What Has Neoliberal Capitalism Ever Done For India?

Colin Todhunter

When India ushered in neoliberal economic reforms during the early 1990s, the promise was job creation, inclusive growth and prosperity for all. But, some 25 years later, what we have seen is almost 400,000 farmers committing suicide, one of the greatest levels of inequality out of all ‘emerging’ economies, a trend towards jobless ‘growth’, an accelerating and massive illegal outflow of wealth by the rich, and, as if that were not enough, now we have the sequestration of ordinary people’s money under the euphemism ‘demonetization’.

Data from the Multi-dimensional Poverty Index indicates that 20 years ago, India had the second-best social indicators among the six South Asian countries (India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan), but now it has the second worst position, ahead only of Pakistan. Bangladesh has less than half of India’s per-capita GDP but has infant and child mortality rates lower than that of India.

The neoliberal model of development has moreover arguably seen the poverty alleviation rate in India remain around the same as it was back  pre-independent India, while the ratio between the top and bottom ten percent of the population has doubled since 1991. According to the Organisation for Co-operation and Economic Development, this doubling of income inequality has made India one of the worst performers in the category of emerging economies.

Neoliberalism in India has been underpinned by unconstitutional land takeovers and population displacement, with the state using military and para-military forces in the process alongside the suspension of various democratic rights and the wide scale abuse of human rights. For supporters of cronyism, cartels and the monopolization of markets by private interests, which to all extents and purposes is what neoliberalism thrives on in India (and elsewhere), there have been untold opportunities for well-placed individuals to make an under-the-table fast buck from various infrastructure projects and privatisation sell offs.

But PM Modi interprets all of this in a different way, which comes as little surprise, given harsh the reality – not the media misrepresentations – of what he ‘achieved’ in Gujarat as Chief Minister. He recently stated that India is now one of the most business-friendly countries in the world. The code for being ‘business friendly’ translates into a willingness by the government to facilitate much of what is outlined above, while reducing taxes and tariffs and allowing the acquisition of public assets via privatisation as well as instituting policy frameworks that work to the advantage of foreign corporations.

In agriculture, for instance, we are seeing the displacement of a pre-existing productive system. Small and medium-sized enterprises are obliged to produce for global entities, state enterprises are being run down or (semi)privatised and independent agricultural producers are impoverished. The tragedy is that model that is intended to supplant the existing one is based on Cargill/Monsanto’s environment- and livelihood-destroying business models for corporate profit which have become synonymous with the ‘national interest’.

Unfortunately, people like Aruna Rodrigues and Vandana Shiva and certain NGOs who criticise this and offer credible alternatives are regarded by elements of the state as either working against the interest of the nation or colluding with ‘foreign interests’ – when the reality is that the state is doing exactly that!

Seeds, mountains, water, forests and biodiversity are being sold off. The farmers and tribals are being sold out. And the more that gets sold off, the more who get sold out, the greater the amount of cash and credit goes into corporate accounts and the easier it is for the misinformed to swallow the lie of ‘growth’. As the state abdicates it redistributive role and facilitates the World Bank’s agenda, India is suddenly labelled capitalism’s ‘economic miracle’.

The opening up of India to foreign capital is supported by rhetoric about increasing efficiency, job creation and boosting growth. According to the neoliberal ideologues, foreign investment is good for jobs and good for business. But just how many jobs actually get created is another matter, as is the amount of jobs destroyed in the first place to pave the way for the entry of foreign corporations.

For example, Cargill sets up a food or seed processing plant that employs a few hundred people, but what about the agricultural jobs that were deliberately eradicated in the first place or the village-level processors who were cynically put out of business so Cargill could gain a financially lucrative foothold? Hundreds of millions of livelihoods are in danger as foreign corporations and capital smells massive profits on the back of the World Bank-backed commercialisation of rural India

India’s much-lauded economic growth in recent times has been built on consumer and corporate debt. Corporate subsidies and (real estate) investment bubbles have given the impression of economic prosperity. And it is merely an ‘impression’. For instance, consider the amount of tax breaks and handouts given to the corporate sector and what little it has achieved in return in terms of jobs or exports. And consider too the massive amount of corporate debt written off by state-owned banks, while farmers kill themselves en masse because of debt, partly due to Monsanto’s capture of the cotton sector and partly because of economic liberalisation and increasing exposure to rigged markets courtesy of the WTO.

And so to the latest heist – ‘demonetization’. According to Binu Mathew, banks in India were facing a liquidity crisis and parts of the debt-inflated economy were in danger of imploding. In this respect, Modi’s outlawing of almost 90% of India’s cash notes overnight is basically a bail-out/windfall for the corporate elites/real estate speculators.

This tactic neatly removed the danger of creating inflation by merely printing money. You can forget about Western-style bank bailouts and subsequent ‘austerity’, the Indian government decided to sequester the public’s money directly in an attempt to keep the neoliberal crony capitalism ponzi scheme on course.

As Mathew says:
“The banks will lend out the money ‘confiscated from you’. Who will benefit? Not the poor farmers who are committing by their thousands every month. Not the children who are dying of malnutrition in several parts of the country. Not the small manufacturers who are struggling to keep up their businesses? Who will benefit? The crony capitalists that props up the Modi regime. This demonetization is the biggest crony capitalist neo-liberalist coup that has ever taken place in India. Never doubt it, India will have to pay a heavy price for it.”

As in the US, the undermining of a productive economic base – in India’s case, a failure to boost industrial manufacturing performance and jobs and pumping up the economy with credit, while at the same time dismantling its greatest asset – the agrarian base – can only lead to a dead-end. Courtesy of its compliant politicians, India has hitched a ride aboard the wholly corrupt neoliberal bandwagon to nowhere.

Warning Of Global Havoc As Possible Arctic ‘Tipping Points’ Pile Up

 Jon Queally

What is happening in the Arctic will not stay in the Arctic.

In an ominous (though not hopeless) report published Friday, researchers warn that as many as 19 various ‘tipping points’ could be triggered by the increasingly warm temperatures in the world’s northern polar region.

The Arctic Resilience Report, produced under the auspices of the Arctic Council by an international team of researchers from multiple institutes and universities, is the first comprehensive assessment of its kind, looking at the unique region from a combined social and ecological perspective. By surveying and synthesizing a large body of previous research on how both communities and natural systems are responding to global warming, the report offers a worrying conclusion.

“The warning signals are getting louder,” Marcus Carson of the Stockholm Environment Institute and one of the lead authors of the new report, told the Guardian. “[These developments] also make the potential for triggering [tipping points] and feedback loops much larger.”

The signs of dramatic change, the researchers found, are everywhere in the Arctic. “Temperatures nearly 20°C above the seasonal average are being registered over the Arctic Ocean,” the report states. “Summer sea-ice cover has hit new record lows several times in the past decade. Infrastructure built on permafrost is sinking as the ground thaws underneath.”

The fear of tipping points—which occur when natural systems hit limits that force dramatic, cascading, and often irreversible changes—have long been held among scientists studying the dynamic impacts of human-caused global warming and climate change. Referred to as “regime shifts” in the report, the concept is the same.

“One of the study’s most important findings is that not only are regime shifts occurring, but there is a real risk that one regime shift could trigger others, or simultaneous regime shifts could have unexpected effects,” said Johan L. Kuylenstierna, executive director of the Stockholm Environment Institute, which contributed to the study.

Johan Rockström, executive director of the Stockholm Resilience Centre and co-chair of the project, added: “How regime shifts interact with one another is poorly understood. If multiple regime shifts reinforce each other, the results could be potentially catastrophic. The variety of effects that we could see means that Arctic people and policies must prepare for surprise. We also expect that some of those changes will destabilize the regional and global climate, with potentially major impacts.”

What the scientists observed in their research, according to a summary of the report, were “large, persistent, often abrupt changes in the Arctic’s natural systems” which they came to classify as regime shifts. The report explains how “these shifts are having large impacts on wildlife, the stability of the climate, and on Arctic peoples’ sense of place and well-being.” The 19 specific shifts identified take many forms, including:

• Loss of Arctic sea ice
• Collapse of the Greenland ice sheet
• Ocean hypoxia
• Collapse of fisheries
• Transformation of landscapes: from bogs to peatlands; from tundra to boreal forest or steppe
• Shifting river channels.

Citing these and other worrying trends, the report, like so many others coming from the scientific community in recent years, urges immediate action by both regional interests and the world community. “The potential effects of Arctic regime shifts [or tipping points] on the rest of the world are substantial, yet poorly understood,” the report states. “Human-driven climate change greatly increases the risk of Arctic regime shifts, so reducing global greenhouse gas emissions is crucial to reducing this risk.”

With a focus on resiliency and community-led response, the report says that reducing the risks of further destruction and destabilization in the Arctic, especially given the region’s crucial role in regulating the planet’s climate, depends on global action driven by local concerns and knowledge.

The hope, according to the scientists involved, is that efforts to stem the damage in the Arctic can also provide guidance for the rest of the world.

“How we manage and respond to the rapid changes in the Arctic,” the researchers suggest, “could be a blueprint for how we meet future climate challenges.”

Deepening social crisis underpins South Korean protests

Ben McGrath

Over the past five weeks, millions of people have poured onto the streets in South Korea to demand the resignation or impeachment of President Park Geun-hye over a scandal involving her longtime confidante Choi Soon-sil. Choi, with the aid of presidential secretaries, has been accused of creating a slush fund for Park, as well as taking part in deciding policy matters despite holding no governmental office.

The crisis reflects deep divisions within the political establishment, including Park’s ruling Saenuri Party, opened up by the worsening global economic slump and rising geopolitical tensions. For those taking part in the protests, however, the hostility to Park is being fuelled not only by the various allegations of corruption but more broadly by her administration’s sustained attack on working and living conditions.

The crisis of global capitalism has gripped South Korea no less than other countries. Last quarter, the economy grew by just 0.7 percent. The Bank of Korea is predicting that growth this year will reach only 2.7 percent and 2.8 percent next year. Exports fell to 3.2 percent in October from a year ago, generating worry in business circles. Exports to China, South Korea’s largest trading partner, have declined for 16 consecutive months. These trends are a far cry from the economic expansion South Korea once enjoyed as one of the supposed Asian “miracles” with annual growth rates of over 10 percent.

That high growth was extracted through the extreme exploitation of workers under the former military dictatorship. As workers fought back, the political establishment turned to so-called democrats like Kim Dae-jung to further their agenda. Since the Asian Financial Crisis of 1997-1998 both the democrats and conservatives have privatized national industries, leading to massive job losses, and casualized the labor force, turning positions into low-paid, part-time jobs.

Big business has been demanding deeper inroads into the social position of the working class, particularly greater “labor flexibility”—that is, the ability to fire workers and slash wages without restriction. However, the Park administration has been unable to force through her plans for this so-called labor reform.

At a recent event hosted by the Korea Economic Research Institute and the Korea Economic Association, participants attacked workers for “low productivity” and resort to strike action. “In the South Korean labor market, which is characterized by the lack of ease of employment and dismissal, some militant labor unions are engaged in irrational labor movements these days to affect the majority of workers,” said Jo Jang-ok, head of the Korea Economic Association.

For the working class, though, conditions are becoming unbearable. In the struggling shipbuilding industries, massive job cuts are underway. At the three largest manufacturers, Hyundai Heavy Industries, Daewoo Shipbuilding and Marine Engineering and Samsung Heavy Industries, 20,000 jobs have already been slashed as the companies undergo restructuring. An additional 20,000 workers are expected to be sacked by the end of the year. At the same time, the government is planning to bail out the companies to the tune of $9.6 billion through 2020.

While the so-called militant unions in the Korean Confederation of Trade Unions (KCTU) have staged some token strikes, in reality they have accepted the job cuts, with unions at smaller shipbuilders being in “harmony mood” with the companies.

Last month the unemployment rate reached 3.4 percent, according to Statistics Korea. For young people, the rate was 8.5 percent. However, the statistics do not take into account those who have stopped looking for work or are underemployed in part-time positions. The total real unemployment rate is likely around 10 percent, while according to Lee Jun-hyup of the Hyundai Research Institute, one in three young people aged 15-29 can be considered unemployed.

South Korean students spend long hours studying to enter top universities in the hope of finding employment after graduating, only to face a dwindling job market. There are 653,000 people currently preparing for jobs, the highest number ever. They are not counted among the unemployed, but are working toward passing exams or gaining additional licenses and certificates to improve their chances of finding a job.

Many students have expressed anger toward Park and Choi, who used her connections with the government to secure placement for her daughter at the Ewha Womans University, one of the country’s top institutions. For working class students, entry to these elite schools is already barred by high tuition fees and the cost of after-school academies and tutors necessary to pass the entry exams.

The top-ranking Seoul National University (SNU) has witnessed a sharp decline in the number of students accepted from regular high schools, that is, those without special or elite status. The proportion of SNU students from these schools fell from 56.43 percent in 2010 to 42.5 percent in 2014.

In 2012, only 1 percent of students from the lowest-income bracket were enrolled at elite schools like SNU, Yonsei University, Korea University and Ewha Womans University. The average for all four-year universities was 3.2 percent.

For working families, education is just one major cost driving up household debt, which reached an historic high of $1.1 trillion at the end of June, and is still growing. Housing under South Korea’s rental system demands people take out large loans nearly equal to the value of an apartment. While the government plans to implement a debt service ratio indicator to protect banks, as interest rates are likely to rise, households will be left on their own.

People are also increasingly cancelling installment savings accounts before reaching maturity as they can no longer afford to put money aside for the future. In September, cancellation of these savings accounts at six major banks stood at 45.2 percent, up 2.6 percentage points from the previous year.

“Installment savings accounts are the last bastion of protection and people tend to hold them until the last minute,” a bank official told the Korea Times. “The rise in the early cancellation rate can be seen as an indication that households are facing more difficult financial situations.”

Poverty is widespread, particularly among the elderly. In February, the Korea Herald cited a Korea Institute for Health and Social Affairs report which found that poverty rates were rising for households with breadwinners aged 34 or under, and with breadwinners over 65. For the elderly, the rate increased from 63.1 percent in 2006 to 63.8 percent in 2014—the highest of any advanced industrialised country.

None of the establishment parties has any answers to this deep social and economic crisis. The main opposition Minjoo (Democratic) Party of Korea, the People’s Party, and the Justice Party are all directing the public’s anger toward Park in the hopes of boosting their chances in next year’s presidential election. This includes their supporters in labor unions like the KCTU. Their denunciations of Park are to obscure the fact that the current conditions in South Korea are not the product of a single corrupt leader, but of the bankrupt capitalist system.

Colombian government signs revised peace deal with FARC

Andrea Lobo 

The Colombian government and the Revolutionary Armed Forces of Colombia (FARC) guerrillas celebrated a new peace accord last Thursday in a sober ceremony in the capital, Bogotá. President Juan Manuel Santos’s promises that the culmination of the five-year peace talks will bring the country “progress, wellbeing, peace and concord” have already been discarded as frauds by a majority of the population.

On October 2, a previous and only slightly different peace agreement was narrowly voted down in a national referendum, with 19 percent of the total electorate voting against it and 63 percent abstaining.

The Colombian far right, dominated by ex-president Álvaro Uribe, has been strengthened as the most organized and intransigent opposition to the accord, saying that the new document remained virtually unchanged. “What will we tell the 3,5000 criminal organizations?” he asked, calling the agreement, “the worst example for the future of the country.”

Throughout his decades in positions of power, Uribe has defended the interests of the landed aristocracy that prefers to finish off or imprison the decimated FARC guerrillas, who today reportedly number 6,000, only a third of their strength under Uribe.

In spite of the continued opposition by the official “no” campaign, the FARC and the Santos administration decided to go ahead with the ceremony, hoping that “the process of consultation will be approved through the course of the next week” in Congress, where the ruling coalition holds a majority of the seats.

Recognizing that a popular vote could again reject the document, president Santos, who was awarded the 2016 Nobel Peace Prize for his role in the peace talks, declared: “The most convenient and legitimate way to consult the new accord is through Congress. It is there that all laws of the Republic ought to be discussed and approved.”

Four days after the new agreement was initially reached two weeks ago, two FARC fighters were killed and one gave himself up to government armed forces, leading the government’s top negotiator, Humberto De la Calle, to warn that the ceasefire, “is indeed fragile!”

In spite of these expressions of concern and with a year left before the 2018 elections, the Liberal Party and the others in the ruling coalition are chiefly seeking to provide a political cover for the much more unpopular measures they will implement to deal with the country’s current budget crisis and economic stagnation. Since their beginning in 2012, the peace talks have been used as a smokescreen.

On the day before the ceremony, the Ministry of Economy presented the first stage of a regressive tax reform urged by the IMF and Wall Street credit agencies, increasing the added-value tax from 16 percent to 18 percent. Economy Minister Mauricio Cáceres reported on Thursday that the IMF was highly pleased with the proposal, and that it had demanded Congress approve it by the end of the year.

These short-term measures to deal with the current budget deficit will further undermine the country’s production and its limited reductions in poverty. Over the last decade, the oil reserves were severely depleted, allowing the country to grow at an average annual rate of over 5 percent. This, however, led to an increased dependence on oil exports and shrank the manufacturing sector and labor productivity, according to a 2015 study by the Levy Economics Institute, “Finance, Foreign Direct Investment, and Dutch Disease: The Case of Colombia.”

While this growth allowed for minimal assistance programs, a small financial elite in the country got obscenely rich, turning away investments from the real economy further.

The drop in oil and other commodity prices has contributed to a 35 percent drop in export earnings since June 2015, along with the widespread deterioration in agriculture and manufacturing caused by oil exploitation and the associated free trade agreements signed by Santos with the US, the European Union and others. Now, the government is struggling to deal with massive trade and accounts deficits and a crisis in public finances.

International heads of state and other top figures, who had been enthusiastic about the peace accord before the “no” vote, have supported the new agreement with sobriety and some reluctance. One of the main backers, US Secretary of State John Kerry, pledged support, while declaring, “After 52 years of war, no peace agreement can satisfy everyone in every detail.”

The London-based Financial Times expressed great skepticism about the new accord, predicting that Uribe’s party will gain strength and “have a strong footing from which to challenge for the presidency in the 2018 election.”

“Many Colombians feel hatred towards the FARC, viewing them as drug traffickers and human rights abusers,” adds the FT. Given the surprising referendum result, which demonstrated how useless the peace deal is to give legitimacy to the current administration’s attacks against social conditions, the dominant imperialist and national bourgeois forces in Colombia are pivoting towards Uribe’s bonapartist means of imposing the costs of public debt and economic stagnation onto Colombian workers and peasants.

Donald Trump’s election and the greater challenges posed to the Colombian economy by his proposed nationalist economic policies, along with likely higher interest rates, are also feeding into a greater support among the bourgeoisie for Uribe’s ultra-reactionary program, which includes massive tax cuts for the corporations and the rich, widespread social cuts and an escalation of the war against peasants to take their lands.

The anti-deal Uribistas are hopeful for a sharp change after Trump’s election. The Democratic Center senator, José Obdulio Gaviria, said that Marco Rubio, who is allegedly close to Uribe, will try to influence Trump in what he called “the new scenery of the anti-terrorist alliance.” Gaviria then hinted at the potential extradition of 50 FARC “narco-terrorists” with pending arrest warrants.

After Trump’s election, Álvaro Uribe was quite direct and tweeted, “Congratulations to President Trump; Colombia’s narco-terrorism and Venezuela’s tyranny are the greatest enemies of our democracy.”

During his speech on Thursday, the leader of the FARC, Rodrigo Londoño, also known as Timochenko, stated: “We welcome Donald Trump’s election as the new US president, and we hope that his administration can play a leading role in favor of world and continental peace.” So far, this is the most blatant demonstration of the political bankruptcy, subservience to imperialism and right-wing character of the FARC and the future, nominally left party it proposes to found.

The current situation of economic crisis and a strengthened far-right was prepared by all the previous governments together with the current administration, which sold out Colombia’s resources, attacked jobs and wages, exempted corporations from taxes and gave the military and paramilitary units a free rein to commit atrocities across the country. The widespread unpopularity of the current government has been severely increased due to their efforts to prop up the discredited leadership of the FARC as a left cover for the government.

Ultimately, both leading political factions of the Colombian ruling class, the center-right Santistas and the far-right Uribistas, agree on social austerity and cutting import tariffs and taxes for transnational corporations and banks that exploit the country’s resources and cheap labor. They also agree that if an incorporation of the guerrillas into official politics happens, the state will still move ahead with its plans to militarize the country and the region and to continue undermining democratic rights.

One of the more significant points of the new agreement will be its separation from the Constitution, giving flexibility for its implementation. Under a “Special Jurisdiction for Peace,” the accord also gives impunity to military and business elements that were involved in the conflict and leaves the option for FARC members accused of crimes to avoid sentences by making amends to the victims.

In terms of political participation, it still gives the FARC leaders and even those accused of war crimes party financing and a chance to run for public office, but it will eliminate the 10 automatic legislative seats that the previous agreement granted them. It also sets a six-month period for disarmament.

In terms of land grants, the accord reasserts the “current authority” and “constitutional rights” that protect the private property of the rural landowners. The agreement promises to use 3 million hectares for redistribution among landless peasants and war victims, under the cloak of “investments in the countryside with an entrepreneurial vision.”

Among the larger changes made in the revised, 310-page document is a further elaboration of the process of listing assets of the guerrillas that will be used for reparations, along with a detailed description of the “agricultural colonies” which are to serve as special prisons for the FARC members found guilty of crimes.

British government steps up attacks on state pensions

Danny Richardson & Robert Stevens

The ruling Conservatives are preparing the ground to scrap safeguards to the British state pension known as the “Triple Lock.”

The Triple Lock was introduced by the 2010 Conservative/Liberal Democrat coalition under then Prime Minister David Cameron. It sees pensions rise in April of each year in line with one of three previously set criteria—a rise in inflation, an increase in average earnings or a set increase of 2.5 percent if the other two are less than this figure. Historically, pensions were linked to inflation rather than earnings, resulting in a steady decline of a state pension that was always set at a meagre amount.

A pro-austerity government was forced to adopt the Triple Lock under conditions of growing concern over pensioner poverty and the reliance of the Tories on an aging voter base. The lock was retained and formed part of the Conservative election manifesto for 2015, which promised to extend the Triple Lock until 2020.

Earlier this month, Parliament’s Work and Pensions Select Committee unanimously concluded that the retention of the Triple Lock, which it noted cost an additional £98 billion in the last tax year, was “unsustainable and unfair on younger families.” They advised the government to scrap the lock and tie any future increases to a single annual rises in average earnings.

The committee is chaired by right-wing Labour Party MP Frank Field. Labour has a further three members on the committee, the Conservatives six and the Scottish National Party one.

The attacks on pensioners are being cynically advanced as necessary in order to develop policies in support of “working families.” Field said the younger generation could not continue to support pensioners who have “fared relatively well in recent years.”

“They’ve accepted that unfairness so that we could largely eliminate pensioner poverty,” he asserted. “Fairness now means that the pendulum swings back in favour of working families, so they do not continue to have cuts—real cuts—in living standards, while we further advance the interests of pensioners.”

Baroness Lady Altmann, the Conservative peer and former pensions secretary, who previously worked with all three main political parties in the past on pensions issues, including the implementation of the Triple Lock, resigned within days of Theresa May taking over as prime minister from Cameron. In what was described by the media as “a secret memo”, she called for the Triple Lock to be scrapped. The memo stated that the pension guarantee had fulfilled its purpose and with the government moving to enforce Brexit, following June’s referendum vote to leave the EU, it would “not be affordable if the economy hits trouble.”

In reply, a government spokesman said it was still committed to the Triple Lock until at least 2020. However, under conditions of major economic crisis and dislocation as a result of Brexit, attacks on what remains of the social gains of the population will be intensified.

In his Autumn Statement, Chancellor Phillip Hammond said in relation to the state pension, “As we look ahead to the next parliament, we will need to ensure we tackle the challenges of rising longevity and fiscal sustainability.” While warning that cuts are on the agenda, Hammond maintained that pensions would be ring-fenced until 2020.

However, this is just for public consumption, with many indications that the government is preparing attacks on the state pension well ahead of that date.

On Sunday, Pensions Minister Damian Green refused to commit to the Triple Lock long-term. “We’ll need to see what happens to the economy between now and 2020, apart from anything else,” he told ITV’s Peston on Sunday .

Tory MP Stephen Crabb, another former work and pensions secretary, said last week, “What we need to spend the next three years doing is explaining very carefully what the fiscal impacts, the spending challenge will be arising from continuing with the triple lock throughout the next parliament and seeing whether actually we can achieve some kind of consensus in society about changing it.”

Crabb pointed out that lowering the increase of the Triple Lock to 1.5 percent would slash billions from the pension budget. The pensions bill accounts for £108 billion annually—around 42 percent of the welfare budget.

Other leading Tories promoting the ending of the Triple Lock include Iain Duncan Smith, a former party leader and former welfare secretary, and Lord Willetts.

On Monday, it emerged that the Department for Work and Pensions is seeking to significantly increase the age at which people are eligible for the state pension.

DWP documents suggest that people currently aged 22-30 would only qualify for a state pension at the age of 70. The document said a “more aggressive” timetable on the state pension age (SPA) was required. Even before such proposals, that would adversely affect millions of workers aged under 55, the SPA is due to rise to 66 between 2018 and 2020, to 67 between 2026 and 2028, and then to 68 between 2044 and 2046.

These attacks are being demanded by the media mouthpieces of the ruling elite. In an editorial, “Time to pick the triple lock on British pensions,” the Financial Times advised, “The best reform is probably to drop the 2.5 percent part of the lock.”

The implications for pensioners are disastrous if the recommendations of the Work and Pensions Select Committee are imposed. A report published by the Trades Union Congress in July of this year disclosed that between 2007 and 2015 real wages in the UK fell by 10.4 percent, a figure equalled only by Greece. If that fall in wages was the criteria used to compile pension increases—under the system recommended by the Works and Pensions Select Committee—pensioners would have gone without any rise in the last eight years.

The Age Concern charity rejected Altmann’s claim that the Triple Lock had served its purpose. Director Caroline Abrahams stated, “It is necessary to see the bigger picture, research shows that the state pension is still the largest source of income for most older people in the UK… 1.6 million older people still live in poverty in the UK.”

The claim that pensioners have been safeguarded at the expense of sections of workers is a fraud. Millions of pensioners still live in dire poverty. The Triple Lock does not apply to benefits relied on by an increasing number of pensioners: Pension Credit, Attendance Allowance or the winter fuel payment. In April this year, Age UK found that:

• One in seven pensioners (1.6 million or 14 percent) live in poverty, having incomes of less than 60 percent of median income after housing costs.

• A further 1.2 million pensioners have incomes just above the poverty line (more than 60 percent but less than 70 percent of median income).

Over the last decade, successive governments have impoverished millions of workers of all ages to impose the burden of the post-2008 bailout of the banks and super-rich on their shoulders. This has included robbing them of the hard-won rights to a decent pension and secure retirement. Last week, the Pensions and Lifetime Savings Association reported that nearly 14 million workers are facing a shortfall in their retirement income.

In 2011, two million public-sector workers struck against government’s attack on their pensions. Within a few days of a mass demonstration in London most of the unions capitulated and every other union soon after.

In the steel industry, the unions have given away their members’ hard won pension entitlements as part of a package that included job losses and inferior working conditions at plants across the country. This is the norm in every industry.

Poverty on the rise in Europe

Elisabeth Zimmermann

The results of the Social Justice Index 2016 were published by the Bertelsmann Foundation last week. The index is an annual study of social conditions in Europe that has been conducted for the past several years. The results provide a devastating indictment of the austerity policies imposed by the European Union (EU), led by Germany, in the face of widespread resistance since the global financial crisis of 2008.

According to the study, one in four citizens is affected by poverty or social exclusion. This is a total of 118 million people. The percentage of people who are poor in spite of having a full-time job rose to 7.8 percent in 2015, an increase of 0.6 percent from 2013. This means that growing numbers of people are employed in the low-wage sector.

This also applies to Germany, which came in seventh place in the Social Justice Index, even though it is the largest economic power. The percentage of those in Germany who live in poverty despite having a full-time job rose from 5.1 percent in 2009 to 7.1 percent in 2015, a consequence of the massive low wage sector, which emerged following the Agenda 2010 reforms and Hartz welfare changes under the SPD-Green government of Gerhard Schröder and Joschka Fischer.

The rise of the so-called working poor, meaning those who are unable to live despite working, and the potential for a social uprising are concerns occupying the authors. As the chief executive of the Bertelsmann Foundation Art de Geus commented, “A growing percentage of people who cannot live permanently from their work undermines the legitimacy of our economic and social order.”

Although the study’s authors seek to identify a few minimal improvements—such as the decline in the official unemployment rate in the EU from 10.4 percent in 2014 to 9.6 percent in the following year and the rise in the employment rate from 64.8 to 65.8 percent—the numbers showing increased unemployment and poverty point to another trend.

In a brief summary of the results, the study therefore stated, “Social justice in Europe in 2016: Improvements on shaky ground.”

The risk of poverty within the EU remains high. As in 2008, the figure in 2015 stood at 23.7 percent. Conditions for children and young people are especially critical, particularly in southern Europe. The study states, “However, seven years after the outbreak of the world economic crisis, chances for participation for people in most European states—with few exceptions—have substantially worsened compared to prior to the crisis.”

Among the 28 EU states, Greece remains at the bottom of the Social Justice Index. The gap between Romania (ranked 27) and Bulgaria (ranked 26) has in fact grown.

But even conditions in the northern European countries of Sweden, Finland and Denmark, which captured first, second and third place respectively, have deteriorated. “Compared against the conditions in 2007-08, these states have suffered setbacks on matters of social justice,” the study states.

The social gulf between northern and southern Europe continues to be immense. This is above all due to the horrifyingly high poverty figures in Greece and Spain. In Spain, the poverty rate is 28.6 percent and in Greece it is 35.7 percent. The percentage of children and young people affected by poverty in these countries is even higher.

One particular focus of the study is the high rate of youth unemployment. 4.6 million young people in the EU are unemployed. In 2015, 20.4 percent of young people had no work, an increase of almost 5 percentage points since 2008.

Children and young people are also affected most severely by poverty and social exclusion. This applies to 25 million children and young people under the age of 18. “In the vast majority of EU states, chances for children and young people since 2007-08 have—sometimes drastically—deteriorated,” the study stated. “The situation in the crisis states of southern Europe, Italy, Greece and Spain, as well as in the southeast European countries Bulgaria and Romania continues to remain very critical,” it added.

Romania leads the way in the percentage of children under 18 living in poverty with 46.8 percent, followed by Bulgaria with 43.7, Greece (37.8 percent) and Hungary (36.1 percent). But also in Spain (34.4 percent), Italy (33.5 percent), Britain (30.3 percent) and Portugal (29.6 percent) the share is very high. In Greece, the number of children facing severe material deprivation has almost tripled since 2007. It has risen from 9.7 to 25.7 percent due to the austerity dictates of the troika, the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF).

The study explained, “Material deprivation means that the people affected must deal with severe deprivation and can no longer financially afford basic necessities of daily life (i.e., an appropriately heated apartment or a telephone).” It frequently also means that families can no longer provide adequate nourishment and medications.

In the countries hit hardest by the euro crisis, Italy, Spain, Greece and Portugal, the number of children in poverty or facing social exclusion has risen by 1.1 million since 2008.

Another section of the study focused on so-called NEETs (not in education, employment or training). This includes young people between ages 20 and 24 not attending school, who have no work and are not in professional training. Within the EU, the average rate was 17.3 percent, compared to 15 percent in 2008. Italy (31.1 percent) and Spain (22.8 percent) were well above the EU average.

The total number of unemployed young people in Spain and Greece amounted to almost 50 percent. In Italy, despite a modest decline, it was still 40.3 percent.

The high numbers of unemployed and impoverished young people without any future prospects is a devastating indictment of the EU’s austerity policies pursued for years. European governments, regardless of the parties involved, know no other policy than the offloading of the economic crisis onto the backs of the working class. They are recouping hundreds of billions of euros used to bail out the banks and corporations by destroying jobs, cutting wages and slashing social welfare. The pseudo-left Syriza government in Greece has been especially brutal in this.

The Bertelsmann study commented on the levels of poverty within the EU, but says nothing about its origins and those who are politically responsible. Instead, it appeals to the EU Commission and governments of the EU states to ensure greater social justice. But nothing could be more delusional than expecting a more social policy from Europe’s capitalist governments. The main direction of their policies is the domestic and foreign build-up of the state apparatus and the preparation of new wars. This is how they respond to social tensions and the anger over social inequality.

"No" vote in Italian referendum could spark banking crisis

Nick Beams 

The outcome of next Sunday’s Italian referendum, in which Prime Minister Matteo Renzi is seeking to reduce the size and power of the Senate, has the potential to set off a crisis in the Italian banking system that possibly could spread to the euro zone as a whole.

Renzi has championed the referendum, even threatening at one stage to resign if it does not get passed. He is seeking to move to a more authoritarian government with greater capacity to push through pro-business, neo-liberal reforms. The financial fallout from a No vote could be immediate, calling into question a rescue plan for the troubled Monte dei Paschi di Siena bank that went into operation yesterday.

Under the rescue plan, there would be a €5 billion debt for equity swap, coupled with an injection of fresh capital through the placement of shares on the market.

Monte dei Paschi, the world’s oldest bank, is the most prominent expression of the deteriorating situation for the entire Italian banking system, having been the worst performer in European Central Bank (ECB) stress tests conducted last July.

The rescue plan is seen as part of a broader agenda in which Renzi would promote “market solutions” for the €4 trillion Italian banking system, which is burdened with €360 billion worth of impaired loans, €200 billion of which are considered to be non-performing. This compares with a total of €225 billion of equity in the banking system.

However, finance capital is demanding that in return for an injection of capital the Renzi government must push through the restructure program it is demanding, including the consolidation and elimination of many smaller banks, which play a key role in support of small businesses, and a deepening assault on the social position of the working class.

Summing up the outlook of key sections of finance, a note published earlier this month by Peter Donisanu, global research assistant at the US bank Wells Fargo, said the Renzi reforms would “make it easier to implement important legislation (such as measures to assist the country’s ailing banking sector) without the threat of a government collapse during periods of political disagreement.”

A No vote in the referendum would send a signal that the Renzi government cannot carry through this agenda. According to Goldman Sachs, not only would the rescue plan for Monte dei Paschi be under threat but there could be a domino effect for other banks that have to raise billions of euros in order to recapitalise.

The bank itself has cast considerable doubt over the rescue plan in a 146-page prospectus published yesterday outlining the debt swap that forms its key component. “In light of the considerable uncertainty surrounding completion of different parts of the overall deal, there is a risk that the deal itself may not succeed and cannot be concluded,” it said.

Shares in the bank fell a further 13.8 percent yesterday and have lost 86 percent of their value over the past year.

The outcome of the referendum is still unclear, with opinion polling prohibited for the last three weeks of the campaign. But the most recent poll showed the No vote some 7 percentage points ahead. The No campaign, which comprises a group of right-wing nationalist and populist parties, with the Five Star Movement of comedian Beppe Grillo playing a prominent role, has received a major boost from the victory of Donald Trump in the US presidential election. They have hailed the Trump ascendancy as a victory for the people against the political and financial elites.

The possible ramifications of a No vote extend throughout the Italian banking system and to the European financial structure as a whole.

“Sunday’s referendum on constitutional reform is Italy’s Brexit moment and a No vote would send tremendous shockwaves through the markets and the banking system. It could also heap pressure on the euro,” Neil Wilson of ETC Capital told Reuters.

Defeat of the referendum would make the overhaul of Italy’s banking system “a lot tougher” as investors would be deterred from pumping in the fresh capital that is required. “The risk of contagion spreading through the rest of Italy’s banks and other European lenders is high,” Wilson said.

The alternative to the Renzi market-based plan is the “resolution” agenda of the European Union. This involves winding up banks by imposing losses on both equity and debt investors. Implementation of this plan would create massive political opposition because many individual Italian bank retail customers have been lured into purchases of shares and debt as an attractive alternative to savings products.

A major report in the Financial Times published on Sunday warned that as many as eight of Italy’s troubled banks could go under if Renzi’s referendum is defeated. Apart from Monte dei Paschi, the list includes three medium-sized banks and four small banks that were rescued last year.

Citing “senior bankers and officials,” the report said the worst-case scenario was where the failure of the Monte dei Paschi recapitalisation translated “into a wider failure of confidence in Italy” which would imperil a “market solution” for ailing banks. They warned that “contagion” from smaller bank failures “could threaten a €13 billion capital increase at Unicredit, Italy’s largest bank by assets and its only globally significant financial institution, planned for early 2017.”

The banking crisis is not confined to Italy but extends throughout Europe. As the ECB noted in its Financial Stability Review published last week, the “euro banking sector remains vulnerable.” The main structural problems for bank profitability” related to the “large stock of non-performing loans in a number of countries” as well as “over-capacity in some euro-area banking sectors.”

The problems go back to the response of European authorities to the global financial crisis of 2008. Fearful that recognition of financial losses and capital restructuring would weaken the position of European banks vis a vis their powerful rivals, particularly US financial institutions, they hoped that a return to economic growth would allow the banks to overcome their problems.

But the hoped-for economic upturn has not materialised and consequently, according to the ECB review, bank profitability has been adversely impacted by a “low growth and interest rate environment.”

Nowhere is this more sharply expressed than in Italy. Gross domestic product per head is 9 percent below where it was in real terms in 2007 and remains near levels achieved two decades ago. Unemployment is running at 11 percent and is close to 40 percent among young people. Family income is below where it was in 2007.

It is these social and economic conditions that have helped fuel the rise of right-wing populist movements, as in the US, Britain, France and internationally, on the basis of their proclaimed hostility to the political and financial establishment, and to official “left” parties whose response to the financial crisis has been to move ever further to the right.

Israel carries out airstrikes against ISIS ally in Syria

Jean Shaoul 

On Sunday, Israel Defence Forces (IDF) dropped 10 1-ton bombs on a compound belonging to a Syrian Islamist group, the Khalid ibn al-Walid Army, previously known as the Yarmouk Martyrs Brigade. The bombing took place in Syria’s Quneitra Governorate in the southwest of the country, adjacent to its border with Israel.

The IDF said the group was linked to Islamic State in Iraq and Syria (ISIS) and that the purpose of the airstrikes was to “prevent the return of terrorists to a facility that constitutes a fundamental threat to the region.”

For more than three years, various local Islamist groups in ever shifting alliances have fought for control over the area. One of these is the Khalid ibn al-Walid Army/Yarmouk Martyrs Brigade, once affiliated to Islamic State in Iraq and Syria (ISIS), which is supposedly the main target of Washington’s ongoing military intervention in Iraq and Syria.

The Yarmouk Martyrs Brigade’s allies, Jaysh al-Islam (Army of Islam) and the Islamic Muthanna Movement, with whom it has merged to form the Khalid ibn al-Walid Army, are bitter opponents of the Jabhat Fateh al-Sham, formerly the Al Nusra Front, which is linked to Al Qaeda.

Syrian regime forces control only three areas near the border: the city of Quneitra, almost totally destroyed in the 1973 Arab-Israeli war, the Druze village of Khader, and the eastern slopes of Mount Hermon.

According to a report earlier this year in Ha’aretz, the main concern from an Israeli perspective is the Yarmouk Martyrs Brigade, which was responsible for seizing 21 Filipino soldiers serving with the United Nations peacekeeping force on the Syria/Israel border in 2013. In June, the US State Department designated the Brigade, which is composed of local clans in southern Syria with few outsiders or foreign fighters in its ranks, as a “global terrorist entity.”

These warring Islamist groups have largely operated unhindered by Israel, and at least some of them—supposedly the more “moderate”—are widely believed to operate under cover from the IDF, which has provided them with food, medical aid and other assistance. Syrian pro-regime media frequently speak of an alliance between Israel and the Al Nusra Front. Tel Aviv has vehemently denied this even though in July 2015, the then Defence Minister Moshe Ya’alon admitted that Israel had been aiding Islamist groups, including Al Nusra.

Israel for its part views the fighting between different Islamist groups and the breakup of Syria as preferable to control by Syrian President Bashar al-Assad’s forces and his allies, the Iranian Revolutionary Guards and the Lebanese militant group, Hezbollah.

According to the Israeli army, the militants were training at the site that served as the operational base for an attack earlier on Sunday by the Islamists on an IDF reconnaissance force operating along the Syrian border. The issue is whether the brigade spotted an opportunity, or deliberately planned the attack as a means of getting Israel directly involved in the war. Either way, it would serve to boost their credentials against their rivals to be seen as fighting the Palestinians’ hated occupier.

Irrespective of the motivation, the incident led to an exchange of fire and an Israeli drone attack on the militants’ vehicle that is believed to have killed four people.

The Israeli army has sought to present this as a response to an attack on its forces. However, its own words belie this and indicate that the IDF was preparing an operation on behalf of “its” rebels—Al Nusra/Al Qaeda forces—against the Brigade. Ha’aretz cited a senior officer as saying, “The terrorists are from Shuhada [Martyrs] al-Yarmouk, with all the significance that organization’s name carries. The Israeli forces didn’t lie in ambush by chance.”

Nitzan Nuriel, former director of the counterterrorism bureau at the prime minister’s office, rejected the notion that this was an ISIS-directed offensive against Israel. He believed it to be a local decision, adding that Israel’s response was appropriate and reinforced the message, “Don’t mess with us.”

Prime Minister Benjamin Netanyahu praised the IDF and promised that Israel “won’t allow Islamic State figures or other enemy actors, under the cover of the war in Syria, to set up next to our borders.”

All the regional powers have intervened in the more than five-year-long war in Syria overtly, or through proxies or covert action, in pursuit of their own often conflicting agendas. Israel has launched around 100 airstrikes against Syrian army artillery positions in response to largely errant shells or rockets launched by either Syrian regime forces or the insurgents that have fallen on its side of the Golan Heights. The Syrian regime has responded only twice, as far as is publicly known.

Israel has also launched dozens of airstrikes against Syrian government positions and Hezbollah since 2013, supposedly targeting arms shipments to Hezbollah, as well as targeted assassinations of senior Hezbollah figures. Hezbollah has played a key role in fighting the ever-shifting alliance of Islamist groups that includes Islamic State, Al Nusra, Jeish al-Fatah and Ahrar al-Sham.

At the same time, Israel has, according to a UN Disengagement Observer Force (UNDOF) report last year, been in regular contact with the Islamist proxy forces sponsored by Saudi Arabia, Qatar, Turkey and the CIA since May 2013. UNDOF itself has come under repeated and lethal attacks from Al Nusra and other groups.

Last year, several Israeli officials acknowledged that Russia and Israel were coordinating their aircraft over Syria, an admission of what has long been suspected: that Israel has been intervening covertly in the Syrian conflict.

A few months ago, Netanyahu acknowledged that Israel’s air force had operated undisturbed in Syrian air space in violation of Syria’s sovereignty and its 1974 agreement with Syria following the October 1973 war. Foreign media have frequently reported that the IDF have used both fighter jets and drones for reconnaissance missions.

The increasingly close relations between Israel and the Islamist forces coincided with the start of oil exploration by a US-Israeli corporation in Syria’s Golan Heights, seized by Israel in the June 1967 war and later illegally annexed to Israel.

In April this year, Israel held an unprecedented cabinet meeting in the Golan Heights. Netanyahu declared, “The Golan Heights will remain in the hands of Israel forever,” and “Israel will never withdraw from the Golan Heights.” He apparently planned the meeting to pre-empt any possibility of Israel returning the Golan as part of a future peace deal for Syria.

Sunday’s airstrikes were the first time that Israel has intervened in an open clash with forces linked to ISIS. It highlights the increasing danger of the regional powers, including a nuclear-armed Israel, intervening directly in the war. It comes in the wake of two other developments.

First, Israel is to take delivery next month of its first Lockheed Martin F-35s that can evade enemy radar while flying at supersonic speeds and can successfully target Iranian facilities. Second, a US-backed extremist militia, previously designated as a terrorist organisation, in southern Syria, in Quneitra province, is to be armed with portable surface-to-air missiles capable of shooting down Syrian aircraft as well as Russian warplanes that have played a key role in providing air cover for the Syrian army against the Al Qaeda-linked “rebels.”

These developments are part of a broader push by the US and Israel to create “facts on the ground,” under conditions where the Assad regime—with Russia and Iran’s backing—has been gaining the upper hand, before Donald Trump, who has indicated that he would seek to improve ties with Russia and reduce US involvement in the Middle East, assumes power in January.

The political issues in the campaign for a recount in the US elections

Joseph Kishore & David North

Three weeks after the US presidential election, the political crisis triggered by the initiative to recount the vote in Wisconsin, Michigan and Pennsylvania—three states that helped ensure Trump’s victory over Clinton—is escalating. This initiative coincides with the continued growth of Hillary Clinton’s lead in the popular vote, which now stands at more than 2.2 million. This is, by far, a historically unprecedented margin for a candidate who did not also win in the Electoral College.

Jill Stein, the presidential candidate of the Green Party, initiated the recount campaign last week following a media report featuring University of Michigan professor and cyber security expert J. Alex Halderman. In a thoroughly unprincipled use of right-wing arguments to legitimize the recount effort in the eyes of the Clinton campaign and the Democratic Party—which did not intend to contest the election results—Halderman claims that a team he leads found persuasive evidence that electronic voting machines in these three states may have been hacked by Russia, a statement that he repeated in an affidavit supporting Stein’s petition for a recount in Wisconsin.

On Saturday, the Clinton campaign announced that it would participate in the process begun by Stein. Trump responded on Sunday by not only denouncing the recount but also charging, without any factual substantiation, that he also won the popular vote if the “millions” of illegal votes for Clinton were discounted.

The demand for a recount is a legitimate political response to a situation in which the votes in the states in question were particularly close (a Trump margin of 22,000 in Wisconsin, 10,000 in Michigan and 68,000 in Pennsylvania).

Much more is involved, however, than a technical procedure in these three states. The recount campaign has exposed political fissures within the ruling elite, complicated efforts to carry out a seamless transition to a Trump administration, and intensified the mood of popular discontent and crisis that has been building since Election Day.

The response of the Obama administration to the recount says a great deal about its indifference toward basic democratic principles. In comments to the New York Times reported on Sunday, a senior White House official insisted on the “overall integrity of the electoral infrastructure,” which ensured results that “accurately reflect the will of the American people.”

This is obviously untrue. The election of Trump does not represent the “will of the people.” He lost the popular vote by a substantial margin. Moreover, Trump campaigned on the basis of demagogic lies, portraying himself as a defender of the working class.

The Democratic Party is far more worried about provoking opposition among workers and youth than it is about the tactical differences it has with the Republicans and Trump. On basic elements of class policy, the two parties are, as the CIA agent-in-chief Obama put it, “on the same team.”

The Green Party, rather than denouncing the undemocratic character of the election process, is justifying its recount initiative with the claim that Russian hacking may have affected the outcome of the vote. Instead of seeking to raise the democratic consciousness of the voters, the Greens—in a manner typical of capitalist political parties—employ reactionary arguments that are pitched toward the interests of the ruling class. In effect, the Greens are arguing that they are seeking a recount not to prevent Trump from stealing the election, but rather to stop Putin from interfering in American politics.

There is an unstated premise in the Green Party initiative—and Stein has said nothing to contradict this—that the election of Clinton would have spared the United States all the unhappiness that will follow from Trump’s victory. This is an exercise in political deception, which portrays Trump as some sort of dreadful and accidental departure from the familiar grooves of American democracy.

It does not seem to occur to the Greens that the result of the 2016 election is, in objective terms, the expression and outcome of a profound crisis of American society. Even if Trump fell short of Clinton in the popular vote, the fact that he received 62 million votes is a devastating condemnation of everything that the Democratic Party and the Obama administration represent. What level of social distress and dysfunction could lead so many millions of people, including many workers, to give their vote to this reactionary charlatan?

In what way would a Clinton presidency contribute to surmounting the economic, political and social crisis that provided the objective impulse for the rise of Trump? Trump's election is the product of twenty-five years of unending war and fifteen years of the “war on terror,” accompanied by historic levels of social inequality and the erosion of basic democratic rights. It is also a verdict on eight years of the Obama administration, whose policies Clinton pledged to continue. 

The Greens, far from advancing an alternative to the Democratic Party, are positioning themselves as its most consistent defenders. Backed by a host of organizations that operate around the Democratic Party and supported the Greens in the elections, Stein is seeking to elevate the role of the Green Party as a political instrument of the ruling class in containing and smothering social opposition.

Under conditions of a historic crisis of capitalism, the working class must advance its own perspective and not allow itself to be corralled behind one or another faction of the ruling class and its political representatives.

Whatever the outcome of the recount, the election of 2016 has inaugurated a new period of convulsive political upheavals within the United States and beyond its borders. Even in the very unlikely event that the votes in Wisconsin, Michigan and Pennsylvania are overturned, who can seriously believe that such an outcome would be accepted by Trump and his most ruthless backers?

There is no easy way out of the crisis of American and world capitalism. The critical question for workers and young people is to break completely with the entire political apparatus of the ruling class and advance an independent response based on a socialist, internationalist and revolutionary program. We urge our readers and supporters to draw the necessary political conclusions from the election of 2016 and join the Socialist Equality Party.

US-backed “rebels” face rout in Aleppo

Bill Van Auken

In what is being described as the worst defeat for US-backed forces since the outset of the war for regime-change in Syria nearly six years ago, government troops, backed by forces from the Lebanese Hezbollah movement and Iraqi Shia militias, have retaken over 40 percent of eastern Aleppo, the last urban stronghold of the so-called “rebels.”

According to a report from Iran, which, together with Russia, is a principal backer of the Syrian government of President Bashar al-Assad, Syrian army units have conquered 20 square kilometers out of the total of 45 square kilometers making up eastern Aleppo.

The government advance has been extremely rapid, suggesting a rout of the US-backed militias. The ground offensive follows two weeks of intense Syrian air strikes, launched after a month-long cessation of bombing by both Syrian and Russian warplanes.

Syrian government media reported that the army had captured the Sakhour area and was clearing it of mines. Government control of this part of the city would effectively split the area held by the “rebels” in two.

The government advance has led to tens of thousands of civilians fleeing the areas controlled by the Islamist militias for safety in both government-controlled western Aleppo and the Sheik Maqsoud district held by the Kurdish YPG militia.

The YPG has joined in the offensive against eastern Aleppo, further complicating the US intervention in Syria. While Washington has backed the Islamist militias fighting the Assad government, it has also sought to use the Kurdish YPG as its principal proxy force in the US military campaign against the Islamic State (also known as ISIS) in Syria.

Turkey, Washington’s NATO ally in the region, has also sent troops into Syria, ostensibly to combat ISIS, but directed principally at preventing the Syrian Kurdish forces from consolidating control over territory near the Turkish border. As a result, on multiple fronts Washington is backing forces that are fighting against each other.

The civilians fleeing eastern Aleppo told stories of the horrors of the Russian-Syrian government bombing campaign as well as the repression and terror carried out by the Islamists controlling the neighborhoods in the east. It has been widely reported that the US-backed militias previously shot civilians trying to leave.

Before the war began in 2011, Aleppo was Syria’s second-largest city as well as its commercial capital.

Western Aleppo, where approximately 1.5 million people live--as opposed to less than 200,000 in the “rebel”-held eastern part of the city--is under the control of the Syrian government. It has come under indiscriminate mortar fire from the US-backed rebels aimed against the civilian population.

Both the Russian media and the Washington Post reported Monday that US Secretary of State John Kerry has mounted a new campaign aimed at brokering a ceasefire in Aleppo. While couched in humanitarian rhetoric, the principal aim of these efforts is to prevent the complete collapse of the US-backed militias and the consolidation of the Assad government’s control over all of Syria’s major population centers.

The media and Obama administration officials have violently denounced the Syrian government and its ally Russia for the siege of eastern Aleppo. The situation today, however, is the reverse of what prevailed a year ago when the so-called rebels were laying siege to western Aleppo, which faced an imminent humanitarian catastrophe. At that time, there were no humanitarian concerns expressed by Washington.

US State Department spokesman John Kirby on Monday denied that Kerry was engaged in “frantic or frenetic, last-ditch efforts” to salvage the US-backed regime-change operation before the fall of Aleppo and the inauguration of Donald Trump, who has expressed disagreements with current US policy.

Kirby acknowledged that the continuing sticking point in attempts to reach a new agreement with Moscow was Washington’s failure to keep its pledge to separate supposedly “moderate rebels” from the fighters of the al-Nusra Front, the Syrian affiliate of Al Qaeda.

“That is a difficult thing,” said the State Department spokesman. “We’ve talked about that for many months, this marbleization, if you will, of--the marbling of opposition groups with al-Nusra.”

The “difficulty” is that the only significant armed opposition forces in the regime-change operation orchestrated by Washington and its allies consist of al-Nusra and ISIS, both offshoots of Al Qaeda, which for the decade-and-a-half of the “war on terror” has been portrayed as the foremost threat to the security of people of the US and the world.