministers, including Finance Minister Gernot Blümel, remain in office.

The role of the Austrian Greens as a prop for ultra-right politics also sheds light on the negotiations on a coalition between the Social Democrats, Greens and Free Democrats (a so-called traffic light coalition) that are currently taking place in Germany. Prospective chancellor Olaf Scholz is on the right wing of the SPD, the FDP sees itself as a guarantor for the protection of the wealth of the rich and compliance with the debt brake, and the Greens are trying to outdo both parties from the right.

Germany ends free coronavirus tests and reopens universities

Tamino Dreisam

Following September’s general election, the ruling class is aggressively pushing forward its policy of mass infection that has already cost the lives of more than 94,000 people in Germany.

Despite new infections continuing at a high level of about 8,000 per day on average, and virologists warning of a severe wave this autumn and winter, the federal and state governments are eliminating even the last protective measures against COVID-19. Significant steps are the ending of free coronavirus tests beginning this week and the reopening of universities in the winter semester of 2021/22.

Students at the University of Michigan strike against a return to face-to-face teaching amid the pandemic on Sept. 11, 2020 (Photo: WSWS)

Officially, the reason given for abolishing free tests is to increase vaccination rates by putting pressure on the unvaccinated. In fact, this does not increase the vaccination rate, but rather systematically dismantles the infrastructure for combating the virus. A large number of testing centres across the country are now closing. The detection and tracing of infections is thus made more difficult and the ground is being prepared for the massive spread of the virus.

On Monday, the Marburger Bund doctors’ union warned of new chains of infection developing because of the abolition of free coronavirus tests. “Paid coronavirus tests will lead to fewer people with symptoms getting tested in the future,” union President Susanne Johna told Redaktionsnetzwerk Deutschland (RND). “This is a gateway for further transmission of the virus.”

The reopening of universities is also particularly threatening in this context. Just like the reopening of schools before, the return of nearly 3 million students to German universities will not be accompanied by increased safety measures. On the contrary, they will be further reduced.

The specific regulations differ in detail from state to state and from university to university. However, the majority of courses are being held in person everywhere. At the universities where online options are still offered, these are only intended to supplement face-to-face courses.

Compulsory testing applies only in the form of the inadequate 3G rule (vaccinated, recovered from COVID-19, tested) which, with the abolition of free tests, also represents a heavy financial burden for students. Distancing rules apply only at some universities, and even there it is almost impossible to comply with them. Even the requirement to wear a mask does not apply at most universities.

The situation is particularly deadly due to the lack of air filtration. Exact figures on how many rooms are equipped with air filters often do not exist. In addition, facilities exist that are not designed to reduce viral loads. Hardly any universities provide information on whether and how many more new filters are to be installed.

A few days ago, process engineer Lutz Böhm of the Technical University (TU) of Berlin warned of the potentially deadly consequences. In a tweet, he explained, “If in-person attendance is (politically) wanted for a semester, the absolute minimum is that the ventilation works, especially in rooms without windows. Anything less potentially puts students and faculty in mortal danger.”

He refers to studies by aerosol researchers at the TU Berlin. Martin Kriegel, head of the TU’s Hermann Rietschel Institute and an expert on indoor health, explained in an FAQ on aerosols and coronavirus that simple ventilation is not enough. What is needed, he said, are filtration systems with HEPA filters, as well as CO2 traffic lights that give a realistic impression of the actual air quality.

Among other things, the “return to normalcy” at the universities is justified by the allegedly high vaccination rate among students. This is a dangerous sham in two respects. On the one hand, the vaccination rate of 71.1 percent in the 18 to 59 age group is comparatively low. Secondly, figures from the US show that even a very high vaccination rate does not prevent the spread of the virus.

At Duke University in North Carolina, where 98 percent of students and 92 percent of all faculty have been vaccinated, 365 people became infected in one week. At the University of California, Berkeley, the vaccination rate is 97 percent. Despite this, the rate of those testing positive rose from 0.5 to 5.8 percent in one week.

In Germany, reports of infection breaking through the vaccine are mounting, with sometimes fatal consequences. A total of 67,661 vaccine breakthroughs have already been reported. According to the Robert Koch Institute’s (RKI) latest weekly report, 28.4 percent of all symptomatic infections in the 18- to 59-year-old age group represent vaccine breakthroughs.

Fatal outcomes are not ruled out. Last week, seven employees and 18 residents, all of whom were fully vaccinated, became infected at a nursing home in Zell. Seven residents died.

The murderous policy of mass infection, which is supported and pushed by all parties in the Bundestag (federal parliament), goes hand in hand with vicious social attacks. With the reopening of universities, financial support for students is also dropping off.

Until the end of September, students could still apply for up to €500 in grants per month. The aid was completely inadequate from the start, and a calculated fraud that excluded many students from the outset. The fact that a total of 619,200 applications were nevertheless submitted shows how much students depend on such support payments. In addition, 50,000 student loans of up to €650 were issued during the pandemic. These must be repaid in full.

With the end of these measures, hundreds of thousands of students—in addition to the unsafe conditions at the universities—will be forced to work under unsafe conditions, risking their health and their lives.

Workers in Vietnam forced to work to maintain profits of US companies

John Braddock

A revealing article in the New York Times last month gave some insight into the way in which US corporations dictate the conditions under which the lives of workers around the globe are sacrificed for capitalist profit.

Garment workers in Vietnam [Credit: Chau Doan/United Nations Industrial Development Organization]

“Retailers’ Latest Headache: Shutdowns at Their Vietnamese Suppliers,” by Sapna Maheshwari and Patricia Cohen, published on September 29, details how COVID shutdowns in the Southeast Asian country are affecting apparel and footwear supplies to US retailers as they head into their “all-important holiday season.”

Vietnam is the second-biggest supplier of apparel and footwear to the US after China. The pandemic, however, has forced many Vietnamese factories to close or operate at reduced capacity. American firms are facing disruptions of supplies, along with higher prices from shortages, labour restrictions and skyrocketing shipping costs.

One US retailer, Everlane, told the Times it was facing delays of four to eight weeks, depending on when factories it worked with in Vietnam had closed. Nike cut its sales forecast last month, citing the loss of 10 weeks of production since mid-July. Vietnam supplies 40 percent of Everlane’s stocks, along with brands such as Gap and Old Navy, while the country’s contract factories manufactured 51 percent of Nike’s footwear last year.

Acutely concerned about the threat to profits, US businesses are ramping up political pressure in both Washington and Vietnam. Executives from 90 companies, including Nike and Fruit of the Loom, wrote to the Biden administration in August to accelerate vaccine donations, saying that “the health of our industry is directly dependent on the health of Vietnam’s industry.” The apparel industry employs about three million workers in the US.

Steve Lamar, president of the American Apparel & Footwear Association told the Times some US companies had been setting up vaccination sites at their Vietnam suppliers to help administer COVID shots. They were, he openly admitted, trying to keep manufacturing going through a “three-in-one place” policy, “where workers eat, sleep and work at factories” [emphasis added].

Put bluntly, highly exploited Vietnamese sweatshop workers are being effectively imprisoned by the profit demands of US corporates.

Jason Chen, owner of the Singtex garment factory, said: “This year in the USA, everybody wants to go shopping. Some goods cannot be delivered in the right time. So it really will affect the holiday.” The company’s 350-person factory in Binh Duong Province is operating with 80 people who live permanently on the premises, which is allowed by the government in a bid to minimize the hit to exports.

Throughout 2020, the Vietnamese government successfully kept infection rates low through a preventative public health strategy prioritizing contract tracing and targeted quarantine measures. Early in the pandemic, Vietnam remained mostly open, allowing the economy to function. Computer chip manufacturer Intel and others increased production by up to 30 percent in the first half of 2020.

With the arrival of the Delta variant last April, new case numbers surged, with a single day record of 9,684 cases on August 8. Ho Chi Minh City and 18 southern provinces went into lockdown in mid-July. The provision of components to global supply chains was severely disrupted.

Samsung was forced to cut back production while Apple’s new iPhone 13 is facing longer-than-expected delivery times due to constrained supplies of camera modules from the manufacturing facility in southern Vietnam. The trade ministry has warned that Vietnam risks losing overseas customers because of shuttered factories.

In three months, the virus has infected 770,000 people and killed over 20,000. While daily case numbers have trended downward since their peak of over 14,000 in late August, on October 10 there were still 3,528 new cases registered, with the 7-day average running at 4,441. To date, the country has registered a total of 840,000 cases and 20,555 deaths

Only 9.3 percent of the population remains fully vaccinated, with short supply blamed for the delay. About 80 percent of fatalities and half of all infections have occurred in Ho Chi Minh City, a metropolis of 10 million people. Overwhelmed hospitals and food shortages highlight an emerging social disaster.

The Ho Chi Minh City lockdown was lifted at the end of September. The Stalinist Communist Party government is now trying to speed up vaccinations and reopen the country with priority for big cities, vulnerable locations and industrial zones. More people are able to leave their homes, restaurants can serve take-away meals and other businesses have opened. A mass exodus of migrant workers has fled to their home provinces in a desperate bid to escape the gathering crisis.

Amid growing imperialist pressure on Vietnam to drop restrictions, US Vice President Kamala Harris visited Vietnam in August. While the focus of her tour was to intensify Washington’s confrontation with Beijing, Harris promised the US would send an additional one million vaccine doses to Vietnam, on top of five million already donated, along with $23 million in emergency aid and 77 freezers to store vaccine. This is a paltry amount given the dire situation facing a population of 97.3 million.

So-called “vaccine diplomacy” has nothing to do with concerns over the health and well-being of the people. Ruling elites around the world are pushing to get vaccine rates at a level pronounced “safe” enough to remove all restrictions and “open up” the economy. It is a strategy to get thousands of highly exploited workers back into factories as soon as possible in order to start ramping up profits again.

The plight of the Vietnamese workers is a product of the directives coming from big business over an escalating supply chain crisis impacting everything from auto production to strategic materials such as semiconductors and computer chips. Virtually every manufacturing firm is dependent on the supply of raw materials, such as steel and copper, tin and parts from across the globe.

Fortune declared that addressing global supply-chain blockages in Southeast Asia is vital “to avoid dampening foreign investor appetite for the dynamic region.” The Times similarly warned about the “longer-lasting impact on future investment decisions in Vietnam and other emerging economies.” Companies deciding where to invest, it noted, “have always evaluated a broad slate of conditions, like taxes, regulatory requirements and labor force availability.”

Vietnam is very much at the centre of the relentless search by finance capital and transnational corporations for access to cheap labour and high profits. Over the recent period it has become an important part of the tech supply chain, with companies including Samsung, Intel and Apple suppliers relocating from China amid rising costs and trade and geopolitical tensions. Tariffs on China instituted under former US President Trump accelerated the shift.

Even as factories in Ho Chi Minh City and elsewhere are now preparing to resume production, however, American companies are looking outside Vietnam, according to the Times, to find partners elsewhere and even returning to Chinese factories that they had worked with previously.

IMF concerned over inflation and push for higher wages

Nick Beams

The International Monetary Fund has warned of growing inflationary pressures in the global economy, making clear its greatest concern is that rising prices will lead to a push for higher wages.

The warnings are contained in the latest projections in the Fund’s twice-yearly World Economic Outlook report prepared for the IMF-World Bank meetings being held in Washington this week and in comments by IMF chief economist Gita Gopinath.

Kristalina Georgieva [Credit: Friends of Europe]

In a blog post, Gopinath said the global recovery from the pandemic continued but it was being “hobbled” by the spread of the Delta variant. “Health risks abound, holding back a full return to normalcy. Pandemic outbreaks in critical links of global supply chains have resulted in longer than expected supply disruptions, feeding inflation in many countries. Overall risks to economic prospects have increased and policy trade-offs have become more complex,” she wrote.

These trade-offs refer to the monetary policy of the US Fed and other major central banks. On the one hand, rising inflation leads to a push for a tighter monetary policy but, on the other, it threatens to destabilise financial markets, which have become ever more dependent on the inflow of cheap money, and to bring about a recession.

“Monetary policy,” Gopinath commented, “will need to walk a fine line between tackling inflation and financial risks and supporting the economic recovery.

“While monetary policy can generally look through transitory increases in inflation, central banks should be prepared to act quickly if the risks of rising inflation become more material in this uncharted economic recovery.”

She elaborated further on this issue in comments made to the Financial Times, saying central banks should act if there were signs that companies, households and workers started to expect higher inflation to continue, with energy prices of particular concern.

“What [central banks] have to watch out for is the second-round effects [with] these increases in energy prices feeding into wages and then feeding into core prices. That’s where you have to be very, very vigilant,” she said.

The IMF report insisted that central banks should act to curb inflation—and by implication the push for higher wages—through the tightening of monetary policy even if employment was still weak.

“A spiral of doubt could hold back private investment and lead to precisely the slower employment recovery central banks seek to avoid when holding off on policy tightening,” it stated.

Gopinath’s blog post also pointed to a “great vaccine divide” and a “dangerous divergence” in economic prospects. While aggregate output for advanced economies was expected to reach its pre-pandemic path by 2022, emerging market and developing economies (excluding China) would remain 5.5 percent below pre-pandemic projections in 2024.

While almost 60 percent of the adult population in advanced countries were fully vaccinated, about 96 percent of the population in low-income countries were unvaccinated.

According to Gopinath, if COVID-19 were to have an impact into the medium-term “it could reduce global GDP by a cumulative $5.3 trillion over the next five years relative to our current projections.”

She called for the stepping up of efforts to ensure equitable vaccine access for every country in order to secure better economic prospects for all.

However, there is no sign of this taking place.

In its financial stability report, the IMF warned that financial markets and emerging economies were vulnerable to a sudden increase in borrowing costs if central banks needed to lift interest rates because of rising inflation.

It said an abrupt and sustained rise in interest rates from low levels, particularly in the US, “could trigger a tightening of global financial conditions” that would interact with existing financial vulnerabilities and lead to a “sharp fall in asset valuations.”

The IMF-World Bank meeting—a virtual gathering due to the pandemic—began in unprecedented circumstances with the very real prospect of the fund’s managing director, Kristalina Georgieva, being removed from her post as proceedings were about to begin.

Georgieva was under examination by the IMF’s executive board. An investigation by the US law firm WilmerHale claimed during her time as a senior executive at the World Bank, prior to her appointment as the fund’s chief in 2019, she manipulated data to lift China’s rating in the bank’s 2018 Doing Business report.

Georgieva rejected the findings and her supporters, including former World Bank chief economist Joseph Stiglitz, denounced the WilmerHale findings as a “hatchet job.” International economist Jeffrey Sachs said she had been targeted because she was “not a sworn enemy of Beijing.”

Within the IMF, Georgieva received support from European countries led by France which had played the central role in securing her IMF appointment in 2019.

Faced with a prospect of another conflict with Europe the US, the fund’s largest shareholder decided to back down, at least for the present.

On Monday, after a series of eight long meetings, stretching over a week, the 24-member IMF executive board issued a statement saying it had “full confidence” in her ability to carry out her duties as managing director.

However, according to a report in the FT, citing people briefed on the discussions, the decision was close. While the executive board statement expressed confidence in Georgieva it left open the possibility for future moves against her. It stated that the evidence presented “did not conclusively demonstrate” that she had played an “improper” role in lifting China’s ranking in the Doing Business report.

While forced to back down, the US has made it clear that so far as it is concerned the conflict is not over.

In a phone call to Georgieva on Monday, US Treasury Secretary Janet Yellen said the WilmerHale report had raised “legitimate issues and concerns” but that “absent further direct evidence with regard to the role of the managing director there is not the basis for a change in IMF leadership.”

Yellen effectively put Georgieva on notice. She said the US Treasury would “monitor, follow up closely, evaluate any new facts or findings” and that the issue highlighted the “need for shareholders to be vigilant in defending the integrity of both the bank and the fund.”

The issue was never about a few points in the Doing Business report but centred on China’s increasing role in global institutions which is seen by the US as undermining its dominance. At present the US is the dominant shareholder in the fund holding more than 16 percent while China, the world’s second largest economy and rapidly approaching the size of the US, holds around 6 percent.

Across the entire political establishment, there is vociferous opposition in the US to any move to increase China’s influence in the IMF and other global institutions. It was summed up in a recent editorial in the Wall Street Journal in which it said China’s economic rise would give it more sway in global bodies such as the IMF and the World Bank, but China had “the habit of turning these institutions to serve the interests of the Communist Party.”