Growing recessionary trends in major economies

Nick Beams

The world’s major economies are showing growing recessionary trends under the impact of the disruption caused by governments’ “let it rip” policies on COVID-19, rising inflation and the higher interest rate regime being imposed by central banks aimed at crushing workers’ wage demands.

Amid concerns of the spread of COVID-19, a shopper wears a mask as she looks over meat products at a grocery store in Dallas, April 29, 2020. (AP Photo/LM Otero, File)

The US, the world’s largest economy, has experienced two successive quarters of negative growth, with indications of further contraction to come as consumer spending is hit by rising prices in basic items.

The impact of COVID is reflected in the employment and labour market data. The US labour force is 600,000 smaller than at the start of the pandemic in 2020. But as the Wall Street Journal noted in a recent article “it is several million smaller if you adjust for the increase in population.” The number of workers has fallen by 400,000 since March.

The labour force participation—the proportion of the population over the age of 16 in work or seeking work—is continuing to fall. It was 62.1 percent in July, down from 62.4 percent in March. Before the onset of the pandemic, it was 63.4 percent.

The hit to the US economy is also reflected in economic output data. According to projections by the Congressional Budget Office, gross domestic product in the second quarter was 2 percent below where it had expected to be in January 2020. Employment is also 2 percent lower than predicted—a loss of around 3 million jobs.

At the same time, inflation is now running at between 8 percent and 9 percent, with essential grocery items up more than 13 percent over the past year. While wages have risen, they have fallen behind the inflation rate, meaning in real terms that there has been a fall of 3.6 percent in the wage of the average worker. This means there is downward pressure on consumption spending which accounts for up to 70 percent of US GDP.

China, the world’s second largest economy, is experiencing a significant downturn in growth. The economy grew by only 0.4 percent in the second quarter, barely escaping an outright contraction, and the outlook appears to be worsening.

On Tuesday, Chinese Premier Li Keqiang held a meeting with local officials from six key provinces, accounting for 40 percent of its economy, calling on them to undertake measures to boost growth after July data on consumption and industrial production came in below expectations.

The worsening outlook for the Chinese economy is the result of the global pandemic, which the Chinese government, in contrast to all others, is battling to control, and the sharp decline in the property market.

Li’s appeal to local authorities to do more and promises that the central government would take measures to promote growth, came in the wake of a decision by the central bank to reduce medium-term interest rates to try to stimulate the economy.

The real estate sector, which accounts for more than a quarter of China’s economy once flow-on effects are considered, continues to worsen. The amount of “residential floor space,” on which construction began in the period from April to June this year, was down by nearly a half compared to last year.

Local government finances are being severely affected with revenue from land sales so far this year down by 31 percent, compared to the first six months of last year.

Consumption spending is only marginally higher than the first half of last year in real terms and running at 10 percent below the trend prior to the pandemic.

Germany, the world’s fourth largest economy, is on the brink of recession, if not already in one. Data released earlier this week showed that retail sales fell at the fastest annual rate since records began to be collected in 1994, down 8.8 percent compared to a year ago. This followed data which showed that German economic growth was stagnant in the second quarter.

The German economy is being battered by the effects of the ongoing NATO proxy war against Russia in Ukraine as gas prices spiral and supplies are cut, with effects hitting the entire eurozone economy.

The chief business economist at S&P Global Market Intelligence, Chris Williamson, told the Financial Times that manufacturing activity in Germany and elsewhere was “sinking into an increasingly deep downturn, adding to region’s recession risks.”

Last week, Clemens Fuest, head of the German economic think tank Ifo, said the concern was the “broad-based” nature of the weakness in the economy. In previous downturns, he said, when services suffered, industry recovered, and vice versa. “But now we’re seeing weakness across the board.”

Britain, the world’s fifth largest economy, continues to be hit by worsening economic events. Yesterday, it was reported that the official UK inflation rate for July, itself an understatement of the impact on working-class families, had reached 10 percent. It is set to rise even further with the Bank of England forecasting it will reach 13 percent by the end of the year.

The Bank of England has already predicted that the UK economy will move into recession with a contraction of at least 2 percent from peak to trough.

The contraction is now likely to be much higher with the central bank set to escalate its interest rate tightening policy, which is intended to drive the economy into recession to suppress the mounting wage demands throughout the British working class.

It is now expected that the central bank will carry out multiple increases of 50 basis points in its base interest rate for the rest of the year. Real wages are continuing to fall with the latest data showing they have fallen by 4.1 percent, the largest decline since record began in 2001.

Falling wages will bring cuts in consumption spending, accelerating the drive into recession.

The only “bright spot,” if it can be called that, in this worsening situation across the world’s major economies, is Japan, the world’s third largest economy.

Its economy grew at annualised rate of 2.2 percent in the second quarter, boosted by a rise in consumption spending as the government lifted COVID restrictions. But the rise is likely to be a one-off. In the first quarter GDP rose by only 0.1 percent and in its latest economic update in July the International Monetary Fund revised down its estimate of Japanese economic growth for 2022, from 2.4 percent in April to just 1.7 percent.

This week Bloomberg carried a significant report on the decline in orders for computer chips, which was sending “shudders through North Asia’s high-tech exporters, which historically serve as a bellwether for the international economy,”

It reported that South Korean chip companies, Samsung and SK Hynix, had signaled plans to cut back on investment while the Taiwan Semiconductor Manufacturing Company, the world’s largest producer, was going in the same direction.

South Korea’s technology exports fell in July for the first time in two years and “semiconductor inventories piled up in June at the fastest pace in more than six years.”

Bloomberg noted that exports from Korea, the world’s 12th largest economy, “have long correlated with global trade, meaning their decline will add to signs of trouble for a world economy facing headwinds from geopolitical risks to higher borrowing costs.”

The marked downward shift in the major economies is not the result of a conjunctural shift in the business cycle to be followed by an upturn.

It is one aspect of the general breakdown of the global capitalist economy, manifested in the ongoing COVID crisis, record levels of private and government debt, the economic effects of climate change, as can be seen in the fall in water levels in the Rhine hitting the movement of goods via barges in Germany, and the highest inflation in four decades, accelerated by the war against Russia and the increasing bellicosity against China.

Dropping pretense of “non-involvement,” US seeks to escalate war with Russia

Clara Weiss

The series of major explosions at Russian military bases on the Black Sea peninsula of Crimea over the past week mark the beginning of a new, even more dangerous phase in the imperialist war waged on Ukrainian territory against Russia.

Ukrainian officials have all but admitted that Kiev is behind the attacks, threatening that more is to come. Mykhailo Podolyak, a top adviser to Ukrainian President Volodymyr Zelensky, described the explosions as part of a beginning counteroffensive. “Our strategy is to destroy the logistics, the supply lines and the ammunition depots and other objects of military infrastructure. It’s creating a chaos within their own forces.” Hinting at plans to strike the Russian-built Kerch Bridge, which connects Crimea with the Russian mainland, Podolyak stated, “Such objects should be destroyed.”

Smoke rises over the site of explosion at an ammunition storage of Russian army near the village of Mayskoye, Crimea, Tuesday, Aug. 16, 2022. [AP Photo]

There are only two scenarios that can account for the explosions, and both bear the imprint “made in Washington.”

The German Der Spiegel has provided evidence suggesting that US-made missiles and ammunition that had not been officially delivered to Ukraine could have caused the explosions, circumventing Russian missile defense systems. Ukraine has openly acknowledged that the US is involved in the decision-making process behind every single strike on Russian targets.

Meanwhile, the American press takes as a given that the explosions were caused by the work of Ukraine’s special forces. The New York Times, which had praised the explosions as a “brazen” act of “defiance” against Russia, gloatingly reported on Wednesday about the work of these forces and one of its members, who had been trained by the neo-fascist Right Sector and the Azov Battalion. According to the Times,these units are not only responsible for these attacks on Russian military bases, but are also terrorizing Ukrainian workers, including teachers, for supposed “collaboration.”

These far-right terrorist forces have been armed and trained by the CIA. In January, Yahoo News reported that the CIA had conducted a secret extensive training program for Ukrainian special operation forces and intelligence personnel to prepare them for an insurgency since 2015. A former CIA official bluntly stated that the program had taught the Ukrainians how “to kill Russians”, adding: “The United States is training an insurgency.”

Whatever the political bankruptcy and reactionary nature of the Putin regime and its invasion of Ukraine, the fact of the matter is that this war was provoked and is now funded and escalated by the imperialist powers.

The Russian military is confronted with an army and paramilitary fascist forces that have been armed and trained systematically by NATO ever since the imperialist-orchestrated coup of February 2014. Their operations are planned and coordinated not in Kiev, but in Washington.

In a massive overhaul that was overseen and funded by NATO, the crumbling Ukrainian military was restructured and ballooned from 130,000 in 2014 to almost 250,000 in 2021. Even before the beginning of the war in February, tens of thousands of troops had been trained directly by the US, UK, Canada and other NATO members. These training programs have been massively expanded since February, and US paramilitary forces are also providing training to Ukrainian troops in action.

The flood of sophisticated weaponry and ammunition into Ukraine, an impoverished country with a pre-war population of less than 40 million, has no precedent. According to the Kiehl Institute for the World Economy, the imperialist powers have pledged over $40 billion in weapons and ammunition since January 24. The US is by far taking the lead with $25 billion, followed by the UK ($4 billion), Poland ($1.8 billion) and Germany ($ 1.2 billion).

By now, any pretense of the “non-involvement” of the US in the war against Russia has been dropped, from decisions and statements by the White House to the coverage in the media, whose war reporting is tightly controlled by the national intelligence apparatus. Indeed, the triumphant reporting about Ukraine’s strikes on Crimea in the US media itself bears the imprint of a deliberate provocation against Russia.

The Biden administration has warned openly of the danger of World War III, yet it has deliberately crossed every single supposed limitation upon US involvement that it had set itself.

Russian officials as well as Western military experts have repeatedly warned that attacks on Crimea by Ukraine would be seen as an existential threat by the Kremlin and could trigger a nuclear exchange. Yet the US, using its proxy forces in Ukraine, has been doing everything possible to provoke precisely such a response.

So far, the Kremlin has been markedly restrained in its response to the evident efforts by Washington to escalate the war. There are no doubt significant divisions among the Russian oligarchs and within Russia’s state apparatus. The Russian oligarchy, the outgrowth of the counter-revolutionary Stalinist bureaucracy and its destruction of the Soviet Union, is inherently incapable of responding in a coherent, let alone progressive, manner to its bloody encounter with imperialism.

But the political impotence and instability of the Putin regime, far from lessening the danger of an escalation of the war, is, on the contrary, another major destabilizing factor. Already, elements within the ruling United Russia party are calling for retaliatory strikes on “decision-making centers,” which, as everyone knows, are located not in Kiev but in Brussels and Washington.

Regardless of the intentions and plans of the warring sides, the war in Ukraine cannot be contained. Already, NATO is pushing aggressively to open up a northern front in the war. In Scandinavia, Sweden and Finland are set to join NATO. In the Baltics, the far-right governments of Lithuania and Latvia have stopped issuing visas to Russian citizens, while Estonia has begun the demolition of World War II-era Soviet monuments. This is a targeted provocation not only against the Kremlin, but also against the large local Russian-speaking population, which, like much of the working class population of the former Soviet Union, still feels a powerful allegiance to the victorious struggle of the Soviet masses against German fascism.

In an indication that the Kremlin is anticipating a broadening of the front of the war with NATO, Russia has significantly increased its troops and missiles in neighboring Belarus, which shares borders with Ukraine and the NATO member states Poland, Latvia and Lithuania.

Only one conclusion can be drawn from the constant, reckless and ever more brazen provocations by US imperialism and its lackeys in Eastern Europe: the American ruling class is determined to escalate the war with Russia. The aims, just as the borders, of this war extend well beyond Ukraine. From the standpoint of imperialism, Ukraine is but the opening shot in a new redivision of the world.

The German government’s war tax: gas consumers to face huge cost rises

Peter Schwarz

Millions of households in Germany that meet their energy needs mainly with natural gas are facing huge cost rises.

On Monday, Trading Hub Europe, a joint venture of the gas transmission system operators, set the amount of the state gas surcharge, which the German government decided on at the end of July. It is 2.419 euro cents per kilowatt hour and must be paid by all private and commercial end consumers from October 1.

Construction of the NEL gas pipeline in Mecklenburg-Western Pomerania, which was supposed to transport the gas from Nord Stream 2 [Photo by Niteshift (talk) / CC BY-SA 3.0] [Photo by Niteshift (talk) / CC BY-SA 3.0]

The gas surcharge is a kind of war tax that Economics Minister Robert Habeck (Greens) is using to pass on to the population the costs of the Ukraine war, which the German government is uncompromisingly fueling.

The sanctions against Russia and the German government’s refusal to put the completed Nord Stream 2 pipeline into operation have led to a shortage in the supply of natural gas and an international price explosion. Imported natural gas was 236 percent more expensive in May 2022 than a year earlier. With the revenues from the surcharge, gas suppliers are being reimbursed for the difference between the previous low Russian prices and the current high world market prices. These billions end up in the coffers of the big energy companies, which are making record profits as a consequence.

Despite this, the government strictly refuses to touch them. It rejects even such a modest measure as a windfall profits tax, which would skim off part of the super profits, and is shifting the entire burden of the self-created energy crisis onto the backs of working people. It is significant that Trading Hub Europe, a private company closely intertwined with the energy companies, can decide the level of the gas surcharge, which it sets every three months.

With a gas surcharge of 2.419 euro cents per kilowatt hour, a household with an annual consumption of 20,000 kilowatt hours will incur additional costs of around €484 a year, plus 19 percent VAT (sales tax), although this has not yet been clarified. The costs can vary greatly depending on the provider, the contract and the thermal insulation of the home. What is certain, however, is that even smaller households will have to pay several hundred euros extra.

The gas surcharge, which is levied in addition to the gas suppliers’ price increases, accounts for only a fraction of the cost explosion. Even before it came into force, prices had risen massively. According to the comparison portal Verivox, in July 2022 a kilowatt hour, including all taxes and levies, cost an average of around 16 euro cents. That is more than twice as much as in previous years, when the final price was well below 8 euro cents.

The increase is even more drastic for new customers. Here, the price for an annual consumption of 20,000 kWh was 17.84 euro cents in August 2022. That is more than three times as much as two years ago, when the kilowatt hour still cost 5.46 euro cents.

And the price increase is far from over. “Imported natural gas was 235.6 percent more expensive in May 2022 than a year earlier,” writes the Federal Statistical Office. “For private consumption, the high price increases for natural gas have not yet fully arrived.”

The drastic increases coming to private households are shown by the example of the Cologne gas supplier RheinEnergie, which has more than doubled energy prices for its customers as of October 1. Instead of 7.87 euro cents, they will have to pay 18.30 euro cents for one kWh in future, an increase of 10.43 euro cents.

RheinEnergie is not raising the basic price, which is included in the final cost. Nevertheless, as of October 1, households will have to pay more than twice as much as before for their gas bill, according to the company’s own calculations. For a small apartment with an annual consumption of 10,000 kWh, annual costs will increase from €960 to €2,002; for a large apartment or a small single-family house with an annual consumption of 15,000 kWh, costs will rise from €1,353 to €2,918 a year. That is an additional monthly cost of €130. Those who purchase district heating from RheinEnergie will also have to pay 73 percent more from October 1.

The gas surcharge is not even included in the announced price increases. For an annual consumption of 15,000 kWh, it amounts to an additional €363. The same applies to the CO2 tax. This had already raised prices when it was introduced in January 2021 and is set to rise from €30 to €55 per tonne by 2025. As a result, the gas bill of a household with 20,000 kWh consumption will increase by another €264.

Since more than 41 percent of Germany’s residential energy needs—heating, hot water, cooking, electrical appliances—are met by natural gas, millions of families are affected by the price explosion. Experts assume that the official inflation rate will rise above 10 percent because of the increase in gas prices.

The standard of living of broad sections of the population, the result of decades of struggle, will thus be wiped out in a very short time. The trade unions, in cahoots with the government and the corporations, agree on long-term wage settlements that do not even cover a fraction of inflation.

Many are not prepared to accept this. The government, politicians and the media are therefore speculating about a “hot autumn” and are preparing to paralyse and suppress resistance.

Left Party politician Sören Pellmann is even calling for “new Monday demonstrations in the East like the one against Hartz IV [welfare cuts] back then.” What a farce! The Left Party supports social cuts including Hartz IV everywhere it has been and is in government. The Monday demonstrations against Hartz IV were unsuccessful because they were stifled by the Left Party and because they were limited to appeals to a government that was not amenable to appeals.

Britain’s strike wave escalates as millions push for action

Thomas Scripps

Britain is experiencing a wave of strikes on a scale unseen for decades.

More than 40,000 rail workers represented by the Rail, Maritime and Transport union (RMT) and Transport Salaried Staffs Association (TSSA) will continue national rail strikes on Thursday and Saturday. Around 10,000 RMT members on the London Underground and Overground will strike Friday, alongside 1,600 London United bus workers beginning two days of action.

In an action that will massively impact on the UK economy, 1,900 workers at the UK’s Felixstowe port, responsible for half of all container freight, will begin eight days of strike action on Sunday. Over 500 workers have also voted to strike at the Port of Liverpool, Britain’s fourth largest.

Close to 115,000 Royal Mail workers in the Communication Workers Union will strike on August 26 and 31 and September 8 and 9. Another 50,000 BT telecoms workers in the same union will strike August 30 and 31. Post Office workers will join on August 26, 27 and 30.

In a powerful confirmation of the angry and determined mood among workers, wildcat walkouts involving thousands have taken place at Amazon and are continuing fortnightly at subcontractors across the UK’s vital energy infrastructure.

These strikes take place as workers across Europe and internationally are also taking significant industrial action. One-day general strikes have been held in Italy, Greece and Belgium. A wave of strikes has swept across Turkey, and major actions have been taken against some of Europe’s biggest airlines, including a planned five months of strikes at Ryanair in Spain.

Workers are being driven into struggle by a catastrophic collapse in living standards comparable only to the Great Depression of the 1930s. Wages in the UK, flatlining for over a decade, have fallen by a staggering 7 percent versus RPI inflation over the year to April-June, at the fastest rate on record. Two-thirds of households face a winter of fuel poverty, with average bills set to rise to £4,426 a year by next April. Millions are unable to even properly feed their families.

The growing mass movement brings the working class into a direct confrontation with trade unions working desperately to contain and sabotage their struggle and a Conservative government seeking to impose the full weight of the crisis on workers and their families by any means necessary, with the active collusion of the opposition Labour Party.

Over 200,000 workers are out on strike this month, but this would be closer to 3 million if the biggest battalions of the working class were not being deliberately demobilised by the trade union bureaucracy.

Over one million workers in the National Health Service and one million more in the education sector and in local government are being prevented from striking by an extended process of consultative ballots and by actual ballots delayed into the autumn and beyond.

This is being done deliberately, to avert a mobilisation that could topple the government. The unions know and fear this possibility, as was revealed by the comments of RMT General Secretary Mick Lynch and Aslef General Secretary Mick Whelan.

Both raised the subject of a general strike, only in order to insist that it was not in their power to organise one. Lynch told BBC Newsnight that only the Trades Union Congress (TUC) “can call a general strike, not me. If they call it we’ll support it, absolutely.” He did so knowing that the TUC would never make such a call. In similar fashion Whelan told Sky News, “I don’t think it’s likely there’s going to be a general strike…”

Nevertheless, the fact that two trade union leaders feel it necessary to speak of a general strike is because this is already being discussed on picket lines and in workplaces up and down the country. Theirs is an attempt to placate popular anger over de facto pay cuts, thousands of job losses and speed ups.

The same political concerns underlie Lynch’s fronting of the new Enough is Enough campaign, launched by the Corbynite left of the Labour Party and the Jacobin-owned Tribune, with the RMT and the CWU the only trade union affiliates. Its demands are: “A real pay rise”, “Slash energy bills”, “End food poverty”, “Decent homes for all” and “Tax the rich”.

These are popular and necessary measures, but they require a frontal assault on capitalism and, above all, a political struggle against the Labour Party that the unions are desperate to prevent.

Even as Labour leader Sir Keir Starmer denounces strikes, threatens to expel his own MPs for joining picket lines and echoes Tory attacks on “magic money tree” reforms, Lynch and Whelan insist that he must be supported as the only alternative to the Tories and encouraged to “come off the fence”.

Another Russian military base in Crimea rocked by major explosions

Clara Weiss

Exactly one week after six blasts devastated Russia’s Saki airbase in northern Crimea, a series of major blasts rocked another military base in a neighboring region of the Black Sea peninsula which was annexed by Russia in March 2014, following the US-backed far-right coup in Kiev. 

Smoke rises near the village of Maiskoe, Crimea, Tuesday, August 16, 2022. (AP Photo)

While the Kremlin has tried to downplay last week’s explosions, Ukraine claimed that 60 people were killed and 100 wounded. Satellite images appeared to show that at least 7 Russian fighter jets of the type Su-24 and Su-34 were destroyed and two severely damaged. This would amount to the largest loss for Russia’s aviation in a single day since World War II.

The latest blasts occurred at around 6:15 a.m. local time on Tuesday, and hit a military base and electrical substation near the villages Maiskoe and Dzhankoiskoe. A major ammunition depot exploded, local energy supplies were disrupted, and residential buildings were damaged. Parts of the local railway network, which reportedly transports military equipment to Russian troops fighting in Ukraine, were also damaged and the railway had to stop service for most of Tuesday.

According to local authorities, over 3,000 people were evacuated, more than 10 times the number of official evacuees after last week’s explosions. A state of emergency was proclaimed across northern Crimea and a safety zone with a radius of 5 kilometers (3 miles) was established around the site of the blasts. Officials indicated that only two people were wounded.

As was the case in last week’s incident, the Kremlin insists that the reason for the blasts were acts of “sabotage,” refusing to acknowledge Ukrainian involvement. Seemingly contradicting the Kremlin’s version of events, Vladimir Konstantinov, a leader of the ruling United Russia party and head of the State Council of Crimea, wrote on his Telegram channel: “one thing is already clear: an agency of the terrorist Kiev regime has received the signal to become activated, and, since it is unable to engage in large actions, they try to do small mischief.” Konstantinov called for strikes on the “decision-making centers” as the “most effective and timely measure.”

While Ukraine has not officially taken responsibility for the blasts, leading Kiev officials all but admitted, gloatingly, that Ukraine was behind them. Minutes after news of the blasts broke, Andriy Yermak, the main advisor to Ukrainian President Volodymyr Zelensky, provocatively tweeted, “The Ukrainian Armed Forces continue the filigree ‘demilitarization’ operation to fully rid our land of Russian invaders. Our soldiers are the best sponsors of a good mood. Crimea is Ukraine.” In a clear hint that more attacks are to come, Ukraine’s Zelensky wrote on his Telegram channel Tuesday evening that Ukrainians should stay away from Russian military bases in Crimea and East Ukraine.

The American press, which had covered the blasts last week in an unusually subdued manner, is now reporting in an almost triumphant tone on the explosions. The New York Times wrote that “A senior Ukrainian official, speaking on the condition of anonymity to discuss Tuesday’s operation, said an elite unit was responsible for the explosions.” Describing the strikes by Ukraine as “brazen,” the Times wrote that they came “in defiance” of warnings by Russia’s former president and deputy head of the security council Dmitry Medvedev that “judgement day” would come in case Ukraine struck Crimea.

The apparent strikes by Ukraine on Crimea are only the most extreme in a number of dangerous escalations of the imperialist proxy war against Russia on Ukrainian territory. Fighting still continues around the Zaporozhia nuclear power plant, the largest in Europe, with both Ukraine and Russia accusing each other of shelling the site. Experts have been warning for weeks of the potential of a major nuclear disaster, but the Ukrainian government has reportedly refused to let officials of the International Atomic Energy Agency enter the site other than by crossing the front lines.

Tensions have also escalated between Russia and the UK, Ukraine’s second largest weapons supplier after the US. Kremlin officials reported that, on Monday, Russian fighter jets intercepted and forced out a British RC-135 reconnaissance flight that had crossed the Russian border. On Tuesday, Russia’s Defense Ministry warned Britain against another planned spy plane flight that would partially cross Russian territory. In a statement, the ministry said, “We regard this action as a deliberate provocation,” and added that the Russian air force had been “given the task to prevent the violation of the Russian border.”

The war in Ukraine, the bloodiest conflict in Europe in generations, is estimated to have already left tens of thousands of soldiers dead on both sides, and has caused over 5,000 civilian deaths and turned 12 million Ukrainians into refugees. However, the imperialist powers, above all the US and Britain, have continued to pump billions of dollars in weapons and ammunition into the Ukrainian army, which includes large fascist battalions and paramilitary units. Their aim is to bleed Russia dry and turn the war into a basis for a profound economic and political destabilization and, eventually, the carve-up of Russia itself.

The extraordinarily reckless behavior of the Ukrainian army and government can only be understood against this background. Despite extremely heavy losses and the immense risks involved, the Ukrainian army and government have for weeks announced that they were preparing an offensive in the south, and were determined to “retake” Crimea, a goal that has been part of Kiev’s official military doctrine since March 2021. A spokesperson for the Pentagon has refused to preclude the use of American weapons for a Ukrainian attack on the Russian-built Kerch Bridge, which connects Crimea with the Russian mainland. 

The Kremlin’s desperate efforts to downplay the explosions on Crimea—which, from the standpoint of the Russian military, are both humiliating set-backs and extraordinary provocations—point to significant nervousness and divisions within the Russian oligarchy and state apparatus.

With the imperialist-provoked invasion of Ukraine, the Putin regime has sought to force the imperialist powers, above all the US, to the negotiating table, hoping that gains of the Russian army in the war would strengthen Moscow’s position in negotiations with imperialism. Many pro-Kremlin commentators also speculated that the war would quickly open up rifts between the imperialist powers, especially Germany and the US, that Russia could exploit.

The opposite has occurred. One escalation and provocation by US imperialism of the war has followed another. And while divisions between the imperialist powers continue to boil beneath the surface, they all have used the Russian invasion as a pretext to massively rearm and consolidate their positions in a new imperialist redivision of the world.

In an indication of the gloomy discussions now taking place in Russian ruling circles, Sergey Krylov, who served as Russia’s deputy foreign minister in 1993-1996, described the war in Ukraine in the Kremlin-aligned think tank magazine Russia in Global Affairs as a “historical tragedy” and “cruel battle.” Krylov speculated what form a carve-up of Ukraine between Russia and other Eastern European countries could look like, stressing that the US would always be the principal negotiating partner with Russia.

At the same time, Krylov insisted that none of the possible scenarios for an Eastern Europe with redrawn national borders would be easily manageable or even all that favorable for the Kremlin. Moreover, Krylov admitted that there was no prospect for any quick end to the war, bluntly stating, “There is little ground for optimism.”

The only potentially positive scenario, Krylov wrote, was one in which the US would refocus its attention on war with China, which is now Russia’s most important economic and military partner. “Strange as it may seem but the Chinese factor could play into our hands. The Americans are literally obsessed with the need to counteract Beijing in all possible ways, both in the economy and in politics. And they might end up committing a stupidity such as, for instance, support the proclamation of Taiwan as independent.” In this case, Krylov continued, there would be an immediate war with China. “But to have two such conflicts at the same time is beyond the abilities of the Americans. Ukraine will have to be put on the back burner.”

It is difficult to think of a more damning exposure of the political bankruptcy and reactionary nature of the Russian regime which has emerged out of the Stalinist nationalist reaction against the October 1917 Revolution and the destruction of the Soviet Union. Faced with encirclement by imperialism and engaged in a proxy war with NATO, the descendants of Stalin’s counterrevolutionary bureaucracy hope that a war between the US and China, which would amount to a full-scale world war, will “play into the hands” of the Russian oligarchs.

Sri Lankan government continues proscription of Tamil and Muslim groups and individuals

Saman Gunadasa

Sri Lankan government of President Ranil Wickremesinghe has added three groups and 55 individuals to the long list of official proscriptions, while delisting six organisations and 316 individuals, leaving 255 on the banned list.

Ranil Wickremesinghe [Source: United National Party Facebook]

These measures were announced on August 1 in an extraordinary gazette, on the basis of “terrorism-related activities” or “funding for terrorism,” without providing any evidence or specific information.

The Liberation Tigers of Tamil Eelam (LTTE), Tamil Rehabilitation Organization (TRO), Transnational Government of Tamil Eelam (TGTE) and National Thowheed Jama’ath (NTJ) remain listed, along with newly-added organisations including Darul Adhar, alias Jamiul Adhar Mosque.

The organisations are proscribed under the draconian Prevention of Terrorism Act (PTA), enacted in 1979. This legislation provides the police and the security forces sweeping powers to arbitrarily arrest and detain people without charge and to use confessions extracted under torture as evidence in court.

Proscription lists have been maintained by successive governments since 2012 under a local regulation prepared according to the United Nations Regulations 2012 to try to give legitimacy to these anti-democratic actions.

The continued proscription of Tamil and Muslim groups is part of ongoing efforts by one government after another to whip up Sinhala chauvinism and discrimination against the country’s oppressed minorities. Facing the mass opposition of workers and poor, the crisis-ridden Wickremesinghe regime is determined to keep communal tensions alive and deepen the repressive measures.

A case in point is placing of Ahnaf Jazeem, a young Muslim poet, among those proscribed. He was arrested in early 2020 and imprisoned on trumped-up allegations, under the PTA, of promoting Islamic extremism.

Jazeem was tortured in an attempt to obtain incriminating statements against human rights lawyer Hejaaz Hizbullah, who had been arrested earlier under the PTA on bogus allegations. Jazeem was released on bail in December 2021 but remains under surveillance by military intelligence, pending a court hearing.

Anti-Tamil communal discrimination has been promoted by the ruling class to divide the working class along ethnic lines since formal independence from Britain in 1948. The Colombo establishment provoked a bloody communal war against the separatist LTTE in 1983 which continued for 26 years.

The LTTE was defeated in May 2009 after a brutal massacre in the final weeks of the war. Tens of thousands of Tamil civilians were killed, according to UN estimates, and hundreds more simply disappeared.

A 2019 Easter Sunday terrorist attack by a local Islamic group backed by ISIS was politically exploited by the then government to fuel anti-Muslim chauvinism, amid growing opposition among workers and the poor. Gotabhaya Rajapakse exploited this terrorist attack for his presidential election campaign, under the slogan “national security first.” 

As the COVID-19 pandemic triggered an economic crisis and growing social opposition, Rajapakse intensified the anti-Muslim campaign and began banning more organisations and individuals. In March 2021, he announced the Prevention of Terrorism (De-radicalisation from holding violent extremist religious ideology) Regulations, aimed against Muslims.

Wickremesinghe’s government has delisted six Tamil organisations and 316 persons. Those organisations include the Global Tamil Forum (GTF), the British Tamil Forum and the Canadian Tamil Congress—the main Tamil diaspora groups.

This delisting has nothing to do with any regard for democratic rights. The government is concerned about the upcoming meeting of the Geneva-based United Nations Human Rights Council (UNHRC), where the human rights situation in Sri Lanka will be discussed.

Wickremesinghe is also keen to rally the Tamil parliamentary parties to his proposal for an all-party government. He is seeking to enlist the entire Colombo political establishment to implement savage International Monetary Fund austerity dictates, which mean all-out class war against the working people.

The leaders of Tamil parties, such as the Tamil National Alliance (TNA) and Tamil Peoples National Alliance (TPNA), welcomed the delisting of these organisations and individuals. They have already expressed their willingness in principle to support an all-party government.

The TPNA leader C.V. Wigneswaran admitted that “Wickremesinghe appears to be in a hurry to rope in Jaffna MPs to be part of the government, to showcase to Geneva.” He added that the “president wanted him to share a document which outlines a proposal on how money could be channeled into the country from the diaspora.”

The GTF issued a statement welcoming the delisting of itself and other Tamil diaspora organisations and individuals, saying “it was an important step towards achieving improved ethnic relations and economic outcomes.”

The opposition Samagi Jana Balawegaya MP Mano Ganeshan praised Wickremesinghe for the delistings, saying: the “international community will look upon Sri Lanka favourably as a result of it.” He offered to facilitate talks with the diaspora, on behalf of the government, to obtain investment.

Sinhala chauvinists have expressed concern on the delistings. A spokesman for Jathika Nidhas Peramuna, which is headed by MP Wimal Weerawansa, asked on what basis the delistings had been decided and whether there remained a terrorist threat from these organisations.

The editorial in the right-wing Island yesterday said: “The SLPP, which elected President Wickremesinghe, with whose blessings the delisting in question has been effected, owes an explanation to the public.” The newspaper is seeking to use the issue to boost communal propaganda.

Thousands of Ukrainian soldiers training in the UK for NATO proxy war with Russia

Thomas Scripps

More than 2,300 Ukrainian soldiers have been trained in marksmanship, battlefield first aid and urban warfare at four British military bases in the last six weeks.

The operation underscores the imperialist proxy war character of the conflict in Ukraine. While the war’s front is in the Donbass and along the Black Sea Coast, its rear extends across the NATO military alliance.

Over 1,000 British soldiers from the 11th Security Force Assistance Brigade are involved in training the Ukrainian troops. They are joined by over a hundred soldiers each from the Canadian Armed Forces, Swedish Armed Forces and New Zealand Defence Forces, with more pledged by Norway, Denmark, Finland, Latvia, Germany and the Netherlands.

Ukrainian volunteer military recruits take part in an urban battle exercise whilst being trained by British Armed Forces at a military base in Southern England, August 15, 2022. Ministry of Defence and British Army as the UK Armed Forces continue to deliver international training of Ukrainian Armed Forces recruits in the United Kingdom. [AP Photo/Frank Augstein]

Norway, Latvia, Germany and the Netherlands announced their contingents at the Copenhagen Conference for Northern European Defence Allies co-hosted by Britain, Denmark and Ukraine last Thursday. The group of 26 countries pledged an additional 1.5 billion euros in funds, equipment and training for the Ukrainian military. According to Reuters, the Polish, Slovakian and Czech defence ministers “signaled willingness to expand production of artillery systems, munitions, and other military equipment.”

The UK gave £250 millionand promised to send additional multiple-launch rocket systems (MLRS) and precision-guided M31A1 missiles, with a range of 80km.

A government press release explained that British funds “will ensure a steady flow of money not just for the provision of vital new weapons, but the essential maintenance and repair of existing kit, and training to maximise the Armed Forces of Ukraine’s effectiveness on the battlefield.”

Defence Secretary Ben Wallace commented, “This conference sends a clear message to Russia. We will not tire and we will stand by Ukraine today, tomorrow and in the months to come.

“The UK and partner nations have agreed to provide long-term military funding, ensuring a steady flow of finance to provide vital military equipment, essential maintenance of existing kit and maximising our UK-led international training programme for Ukraine’s Armed Forces.”

Britain and its allies are providing fodder for the bloody war with Russia, in which the Ukrainian military is reported to be losing up to 200 soldiers a day. A senior UK officer explained the training programme was designed to produce “battle casualty replacements.”

Those being trained are new civilian recruits, taken through a version of the six-month basic infantry training course in three weeks. Britain is committed to preparing 10,000 in the 120 days by October, but Wallace made clear in Copenhagen, “We’re committed now to really going beyond that. We are going to train more and for longer.”

The intensive course is intended to provide a higher level of training than the Ukrainian Armed Forces can provide, at an instructor to trainee ratio of 1:10 or 1:15, with a heavy focus on urban warfare.

Ukrainian soldiers will be schooled in the tactics learned in the imperialist invasions and brutal occupations of the Middle East. One trainee told the New York Times, “The British officers training us have experienced this warfare in Iraq and Afghanistan—so now it is very useful for us.” At least one of the army bases involved was used to prepare British troops to fight in Northern Ireland.

In a statement announcing the start of the programme, the British Ministry of Defence said Ukrainian Army recruits were “being given the skills needed to be effective and lethal on the frontline and defend their homeland.”

Chief of the General Staff, General Sir Patrick Sanders, the head of the British Army, visited the Kent military base in its first 10 days of providing training in mid-July, praising the “fighting spirit of the Ukrainian soldiers” and promising, “We will continue our work to scale up the ambition and pace of the training to maximise support to Ukraine.”

Weeks earlier he had told the Royal United Services Institute’s (RUSI) annual Land Warfare Conference that the Russian invasion meant the UK had to be “prepared to fight … This means focusing on winning the war, working with these allies, against this threat and in this location.”

He added, “Ukraine has also shown that engaging with our adversaries and training, assisting and reassuring our partners is high payoff activity.”

The British Army, too, “must be prepared to engage in warfare at its most violent.”

Britain’s recruit training programme is in addition to the specialist military training it is giving hundreds of Ukrainian soldiers in how to use heavy equipment.

Six days of instruction have been given in the use of the L119 light gun howitzer, with a range of 12km—Britain is sending 36 pieces to Ukraine, along with 20 M109 howitzers. Soldiers spend three weeks—the usual time is five—on the MLRS, Britain’s most advanced long range artillery weapon, similar to US HIMARS launchers. London has sent three of these systems to Ukraine already and will send three more.

Ukrainian troops have also spent several weeks being trained on 120 donated British armoured vehicles, including Mastiff, Husky and Wolfhound protected mobility vehicles, Spartan combat reconnaissance vehicles, Sultan armoured command and Samson armoured recovery vehicles, and Samaritan ambulances.

Over 100 Ukrainian sailors are being trained by the Royal Navy in Scotland at its Rosyth naval base.

Outside of the UK, British forces are reportedly in Poland training Ukrainians in using the Starstreak missile air defence system and its Stormer launch vehicles. In April, it was revealed that British SAS special forces were training soldiers on the ground in Ukraine in the use of NLAW anti-tank missiles—the UK has shipped more than 5,000. The news prompted commentary in Russia that “World War Three” and a “full-scale multi-level war” had begun against the “collective West.”

The US is carrying out military training as well. Over a hundred New York Army National Guard Soldiers travelled to Germany in July. Florida National Guardsmen have also been deployed. They are training Ukrainian personnel in the use of artillery, radar and other systems. Other US soldiers are doing the same in Poland.

Leading Ukrainian Armed Forces generals—including Oleksiy Nozdrachov, its chief of coordination centre in Kyiv—have passed through the US Army Command and General Staff College at Fort Leavenworth in Kansas. Ukrainian officers started attending the school in the 1990s, immediately after the dissolution of the Soviet Union. The BBC reports, “Today, experts say, the knowledge they gain there is helping Ukrainians mount a fierce defence of their country.”

NATO’s training programmes are a continuation of long-held plans to use Ukraine in a military conflict with Russia. Military newspaper Stars and Stripes reported Lt. Col. Todd Hopkins, deputy commander of the Florida National Guard’s 53rd Infantry Brigade Combat Team, echoing the words of a Ukrainian officer who told US soldiers, “the biggest mistake that the Russians made was giving us eight years to prepare for this.”

Under Operation Orbital, the UK trained 22,000 Ukrainian soldiers between 2015 and the start of the war. The United States trained 23,000 through its Joint Multinational Training Group Ukraine in the same time, backed by Canada, Lithuania, Denmark, Poland, Sweden and the UK. Canada has trained 33,000 since 2015 under Operation Unifier, also with Swedish participation.

All this points to the imperialist war against Russia being extensively prepared, with massive resources and systems put in place to sustain it through to its bloody intended conclusion—the collapse and subjugation of the Russian state. As the war progresses, and the fiction that NATO is some third party in the conflict evaporates completely, the danger of a direct clash between nuclear-armed powers becomes ever more real.

Taiwan and the Virtues of Ambiguity

John Feffer

Photograph Source: 總統府 – 08.03 總統與美國聯邦眾議院議長裴洛西媒體互動會 – CC BY 2.0

When I visited Taiwan in the early 2000s, I was struck by how politically vibrant the country was: the accessibility of the leadership, the intensity of the civil society, the diversity of the culture. How far the county had come from its authoritarian roots!

At that time, it was not uncommon for analysts to look at Taiwan as the future of China. Beijing might aspire to absorb the island militarily, but Taiwan aspired to transform the mainland by the inevitability of its example.

In 20 years, the geopolitical environment has changed dramatically. Beijing has abrogated Hong Kong’s status as a semi-independent entrepot on the edge of the mainland. Russia has invaded Ukraine, reviving the prerogative of superpowers to absorb whatever territory they can swallow on their borders. And U.S.-China relations have entered a downward spiral of mutual recriminations. Against this backdrop, Taiwan no longer looks like the future of the People’s Republic of China except perhaps as an occupied province.

Enter Nancy Pelosi.

The Speaker of the House visited Taiwan at the beginning of August, the first person of her position to do so since Newt Gingrich traveled there in the 1990s as a way to stick his thumb in the eye of the Clinton administration. Pelosi wasn’t going at the behest of President Biden. Indeed, the Biden administration was cool to her trip, conscious that it would unnecessarily provoke Beijing. The president even talked with Chinese leader Xi Jinping to explain that Pelosi was acting as a free agent and he couldn’t control her travel itinerary.

As a critic of Beijing’s human rights record, Pelosi has also been a long-time defender of Taiwan. Her visit sends a strong signal, ahead of the November mid-term elections, that the Democrats can be just as hawkish on China as the Republicans. Indeed, her visit garnered praise from those very Republicans, even as it, interestingly, generated criticism across the spectrum of the foreign policy commentariat. In The New York Times, Thomas Friedman led the charge by calling her visit “utterly reckless, dangerous and irresponsible” (largely because it detracts from U.S. efforts to aid Ukraine). Over at the Hoover Institution, Larry Diamond concurred: “It provoked a serious escalation of Beijing’s military intimidation without really doing anything to make Taiwan more secure.”

The commentariat can generally be counted on to support the status quo, which in this case is “strategic ambiguity.” The United States recognizes the People’s Republic of China as the “one China.” Yet it maintains economic ties to Taiwan, provides it with substantial military assistance, and sends periodic delegations of officials there to consult with their Taiwanese counterparts. What the United States won’t do—except when President Biden misspeaks—is promise to come to Taiwan’s aid in the case of an invasion from the mainland.

In other words, the U.S. commitment to Taiwan is roughly similar to its commitment to Ukraine. It will send both countries the means to defend themselves. But it won’t directly intervene against either Russia or China. In the case of Taiwan, this strategic ambiguity allows the United States to have its mooncake and eat it too: simultaneously maintain a strong economic relationship with Beijing and beef up the military capacity of Taipei.

There has been some movement in the United States, particularly in Congress, to eliminate this strategic ambiguity. The pending Taiwan Policy Act is designed not only to increase military assistance to the island but to elevate the country’s status to a “major non-NATO ally.” There is bipartisan support in Congress to end the “One China” policy and clearly state that the United States will directly defend the country in the case of attack. Proponents of this view believe that it will deter China from invading.

Beijing has certainly made more noises about Taiwan in recent years. “Taiwan independence separatism is the biggest obstacle to achieving the reunification of the motherland, and the most serious hidden danger to national rejuvenation,” Xi said in 2021. He has vowed to reunify the two lands on many occasions. He is being pushed toward a more aggressive stance by nationalist voices that Xi himself has encouraged over the years.

As he prepares to assume his third term as the head of the ruling Communist Party, Xi Jinping remains focused on keeping the Chinese economy humming along. The Party believes that it can maintain its hold over the political realm as long as the populace sees continuing economic progress. Economic growth also helps to maintain the country’s global status as a superpower, which also keeps Chinese nationalists happy. International sanctions against China in the event of a war with Taiwan would seriously compromise this economic vision.

In response to Pelosi’s trip, Beijing has ramped up military exercises in the Taiwan Strait. It conducted live-fire drills and missile launches to demonstrate “how China could cut off Taiwan’s ports, attack its most important military installations, and sever access for foreign forces that may come to Taiwan’s aid.” China also suspended discussions with the United States on military matters and climate cooperation as well as imposed trade sanctions on Taiwan. Pelosi has remained unapologetic, calling Xi a “scared bully.”

Of course, China is not the only country engaged in provocative maneuvers in the region. The United States, still eager to assert itself as a preeminent Pacific power, has conducted numerous operations in the Taiwan Strait and the South China Sea, as documented on this useful webpage maintained by the Committee on a Sane U.S.-China Policy. The enormous RIMPAC exercises, coordinated by the United States with its allies and just finishing up this week, must look from Beijing’s standpoint like a dress rehearsal for either a military campaign or an economic strangulation policy like the one directed at Russia.

Strategic ambiguity is not an ideal policy. The best-case scenario is for Beijing to back off, for Taiwan to make a democratic choice about its status, for the Taiwan Strait to be demilitarized, and for the United States to reduce its military footprint in the region. Such strategic clarity would be most welcome.

But second best is a continuation of the status quo in which all sides play-act and thus preserve space for diplomacy. It’s not too late for all three sides to back away slowly from the current confrontation. Beneath all the harsh words and the military preparations, the economic relationships remain strong. China absorbs 37 percent of all of Taiwan’s exports, and those imports have increased by 14.2% so far this year. Taiwan, meanwhile, relies on nearly 20 percent of its imports from China, which increased by 9.5 percent this year. The two countries also face a raft of mutual challenges—from depletion of fishing stocks to kinks in the global supply chain—that require coordination and cooperation.

For the adherents of strategic ambiguity in the United States, Pelosi’s trip was a mistake because it was no substitute for providing more useful, asymmetric means for Taiwan to defend itself. That means air defense and drones and naval mines rather than tanks or even big ships or fancy jets. The idea is that Taiwan needs to build up its capacity to deny China the ability to invade rather than fight the People’s Liberation Army in a more conventional war on the seas and in the air. The virtue of such a strategy is that it’s cheaper and doesn’t present as much of a potential offensive threat to China.

Pelosi would be well-advised to take another look at the uses of strategic ambiguity. Taiwan is indeed worth defending, both rhetorically and militarily. But there are better ways of doing that than waving a red flag in front of China and daring it to charge.