ILO report reveals deepening cuts in real wages

Nick Beams

A report issued by the International Labour Organisation has blown apart the claims by capitalist governments and central bankers around the world that interest rate hikes, now threatening to drive significant areas of the world economy into recession, are necessary to “fight inflation” by suppressing wage demands.

ILO Global Wage Report 2022-23 [Photo: International Labour Organization]

The ILO’s Global Wage Report for 2022-23, issued at the end of last month, revealed that real wages are already being cut by ever-increasing amounts as prices rise at the fastest rate in four decades.

But in the face of all the evidence, the guardians of international capital continue to promote the Big Lie that workers’ demands are responsible for the inflationary spiral and must therefore be suppressed.

The central bankers’ class war is being led by Federal Reserve chairman Jerome Powell. Last week in a major speech at the Brookings Institution he declared that “wage increases are probably going to be a very important part of the [inflation} story going forward.”

There was an imbalance between supply and demand in the labour market, he insisted, making it clear that even limited rises in nominal wages – well below the inflation rate – were in excess of those deemed by the Fed to be consistent with its supposed target of 2 percent inflation.

The ILO report said available evidence for this year showed that rising inflation “is causing real wage growth to dip into negative figures in many countries, reducing the purchasing power of the middle class and hitting low-income groups particularly hard.”

The cost-of-living crisis came on top of the COVID-19 crisis, which in many countries had its greatest impact on low-income groups, as it pointed to the political dangers for the ruling classes.

“In the absence of adequate policy responses,” it said, “the near future could see a sharp erosion of the real income of workers and their families and an increase in inequality, threatening the economic recovery and possibly fuelling further social unrest.”

According to the report, global data for the first half of this year revealed “a striking fall in real monthly wages” which fell by 0.9 percent, the first negative figures since the first edition of the wages report in 2008.

The decline was much larger in the economies of the G20, comprising 60 percent of the world’s wage workers, where the fall is estimated to be 2.2 percent for the first six months of this year.

The biggest fall was in North America, the US and Canada. Real wage growth was zero in 2021 and then dropped to minus 3.2 percent in the first six months of this year. In the European Union, where wage subsides were in operation in 2020 and 2021 because of the pandemic, real wages rose slightly, but were minus 2.4 percent in the first half of this year, wiping out all the previous limited gains.

The report also pointed to the effects of the COVID-19 pandemic which are not captured in the data on average wages.

Analysis revealed how “the combination of job losses, shorter hours worked and adjustments in hourly wages during the crisis resulted in an accumulation of lost earnings for wage employees and their families in many countries.”

Compiling data from 28 countries, representing different regions and incomes groups, it found that the total wage bill decreased by between 1 and 26 percent in 2020 with an average decline of 6.2 percent, equivalent to the loss of three weeks’ wages for each average employee.

In 21 of those countries for which data was available for 2020 and 2021, the decrease in total wages was equivalent to the loss of four weeks of wages per employee in 2020 and two weeks in 2021, a cumulative loss of six weeks’ wages over two years.

The standard doctrine of capitalist economics is that real wages can only increase when there is an increase in productivity. That is, the working class and capital can “share” the increase in economic output.

This fiction is exposed in the ILO data. They make clear that the economic and financial system is an institutionalised mechanism for siphoning all additional wealth into the coffers of the corporations and the financial oligarchy.

According to the report, in 52 high-income countries real wage growth has been lower than productivity growth since 2000 and the erosion of real wages in the first half of this year combined with positive productivity growth has widened the gap.

“In fact, in 2022 the gap between productivity growth and wage growth reached its widest point since the start of the twenty-first century with productivity growth 12.6 percent above wage growth,” it said.

As Financial Times columnist Rana Foroohar noted in a comment on the report: “People are working harder and better. But they simply aren’t seeing as much monetary benefit from their efforts as they would have in the past.”

The supposed “justification” advanced by Powell and other central bankers for the interest rate hikes, even at the risk of recession, is that these measures are necessary to prevent a wage-price spiral from setting in which would be an even worse outcome.

But according to the ILO report, “empirical evidence” shows that nominal wages are not catching up with inflation and “the gap between wage growth and productivity growth is continuing to widen, with labour productivity increasing .... and wages falling in real terms.”

“Hence,” it continued, “there would appear to be scope in many countries for increasing wages without generating a wage-price spiral.”

In other words, the data suggest “sweet reason” should prevail, and the capitalist economy should be somehow made to function to at least meet some of the needs of the producers of all wealth, the working class.

This is akin to the claims that nuclear war – an ever-present danger arising from the US-NATO war against Russia in the Ukraine – will not take place because the consequences would be too horrific, and the ruling classes would therefore pull back.

Such arguments ignore the fact that geopolitics is not driven by rationality but the strivings of the imperialist powers for global domination.

Likewise, in the sphere of the economy, the appeal to reason ignores the fact that the capitalist economy does not function in the interests of the population but by the never-ending drive for profit.

Over the past three decades, and the past 15 years in particular, the central banks have pumped trillions of dollars into the financial system to try to prevent its collapse beginning in the global financial crisis of 2008 and the accelerated after the crisis at start of 2020 as the pandemic struck.

This has created a mountain of fictitious capital comprising debt and vastly inflated stock and asset values. This fictitious capital does not embody real wealth as such but is a claim on the wealth extracted from the working class in the process of production.

Now the chickens have come to roost in the form of spiraling inflation – the result of the refusal to eliminate COVID, the endless supply of cheap money and the war against Russia in Ukraine – and the ruling classes are seeking to resolve the crisis they have created by making the working class pay for it.

Britain uses “aid” to Afghanistan as a cover for imperialist domination

Jean Shaoul

According to the government’s own watchdog, much of the UK’s £3.5 billion aid to Afghanistan between 2000 and 2020 was spent not on “humanitarian aid” but on the police and other security agencies’ paramilitary operations. It served to entrench corruption and injustice.

The Independent Commission for Aid Impact (ICAI)’s report, published last month, is a devastating indictment of the government’s aid and state reconstruction policy.

An internally displaced Afghan child looks for plastic and other items which can be used as a replacement for firewood, at a garbage dump in Kabul, Afghanistan, December 15, 2019. [AP Photo/Altaf Qadri]

Far from providing humanitarian aid and relief in the aftermath of the NATO-led war and occupation, as publicly portrayed, these financial flows served first and foremost the imperialist powers’ broader geostrategic and military agenda. Moreover, all the international institutions such as the World Bank and United Nations and various NGOs were mobilized in this endeavour.

The ICAI’s report, scrutinizing the UK foreign aid budget, previously distributed by the Department for International Development and now subsumed under the Foreign, Commonwealth and Development Office (FCDO), criticized the use of the aid budget to fund the Afghan national police’s salaries as a “questionable use of UK aid.” This was because the police’s primary task was not civilian policing, but counterinsurgency operations.

Overall, the UK spent £252 million funding the salaries of the Afghan national police (ANP) and £400 million on the Afghan security services over the last six years of Britain’s operations in the country, the period of the ICAI’s review. The government overruled the efforts of UK aid officials to stop the funding. This was because London, despite misgivings on the ground, “chose to prioritise the transatlantic alliance,” meaning that it fell in line with US requirements, largely drawn up by the military, to crush the Taliban’s long running and intensifying insurgency against Washington’s deeply unpopular puppet government in Kabul.

The ICAI said that its discussions with senior officials revealed that while London disagreed with Washington over its refusal to include the Taliban in any political settlement, it was “unwilling to challenge the US approach.” It “became publicly committed into a narrative of imminent success” even though officials knew this had little chance of success.

The Afghan national police operated armed checkpoints across the country as it sought to suppress the Taliban. Its recruits, who had little training, suffered heavy casualties, leading to desertion and attrition rates of 25 percent a year. Theft of arms and equipment was widespread while the ANP’s payroll was inflated with “ghost officers,” amid “numerous reports from human rights organisations of police corruption and brutality, including extortion, arbitrary detention, torture and extra-judicial killings.”

The huge scale of the US, UK and international support both aid and military—for Afghanistan meant that this was the second largest American “aid” project after Iraq. In 2020, it accounted for most of Kabul’s national budget, under conditions where the government lacked the professional capacity to manage it. Instead, the aid was managed by a veritable army of well-paid management consultants. The report stated that in 2020, there were 585 consultants in the ministry of finance, down from 780 in 2017.

These consultants awarded contracts to the business elites close to the government that syphoned off most of the aid as they fought for contracts and sub-contracts to manage the vast flows of international cash. The report cited a survey by the Asia Foundation in 2021 that 98.7 percent of Afghans described corruption as a major problem, up from 76 percent in 2014.

The ICAI drew upon UK government documents, including some written as late as 2019, that “describe the situation as an extreme form of state capture, which benefited a narrow group of Afghan political elites at the expense of the population at large”. It added, “In these circumstances, there was little prospect of meaningful institutional development. One year on, in 2020, the Department for International Development assessed that central government institutions were largely unable to deliver on their mandates, despite years of financial and technical assistance. Afghan leaders saw them as fiefdoms for patronage, rather than mechanisms for promoting the public interest.”

Britain’s largest contribution of £668 million was to the US-dominated World Bank’s Afghanistan Reconstruction Trust Fund (ARTF). This was supposed to fund basic services such as health and education, provide infrastructure investment, support for agriculture and jobs and finance the government’s fiscal deficit. It was often administered by “multilateral delivery partners” including the international NGOs that constituted a parasitic industry in the impoverished country.

None of this made any material difference to the lives of the Afghan people. While the ICAI tried to make out that this “was likely to have made a significant difference,” it could not but note that “The ARTF struggled to measure the development outcomes attributable to its interventions” and “overall poverty rates increased over the review period.” The much-vaunted emphasis on developing girls’ access to education and job opportunities for women “was limited by the [Afghan] government’s lack of ownership and implementation capacity” and its practical impact “was still at an early stage.”

The ignominious withdrawal of US and UK troops after two decades of proxy wars and occupation left the country brutalized and pauperised and facing a humanitarian catastrophe. Throughout the 20 years of occupation, the imperialist powers did nothing to develop Afghanistan. Its economy was shattered, with agriculture undermined by so-called aid. This, along with the insecurity, the most severe drought in 40 years, earthquakes and natural disasters, played into the hands of Afghanistan’s warlords and drug dealers, as impoverished farmers turned to poppy cultivation and the opium trade.

According to the World Bank, Afghanistan is the sixth poorest country in the world, with a gross national income per capita of only $500. The United Nations estimates that 24 million Afghans, or more than half of the population, suffer from acute hunger. An estimated 8.7 million are at risk of famine, while 5 million children are on the brink of starvation. This is before the surge in the prices of basic commodities over the past months that sent wheat prices in September 37 percent higher than their levels a year ago.

This has been compounded by Washington’s freezing of Afghanistan’s financial assets, suspension of foreign aid and imposition of an economic blockade—tantamount to starving the country to death—after the Taliban took control in August 2021 amid the US military’s humiliating withdrawal from its longest-ever war. According to the World Bank, this has led to a 30 percent contraction in the economy.

Afghanistan’s decades-long US-orchestrated wars have produced one of the largest refugee populations in the world. At the beginning of 2022, before the war in Ukraine, about one in 10 Afghans—3 million people—were refugees, mostly living in neighbouring Pakistan and Iran. Three in four Afghans have suffered internal or external displacement in their lifetime.

While the UK government pledged to bring out tens of thousands of Afghans who had worked with British forces and officials, along with their families, more than one year after NATO’s withdrawal from the country, many thousands of vulnerable Afghans remain trapped in Afghanistan or neighbouring Pakistan, forcing them to turn to dangerous and unofficial routes to reach Britain. Thousands are stranded in hotels in Britain as their applications for resettlement are processed.

These disastrous conditions underscore the devastating impact of US imperialism’s four decades of covert operations, war, and occupation—all justified with cynical rhetoric of humanitarianism and “building democracy”—on what was already one of the poorest countries on the planet. It must serve as a warning to workers throughout the world about what the US and NATO have in store for both their “allies” and their enemies, as they intensify their operations in Ukraine against Russia and prepare for war with China.

UK government prepares “emergency powers” to smash strikes

Robert Stevens

The Conservative government is preparing to deploy the armed forces to smash upcoming strikes this month by hundreds of thousands of workers, including a 48-hour nurses walkout. Plans are also being forwarded to impose new anti-strike legislation aimed at making industrial action largely ineffective.

Up to 100,000 members of the Royal College of Nursing (RCN) are to strike in England, Wales and Northern Ireland on December 15 and 20. The nurses are fighting years long-government pay restraint and support a pay rise of 5 percent above RPI inflation—around 20 precent.

Postal workers on strike at the Bradford North depot October 1, 2022 [Photo: WSWS]

Postal workers in the Communication Workers Union (CWU) are continuing a series of national strikes, with last week’s walkout of 115,000 workers to be followed by stoppages on December 9, 11, 14, 15, 23 and 24.

40,000 rail workers in the Rail, Maritime and Transport (RMT) union will continue their strike against Network Rail and 14 train operating companies in a series of 48-hour stoppages on December 13, 14, 16 and 17 and on January 3, 4, 6 and 7, 2023.

To justify repression against workers fighting low pay, the destruction of their conditions and threat of thousands of job losses, the government once again denounced them as stooges of Russian President Vladimir Putin. Conservative Party Chairman Nadhim Zahawi told Sky News' Sophy Ridge on Sunday, “This is a time to come together and to send a very clear message to Mr Putin that we’re not going to be divided in this way… Our message to the unions is to say ‘this is not a time to strike, this is a time to try and negotiate’.”

Zahawi warned that, “It's the right and responsible thing to do, to have contingency plans in place… We're looking at the military, we're looking at a specialist response force... surge capacity.” Troops could be “driving ambulances” and working on UK borders during strikes.

At the end of November, 80,000 ambulance technicians, paramedics and 999 call handlers in England voted for industrial action to be held in January over pay and staffing. It would be the first by ambulance staff in 30 years. During the 1989-1990 national strike by ambulance workers the Thatcher Tory government mobilised the armed forces in an attempt to break it.

A West Midlands Police motorcyclist escorts a British Army ambulance during the 1989-90 strike. [Photo by West Midlands Police / CC BY-SA 2.0]

Sky News reported, “Cabinet Office said around 2,000 military personnel and civil servants are being trained to support a range of services - including Border Force at airports and ports - in the event of strike action.

“They include up to 600 armed forces personnel and 700 staff from the government's specialist surge and rapid response team, as well as other parts of the civil service.

'Decisions are yet to be taken on deploying troops to these tasks but they are part of the range of options available should strike action in these areas go ahead as planned.”

The Sunday Telegraph reported, “Cabinet ministers in departments most affected by strike threats, including the Home Office, Transport, Health and Education, gathered this week for a series of Cobra meetings to coordinate their response.”

Other plans being considered for use against the nurses strikes are bound with the government’s privatisation agenda in the National Health Service. The Sunday Telegraph reported, “Chemists could be allowed to diagnose patients with minor conditions and prescribe antibiotics for the first time to try to reduce demand for GP appointments and cut record backlogs.” It added, “But the plan is unlikely to be deployed before Christmas because it will take time to train staff and arrange NHS contracts for private pharmacies…”

The government is moving, at the insistence of a rabid right-wing media to legally impose Minimum Service Levels [MSL] during strikes. The Sun and Times, both owned by Rupert Murdoch, demanded the government legislate with no more delay. On Friday, the Sun revealed that Prime Minister Rishi Sunak “is considering new emergency powers to break a winter of strikes”. The government planned to “rush through an anti-strikes Bill,“ that would open a new front in the Government’s war with health, rail and postal unions among others.” The “package may include using agency workers to fill strikers’ crucial roles and making it easier for bosses to replace strikers permanently.” The legislation “would add to legislation currently going through Parliament to ensure a minimum level of service on strike days in key industries, such as rail.”

The Times in a leader comment declared that if Sunak “is to have any chance of reversing the slide in his party’s fortunes, he must find ways to prevent a wave of planned walkouts from paralysing the country.” It said, “Sunak’s decision to press ahead with legislation to require the unions to guarantee minimum service levels during strikes is encouraging.” It would “oblige trade unions and rail operators to ensure that at least 20 percent of trains run during strikes, thereby ensuring sufficient services for people to get to work and school.” Passing the MSL legislation was “a test” that “Sunak, and the Tories, cannot afford to fail.”

The Times stated, “Nor should the government be deflected by apparent public sympathy for some of the strikers. That is bound to shift as the impact of industrial action starts to disrupt people’s lives.”

Opposing this view in its main editorial Sunday, the Telegraph warned, “The obvious strategy is for ministers to wait and hope that the public will turn its ire on strikers, especially given that many of the workers planning industrial action have comparatively generous pay and pension arrangements.

“But that is highly risky. Polls show that voters currently back the strikers. Nurses are hugely popular. Inflation is eroding the real value of wages across the economy. There is every chance that public fury will fall on Rishi Sunak’s administration.”

In seeking to suppress strikes, the government relies politically on the trade union bureaucracy. In an interview with the Telegraph, Communication Workers’ Union General Secretary Dave Ward said of the many groups of workers involved in or being balloted for action, “It's almost like a de facto general strike taking place by the amount of disputes.”

But Ward spoke as someone moving heaven and earth to prevent such a development. This week his union sold-out a month’s long national strike of 40,000 BT workers, resulting in an eruption of anger by CWU members.

Ward told the Telegraph that not only that strikes could be ended by Royal Mail, it could partner with the CWU to establish a competitive edge over its rivals. The Telegraph reported, “Ward rejected claims of inflexibility: ‘We’ve said we will deliver 24/7. We've agreed to that.’”

He added, “What I'm saying to you is, we agreed to explore in a deeper way, how we could develop the infrastructure and Royal Mail and how we develop new products and services.”

Ward stressed, “If Amazon were in control of Royal Mail’s infrastructure, I guarantee you now they would be leveraging that as a competitive advantage.”

The agenda of the public sector union bureaucrats is no different. Royal College of Nursing General Secretary Pat Cullen stated that threatened strikes could be shelved based on a well below inflation pay deal, citing the example of the deal struck in Scotland with the Scottish National Party government. “This must be a lesson to ministers elsewhere that negotiations can avert action, and pay offers are put out to members for a vote.”

The Observer reported, “RCN and Unison suggested to the Observer that if a deal similar to that offered in Scotland – between 5% and 11% depending on staff grades – were put forward, this could be a basis for progress.”

Christina McAnea, general secretary of the largest public sector union Unison told the newspaper, “It’s in the gift of the government to stop strikes across the NHS this winter.” The health secretary “should learn from the way ministers in Holyrood averted strikes with talks and more pay.”

Spain’s Podemos rejects inquiry into Melilla massacre of migrants

Alejandro López

The “Left Populist” Podemos party has refused a parliamentary inquiry into the June 24 massacre of 37 refugees in Melilla, joining its social-democratic government partner, the Socialist Party (PSOE), the right-wing Popular Party (PP) and the neo-fascist Vox party. This came after El País released a joint investigation with Lighthouse Reports, Le Monde, Der Spiegel and Enass showing that at least one death likely occurred on Spanish soil. Podemos is leading a cover-up.

Migrants run for safety after crossing the fences separating the Spanish enclave of Melilla from Morocco in Melilla, Spain, Friday, June 24, 2022. [AP Photo/Javier Bernardo]

On June 24, 2,000 migrants from war-torn and poverty-stricken Chad, Niger, Sudan and South Sudan tried to cross the border between Morocco and Spain's North African enclave of Melilla. Spanish border police fired tear gas canisters and rubber bullets to drive them back. On the other side, Moroccan gendarmerie, using batons, tear gas and smoke guns, cornered hundreds of migrants along the walls of a courtyard along the border. Spanish police refused to open the doors, beating and tear-gassing migrants instead. The savage repression provoked a deadly stampede.

The combined effects of the tear gas, migrants falling from the top of a 6-metre-high fence as they were shot with rubber bullets, and the stampede left many dead. Afterwards, the combined efforts of Spanish and Moroccan police to deprive the injured of the necessary medical attention increased the total.

UN experts put the death toll at 37. The Moroccan Association for Human Rights, says that at least 77 people are dead or missing. The death toll was the highest-ever on the land border between the European Union (EU) and the Maghreb, including the 2014 infamous Tarajal Massacre, when heavily armed police fired tear gas and rubber bullets on migrants attempting to swim across Ceuta. This left 15 dead, most of them drowning after suffocating on tear gas in the water.

Spain’s ombudsman found that as many as 470 migrants who had managed to cross to the Spanish side were sent back across “with no consideration for their national or international legal rights.” Thirteen migrants who crossed the border received two-and-a-half-year jail sentences in Morocco.

Spanish Prime Minister Pedro Sánchez reacted to the massacre with a fascistic tirade, claiming it was a 'well-organized, violent assault' by organised crime groups, and thanked Spanish and Moroccan security forces for their actions.

Podemos remained silent. Two days after the killings, at a press conference, Irene Montero, minister for equality and leading member of Podemos, refused to take a position on the massacre despite being asked by journalists five times. It later emerged that her silence had been agreed upon between the PSOE and Podemos.

The question of to what extent the PSOE-Podemos government instigated the massacre remains open. On the eve of the June NATO Summit held in Madrid, Moroccan police stepped up repression of makeshift refugee camps near Melilla, destroying their tents and stealing food and belongings. It took place as Spain lobbied to include migration as a “hybrid threat” targeted by NATO. As the WSWS noted, this amounted to an attempt of the Spanish bourgeoisie to justify stepped-up repression of refugees from North and sub-Saharan Africa.

Successive investigations have revealed the criminality of the PSOE-Podemos government. Last month, the BBC released a documentary, 'Death on the Border,' showing how the actions of police in both Spain and Morocco triggered a stampede.

After the revelations that deaths likely occurred on Spanish soil, Spanish Interior Minister Fernando Grande-Marlaska insisted “there were no deaths in Spanish territory,” adding that Guardia Civil officers acted “totally within the law and with the necessary proportionality required by events.”

Fifteen days ago, Podemos had called for a commission of enquiry into the massacre. This was just the latest request, after similar petitions in September and November were rejected by the PSOE, PP and Vox. Podemos no doubt hoped that a commission would whitewash those responsible—above all, Podemos itself and the PSOE in the Spanish government—for deadly anti-migrant policy.

Marlaska defended border police actions as “appropriate,” adding: “We did not have to lament any loss of human life in our national territory. The tragic events occurred outside our country.” He defended the fascistic actions of the Spanish police, stating: “The insinuation that I have heard and read that our security forces would have permitted that these tragic events occur in our country is a grave irresponsibility.”

Since the revelations in El País, moreover, Podemos has backed down from its call for a commission of enquiry. Last week in parliament, Podemos spokesperson and general secretary of the Stalinist Communist Party of Spain, Enrique Santiago, criticized Marlaska but refrained from calling for a commission and Marlaska’s resignation.

Enrique Santiago, (left) secretary-general of the Stalinist Communist Party of Spain (PCE) since April 2018. [Photo by Fernando Jiménez Briz / CC BY 2.0]

De Santiago cynically requested Marlaska, who has repeatedly lied about the massacre, to be 'clear about what happened', and demanded 'corrections for the future', such as the possibility that migrants could request asylum at the border in Ceuta and Melilla.

El País noted, “Podemos has promoted similar requests for a commission twice in the past … and now, in this context of noise and controversy on various fronts and ministries of the coalition [government], it is clear that ‘they are part of the of a Government’ and, therefore, they do not want to ask for resignations or disapprovals of ministers.”

The cover-up of this crime and the unconditional defence of the border guards is a further devastating exposure of the imperialist militarism of the pseudo-left Podemos party. Founded in 2014 by the Pabloite Anticapitalistas party and Stalinist professors—supposedly to “democratize” political life, dismantle anti-migrant policies and attack the “political establishment” for using immigrants as scapegoats—Podemos is now implementing the policies of Vox.

The PSOE-Podemos government’s commitment to EU’s fascistic “Fortress Europe” policy targeting migrants has claimed thousands of lives. With the Spanish ruling elite effectively shutting off any legal migration route into Spain, the Canary Islands crossing is now the deadliest route into Europe, surpassing Mediterranean crossings to Italy and Greece. Since Podemos joined the government, at least 2,100 migrants have drowned trying to reach the Canary Islands.

Those who reach the islands are interned in concentration camps built by the PSOE and Podemos, in which migrants are imprisoned in unsanitary, inhumane conditions pending deportation. This also included a policy of separating children and their parents before protests forced it to change policy.

Last year, in May 2021, over a year before the Melilla Massacre, the PSOE-Podemos government, backed by EU, reacted to desperate migrants crossing from Morocco into Spain by deploying the army and special forces. This was the first time the army was deployed, signaling the government’s readiness to use mass violence to stop refugees. Spain's then sent hundreds of unaccompanied child migrants back to Morocco, in flagrant violation of international law.

Indian government doubles down on support for US war drive against China

Rohantha De Silva

India is doubling down on its participation in US imperialism’s all-rounded economic, diplomatic and military-strategic offensive against China throughout the Indo-Pacific. And it is doing so, even as Washington has demonstrated by inciting and waging war with Russia over Ukraine that it is ready to risk a nuclear conflagration to achieve its predatory objectives.

In recent weeks, New Delhi has participated in two provocative military exercises with US forces aimed at preparing for war with China. The first, a major naval exercise, was within the framework of the “Quad”—the Washington-led, quasi formal military-security alliance between India, the US, and its principal Pacific allies, Japan and Australia. The second saw Indian and US troops train for “high altitude warfare” in the Himalayas a hundred kilometres (just over 60 miles) from the disputed and increasingly heavily-armed Indo-China border.

Although not officially a Quad initiative, this year’s edition of the Malabar naval exercise brought together significant naval forces from the four countries. It was held from November 8 to 15 off the coast of Japan.  

US aircraft carrier USS Ronald Reagan (CVN76) and an Indian Kamorta-Class anti-submarine corvette participate in exercise Malabar 2022 [Photo: US Navy]

The annual Malabar exercise began in 1992 as a bilateral Indo-US initiative. In 2015 Japan became a permanent member. Australia has participated since 2020.

While Washington is recklessly escalating NATO’s war against Russia in Ukraine, American imperialism is simultaneously preparing for war with nuclear-armed China. Continuing in the vein of the Trump administration, the Democratic-led Biden White House is employing a series of pretexts to ratchet up military, diplomatic, and economic pressure on Beijing. Chief among them in recent months has been the incitement of tensions with Beijing over Taiwan. But the US has also stepped up its bogus “human rights” campaign against China, including with lurid allegations Beijing is committing genocide against its Uighur minority and denunciations of its Zero COVID policy as inhumane.

In addition to overthrowing in all but name its “One-China” policy, Washington is stoking a series of regional border disputes, any one of which could trigger a war between the US and China. These include disputes over territorial claims in the South China Sea, as well as the Indo-China border dispute, which Washington has repeatedly trumpeted along with the conflicts in the South China Sea as examples of Chinese “aggression.”

Under these conditions, the participation of the four major Indo-Pacific powers in the Malabar exercises near Japan was a deliberate provocation aimed at China.

India enthusiastically participated in the exercise with its multi-role stealth frigate INS Shivalik, anti-submarine corvette INS Kamorta and a P-8I long-range maritime patrol aircraft. According to the US Navy website, a variety of high-end tactical training events, submarine integration, anti-submarine warfare training, air defense exercises, and joint war fighting planning scenarios were included in the exercise.

The Malabar exercise took place as India’s ongoing border dispute with China enters its third winter, with Delhi and Beijing once again arraying vast military forces against each other under some of the world’s most inhospitable conditions in the Himalayas. The current dispute—far and away the most serious since the two countries fought a brief border war in 1962—began in May 2020 and erupted into violent conflict in June 2020, leading to the deaths of at least 20 Indian and four Chinese soldiers. In August of 2020, with US intelligence support, thousands of Indian troops captured several mountain tops unopposed, in a high-risk operation that Indian officials later admitted could well have resulted in major casualties on both sides and an all-out war.  

Throughout the coming winter, both India and China intend to keep more than 50,000 troops “forward deployed” near their disputed border, along with war planes and heavy artillery. In the past two-and-a-half years, both New Delhi and Beijing have rushed to build military infrastructure along their disputed border. India has repeatedly said that the relationship between the two countries cannot be normalized until the current border conflict is resolved on its terms.

On November 15, shortly after the conclusion of the Malabar exercises, India hosted its annual bilateral military exercise with the US, known as “Yudh Abhyas.” In what was a first—one that Beijing was quick to denounce when it was first revealed last August—the war game took place in close proximity to the disputed Indo-China border and was designed to prepare troops to fight in the high altitude conditions they would encounter in the Himalayas, that is to say in virtually no other place in the world. According to official releases, the exercise was aimed at enhancing interoperability and operational readiness between US and Indian forces.

The Modi government has seized on the border standoff to ratchet up tensions with Beijing and justify New Delhi’s ever-closer military and economic cooperation with Washington.

By assuming the role of a frontline state in Washington’s military-strategic confrontation with China, the Indian ruling class hopes to further its own reactionary great-power ambitions, including asserting itself as the regional hegemon in South Asia. It is also gambling that it can benefit from the economic “decoupling” of the US and its allies from China, exploiting its role as the overlord of a vast, super-exploited cheap-labor workforce to make India an alternate global production chain-hub.  

U.S. President Joe Biden, right, meets with Indian Prime Minister Narendra Modi during the Quad leaders summit at Kantei Palace, Tuesday, May 24, 2022, in Tokyo. [AP Photo/Evan Vucci]

Modi and US president Joe Biden had a bilateral meeting on November 15 on the sidelines of the G-20 Summit held in Bali in Indonesia. There they “reviewed the continuing deepening of the India-US Strategic partnership including cooperation in future oriented sectors like critical and emerging technologies, advanced computing, artificial intelligence etc.,” according to a statement issued by the Indian External Affairs Ministry. Pointing to the expanding cooperation between New Delhi and Washington in the entire Indo-Pacific region, including Africa and the Middle East, the statement added that the “Leaders appreciated the continuing deepening of the India-US Strategic Partnership and close cooperation in groups like Quad, I2U2 (a quadrilateral alliance involving India, Israel, the US and United Arab Emirates) etc.”

India is strategically located between the eastern and western parts of the Asian continent and is a “resident Indian Ocean power.” This advantageous maritime geography, which makes India an ideal vantage point for controlling the Indian Ocean, has played a major role in Washington’s efforts to harness India to its diplomatic, military, and economic offensive against China. Over the last two decades, Washington has concluded a series of military and strategic agreements with India to provide it access to advanced nuclear technology, US-made high-tech weapons, and assist it in the development of its “blue water” navy—i.e., one capable of functioning on the high seas.

The 2022 National Defense strategy released by Washington in October committed to enhancing America’s military-strategic alliance with the specific aim of increasing India’s capacity to resist China on land and at sea. The strategy noted: “The [Defense] Department will advance our Major Defense Partnership with India to enhance its ability to deter PRC [People’s Republic of China] aggression and ensure free and open access to the Indian Ocean region.” 

The report stressed that China will be the most significant strategic competitor to the US in the coming decades. This underscores that Washington’s preparations for war with China are at an advanced stage. The eruption of a war between the two nuclear-armed powers would pose a grave threat to the survival of humanity under conditions in which the ongoing war against Russia already threatens to produce a catastrophic nuclear exchange.

The US-India relationship is not without its frictions. India has refused to condemn Russia over the war in Ukraine despite US pressure to do so. Indian External Affairs Minister Subrahmanyam Jaishankar travelled to Russia for a two-day visit on November 8, contrary to the expectations of Washington. This visit was mainly focused on commerce and investment deals and using the rupee and ruble for trading purposes so as to bypass US sanctions on Russia. Jaishankar, who also discussed future projects in the energy sector, held talks with his Russian counterpart Sergey Lavrov and other Russian leaders. During the visit, he reiterated India’s intentions to continue its close ties with Russia despite US pressure to break them. Jaishankar said: “As the third-largest consumer of oil and gas and where incomes are not very high, we need to look for affordable sources, so the India-Russia relationship works to our advantage. We will keep it going.”

After an initial public outburst of anger last March over India’s refusal to toe the US line on Russia, Washington has to some extent chosen to look the other way. This is in large measure due to the Indian ruling elite’s efforts to placate US imperialism by intensifying still further its support for Washington’s offensive against China.

New Delhi relies on Russia at present not only for military hardware but also for oil, under conditions of international economic turmoil and a mounting domestic social crisis. Though Iraq and Saudi Arabia used to be India’s main oil suppliers, Russian energy imports have surged since the Ukraine war. Having lowered oil and gas prices for countries prepared to buy its petroleum products in defiance of western sanctions, Moscow recently surpassed Iraq and Saudi Arabia as India’s largest supplier of oil.

Nonetheless, the war in Ukraine is making India’s precarious balancing act between its strategic partnership with the US and its long-standing relationship with Russia as a major supplier of defense equipment going back to the Soviet era ever more precarious.

Quoting Modi’s remarks during his talks with Russian President Putin in Uzbekistan in September that “this is not an era of war,” Jaishankar stated during his Russia visit that India strongly advises a return to dialogue between Russia and Ukraine. He also offered to mediate between the two countries.

Washington, which has armed its Ukrainian proxy to the teeth with the support of its NATO allies, has no intention of countenancing a “diplomatic settlement” to the conflict that does not include Moscow’s complete capitulation to the its drive to subjugate the country and seize control of its natural resources. Moreover, US imperialism views the conflict with Russia as an initial stage in its preparation for war with its more serious rival, China.

Resistance in Germany is growing to insolvencies, redundancies and wage dumping

Marianne Arens

Outrage is growing in the working class. Across Germany and Europe, the costs of the pandemic, economic crisis and war are being passed on to working people. More and more workers are ready to take up the struggle against exploitation, spinoffs and job cuts.

In the third quarter of this year, there was an unusually high number of insolvencies among medium-sized companies. In just three months between July and September, 33 companies whose annual turnover was at least 20 million euros filed for bankruptcy. By the end of the year, 130 such large insolvencies are expected, 71 percent more than last year.

Above all, automotive suppliers are badly affected. For example, the ZF site in Eitorf, which belongs to the automotive supplier ZF Friedrichshafen, is to be closed by the end of 2025 and production relocated, destroying the jobs of 690 employees. Other auto suppliers that have filed for insolvency include the North Rhine-Westphalian Borgers Group (1,900 employees at five sites), the Upper Franconian plant of Dr. Schneider (2,000 employees), the Palatine foundry Heger (130 employees) and the Rüster plant (630 employees) in Deggingen.

In Göbbingen, Elektro Speidel, an electrical and communications technology company with 360 employees, is also insolvent. The IT company Atos in Essen wants to cut 1,400 jobs in Germany in the course of a “split-up.” In Essen, 1,100 Atos workers are fighting for their jobs.

The biggest auto companies have made record profits in the same period. According to a study by Ernst&Young on the world’s 16 largest carmakers, the third quarter of 2022 was “a dream quarter for them despite the slowing economy and a very difficult geopolitical situation...”

Both total profits and total sales were “at the highest level ever recorded in a third quarter,” writes Manager Magazin. Worldwide, the companies were able to increase sales and profits by an average of 28 percent; for the German corporations, the profit increase was 58 percent. Mercedes Benz posted the highest profit, with 5.2 billion euros, ahead of Volkswagen, with 4.7 billion euros, and BMW, with 3.7 billion euros.

Metalworkers at the vacuum smelter in Hanau on strike [Photo: WSWS]

Among auto workers, on the other hand, there is anger and concern. The new contract recently negotiated by the IG Metall union means a significant cut in real wages in view of the inflationary consequences of the Ukraine war. In addition, IG Metall completely ignores the temporary workers, although they make up an increasingly large part of the workforce—also at Mercedes. They do the same work as the permanent employees, but at considerably lower wages and without any job security.

Above all, many workers are critical of the fact that the great willingness to fight, which was demonstrated in warning strikes involving almost 900,000 workers, was not used to achieve a better result. Instead of extending the strike, initiating a ballot, and preparing for a full strike, IG Metall stifled and suppressed the strike movement at the crucial moment.

At electric auto manufacturer Tesla in Grünheide, owned by the richest man in the world, Elon Musk, workers confront conditions that acutely endanger their health. A team from the Brandenburg State Office for Occupational Safety, Consumer Protection and Health (LAVG) discovered that the factory is operating without the necessary and prescribed dust protection measures. Mineral dust with different quartz contents is released, which can lead to silico-tuberculosis or lung cancer. There is also no tested and reliable fire alarm system at Tesla, only a provisional fire alarm plan.

The Tesla plant, with 5,000 employees, was trimmed back for maximum exploitation in the summer, so as to maintain production at “hell’s pace” (in the words of Musk himself). But even now, when the authorities have identified acute deficiencies, the state of Brandenburg is not intervening. Nor does IG Metall intend to take up a principled fight for the rights of the largely international workforce. Instead, the union has been submissively assisting Tesla for months as an advisor and “partner” on the way “into the culture of co-determination,” and is trying to be accepted by Elon Musk as a proven force for labour discipline.

Numerous workforces in other sectors are in a similarly difficult situation as the Tesla workers and are ready to fight. In eastern Saxony, workers at Waggonbau Niesky (WBN) are protesting against the fact that they have been forced onto short-time working since April this year, while the workforce is constantly shrinking. The company, which belongs to the Slovakian freight car manufacturer Tatravagonka, has already cut 100 of the original 360 jobs.

Also in Saxony, the strike by 150 workers at Teigwaren Riesa ended in victory last week. For seven weeks, workers struck against outright dumping of wages. They finally won their demand for two euros more per hour. The wages of the workers, who until now have only earned just over the legal minimum wage of 12 euros, are to be raised in three steps by the end of next year, although even an hourly wage of 14 euros gross will not solve their financial problems.

At Frankfurt’s Rhine-Main airport, Air France/KLM ground workers went on strike all day on 25 November. Some 150 employees work in the cargo area at several airports for very low wages but have not received a wage increase for almost 10 years. Verdi, the service union, is pursuing a divisive strategy of seeking its own in-house pay scales for each company and calling on each workforce to fight separately.

As a result, the protest actions organised by Verdi are completely toothless from the outset, as the case of the KLM ground staff proves once again. The already poorly paid workers, who work hard in wind and weather, have been working without a pay scale for seven years and 21 rounds of negotiations. Even before the current hike in inflation, the ground workers had to accept a loss in real wages of about 12 percent, while the airline’s cargo business is booming.

Struggles at airports are taking place around the world. In the US, American Airlines flight attendants went on strike simultaneously at eleven major airports on 16 November for their wage demands. The conflicts are not only increasing among private service providers and in production, resistance is also growing in the public sector, in nursing, in local and long-distance public transport and at universities.

At the beginning of October, about 1,000 doctors at the Berlin Charité Hospital held a warning strike—for the first time in 15 years! Another such strike was only averted at the last minute when on 29 November the Marburger Bund (doctors’ union) agreed with the Charité board on a “further development” of the in-house pay scales.

This will not solve any of the problems, neither the chronic understaffing nor the effects of the coronavirus pandemic and rampant inflation. In addition to a one-time bonus of 3,800 euros, doctors are to receive an increase of 3.5 percent from January 2023 and a further 2.2 percent from July 2023 on their salary scales. This means that they too will have to accept a cut in real wages in the face of 10 percent inflation.

Nurses everywhere are working at their limit, fighting against deteriorating conditions, staff shortages and the pandemic. Meanwhile, the situation in the intensive care units at children’s hospitals is getting out of control as a strong wave of influenza meets an unusually violent spread of respiratory diseases. More and more paediatricians rightly see the cause in the fact that paediatric clinics, like hospitals, are supposed to make a profit instead of curing the sick.

This week there were warning strikes at four university hospitals in Baden-Württemberg, and Verdi’s actions show how great is the willingness to fight. The union was forced to extend the warning strikes to four days. Meanwhile, it refuses to initiate a ballot and an indefinite strike.

About 2,000 nurses went on strike this week in Tübingen, Ulm, Heidelberg and Freiburg. In the previous week, there were strikes at the university hospitals in Giessen and Marburg in the state of Hesse.

The strikes in the nursing sector are part of a European-wide and international movement. In France, for example, doctors in private practice have been on strike from Thursday until Saturday, mainly for higher fees. The initiative came from a free association of young doctors, the “Médecins pour demain” (Doctors for Tomorrow).

In long-distance transport, train drivers, train attendants and railway workers are unhappy because their wages are not keeping pace with inflation. Their struggles are part of railway workers’ wage struggles in France, Britain, Belgium, Austria and the United States. In Baden-Württemberg, train drivers at Südwestdeutsche Landesverkehrs GmbH (SWEG) and SWEG-Bahn Stuttgart GmbH are ready to strike after five weeks of inconclusive negotiations. Both companies are owned by the state of Baden-Württemberg.

The energy crisis is also affecting universities, where staff and students now must work in room temperatures of 19 degrees Celsius (instead of 21 degrees). Other institutions, such as Koblenz University of Applied Sciences, have switched to distance learning for five weeks, until 8 January, to save energy. During this time, all lectures will be held online, and laboratories, libraries and the refectory will remain closed.

The Ruhr University Bochum (RUB) has imposed a six-month hiring freeze in non-scientific departments in order to cut up to 250 jobs and save seven million euros. The RUB is thus copying the University of Vienna, which is not hiring any new staff until February 2023. There, the hiring freeze also affects employees in temporary positions whose contracts are now no longer being renewed.

This by no means exhaustive list makes it clear that the social catastrophe facing the working class is directly linked to the enrichment of corporate and financial elites. The general trend that is clear is the widening of the gulf between rich and poor, between the ruling elite and the working class. At the same time, there is a growing resistance, which is increasingly international and anti-capitalist in character, and directed against the sabotage of the trade union bureaucracies. The war policy of the ruling class is increasingly perceived as the cause and aggravation of the hardship confronting working people.