The United States of Inequality

Rajan Menon

So effectively has the Beltway establishment captured the concept of national security that, for most of us, it automatically conjures up images of terrorist groups, cyber warriors, or “rogue states.”  To ward off such foes, the United States maintains a historically unprecedented constellation of military bases abroad and, since 9/11, has waged wars in Afghanistan, Iraq, Syria, Libya, and elsewhere that have gobbled up nearly $4.8 trillion.  The 2018 Pentagon budget already totals $647 billion — four times what China, second in global military spending, shells out and more than the next 12 countries combined, seven of them American allies.   For good measure, Donald Trump has added an additional $200 billion to projected defense expenditures through 2019.

Yet to hear the hawks tell it, the United States has never been less secure.  So much for bang for the buck.

For millions of Americans, however, the greatest threat to their day-to-day security isn’t terrorism or North Korea, Iran, Russia, or China.  It’s internal — and economic.  That’s particularly true for the 12.7% of Americans (43.1 million of them) classified as poor by the government’s criteria: an income below $12,140 for a one-person household, $16,460 for a family of two, and so on… until you get to the princely sum of $42,380 for a family of eight.

Savings aren’t much help either: a third of Americans have no savings at all and another third have less than $1,000 in the bank.  Little wonder that families struggling to cover the cost of food alone increased from 11% (36 million) in 2007 to 14% (48 million) in 2014.

The Working Poor

Unemployment can certainly contribute to being poor, but millions of Americans endure poverty when they have full-time jobs or even hold down more than one job.  The latest figures from the Bureau of Labor Statistics show that there are 8.6 million “working poor,” defined by the government as people who live below the poverty line despite being employed at least 27 weeks a year.  Their economic insecurity doesn’t register in our society, partly because working and being poor don’t seem to go together in the minds of many Americans — and unemployment has fallen reasonably steadily.  After approaching 10% in 2009, it’s now at only 4%.

Help from the government?  Bill Clinton’s 1996 welfare “reform” program, concocted in partnership with congressional Republicans, imposed time limits on government assistance, while tightening eligibility criteria for it. So, as Kathryn Edin and Luke Shaefer show in their disturbing book, $2.00 a Day: Living on Almost Nothing in America, many who desperately need help don’t even bother to apply.  And things will only get worse in the age of Trump.  His 2019 budget includes deep cuts in a raft of anti-poverty programs.

Anyone seeking a visceral sense of the hardships such Americans endure should read Barbara Ehrenreich’s 2001 book Nickel and Dimed: On (Not) Getting By in America.  It’s a gripping account of what she learned when, posing as a “homemaker” with no special skills, she worked for two years in various low-wage jobs, relying solely on her earnings to support herself.  The book brims with stories about people who had jobs but, out of necessity, slept in rent-by-the-week fleabag motels, flophouses, or even in their cars, subsisting on vending machine snacks for lunch, hot dogs and instant noodles for dinner, and forgoing basic dental care or health checkups.  Those who managed to get permanent housing would choose poor, low-rent neighborhoods close to work because they often couldn’t afford a car.  To maintain even such a barebones lifestyle, many worked more than one job.

Though politicians prattle on about how times have changed for the better, Ehrenreich’s book still provides a remarkably accurate picture of America’s working poor.  Over the past decade the proportion of people who exhausted their monthly paychecks just to pay for life’s essentials actually increased from 31% to 38%.  In 2013, 71% of the families that had children and used food pantries run by Feeding America, the largest private organization helping the hungry, included at least one person who had worked during the previous year.  And in America’s big cities, chiefly because of a widening gap between rent and wages, thousands of working poor remain homeless, sleeping in shelters, on the streets, or in their vehicles, sometimes along with their families.  In New York City, no outlier when it comes to homelessness among the working poor, in a third of the families with children that use homeless shelters at least one adult held a job.

The Wages of Poverty

The working poor cluster in certain occupations.  They are salespeople in retail stores, servers or preparers of fast food, custodial staff, hotel workers, and caregivers for children or the elderly.  Many make less than $10 an hour and lack any leverage, union or otherwise, to press for raises.  In fact, the percentage of unionized workers in such jobs remains in the single digits — and in retail and food preparation, it’s under 4.5%.  That’s hardly surprising, given that private sector union membership has fallen by 50% since 1983 to only 6.7% of the workforce.

Low-wage employers like it that way and — Walmart being the poster child for this — work diligently to make it ever harder for employees to join unions.  As a result, they rarely find themselves under any real pressure to increase wages, which, adjusted for inflation, have stood still or even decreased since the late 1970s. When employment is “at-will,” workers may be fired or the terms of their work amended on the whim of a company and without the slightest explanation. Walmart announced this year that it would hike its hourly wage to $11 and that’s welcome news.  But this had nothing to do with collective bargaining; it was a response to the drop in the unemployment rate, cash flows from the Trump tax cut for corporations (which saved Walmart as much as $2 billion), an increase in minimum wages in a number of states, and pay increases by an arch competitor, Target.  It was also accompanied by the shutdown of 63 of Walmart’s Sam’s Club stores, which meant layoffs for 10,000 workers.  In short, the balance of power almost always favors the employer, seldom the employee.

As a result, though the United States has a per-capita income of $59,500 and is among the wealthiest countries in the world, 12.7% of Americans (that’s 43.1 million people), officially are impoverished. And that’s generally considered a significant undercount.  The Census Bureau establishes the poverty rate by figuring out an annual no-frills family food budget, multiplying it by three, adjusting it for household size, and pegging it to the Consumer Price Index.  That, many economists believe, is a woefully inadequate way of estimating poverty.  Food prices haven’t risen dramatically over the past 20 years, but the cost of other necessities like medical care (especially if you lack insurance) and housing have: 10.5% and 11.8% respectively between 2013 and 2017 compared to an only 5.5% increase for food.   

Include housing and medical expenses in the equation and you get the Supplementary Poverty Measure (SPM), published by the Census Bureau since 2011.  It reveals that a larger number of Americans are poor: 14% or 45 million in 2016.

Dismal Data

For a fuller picture of American (in)security, however, it’s necessary to delve deeper into the relevant data, starting with hourly wages, which are the way more than 58% of adult workers are paid.  The good news: only 1.8 million, or 2.3% of them, subsist at or below minimum wage.  The not-so-good news: one-third of all workers earn less than $12 an hour and 42% earn less than $15.  That’s $24,960 and $31,200 a year. Imagine raising a family on such incomes, figuring in the cost of food, rent, childcare, car payments (since a car is often a necessity simply to get to a job in a country with inadequate public transportation), and medical costs.

The problem facing the working poor isn’t just low wages, but the widening gap between wages and rising prices.  The government has increased the hourly federal minimum wage more than 20 times since it was set at 25 cents under the 1938 Fair Labor Standards Act.  Between 2007 and 2009 it rose to $7.25, but over the past decade that sum lost nearly 10% of its purchasing power to inflation, which means that, in 2018, someone would have to work 41 additional days to make the equivalent of the 2009 minimum wage.

Workers in the lowest 20% have lost the most ground, their inflation-adjusted wages falling by nearly 1% between 1979 and 2016, compared to a 24.7% increase for the top 20%.  This can’t be explained by lackluster productivity since, between 1985 and 2015, it outstripped pay raises, often substantially, in every economic sector except mining.

Yes, states can mandate higher minimum wages and 29 have, but 21 have not, leaving many low-wage workers struggling to cover the costs of two essentials in particular: health care and housing.

Even when it comes to jobs that offer health insurance, employers have been shifting ever more of its cost onto their workers through higher deductibles and out-of-pocket expenses, as well as by requiring them to cover more of the premiums.  The percentage of workers who paid at least 10% of their earnings to cover such costs — not counting premiums — doubled between 2003 and 2014.

This helps explain why, according to the Bureau of Labor Statistics, only 11% of workers in the bottom 10% of wage earners even enrolled in workplace healthcare plans in 2016 (compared to 72% in the top 10%). As a restaurant server who makes $2.13 an hour before tips — and whose husband earns $9 an hour at Walmart — put it, after paying the rent, “it’s either put food in the house or buy insurance.”

The Affordable Care Act, or ACA (aka Obamacare), provided subsidies to help people with low incomes cover the cost of insurance premiums, but workers with employer-supplied healthcare, no matter how low their wages, weren’t covered by it.  Now, of course, President Trump, congressional Republicans, and a Supreme Court in which right-wing justices are going to be even more influential will be intent on poleaxing the ACA.

It’s housing, though, that takes the biggest bite out of the paychecks of low-wage workers.  The majority of them are renters.  Ownership remains for many a pipe dream.  According to a Harvard study, between 2001 and 2016, renters who made $30,000-$50,000 a year and paid more than a third of their earnings to landlords (the threshold for qualifying as “rent burdened”) increased from 37% to 50%.  For those making only $15,000, that figure rose to 83%.

In other words, in an ever more unequal America, the number of low-income workers struggling to pay their rent has surged.  As the Harvard analysis shows, this is, in part, because the number of affluent renters (with incomes of $100,000 or more) has leapt and, in city after city, they’re driving the demand for, and building of, new rental units.  As a result, the high-end share of new rental construction soared from a third to nearly two-thirds of all units between 2001 and 2016.  Not surprisingly, new low-income rental units dropped from two-fifths to one-fifth of the total and, as the pressure on renters rose, so did rents for even those modest dwellings. On top of that, in places like New York City, where demand from the wealthy shapes the housing market, landlords have found ways — some within the law, others not — to get rid of low-income tenants.

Public housing and housing vouchers are supposed to make housing affordable to low-income households, but the supply of public housing hasn’t remotely matched demand. Consequently, waiting lists are long and people in need languish for years before getting a shot — if they ever do.  Only a quarter of those who qualify for such assistance receive it.  As for those vouchers, getting them is hard to begin with because of the massive mismatch between available funding for the program and the demand for the help it provides.  And then come the other challenges: finding landlords willing to accept vouchers or rentals that are reasonably close to work and not in neighborhoods euphemistically labelled “distressed.”

The bottom line: more than 75% of “at-risk” renters (those for whom the cost of rent exceeds 30% or more of their earnings) do not receive assistance from the government.  The real “risk” for them is becoming homeless, which means relying on shelters or family and friends willing to take them in.

President Trump’s proposed budget cuts will make life even harder for low-income workers seeking affordable housing.  His 2019 budget proposal slashes $6.8 billion (14.2%) from the resources of the Department of Housing and Urban Development’s (HUD) by, among other things, scrapping housing vouchers and assistance to low-income families struggling to pay heating bills.  The president also seeks to slash funds for the upkeep of public housing by nearly 50%.  In addition, the deficits that his rich-come-first tax “reform” bill is virtually guaranteed to produce will undoubtedly set the stage for yet more cuts in the future.  In other words, in what’s becoming the United States of Inequality, the very phrases “low-income workers” and “affordable housing” have ceased to go together.

None of this seems to have troubled HUD Secretary Ben Carson who happily ordered a $31,000 dining room set for his office suite at the taxpayers’ expense, even as he visited new public housing units to make sure that they weren’t too comfortable (lest the poor settle in for long stays).  Carson has declared that it’s time to stop believing the problems of this society can be fixed merely by having the government throw extra money at them — unless, apparently, the dining room accoutrements of superbureaucrats aren’t up to snuff.

Money Talks

The levels of poverty and economic inequality that prevail in America are not intrinsic to either capitalism or globalization. Most other wealthy market economies in the 36-nation Organization for Economic Cooperation and Development (OECD) have done far better than the United States in reducing them without sacrificing innovation or creating government-run economies.

Take the poverty gap, which the OECD defines as the difference between a country’s official poverty line and the average income of those who fall below it.  The United States has the second largest poverty gap among wealthy countries; only Italy does worse.

Child poverty?  In the World Economic Forum’s ranking of 41 countries — from best to worst — the U.S. placed 35th.  Child poverty has declined in the United States since 2010, but a Columbia University report estimates that 19% of American kids (13.7 million) nevertheless lived in families with incomes below the official poverty line in 2016.  If you add in the number of kids in low-income households, that number increases to 41%.

As for infant mortality, according to the government’s own Centers for Disease Control, the U.S., with 6.1 deaths per 1,000 live births, has the absolute worst record among wealthy countries. (Finland and Japan do best with 2.3.)

And when it comes to the distribution of wealth, among the OECD countries only Turkey, Chile, and Mexico do worse than the U.S.

It’s time to rethink the American national security state with its annual trillion-dollar budget.  For tens of millions of Americans, the source of deep workaday insecurity isn’t the standard roster of foreign enemies, but an ever-more entrenched system of inequality, still growing, that stacks the political deck against the least well-off Americans.  They lack the bucks to hire big-time lobbyists.  They can’t write lavish checks to candidates running for public office or fund PACs.  They have no way of manipulating the myriad influence-generating networks that the elite uses to shape taxation and spending policies.  They are up against a system in which money truly does talk — and that’s the voice they don’t have.  Welcome to the United States of Inequality.

Walmart’s backdoor entry

Angela Ferrao

US retail giant Walmart bought 77 per cent stake in Indian online website Flipkart in a $16 billion deal. India does not allow retail monoplies like Walmart to enter Indian market. Walmart’s acquisition of Flikart is seen as a back door entry which may put thousands of small vendors out of business.

Former Pakistan PM Sharif arrested in run-up to election

Sampath Perera

Nawaz Sharif, Pakistan’s recently deposed prime minister, was arrested last Friday on his return to the country and is now in prison, pending legal appeals of the 10-year jail sentence imposed on him earlier this month in a politically motivated and manipulated corruption case.

Sharif’s arrest was a foregone conclusion once he boarded a plane for Pakistan. But he hopes that his return, in the face of what he has termed a military-orchestrated “judicial witch hunt,” will rally public sympathy and support for his beleaguered Pakistan Muslim League (Nawaz) or PML-N in the run up to the July 25 national and provincial assembly elections.

Determined to thwart such an eventuality, Pakistani state authorities banned all public gatherings in Sharif’s home town of Lahore prior to his arrival, suspended mobile services, and deployed thousands of police and paramilitary Pakistan Rangers. Nevertheless, large crowds, estimated by some to number tens of thousands, took the streets to voice their support for Sharif.

According to press reports, at least 600 PML-N supporters have been arrested in recent days as part of the state campaign to prevent demonstrations in support of Sharif, whose PML-N led Pakistan’s government, at least formally, from May 2013 until the beginning of June. It was then replaced by a “caretaker government” that will hold office pending the outcome of the July 25 elections.

On July 6 an anti-corruption court found Sharif guilty of charges filed by the National Accountability Bureau (NAB) arising from the Panama Papers’ 2016 exposure of the Sharif family’s ownership of four luxury apartments adjacent to London’s Hyde Park. Sharif’s daughter, Maryam, who has been touted as his possible successor, has also been ensnared in the corruption case and was arrested with him on their return to Pakistan last Friday.

That Sharif has used his more than thirty-year-long political career to illicitly grow the family fortune is beyond doubt. But corruption is endemic within the Pakistani elite, especially in the military, the judiciary and other state institutions. The NAB, which has spearheaded the prosecution of Sharif, was created under the dictatorship of General Pervez Musharraf and is notorious for its manipulation of charges against political opponents of the military.

In an interview with Reuters just prior to his departure for Pakistan, Sharif denounced the blatant state campaign against his PML-N, which has included an order to television channels to stop airing speeches by “political leadership containing defamatory and derogatory content targeting various state institutions specifically judiciary and armed forces.”

“What credibility will these elections have,” complained Sharif, “when the government is taking such a drastic action against our people and this crackdown is taking place all over the country?”

“I’m aware of the fact that I’ll be jailed,” continued Sharif, “but it’s a very small price to pay for the great mission to save the sanctity of the vote in Pakistan.”

Sharif’s attempts to portray himself as martyr for democracy are risible. He was a political protégé of the “Islamisizing” dictator General Zia-ul Haq and came to power twice in the 1990s as the result of the political machinations of the military-intelligence apparatus against the Pakistan People’s Party (PPP).

Sharif had a falling out with the military in 1998 when he bowed to US pressure and ordered an end to the Kargil War against India in a remote part of disputed Kashmir. The following year, Musharraf ousted him in a coup.

A military court subsequently sentenced Sharif to life in prison, but under pressure from Riyadh and Washington he was permitted to go into exile in Saudi Arabia. He returned to the country in the fall of 2007 as Musharraf’s, Bush administration-backed, regime unravelled. Following the February 2008 elections, his PML-N joined forces with the PPP to force Musharraf to relinquish the presidency and return to a prime ministerial-led government.

Exploiting popular opposition to the PPP-led government’s IMF-dictated austerity measures and complicity in the US drone war in Pakistan’s tribal areas, Sharif and his PML-N came to power after winning a plurality of seats in the 2013 elections. His government promptly intensified austerity and accelerated the selloff of state-owned enterprises and assets.

In the name of fighting terrorism, it also soon extended military operations to all parts of Pakistan, including Karachi; revived a military court system in which civilians can be tried in secret; and greased the rope for hundreds of hangings by lifting a moratorium on the death penalty.

However, these attempts to placate the military proved too little, too late. The top brass pushed back aggressively when Sharif attempted, in his first months in office, to assert civilian government control over foreign and security policy. The military also opposed his attempts to revive the long-stalled “peace process” with India and his government’s championing of Musharraf’s prosecution on treason charges.

Sharp differences also emerged between the government and military over the oversight of the $50 billion Chinese Pakistan Economic Corridor (CPEC), which not only promises a windfall for those in charge, but also has huge military-strategic implications.

The PPP, which has remained in the margins since being trounced in the 2014 elections for serving as a pliant instrument of the IMF and Washington, has maintained an ambivalent position on Sharif’s case. In response to last week’s crackdown against Sharif supporters, PPP leader Bilawal Bhutto Zardari issued a single tweet that questioned the “siege” of Lahore and urged respect for the right to “peaceful protest.”

However, the PPP and other opposition parties have had to raise their voices in recent days against the ever more intrusive efforts of the authorities to limit and disrupt their campaigning. The PPP has publicly charged that a mass vote-rigging operation is being prepared and on Monday, Bilawal’s father, former Pakistan President Asif Ali Zardari, denounced reports that some sixty PML-N leaders and activists are being charged under the country’s draconian anti-terrorism laws for defying last Friday’s ban on public gatherings.

Everything points to the cricketer-turned-politician Imran Khan and his right-wing Pakistan Tehreek-i-Insaf (PTI) being the intended beneficiaries of the authorities’ manipulation and repression. Khan has given his full support to the flurry of judicial measures against Sharif and has spearheaded the campaign against Sharif under the banner of fighting corruption.

Khan, who has courted the support of the Islamist right by championing Pakistan’s sweeping “anti-blasphemy laws and state discrimination against the Ahmadiyya minority, is promoting himself as a civilian leader capable of working in tandem with the military. In an interview with New York Times in May, Khan justified the military’s bullying of the Sharif government, saying that if “a democratic government” lacks “moral authority, then those who have the physical authority assert themselves.” Khan said he was confident he would “carry the army with me.” “In my opinion, it is the Pakistan Army and not an enemy army.”

Pakistan’s political crisis is playing out amid a longstanding geopolitical crisis and a looming financial meltdown.

The Pakistani rupee has depreciated almost 15 percent against the US dollar since the beginning of the year, while the debt-to-GDP ratio has surpassed 70 percent, bypassing what are deemed acceptable levels for a “developing country.” Although Pakistan has borrowed more than $4 billion from China during the past year, the financial press considers it highly likely, if not inevitable, that Islamabad will have to seek IMF support to forestall a balance of payments crisis.

Pakistan’s relations with Washington remain fraught, with the Trump administration demanding that it bear more of the burden of the Afghan War and Islamabad eying nervously the ever-deepening strategic embrace between Washington and its arch-rival, New Delhi.

Pakistan’s attempts to compensate for the downgrading of its historically close ties with Washington by strengthening its military-strategic alliance with China have only further damaged its relations with the US. Washington supported India’s September 2016 “surgical strikes” inside Pakistan and, to Islamabad’s dismay, has urged New Delhi to play an even greater role in Afghanistan.

Tensions with India have lessened in recent weeks. But for the better part of two years, South Asia’s nuclear-armed states were exchanging virtually daily military barrages across the Line of Control in disputed Kashmir and continue to regularly issue blood-curdling threats of all-out war.

While the media focuses on the vicious factional fighting within Pakistan’s elite, there is seething social discontent within the working class and rural and urban poor. The draconian anti-terrorism laws, upheld and expanded by successive governments, have repeatedly been invoked against workers struggling for better living conditions and jobs and rural people fighting for land rights.

In a warning sign of what is to come, the military has brutally repressed a movement protesting against the state’s treatment of the Pashtun minority, who as part of Pakistan’s “anti-terrorism” campaign have been subject to harassment, forced disappearances, and colonial-style collective punishments.

European powers fear loss of influence in Balkans after London summit failure

Julie Hyland 

The European Union (EU) summit on the West Balkans in London last Monday was overshadowed by the political crisis in the Conservative government over Brexit.

Political and business leaders from Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, Croatia and Serbia attended, along with several EU leaders including German Chancellor Angela Merkel and Polish Prime Minister Mateusz Morawiecki.

The event was part of the Berlin Process, set up by Germany in 2014. It was intended to keep the Balkan countries firmly on side, as part of EU and NATO moves against Russia, under conditions in which the EU effectively halted the accession process following the 2008 financial crash. Talk now is that no country will be accepted before 2025 at the earliest.

Commentators had already noted the irony of London hosting the summit when it is attempting to exit the EU. But the UK is keen to prove that it will continue to play a role in Europe—especially in such strategic areas—post-Brexit.

The government press release on the meeting stated, “The UK wants a strong, stable and prosperous Western Balkans region. By hosting the summit in London, we demonstrate our continued interest and involvement in the stability of the region beyond our exit from the EU.”

More fundamentally, the London-based think tank Emerging Europe noted the comments of UK-based Serbian media correspondent Siniša Lepojević:

“The Balkans, and namely those Balkan countries that are not EU members, remain the only space where the British can ‘flex their muscles,’ because they will exit the EU in March 2019. They need a presence in this part of Europe, because after Brexit, London will have nothing but NATO and the Western Balkans.”

It was intended that Boris Johnson—as foreign secretary—would announce an increase in funding to the region to £80 million in 2020-2021 and the launch of a UK package of £10 million to “build digital skills and employment prospects” for young people in the region, as part of a Global-trade Entrepreneur Programme. But his audience was left waiting.

Initially it was announced that Johnson was delayed due to an urgent meeting on the latest “Novichok” poisonings in Salisbury. It soon emerged that he was, in fact, gathered with his advisers, preparing his resignation from the cabinet over Prime Minister Theresa May’s “soft-Brexit” proposals.

In the end, despite joint declarations on “Good Neighbourly Relations, War Crimes and Missing Persons” and “Principles of Information-Exchange in the field of Law Enforcement,” little of a concrete character came out of the gathering.

The EU has committed to invest up to €150 million in 2019-2020, to help “unlock private investment in a broad range of sectors ... thus tackling key bottlenecks hampering access to finance in the region.”

But there was no movement on accession. Apart from Albania, the six Western Balkan countries that now want to join the EU (Serbia, Montenegro, Bosnia-Herzegovina, Kosovo and Macedonia) emerged from the collapse of Yugoslavia, which was actively promoted by the US and European powers to secure their hegemony over the Balkans.

But, as noted previously, the regimes they helped bring to power are so corrupt and tied in with organised crime that delivering on the promise of EU membership would further destabilise the bloc.

In May, the EU-Western Balkans summit in Sofia had postponed opening membership talks with Macedonia and Albania and made no mention of EU membership or enlargement more specifically. This was despite the Greece-Macedonia deal to resolve the 25-year dispute over the latter’s name, so that the Former Yugoslav Republic of Macedonia (FRYOM) now becomes North Macedonia.

Just days after the London summit, the EU imposed new conditions on Bulgaria’s application to join the euro, making it dependent on fulfilling extra criteria. These include passing European Central Bank stress tests and asset quality reviews of its banks before its application will even begin to be considered in July 2019. The Financial Times opined that the obstacles on Bulgaria—which joined the EU in 2007—were proof that the EU was “quietly changing its criteria for eurozone membership” out of concern for financial stability.

However, failure to integrate the west Balkan countries has opened up space in the region for Europe and Britain’s competitors. It threatens to become a gaping hole under conditions in which US President Donald Trump has thrown a hand grenade into the transatlantic alliance, making clear he favours the break-up of the EU and has even criticised NATO.

The summit debacle caused consternation in Britain’s ruling circles.

The Economist complained, “Thanks to Boris Johnson, a farcical west-Balkan summit in London” at times resembled a “Carry On movie” [a famous and much-loved series of British comedy films].

The Financial Times warned, “EU’s waning influence opens a dangerous vacuum in the Balkans,” writing that Johnson’s no-show was a “fitting metaphor” for Western European leaders’ “disinterest in the Balkans.”

Complaining that a “historic opportunity ... is at risk of being lost,” it continued that it has opened “a vacuum that other powers—China and Russia—are seeking to fill.”

The FT noted that only the previous weekend, China had organised its own summit with 16 central and eastern European countries in Bulgaria, “where Beijing lavished pledges of investment,” and accused Russia of “mischief-making” in trying to thwart NATO expansion.

The seventh CEEC-China summit comes as Beijing invests heavily in the region as part of its $1 trillion Belt and Road Initiative. It has put millions into building and repairing infrastructure in Serbia—heavily damaged in NATO bombings some 20 years ago—including a $740 million highway, connecting Belgrade with Montenegro, and a $3 billion investment project for a 350km high speed rail link between Belgrade and Budapest.

China is accused of politically backing Serbia against EU/US demands that it must recognise Kosovo, while Belgrade is regarded as a Russian ally.

The Chinese company COSCO operates the Greek port of Piraeus, one of several major investments in the country that has been ravaged by EU austerity. China Everbright Group owns Tirana International Airport, in Albania, while Chinese corporations are invested in the country’s oilfields.

Poland and Hungary are also part of the 16+1 initiative, and the county’s right-wing governments have repeatedly clashed with the EU. Politico, writing on Trump's denunciations of Germany—which is the target of US sanctions against the EU—cited James Carafano, of the right-wing conservative Washington-based Heritage Foundation. Carafano noted “that some countries in Eastern and Central Europe resent Germany’s influence on the continent and might take pleasure in Trump’s approach to Berlin. ‘People say “Why is he making so many enemies in Europe?” but I say, “He might be making a lot of friends in Europe”,’ Carafano said, mentioning Poland as one example.”

Pharmaceutical distributors flooded Missouri with opioids

Shelley Connor 

The opioid overdose crisis claimed the lives of more than 3,400 Missouri residents between 2012 and 2016. According to a recently released US Senate report, three separate pharmaceutical distributors flooded the state with opioids during this period and failed to report suspicious orders to the Drug Enforcement Agency (DEA).

The Senate Committee on Homeland Security and Governmental Affairs’ Minority Report, released by Democratic Senator Claire McCaskill of Missouri, states that pharmaceutical companies McKesson, Amerisource Bergen and Cardinal Health together shipped 1.6 billion doses of opioids into Missouri between 2012 and 2017 at the height of the crisis.

During that time, thousands Missouri residents succumbed to opioid overdose, with many others suffering the long-term consequences of addiction.

Missouri’s opioid crisis is part of a larger national crisis. According to an earlier Senate report, “[F]atal overdoses from fentanyl and other synthetic opioids more than doubled in the United States between 2015 and 2016.” This spike in opioid deaths contributed, along with other social and economic factors, to the first two-year drop in life expectancy in the US since the 1960s.

At the same time, the three companies involved in the distribution of opioids in Missouri and across the country reaped extraordinary profits. According to the report, “[E]ach recorded 2017 revenue in excess of $125 billion and ranked within the top 15 companies on the 2017 Fortune 500 list.”

The Controlled Substances Act (CSA) requires that pharmaceutical companies report to the Drug Enforcement Agency (DEA) any suspiciously high rates of orders from physicians and pharmacies, as this can signal that a physician is enabling addicts or that pharmacies are diverting pills to street dealers. As the report clarifies, the companies supplying most of Missouri’s opioid tablets also reported the fewest suspicious orders.

Despite the existence of “significant resources” for reporting suspicious orders, the report found that the three most significant distributors—McKesson, AmerisourceBergen, and Cardinal Health—“varied widely” in their reporting of suspicious orders between 2012 and 2017. According to the report, both McKesson and AmerisourceBergen “shipped around 650,000,000 dosage units to Missouri in this five-year period.”

While McKesson reported 16,714 suspicious orders to DEA, AmerisourceBergen reported only 224. Cardinal Health’s shipped fewer than half the opioid dosages as AmerisourceBergen, but it reported 5,125 suspicious orders—about 23 times the reports made by AmerisourceBergen.

While the Senate report states, “These divergent reporting results alone do not in any way indicate violations of the CSA by the companies involved,” the evidence in the report points to social predation by these companies, who have aided and abetted a scourge that has claimed hundreds of thousands of lives throughout the US.

The findings in the report only account for those companies who complied with Senator McCaskill’s requests for information. Allergan did not comply with the committee’s requests for information for months. The pharmaceutical company Teva refused to respond “to the specific July 2017 requests” by the committee.

Teva had previously submitted incomplete answers to the Senate committee’s questions, yet it stated that it had already complied fully. Any further demands for information, Teva asserted, would “chill the willingness” of its suspicious customers to comply with the Committee’s investigation and make them unwilling to “participate in our collective efforts to address opioid abuse.”

Teva’s response highlights several troubling aspects of the opioid epidemic. That these companies are effectively policing themselves is, in and of itself, alarming. As the Senate Minority Report on opioid abuse points out, these are the same companies that have spent hundreds of millions of dollars on donations to physicians groups and chronic-pain research groups, part of an aggressive public relations campaign that has served to downplay the risks associated with opioid use and to sell a dangerous product to healthcare providers.

Senator McCaskill has presented a bill that would repeal the changes to the CSA instituted by the Ensuring Patient Access and Effective Drug Enforcement Act of 2016—which passed the Senate by unanimous consent—which require the DEA to notify pharmaceutical companies “of the opportunity to submit a corrective action plan on or before the date of appearance” before an Immediate Suspension Order (ISO) is issued, and also requires the agency demonstrate “a substantial likelihood of an immediate threat that death, serious bodily harm, or abuse of a controlled substance will occur in the absence of an immediate suspension of the registration.”

However, McCaskill’s report itself underscores the incestuous relationship between the DEA and the pharmaceutical companies. While the 2016 rule changes represented a new summit of impunity for drug manufacturers and distributors, there was little oversight even before it passed.

The number of ISOs declined sharply between 2012 and 2017. During that time, they were issued primarily to pharmacies and physicians, not to pharmaceutical companies themselves; not a single ISO was issued to distributors or manufacturers between 2012 and 2016. Only one was issued to a distributor in 2017. The report quotes a DEA agent from the Denver field division: “Why would you go after a Fortune 50 [sic] company that’s going to cause all these problems with Ivy League attorneys, when we can go after other [DEA registrants] that are much lower, that are going to put up no fight?”

In the absence of ISOs, the DEA has issued fines to pharmaceutical companies for supplying excessive opioid doses to pharmacies and physicians. These fines, however, are pittances in light of the companies’ revenues. A $150 million fine for McKesson in 2017 amounted to less than .08 percent of the company’s revenues that year. Cardinal’s $44 million fine in 2016 came to about .03 percent of its 2016 profits.

The Senate Minority Report aims to outline the corrosive role that opioid manufacturers have played in a society increasingly subject to addiction, overdose, and death. Yet the report succeeds better at demonstrating the government’s subordination to the whims of profit, as well as its openly complicit relationship with pharmaceutical companies. Giving the DEA more latitude in bringing these companies to heel is a laughable pipe dream. Moreover, any report on the opioid epidemic that fails to consider the severe economic and social pressures borne by America’s workers is dangerously, criminally incomplete.

As Americans continue to suffer the effects of prolonged economic decline—from poverty to addiction to soaring healthcare costs—pharmaceutical companies, with the help of the agencies tasked with overseeing them, have enjoyed record profits. The government—including Senator McCaskill—has neither the will nor the ability to answer to this imbalance, other than widening it. The DEA will continue to criminalize opioid usage by citizens, yet the companies pushing these substances upon the public will continue to evade justice. The opioid crisis and the coinciding surge in revenues by drug manufacturers is simply one example of the advanced rot of American capitalism, and it can only be redressed by the working class.

US-backed Iraqi government guns down protesting workers

Patrick Martin

More than a dozen working-class protesters have been shot and killed by police, Special Forces and pro-government militias across south and central Iraq over the past week, amid a widening popular upsurge against the US-backed government of Prime Minister Haider al-Abadi.

The driving force of this movement is anger that seven years after the official withdrawal of the US military forces that invaded, occupied and devastated the country, conditions of life remain intolerable and the government has failed to deliver on its promises to use the country’s oil wealth to benefit the people, rather than multinational oil companies and a corrupt stratum of Iraqi collaborators with US imperialism.

Since the killing of a demonstrator in Basra on July 8, six more people have been killed in the city, Iraq’s third largest and the center of its oil industry. Other deaths have been reported at the hands of security forces in the cities of Amara, Samawa and Muthanna, as well as mass shootings in Nasariya and Karbala. The casualty toll reported by international news services has reached 14 dead and 366 injured.

Hundreds have been arrested as the government seeks to crush the mass protests before the movement becomes so widespread that it cannot be contained. In the first week alone, protests localized to Basra and al-Muthanna provinces in the far south spread throughout the entire south, where the majority of Iraq’s people live, and into Baghdad, Diyala and Salahuddin provinces in the center of the country.

The demonstrations began in Basra, whose oil industry produces the bulk of national wealth, but whose residents live under some of the poorest and most degrading conditions imaginable, with high levels of unemployment and poverty and a virtual absence of civilized public services such as electricity and clean running water.

Ahmed Abdulasmar, a journalist from Basra, told the British newspaper theIndependent: “The protests have one main demand, employment for the youth. There aren’t any jobs, despite the south being an area of oil, there isn’t even clean water. The terrible facilities make it even worse… There are very few schools and almost no fresh water. Those who can’t afford bottled water resort to drinking salty water, which makes them sick.”

As the movement spread, crowds of protesters targeted some of the most critical transport facilities, forcing the shutdown of the Um Qasr port, Basra’s main outlet to the Persian Gulf, from which nearly all oil tankers depart carrying Iraqi oil, as well as the country’s second busiest airport, in Najaf, and the two main border crossings in the south, Safwan with Kuwait and Shalamcheh with Iran.

Hundreds of protesters sought to block access to major oil-producing facilities, including the West Qurna-1 oilfield, operated by Exxon Mobil, the West Qurna-2 oilfield, managed by the Russian firm Lukoil, and Rumaila, the giant state-owned oilfield that is one of the world’s largest. On Monday, 200 protesters sought to block the main entrance to the Siba natural gas field in Basra.

Iraqi provinces (in red) where protests took place

Demonstrations against unemployment, corruption, and the collapse of utilities and other public services spread through the southern provinces of Maysan, Karbala, Najaf, Babil, Wassit, al-Qadisiya and Dhi Qar, eventually reaching the capital Baghdad. By the weekend, there were protests in two provinces north of Baghdad, Diyala and Salahuddin, which were further devastated during the three years of war between Iraqi government forces, backed by the United States and its imperialist allies, and the Sunni fundamentalist group ISIS.

The protests have swept the entire Shiite-populated region of the country. They represent a class movement by working-class Shiites against an administration based on the bourgeois Shiite parties, which have been unable to form a new government since the May elections because of conflicts with rival Sunni and Kurdish elites, as well as tensions within the Shiite ruling class itself.

By this weekend, the political focus of the upheaval had become more pronounced, with demonstrators attacking the offices of the ruling Shiite parties and their militia organizations in Najaf.

In al-Muthanna province, protesters stormed government buildings and party offices. One was killed and 15 wounded attacking the provincial council offices. Demonstrators also burned the headquarters of the two main Shiite bourgeois parties, Virtue and Dawa, and of the Badr Organization, the most powerful Shiite militia group, as well as the Badr al-Samawa TV station. At least 33 protesters were arrested Sunday and 65 more on Monday in al-Muthanna province alone.

Prime Minister al-Abadi rushed back from Brussels, where he was attending a meeting on the sidelines of the NATO summit to discuss the ongoing struggle against ISIS. He flew directly to Basra to meet with local officials and tribal leaders, ordering a combination of repressive measures and palliatives.

The government imposed a curfew in several southern provinces and shut down the Internet for most of the south for several days. Elite counterterrorism troops were sent in to confront protesters, erecting barbed-wire barricades around government offices and oil facilities.

At the same time, al-Abadi established a six-minister committee headed by oil minister Jabbar Ali Husayn al-Luaibi to funnel money into the Basra region, promising allocations for improvements in the water system and the electricity distribution system. The population of the city appeared little impressed. A video posted on social media showed al-Abadi being rushed away by bodyguards as protesters attacked the hotel where he was staying in Basra.

In a clear indication of the fear that the upheaval has struck in the Iraqi ruling elite, some of the most powerful figures in the Shiite political establishment issued statements on Friday expressing sympathy for the demonstrators.

Moqtada al-Sadr, the one-time Shiite radical whose party won the biggest bloc of parliamentary seats in the May election, tweeted Friday that the protests were “a revolution of the starving.” Al-Sadr, whose Mahdi Army loyalists once fought against the US occupation, has long since made his peace with the American Embassy. He is expected to emerge as the power behind the throne in any new government in Baghdad.

The chief of Iraq’s Shiite clergy, Grand Ayatollah Ali al-Sistani, also expressed sympathy for the protesters during Friday prayers in Karbala, the holy city of the Shiite sect, to which most people in the southern provinces adhere. Basra was one of Iraq’s “most miserable areas,” his representative told the press. The people of Basra “are suffering from a lack of public services,” the representative said, adding that al-Sistani urged the “federal and local government to deal seriously with the demands of citizens and work urgently to do what can be done.”

In an ominous forewarning of greater bloodshed to come, some Shiite media outlets linked to Iran denounced the protesters as “infiltrators,” echoing the Tehran regime’s condemnations of popular protests over economic conditions when they broke out at the beginning of this year in Iran.

There may be some links between the Iranian protests and those now emerging in Iraq; only a week before the protests began in Basra, there were violent clashes between police and protesters in the cities of Abadan and Khorramshahr, less than two hours’ drive to the east across the Iraq-Iran border, and over the same issue—poor-quality water supplies. Four people were shot to death by Revolutionary Guard forces June 30 in Khorramshahr.

Enhancing India-South Korea Relations

Sandip Kumar Mishra


South Korean President Moon Jae-in visited in India for a four-day trip from 8 to 11 July 2018, and both the countries resolved to add more substance to their partnership. Indian Prime Minister Narendra Modi and Moon Jae-in re-emphasised the natural partnership in which mutual complementarities have been key in bringing both countries close to each other in the last three decades. India and South Korea have decided to widen and deepen their relations and give it a big top-down push. In fact, business and people-to-people exchanges have incrementally grown between the two countries. However, it has not been sufficient to fully realise the vast potential of the India-South Korea partnership. Special and sustained top-level has allegedly been missing. The leadership of both countries have been rather occupied in their neighborhoods as well as with their relationships with the big powers. The space to give more attention to each other has been limited despite the intention to do so. 

President Moon has made a serious attempt to overcome this limitation. After assuming office in May 2017, he sent his special envoys to India and Southeast Asian countries, and also sent four other envoys to the US, China, Japan and Russia. It was the first time a South Korean president gave an important place to India through the act of sending a special envoy. Subsequently, Moon announced his New Southern Policy, which sought to increase South Korea’s exchanges with India and Southeast Asian countries in all possible fields. During his visit to India, Moon categorically expressed his resolve to enhance India-South Korea relations to the same levels that South Koreas shares with the ‘big-four’ countries: the US, China, Japan and Russia. A four-day visit to India (which is the longest by any Indian or South Korean top leader to each other's country so far) is noteworthy because the South Korean leader has been extremely busy with peninsular politics over the past few months. 

India must reciprocate South Korea’s intent and give more space to South Korea in its foreign policy. India does include South Korea as an important partner in its Act East Policy, but the economic and strategic content of the New Delhi-Seoul relationship has not increased to meet expectations. In 2011, bilateral trade between India and South Korea was around US$ 20 billion and it remained same in 2017, apart from a period of decline and recovery. The Comprehensive Economic Partnership Agreement (CEPA) between the two countries, which came into force in 2010, has not been able to push economic exchanges between the two countries forward. Both countries have been reviewing CEPA since it was reached during Narendra Modi’s May 2015 visit to Seoul, but progress appears to be taking a long time. 

On political and security issues, too, it is being said that the Strategic Partnership Agreement (2010) or the Special Strategic Partnership (2015) between India and South Korea are limited in their content. Neither country has been able to bring definite agenda items to the table, barring a few statements talking about North Korea's nuclear and missile programmes, maritime and cyber security, and joint defence production plans. South Korea is one of three countries India has a Special Strategic Partnership with - the others are Japan and Russia - but the depth of strategic understanding is less than that in its other two partnerships.

Through Moon's visit, South Korea has expressed a strong will to transform its approach towards India, and there are high expectations that India will also respond resolutely, and that both countries can significantly improve their relations in the near future. More importantly, if more people-to-people contact and cultural exchanges are promoted, the two countries would be able to articulate their economic complementarities and common strategic objectives in regional politics more comprehensively.

In the economic sphere, India and South Korea's core competencies are different, and they are each positioned to gain tremendous benefits through their exchanges. South Korea in rich in capital and technology, and India has a huge market, and human and natural resources. Rather than expecting short-term reciprocity that might be beneficial to one party, they should keep their eyes on the long-term win-win framework. 

India and South Korea also have similar approaches to North Korea and Pakistan and their destabilising behaviour in the East and South Asian regions, respectively. On the issue of China's rise, too, both New Delhi and Seoul would like to maintain a more ambivalent position; one that is more nuanced than the US and Japanese approaches. India and South Korea could also contribute more constructively to the process of establishing an open and multipolar Asia in which inter-state relations are rules and norms-based, and where regional institutions to deliberate and coordinate divergent national interests are given more prominence. It is important to note that both countries need each other and both Modi and Moon are popular in their respective countries. If the two countries decide to pay more attention to each other, bilateral relations are poised to take a huge leap in a short-span of time.