As economic distress grows in Russia, government makes officials’ wealth and income classified information

Andrea Peters

Indices published since the start of 2023 show that key sections of Russian industry, the country’s treasury and masses of working people are in economic distress. As signs of the problems increase, the country’s Duma recently passed a law ending the requirement that parliamentary representatives publicly declare their wealth and income. The measure was justified on grounds of military expediency.

People stand in line to withdraw U.S. dollars and Euros from an ATM in St. Petersburg, Russia, Friday, Feb. 25, 2022. (AP Photo/Dmitri Lovetsky, File)

Despite record oil and gas sales, the Kremlin has not overcome the impacts of crippling western sanctions imposed after Russia invaded Ukraine in response to years of US-NATO provocations. As Washington and its allies escalate militarily—ever more openly proclaiming their intentions to break apart and “decolonize” Russia—the ruling class in Moscow finds itself on a collision course with its own working class, a population which it can only exploit but not defend.

In late January, news broke that auto manufacturing in Russia declined by 58.8 percent year, reaching a level not seen since the era of “stagnation” under Soviet leader Leonid Brezhnev. The decline, reported by the Association of European Business based on official Russian data, has set the country back 50 years. Industry expert Sergei Slyanov described the situation in an interview with press outlet Nastoyashschye Vremya as “catastrophic.” The plants, he says, are filled with half-built cars.

Last year, every auto factory in the country halted operations at some point, and most have not come back online, with American and European manufacturers having pulled out of the Russian market entirely. Citroen, Opel, Peugeot, Mitsubishi, Volkswagen, Mazda, Ford, Mercedes-Benz, Hyundai-Kia, Nissan and Toyota are just a few of the companies that have closed down facilities that span all of Russia, from Saint Petersburg in the east to Vladivostok in the west.

According to the Rosstat, the country’s federal statistical agency, in October of last year 27.1 percent of autoworkers were furloughed, and another 8.4 percent were working part-time. The industry directly employs 300,000 and indirectly roughly 3 million people. The shuttered Hyundai plant in Saint Petersburg, Russia’s second-largest city, laid off 2,180 workers last month.

Speaking about the Russian province located in between Poland and Lithuania along the coast of the Baltic Sea, Slyanov stated, “To count precisely the number of people who have survived in the Kaliningrad region at Avtotor, for example—it is very difficult to imagine such a thing. It is not for nothing that they were given land and sown potatoes so that these people, who produced BMWs recently, are now turned into peasants and at least will not starve to death.”

While Chinese manufacturers have taken over some idled facilities, this is not enough to compensate for the production that has been lost. The new cars, twice as expensive as those made before the war, are out of reach of most Russians. According to an analysis of government data conducted by Russia’s Higher School of Economics, real incomes in 2022 were 8 to 9 percent lower than they were in 2013, with essentially a decade of growth having been wiped out.

Russian domestic carmakers have neither the technology nor the know-how to restart production on a wide scale, as the industry has been dominated by foreign firms for decades. Currently, producers at AvtoVaz, Russia’s massive, flagship facility in Togliatti, are largely out of paint, and one can only buy an automobile in one of three colors.

In his interview, Slyanov noted that the government is remaining tight-lipped about conditions in other industries. “We can see that aviation is not doing well either, but we do not know what is happening with ships, what is happening with food, clothing, medicine. We can only guess,” he said.

The Kremlin has recently touted data showing that poverty and unemployment levels are at historic lows in Russia, and inflation is falling. But the statistics and the claims are based on a combination of half-truth and cover-up.

While inflation, which stood at around 12 percent last year, has declined, the fact that price increases are slowing does not mean that working people who could not afford goods at yesterday’s prices will suddenly be able to afford them at today’s. If one could not buy a pound of butter for $1 in December, one will not be able to buy one for $1.05 in January. A drop in the inflation rate from 12 percent to a predicted 5 to 8 percent in 2023 does not improve the situation for a single working person.

Costs continue to rise for households in those areas of the economy most central to families’ budgets. Last year, the Russian government authorized what was supposed to be a maximum 9 percent increase in rates charged for utilities. Households and businesses across the country, however, report being hit with bills that are 30 to 40 percent higher and more.

In many cities, residents are circulating petitions opposing the new tariffs. One petitioner in Saint Petersburg said that between November and December of last year his bill went from 3,000 rubles to 5,100 rubles a month, despite the fact that his usage did not climb accordingly. When comparing what he paid for gas in December 2021 to December 2022, a resident of Orenburg saw his charges double.

The federal government insists that the price hikes are necessary to cover the cost of Russia’s dilapidated utility infrastructure. According to a January 26 article in Nezavisimaya Gazeta, 6,000 utility failures of one form or another happen every month in Russia resulting in blackouts, water shutoffs and heating outages. “People often die,” reports the newspaper. In total, the country needs to replace more than 952,000 kilometers of heating, water and sewer networks.

In 2022, the government took limited measures to buoy the incomes of some of the most distressed layers of the population. It issued a number of support payments to families and indexed pensions for retirees, giving them a 10 percent across-the-board boost. The result of this has been to pull many just across the absurdly-low official poverty line, such that even though they are desperately poor, they are not counted as such.

The state, however, is not willing to extend the mirage farther. The Russian Duma just recently refused to increase the pensions of those of retirement age who continue to work. In other words, a 65-year-old man who still has a job as a security guard will get his pension, but not the 10 percent increase offered pensioners who are not working at all. In addition, in 2023 no one in Russia is eligible for retirement. When the government pushed through pension reforms in 2016, it created a gap in the years that individuals are eligible for retirement such that those who did not make an earlier cutoff date have to wait several more to stop working.

Widespread socioeconomic distress in Russia manifests itself in different forms. One out of every five job-seekers reports long searches to find new work, according to Zarplati.ru. Of the working population under the age of 35, just 17.7 percent make enough to be considered “middle class,” found a new study by the Center for Stratification Studies at the National Research University Higher School of Economics. Forty percent of Russians do not have enough savings to last even three months in the event of a job loss, a federal agency found. Crimes related to drug production are up 40 percent, says the ministry of international affairs. The country is entering its seventh year of population decline, with 2023–2024 expected to have the lowest birth rate on record, notes the Gaidar Institute. A primary reason is that young people are too indebted to have kids.

A report based on a recent survey by sociologists from MGIMO and the University of Finance warned that the socioeconomic situation in Russia is “fraught with the possibility of a social explosion.”

While the Kremlin is quick to highlight the size of Russia’s revenues being generated from hydrocarbon sales, nonetheless there is a growing hole in the country’s treasury, with the state running a budget deficit of 2 trillion rubles, about 2.2 percent of GDP. Experts expect it could rise to 6 trillion rubles. The government has to finance its disastrous war at the same time that it has lost, according to the upper chamber of the country’s parliament, trillions in revenue to tax breaks for businesses. While the country continues to export massive amounts of oil and gas, purchasers are demanding 30 to 40 percent discounts off global prices because, due to western sanctions, it is a “buyer’s market.”

It is under these conditions that the state Duma just enacted a law that ends income and wealth reporting requirements for parliamentary representatives. There is a related effort underway to extend this to thousands more government officials. Already, many local and regional politicians are able to keep their riches secret because they are also businessmen and, no doubt out of the generosity of their own hearts, have long decided to forego a meager government salary. As a result, they are required to reveal virtually nothing about their wealth.

Clearly the Russian ruling class is afraid that under conditions of growing social suffering and an unwinnable war instigated by the imperialist powers and being waged for the defense of the country’s oligarchs, knowledge of its wealth will provoke a social explosion.

Simultaneously, the state Duma is considering a law that will allow commanding officers and military police to arrest and detain rank-and-file soldiers for disciplinary reasons without the decision of a military court during times of conscription, war and martial law.

In budget talks with Biden: Republicans target food stamps, student loans for cuts

Patrick Martin

In their initial proposals for social spending cuts, in response to a repeated request from President Joe Biden, congressional Republicans have put forward demands to target food stamps and other programs for the poor, as well as to rescind entirely Biden’s proposed student loan debt relief plan, which is currently being challenged in the courts.

While the White House has publicly rejected efforts to link budget cuts to the raising of the federal debt ceiling, which Congress must approve by early June to avoid a federal debt default, the talks have nonetheless begun, on the basis of a purely nominal separation. Debt ceiling talks are going on in one room, as it were, and talks on cuts in social spending in another room, conducted simultaneously and interlinked.

Speaker of the House Kevin McCarthy (Republican-California) [AP Photo/Scott Applewhite]

Biden implicitly backed this cynical arrangement by agreeing to the meeting with Republican House Speaker Kevin McCarthy in the first place. He repeated his appeal to the Republicans to put forward their own budget proposals in his State of the Union speech and in subsequent campaign-style appearances in Madison, Wisconsin, Wednesday and Tampa, Florida, Thursday.

Referring to the formal issuance of a budget proposal for the 2024 fiscal year, which begins October 1, he said in Tampa, “Next month when I offer my fiscal plan, I ask my Republican friends to lay down their plan as well. I really mean it.”

The various proposals have not yet been backed by McCarthy or adopted by the House Republican caucus, but they give a glimpse of the type of reactionary attacks on the working class and young people which will be on the table in the talks with Biden begun by McCarthy last week. McCarthy is to return to the White House within a matter of days for the next round.

One list of proposed cuts was released by Representative Jodey Arrington of Texas, the new chairman of the House Budget Committee, on behalf of the Republican majority on that panel. Arrington identifies himself as a “far-right ideological conservative,” putting him squarely in the mainstream of the Republican caucus.

The 21 Republicans include four members of the ultra-right group that held up McCarthy’s election as speaker for 15 ballots last month, in order to extract concessions on House rules and budget policy.

The measures proposed include cuts totaling more than $1 trillion in domestic discretionary spending, none of it from the military or police, which are treated as untouchable.

The biggest single cut would be $404 billion from Biden’s proposed relief of student loan debt, which came to less than one quarter of the massive $1.7 trillion, but was still anathema to the Republican right. There would be a $25 billion spending reduction by ending the moratorium on student loan payments, currently set to go through June 30, and $379 billion by rescinding the debt cancellation plan, which has not yet taken effect because of state lawsuits against it.

Another $381 billion would come from rescinding $100 billion in pandemic relief funds that are in the pipeline to the states but not yet expended, and eliminating $281 billion in “improper payments,” estimated by the Government Accountability Office (GAO) but not specifically identified (and the estimate includes underpayments as well as overpayments).

The most significant is a full-scale onslaught on social benefits for the most vulnerable sections of the working class, estimated to cut at least $135 billion. Undocumented immigrants, who pay income tax, would be cut off from the Child Tax Credit by requiring Social Security numbers. Workers who qualify for Obamacare subsidies would see those capped. Workers receiving food stamps (SNAP) would be required to provide income verification and submit to work requirements. Those who receive Temporary Aid for Needy Families (TANF), the very limited cash aid payments remaining after Democrat Bill Clinton backed the abolition of federal welfare payments (Aid to Families with Dependent Children) 27 years ago, would also face work requirements.

Another $100 billion would be cut from environmental programs, including $87 billion from spending authorized by last year’s Inflation Reduction Act and another $13 billion for the purchase of electric or low-emission buses, garbage trucks and postal vehicles, as well as reduced spending on “greenways” and trails.

Another proposed cut inadvertently exposes the hollow demagogy of the Republican attack on so-called “woke” spending. These programs, largely directed at opposing prejudice against gays and lesbians, come to a grand total of $6 million, less than a drop in the bucket. Eliminating them is not an anti-deficit measure, but an expression of the very bigotry the programs are supposed to combat.

The Republican majority on the Budget Committee flatly rejected any increase in taxation on the wealthy, or any increase of any kind in federal revenues, declaring that the budget deficit must be eliminated entirely through spending cuts.

Its press release declared: “We must ‘reverse the curse’ of deepening deficits and debt by addressing the underlying reason that we are having to raise the debt ceiling to begin with: uncontrolled federal spending.”

One of the most vocal members of the committee, Chip Roy of Texas, said there was overall agreement with McCarthy. “The Speaker has indicated his commitment to what we’ve all agreed to fighting to make sure that we restrict spending,” he told the press. “He’s been pretty clear about needing caps, and we’re going to cap 2024 spending.”

Another group of five of the most fascist Republican representatives, all of whom voted against McCarthy’s speakership, sent a letter to Biden before the State of the Union speech demanding “structural reforms” in the food stamp program to reduce its total cost significantly. The five include Matt Gaetz, Andy Biggs, Dan Bishop, Lauren Boebert and Ralph Norman. They all represent districts with sizeable numbers of impoverished working people who would be cut off and left to starve under their proposed cuts.

Senator Rick Scott, whose plan to “sunset” Social Security and Medicare every five years was singled out for attack in the State of the Union address, reiterated his support for the proposal in remarks on Twitter and to the press.

As for the Republican leadership, Speaker Kevin McCarthy declared after Biden’s speech, “A responsible debt limit increase that begins to eliminate wasteful Washington spending and puts us on a path to a balanced budget is not only the right place to start, it’s the only place to start… The debt limit is one of the most important opportunities Congress has to change course.”

The Democrats and the Biden administration will now proceed to “negotiations” with the Republicans, which will inevitably end in massive cuts to social programs.

What is Maximus, the call center contractor which laid off hundreds in the US South?

J. L’Heureau

Maximus Call Center workers demonstrate in November 2022. (Photo: Call Center Workers United/Facebook)

The layoffs last month of hundreds of Maximus call center workers in Hattiesburg, Mississippi and Bogalusa, Louisiana last month has generated significant opposition from workers at the company.

Among Maximus workers, there is a strong mood for a fight in defense of jobs. But any campaign must be based on an understanding of what workers are up against. Maximus is not just a particularly greedy employer, but a multi-billion dollar multinational corporation with deep ties to the US government.

Founded in 1975, Maximus Inc. is a federal communications contractor headquartered in Tysons, Virginia, half an hour outside of Washington D.C. It has over 39,000 employees in 10 countries and is the parent company of dozens of subsidiaries across the globe, including the US, United Kingdom, Italy, Saudi Arabia, Australia, Singapore and South Korea.

One worker at the call center in Bogalusa explained their working conditions as follows to the World Socialist Web Site :

[The] workload is incredibly high and stressful. I handle at least two calls a day where I am verbally abused. I take on average over 50 calls a day with average handle times of 10 minutes in the Medicare division. I have seen coworkers burst into tears/terminated because of the micromanaging and unrealistic expectations. You can also have 50 calls that are deemed excellent but if you make a mistake on one call you are punished. The break times are short. We receive one 30 minute unpaid lunch break and two paid 15 minute breaks. Since I have started working at Maximus, I have noticed that I am drinking more and my mental health has declined. I can't afford to see a doctor, despite paying $100 a month in deductions for my employee health plan.

According to its “Fourth Quarter and Full Year Results for Fiscal Year 2022,” the company’s revenue “increased 8.9% to $4.63 billion, compared to $4.25 billion for the prior year,” and it reached “[r]ecord signed contracts awards of $10.5 billion, which includes awarded Centers for Medicare & Medicaid Services contract for Contact Center Operations valued at $6.6 billion.” The company’s current market capitalization is $4.55 billion, and the net worth of CEO Bruce Caswell is nearly $78 million.

The National Employment Law Project (NELP) issued a report in May 2021 documenting the codependency between federal contracting and private businesses, using Maximus as the example. The report exposes the mechanisms through which Maximus maintains its monopoly on federal contracts:

Maximus relies entirely on public contracts for its business, and contracts with federal agencies have become an ever-greater part of its business, fueled by acquisitions of other contractors. Initially acting as a subcontractor on the $5.5 billion ten-year call center contract between the Centers for Medicare and Medicaid Services (CMS) and prime contractor General Dynamics Information Technology (GDIT), Maximus became the largest federal call center contractor in 2018 when it paid $400 million in cash to take over the call centers and the GDIT contract. With the purchase Maximus brought in $670 million in new revenues annually, increasing the company’s overall federal contracting business segment to over $1 billion. After this acquisition, Maximus became the employer of approximately 10,000 workers at the CMS call centers. …

Maximus holds other federal contacts [sic] as well, with the Centers for Disease Control, Department of Education support, and the Veterans Administration, and to continue its growth the company spends $800,000 a year on lobbying the federal government. As Maximus assures its investors, the barriers to entry for providing government services—including the complexity of the bidding process itself and some pre-approval requirements—can limit the pool of competitors for federal agencies to choose from. Under the current acquisition framework, Maximus has an incentive to offer to do the work for a bargain price no matter the impact on workers.

Speaking to Federal Times in July 2022, Virginia-based attorney Todd Whay said, “The government is looking for the cheapest contractor,” and that what “competitors are likely going to offer is going to be the bare minimum in terms of wages.”

Federal Times cited a September 1965 report from the House Education and Labor Committee on the Service Contract Act (SCA), enacted that same year to establish a base minimum wage for service workers contracted through the federal government, compared with workers directly employed by federal government departments. The report sheds light on how the federal government has aided the financial operations of Maximus:

The Federal Government has added responsibility in this area because of the legal requirement that contracts be awarded to the lowest responsible bidder. Since labor costs are the predominant factor in most service contracts, the odds on making a successful low bid for a contract are heavily stacked in favor of the contractor paying the lowest wage. Contractors who wish to maintain an enlightened wage policy may find it almost impossible to compete for Government service contracts with those who pay wages to their employees at or below the subsistence level.

The Institute for Policy Studies, in its 28th annual Executive Compensation Report, released last June, reviewed “compensation over the past year at the 300 publicly held U.S. corporations that had the lowest median wages in 2020.” Its “key findings” exposed how working and middle class “tax dollars are fueling corporations with extreme CEO-worker pay gaps,” adding: “Of the 300 companies in our sample, 40 percent received federal contracts between October 1, 2019 and May 1, 2022. The combined value of these contracts over this three-and-a-half year period [equaled] $37.2 billion.”

The report found that: “Maximus, the top contractor in our sample, has held $12.3 billion in federal contracts over recent years. The company’s contracts include deals to service federal student loans and operate Obamacare and Medicare call centers. In fiscal year 2021, federal contracts made up 45 percent of Maximus total revenue.”

A separate report entitled, “Customer Disservice: Examining Maximus, the Federal Contractor that just became the largest student loan company in the world,” was published in March 2022. Co-sponsored by the CWA (Communications Workers of America) and the Student Borrower Protection Center, it revealed that “Maximus—though virtually unknown to the general public—is a long-time participant in the federal student loan system.” It continued:

From 2000 to 2006, Maximus contracted with the Department [of Education] as a private collection agency (“PCA”) collecting on student loans in default. Since 2013, Maximus has served as the default loan servicer for the Department’s entire defaulted loan portfolio....

[B]eyond the nearly 13 million borrowers for whose accounts Maximus and Aidvantage [the company’s servicer of performing loans] now have sole day-to-day management responsibility, in 2020 Maximus was also selected as one of five “Business Process Operations” vendors by the Office of Federal Student Aid. In this role, Maximus provides a wide range of back-office functions across the federal student loan system for millions more people with student debt, including operating call centers that answer borrowers’ questions about student loan repayment. This means that Maximus is now the largest student loan servicer in the world, managing a staggering $449 billion of debt owed by almost 13 million borrowers and playing a key part in millions of additional borrowers’ repayment sequences.

The report exposed the company’s modus operandi as follows:

Maximus, Inc., the parent company to Maximus Federal Services, is a massive government services company that rakes in nearly $4 billion taxpayer dollars every year, ostensibly towards the goal of “helping government serve the people.” While Maximus’s share of the Department’s student loan portfolio is impressive, the company’s numerous and lucrative contracts with other public service-oriented agencies reveal the true size and scope of the private company’s central role within the federal and state governments.

The many inroads that Maximus has made into the broad expanse of the federal public service landscape are connected by a single thread: Maximus has focused on the provision of critical public service functions to the most marginalized and vulnerable Americans. The company recognizes that the strength of its business model lies in its entanglement with the vital services the federal government provides to people. In a disclosure to its investors, Maximus explains that by targeting “the most vulnerable populations,” the firm “helps insulate our services from significant downward pressure, particularly during an economic downturn.”

It should be added that its parasitic leechings off “the most vulnerable populations” are on behalf of its primary stockholders such as BlackRock, Victory Capital Management, The Vanguard Group, Mackenzie Investments and SSgA Funds Management, Inc.

The deep integration of Maximus with the government and the financial oligarchy underscores that the layoffs are part of a broader jobs bloodbath currently taking place, with tens of thousands of jobs cut in the tech sector in the past few months. This is the outcome of deliberate policies employed by Washington and the Federal Reserve to rein in the push by workers for better wages by ramping up unemployment. A key element in this strategy is the leveraging of higher interest rates to reduce hiring demand.

These policies are also generating massive social conflict. In December and January, more than 40,000 graduate students in the University of California system struck across the state for living wages. Also last year, 120,000 railroaders were pushing for national strike action, to which Congress responded by passing an anti-strike law. In Europe, millions of workers in the UK and France have taken part in national strikes against similar austerity policies. The response of governments everywhere to this is the same—to double down on cuts and to escalate attacks on core democratic rights, including the right to strike.

Stepping up US war preparations against China, Victoria Nuland visits South Asia

Rohantha De Silva

US Under Secretary of State for Political Affairs Victoria Nuland visited Nepal, India and Sri Lanka between January 28 and February 1, before travelling to Qatar. Her trip coincided with US Defence Secretary Lloyd Austin’s recent trip to South Korea for high-level meetings with President Yoon Suk-yeol and Defense Minister Lee Jong-seop.

US Under Secretary of State for Political Affairs Victoria Nuland in Colombo, Sri Lanka, Wednesday, Feb. 1, 2023. China has not done enough, she said, to meet International Monetary Fund requirements to unlock a bailout package for Sri Lanka. [Photo: Eranga Jayawardena/WSWS]

Nuland, who served under former US presidents Barack Obama and George W. Bush, is infamous for her aggressive pursuance of Washington’s geopolitical interests. She played a key role in the 2014 fascist-led coup that overthrew the pro-Russian Ukraine government of President Viktor Yanukovich.

In 2013, Nuland bragged that Washington had “invested over $5 billion” in the Ukrainian opposition, and in 2014, she was recorded on a telephone call with the US ambassador to Ukraine, Geoffrey Pyatt, selecting the head of a post-coup government and discussing US collaboration with neo-fascist forces like the Svoboda party.

Nuland spent January 29 and 30 in Nepal, where she met with Prime Minister Pushpa Kamal Dahal and several other officials. She was the highest-ranking foreign dignitary to visit the country since Dahal’s election as prime minister on December 25.

In Kathmandu she denounced unnamed “autocrats” for “trying to change global rules by force”—a provocative reference to Beijing and Moscow.

Washington repeatedly and falsely promotes its political and military aggression against Russia and China as missions to defend “democracy.”

Underscoring US efforts to enlist Nepal in the military-strategic offensive against China, Nuland declared: “It’s enormously important for the US to have partners like Nepal.” Sandwiched between China and India, Nepal is caught in the intensifying strategic conflict between the US and India on one side, and China on the other.

Nepal is receiving heightened attention from Washington since Dahal, leader of the Communist Party of Nepal (Maoist Centre), became prime minister with the support of K.P. Sharma Oli, head of the pro-China Communist Party of Nepal—United Marxist-Leninist. It was expected that Dahal would become prime minister backed by Sher Bahadur Deuba, leader of the pro-India Nepali Congress. The US and India fear that the Dahal government will be closely aligned with Beijing.

On February 5, a few days after Nuland’s visit, United States Agency for International Development (USAID) chief Samantha Power arrived in Kathmandu. Nepal is due to receive $US500 million under the US Millennium Challenge Corporation project. Washington has also agreed to provide another $659 million in economic assistance through USAID in the next five years. The aid is clearly aimed at undermining the influence of China, which remains Nepal’s largest foreign investor.

On January 31, Nuland travelled to India where she met with External Affairs Minister S. Jaishankar and later Foreign Secretary Vinay Kwatra. Media reports said Nuland and Jaishankar discussed the Indian subcontinent, the Indo-Pacific, and the “many points of convergence” in the India-US relationship.

It was Nuland’s second meeting with Jaishankar in the past two months. At their previous meeting, on December 15 at the UN headquarters, Jaishankar and Nuland discussed their efforts to support “security in the Asia Pacific and globally.”

Indian Prime Minister Narendra Modi and US President Joe Biden will meet three times this year—at the G7, Quad and G20 summits—while US Secretary of State Anthony Blinken is to visit India next month.

India is Washington’s principal military-strategic partner in South Asia. Under Prime Minister Narendra Modi, India has been transformed into a frontline state of the US war drive against China. New Delhi has bilateral, trilateral and quadrilateral alliances with the US, Japan and Australia. New Delhi and Washington are collaborating closely to enlist Nepal, Sri Lanka, Bangladesh and the Maldives into this anti-China military-strategic offensive.

As Nuland was visiting New Delhi, Indian National Security Advisor Ajit Doval met with his US counterpart Jake Sullivan and other senior officials in Washington to inaugurate the Initiative on Critical and Emerging Technologies (ICET) dialogue between the two countries.

In an exclusive interview with Mint, former Indian envoy to the US Arun Singh said the ICET would provide mechanisms for the two countries to “explore and deepen collaboration in several critical and emerging technologies, including artificial intelligence, quantum, 6G, space, semiconductors and biotech.” Singh said the “rise of China” was a factor in driving this collaboration.

Nuland visited Sri Lanka on February 1 where she met with President Ranil Wickremesinghe. Nuland declared that Washington supports the Colombo government’s efforts “to stabilize the economy, protect human rights, and promote reconciliation” and that both countries were together for “an inclusive, prosperous and secure future for all Sri Lankans.”

Nuland’s call for a prosperous future “for all Sri Lankans” is totally hypocritical. The extreme economic and political crisis facing the country, which was worsened by COVID-19, was even more dramatically intensified by the US-NATO war against Russia in Ukraine.

Contrary to Nuland’s bogus claims, the Wickremesinghe government, working in tandem with the US and the International Monetary Fund, is brutally imposing the full burden of this crisis onto millions of already impoverished workers, rural toilers and their families.

Nuland also used her Sri Lankan trip to further denounce Beijing. She declared: “We expect that China will provide credible and specific assurances regarding its readiness to join the rest of us in meeting the IMF standards regarding debt restructuring. We are seeing the rest of Sri Lanka’s creditors come forward with those assurances, and now all eyes are on China to do the same.”

Nuland’s comment is a reference to Sri Lanka’s negotiations with its creditors on the restructuring of Colombo’s defaulted loan repayments, as demanded by the IMF.

Immediately responding to Nuland’s provocative remarks, Chinese Foreign Ministry spokesperson Mao Ning stated: “What was said by the US side does not reflect the truth. The Export-Import Bank of China has already provided Sri Lanka with the letter to express support for its debt sustainability. Sri Lanka has responded positively and thanked China for that.”

Mao called on the US to, “Show some sincerity and actively do something to help Sri Lanka weather the current difficulties… rather than jabbing fingers at China’s close cooperation with Sri Lanka.”

Nuland’s trip to Sri Lanka—the second within a year—further indicates the prominence Washington gives to the strategically located Indian Ocean nation and the intensification of US preparations for war against China.

Intact hominid skull found in China offers insights into human evolution

Frank Gaglioti

The announcement in November of the discovery of what appears to be a near-intact hominid skull in China is a stunning discovery. It has the potential of further revealing the complex intricacies of human evolution particularly in China and the Eurasian landmass more generally. Complete hominoid skulls are a rare find and can offer an important opportunity to gain further insights into human evolution. 

The skull of Yunxian 1, an earlier find at the site. [Photo: Gary Todd]

The discovery of a near-intact hominid skull should be welcomed, as its analysis will further add to our knowledge of humanity’s complex evolutionary history. 

The skull is named Yunxian 3 as it was discovered 20 kilometres west of Yunyang, formerly known as Yunxian, in central China’s Hubei province. It was found on 18 May 2022, 35 meters from two other skulls, known as Yunxian Man or Yunxian 1 and 2, discovered in 1989 and 1990 respectively. The excavation site is known as Xuetangliangzi in the city of Shiyan’s Yunyang district.

The Yunxian site is located on a terrace on the Han River, a tributary of the Blue River in the Hubei Province, at 550km north-east of Wuhan and 40km west of Yunxian. 

Yunxian 3 was found half buried in an upright position. So far scientists have revealed the forehead, including the brow ridge and eye sockets, as well as the top, back and left cheekbone of the skull. Gao Xing, paleoanthropologist at the Institute of Vertebrate Paleontology and Paleoanthropology in Beijing, told Nature that it is not known if the teeth and the lower jawbone are still present. Gao Xing is excavating the skull.

‘No obvious deformation has been found. It is in very good condition and features the typical characteristics of Homo erectus,’ Gao told the Global Times.

Fieldwork is currently underway to fully excavate the skull, which is a meticulous and laborious task. This will be followed by extensive analysis to extract as much information as possible.

“It’s a wonderful discovery, unlike those earlier discoveries, which were crushed and distorted after millennia underground, the third skull, Yunxian 3, seems to be in good condition,” palaeoanthropologist at the National Museum of Natural History in Paris Amélie Vialet, who worked on the Yunxian 2 skull, told Nature.

The earlier discoveries were dated at between 1.1 million and 800,000 years old using sediments and nearby fossils. Dating was done using Uranium series and Electronic Spin Resonance on some teeth of the Yunxian fauna.

‘Preliminary studies showed that the No 3 skull should belong to the same period of time as the No 1 and No 2,’ Gao said.

Based on Vialet’s three dimensional analysis of Yunxian 2, the skulls are considered to be members of the archaic hominid species Homo erectus. It is highly likely the current discovery is of the same species.

H. erectus is thought to have originally evolved 2 million years ago. The species is one of the most widespread, with fossils found in Africa and across the Eurasian landmass to China and southeast Asia (Java man). The species is thought to have become extinct 117,000 years ago, based on a fossil found in Ngangdong Java in 2019.

Skeletal remains of “Java man” in an Indonesian museum [Photo by Peter Maass / CC BY 3.0]

Eugene Dubois discovered the first H. erectus fossil in Java in 1891. It was originally dubbed Pithecanthropus erectus or upright ape man. 

Scientists think H. erectus was relatively large, probably standing about 1.5m tall. The brain size was about 800 cubic centimetres, about 60 percent smaller than modern humans, but 50 percent larger than the earlier australopiths. They were one of the first humans to walk upright and had modern body proportions, such as long legs and shortened arms adapted for a life out of the trees.

They were technologically adept, with a sophisticated tool kit known as Acheulean stone tools, consisting of hand axes and blades. H. erectus had the ability to control fire.

H. erectus had a more diverse diet than its predecessors, which meant its teeth were smaller, as they didn’t require robust chewing adaptations, giving it a more gracile face. 

Because of the widespread nature of H. erectus and its long existence, it is considered a highly variable species across its range.

Vialet told Nature that the “Yunxian 1 and 2 skulls share some features with older Javanese fossils, and others with younger Homo erectus fossils from mainland Asia. Like the Javanese fossils, they are large, big-brained skulls.” But, she says that they are “less heavily built, a characteristic that usually indicates a more modern individual.”

Scientists consider the Chinese populations of H. erectus to be highly variable. It is not known if this is due to each population evolving independently, or successive waves occurring out of Africa.

Palaeoanthropologist at Shandong University Yameng Zhang said, “More complete Chinese H. erectus like Yunxian 3 are crucial to answer this question.”

Vialet is currently comparing Yunxian 2 to European hominid populations to see whether the Chinese specimen could be similar. She told Nature that Yunxian 3 should be compared with Chinese as well as European hominid fossils, such as the 1.4-million-year-old face from the Sima del Elefante cave in Atapuerca, Spain. 

A jawbone fragment discovered in northern Spain on June 30 is considered to be the oldest hominid fossil discovered in Europe so far. It has been estimated as 1.4 million years old. Scientists have identified it as a new species, Homo antecessor, that evolved from H. erectus and may have been an ancestor of Neanderthals and modern humans. A comparison with Yunxian 3, if its jaw bone is found intact, will be critical.

Scientists think that H. erectus originated in Africa about 2 million years ago, probably from an australopith or early Homo species, and then migrated across the Eurasian landmass to Asia and southeast Asia. Paleoanthropologists studying H. erectus think that it may be an ancestral species to modern humans, H. sapiens.

Although the African and Asian H. erectus specimens have been designated into one species, their relationship is still very controversial. 

The skull of Yunxian 2, another skull found earlier at the site. [Photo: Gary Todd]

A comment published in Nature Education Knowledge Project in 2013 by Professor Adam Van Arsdale at the Department of Anthropology, Wellesley College, put forward a possible classification of H. erectus. Some scientists consider the species restricted to eastern and southeast Asia, with fossils from the Lower Pleistocene through the Middle Pleistocene, dated at approximately 1.4 to 0.2 million years ago. Earlier fossils from (Caucasian) Georgia and Africa that have similarities to the eastern and Southeast Asian H. erectus, but also have more primitive traits, are designated as Homo ergaster. While fossils from the Middle Pleistocene (1.25 to 0.7 million years ago) found in Europe are classified as Homo heidelbergensis.

“Our current findings have shown that human evolution in East Asia was continuous. The links between Homo erectus and later Homo sapiens are still unclear, but this issue is a key to decoding the origins of modern human beings in East Asia. Indisputably, the skull fossil can provide crucial evidence,” Gao said.

Allegations of Adani Group corruption shake India's financial markets, Modi government

Kranti Kumara

The stock valuation of the Adani Group, one of India’s largest conglomerates, has been more than halved in the two weeks since a Wall Street investment firm published a scathing report charging its owners and management with corrupt practices.

The sudden reversal in the Adani Group’s fortunes has shaken India’s financial markets and the country’s far-right, Narendra Modi-led Bharatiya Janata Party (BJP) government.

There are mounting fears the financial contagion will spread, as the Adani Group’s shrinking market capitalization impacts the balance sheets of India’s banks, which are already weighed down by a mountain of debt, and other major lenders and investors.

India’s opposition parties, meanwhile, are pointing to the extent to which the Adani Group, and its chairman, Gautam Adani—who up until a few weeks ago was being touted as Asia’s richest person—have benefited from extensive, often times obtrusive, BJP government support. Modi himself has a decades-long association with the rags-to riches oligarch Gautam Adani, whose wealth has grown exponentially since the BJP came to power in New Delhi in May 2014.  

Gautam Adani with Israeli Prime Minister Benjamin Netanyahu [Photo: Twitter/Gautam Adani]

On Jan. 24, Hindenburg Research published a report titled “Adani Group: How the world’s 3rd richest man is pulling the largest con in corporate history.” It accused the Adani Group—which is comprised of 9 publicly listed entities, seven of them headed by Gautam Adani—of pervasive accounting fraud and brazen stock manipulation to puff up the Group’s financial valuation. It has done so, the report alleges, by creating an “empire” of shell companies in Mauritius, Cyprus, UAE and other places, which have indulged in illegal “stock-parking,” “wash-trading” and money laundering.

India’s corporate media have promoted the meteoric rise of Adani and his Adani Group as a quintessential example of “India’s growth story.” In doing this, they have ended up saying more than they intended for Adani is indeed emblematic of the raft of newly minted Indian billionaires and multimillionaires that has arisen over the past three decades through the state-enabled looting of public assets, massive tax cuts and other concessions, and the brutal exploitation of the country’s impoverished working class.

That the key to Adani’s success has been his close ties to Modi and his government has long been an open secret. He has benefited from the privatization of huge swathes of publicly built infrastructure, including seaports, electricity generation and transmission, coal mines and airports. These assets were invariably sold off for way less than they were worth, and with much of the money for their purchase coming from unsecured loans extended to Adani by India’s public sector banks.

Adani, who has frequently accompanied Modi on his foreign travels, has also benefited from high-level BJP government interventions, some of them apparently delivered by Modi himself, to smooth the path for large foreign acquisitions.

Recently, Adani traded on India’s burgeoning military-security partnership with Israel and Modi’s close connections to Israeli Prime Minister Benjamin Netanyahu to acquire Israel’s Haifa port. Earlier, the Adani Group acquired the rights to develop the vast, highly polluting Carmichael coal mine in Queensland, Australia.   

The Adani Group’s corrupt modus operandi sheds light on the crony capitalism that is the hallmark of the Modi government. It duplicates on the national stage the “Gujarat model” of economic development that Modi pioneered during his tenure as Gujarat chief minister from 2001 to 2014. The “Gujarat model” essentially consisted of making government policy and the state bureaucracy totally subservient to the profit interests of private corporations, with those industrialists and businessmen close to Modi being first in line to benefit from the fire-sale of government assets and other “pro-investor” policies. Meanwhile, worker protests were ruthlessly suppressed.

As Ashok Swain, a professor at Uppsala University observed to the Asia Times, Adani’s spectacular personal enrichment is mind-boggling and clearly inextricably bound up with his ties to Modi and the BJP government. “Before Modi became the BJP’s prime ministerial candidate in September 2013, Adani’s worth was $1.9 billion,” explained Swain, “In August 2022, while Covid pushed 230 million Indians into poverty, Adani’s worth went up to $137 billion. Why does anyone need Hindenburg Research to write a report?”

On January 29, with its stock already in freefall, the Adani Group issued a 413-page “reply” to the charges of corporate criminality outlined in the Hindenburg report. Unsurprisingly, it wrapped Gautam Adani in the national flag, saying that the charges made in the report were a “calculated attack on India.”

In its response, Hindenburg Research pointed out that only 30 of the 413 pages dealt in some fashion with the issues raised in its original report, and that the Adani Group had failed to provide any sort of answers to 62 of the 88 questions that report raised. It went on to say that “India’s future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation.”

Initially the Modi government maintained a deathly silence on the Hindenburg Research report. But the rout of the Adani Group on Indian and US stock markets, prompted the finance minister to issue a statement pledging that regulatory authorities will do their jobs, and insisting that “the macroeconomic fundamentals of our economy and image, none of it is affected.”

This, however, failed to reassure international investors. Following the nosedive in the share prices of Adani Group companies, the giant US bank Citigroup issued a statement saying it will no longer accept either Adani Group shares or bonds as collateral for new loans. Similar steps have been taken by the Swiss bank Credit Suisse and the British lender Standard Chartered.

As of Monday, February 6, the shares of Adani group companies had lost a combined total of around $110 billion from their estimated valuation of $218 billion when the Hindenburg Research report was released.

A further rout in Adani Group companies’ share prices on Monday was only arrested because India’s stock market and regulatory authorities stepped in to restrict the maximum slide in Adani stock prices to minus 5 percent for a subset of Adani companies and minus 10 percent for Adani Transmission. The share prices of all the companies concerned slid to these limits.

In recent days, Adani Group share prices have slightly rebounded. There is every reason to believe that this is due to fresh injections of funds from India’s public sector banks and other predominantly state-owned corporations like the Life Instance Corp. of India, already a large Adani Group investor.

Despite its public pose of calm, the government is clearly acutely concerned about both the economic and political fallout of the potential unraveling of the Adani Group.

The Modi government and India’s corporate media are continually tub-thumping about India’s “world-beating” economic growth. The reality is very different.

In the 2023-24 budget, tabled by Finance Minister Nirmala Sitharaman on February 1, the government announced a massive allocation of Rs. 13.7 trillion ($167 billion) for capital expenditure for improving or building seaports, roads, bridges and other infrastructure all for the benefit of big business. While India’s existing infrastructure is woefully inadequate, the principal reason for the massive hike in infrastructure spending was to kick-start the economy, under conditions where private investment has been falling for years. This is because India’s companies are weighed down by debt and, when they can’t benefit from government largesse in the manner of the Adani Group, prefer to engage in stock buybacks and other financial manipulations rather than invest. 

In an action that points to the government’s extreme sensitivity about any exposure of Modi’s close ties to Adani, Lok Sabha Speaker Om Birla ordered large parts of a speech by Congress Party leader Rahul Gandhi raising questions about the government’s relations with the Adani Group and Modi’s pre-2014 relationship with Gautam Adani from the parliamentary record.

Modi has also hit back by dragging up numerous scandals that demonstrate that the Congress Party-led government that held office from 2004-14 was immersed in numerous corrupt dealings with various Indian business houses. What Modi of course could not and would not say is that this vast nexus of government-business corruption has greatly expanded under his rule; is rooted in the very DNA of Indian capitalism; and has grown exponentially since the Indian ruling class formally abandoned its state-led capitalist development strategy in 1991 in favor of full-scale integration with the imperialist-led world capitalist order. 

Both Adani and Modi hail from the state of Gujarat. Their close association dates back to 2003, that is shortly after Modi came to national prominence because of his role, as Gujarat’s Chief Minister, in instigating and overseeing the February 2002 Gujarat anti-Muslim pogrom. This mass killing by Hindu-terrorist gangs linked to the BJP and its allied organizations resulted in the gruesome deaths of at least 2,000 innocent persons, mostly Muslims. Hundreds of thousands of other impoverished Muslims were rendered homeless and forced to live in squalid refugee camps which exist even till now.

Subsequently at an event organized by the Confederation of Indian Industries (CII) in February 2003 in New Delhi, where Modi was the chief guest, two well-known industrialists, Rahul Bajaj and Jamshyd Godrej, aggressively grilled Modi onstage about the “law and order” situation in Gujarat.

This angered Adani and several Gujarat industrialists. They broke with the CII for having brought “disrepute to Gujarat” and then formed a body named the Resurgent Group of Gujarat to promote the state under Chief Minister Modi as an unmatched business-friendly state. They initiated a biennial business summit, “Vibrant Gujarat,” which showcased Modi as an autocratic leader who would cater to the profit interests of corporations by brooking no opposition from the government bureaucracy, popular protests or worker agitations.

This event soon came to be a major draw for Indian and global investors, with the United Nations Industrial Development Organization, the Federation of Indian Chambers of Commerce and Industry (FICCI) and the CII, which had issued a groveling apology to Modi for what had happened at its 2003 event, all serving as sponsors.

By ruthlessly implementing pro-investor policies, Modi soon endeared himself to Indian industrialists such as Ratan Tata, scion of the Tata empire, who at an earlier time would have shunned a Hindu supremacist thug like Modi. Nevertheless, Adani continued to have a preferential relationship with Modi.

In 2014, Indian big business propelled the would-be Hindu supremacist strongman and his BJP to power so as to intensify the class war assault on India’s workers and toilers and more aggressively assert their great-power ambitions on the world stage. Adani’s ascent among India’s billionaires would soon attain warp speed, making him briefly last year the world’s second wealthiest person. Five days ago, Forbes listed him as 18th, with an estimated fortune of “merely” $60 billion.