McKinsey’s Addiction Corporations

Thomas Klikauer

Photograph by Nathaniel St. Clair

Almost 30 years ago, tobacco CEOs were forced to answer questions – under oath. For the first time, corporate bosses had to admit that tobacco companies were designing cigarettes to sustain addiction – a dark day for corporate profits, tobacco corporations, and the ever supportive management consultancy firm: McKinsey. Yet, it was a good day for everyone else. Corporate CEOs also confessed that they had manipulated an addictive drug. But Big Tobacco wasn’t finished.

The $157bn heavy tobacco giant Philip Morris shot back by trying to intimidate the media. The corporation did this by filing a $10bn lawsuit against two reporters and their employer – ABC News.

The goal was to shut them up – in the so-called “land of the free speech”. The corporation did this because of their investigation into nicotine manipulation in cigarettes. Yet, the corporate strategy came a touch too late. Public sentiments began to turn against Big Tobacco.

Watching all this unfold in horror was McKinsey. The global consultancy juggernaut was forced to observe a rising tide of public disapproval. Yet, McKinsey knew full well – for decades on end – what they had done.

McKinsey had facilitated some of the world’s largest tobacco corporations with the goal to sell more cigarettes. For McKinsey and Big Tobacco, it meant profits and handsome fees. While for smokers, it often means a painful and early death.

The entire affair was handled in a traditional McKinsey way. The firm kept out of the limelight. Even better for the world’s largest management consultancy firm, is when its name did not even feature once in the congressional hearings on tobacco. An outstanding corporate PR success achieving its corporate goal of hiding the truth.

Nobody even asked McKinsey whether its support for Big Tobacco matches its very own and much trumpeted “values” or not? And, what happened to Corporate Social Responsibility (CSR) and Business Ethics?

Next to corporate propaganda, the WHO estimates that about eight million people die from smoking related illnesses every year. McKinsey – in part – makes these deaths possible. Worse, the mass casualties of tobacco corporations are camouflaged by McKinsey’s so-called Values, CSR and the ultimate oxymoron of business ethics.

Perhaps it all followed McKinsey’s purpose, mission, and values. These values assisted tobacco corporations in killing about 15 people every hour. In any case, Big Tobacco offers what McKinsey really wants – mountains of cash. Despite what McKinsey calls o”bserve high ethical standards,” Big Tobacco was good for and to McKinsey.

Worse than McKinsey’s ethical greed was the fact that – as Walt Bogdanich and Michael Forsythe write in When McKinsey Comes to Town – “McKinsey knew about the health risk of smoking.” Today, this so-called health risk is a certainty as about three jumbo jets full of people die every hour on a so-called “smoking related disease”.

Imagine three 747 jumbo jets falling out of the sky every hour? After a few hours, global air traffic would grind to a halt.  Luckily for tobacco corporations, most, if not all, smokers die quietly. With mass death out of sight, Big Tobacco can carry on raking in $912bn per year – year after year after year. These are the wonders of Capitalism.

But things got even worse. As global alarms about death through cigarettes intensified, McKinsey found three perfect solutions, while, of course, adhering to their self-imposed task of observe high ethical standards:

1) McKinsey took on new tobacco clients. And these included R. J. Reynolds, Lorillard, Brown & Williamson, British American Tobacco;

2) on top of that, McKinsey even expanded their reach by getting Japan Tobacco International; and,

3) McKinsey sought to boost cigarette sales in Germany and Latin America.

Beyond that, McKinsey also cranked up two of their all-time favorites in order to turbo-charge the profits of Big Tobacco corporations. McKinsey recommended: its classic solution of offshoring, i.e. shifting manufacturing to low-cost countries; and simply paying workers less.

But McKinsey wasn’t done. In cahoots with Big Tobacco, McKinsey also pushed two more strategies: for one, McKinsey sought to weaken tobacco control measures in line with semi-religious belief in deregulation (read: pro-business regulation). The ideology of the free market serves corporations. But perhaps, it is not so good for people dying from lung cancer.

McKinsey’s second strategy was to push the idea that Big Tobacco moves its field of operation towards developing countries where it hopes to find less regulation, weaker states, and the ability to corrupt officials.

Perhaps it is not surprising when federal judge Gladys Kessler wrote, that Big Tobacco has,

known many of these facts for at least 50 years or more. Despite that knowledge, they have consistently, and repeatedly, and with enormous skill and sophistication, denied these facts to the public, to the Government, and to the public health community.

In other words, for about half a century, McKinsey kindly – well, for a fee! – assisted tobacco corporations in flogging off their deadly and toxic goods. McKinsey did so without getting much bad publicity and penalties.

What Big Tobacco and McKinsey did goes well beyond the standard volume of corporate criminality. Meanwhile, $10bn-firm McKinsey did all this while making a fortune –‘quite’ ethically.

Perhaps the final success of McKinsey’s ethics is that well above 20% of children under eighteen years of age are using e-cigarettes – compared to less than 3% of adults. Big Tobacco knows exactly where profits are coming from. It isn’t from adults. It’s from our children. Of course, McKinsey assisted tobacco corporations in achieving such outstanding successes.

In the end, ethical McKinsey is about corporate growth and profits and, as Walt Bogdanich and Michael Forsythe say, stuff about health was just a cover. Companies like McKinsey and Big Tobacco corporations tend to see “stuff about health” – the impact of smoking on people and society – merely as an externality. It can be off-loaded to someone else.

Yet, as soon as McKinsey smells money, it is very happy to reach beyond Big Tobacco. Of course, McKinsey doesn’t shy away from venturing into another commercial sector. This is the sector where highly addictive behavior can be, as management jargon says, monetized. People can be made addictive to turn a profit.

This time it was gambling – a $260bn global behemoth. McKinsey was never shy when it comes to advising, for example, a major casino on how to keep gamblers at the table when they were about to leave. Pretty soon, super-ethical McKinsey understood that addiction offered big rewards – whether opioids, tobacco, or gambling.

McKinsey was also at hand when people can be made addicted to drugs. Between the years 2004 and 2019, the pharma giant Purdue and its secret Empire of Pain – handed over a cool $83.7 million in fees for so-called marketing advice to McKinsey. The ethical McKinsey assisted Sackler’s Purdue when turbo-charging opioid sales. As a consequence, thousands of people were dying of overdoses.

750,000 people had died in an epidemic crank up by the sales of OxyContin. As of late 2021, opioid deaths showed no sign of abating – thanks to Big Pharma and its lackey of McKinsey. Beth Macy – the author of Dopesick – noted the inevitable, “companies, instead of seeing the potential for tragedy, saw a path to bigger profits.” This is capitalism – our enduring love story!

When Purdue started to realize that it is increasingly under public scrutiny, the corporation sought help. It hired McKinsey. Ethical company McKinsey was tasked with helping – not the people the drug made addicted to but the Big Pharma and how to protect its opioid profits. Seeking McKinsey‘s assistance wasn’t an irrational hallucination. It had three very good reasons:

1) McKinsey had a “good” track record given its ability to crank up profits for Big Tobacco;

2) McKinsey calls itself the leading consultancy for medical product companies – very true; and

3) McKinsey also had a good track record, not just in Big Tobacco, but also with Big Pharma corporations. It had already been advising Johnson & Johnson – a pivotal corporation in opioid production.

McKinsey had already assisted Johnson & Johnson sell its signature opioid drug – a narcotic patch called Duragesic. Meanwhile, as drug stores and law enforcement were trying to limit how much OxyContin was running through the USA, ethical McKinsey was doing the exact opposite.

McKinsey even suggested ways to get around specific safety measures. Such safety measures are unnecessary and unwarranted Uber-regulations for the crypto-religious believers in the free market. In other words, the free market should be free to kill – and, for a profit, of course!

Perhaps the height of immorality and corporate hypocrisy was reached when McKinsey itself claimed to have, “the duty to serve the client’s bottom line within moral and ethical boundaries.” McKinsey showed that hallucination like “corporate social responsibility” and “business ethics” are ideological fig-leafs for what McKinsey calls a “client’s bottom line,” i.e. profits.

It may well be that McKinsey’s understanding of ethics and profits can best be expressed by none other than Karl Marx who once wrote,

a certain 10%, will ensure its employment anywhere; 20%, certain will produce eagerness; 50%, positive audacity; 100%, will make it ready to trample on all human laws; 300%, and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged.

So far, McKinsey has – and given the accounts outlined above – avoided being hanged. As a management consulting firm, it operates in the shadows of corporate capitalism.

Yet, McKinsey oils the wheels of capitalism and has – seemingly – no qualms when profit-making causes the death of hundreds of thousands of people made addicted by large corporations. All for a profit as we are told – that capitalism is the best system to allocate goods and services, and that competition serves us all. It is Capitalism – a Love Story, sold to us through corporate mass media every day.

The XBB.1.5 “Kraken” subvariant of Omicron takes hold in the US

Benjamin Mateus

For more than a year, the Omicron “alphabet soup” subvariants have seen a myriad of sub-lineages rapidly emerge and disappear, giving rise to subsequent waves of infections. XBB.1.5, the latest iteration of the variant of concern, has garnered significant attention from the health officials, epidemiologists, and the world press.

A nurse administers a COVID-19 test outside the Salt Lake County Health Department, Tuesday, December 20, 2022, in Salt Lake City, Utah. [AP Photo/Rick Bowmer]

At the press briefing by the World Health Organization last week, lead scientist Dr. Maria Van Kerkhove called XBB.1.5 “the most transmissible Omicron subvariant detected yet.”

She added, “We do expect further waves of infection around the world, but that doesn’t have to translate into further waves of death because our countermeasures continue to work.” What this optimistic assertion conceals is that XBB.1.5 will lead to more infections and reinfections, these will inundate health systems, and people will die unnecessarily.

Additionally, allowing SARS-Cov-2 to continue its rampage unimpeded by any efforts on the part of national and international health agencies to bring the pandemic to an end means that the virus will continue to mutate genetically in ways that will enable it to bypass the current immunity built up in the population and potentially evolve into a more pathogenic form, making it deadlier and more virulent.  

XBB.1.5 was given the moniker “Kraken”—the name for the Norwegian mythological sea monster—by Dr. Ryan Gregory, a professor of biology from Canada, to distinguish the ever-growing complex designations of Omicron. As he noted in his December 28, 2022, Twitter post, “XBB.1.5 definitely earns a nickname with its record-setting growth advantage and both very high immune escape and ACE2 binding.”

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XBB (Gryphon) and XBB.1 (Hippogryph), recent ancestors of XBB.1.5, were first identified in mid-August in India. They quickly spread across different regions of Asia, becoming predominant in India and causing a massive wave of infection in the highly vaccinated city-state of Singapore. The latest subvariant has been detected in close to two dozen countries including the US, where it was first identified in early October.

With BA.5 on its way out, and BQ.1.1 (34.4 percent as of January 7, 2023) in decline, XBB.1.5 is quickly displacing all other subvariants across the country. accounting for 27.6 percent (revised estimate down from last week’s 40 percent) of all tracked lineages.

It surpassed the one percent threshold of all subvariants at the end of November, a level which requires the Centers for Disease Prevention and Control (CDC) to report its weekly prevalence as a subvariant of interest. However, the public health agency only confirmed its presence after an insider at the CDC leaked the number to epidemiologist Dr. Eric Feigl-Ding, who in turn tweeted his concerns on social media on December 29. This was not the first time that the CDC has suppressed such information only to confirm it after the information was divulged, as a matter of damage control.

Dr. Ashish Jha, White House’s COVID Response Coordinator, took to social media last week, admitting that the jump in the number of cases attributed to XBB.1.5 was “stunning.” The word “stunning” is intended to convey surprise and to evade responsibility for the sudden growth of this subvariant, which has caused the number of elderly people hospitalized in the Northeast US to grow rapidly. Yet, given the vast global resources at their disposal, such terminology is abhorrent and indefensible for any genuine public health advocate.

Dr. Jha wrote, “More inherently contagious? Maybe. It binds more tightly to the human ACE receptor.” He acknowledged this might affect contagiousness, and then quickly downplayed the dangers and recommended the bivalent COVID booster vaccines as “your best protection against both infection and serious illness.” At present, only 34 percent of the US population have received a booster dose and, according to the CDC, only 15.4 percent of people over the age of five have received the updated bivalent shot since it was first introduced in September.

White House COVID-19 Response Coordinator Ashish Jha speaks during the daily briefing at the White House in Washington, Tuesday, Oct. 11, 2022. [AP Photo/Susan Walsh]

With his usual cavalier and glib manner, Dr. Jha concluded, “So, am I concerned about XBB.1.5? Yes. Am I worried this represent some huge setback? No. We can work together to manage the virus. And if we all do our part, we can reduce the impact it will have on our lives.” The oft-used phrases “work together” and “all do our part” sound more like empty campaign promises. In other words, this translates to “nothing to see here” and “move on.”

Meanwhile, there is a significant surge of COVID infections passing through the country with its epicenter presently located in the Northeast, where XBB.1.5 accounts for 70 percent of sequenced variants. The Northeast has always set the pace for the rest of the country and soon every other region will find COVID cases climbing again.

Hospitalizations for those 70 years and older across the US have risen to 16 daily admissions per 100,000, the third-highest peak in the pandemic. There are close to 50,000 people hospitalized with COVID, a 17 percent increase over 14 days. Deaths are up 20 percent at 514 per day, with 90 percent of those dying aged 65 and older.

Professor of Immunology and Biology at Yale School of Medicine Akiko Iwasaki, who has studied and written extensively on the immunology of the coronavirus and is working on developing mucosal sterilizing vaccines against it, warned in a recent tweet, “Please protect yourselves and others by wearing N95 masks. I am truly concerned about the Long COVID wave that follows this infection. I’m concerned because the putative ability of XBB.1.5 to have increased capacity to infect cell types that express even lower levels of ACE2. This will increase tropism and possibly persistence in cell types that are long lived [neurons].”

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XBB.1.5 is a recombinant strain created through the fusion of two BA.2 variants, BJ.1 (BA.2.10.1.1) and BM.1.1.1 (BA.2.75.3.1.1.1). Dr. Emma Hodcroft, British-American molecular epidemiologist at the Institute for Social and Preventive Medicine at the University of Bern, explained that at some point they both infected the same person, and recombined and swapped genetic material, creating XBB.

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Dr. Eric Topol, founder and director of the Scripps Research Translational Institute in California, wrote on December 23, 2022, “Now it appears that in New York State, XBB evolved further to XBB.1.5, with new mutations, which was aptly first noted by JP Weiland [in a December 15, 2022, tweet] a couple of weeks ago, coincident with the beginning of a steep rise of hospitalizations there.”

Dr. Topol’s commentary on XBB.1.5 highlights the significance of the F486P mutation that Kraken has acquired giving it the advantage over its ancestral lineages. SARS-CoV-2 is in effect playing a patient game of tinkering with the genetic mutations needed to circumvent current immunity and has hit on a key protein like a thief playing with the keys of a lock trying to break into the safe.

Lead and senior authors from the Department of Microbiology and Immunology at Columbia University, New York, wrote on this subject in their paper published in the journal Cell, titled, “Alarming antibody evasion properties of rising SARS-Cov-2 BQ and XBB subvariants.”

They wrote, “Our data demonstrate that these new subvariants were barely susceptible to neutralization by sera from vaccinated individuals with or without prior infection, including persons recently boosted with the new bivalent mRNA vaccines. The extent of the antigenic drift or shift measured herein is comparable to the antigenic leap made by the initial Omicron variant from its predecessors one year ago.” In layman’s language, XBB.1.5 is the equivalent of an entirely new variant.

The winter wave of COVID is upon the US once more. Data is lacking on the severity related to XBB.1.5 but time will tell, very soon. The “let it rip” policy of governments and lead public health agencies across the world means that the world’s population is being subjected to an ongoing “gain of function” experiment, in which mass mutation of the SARS-CoV-2 virus poses the increasing danger of a new and even more terrible wave of the pandemic.

Adding to the crisis is the complete reopening of China, with its 1.4 billion people, to the coronavirus, after the ending of the country’s highly successful zero-COVID policy.

Along with abandoning essentially every mitigation measure, surveillance, and sequencing by countries of new variants had dropped by 90 percent at the beginning of 2023 and continues to fall as the world enters the fourth year blindfolded.

The Economist took careful measure of these developments, writing, “Dismantling the testing, sequencing and surveillance capacity built up in the past three years risks leaving the world unprepared for the next pandemic. Hopes that politicians might, at last, see pandemic illness in the way that they see the defense of the realm, as something requiring the maintenance of a permanent establishment ready to counter threats, seem to be fading.”

Massive German arms exports in 2022

Ela Maartens

Between January 1 and December 22, 2022, the German ruling coalition approved arms exports totaling upwards of 8.35 billion euros. While final figures are pending, this is already the second-highest figure in the history of the Federal Republic.

Only the arms exports for 2021, at some 9.35 billion euros, were higher. The biggest contribution to this total came from arms deliveries to the brutal Egyptian regime of al-Sisi, which alone amounted to 4.34 billion. The Grand Coalition under Angela Merkel approved this before handing over power to the current government.

The near-record exports of 2022 under the coalition government consisting of the Social Democrats (SPD), the Greens and the Free Democrats (FDP), carried out with the backing of the opposition, exemplifies the continuation of the systematic and frenetic drive to war. It underscores Germany’s aggressive role in the NATO proxy war in Ukraine against Russia. Ukraine received a greater portion of heavy weapons and military equipment than any other country, totaling about 2.24 billion euros.

German self-propelled howitzer Panzerhaubitze 2000 ("tank howitzer 2000") [AP Photo/Michael Sohn]

Since the Ukraine conflict began nearly a year ago, Germany has flooded the country with weapons. The German government’s ever-expanding official list of delivered “military support” already includes thousands of RPGs, 100,000 hand grenades, 30 Gepard anti-aircraft tanks, 14 Panzerhaubitzen 2000 systems, five multiple rocket launchers and the Iris-T anti-aircraft system. There were further arms deliveries over the holidays—including the Bergepanzer 2 armored recovery vehicles, border control vehicles and ambulances.

In the new year, the German government intends to further expand arms deliveries. The list of military support currently “in preparation/in execution” already includes 36 items. In addition to more tanks, items listed include 26 loading-handling trucks, 18 RCH 155 wheeled self-propelled howitzers, 16 Zuzana self-propelled howitzers and 156,000 rounds of ammunition for 40mm grenade launchers. At the end of last week the German government also announced it will send “Marder” infantry tanks to Ukraine.

Arms deliveries are not limited to Ukraine. Ranking second for 2022 is the Netherlands, at 1.83 billion euros. The explanation given by the German Federal Ministry of Economic Affairs is the carrying out of a “large-scale multi-year procurement project,” including artillery ammunition of various calibers for ammunition depots as well as firing ranges.

The US follows in third place, receiving arms deliveries totaling 863.7 million euros, with the UK, at 453 million euros, in fourth place.

In fifth place is Hungary, which received arms worth 249.2 million euros. The country, ruled by fascistic Prime Minister Viktor Orbán, has received massive arms deliveries from Germany over the past three years. The Hungarian armed forces are known for their brutal crackdown on refugees fleeing imperialist wars in the Middle East and Africa and trying to reach the European Union via the Balkans, which border Hungary.

Among the top 10 recipients of German arms are three other countries that are not members of NATO or the EU: Australia (196.1 million euros), Singapore (175.1 million euros) and South Korea (166.5 million euros). The Asia-Pacific region bears the stamp of the United States’ war preparations against China. Australia and South Korea in particular are at the forefront of US war plans.

The massive arms deliveries to the world’s war and crisis regions underscore the aggressiveness with which the ruling class is driving the return of German militarism.

Shortly after the start of the Ukraine war, Chancellor Olaf Scholz (SPD) tossed overboard the specious principle of not supplying heavy weapons to crisis regions, following in the footsteps of his predecessor. This was followed by the passage of “special assets” (Sondervermögen) for the Bundeswehr (German military) amounting to 100 billion euros—part of the largest rearmament program since the end of World War II.

Over the holidays, SPD leader Lars Klingbeil said the special assets had to be used at “record speed,” in part to implement major military projects. “We need a national pact for security: a large alliance of politics and industry so that Germany can defend itself sufficiently, fulfill our alliance obligations and at the same time deliver more weapons to Ukraine,” he told the Böhme-Zeitung.

With his war pact, Klingbeil is rolling out the red carpet for the German arms industry to organize the country’s rearmament and future arms exports. Some of Germany's largest arms companies, including Rheinmetall, Thyssenkrupp, MTU and Heckler & Koch, already reaped massive profits in 2022. Düsseldorf-based arms manufacturer Rheinmetall announced plans to expand an ammunition production facility in Germany. Production could begin as early as mid-January.

Defense Committee Chair Marie-Agnes Strack-Zimmermann (FDP) hailed these developments, telling the Deutsche Presse-Agentur (dpa), “In view of the security situation, it is of immense importance that Germany, together with its NATO partners, become more independent in the production of ammunition.”

The Greens are particularly aggressive. Speaking to the dpa, Green Party Economy Minister Robert Habeck proclaimed, “Putin is losing this war on the battlefield.” He supported the provocative US plan to send Patriot missiles to Ukraine and announced further arms deliveries. “As for Germany,” he said, “We also have been supporting Ukraine with heavy weapons for months, and we’ll continue to do so.”

As late as the September 2021 federal election, the Green Party’s election posters were emblazoned with the hypocritical slogan: “No weapons and armaments to crisis regions.” In its election program, it ranted about a “more restrictive arms export policy.” Now the former “peace party” is doing everything in its power to further fuel the war in Ukraine.

The Left Party is playing a similar role. After the arms exports for 2022 became known, individual representatives feigned opposition. In fact, however, leading Left Party politicians—first and foremost the prime minister of the state of Thuringia, Bodo Ramelow, and Berlin mayoral candidate Klaus Lederer —publicly support the war drive and the arms deliveries to Ukraine. The official site of the Left Party states: “The desire now to help Ukraine with arms deliveries is understandable.”

Nepali prime minister sworn in amid growing political instability

Rohantha De Silva

Communist Party of Nepal (Maoist Centre) chairman Pushpa Kamal Dahal, known as Prachanda, was sworn in as the country’s new prime minister on December 25. Underscoring the acute political instability of bourgeois rule in this poor, landlocked country, Dahal’s party won only 32 seats in the 275-parliament in the November national elections.

Nepal’s newly appointed prime minister Pushpa Kamal Dahal smiles after being sworn in Kathmandu, Nepal, Monday, Dec. 26, 2022. [AP Photo/Niranjan Shrestha]

Dahal became prime minister, not by winning popular electoral support, but via a series of sordid manoeuvres. His party contested the recent elections as part of an alliance led by the bourgeois Nepali Congress and in opposition to a political front led by the Stalinist Communist Party of Nepal (Unified Marxist–Leninist [UML]).

Following the elections, Nepali Congress leader Sher Bahadur Deuba, who planned to become prime minister, refused to support Dahal’s bid to be PM during the first half of the new government’s five-year term. Dahal had promised to pass on the prime ministership to Deuba during the second half.

Dahal responded by turning to the opposition UML-led political alliance. Despite being bitter rivals during the election, UML leader K. P. Sharma Oli agreed to support Dahal and back him as prime minister in the first half of the five-year term.

Dahal had previously been part of the last UML-led coalition government which came to power in 2017 but collapsed in late 2020 after Prime Minister Oli refused to hand over the reins of power to Dahal. Nepali Congress leader Deuba came to power in July 2021 with the support of Dahal.

The Maoist Centre’s flip-flopping alliances with Nepali Congress and the Stalinist UML are yet another exposure of the thoroughly opportunist and corrupt character of this pro-capitalist party. 

None of the establishment parties came close to securing a majority in the November elections. Nepali Congress won 89 seats, far less than the 138 seats required for a majority in the 275-member House of Representatives. Its coalition partner, the Communist Party of Nepal-Unified Socialist (CPN-US), won 10 seats, and has now swung its support to Dahal. 

The opposition UML secured only 78 seats and, with their allies, which includes the Hindu chauvinist and royalist Rastriya Prajatantra Party (RPP) and the Janata Samajwadi Party, have only 92 seats, 46 less than the required majority. With the support of a clutch of even smaller parties, the ruling coalition now has the support of 170 members of parliament.

The mass alienation and hostility towards the whole political establishment was also indicated in the fact that only 61.4 percent of the registered electors cast votes in the general election. This is 7.2 percent less than the last previous election. 

How long this highly unstable coalition remains in power is yet to be seen. Nepal, which has a population of 29 million, has had 13 different governments during the last 16 years of parliamentary rule. Not one of them has finished its scheduled terms.

Following the eruption of working-class struggles against the monarchy in 2006 the Maoists ended their armed struggle perspective and joined bourgeois parties like Nepali Congress to save capitalist rule.

As the World Socialist Web Site noted in September 2008: “CPN-M leaders Prachanda [Dahal] and Bhattarai have been making it clear to business leaders and foreign governments that a Maoist-led government would guarantee private property and welcome foreign investment… [T]he Maoists have worked might and main to prevent the mass movement that erupted in April 2006 against King Gyanendra’s autocratic rule, from threatening capitalist rule.”

Dahal previously led the Maoist uprising against the Nepal monarchy for more than ten years before entering electoral politics in 2006. Today his prime ministership is dependent on the UML-led alliance that includes the right-wing monarchist RPP.

Nepal’s last period of monarchical rule was marked by corruption, widespread poverty and unemployment, inflation, long hours of power cuts and grossly inadequate social services and infrastructure.

That the royalist RPP, 14 years after the monarchy was abolished, was able to win more than half a million votes in last November’s election underscores the political bankruptcy of the Maoist and Stalinist parties and the intensity of the social crisis now gripping Nepal.

Rising geopolitical tensions in the South Asian region between US and India on one side and China on the other side, are heavily impacting on Nepal.

When Dahal was sworn in as leader of the Nepali government, Indian Prime Minister Narendra Modi immediately offered his congratulations. New Delhi, he said, was looking forward to working with him to strengthen the friendship between the two countries.

Notwithstanding this proforma statement, the Modi government, which regards Nepal as its backyard, is concerned about Beijing’s influence on the new administration and in particular the UML leader Oli, who is close to China.

The Indian Express reported on December 27 that Nepal Congress leader Deuba “boasted that he enjoys the ‘support of both Washington and Delhi’ and after the [election] results were out, the US and Indian ambassadors met Deuba and Prachanda frequently, in the hope that their alliance would remain intact.”

To New Delhi’s dismay, the Congress-Maoist electoral alliance fell apart and led to a new government formed with the pro-China UML. 

While New Delhi remains Kathmandu’s largest trading partner, Beijing is investing heavily in Nepal in greater infrastructure connectivity between the two countries, including rail and road links. The Himalayas form a natural wall separating Nepal and China, so the easiest access to the outside world for Kathmandu is through India. This is exploited by New Delhi to enforce its economic and political interests.

Beijing, however, is seeking to overcome the Himalayan barrier with Nepal. Under its proposed Belt and Road Initiative it plans to establish a rail link between Kerung city in southern Tibet, to Kathmandu.

India’s ongoing efforts to keep Nepal within its own economic and military sphere of influence is also related to its role as Washington’s major strategic partner in the South Asian region.

In opposition to protests from China, New Delhi held its annual Yudh Abhyas joint US-Indian military exercise from November 16 to December 3. The provocative operation was held in Auli, Uttarakhand, near Arunachal Pradesh and just 100 km from the Sino-Indian border.

While the US is leading the NATO war against Russia in Ukraine, it considers China as its most significant strategic competitor and is stepping up its military preparations accordingly.

Even as Nepal is being increasingly being drawn into the sharpening geopolitical conflicts between US-India and China, the ruling elites in Nepal whether Stalinist-Maoist, Royalist or Nepali Congress, are incapable of addressing any of the basic social and democratic issues confronting the working class and rural poor.