16 Nov 2022

G20 meets amid mounting economic and geopolitical crisis

Nick Beams


The G20 summit meeting in Bali, Indonesia, is being held amid the worst global economic conditions since the organisation was advanced as the major international economic forum in 2009, in the wake of the global financial crisis of 2008.

Economic conditions are worsening on every front. Global inflation is at its highest level in 40 years, recession is looming in a growing number of major economies, including the US, interest rates are rising as central banks tighten monetary policy, and a deepening food crisis is pushing millions of people into starvation.

The ongoing US-led war against Russia in Ukraine, combined with increased military spending, is adding to the inflationary spiral, while intensifying geopolitical tensions and conflicts are ruling out any coordinated response to the mounting global economic problems.

In a speech delivered yesterday, the managing director of the International Monetary Fund, Kristalina Georgieva, pointed to the worsening outlook.

“Hopeful signs of recovery last year were replaced by an abrupt slowdown in the world economy because of COVID, the war in Ukraine and climate disasters on all continents,” she said.

In earlier comments on Sunday, she noted that when looking at the gloomy picture, “even more troubling is the trend towards increasing fragmentation – at a time when we need each other the most. And I am very concerned that we may be sleepwalking into a world that would be poorer and less secure as a result.”

The deepening recessionary trends have been highlighted by the IMF in its most recent economic reports. It expects global growth will be only 2.7 percent in 2023 with 31 of 72 economies set to record two consecutive quarters of economic contraction, the definition of a technical recession.

The world’s major economies are at the centre of this trend. After recording two consecutive quarters of contraction in the first six months of the year, the US economy expanded in the third quarter, but this trend is not expected to last with a wave of mass layoffs underway in high-tech industries.

S&P Global’s purchasing manager indexes for October pointed to a worsening downturn for the UK, US and the eurozone. The global index for new orders fell to its lowest level since the beginning of 2020, the start of the pandemic.

According to the Financial Times, “Economists are revising down their growth forecasts for 2023 for the wealthiest countries and expect output to decline in Germany, Italy and the UK.”

In the wake of the 2008 crisis, China carried out massive stimulus measures and acted as an economic “shock absorber” for many parts of the world, particularly poorer countries, as well as major commodity-exporting countries such as Australia and Canada.

There will not be any repeat. Chinese growth has hit its lowest levels in three decades and, as the Wall Street Journal reported, data released yesterday showed “economic activity cooling across the board.”

“Retail sales contracted unexpectedly for the first time in five months as factory output slowed and a pull-back in real-estate investment accelerated.”

The official growth rate for this year is only 5.5 percent, the lowest since the early 1990s, but could come in even lower with the economy only expanding at an annual rate of 3 percent for the first nine months of the year.

Trade war measures by the US are intensifying the slowdown, with bans on chip exports to China expected to slice off a quarter of a percentage point from the growth rate for 2023.

The class war being unleashed by the US Federal Reserve—the escalation of interest rates at a record pace in order to try to batter down wage demands—is sending shock waves through the global economy and the financial system.

The resulting rise in the US dollar, lifting the price of vital basic commodities in local currencies, is increasing food insecurity.

In a report issued on Monday, the World Bank said domestic food price inflation “continues to remain high in almost all low- and middle-income countries and high-income countries,” despite decreases in global food prices since their peak last April.

Last month, it said that, because of currency depreciations against the US dollar, almost 60 percent of oil-importing poorer countries saw an increase in domestic oil prices this year with 90 percent of these economies experiencing a “larger increase in wheat prices in local-currency terms compared to the rise in US dollars.”

The hike in interest rates and the rise in the payments on dollar-denominated debt have already pushed countries such as Sri Lanka into bankruptcy, with the potential for major international consequences.

New York Times article on the Bali summit noted: “The strengthening US dollar is worsening the debt burdens of developing economies, increasing the chances that government defaults rip through the world financial system like wildfire.”

The higher interest rate regime is already setting off turbulence in the very heart of the world financial system.

The UK bond market gyrations at the end of September, the collapse of the crypto currency exchange FTX in the past week, and the growing warnings that liquidity levels in the $24 trillion Treasury market—the basis of the global financial system—have fallen to the lows experienced in March 2020, when the market froze, are all indications of a gathering financial crisis.

Amid this worsening turmoil, a major political factor is the deepening divisions between the major powers, resulting from the US-led war against Russia and its intensifying military and economic preparations for a conflict with China.

Whatever tactical shifts may have occurred in recent days—the meeting between Biden and Chinese president Xi Jinping—the strategy, US domination of the Eurasian landmass, remains the same.

At the G20 meeting in 2009, there was some agreement on policy coordination. At this meeting there are great difficulties in even producing a final communiqué.

The differences between the current meeting and that of 13 years ago were summed up in an interview last month with the finance minister of the host nation Indonesia, Sri Mulyani Indrawati.

“I saw with my own eyes how the G20 at that time really formulated that kind of policy, when all the leaders were in the same boat with the same concern with the same enemy,” she said. “This one, they are enemies with each other.”

Any prospect for global coordination, let alone collaboration, to combat the mounting economic crisis was virtually ruled out by US Treasury secretary Janet Yellen in comments reported by the Wall Street Journal.

“After the global financial crisis,” she said, “countries could band together and say we need fiscal stimulus to try to create jobs so that this isn’t a long damaging downturn. But now, countries have different amounts of fiscal space, different inflationary pressures.”

These comments are the expression of an objective contradiction at the very centre of the capitalist economy: that between the interconnected and integrated global economy and the system of rival nation-states in which the profit system is rooted.

This contradiction is fueling the US war with Russia and preparations for conflict with China. It is the reason why no international response has been developed to deal with the pandemic, at the cost of millions of lives, and it makes any progressive response by the ruling classes to mounting economic devastation impossible.

15 Nov 2022

Stipendium Hungaricum (Government of Hungary) Scholarships 2023/2024

Application Deadline: 16th January 2023

Eligible Countries: International. See list of countries below

To be taken at (country): Hungary

Field of Study: Applicants are encouraged to apply for study fields that are in the educational cooperation programmes between Hungary and the specific Sending Partner.

About the Stipendium Hungaricum Award: Thousands of students from all around the world apply for higher educational studies in Hungary each year. The number of Stipendium Hungaricum applicants is continuously increasing as well as the number of available scholarship places.

The programme is based on bilateral educational cooperation agreements signed between the Ministries responsible for education in the sending countries/territories and Hungary or between institutions. Currently more than 50 Sending Partners are engaged in the programme throughout 4 different continents.

Offered Since: 2013

Type: Stipendium Hungaricum scholarships are available for bachelormasterone-tier masterdoctoral and non-degree programmes (preparatory and specialisation courses).

In the Hungarian education system, one-tier master programmes cover both the bachelor and the master level of studies; therefore it is an undivided master programme that results in a master degree. These one-tier programmes are offered in specific study fields such as general medicine, pharmacy, dentistry, architecture, law, veterinary surgery, forestry engineering, etc.

Eligibility: See full eligibility of all study types in Scholarship Webpage (Link below).

Applications will not be considered in the following cases:

  • Hungarian citizens (including those with dual citizenships)
  • former Stipendium Hungaricum Scholarship Holders, who are re-applying for studies in the same cycle of education (non-degree studies, bachelor, master, doctoral level) including both full time and partial study programmes

Number of Awardees: Numerous

Value of Stipendium Hungaricum Scholarship: 

  • Tuition-free education
    • exemption from the payment of tuition fee
  • Monthly stipend
    • non-degree, bachelor, master and one-tier master level: monthly amount of HUF 40 460 (cca EUR 130) contribution to the living expenses in Hungary, for 12 months a year, until the completion of studies
    • doctoral level: according to the current Hungarian legislation, the monthly amount of scholarship is HUF 140 000 (cca EUR 450) for the first phase of education (4 semesters) and HUF 180 000 (cca EUR 580) for the second phase (4 semesters) – for 12 months a year, until completion of studies.
  • Accommodation
    • dormitory place or a contribution of HUF 40 000 to accommodation costs for the whole duration of the scholarship period
  • Medical insurance
    • health care services according to the relevant Hungarian legislation (Act No. 80 of 1997, national health insurance card) and supplementary medical insurance for up to HUF 65 000 (cca EUR 205) a year/person

Duration of Scholarship: Duration of candidate’s chosen program:

  • Bachelor programmes: Fulltime: 2-4 years. Partial: 1 or 2 semesters
  • Master programmes:  Fulltime: 1.5-2 years. Partial: 1 or 2 semesters
  • One-tier master programmes: Fulltime: 5-6 years Partial: 1 or 2 semesters
  • Doctoral programmes:  Fulltime: 2+2 years Partial: 1 or 2 semesters
  • Non-degree programmes:
    • Preparatory course in Hungarian language: 1 year
    • Other preparatory and specialisation courses: up to 1 year

List of Eligible Countries: For full time programmes, students can apply from the following Sending Partners: Arab Republic of Egypt, Argentine Republic, Bosnia and Herzegovina, Federal Democratic Republic of Ethiopia, Federal Republic of Nigeria, Georgia, Islamic Republic of Iran, Islamic Republic of Pakistan, Japan, Kingdom of Cambodia, Kingdom of Morocco, Kurdistan Regional Government/Iraq, Kyrgyz Republic, Lao People’s Democratic Republic, Lebanese Republic, Mongolia, Oriental Republic of Uruguay, Palestine, People’s Democratic Republic of Algeria, People’s Republic of China (including the Hudec scholarships), Republic of Albania, Republic of Angola, Republic of Azerbaijan, Republic of Belarus, Republic of Colombia, Republic of Ecuador, Republic of Ghana, Republic of India, Republic of Indonesia, Republic of Iraq, Republic of Kazakhstan, Republic of Kenya, Republic of Korea, Republic of Kosovo, Republic of Macedonia (FYROM is used at OSCE, UN, CoE, EU and NATO fora), Republic of Moldova, Republic of Namibia, Republic of Paraguay, Republic of Serbia, Republic of South Africa, Republic of the Philippines, Republic of the Union of Myanmar, Republic of Turkey, Republic of Yemen, Russian Federation, Socialist Republic of Vietnam, State of Israel, Syrian Arab Republic, The Hashemite Kingdom of Jordan, Tunisian Republic, Turkmenistan, Ukraine, United Mexican States.

For partial study programmes, students can apply from the following Sending Partners: Georgia, Islamic Republic of Iran, Japan, Kingdom of Cambodia, Lao People’s Democratic Republic, Lebanese Republic, Mongolia, People’s Republic of China (only Hudec applicants), Republic of Albania, Republic of Belarus, Republic of India, Republic of Korea, Republic of the Union of Myanmar, Republic of Turkey, Socialist Republic of Vietnam, Russian Federation, Syrian Arab Republic, United Mexican States.

How to Apply: Apply for a Stipendium Hungaricum Scholarship Here

  • Applications shall be submitted to the responsible authority of the Sending Partner
  • It is important to go through all application requirements in the Award Webpage (see Link below) before applying.

Visit Scholarship Webpage for details

Fighting a War on the Wrong Planet

Rajan Menon


Washington’s vaunted “rules-based international order” has undergone a stress test following Russia’s invasion of Ukraine and here’s the news so far: it hasn’t held up well. In fact, the disparate reactions to Vladimir Putin’s war have only highlighted stark global divisions, which reflect the unequal distribution of wealth and power. Such divisions have made it even harder for a multitude of sovereign states to find the minimal common ground needed to tackle the biggest global problems, especially climate change.

In fact, it’s now reasonable to ask whether an international community connected by a consensus of norms and rules, and capable of acting in concert against the direst threats to humankind, exists. Sadly, if the responses to the war in Ukraine are the standard by which we’re judging, things don’t look good.

The Myth of Universality

After Russia invaded, the United States and its allies rushed to punish it with a barrage of economic sanctions. They also sought to mobilize a global outcry by charging Putin with trashing what President Biden’s top foreign policy officials like to call the rules-based international order. Their effort has, at best, had minimal success.

Yes, there was that lopsided vote against Russia in the United Nations General Assembly, the March 2nd resolution on the invasion sponsored by 90 countries. One hundred and forty-one nations voted for it and only five against, while 35 abstained. Beyond that, in the “global south” at least, the response to Moscow’s assault has been tepid at best. None of the key countries there — Brazil, India, Indonesia, and South Africa, to mention four — even issued official statements castigating Russia. Some, including India and South Africa, along with 16 other African countries (and don’t forget China though it may not count as part of the global south), simply abstained from that U.N. resolution. And while Brazil, like Indonesia, voted yes, it also condemned “indiscriminate sanctions” against Russia.

None of those countries joined the United States and most of the rest of NATO in imposing sanctions on Russia, not even Turkey, a member of that alliance. In fact, Turkey, which last year imported 60 billion cubic meters of natural gas from Russia, has only further increased energy cooperation with Moscow, including raising its purchases of Russian oil to 200,000 barrels per day — more than twice what it bought in 2021. India, too, ramped up oil purchases from Russia, taking advantage of discounted prices from a Moscow squeezed by U.S. and NATO sanctions. Keep in mind that, before the war, Russia had accounted for just 1% of Indian oil imports. By early October, that number had reached 21%. Worse yet, India’s purchases of Russian coal — which emits far more carbon dioxide into the air than oil and natural gas — may increase to 40 million tons by 2035, five times the current amount.

Despite the risk of facing potential U.S. sanctions thanks to the Countering America’s Adversaries Through Sanctions Act (CAATSA), India also stuck by its earlier decision to buy Russia’s most advanced air-defense system, the S-400. The Biden administration eventually threaded that needle by arranging a waiver for India, in part because it’s seen as a major future partner against China with which Washington has become increasingly preoccupied (as witnessed by the new National Security Strategy). The prime concern of the Indian leadership, however, has been to preserve its close ties with Russia, war or no war, given its fear of a growing alignment between that country and China, which India sees as its main adversary.

What’s more, since the invasion, China’s average monthly trade with Russia has surged by nearly two-thirds, Turkey’s has nearly doubled, and India’s has risen more than threefold, while Russian exports to Brazil have nearly doubled as well. This failure of much of the world to heed Washington’s clarion call to stand up for universal norms stems partly from pique at what’s seen as the West’s presumptuousness. On March 1st, when 20 countries, a number from the European Union, wrote Pakistan’s then-prime minister Imran Khan (who visited Putin soon after the war began), imploring him to support an upcoming General Assembly resolution censuring Russia, he all too typically replied: “What do you think of us? Are we your slaves… [Do you take for granted] that whatever you say we will do?” Had such a letter, he asked, been sent to India?

Similarly, Celso Amorim, who served as Brazil’s foreign minister for seven years during the presidency of Luis Inacio “Lula” de Silva (who will soon reclaim his former job), declared that condemning Russia would amount to obeying Washington’s diktat. For his part, Lula claimed Joe Biden and Ukrainian president Volodymyr Zelensky were partly to blame for the war. They hadn’t worked hard enough to avert it, he opined, by negotiating with Putin. South African President Cyril Ramaphosa blamed Putin’s actions on the way NATO had, since the collapse of the Soviet Union, provocatively expanded toward Russia’s border.

Many other countries simply preferred not to get sucked into a confrontation between Russia and the West. As they saw it, their chances of changing Putin’s mind were nil, given their lack of leverage, so why incur his displeasure? (After all, what was the West offering that might make choosing sides more palatable?) Besides, given their immediate daily struggles with energy prices, debt, food security, poverty, and climate change, a war in Europe seemed a distant affair, a distinctly secondary concern. Brazilian President Jair Bolsonaro typically suggested that he wasn’t about to join the sanctions regime because his country’s agriculture depended on imported Russian fertilizer.

Leaders in the global south were also struck by the contrast between the West’s urgency over Ukraine and its lack of similar fervor when it came to problems in their part of the world. There was, for instance, much commentary about the generosity and speed with which countries like Poland and Hungary (as well as the United States) embraced Ukrainian refugees, having largely shut the door on refugees from Afghanistan, Iraq, and Syria. In June, while not mentioning that particular example, India’s foreign minister, Subrahmanyam Jaishankar, highlighted such sentiments when, in response to a question about the European Union’s efforts to push his country to get tougher on Russia, he remarked that Europe “has to grow out of the mindset that [its] problems are the world’s problem, but the world’s problems are not Europe’s problem.” Given how “singularly silent” European countries had been “on many things which were happening, for example in Asia,” he added, “you could ask why anybody in Asia would trust Europe on anything at all?”

The West’s less-than-urgent response to two other problems aggravated by the Ukraine crisis that hit the world’s poor countries especially hard bore out Jaishankar’s point of view. The first was soaring food prices sure to worsen malnutrition, if not famine, in the global south. Already in May, the World Food Program warned that 47 million additional people (more than Ukraine’s total population) were going to face “acute food insecurity” thanks to a potential reduction in food exports from both Russia and Ukraine — and that was on top of the 193 million people in 53 countries who had already been in that predicament (or worse) in 2021.

A July deal brokered between Ukraine and Russia by the U.N. and Turkish President Recep Tayyip Erdoğan did, in fact, ensure the resumption of food exports from both countries (though Russia briefly withdrew from it as October ended). Still, only a fifth of the added supply went to low-income and poor countries. While global food prices have fallen for six months straight now, another crisis cannot be ruled out as long as the war in Ukraine drags on.

The second problem was an increase in the cost of both borrowing money and of debt repayments following interest rate hikes by Western central banks seeking to tamp down inflation stoked by a war-induced spike in fuel prices. On average, interest rates in the poorest countries jumped by 5.7% — about twice as much as in the U.S. — increasing the cost of their further borrowing by 10% to 46%.

A more fundamental reason much of the global south wasn’t in a hurry to pillory Russia is that the West has repeatedly defenestrated the very values it declares to be universal. In 1999, for instance, NATO intervened in Kosovo, following Serbia’s repression of the Kosovars, even though it was not authorized to do so, as required, by a U.N. Security Council resolution (which China and Russia would have vetoed). The Security Council did approve the U.S. and European intervention in Libya in 2011 to protect civilians from the security forces of that country’s autocrat, Muammar Gadhafi. That campaign, however, quickly turned into one aimed at toppling his government by assisting the armed opposition and so would be widely criticized in the global south for creating ongoing chaos in that country. After 9/11, the United States offered classically contorted legal explanations for the way the Central Intelligence Agency violated the Convention Against Torture and the four 1949 Geneva Conventions in the name of wiping out terrorism.

Universal human rights, of course, occupy a prominent place in Washington’s narratives about that rules-based world order it so regularly promotes but in practice frequently ignores, notably in this century in the Middle East. Vladimir Putin’s invasion of Ukraine was aimed at regime change against a country that posed no direct threat to Russia and therefore was indeed a violation of the U.N. Charter; but so, too, was the 2003 American invasion of Iraq, something few in the global south have forgotten.

The War and Climate Change

Worse yet, the divisions Vladimir Putin’s invasion has highlighted have only made it more difficult to take the necessary bold steps to combat the greatest danger all of us face on this planet: climate change. Even before the war, there was no consensus on who bore the most responsibility for the problem, who should make the biggest cuts in greenhouse gas emissions, or who should provide funds to countries that simply can’t afford the costs involved in shifting to green energy. Perhaps the only thing on which everyone agrees in this moment of global stress is that not enough has been done to meet the 2015 Paris climate accord target of ideally limiting the increase in global warming to 1.5 degrees Centigrade. That’s a valid conclusion. According to a U.N. report published this month, the planet’s warming will reach 2.4 degrees Centigrade by 2100. This is where things stood as the 2022 United Nations Climate Change Conference kicked off this month in Sharm el-Sheikh, Egypt.

As a start, the $100 billion per year that richer countries pledged to poor ones in 2009 to help move them away from hydrocarbon-based energy hasn’t been met in any year so far and recent disbursements, minimal as they have been, were largely in the form of loans, not grants. The resources the West will now have to spend just to cover Ukraine’s non-military needs for 2023 — $55 billion in budgetary assistance and infrastructure repairs alone, according to President Volodymyr Zelensky — plus soaring inflation and slower growth in Western economies thanks to the war make it doubtful that green commitments to poor countries will be fulfilled in the years to come. (Never mind the pledge, in advance of the November 2021 COP26 United Nations Climate Change Conference, that the $100 billion goal would be met in 2023.)

In the end, the surge in energy costs created by the war, in part because Russia’s natural gas supplies to Europe have been slashed, could prove the shot in the arm needed for some of the biggest emitters of carbon dioxide and methane to move more quickly toward wind and solar power. That seems especially possible because the price of clean energy technologies has declined so sharply in recent years. The cost of photovoltaic cells for solar power has, for instance, fallen by nearly 90% in the past decade; the cost for lithium-ion batteries, needed for rechargeable electric vehicles, by the same amount during the last 20 years. Optimism about a quicker greening of the planet, now a common refrain, could prove valid in the long run. However, when it comes to progress on climate change, the immediate implications of the war aren’t encouraging.

According to the International Energy Agency, if the Paris Agreement’s target for limiting global warming and its goal of “net zero” in global emissions by 2050 are to prove feasible, the building of additional fossil-fuel infrastructure must cease immediately. And that’s hardly what’s been happening since the war in Ukraine began. Instead, there has been what one expert calls “a gold rush to new fossil fuel infrastructure.” Following the drastic cuts in Russian gas exports to Europe, new liquefied natural gas (LNG) facilities — more than 20 of them, worth billions of dollars — have either been planned or put on a fast track in Canada, Germany, Greece, Italy, and the Netherlands. The Group of Seven may even reverse its decisionlast May to stop public investment in overseas fossil-fuel projects by the end of this year, while its plan to “decarbonize” the energy sectors of member countries by 2035 may also fall by the wayside.

In June, Germany, desperate to replace that Russian natural gas, announced that mothballed coal-fired power plants, the dirtiest of greenhouse-gas producers, would be brought back online. The Federation of German Industry, which opposed shutting them down well before the war started, has indicated that it’s already switching to coal so that natural gas storage tanks can be filled before the winter cold sets in. India, too, has responded to higher energy prices with plans to boost coal production by almost 56 gigawatts through 2032, a 25% increase. Britain has scrapped its decision to prohibit, on environmental grounds, the development of the Jackdaw natural gas field in the North Sea and has already signed new contracts with Shell and other fossil-fuel companies. European countries have concluded several deals for LNG purchases, including with Azerbaijan, Egypt, Israel, the United States, and Qatar (which has demanded 20-year contracts). Then there’s Russia’s response to high energy prices, including a huge Arctic drilling project aimed at adding 100 million tons of oil a year to the global supply by 2035.

U.N. Secretary-General António Gutteres characterized this dash toward yet more hydrocarbon energy use as “madness.” Using a phrase long reserved for nuclear war, he suggested that such an unceasing addiction to fossil fuels could end in “mutually assured destruction.” He has a point: the U.N. Environment Program’s 2022 “Emissions Gap Report” released last month concluded that, in light of the emissions targets of so many states, Earth’s warming in the post-Industrial Revolution era could be in the range of 2.1 to 2.9 degrees Celsius by 2100. That’s nowhere near the Paris Agreement’s more ambitious benchmark of 1.5 degrees on a planet where the average temperature has already risen by 1.2 degrees.

As the Germany-based Perspectives on Climate Group details in a recent study, the Ukraine war has also had direct effects on climate change that will continue even after the fighting ends. As a start, the Paris Agreement doesn’t require countries to report emissions produced by their armed forces, but the war in Ukraine, likely to be a long-drawn-out affair, has already contributed to military carbon emissions in a big way, thanks to fossil-fuel-powered tanks, aircraft, and so much else. Even the rubble created by the bombardment of cities has released more carbon dioxide. So will Ukraine’s post-war reconstruction, which its prime minister estimated last month will cost close to $750 billion. And that may be an underestimate considering that the Russian army has taken its wrecking ball (or perhaps wrecking drones, missiles, and artillery) to everything from power plants and waterworks to schools, hospitals, and apartment buildings.

What International Community?

Leaders regularly implore “the international community” to act in various ways. If such appeals are to be more than verbiage, however, compelling evidence is needed that 195 countries share basic principles of some sort on climate change — that the world is more than the sum of its parts. Evidence is also needed that the most powerful countries on this planet can set aside their short-term interests long enough to act in a concerted fashion and decisively when faced with planet-threatening problems like climate change. The war in Ukraine offers no such evidence. For all the talk of a new dawn that followed the end of the Cold War, we seem stuck in our old ways — just when they need to change more than ever.

COVID outbreak exposes oppressive conditions for Foxconn workers in China

Jerry Zhang


An outbreak of COVID-19 infections at the massive Foxconn campus at Zhengzhou in China’s Henan province—the world’s largest iPhone plant—has pointed to the repressive conditions enforced by the company in order to churn out phones for Apple.

Production workers at one of Foxconn's plants in China. [Photo by Wikimedia Commons: Steve Jurvetson / CC BY 2.0]

Corporate media outlets internationally, agitating against China’s zero-COVID policy, claimed to raise concerns about the treatment of workers at the facility when numbers of workers, worried about infection, decided to return home on foot.

Reuters, for example, claimed that the events at the complex had “come to symbolise worker discontent with harsh COVID curbs.”

At the same time, Foxconn’s disregard for employees’ health and living conditions during the outbreak sparked outrage on the internet in China and elsewhere.

The Zhengzhou complex, a virtual mini-city, exclusively manufactures iPhones, worth billions of dollars to Apple. Its workforce swells to 350,000 at peak times when a new model is launched. It can mass-produce 500,000 phones a day. For that purpose, lowly-paid workers are crammed into dormitories—eight to a room—in 10- or 12-storey buildings.

According to reports, Foxconn’s infections began to emerge as early as October 8, but did not attract attention at that time. At first, the Taiwanese-owned company told the media there were no “symptomatic” infections and tried to mislead workers that no cases had occurred at the facility.

Foxconn said production and operations were “relatively stable,” and the three-month output from October to December would have “an unchanged outlook.”

According to some social media comments, government officials also covered up the infections. There is still no credible data on infections within Foxconn factories.

Instances of employees testing positive increased, but it was not until October 14, when the factory suddenly began to implement “closed management”—ordering workers to remain inside the complex—that workers realised that the pandemic had spread.

As the number of cases continued to rise, close contacts had to be isolated in dormitories. The factory stopped dine-in meals from October 19, and instead distributed lunch boxes for workers to take back to the dormitories to eat.

Many workers reported that they received spoiled meals, and sometimes there were no lunch boxes, so they had to satisfy their hunger with bread and instant noodles. Several workers said the domestic waste was not disposed of and piled up at dormitory doors.

The chaotic management and poor environment created alarm among the workers, who saw fellow workers getting infected.

“All this information gives me the feeling that more and more people are infected, but Foxconn does not have enough manpower to deal with it,” one worker told Lifeweek, a Chinese business magazine. What he was afraid of, he said, was what would happen if the pandemic became “uncontrollable.”

The worker explained: “It may be hard for outsiders to imagine this sentiment, but for employees who knew nothing at the time, there are signs that our safety is difficult to guarantee.”

Growing unease led many workers to leave, mostly those from nearby areas. “This is not stable work, and it is not worth the risk of contracting the disease to continue to do it,” a worker said in an interview with Caixin News.

Another worker said Foxconn even had workers who had tested positive continuing to work, mixing with other workers.

Because some infected areas in Zhengzhou were also under lockdown, fleeing workers could not access public transport and had no choice but to return to their home locations on foot.

A day after videos of workers leaving the factory circulated, Foxconn and several local governments in Henan said they had arranged transport for workers who chose to go home.

Government announcements said workers returning to their hometowns must undergo centralised isolation. But some places required workers to pay for their isolation, and this caused further dissatisfaction.

Foxconn is notorious for its harsh labour conditions, particularly since a series of suicides in 2010 by workers at its huge Longhua plant in Shenzhen received global publicity. Foxconn moved some production to other areas, including Zhengzhou, where wages were even lower.

The size of Foxconn’s factories and its ability to standardize the production of large numbers of phones make it Apple’s most important supplier, accounting for half its global supply. Foxconn is now in a critical manufacturing period ahead of the holiday season at the end of the year.

Apple reportedly lost about $4 billion in iPad and Mac sales in the spring and summer after factories outside Shanghai closed to limit the spread of COVID-19.

In Zhengzhou, a city with a population of around 10 million, Foxconn has a dominating presence, facilitated by the local, provincial and national governments.

According to data released by the China Association for Foreign Economic Relations and Trade, in 2019 Zhengzhou Foxconn ranked first in China for exports, with a total value of $US31.6 billion. Foxconn accounted for some 82 percent of Henan province’s total import volume and 65 percent of its export volume.

On October 31, a Foxconn spokesperson said no serious infections had occurred in the facility and spoke about ensuring continued production, while claiming the company’s top priority was the safety of employees.

Likewise, Apple says the company is working closely with suppliers to restore normal production levels, while it “ensures the health and safety of workers.”

However, Apple announced on November 7 that due to the restrictions imposed by the pandemic, production at Zhengzhou had been greatly reduced. That triggered warnings on Wall Street that Apple may not have enough iPhones to meet demand this year, which could severely impact the company’s bottom line.

“[T]his latest zero-COVID situation is an absolute gut punch for Apple in its most important holiday quarter,” Wedbush analyst Dan Ives wrote in an investor note. These pressures from the financial markets point to the colossal profit interests bound up with the global media campaign to denounce China’s zero-COVID policy and demand its reversal.

After the Foxconn outbreak became the focus of global media attention, the government response focused on cooperating with the company to resume production. Foxconn Technology Group chairman Liu Yangwei, said: “We will cooperate with the government and customers to return to normal production capacity in the shortest possible time.”

Despite the risk of further infections, government authorities asked Henan vocational schools and colleges to mobilise students to enter the Foxconn factory and directed some villages and towns to assist Foxconn to recruit workers.

Each of China’s recent outbreaks have largely been suppressed through the continuation of the zero-COVID policy, which includes lockdowns, rigorous contact tracing, isolation of infected individuals, mass testing and universal mask-wearing.

However, without a globally coordinated elimination strategy, infections will continue to be imported into the country to spread and threaten public health, and pressures will mount for China to end its policy.

Despite claiming to continue to adhere to a zero-COVID policy, the Chinese government issued 20 measures on November 10, including further reducing the isolation time of close contacts and cancelling the designation of secondary close contacts. If China were to drop its mitigation measures and pursue a vaccine- and treatment-only approach, as advocated relentlessly by the Western media, it would likely lead to the deaths of millions of people.

With the arrival of late autumn, COVID-19 has begun to spread in China. As of November 12, there were tens of thousands of infected people, including 12,175 local confirmed cases and 80,251 asymptomatic infections. Although the pandemic is still controllable, it is regarded as China’s most serious pandemic wave in six months.

Peru hit with credit rating downgrade over deepening political and economic crises

Cesar Uco & Armando Cruz


With the government of Peru’s pseudo-left populist President Pedro Castillo confronting an escalating crisis of rule, the credit rating agency Fitch—whose ratings measure the probability of default on a government's foreign currency debt payments—has lowered its outlook on Peru to negative from stable.

The reason Fitch Ratings gave for the negative rating, issued on October 20, was that a “deterioration in political stability and government effectiveness has increased downside risks to Peru's ratings.”

Peruvian President Pedro Castillo (Photo: ANDINA/Presidency of the Republic of Peru) [Photo: ANDINA/Presidency of the Republic of Peru]

The agency said high turnover in the cabinet as well as a pair of failed impeachment attempts against Castillo “have sustained political tumult.” According to Fitch, corruption investigations directly involving the president or close affiliates, along with frequent rotation of ministerial positions, have undermined government effectiveness. “Private investment has fallen, a fiscal liability has materialized, and policy implementation has slowed as a result of the political volatility,” Fitch said.

Peru’s media has documented that Castillo is engaged in the same corruption schemes as his predecessors, involving bribes for government contracts and the appointment of family members to high positions.

Castillo’s election in 2021 was a distorted expression of a general rejection of the right-wing free-market policies that have dominated the South American country for more than three decades. He based his election campaign on the slogan, “No more poor people in a rich country.”

However, in less than a year, all these promises have been revealed to be empty demagogic gestures. Castillo has proven to be an obedient servant of the Peruvian bourgeoisie and imperialism, as he has left intact the basic structure of the economic system he criticized so much.

Nonetheless, right-wing forces centered around Keiko Fujimori, the three-time candidate whom Castillo defeated at the polls and daughter of Peru’s authoritarian (and jailed) former president Alberto Fujimori, have pursued a non-stop campaign to bring his government down.

This has led to an almost permanent state of ungovernability, as Congress has become the de facto headquarters for political representatives of big business and far-right forces to plot against and undermine Castillo’s executive power. Two impeachment attempts failed because the necessary 87 votes were not obtained in Congress to start the process.

While mounting a third attempt, Castillo’s right-wing opposition in Congress is seeking his suspension from office on the ultra-reactionary nationalist charge of “treason against the fatherland,” based upon a remark by Castillo that his government could help land-locked Bolivia secure access to the Pacific Ocean. Approved by a congressional subcommittee on November 11, the indictment, if supported by a majority of Congress, would result in Castillo being barred from holding office for five years.

Such is the depth of the crisis in this undeclared intra-state warfare that, in his first 13 months in office, Castillo appointed 68 ministers to the 19 ministries that make up the executive cabinet. That is 3.6 incumbents per ministry, with an average tenure of three months and ten days.

Underscoring his government’s subordination to US imperialism, Castillo appealed to the Organization of American States to intervene in Peru to protect “democracy” against a congressional coup. An OAS delegation is expected to arrive in Lima soon. This is the same OAS which, under Washington’s direction, orchestrated the 2019 coup that ousted Bolivia’s Evo Morales.

Fitch has maintained Peru's “Long-Term Foreign Currency Issuer Default Rating” at BBB, the lowest investment grade rating. However, Fitch’s rating of the country’s outlook as “negative” will have direct consequences for Peru’s foreign currency financing capacity, at a time when its economy is stagnant.

Another factor cited by Fitch for changing the rating to negative is its revision of the “real GDP growth forecast for 2022 downward from 2.5 percent to 2.3 percent.”

Here Fitch disagrees with the figures published by Peru’s Economics and Finance Ministry (MEF), which reported in the business daily Gestión that “the Peruvian economy has continued with its recovery process, and the economic growth of 3.0 percent between January and August 2022 marks an important floor for the end of the year.”

Fitch's function is to protect the interests of foreign capital, particularly US capital, while the MEF wants to promote investment by publishing more attractive figures. However, the MEF has a history of revising its forecasts downwards after making an encouraging announcement.

Eight years ago, Fitch had upgraded Peru's rating to BBB+, giving the go-ahead for foreign capital to invest in Peru based on the strong macroeconomic factors operative at the time: between 2003 and 2013, the country had the highest GDP growth in South America. This meant the unbridled enrichment of the Peruvian bourgeoisie and high profits for the transnationals, who benefited mainly from China's demand for minerals.

Beginning in 2014, the slowdown in the world economy had repercussions for Peruvian mineral exports. Then came the pandemic and the sudden paralysis of the economy, combined with high unemployment, falling purchasing power of Peruvians and the return of millions to extreme poverty.

This led, in 2021, as reported by La República newspaper at the time, to a depletion of “liquid fiscal buffers, eroding the soundness of Peru's government balance sheet relative to its peers,” that is, compared to other similarly rated economies.

By October 15, 2021 Fitch had revised Peru's credit rating again, this time downward, from BBB+ to BBB, but stable. “Stable' means that the country's macroeconomic factors are consistent with the rating assigned.

The other two main rating agencies have likewise downgraded Peru. In September 2021, Moody's Investor Services lowered it from A3 (low end of upper-medium grade/low credit risk) to Baa1 (upper end of medium credit grade/moderate credit risk). Then, in March of this year, S&P downgraded Peru's credit rating from BBB+ to BBB (the equivalent of Baa2 on Moody's scale, involving more risk than Baa1).

In its October report Fitch said it expects Peru’s weak economy and uncertain political situation to continue through 2024. It wrote, “[m]ining investment has moderated and business confidence is muted. Tighter monetary and fiscal policies have dampened domestic demand. Commercial credit growth remained subdued in June-August.”

Apart from concerns over governability, the rating agencies’ concerns no doubt also reflect the demand of international capital for the Peruvian government to resolve the ongoing social conflicts, especially in the mining sector, where the largest foreign capital investment is concentrated.

In response to Fitch’s decision to put Peru on negative watch, Peru’s Finance Minister Kurt Burneo said that “the negative perspectives require urgent measures and the search for consensus to avoid the deterioration of our country's credit rating.” His ministry quickly tried to calm investment markets.

It announced a new program called Impulso Perú, aimed at “strengthening the management and quality of investments, improving the participation of the private sector and generating better environments to reactivate paralyzed works.” Measures and actions aimed at reactivating the economy and boosting GDP growth to above three percent would focus on: 1) improvement of conditions for private spending; 2) acceleration of public investment; and 3) recovery of confidence.

Fulfillment of Impulso Perú’s dubious projections would require the continued participation of large mining companies such as Antamina, Southern Copper, MMG Las Bambas, Zafranal and Panoro Minerals, virtually all of them owned by foreign capital (Mexico, China and Canada.).

Although the mining companies in the main have indicated an intention to continue with their investment commitments in Peru, it is clear that the “negative” outlook published by Fitch will pressure Castillo to resolve the multiple ongoing conflicts between the mines and the indigenous communities whose livelihood is endangered by their operations, resorting to the use of force if necessary.

Impulso Perú also includes some token measures designed to calm the rising anger of the working class, and especially of the youth, who are suffering greatly from both unemployment and higher prices of food and public transportation. In fact, there is little new in the announced measures that will help the most vulnerable sectors of the population, unspecified reduction of electricity bills and subsidizing urban transportation being among the modest reforms mentioned.

While the new program purports to emphasize creating jobs for the youth, the proposed hires amount to a drop in the bucket, and, in fact, would institutionalize starvation-wage exploitation. As La Republica reports: “[the program] aims to hire more than 164,000 young people by 45,000 companies in the private sector.” The daily continues, “This rule would reach people between 18 and 29 years old who have a remuneration of up to 1,700 soles.” This amounts to $425 per month or $5,100 per year. Assuming 40 hours of work per week, the proposed wage amounts to $2.47 per hour.