Oxfam report: Poorer countries going from crisis to catastrophe

Nick Beams

In the lead up to the semi-annual meetings of the International Monetary Fund (IMF) and the World Bank being held in Washington this week, the global aid agency Oxfam has produced a report detailing the horrendous impact of rising inflation, coming on top of the devastating effects of the COVID-19 pandemic, for almost half the world’s population.

Cover page of April 2022 Oxfam Report

It said the crises of extreme inequality and massive food and energy inflation, accelerated by the war in Ukraine and COVID-19, are converging to create a catastrophe for the world’s poorest people “that is unprecedented in living memory.”

The report, entitled “First Crisis, Then Catastrophe,” estimated that at least a quarter of a billion more people could be pushed into extreme poverty, defined as receiving below $1.90 per day, bringing the total to 860 million.

The number of people estimated to be living below the poverty line of $5.50 per day is already 3.3 billion, almost half the world’s population.

It noted that at the same time, billionaire wealth “has seen its biggest increase ever” with more accumulation at the top to come.

“Large corporations appear to be exploiting an inflationary environment to boost profits at consumers’ expense: soaring energy prices and margins have pushed oil company profits to record levels, while investors expect agriculture companies to rapidly become more profitable as food prices spiral,” Oxfam stated.

Inflation is rising rapidly and will far outstrip wages growth this year.

Poorer countries are being bled white by the international banks, multilateral lending institutions, including the IMF, and investment houses.

According to the report, debt servicing for all the world’s poorer countries is estimated at $43 billion for this year, equivalent to nearly half their spending on food import bills, healthcare, education and social protection combined.

The situation is even worse for the lowest income countries. In 2021 the amount spent on debt servicing and repayments was 171 percent of their combined spending on healthcare, education and social protection.

The report made clear that the very limited measures initiated at the start of the pandemic, supposedly to lessen the debt burden, the Debt Service Suspension Initiative and the Common Framework introduced by the G20, “have proven largely ineffective.”

Likewise, the much-trumpeted decision by the IMF to make available $650 billion of additional Special Drawing Rights (SDRs) in August, which provides for greater access to foreign currencies without conditions being attached. The additional SDRs were not allocated in accordance with need but in line with IMF quotas which meant richer countries were the chief beneficiaries.

There were pledges by the G20 to reallocate some $100 billion but so far only $36 billion has been provided.

The financial situation confronting poorer and highly indebted countries is only going to worsen in the coming period because of the moves by the world’s major central banks, led by the US Federal Reserve, to hike interest rates amid soaring inflation.

This is a recipe for financial turmoil in lower income countries that need dollars to pay for their energy, food and medical imports.

The report warned, “Several developing countries are likely to default on their debts in coming months, and will try to stave off bankruptcy as they try to maintain vital imports. This could mean drastic cuts to spending worldwide, exacerbating an already dangerous path towards austerity that countries were beginning to take with IMF backing.”

According to Oxfam representatives, whereas in 2020 the IMF had urged countries to spend money to combat the effects of the pandemic, without imposing the conditionalities that had been tied to loans in the past—measures such as cuts in social spending and privatisation of government-owned entities—these conditionalities were now returning in a large majority of loans and debt restructuring agreements.

The IMF is laying down such conditions as representatives of the government of Sri Lanka, one of the countries at the centre of the debt crisis, meet with its officials in Washington this week.

The Oxfam report provided figures showing there is more than enough money to deal with the crisis.

“A progressive wealth tax of just 2 percent on personal wealth above $5 million, rising to 3 percent for above $50 million and 5 percent for wealth above $1 billion could generate $2.52 trillion worldwide,” it said.

That amount of money would be “enough to lift 2.3 billion people out of poverty, make enough COVID-19 vaccines for the world, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries” with a combined population of 3.6 billion.

But such measures will never be implemented while control of the economy remains in the hands of the representatives of the financial elites, multi-billionaires and capitalist oligarchs that comprise the governments of all countries. In fact, they are moving in the other direction.

In the US, for example, the limited so-called “billionaire tax” floated by President Biden is already effectively dead in the water. In Australia, amid an election campaign, the opposition Labor Party has announced it will support tax cuts for the wealthiest sections of the population proposed by the Liberal government, while ruling out any increase in payments to the unemployed.

As is often the case with its reports, Oxfam produced a devastating picture of the workings of the capitalist system. But as always, the height of its indictment is only matched by the depth of its political bankruptcy when it approaches the key question: what is to be done?

A single paragraph in the report said it all:

“While the COVID-19 pandemic pushed people and countries into economic crisis worldwide, the compounding effects of the Ukraine crisis mean we risk now heading towards catastrophe. But this can be averted through bold and coordinated international and national action.”

In other words, if only reason and rationality prevailed the catastrophe could be prevented. But the capitalist profit system, which all governments serve, does not operate on this basis. The refusal of all governments to undertake science-based measures to eliminate COVID-19 demonstrated that fact once again.

A system which, through its very objective logic, necessarily produces fabulous wealth for an oligarchy at one pole and poverty, death and misery for billions at the other, cannot be made to change course by appeals to see reason.

Furthermore, no matter how rational and necessary international cooperation is in a world that has never been so intimately connected, it cannot be achieved under capitalism because the profit system itself is rooted in rival and conflicting nation-states and great powers.

Australian war crimes from 1999 in East Timor exposed

Patrick O’Connor

The Australian Broadcasting Corporation’s “Four Corners” current affairs television program released a two-part series, “Ghosts of Timor,” on April 4 and 11 that outlined evidence of significant war crimes committed by Australian military forces in East Timor in 1999.

These crimes included murder, the mutilation of corpses, and sexual assault and torture of prisoners, including children. “Four Corners” also provided evidence of a deliberate cover up orchestrated within the highest levels of the Australian military command. No soldier has ever been charged over the incidents.

One of the tortured, Julio Da Silva, who was 16 years old in 1999 (Credit: ABC/Four Corners)

Military lawyers interviewed on the program suggested that this cover up encouraged a culture of impunity within the Australian military, including its elite Special Air Service Regiment (SAS), paving the way for the even more widespread crimes carried out during the occupation of Afghanistan from 2001.

In 1999, following the downfall of the Indonesian dictator Suharto, Jakarta authorised a referendum in East Timor, which had been occupied by the Indonesian military since 1975. The ballot showed a large majority favouring independence. An Australian-led military force subsequently intervened, with the ostensible aim of “restoring peace and security in the territory” and “facilitating humanitarian assistance.”

The focus of the “Four Corners” report was the events following a clash between Australian troops and pro-Indonesian militia fighters near the Timorese town of Suai on October 6, 1999.

An Australian convoy, which also had several New Zealand troops, was ambushed and two SAS soldiers were wounded. The soldiers responded to the ambush with a hail of gunfire, killing two militia members. When their corpses were sent back to the Timorese capital, Dili, examiners found clear evidence, including muzzle blasts, that close range shots had been fired into the bodies after the two men were killed. One of the shots severed a large chunk of the person’s skull and brain.

These actions, of course, represented clear violations of international law. A legal officer from New Zealand deployed with the intervention force known as INTERFET (International Force East Timor), Andrena Gill, immediately requested an investigation into the incident, which was the first fatal shooting of the operation.

This, however, was rejected by the head of INTERFET, Australia’s Major General Peter Cosgrove (later to be the Australian governor-general from 2014 to 2019).

Shortly afterwards, “Four Corners” reported, witnesses from within the New Zealand military forces began to talk about what had happened. Within a year, this triggered a secret, internal Australian military police special inquiry. Investigators took sworn testimony from three New Zealand troops, who reported hearing at least two or three gunshots fired well after the initial ambush and firefight. One soldier said: “I heard someone call out, ‘They’re our rounds, just shooting the bodies,’ or words to that effect.”

Another New Zealand soldier testified that an Australian soldier, identified only as “Operator K,” later told him that one of the targeted Timorese had in fact only been wounded initially. Operator K explained that the man had tried to get up and run away, unarmed, and that he had shot him in the back, killing him. This, again, is a blatant violation of the laws of warfare.

One of the corpses mutilated by “Operator K” (Credit: ABC/Four Corners)

At least three other New Zealand witnesses told authorities that they saw Operator K further mutilate the corpses as they were being transported to Dili.

One said: “I can also recall seeing [Operator K] standing on top of this LAV [light armoured vehicle] towards the rear. I heard [Operator K] scream, ‘How dare you shoot my boys,’ or words to that effect. He was also kicking and punching the bodies as he said this. At this time I was about 10–15 [metres] away from the LAV and I thought to myself, ‘Fuck he’s lost it.’… He then kicked one of the bodies off of the back of the LAV.”

By 2001, the defence department contacted the Australian Federal Police (AFP) to provide advice on the case. After reviewing the evidence, the AFP noted that rumours had “suggested the killings were an act of revenge for the wounding of the two Australian soldiers,” and that forensic evidence indicated that the two militiamen may have been shot “at short range with a 9mm pistol after they had been wounded,” with available material “provid[ing] some evidence toward substantiating an allegation of Murder.”

In a highly telling comment, the AFP stated that “the political impact of this investigation has been assessed as substantial and has to be managed.”

In October 2002, the bodies of the two men, who had been hastily buried three years earlier, were exhumed and autopsies carried out. These found evidence that one man may have been shot in the back of the head, while both corpses had shattered skulls and broken ribs, consistent with the witness testimony that Operator K had kicked and stomped on the bodies.

Operator K was finally charged. Australian authorities, however, refused the New Zealand military’s request to uphold the anonymity of their witnesses. “Four Corners” reporter Mark Willacy explained, “their superiors in the New Zealand defence force had genuine fears for their safety if they did take the stand.”

The case collapsed, nothing was made public, and the court records remain suppressed. Operator K received a formal apology.

Australian forces operate black site torture centre

The second part of the “Ghosts of Timor” broadcast exposed Australian military torture. On the same day as the Suai ambush, October 6, 1999, a separate incident nearby resulted in the detention of 14 Timorese boys and men that Australian forces incorrectly believed were pro-Indonesian militia and had been involved in the ambush.

Black site used as SAS torture centre (Credit: ABC/Four Corners)

At least 10 of the 14 individuals were brought to Dili but were not registered at the official INTERFET detention centre. Instead, they were taken to a heliport controlled by the Australian SAS, which was being used as a secret torture and interrogation centre—a “black site” in the language that subsequently emerged in the so-called war on terror.

The ten males, mostly young men but including at least one 16-year-old child and another approximately 13-year-old, were terrorised. First they were shown the bodies of the two men who were earlier mutilated by Operator K.

One witness who spoke with “Four Corners,” Alan Joyce, formerly of the Australian Defence Force Intelligence Corps, said: “There was a little kid, I think he was about 13, if that. He cried and screamed and almost dropped to the ground. We had to hold him up.”

Another witness reported that the boy, and some of the others, soiled themselves, fearing they were about to be murdered.

“Four Corners” tracked down and interviewed several of those subjected to Australian torture. They explained that they were stripped naked, blindfolded, not allowed to sleep, kept in stress positions, and kicked in the back if they attempted to move. They were also denied food and water and physically assaulted, including by being punched in the face. One man explained that after being stripped naked, a female Australian soldier fondled his genitals, with the sexual assault aimed at humiliating him.

Two other detainees who had suffered gunshot wounds while being detained by Australian troops were forcibly removed from the medical facility where they were receiving emergency treatment. They were taken to the black site for torture and interrogation. Witnesses reported seeing, several days later, that one of the man’s gunshot wounds was seeping with blood and pus and infested with maggots as a result of being denied intravenous antibiotics.

The criminality of the Australian military was so severe that forces from other countries sought to avoid any complicity, fearing legal repercussions. A British officer instructed his men to have nothing to do with the secret SAS detention site. A New Zealand military legal officer advised that what was happening may have legally obliged New Zealand troops to refuse to transfer detainees to INTERFET’s control.

INTERFET legal officer Andrena Gill attempted to investigate the issue, but was again blocked. She reported that when she raised the allegations with her boss, the chief INTERFET legal officer Australian Lieutenant-Colonel Drew Braban, he made dismissive jokes about the issue, saying, “Who cares if they are not being given or withdrawn food and water” and “what’s the big deal?”

Major General Peter Cosgrove ordered a cursory investigation. The chief of the torture centre insisted that detainees were being treated “humanely” and in line with the Geneva Conventions—the investigation concluded with “no recommendation for further enquiry.”

A later military police investigation reportedly assembled briefs of evidence for charges of torture to be brought against three Intelligence officer commanders. No one, however, was ever charged and the defence department has refused to explain why.

The “Four Corners” report is an important piece of investigative journalism, exposing for the first time appalling war crimes carried out with impunity by Australian forces in East Timor.

There was nevertheless a glaring absence in the two-part broadcast—an explanation as to why these crimes were carried out, and what they reflect about the nature of the Australian-led intervention in 1999.

The “bad apples” theory—chalking things up to one or two evil individuals, thereby explaining nothing —was trotted out, with the program concluding with the assessment of former military police investigator Karl Fehlauer: “Unfortunately, it only takes one or two bad apples to spoil a bunch.”

“Four Corners” insisted that the Australian military had “justifiable pride that they helped bring peace and stability to one of Australia’s closest neighbours,” and that the war crimes represented a “dark stain” on an otherwise noble endeavour.

In fact, the humanitarian rhetoric used to justify the 1999 intervention was nothing but a pretext. The Australian government had for decades collaborated with the Indonesian military junta in the oppression of the Timorese people, including through the illegal carve up of its lucrative oil and gas resources in the Timor Sea. When Canberra assessed that continued Indonesian control over Timor had become untenable, it orchestrated a military intervention in order to dominate the process leading to formal independence. This was aimed at advancing Australian imperialism’s geostrategic position in the region and at securing its highly profitable investments in the oil and gas industry.

The operation was of a neo-colonial nature—and it is only within that context that one can understand the criminal activities of the SAS, supported and covered up by the highest levels of the military command.

The Timor intervention was an important turning point. The bogus humanitarian pretext had been boosted by pseudo-left organisations who organised “troops in” demonstrations. These events, the Australian Financial Review noted at the time, helped create the political climate for the first large-scale overseas military deployment since the Vietnam War. The 1999 deployment was followed by an upsurge of Australian militarism, including involvement in the US-led wars and occupations of Afghanistan and Iraq, in which both American and Australian forces committed countless atrocities and war crimes.

The “Ghosts of Timor” broadcasts can be viewed here: Part 1 and Part 2.

Sri Lankan president appoints a new cabinet, as IMF bailout talks begin

K. Ratnayake

Sri Lankan President Gotabhaya Rajapakse appointed a new cabinet of 17 ministers yesterday on the eve of talks over the terms of a bailout loan between the International Monetary Fund (IMF) and his government’s delegation headed by Finance Minister Ali Sabry. He also appointed 21 state ministers.

Gotabhaya Rajapakse (AP Photo/Eranga Jayawardena)

Rajapakse’s announcement is a desperate move, amid mass protests demanding his resignation, to demonstrate that Sri Lanka is politically stable. Sri Lanka’s Central Bank governor declared last week that there had to be “political and social stability” to prove to the IMF that the government could implement the austerity demands of international finance capital.

The protest movement is continuing and spreading throughout the country demanding that the president and his government step down and that measures are implemented to end the social calamity facing ordinary people. Broad sections of the population are facing rampant inflation, acute shortages of food, medicine and fuel, and lengthy power cuts every day.

In an attempt to give a new look to his crisis-ridden regime, Rajapakse reduced the size of the new ministry and exclude virtually all of the previous cabinet ministers and state ministers. At the same time, his speech to the new ministers, publicised widely through that media, declared that changes would be made to address the problems people are facing.

The president cynically claimed that he “deeply regretted” the immense pressure caused by the economic crisis. He declared that the “pain, discomfort and anger” displayed by people “for having to spend time in queues to get essential items at a high price... is justified.”

In response to the groundswell of opposition in rural areas, he said that the decision to ban chemical fertilizers was “wrong.” The ban on fertilizer imports implemented to save foreign exchange under the guise of a shift to organic agriculture has created immense hardship for farmers.

Rajapakse also said that he now believed “we should have gone for a program with the International Monetary Fund earlier.” This was a direct appeal to the opposition parties, investors and big business who have been demanding talks with the IMF for an economic rescue package that will inevitably mean greater hardships for working people.

The president again called for the collaboration of opposition parties and even offered to approve some of their limited constitutional amendments to curb the far-reaching, autocratic powers of the executive presidency.

Speaking about the protests, Rajapakse declared that youth were the most active in society, releasing their frustration in a way accustomed to them. The majority, he said, “love the country,” but they must not “allow opportunists to turn your protest into rioting.”

This remark is a menacing warning to the hundreds of thousands of people who have joined in the island-wide protests. It follows a speech last week by Prime Minister Mahinda Rajapakse who accused the protests of being a threat to democracy and recalled the way in which governments had brutally crushed previous so-called threats in the late 1980s and the country’s vicious civil war.

Over the past three years as it has implemented austerity policies, the Rajapakse regime has strengthened the autocratic powers of the executive presidency and militarised the administration through the appointment of military officers. It has ruthlessly suppressed freedom of expression including through the arrest of political opponents and journalists while whipping up anti-Muslim and anti-Tamil racism to try and divide the working class.

Confronted with mass opposition to the hardships already imposed on working people, the government is mired in deep political turmoil and an unprecedented economic crisis. The Central Bank governor and the finance ministry secretary on April 12 jointly declared a temporary default on the $US51 billion in foreign debts in order to promote the lie that there was no alternative but to beg the IMF for emergency assistance and accept its draconian terms.

The IMF talks in Washington begin today. Speaking to Bloomberg, Finance Ministry Sabry said Sri Lanka was appealing for $3 to $4 billion from the IMF Extended Fund Facility over three years. He said he was also looking for immediate funding to pay for essential imports. He pledged that Sri Lanka would repay creditors after the restructuring of loans. The finance ministry is also requesting $500 million from the World Bank to aid farmers.

At what price to the working class is this aid being sought?

Sabry said the government would review state-owned enterprises on a case-by-case basis to determine those that could be “salvaged” and which should be to “reformed”—that is, restructured, corporatised and privatised. Rajapakse’s economic advisors have already recommended Katunayake, Mattala and Ratmalana airports be leased, the Colombo North Port Development Project to be handed to private investors, and more shares in Sri Lanka Telecom and the Sri Lanka Insurance Corporation be sold off.

The IMF has also outlined further savage austerity measures, including increasing taxes and slashing the fiscal deficit through deep cuts to public sector jobs, wages, pensions and the remaining price subsidies.

The social catastrophe for working people that will result from these measures will dwarf what is already taking place. This program of relentless austerity is to service the needs of foreign creditors and the Sri Lankan corporate and financial elite at the expense of the vast majority of the population.

Over the past six months, the price of rice and wheat have doubled along with many other essentials. Diesel prices have shot up 60 percent. Yesterday, Sri Lankan oil companies increased all fuel prices for the third time. Last month the official inflation rate rose to 18 percent and it predicted to hit 28 percent this month.

As the crisis deepens, the capitalist opposition parties are all manoeuvring to take advantage of the disaster while trying to divert the mass protest movement into safe parliamentary channels and defend capitalist rule. The protests have largely erupted outside their direct control.

The main opposition party, Samagi Jana Balavegaya (SJB), is tabling a no-confidence motion against the government. The SJB is calculating it can get the support of the Janatha Vimukthi Peramuna (JVP) and win the backing of 40 MPs who recently deserted the ruling coalition.

SJB has also announced a “massive” march from Kandy to Colombo on April 26 in support of the anti-government protests. The JVP initiated its own three-day march beginning on Sunday and due to reach Colombo today.

Both parties, whatever their tactical differences, call for an interim government to replace the Rajapakse regime rule in preparations for new elections. Both have a track record of implementing the IMF’s austerity demands and will not hesitate to do so again.

At the same time, a trade union front has declared an island-wide protest day tomorrow, calling on its members to wear black attire and hold demonstrations around the country. The protests will culminate in a strike on April 28, accompanied by the threat of an indefinite stoppage if their demands for limited relief are not met.

After days of silence, this a desperate attempt by the unions to retain control of their members who are being radicalised by the unbearable conditions they face. These same unions have sold out one struggle after another for higher wages and improved conditions over the past two years.

The Ceylon Teachers Union and the JVP-controlled Ceylon Teacher Services Union betrayed a 100-day pay campaign by teachers last year and accepted greatly reduced offer from the government. The Federation of Health Professionals sold out a strike last month and even admitted that its limited campaign was to “manage” their members’ anger.

Polls show deepening rejection of major parties in Australian election

Mike Head

The first week of the campaign for the May 21 federal election in Australia has only deepened the underlying crisis of the capitalist political establishment, which confronts a groundswell of hostility from ordinary people.

There is widespread disgust toward the two traditional ruling parties, Labor and the Liberal-National Coalition, because of their bipartisan commitment to the profit-driven policies demanded by the corporate elite and to Washington’s escalating confrontations with Russia and China, which raise the prospect of catastrophic US-instigated wars.

NSW nurses protesting during a one-day strike on March 31, 2022 (WSWS Media)

According to media opinion polls, the loathing for the major parties has reached record levels. That is being intensified because none of the burning issues facing working-class households—the soaring cost of living, growing poverty and social inequality, and the mounting toll of infections and deaths in the unchecked COVID-19 pandemic—are being addressed in the official and media election campaign.

Media polls provide only a muted and partial measure of the discontent, but they indicate that after the first week of the campaign, which was dominated by diversionary mud-slinging, the already-low voting support for both Labor and the Coalition slumped further.

The Murdoch media’s Newspoll, published in today’s Australian, showed Labor’s first preference support had fallen to 36 percent, down one point from the previous poll a week earlier, even though the Coalition’s primary vote also declined one point to 35 percent.

The combined voting support for the Coalition and Labor was at the lowest level on Newspoll’s record for an election campaign. At the same point in the 2019 election—which produced a debacle for Labor—Newspoll said the Coalition’s primary vote was 38 percent while Labor was on 36 percent.

Prime Minister Scott Morrison’s unpopular Coalition won that election, and clung to office with a bare majority of 77 seats in the 151-seat House of Representatives. That was only because Labor’s vote plunged to a near-record low of 33.3 percent on election day, with the biggest losses in working-class electorates, even as the Coalition vote fell too.

Labor responded to that defeat by installing Anthony Albanese as leader to execute a sharp shift to the right, junking its phony “fair go” election pitch to pledge pro-business policies to ensure “wealth creation.”

This week, as Albanese doubled down on his appeals for the backing of the financial elite, his approval rating, as measured by Newspoll, fell to its lowest level since he became Labor leader in 2019. His low of minus 14 percent pulled him below that of the widely detested Morrison, on minus 9.

According to Newspoll, 29 percent of voters indicated they would vote for a minor party or an independent. Significantly, this shift is not going in a right-wing direction. Rather, more people are trying to find anti-establishment alternatives.

The two most promoted far-right parties, billionaire Clive Palmer’s United Australia Party and Pauline Hanson’s One Nation, remained stuck on about 4 percent each. The Greens rose marginally to 12 percent, with the rest going to “independents,” many of whom are appealing, within the capitalist profit system itself, for action on climate change.

A Resolve Strategic poll published yesterday by Nine Media outlets had similar results. It estimated that Labor’s primary vote had fallen from 38 percent to 34 percent while the Coalition’s stayed at around 34 percent to 35 percent. It said 27 percent of voters described themselves as uncommitted, up from 21 percent two weeks ago.

The sinking support for Labor and the Coalition is producing visible fears in ruling circles of political instability. In the first place, there is concern about the prospect of another “hung” parliament, with neither party winning enough seats to form a majority government.

More profoundly, alarm is being sounded in the corporate media about the decaying base of the political system itself, particularly under conditions in which the next government, whichever party leads it, will be the most right-wing and militarist in Australia’s history.

The incoming government will quickly move to slash health, education and other essential social spending to make the working class pay for the $1.2 billion debt created by the handouts to big business during the pandemic, and impose sacrifices of living standards to spend billions on the military and other requirements of US-led war preparations.

Morrison yesterday raised the spectre of political “instability, chaos and uncertainty” if people voted for independents. At the same time, he was forced to express his readiness to horse-trade with independents to form a minority government.

The fragility of the political order began long before this election. It is the accumulating result of decades of successive governments, both Coalition and Labor, enforcing cuts to real wages and surging social inequality, which has spiraled further during the COVID-19 pandemic. This corporate-government offensive was set off by the Hawke and Keating Labor governments of 1983–1996, which inflicted pro-market restructuring on workers in close partnership with the trade unions.

As a result, the gulf between the political establishment and working people, and the fragility of the parliamentary order, has grown. Morrison was only the first prime minister to survive a full parliamentary term since the landslide defeat of the Howard Coalition government in 2007.

Australia’s last hung parliament was in 2010 when Labor’s Julia Gillard negotiated a supply-and-confidence arrangement with the Greens and three independents. Propped up by the Greens, that government signed up to the US military “pivot” to Asia targeting China, cut education and health spending and resumed the indefinite offshore detention of asylum seekers, paving the way for the return of the Coalition in 2013.

The Greens are again bidding for a power-sharing arrangement with Labor to try to hold the parliamentary order together, but the political crisis has escalated over the past decade of short-term prime ministers.

The depth of ruling class nervousness was indicated in a column today by Australian foreign editor Greg Sheridan, who reflects the views of the US-aligned military and intelligence apparatus. He warned of a “political culture crisis” generated by “the fatigue if not exhaustion of the Westminster [parliamentary] system.”

Sheridan tried to blame social media for the collapse of trust in the political elite. But he pointed to the fact that rifts in both Labor and the Coalition had led to party bosses selecting candidates. Labor in Victoria is under federal executive control, while Morrison hand-picked 12 Liberal candidates in New South Wales. “Unless they were seeking paid employment in politics, why would anyone bother being a member of the Victorian Labor Party or the NSW Liberal Party?” Sheridan asked.

This anxiety is that any government formed after the election may not be able to deliver the agenda required by big business and Washington. Sheridan complained that “fundamental issues,” such as “the giant structural deficit we’ve built into our budget, our shocking productivity performance” and “our dreadful failure to provide any meaningful defence capabilities,” were being neglected.

The increasingly frenzied demands for a “strong government” after the election are a warning to the working class.

They give a hint of the scale of the austerity offensive that is being prepared, under conditions of mounting global economic turbulence and demands from the financial elite for the national debt, approaching one trillion dollars, to be paid down through vicious cuts to social spending. As in every country, the already disastrous public healthcare, education and welfare systems are on the chopping block, with the ruling elite seeking a return to social conditions not seen since the 1930s Great Depression.

At the same time, the heated denunciations of an “unworkable parliament” point to the turn by the capitalist class towards more authoritarian forms of rule.

This found expression prior to the election, with Labor and the Coalition joining hands to pass anti-democratic laws aimed at deregistering alternative parties without parliamentary representation. In 2016, at a far earlier stage of the political crisis, multi-millionaire Gerry Harvey called for a dictatorship in response to the dysfunction of the parliamentary set-up.

While the ruling elite is lurching ever further to the right, the working class is moving to the left. Hostility to the major parties is intersecting with the first stages of a resurgence of the class struggle, spurred by opposition to inflation, wage suppression and the social crisis.

Bank of Canada hikes interest rates, as soaring inflation squeezes workers’ incomes

George Locke

The Bank of Canada hiked its benchmark interest rate by 0.5 percent last Wednesday, due to mounting fears within the ruling class that surging inflation could fuel class struggle as workers push for compensatory wage increases and the restoration of cost-of-living escalator (COLA) clauses.

The rate hike, the first since 2000, doubled the bank’s trend-setting rate to 1 percent. The bank indicated in policy guidance that additional rate increases will be needed if inflation is to be brought back within its official target range of between 2 and 3 percent. Analysts suggest this will almost certainly mean a further increase when the bank’s governing council next meets at the beginning of June, possibly by as much as 0.5 percent.

New Brunswick public sector workers' picket line from their 2021 strike. One sign reads “Essential work. Essential wage?”; another “Study to be not paid” (CUPE Facebook)

The rate hike has been applauded by Canada’s major banks and big business think-tanks. However, there are growing concerns in these circles over the overall state of the economy, with many economic commentators voicing fears the Bank of Canada’s efforts to curtail inflation will either push the economy into recession, leading to a wave of bankruptcies among high-leveraged businesses, or result in stagflation, with prices continuing to rise rapidly even as growth stalls.

Working people, who have already borne the brunt of the pandemic, meanwhile must contend with the fastest rise in prices in 30 years.

According to Statistics Canada, the annual inflation rate reached 5.1 and 5.7 percent, respectively, in January and February, the first time it has exceeded five percent since 1991. A quick look at the numbers for February reveal Canadian motorists paid 32.3 percent more at the pump, while prices for food rose by 7.4 percent and housing by 6.6 percent year over year, their fastest pace since August 1983.

A major factor driving inflation is the huge quantities of cash pumped into the financial markets by governments in Canada and around the world at the beginning of the COVID-19 pandemic, so as to protect the investments of the rich and super-rich. The disruption of supply chains, including for basic necessities and key commodities, has also pushed prices higher. These developments had already fueled a surge in inflation prior to the outbreak of the US-NATO proxy war with Russia over Ukraine, confounding predictions by some economists that inflation would be short-lived as pandemic restrictions were lifted and monetary policy tightened. The economic war the imperialist powers are waging against Russia by sanctioning its exports and seizing its central bank-holdings have exacerbated the inflation spiral. Workers around the world are paying more for gas, food, energy, and other basic necessities, causing their real incomes to stagnate or, more commonly, fall.

A report released this week from the Canadian Center for Policy Alternatives (CCPA) found that two-thirds of Canadian workers had experienced a real-terms pay cut during the two years up to the end of February 2022. Annual wage growth during this period amounted to 2.7 percent, compared to average yearly inflation of 3.4 percent. Particularly sharp wage reductions were recorded in the education and health care sectors, where workers have been subject to various “wage restraint” programs, including under Ontario’s Bill 124.

“We’re just not seeing wage gains anywhere near the rate of inflation,” remarked the CCPA’s David Macdonald. “It may be that workers are yet to catch up to the fact that inflation is high, and that they should start asking for higher wage gains on a year-to-year basis.”

This complacent remark only goes to show that whilst institutes like the CCPA that are aligned with the trade unions and New Democratic Party can provide useful statistics and information documenting the social crisis, their political conclusions are utterly bankrupt. Privileged sections of the middle class like Macdonald and the well-heeled union bureaucrats may treat inflation as an afterthought that one can ignore or pay attention to as one pleases. But workers are confronted with it on a daily basis as they face the brutal realities of putting food on the table, while the price of other essentials, from heating and gasoline to rents, are rising sharply.

A series of militant struggles over the past year by workers across all sectors of the economy, from miners to New Brunswick public sector workers, grocery store employees and rail workers, demonstrate that workers are more than ready to fight for wage increases and to claw-back concessions the unions granted over the past four decades. The problem is that every struggle by workers is sabotaged and sold out by the unions, resulting in contracts that impose real-terms pay cuts.

Energy and commodity prices—including wheat and other grains—are surging. A core commodity index compiled by Thomson Reuters has risen more on a three-month basis than in any period since 1973. Global food prices rose 9 percent in 2020 and 11 percent in 2021, because of frantic buying during the pandemic, rising transport and fertilizer costs, and a number of poor harvests connected to the erratic weather caused by climate change. Stuart Smyth, an agriculture professor at the University of Saskatchewan, stated that if the farmland in Ukraine isn’t seeded this spring and Russian farmers can’t get their crops to market, a global wheat shortage could result, triggering a further price spiral.

According to a survey by the Angus Reid Institute conducted before Russia’s invasion of Ukraine, seven in 10 Canadians reported being stressed about their finances and over half of Canadians said they couldn’t keep up with the cost of living.

“Canadians’ household budgets are becoming squeezed from all angles as the price of goods rises,” the report from Angus Reid noted. “The costs of food, gasoline, and energy in particular are adding to household bills.”

The survey went on to state that two in five (39 percent) Canadians report they are worse off now than they were last year, which is the highest in 13 years of tracking. Twenty-nine percent of Canadians expect their financial condition to worsen over the next 12 months.

Underscoring the devastating impact the ruling elite’s response to the pandemic has had on wide swathes of the population, a staggering three in five (57 percent) Canadians said that they were finding it difficult to put food on the table, which was up substantially from the 36 percent recorded in 2019.

Food Banks Canada’s HungerCount 2021 report shows that visits to food banks climbed 20 per cent nationally. A quarter of all locations experienced a 50 percent increase in demand.

Canada’s Food Price Report for 2022 forecasts the cost of food rising between 5 to 7 percent this year, resulting in a family of four spending approximately $960 more on food than they did in 2021. Kendra Sozinho, a manager at the Fiesta Farms grocery store in Toronto, told CBC, “We’re seeing almost every single supplier increasing their pricing which then increases our pricing. I’ve been here for 20 years, and I’ve never seen a jump like this.”

In another alarming report, The Farm Product Price Index (FPPI), which measures the change in prices Canadian farmers are receiving for their products, rose 25.9 percent in December 2021. The index thus reached its highest level in 40 years.

In partnership with insight start-up app Caddle, Dalhousie University’s Agro-Food Analytics Lab recently surveyed 10,000 Canadians to determine how consumers are responding to rising grocery bills. Nearly half of Canadians (49 percent) said they have reduced their purchases of meat products over the past six months due to higher prices. In Alberta, Canada’s biggest beef-supplier, a majority of consumers (57 percent) acknowledged cutting back on meat since the start of this year.

The survey found 42 percent of respondents were reading their weekly grocery store flyer more often and nearly as many (40 percent) said they were purchasing discounted products with expiry/best before dates within a few days of purchase. One in four Canadians (26.9 percent) said they are buying products with an “enjoy tonight” label more often this year than they did in 2020.

The study also identified the increased use of a strategy known as “shrinkflation,” whereby food producers sell products in packages with less items, reduced weight or smaller volume without reducing the price. Almost three quarters of respondents (73.5 percent) said they were aware of certain food products that have shrunk, despite prices either remaining the same or increasing.

In terms of the factors driving the trend of rising food prices, the study cites “unfavorable weather patterns in the northern hemisphere and logistical challenges due to the global pandemic.” This study was conducted late last year and does not, therefore, record the disastrous impact of the Russia-Ukraine war and the sweeping sanctions imposed by the Western powers. They will mean further misery for the growing numbers of working people scrambling to put food on the table.

Terrorist group planned to kidnap German health minister

Gregor Link

After a nationwide police raid conducted against members of the Telegram network of the far-right “United Patriots,” four people were arrested on Wednesday. They stand accused by the Koblenz Prosecutor General’s Office of preparing a “serious act of violence endangering the state.” As recounted on Report Mainz from broadcaster ARD, the charges involved plans for mounting attacks using explosives and the kidnapping of Federal Health Minister Karl Lauterbach (Social Democratic Party, SPD), whose bodyguards were to be “eliminated” beforehand.

Health Minister Karl Lauterbach (SPD) during a press conference on January 14 (AP Photo/Michael Sohn).

The group, which has been under investigation since October, allegedly planned to cause a nationwide blackout by sabotaging electricity substations and power lines, creating civil war-like conditions to “take over the government” in the ensuing chaos. In addition to Lauterbach, other kidnappings of “well-known public figures” were also planned. Although the searches took place simultaneously at 21 residential properties in nine federal states, another suspect could not be arrested. A total of 12 men and women are under investigation.

The arrests followed a weapons handover conducted between undercover investigators and members of the group—said to involve pistols, Kalashnikov machine guns and mines worth €12,000. The suspects are believed to belong to the “Reichsbürger, anti-vaxxer and prepper scene” and are said to have planned weapons purchases totaling “several tens of thousands of euros.” Lauterbach—as well as prominent virologists and epidemiologists—has been a declared bogeyman of the extreme right since the beginning of the COVID-19 pandemic.

According to media reports, the security agencies—the Rhineland-Palatinate state office and the federal office in Cologne—also played a role in “uncovering the group.” Federal Interior Minister Nancy Faeser (SPD) spoke to the press of a “serious terrorist threat” emanating from preparations for a violent uprising on a “Day X.” The coup plans of “armed Reichsbürger members and radicalised coronavirus deniers,” Faeser said, had reached a “new quality.”

In fact, the case is only the latest in a whole series of raids the security authorities have utilized to take action against fascist groups in recent weeks. The events leave no doubt that right-wing extremist forces are now permanently working on plans for an armed coup and other terrorist actions under the eyes of the authorities. However, the leaders of these groups often remain at large.

On the same day as the major operation against the Telegram network, the Federal Prosecutors Office brought charges against a suspected member of the far-right “Atomwaffen Division,” which has been linked to dozens of murders and maintains contacts with the notorious Azov battalion of the Ukrainian armed forces, among others. The accused, Marvin E., is said to have planned attacks in Germany using explosive devices and firearms but was arrested before carrying out these plans. Using components obtained online, he had manufactured several “unconventional explosive devices,” including 600 “small explosive devices,” according to the Federal Prosecutor’s Office. The profile of the accused is reminiscent of the Yom Kippur murderer in Halle, who also possessed propaganda material from the group.

The charges against Marvin E. are the result of the neo-Nazi raid that had taken place a week earlier, when 800 officers from the State Criminal Office (LKA) and Federal Criminal Office (BKA) had searched 61 homes in 11 federal states, arresting four people accused of setting up a criminal organisation. According to information from the newsweekly Der Spiegel, the 50 accused right-wing extremists include a leading cadre from the neo-Nazi scene in Eisenach, but also an active noncommissioned officer in the Bundeswehr (Armed Forces) who was under “observation” by the Military Counterintelligence Service (MAD).

As reported by Der Spiegel, however, “conflicts involving the MAD” had led to a situation in which the “Atomwaffen Division” supporter, who is said to have last served in the tank unit in Munster, Lower Saxony, could neither be suspended nor disarmed. The Bundeswehr intelligence service had wanted to inform the officer cadet about the terrorism investigations against him—allegedly to “deter” him. Since then, the relationship between law enforcement and the MAD has been considered “strained,” writes Der Spiegel. As a result, apart from the 20-year-old carpenter apprentice Marvin E., no one has been charged so far.

At the end of March, about 300 police officers had already searched several properties in Bavaria in a large-scale operation. In the process, 3,000 litres of diesel were found and 75 firearms seized, including many suspected illegal handguns and rifles. Although the police believed that the suspects had planned “attacks on overhead pylons of major power lines” to “interrupt the power supply in large parts of the Federal Republic,” a spokesperson played down the group as “preppers,” saying there were no indications of a “radical network.”

The fact that law enforcement authorities have felt compelled to carry out three large-scale raids against right-wing extremist subversives within just two weeks is proof of the extent of the fascist danger in Germany. In view of the ever more aggressive herd immunity policy, allowing the virus to rip through the community, and the aggressive war course against Russia, these forces sense the tide flowing in their direction.

Before the kidnapping plans against Lauterbach became known, unknown persons had, among other things, damaged his car and broken a window of his Bundestag (parliamentary) office in Cologne. In Switzerland, the president of the vaccination commission had been kidnapped by a German citizen at the beginning of April, who subsequently died in a gun battle with the police. In Austria, the Green Minister of Health, Wolfgang Mückstein, had to resign due to death threats at the beginning of March amidst discussions about compulsory vaccination.

The Frankfurter Rundschau reported on Wednesday that German neo-Nazi parties had shipped “donations of materiel for the front” to Kiev and that members had donated four-figure sums to the Azov regiment. The federal police officially assume that dozens of German right-wing extremists are “intending to travel to Ukraine,” after denying such a threat a month ago. The Atomwaffen Division, an international right-wing extremist and neo-Nazi terrorist network, is also recruited from the same neo-Nazi milieus.

The growing fascist danger is a result of the fact that the state apparatus systematically cultivates right-wing extremist tendencies and previous governments have undisguisedly put their policies into practice. This concerns especially those politicians who, like Lauterbach and federal politicians from the Green Party, are now in the crosshairs of the fascists.

While SPD politician Lauterbach is overseeing the worst COVID-19 infection levels since the beginning of the pandemic, Green Party politicians are agitating against Russia and demanding arms deliveries to the Nazi-infested Ukrainian military. The “traffic light” coalition of the SPD, Liberal Democrats (FDP) and Greens has removed all coronavirus protections and initiated the largest German arms buildup since the fall of the Nazi dictatorship.

As far as the state apparatus and the so-called “security agencies” are concerned, they are closely networked with the fascist forces they are supposed to combat. Both in the case of the neo-Nazi National Socialist Underground (NSU) complex and the so-called “ Hannibal ” network, it is now known that the central actors were undercover agents of the secret services or members of the police and the Bundeswehr. As in the times of the Weimar Republic in the 1920s and ’30s, these forces are being deliberately promoted to be used against the growing opposition to price increases, war and the policy of deliberate mass infection.

At the same time, the same state apparatus is cracking down on anyone who opposes the capitalist agenda of social inequality, pandemic and war.

Protests erupt throughout France against Macron and Le Pen

Samuel Tissot

Days after students occupied the Sorbonne and Sciences Po universities in Paris, as well as universities in Reims and Nancy, mass protests opposed to both right-wing presidential candidate Emmanuel Macron and neo-fascist candidate Marine Le Pen broke out across France.

Thousands marched in Paris, Lyon, Nantes, Rennes, Caen, Marseille, Nice, Bordeaux, Grenoble, Lille and other cities across France. There is explosive opposition to the April 24 second round between Macron and Le Pen.

Workers and youth marched under banners reading “Neither Macron nor Le Pen,” opposing a fraudulent election between these two reactionaries. The hash tag #NiMacronNiLePenAbstention was trending on Twitter throughout the weekend in France.

The Parti de l’égalité socialiste (PES), the International Committee of the Fourth International’s (ICFI) French section, has called for an active boycott of the April 24 election. An open rejection of both far-right candidates is the best way to arm the working class to oppose whichever of the two extreme-right candidates wins the election.

Jean-Luc Mélenchon, who placed third with 22 percent of the vote, is abdicating all political responsibility to give a lead to his voters. Though he won the youth and the working class suburbs of major cities, as well as 10 of France’s 16 largest urban areas, he made no effort to mobilize his vote. Even as police violently assaulted protesters marching Saturday, he was only organizing a “consultative” poll on what his voters plan to do in the second round.

Jean-Luc Melenchon in Marseille, May 11, 2019. (AP Photo/Claude Paris)

According to this poll of 310,000 Mélenchon voters , 37.65 percent intend to vote blank, 28.96 percent intend to abstain and the rest to vote Macron. That is, at least two-thirds of Mélenchon’s nearly 8 million voters oppose voting for either candidate on Sunday.

Nonetheless, Mélenchon and his Unsubmissive France (LFI) party are insisting that they do not have the authority to issue any political statements to their voters. They wrote “the results of this poll are not a voting instruction given to anyone. It indicates the views of the 215,292 people who took part in it. Each will conclude and will vote their conscience as they see fit.” Mélenchon for his part claimed that LFI’s “cohesion” was his primary concern.

That is, Mélenchon intends to tie those of his voters who are opposed to both candidates and are seeking a way to fight to the minority of LFI supporters who also back Macron. In this way, he is working to dissipate the political impact of the mass support his campaign received from millions of voters who looked to him to express left-wing opposition to Macron and Le Pen.

Mélenchon will speak on Tuesday night, the night before a televised debate between Macron and Le Pen. LFI official Mathilde Panot, the head of the party’s parliamentary group in the National Assembly, again made a veiled comment to indicate her party’s support for Macron, declaring that the threat posed by Le Pen is “not of the same nature” as that posed by Macron.

With Mélenchon is working to isolate protesting workers and youth and defuse mass opposition, this weekend’s protests against the election were met with sharp repression. In Rennes on Saturday, riot police used tear gas and water cannon to disperse protesters. The city prefecture defended this trampling on the population’s democratic right to assemble and protest because it had not authorized a protest.

In scenes reminiscent of the police violence used to suppress “Yellow Vest” protesters earlier in Macron’s presidency, in Paris police charged protesters on the Place de la République. A video showing the police pushing over a man on crutches and another showing police striking a protester on the floor with a baton were shared online.

Before the protest another video showed the police combing metro stops in Paris to intimidate people on their way to the protests and dissuade others from joining. In response, those on the metro car chanted “freedom to protest.”

Alongside an explosion of working class opposition to both candidates, the French ruling class is fearful of an expansion of recent student rebellions over the next week. Nanterre University just outside Paris, where the first occupation of May 1968 took place, has been moved completely online. Heightened security teams have been posted to all universities in the center of Paris, where additional measures such as bag searches are being imposed on students.

Nonetheless, students are planning general assemblies to organize continued opposition next week. Within the capital, students at Paris-8, in the working class suburb of St Denis, are organizing an open meeting on Tuesday, April 19.

Many of the weekend’s anti-Macron and Le Pen demonstrations took place alongside ecologist and anti-Russia protests calling for further arms and support for far-right Ukrainian militias, the expansion of NATO, and more sanctions against the Russian people. An Extinction Rebellion protest occupied the Boulevard St Denis overnight without any police interference. These forces are apparently being tolerated by the security forces in part because of Green candidate Yannick Jadot’s endorsement of Macron in the second round.

In response to growing anger at the election among millions of workers and youth, the union bureaucracies are scrambling to keep social anger contained within limits acceptable to the state. Ahead of the election of April 24, they are doing everything possible to channel anger against both Macron and Le Pen behind the incumbent.

On Sunday, Philippe Martinez and Laurent Berger, chiefs of the General Confederation of Labor (CGT) and French Democratic Confederation of Labour (CFDT) respectively, published a joint letter in the Journal de Dimanche all but calling for a Macron vote. They wrote: “The National Rally [Le Pen’s party] is a danger to the fundamental rights of citizens and workers. It cannot be considered as the republican parties, respectful and guarantors of our motto, liberty, equality, fraternity. Let us not entrust it with the keys to our democracy, at the risk of losing them.”

Martinez, whose union also endorsed the NATO war in Ukraine and backed trillion-euro bailouts for the rich during the pandemic, is claiming Macron defends democracy. However, this is a political fraud. His celebration of Nazi collaborationist dictator Philippe Pétain while riot police attacked “yellow vests” protesting for social equality, his deadly policy of “living with the virus” and his discriminatory laws targeting Muslims align him firmly with the tradition of extreme right politics in France.

Once again, as workers and youth enter into the streets to oppose Le Pen and Macron, the unions and allied pseudo-left parties like Mélenchon’s LFI are attempting to stifle this opposition and lead it into a dead end. Indeed, they consistently worked to suppress opposition of every one of Macron’s major social attacks against the working class over the last five years of his term.

This is diametrically opposed to the sentiment of millions of workers and youth in France, however, who find the prospect of another five years of austerity, attacks on Muslims and mass death from the pandemic under Macron just as unacceptable as Marine Le Pen.