Civil war clashes erupt in Libya

Marianne Arens 

A fragile truce prevails in the Libyan capital of Tripoli following fierce fighting last week. The city’s Mitiga airport remains closed and fighting is continuing in the south of the city.

The conflict that broke out between armed militias on August 27 was fought with tanks and heavy artillery. Entire neighbourhoods went up in flames. According to the local health authority, there were 63 dead and 171 injured. Some 2,000 people have been driven from their homes, and the fate of some 8,000 refugees trapped in camps in Tripoli remains uncertain.

The latest round of civil war strife highlights the neo-colonial ambitions of the imperialist powers. The European Union and United States have reacted with alarm to the fighting in the country, which is their gateway to Africa and access route to vast oil and gas resources. The EU is particularly worried about the future of the puppet regime of Fayez al-Sarraj, which it relies upon to keep refugees out of Europe.

The fighting in Tripoli has also revived longstanding conflicts between Italy and France—not only aggravating the political interests of the governments in Rome and Paris, but also the rivalry between Eni and Total, the major oil and energy companies of each country. Libya has the largest oil and gas fields in Africa and the ninth largest in the world.

Eni has been active in the former Italian colony since 1959 and had a quasi-monopoly position in the Libyan oil and gas sector prior to the NATO-led overthrow of Gaddafi in 2011. Since then, Total has sought to outdo Eni, with both companies supporting different militias in their quest to win the upper hand in the oil and gas business.

Italian Interior Minister and leader of the far-right Lega party, Matteo Salvini has openly accused France of being responsible for the chaos in Libya. “Obviously, someone is behind it,” Salvini told journalists on September 4, “…something like this does not happen by accident.” This same someone has endangered “for national economic interests ... the stability of all North Africa and thus of Europe,” Salvini continued, and added: “Ask Paris!”

Italian Defense Minister Elisabetta Trenta (Five-Star Movement, M5S) also blamed France for the armed conflict. “There is no denying that Libya is in this situation today because someone put their own interests above those of the Libyans and all of Europe in 2011” she wrote on Facebook. “France has a responsibility, we cannot ignore it.”

For months, the Italian government has been accusing French President Emmanuel Macron of intervening in Libya without consulting its EU partners. At the end of May 2018, Macron invited Sarraj and General Khalifa Haftar to Paris to agree on a plan for Libyan parliamentary elections next December. For the Italian government, which regards Libya as its colonial backyard, Macron’s initiative amounts to inadmissible interference.

Unlike Italy, France works closely with General Haftar, who represents the alternative-parliament in Tobruk. The Libyan Liberation Army, LNA, led by Haftar, controls most of the oil crescent on the northeast coast of Libya. Haftar also has the backing of the regional powers of Egypt, Saudi Arabia and the United Arab Emirates, while Qatar, Iran and Turkey support the UN-recognised Sarraj “unity government.”

Salvini also relies on Sarraj because he needs the Libyan coast guard as a force to seal off the Mediterranean from refugees. Only recently, Italy signed an alliance with the unity government to provide the coast guard with weapons, logistics and naval boats worth several million euros.

Since 2014, Italy has expanded its military presence in Libya. Today, the Italian army maintains a 350-member military unit in Misrata whose mission is officially to secure a military hospital. In reality, it is mandated by the Italian government to “protect certain sensitive areas in Libya, including the oil wells.” It also has the task of training the Libyan coast guard to deter immigrants from reaching Europe by any means possible.

The conflicts between France and Italy date back to the NATO war against Libya seven years ago. At that time, NATO obliterated the functioning state of Libya and brutally murdered its leader, Muammar al-Gaddafi. Since then, the country has been plagued by chaos and civil war.

Italy had initially rejected a NATO intervention led by France, the United States and Great Britain. Italian Prime Minister Silvio Berlusconi had signed a cooperation treaty with Gaddafi in 2008. The treaty provided a miserly compensation for the historic crimes resulting from Italy’s colonial rule, while granting the Italian oil industry privileged trade relations with Tripoli. Gaddafi also pledged to prevent African refugees fleeing to Europe.

In the course of the war, however, Italy changed its attitude, so as not to end up empty handed when it came time to distribute the spoils of war. It provided logistical support and missile launchers in Sicily for the war. Nevertheless, Italian politicians repeatedly blame France’s role in the 2011 war for the refugee crisis. Roberto Fico (M5S), president of the Chamber of Deputies, described the Libyan situation as a “serious problem left to us by France.”

For its part the German government has no interest in an intra-European conflict at the moment. On September 5, the German foreign minister Heiko Maas sought to pursue a policy of appeasement in Libya: “The weapons must be silent, any renewed escalation must be avoided,” read a statement by the Foreign Office.

This does not mean that Germany is staying out of the neo-colonial race for Africa. On the contrary, as part of its foreign and security policy reversal, Germany is endeavoring to correct the “flaw” of its foreign policy of 2011, i.e. the fact that it did not participate in the Libyan war. It is now intent on building up its military presence in Africa. Currently, the Bundeswehr is deployed in countries surrounding Libya, in Mali, Morocco, Tunisia, Sudan, South Sudan and in the Mediterranean.

The US is also preparing for new military intervention in North Africa. In the Nigerian desert town of Agadez, a hub of the traditional Tuareg nomadic tribes, the US Air Force is currently expanding its base for drones and fighter aircraft—the Niger Airbase 201. From bases in Italy, US fighter jets have regularly bombed Libya in recent years.

Germany’s main economic rival in Africa, however, is China. The People’s Republic has become the largest investor in Africa and announced billions of new investments a few days ago at an Africa summit in Beijing, involving all African countries.

With a high-ranking business delegation, German chancellor Angela Merkel (Christian Democratic Union, CDU) recently visited several African countries and promised them German assistance for industrialization and infrastructure. In the Sahel countries, the Bundeswehr and France are helping to build the new G5 Sahel Resilience Force, which has around 5,000 troops stationed in Mali, Mauritania, Niger, Chad and Burkina Faso.

For these reasons, the German bourgeoisie favours a united EU position on Libya. A “viable solution” can only be achieved “under the auspices of the United Nations,” a Foreign Ministry statement reads. However, the UN is far from solving the problems in Libya.

On September 5, Ghassan Salamé, UN Special Envoy for Libya, said in a video message that “only a façade of tranquility” prevails in Tripoli and the Libyan capital is “on the verge of a full-blown war.” He demanded that the UN-backed Sarraj government finally implement the security provisions set out in the 2015 Skhirat Agreement and disarm all militias.

The puppet regime of Sarraj, however, lacks the means to do so. Since the overthrow of Gaddafi seven years ago, the country’s military forces have been divided into the hands of rival militias who have plundered everything left of the Gaddafi state. They control the oil fields and economic facilities, extort protection money, run murder squads, administer the many prisons and refugee camps and offer their services to varying imperialist powers for high amounts of foreign exchange.

The most recent riots broke out when the 7th Brigade of Tarhuna invaded southern Tripoli. This brigade, which was originally founded by King Idris Senussi and also served Gaddafi, still counts a number of Gaddafi loyalists among its officers. When the Sarraj government tried to cut its budget in August, the brigade struck back, claiming it wanted to settle accounts with the corrupt militia cartel to which it had previously belonged.

The 7th Brigade was eventually repulsed by auxiliary troops from Misrata. No less than four different militias are currently active in Tripoli.

These militias hold Libya in a stranglehold and condemn the population to unimaginable poverty and lack of any prospects. In the country where access to schools and hospitals was free, there is now no guarantee of clean drinking water, electricity or a functioning sewage system. Many foodstuffs and basic goods are only available on the black market and at horrendous prices.

Syriza jails Syrian swimmer Sara Mardini for helping refugees in Greece

Kumaran Ira

Greece’s Syriza-led government has jailed 23-year-old Syrian competitive swimmer Sara Mardini and three other members of the ERCI (Emergency Response Centre International) association on blatantly trumped-up charges. They are accused of people smuggling, espionage and membership in a criminal organisation. The purpose of this chilling arrest is to stop assistance to refugees fleeing the NATO war in Syria by criminalising humanitarian aid.

This latest attack exposes yet again the reactionary character of the petty-bourgeois populist Syriza (the “Coalition of the Radical Left”) party, which rules Greece in a coalition with the xenophobic Independent Greeks (Anel). While overseeing draconian EU-led austerity, they set up EU-backed concentration camps to house refugees fleeing NATO wars in the Middle East and Africa in horrific conditions.

In August 2015, Sara and her Olympian younger sister Yusra became internationally famous when they risked their lives to save 18 fellow refugees as they crossed the Aegean from Turkey to the Greek island of Lesbos. When the boat’s engine failed, leaving the craft drifting and taking on water, Sara and Yusra swam the boat to safety. After a 25-day march to Germany on foot and by train and bus, Sara and Yusra were granted asylum there.

A year later, Mardini agreed to join ERCI as a volunteer to help refugees and returned to Lesbos last December. Last month, while waiting at Mytilini airport to return to Germany, she was arrested. The Guardian reported that “soon after that, police also arrested ERCI’s field director, Nassos Karakitsos, a former Greek naval force officer, and Sean Binder, a German volunteer who lives in Ireland. All three have protested their innocence.”

Mardini is being held in Greece’s high-security Korydallos prison. Under Greek law, she can be held pending trial for 18 months. The four ERCI volunteers face charges of establishing and joining a criminal organisation, money laundering, espionage, violating state secrets, counterfeiting and offences against the immigration code and electronic communications legislation.

Police provided no evidence to back up such charges. Mardini’s lawyer, Harris Petsikos, told the WSWS she “has denied all the charges. … These very serious accusations are in no way substantiated by the evidence in the police file. The accused are totally innocent. Police cannot prove anything concrete, but it will take time for the courts to hear our arguments.”

He added, “My clients and the other defendants are accused of having committed crimes in Greece on specific dates when they were not even in Greece. We provided specific evidence from Germany and England, showing that on those dates, they were in Germany or England.”

Petsikos noted, “These accusations are almost incredible. … They had radios to speak to each other, and on this public radio frequency they could also hear what police were saying. Now they are accused of hearing police radio transmissions that are supposedly state secrets. But this is obviously not the case.”

Refuting accusations that assembling water and blankets for refugees in Lesbos is people smuggling, Petsikos added: “The police are going too far. They claim that practices common in all humanitarian aid groups, that are legal and normal, to help people who have already arrived in Lesbos, are crimes. The police combined facts in a very speculative manner. Then they assembled a file that they gave the courts to try to make it seem as if these were very serious crimes: espionage, participating in criminal organisations, illegal entry into Greece, etc.”

This is a blatant attempt by police, Syriza Interior Minister Alexis Haritsis, and the Syriza government to silence anyone offering humane assistance to refugees. Human rights lawyer Jonathan Cooper told the Guardian, “this is another example of civil society being closed down by the state. … What we are really seeing is Greek authorities using Sara to send a very worrying message that if you volunteer for refugee work, you do so at your peril.”

Syriza’s cruel and anti-working class character has been exposed since it was elected in 2015, after pledging to end austerity and overhaul right-wing, anti-refugee policies. It has since betrayed all its election promises and capitulated to the European Union (EU), slashing pensions, health care and other key social services, and trampling the overwhelming “no” vote in its own July 2015 referendum on EU austerity. It also reneged on its promises on refugees, accepting the 2016 EU-Turkey deal to keep refugees from reaching Europe.

That deal stipulates that all refugees reaching Greece from Turkey will be interned in Greece until their cases are processed and they are ultimately deported backed to Turkey. More than 60,000 refugees and migrants are reportedly stranded in Greece due to that deal and to border closures across the Balkans. So far, over 19,000 refugees arrived in Greece by sea this year, compared to around 14,000 in 2017. Over 100 people died during the journey in 2018.

Refugees on the Greek islands face horrific conditions, as thousands are packed into overcrowded, make-shift EU concentration camps. On Lesbos island, more than 8,000 people are crammed into the Moria camp, which was supposed to house 2,000. Some of its inmates have been stranded there for years.

BBC journalists who were given rare access to the camp reported that children are attempting suicide there amid appalling sanitary conditions, overcrowding, and deadly violence. “Some people live in mobile cabins, but rammed in-between them all are tents and tarpaulin sheets—homes for those who cannot obtain any official living space. The camp is also now sprawling into surrounding countryside. One tent houses 17 people—four families under one canvas.”

The camp smells of raw sewage. There are around 70 people per toilet, according to medical charity Médecins Sans Frontières (MSF). “A mum describes faeces on the floor of the shelter that she lives in with her tiny 12-day-old baby,” the BBC noted.

Sara Khan, an Afghan refugee, said: “We are always ready to escape, 24 hours a day we have our children ready. The violence means our little ones don’t get to sleep.” She said her family spends all day queuing for food and all night ready to run, in fear of fights at the camp.

MSF members said, “The children they are treating have skin conditions caused by the poor hygiene inside, and respiratory diseases from tear gas fired into the camp by police to quell fights. Mental health problems are rife. ... Despite the fact that we push to move these children to Athens, as soon as possible, it’s not happening. Those children are still here.”

Luca Fontana, who has worked in conflict zones, including during deadly Ebola outbreaks in Africa, told the BBC the EU’s Greek camps “the worst place” he had ever seen. “I’ve never seen the level of suffering we are witnessing here every day. … Even those affected by Ebola still have the hope to survive or they have the support of their family, their society, their village, their relatives. Here, hope is taken away by the system.”

Podemos proposes to “co-govern” with Spain’s Socialist Party government

Alejandro López 

The Podemos party is negotiating to enter into an open coalition with Spain’s minority Socialist Party (PSOE) government. Three years after its Greek ally Syriza, the “Coalition of the Radical Left,” took power and betrayed its election promises to end European Union (EU) austerity, Podemos is signaling to the ruling elite that it has at most minor differences with the PSOE’s militarist and austerity agenda.

Last May, the PSOE took office after organizing a no-confidence vote with Podemos and Catalan and Basque nationalists to oust the minority, right-wing Popular Party (PP) government. The PSOE government has stumbled from one crisis to another, however, trying to present a “left” face by playing up its female ministers or proposing to move the remains of fascist dictator Francisco Franco from his official state tomb. At the same time, it is deepening the PP’s austerity, military spending increases, attacks on migrants, and incarceration and prosecution of Catalan nationalist politicians.

Having played a key role to garner regionalist and nationalist votes to support the PSOE’s no-confidence motion against the PP, Podemos is now negotiating a possible parliamentary coalition to prop up the PSOE. Speaking to Telecinco, Podemos General Secretary Pablo Iglesias said he sees himself as “a partner in government” with the goal of “co-governing together from parliament.”

Last Thursday, Iglesias also met with Sánchez to discuss the 2019 budget. “There are good vibes, it’s a good start; if we do reach an agreement we would like to see out the term to 2020,” he said at a press conference after a two-and-a-half-hour meeting. He added, “We have advanced towards an agreement on the budget.” This would open the way for Madrid to pass a new austerity budget for 2019 next month, once it submits its draft budget to the EU.

Iglesias was shelving the criticisms Podemos raised of the PSOE this summer, calling for talks with the European Commission and for repealing the Organic Law on Budgetary Stability and Financial Sustainability. Podemos and the PSOE did not disagree over austerity, however, but over the tempo at which to implement EU demands. Now, Podemos is making clear that it is willing to jettison even these minor, essentially symbolic differences in order to show the ruling class that it can be trusted in government.

Underlying Podemos’ offer to “co-govern” with the PSOE is an attempt to stabilize the government amid growing economic crisis and social opposition. The end of the summer tourist season saw the destruction of 300,000 jobs in one day, a new record even in Spain’s bankrupt labour market. The downturn also provoked a fall in retail sales in July of 0.4 percent year-on-year.

At the same time, according to the Spanish Confederation of Employers’ Organisations, the main business lobby, strikes called between January and August led to the loss of 9.5 million hours of work, up 46.43 percent from 2017. There were 348 strikes in Spain during that time, in which 633,936 workers participated.

The consolidation of a PSOE-Podemos coalition in parliament will be no less reactionary than a minority PSOE government supported by Podemos from the outside. Indeed, as Podemos negotiates with the PSOE, it is not demanding that the PSOE abandon its militarist policies and escalating attacks on social and democratic rights. Its silence denotes consent to the EU-PSOE agenda.

The new government’s first measure was to take over the previous PP government’s austerity and militarist budget. The budget includes cuts of 13 percent in education, 8 percent in health, 27 percent in research and technology, 35 percent for culture and 58 percent in infrastructure. At the same time, it showered the military and intelligence apparatus with billions of euros, mandating a 10.5 percent increase in military expenditure, the largest in a single year since the fascist dictatorship of Francisco Franco, and 7.4 percent funding increase for the National Intelligence Centre.

On migration, after having allowed the Aquarius refugee vessel to dock in Valencia, PSOE Prime Minister Pedro Sánchez is supporting neighbouring Morocco’s large-scale crackdown on thousands of migrants, asylum seekers and refugees. So far, two migrants have died in this operation. The PSOE also carried out an unprecedented mass expulsion of 116 Sub-Saharan migrants to Morocco last month.

Sánchez is also continuing the crackdown on Catalan nationalists that has unfolded since the brutal police assault on peaceful voters in last October’s referendum on Catalan secession from Spain. He has threatened to again suspend Catalonia’s elected government by invoking Article 155 of Spain’s 1978 constitution. Prosecutors recently reaffirmed that the referendum was a “violent insurrection” and called on the Supreme Court to condemn Catalonian politicians on charges of rebellion, punishable by 15 to 25 years in prison.

Last Wednesday, the Interior Ministry announced that it would send around 1,000 police officers to Catalonia for the September 11 celebrations of the region’s national day.

The most virulent criticism of the PSOE from Podemos emerged last week, when the Ministry of Defence announced it was suspending the sale of 400 laser-precision bombs to Saudi Arabia. Podemos’ criticisms came from the right, however.

Even though the contract amounted to €9.2 million, or 1 percent of the total €932 million in Spanish weapons sales to the Saudi monarchy since 2015, it soon emerged that Riyadh was threatening to cancel a €1.8 billion contract with Spain to build five Corvette warships. José María “Kichi” González, the Podemos mayor of Cádiz, where the warships are being built, attacked the PSOE for jeopardising the contract. He falsely portrayed the sale of warships as “the dilemma between producing weapons or eating” referring to defense industry jobs in Cádiz.

Iglesias came to the defence of the mayor, stating that “the problem is that Spain has been selling arms to one of the states that favored ISIS, and we are concerned about violation of Human Rights […] but I understand that Kichi puts workers before.”

By the end of the week—under pressure from the Saudis, Podemos and sections of the PSOE—the government backed down. “The government is working to maintain good relations with Saudi Arabia and to defend the contracts for the construction of five Corvettes in Navantia’s shipyards,” government spokeswoman Isabel Cela said.

The Saudi-bomb affair has once again exposed that Iglesias and Podemos are imperialists and militarists. It continues their track record of defending the police and the army and recruiting its members—most prominently former Chief of the Armed Forces and Podemos member General Julio Rodríguez, who led Spain’s participation in the 2011 NATO war in Libya.

PSOE-Podemos talks confirm the assessments of Podemos made by the WSWS. As a newcomer in the December 2015 elections, Podemos had ranked third, winning over 5 million votes, or 20 percent. As the bourgeois parties struggled to elect a new government, the WSWS warned that Podemos’ repeated pleas to form a government with the PSOE aimed “to enforce further unpopular austerity measures on working people and the entire Spanish population.”

We warned: “Podemos, regardless of its rhetoric, does not aim to carry out an alternative or radical policy. Instead, like Syriza … it aims to give a face lift to a discredited political establishment—in this case, working with the PSOE, which has waged imperialist wars and enforced savage austerity measures against the Spanish people.” This assessment has been vindicated.

Police suppress protest over schools in debt-ridden Chinese city

Pradeep Ramanayake 

Chinese police made multiple arrests to curb a protest in Leiyang, a large city in Hunan province in southern China, during the first weekend of September. The immediate reason for the protest was a local government decision to cut costs in government-funded schools by relocating all fifth and sixth grade students to private schools.

The parents had already petitioned the authorities in an open letter to reverse the decision without success. On September 1, some parents demonstrated at their schools in central Leiyang, blocked a national highway and then protested outside the Leiyang government offices. Police stepped in and arrested five people.

Later that day another protest erupted outside the city’s public security bureau headquarters to demand the release of the five detainees. Ten more protesters were arrested which only escalated the confrontation as over 600 people gathered outside the police headquarters.

Angry protesters threw water bottles, bricks, fireworks and petrol bottles at government officials and police officers. By Sunday morning, the police had broken up the protest and arrested 46 more. Amid continuing anger over the arrests, the police later released 41 people.

The proposed change affected nearly 10,000 pupils who were due to start the new school year after the weekend. They were forced to transfer to a private school which is remote, more expensive and is suspected of formaldehyde pollution. The protesting parents displayed banners declaring “I want to attend public school” and “Boycott private schools.”

Even after the forced relocation of students to private schools, the public schools remain under-resourced and overcrowded. The Leiyang administration anticipates that the number of students in each class room will remain at 66, almost three times the standard class size.

Even after the protests dissipated, the authorities blocked news of the parents’ demands. A summary of the complaints published on WeChat, a popular Chinese messaging platform, was quickly taken down with a notice posted that it was in violation of rules.

The protests were not just the outcome of forcing thousands of students to switch schools, but reflect the resentment and hostility that has built up as social conditions have declined. Leiyang has been heavily dependent on the coal industry which has been in continuous decline leaving the city’s government in a deep financial crisis.

According to the annual revenue statement, in the first five months of this year, Leiyang’s government revenues dropped 15.4 percent year-on-year to 807.3 million yuan ($US118 million). Now the workers and other masses have to bear the burden of the decline of coal industry and the growing debts of city-backed companies.

The local government’s attempts to diversify the economy have fallen flat. The Wall Street Journal reported: “Newly constructed buildings are struggling to find residents, while across the Lei River on the city’s east side, warehouses once packed with coal are empty and black with soot. Rundown shops, empty shacks and unwanted piles of coal dust line a road that once saw busy traffic from trucks transporting coal to and from mines uphill.”

Many areas of China have been hit by closures and retrenchments as the central government has restructured the coal and steel industries to wind back capacity and destroy hundreds of thousands of jobs.

By February, the Leiyang government warned about the financial difficulties it faced in providing education, health care and other social services. In May, government workers went unpaid for more than a week, until emergency funds arrived. Then the government took the drastic step of cutting admissions to public schools, attempting to make parents pay for more expensive and inferior education for their children.

Just prior to the weekend protests, residents complained about a planned new sports complex costing 430 million yuan to be opened for the Hunan Province Youth Games basketball competition later this month. Their anger boiled over in social media in comments saying that the government was spending taxpayers’ “blood and sweat money” to build a vanity project, while ignoring basic education.

The protests point to the broader tensions being generated by China’s debt crisis. Larry Hu, an economist at Macquarie, Australian based global financial group, told the Wall Street Journal: “Debt by local governments totals 46 percent of the size of China’s $12 trillion economy”

Zhang Ming, an economist with the state-run Institute of World Economics and Politics, estimates that “hidden debt” totaled 23.57 trillion yuan at the end of 2017, greater than the 18.58 trillion yuan of local government debt acknowledged in official data.

According to the IMF, the rate of debt growth will accelerate over the next few years. It said China’s non-financial sector debt was now expected to reach 290 percent of gross domestic product (GDP) by 2022, compared with 235 percent last year. Previously the IMF estimated that debt would stabilise at around 270 percent of GDP over the next five years.

As the central government seeks to rein in debt and stave off a financial crisis, it will be the working class in more depressed areas such as Leiyang that will be hit hardest. This will inevitably fuel the class struggle. Just last June, large protests by truck drivers erupted in nine Chinese provinces and municipalities against falling wages, high fuel prices and police harassment.

Japan and China improve relations in face of US trade war measures

Ben McGrath

In recent months, Japan and China have taken tentative steps towards improved relations in response to trade war measures against both countries by the Trump administration in the US. The apparent thaw in what has been a frigid, and at times hostile, relationship underscores the destabilizing impact of Trump’s aggressive America First drive.

In an interview with the Sankei newspaper on September 2, Japanese Prime Minister Shinzo Abe stated “that the Japan-China relationship has completely returned to a normal track.” Japanese Finance Minister Taro Aso expressed similar sentiments when meeting his counterpart Liu Kun in Beijing on August 31. Implicitly criticizing Trump and Washington, Aso told reporters after the meeting, “We affirmed that protectionism benefits no country.”

Aso’s trip was in part to negotiate reinstating a currency swap that could be finalized when Abe travels to China in October for a summit with Chinese President Xi Jinping. In turn, Xi may visit Japan next year. The original deal expired in 2013 and was not renewed amid sharp tensions over the territorial dispute between Tokyo and Beijing over the Senkaku/Diaoyu Islands in the East China Sea.

Both governments are exploring closer economic relations to offset Washington’s trade war measures. Trump has criticized Japan for trade deficits in the auto industry, with the US president threatening to place tariffs on Japanese carmakers in addition to the current tariffs on steel and aluminum. Tokyo had sought exemption from the latter measures but was rebuffed.

While Tokyo has publicly tried to maintain the appearance of an airtight alliance with Washington, cracks are appearing over foreign policy as well as trade. In his interview with Sankei, Abe also made clear that he would not be bound by friendship, but instead act in Japan’s national interest.

Talks over trade and North Korea have reportedly turned contentious, according to a Washington Post article on August 28. It noted that in June Trump reportedly told Abe at a meeting, “I remember Pearl Harbor,” and criticized Japanese trade policy after Abe refused to budge on demands for a bilateral trade deal favorable to the US.

Trump’s remark is highly provocative as it recalls the US battle cry during World War II in the Pacific—Remember Pearl Harbor. Trump has a history of anti-Japanese demagogy on trade going back to the late 1980s when he was lashing Tokyo, not Beijing, for its trade deficit and buying up America.

Trump also “completely ignored” Abe’s advice on North Korea, a source close to the prime minister told the Washington Post, generating concerns in Tokyo that its interests were being undermined. The Japanese government is concerned that the US might allow North Korea to keep shorter range nuclear missiles capable of hitting Japanese cities.

Japan, as the third largest economy in the world, is turning to China to offset the negative impact of the more openly predatory US policy. With the economies in the region closely linked, the US tariffs on Chinese goods will also indirectly impact Japan.

Criticizing Washington, Hiroshige Seko, Japan’s Economy, Trade, and Industry Minister, stated, “This works as absolutely no plus for the world economy, and Japanese companies are shipping parts to China to finish them as products there that are exported to the US, and the effects are already being felt. Ultimately, it will hurt the US and Chinese economies.”

However, Tokyo will use whatever foothold it can gain through this apparent thaw in relations with Beijing to ensure its imperialist interests are met. Rather than working as a junior partner of the US, the Abe government is increasingly pursuing a more independent foreign policy and remilitarizing so it can back it through force of arms if necessary.

On assuming office last year, Trump dealt Abe a blow by pulling out of the Trans-Pacific Partnership (TPP). Now, however, Japan is playing the leading role, along with Australia, in refashioning a new TPP. At the same time, it is taking part in the previously stalled China-backed Regional Comprehensive Economic Partnership (RCEP).

The RCEP deal includes the ten ASEAN nations as well as Japan, China, South Korea, Australia, New Zealand, and India. It would be the largest regional free trade deal in the world. It would cover one half of the global population and one third of the world’s gross domestic product. Singapore’s Trade and Industry Minister Chan Chun Sing stated early this month that a broad agreement could be reached by November.

For China, opening new markets would mitigate some of the effects of US tariffs already imposed on $50 billion worth of goods and another $200 billion that Trump is now proceeding with. To mend relations with Tokyo, Beijing has toned down its anti-Japanese chauvinism and also eased tensions over its territorial dispute.

Last month, the two countries celebrated the 40th anniversary of the 1978 Friendship Treaty between the two nations. Much has also been made by the two governments and the media over the trip in May to Japan by Chinese Premier Li Keqiang. Li even using the preferred Japanese expression of “forward looking” on historical issues—a means of pushing Japanese imperialism’s war crimes in the 1930s and 1940s into the background.

Economic cooperation is also growing in other areas. Japan originally boycotted the launch of China’s Belt Road Initiative—a massive infrastructure project linking the Eurasian landmass. However, Tokyo is now considering joining China in investment projects in Southeast Asia and other regions.

This new thaw seemed only a few years ago, as the previous US administration of Barack Obama carried out the “pivot to Asia,” aimed at applying military and economic pressure to China, exploiting regional territorial disputes to do so. This included the dispute between Tokyo and Beijing over the Senkaku/Diaoyu Islands, with Obama declaring that the US would back Japan in any war with China over these rocky outcrops.

Despite these improved relations between Japan and China, tensions and rivalry remain. Tokyo has never reconciled itself to slipping from the world’s second largest economy to third behind China. Nor has it ever been willing to permanently accept a subordinate role to the US. As in the 1930s, conflict over trade in the Asia Pacific is paving the way for a new and even more terrible war for dominance.

Growth at 8.2%, Yet All Is Not Well in India’s Unorganised Sector

Arun Kumar

India’s gross domestic product (GDP) has grown at a robust 8.2% in the first quarter of the current financial year, according to recently released official data.

This is the highest in the last two years which has seen two shocks to the economy in the form of demonetisation and GST. The spurt in growth is due to a sharp increase in the growth of the manufacturing sector (13.5%), construction (8.7%) and agriculture and allied sectors (5.3%) compared to the same period last year.

Critics have argued that the numbers are higher precisely because they were so low during this period last year. Manufacturing had declined by 1.8%. Construction had grown at 1.8% and agriculture at 3%. This is called the base effect.

Growth last year during the first quarter was low due to the effect of demonetisation. So, if the economy recovers from the shock of demonetisation, there would be a spurt in growth because it is catching up with its trend growth. This is what the officials claim.

The rate of growth in the services sector is mostly down compared to last year. Also, investment is hardly recovering with gross fixed capital formation at current prices rising from 28.7% to 28.8%. This implies that businesses are not investing more in machinery and buildings. Thus, even if growth rate is higher now, this spurt may not continue both because of the base effect and the lack of increase in investment rates.

At 8.2% rate of growth there should be feel good all around in the economy. Are the protesting farmers and traders barking up the wrong tree? The farmers should be earning much more with a higher agricultural growth rate and ought not to be protesting. Are the young protesting about jobs doing so for nothing? Jobs creation in the economy should be robust and there should be less of a crisis of employment. Are businessmen complaining of difficulties for no cause?

The government has assiduously argued that demonetisation did not have a negative impact on the economy. If there was some adverse impact it was temporary and disappeared soon. It has emphasised that the long-term impact has been positive and that is what is visible now.

Similarly, regarding GST, the government has argued that it was a much-needed reform. It is contended that it has had a positive impact on the economy after some teething troubles. The claim is that GST has led to ‘ease of doing business’ which has led to a spurt in growth. So both these shocks to the economy are portrayed as structural changes that have resulted in the present higher growth, even if there was a temporary setback.

The problem with these arguments is that the unorganised sector does not figure in any of them. This sector is 45% of the GDP and employs 93% of the workforce. Data from this sector is collected periodically (not quarterly or even annually) as is the case with some components of the organised sector. The data on the basis of which the quarterly GDP is calculated is primarily from the corporate sector, agriculture and so on.

The press note issued by the government says that for industry, “The first quarter estimates are based on …. abridged financial results of listed companies from BSE/NSE, Index of Industrial Production (IIP)…”.

So not even the entire organised sector data are used to estimate the growth rate. No question of using the unorganised sector data which is not available.

So how is the unorganised sector estimated in the absence of data? Certain assumptions are made. Namely, that it is growing in proportion to the organised sector for which some data are available. The ratio of the two sectors is estimated in a reference year and this is used till the next survey is done. However, in between the surveys, if there is a shock, the ratio changes and the old ratio is no more applicable. A new ratio is required for which a survey needs to be done but since this was not done, a new ratio cannot be calculated. The two shocks due to demonetisation and GST have changed the ratio. Thus, the old methodology needs to change.

The unorganised sectors which largely use cash were massively hit by demonetisation. Due to persisting cash shortage for eight months, they could not revive for long and were again hit by GST. While they have been exempted from GST or a simple provision has been made for them (called Composition Scheme), they have been adversely hit due to the design of GST. They are hit by input tax credit (ITC), reverse charge mechanism (RCM), restrictions on inter-state sales and so on.

While official surveys were not done, private surveys were conducted and they point to a sharp decline in the unorganised sector. Demand for work under the MGNREGS shot up as workers lost work in urban areas and migrated back to the rural areas. This demand has remained high. Further, credit off-take reached a record low. Finally, investment data showed a sharp decline. These factors support the argument that there was a sharp downturn in the economy.

The decline in the unorganised sector had two consequences. Production from the unorganised sector was substituted by the organised sectors and mass demand from the unorganised sector declined. The latter further hit the growth of the unorganised sectors. Coexistence of agricultural surplus along with persistence of malnourishment among a large percent of the women and children is an indication of lack of purchasing power with the unorganised sectors. Surpluses due to low demand have led to low prices of agricultural produce and depressed incomes.

In brief, the two-way movement in the economy – the rise in the organised sector production and a decline in the output of the unorganised sector – means the pre-demonetisation ratios for estimation of quarterly growth rates do not hold. Earlier, it was implicit in the method that the unorganised and organised sectors are growing together – this is no longer true.

Two important conclusions follow. One, the organised sector is growing at the expense of the unorganised sector leading to a crisis in the latter. Two, official data needs to be corrected and the rate of growth would turn out to be far less than 8.2%.

Following strike wave, New Zealand prime minister appeases the corporate elite

John Braddock 

New Zealand Prime Minister Jacinda Ardern announced on August 28 the creation of a new Business Advisory Council to build “closer relationships” between the Labour Party-led government and big business.

Ardern’s announcement, made to a gathering of corporate leaders in Auckland, was aimed at arresting a collapse in “business confidence” 10 months into her government’s term. A current ANZ bank outlook, the gloomiest monthly survey in a decade, shows 50 percent of businesses expect conditions to deteriorate. Economists are mostly downgrading growth forecasts for the coming year to around 2 percent, from about 3.5 percent a year ago.

Ardern had earlier described plummeting business confidence as the “elephant in the room” for the Labour-NZ First-Greens coalition government, but she opened her speech by declaring that the level of corporate disquiet had now become a “massive, big, flashing neon sign.”

Ardern reassured her audience that the government was “listening” to their concerns and promised to “do better.” Certainty, she warned, “should not be confused with stasis and complacency.” By failing to “transform” the economy in the 1970s and early 1980s, Ardern asserted, “we paid a price for that with the speed of reform that had to come after.”

The remarks were a reference to the brutal market-liberalisation attacks on jobs and living standards that was carried out by the Labour government of 1984–90. Ardern emphasised that her government has ambitious plans to further “transform the economy”—i.e., to extend the pro-capitalist agenda and deepen the assault on the working class—and “wants business to come with it.”

Ardern said the business council, to be chaired by Air New Zealand chief executive Christopher Luxon, will provide her with “high-level free and frank advice” on key economic issues, and “harness expertise” from the private sector to develop the government’s economic policies.

BusinessNZ chief executive Kirk Hope welcomed the move, describing it as a sign the government was heeding the “concerns” of the corporate elite. One Fairfax Media commentator described it as “a direct line for business into the upper floors of the Beehive”—the Wellington building that houses government ministers and top bureaucrats.

The government had already established two other business-led groups to “advise” it—the Tripartite Future Work Forum, which includes the Council of Trade Unions, and the Small Business Council.

Labour’s move to further appease business is a clear response to the shift to the left by the working class, with tens of thousands of workers—including nurses, teachers, public servants, retail workers and transport workers—initiating the largest strike movement for two decades over low wages and living standards.

The strike wave has emerged amid growing anger among workers with the trade unions, which are desperately manoeuvring to suppress workers’ demands and impose spending limits dictated by the government.

Signalling rising alarm in ruling circles, Canterbury Employers Chamber of Commerce manager Leeann Watson told Fairfax Media last month: “We’ve had more strikes in the last six months than we’ve had in years.”

Manufacturers’ and Exporters Association chief executive Dieter Adam warned against significant pay rises for nurses and teachers, declaring: “When employees in our sector see a bunch of state employees getting these high settlements, the logical question is ‘why not us?’”

Acutely aware of the widespread popular hostility to the political establishment after decades of attacks social conditions and entrenched inequality, Labour and its coalition partners have sought to present a “progressive” image. It has introduced a series of populist gestures, including freezing MPs’ pay, reining in state sector CEO bonuses, marginally improving tenants’ rights and banning single-use plastic bags supposedly to protect the environment.

Behind these cosmetic measures, however, Labour is maintaining the previous National Party government’s austerity program by keeping a tight lid on spending in health, education and other services. Its right-wing nationalist agenda includes slashing immigration and banning foreign house buyers. While claiming there is “no more money” for health and education, 1,800 new police are being recruited. Defence spending and NZ’s integration with Washington’s anti-China offensive in the Asia-Pacific is being ramped-up.

In her speech, Ardern sought to assuage business concerns over Labour’s industrial relations policies. She promised that there will be no more than two industry-wide “Fair-Pay Agreements” in the current term in office, and that none would impact on major industries. Most employers would be able to “sit back and see how they work,” she said.

The so-called Fair Pay Agreements (FPAs) were the cornerstone of Labour’s industrial policy during last September’s national election. The policy was fraudulently promoted as giving “power back to workers” by preventing a “race to the bottom” by employers competing with each other to lower wages.

The FPAs are not intended to restrict exploitation of workers. Their real role will be to establish a corporatist framework of employer-union-government wage setting, while outlawing industrial action. This process will entrench low pay across entire industries, enforced by draconian legislation. The unions will enforce the deals and suppress resistance from workers.

A working group chaired by right-wing former National Party Prime Minister Jim Bolger and including trade union representatives is drafting the plans for the FPAs, which will be presented by the end of this year.

With global financial turbulence rapidly intensifying, the ruling elite is preparing deep attacks on the working class. The Wall Street Journal (WSJ) published an article on August 26 noting that currency traders are watching Australia, New Zealand and Canada for “signs of the sort of malaise that often hits emerging markets when the US dollar is rising.”

The article noted that rising US interest rates are hitting these currencies and “diminishing their attractiveness to overseas capital.” The three countries have relied increasingly on inflows of foreign investment to finance current account deficits. The weaknesses in their economies, mainly dependent on commodity exports and trade with China, will only be exacerbated as US-initiated trade conflicts worsen.

The New Zealand dollar has already lost 5.7 percent this year. The WSJ cited a NZ Reserve Bank statement that, in the light of an economic slowdown that could be “prolonged,” it will keep borrowing rates at record lows for the next two years. The central bank warned that trade wars, “or even their threat” could “stall global investment and spending, and reduce demand for our products.”

New Zealand’s economy has struggled in recent months, with a slump in retail and car sales, dropping global prices for milk products, the country’s main export, and major construction firms experiencing financial trouble and exiting the industry. Job cuts are under way in the tertiary education sector, the Warehouse retail chain, Auckland city libraries, Nestlé’s chocolate factory in south Auckland, in the core public service, and among rail workers .

India expands anti-China “strategic partnership” with Washington

Keith Jones

Thursday’s inaugural “2+2” strategic dialogue between the US and India ended with New Delhi signing on to yet another “foundational” military cooperation agreement aimed at transforming India into a front-line state in the US military-strategic offensive against China.

Patterned after one of the key mechanisms Washington uses to manage its military-strategic ties with Japan and Australia, its chief Asia-Pacific allies, the “2+2” dialogue is to be an annual event bringing together the US and Indian foreign and defence ministers.

The joint statement that US Secretary of State Mike Pompeo, Defense Secretary James Mattis, Indian Foreign Minister Sushma Swaraj, and Defence Minister Nirmala Sitharaman issued at the conclusion of their series of meetings in New Delhi Thursday outlined numerous initiatives to expand Indo-US military and strategic cooperation.

The most consequential of these is India’s adoption, after ten years of negotiations, of a Communications Compatibility and Security Agreement (COMCASA) modeled on agreements Washington has with its most important NATO and treaty allies. It will enable the Indian military to obtain advanced US communications equipment for its weapons systems, and enhance encrypted communication and “inter-operability” between the militaries of the US, its allies, and India.

The agreement is expected to pave the way for a further major boost in Indian purchases of US weaponry, likely beginning with the procuring of armed naval drones for anti-submarine warfare. India’s military long balked at signing such an agreement for fear that it would facilitate US spying on its activities.

But the Narendra Modi-led Bharatiya Janata Party (BJP) government has dramatically expanded India’s integration into Washington’s anti-China offensive, including sanctioning the exchange of intelligence about ship and submarine movements in the Indian Ocean and parroting the US line on the South China dispute.

COMCASA is the second of three bilateral agreements that Washington insists are “foundational” for any true military-strategic partnership, and for India gaining the full benefit—through access to the most advanced weapons systems that the Pentagon is willing to share with allies—of its recent designation as a “Major Defence Partner” of the US.

Under the Logistics Exchange Memorandum Agreement, which was signed in 2016 and operationalized last year, India has opened its air bases and naval ports to routine use by US warplanes and battleships for refueling and resupply.

With New Delhi inking the COMCASA pact, negotiations on the third and final “foundational” agreement, the Basic Exchange and Cooperation Agreement for Geo-spatial Cooperation (BECA), are expected to go into high-gear.

New Delhi and Washington also announced that they will stage their first-ever joint exercise involving all three branches of India’s military next year, and that they are setting up “hotlines” between their respective foreign and defence ministries “to help maintain regular high-level communication on emerging developments.”

The “2+2” joint statement also commits New Delhi and Washington to increased bilateral, trilateral and quadrilateral military-security cooperation. While they are not named in the statement, a longstanding US objective has been to draw India into closer cooperation with Japan and Australia, with the ultimate aim of creating a NATO-style US-led alliance against China.

Under Modi, New Delhi has increased trilateral cooperation with both Japan and Australia, including making the former a permanent partner, alongside India and the US, of the annual Malabar naval exercise. Last November, senior officials from the US, Japan, Australia and India held a Quadrilateral Security Dialogue, reviving a forum that had been abandoned a decade before after vociferous protests from China.

The statement reiterated commitments from recent Indo-US communiqués to uphold a “rules-based order” and “freedom of navigation” in the Indo-Pacific region—that is, US hegemony, including the unfettered right of the US Navy to maintain an armada off China’s shores. No less significantly, it pledged the two countries will “work together to counter North Korea’s weapons of mass destruction,” under conditions where Trump has repeatedly threatened to annihilate that small, impoverished country.

On his way to New Delhi, Pompeo made a brief stop-over in Islamabad where he hectored Pakistan’s new government, insisting that they do more to assist Washington in subduing the Taliban insurgency in Afghanistan. Pompeo’s threats were directed in the first instance at Pakistani Prime Minister Imran Khan and the country’s military-security establishment. But they were also clearly aimed at New Delhi, which under Modi has adopted an even more belligerent posture against Pakistan than its predecessor, including cross-border military strikes and repeated threats of war.

The “2+2” statement welcomed “India’s enhanced role in Afghanistan’s development and stabilization,” while calling on Pakistan “to ensure that the territory under its control is not used to launch terrorist countries in other countries.”

At the conclusion of the “2+2” meetings, Defence Secretary Mattis said Washington would continue to work with India “to elevate our relationship to a level commensurate with our closest allies and partners.” His Indian counterpart, Nirmala Sitharaman, was even more effusive. “The momentum in our defense partnership,” she said, “has imbued a tremendous positive energy that has elevated India-US relations to unprecedented heights.”

Her colleague, Foreign Minister Swaraj, said India “welcome[s] President Trump’s policy on Afghanistan”—that is Washington’s plans to intensify the bloodletting in Afghanistan and turn the screws on India’s arch-rival Pakistan.

During the past two decades, a central objective of US foreign policy, under Republican and Democratic administrations alike, has been to draw India into America’s strategic orbit and develop it as a military-strategic counterweight to China. Toward this end, Washington has plied New Delhi with strategic “favours,” including the 2008 nuclear deal, which allowed India to purchase civilian nuclear technology and fuel, enabling it to focus its indigenous nuclear program on developing its nuclear arsenal.

The pivotal role India and the Indian Ocean play in Washington’s plans to strategically encircle and subjugate China is reflected in the recent decision to rename the US Navy’s Pacific Command the Indo-Pacific Command.

India’s “reset” of its relations with China, and its limits

Over the course of the past half-year there has been much talk of a “reset” in Sino-Indian relations. It is certainly true that New Delhi has taken a number of steps to reduce tensions with Beijing, which in the summer of 2017, during the armed stand-off over control of a remote Himalayan ridge (the Doklam), threatened to spiral out of control. Concerns over Trump’s aggressive “America First” and oft-times erratic foreign policy, particularly his trade war measures, no doubt were also a factor in Modi’s sudden prioritizing last spring of improved relations with Beijing.

Thursday’s Indo-US “strategic dialogue” makes clear, however, that despite the “China reset,” the Indo-US alliance remains the cornerstone of India foreign policy. Under conditions of capitalist breakdown, the venal Indian bourgeoisie sees no other path to pursuing its great power ambitions than aligning itself with Washington, no matter how reckless and manifest becomes the crisis of US imperialism.

That said, there are significant tensions between New Delhi and Washington, as the US, anxious to stave off decline, demands “more” from rivals and allies alike.

India is certainly rankled by Trump’s protectionist measures, including the aluminum and steel tariffs, his demands India reduce its trade surplus with America and his restriction on the H1B Visa program, under which Indian-based IT companies have been able to bring skilled workers into the US.

The tensions over strategic questions are if anything greater. Washington is demanding India fall into line with its drive to crash the Iranian economy through the reintroduction of sanctions, an economic embargo that is tantamount to war, although Tehran has fulfilled all its obligations under the 2015 Iran nuclear accord.

Not only is India a major importer of Iranian oil, India has been developing the Iranian port of Chabahar to open a transit corridor to Central Asia, so it can vie for strategic influence and a share of that region’s massive energy reserves.

Prior to Thursday’s meeting, the Trump administration had been adamant that, unlike Obama, it will not provide any “waivers” exempting those dependent on imports of Iranian oil from the full force of the sanctions when they come into force on Nov. 4. As he left New Delhi, Pompeo was slightly more accommodating, indicating India could be offered a waiver but only for a brief interim. “We will consider waivers where appropriate,” said the US Secretary of State, “but it is our expectation that the purchases of Iranian crude oil will go to zero from every country or sanctions will be imposed.”

Everything indicates that when push comes to shove, New Delhi will bend to Washington’s diktats, just as it did to the Bush and Obama administrations’ campaign again Iran, so as not to jeopardize its “partnership” with the US.

Things are even more fractious when it comes to Russia. For many decades Moscow was New Delhi’s most important strategic partner and it continues to furnish India with crucial war materiel and plays a vital role in its nuclear program.

Washington is angered that India is in the process of purchasing Russia’s S-400 air defence system, with US officials warning that this could lead to sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA).

The Trump administration is divided over the issue, with Mattis publicly arguing it would be a mistake to jeopardize the Indo-US partnership over it. But even if Washington does decide to give a waiver to India over the S-400, the long-term implication for India is clear: the US is intent on disrupting and ultimately breaking India’s partnership with Russia.

Far-right Sweden Democrats poised to make gains in general election

Jordan Shilton

The official narrative ahead of Sweden’s parliamentary elections tomorrow is that the Scandinavian country, overrun by refugees, is no longer able to fund public spending and welfare services.

Whether one follows the campaign of the far-right Sweden Democrats or the governing Social Democrats, virtually identical policies are on offer: a vicious crackdown on immigrants and refugees, hikes in military spending in the face of alleged “Russian aggression,” and the strengthening of the police and repressive state apparatus.

As with the AfD in Germany or the National Rally (formerly National Front) in France, this right-wing conspiracy involving the entire political establishment is playing directly into the hands of the Sweden Democrats while disenfranchising the majority of the population. The political elite is widely viewed with contempt. Capitalising on this social anger, the Sweden Democrats are projected to increase their share of the vote to around 20 percent on Sunday from 13 percent in 2014. Some polls even suggest that the party, which emerged out of the neo-Nazi movement in the 1980s, could win the election.

The drive to scapegoat immigrants for all of Sweden’s social problems is part of a deliberate attempt to cover up the role of the political establishment, above all its nominal left-wing, in gutting public services and the welfare state. Since the early 1990s, successive governments led by the Social Democrats and right-wing Alliance have carried out an onslaught, including slashing taxes for corporations and the rich, privatising education, healthcare, and welfare services, and cutting back on social benefits.

Although it was the Alliance government between 2006 and 2014 that spearheaded the largest privatisation drive in Swedish history, the groundwork for this assault on working people was laid by over a decade of Social Democratic rule from 1994 to 2006 under Göran Persson. This included support for a regulation on budgetary discipline following the economic crisis of the early 1990s aimed at clawing back from the working class the billions used to bail out Sweden’s financial institutions.

These policies produced a sharp rise in social inequality. Between the mid-1980s and the 2000s, Sweden’s GINI coefficient, measuring income inequality, rose by 30 percent. In 1980, the richest 10 percent of the population received 23 percent of total income, but by 2013 this had risen to over 30 percent. Whereas in education the average of 15-year-olds leaving school without any qualification stands at 17.5 percent nationally, it rises to over 50 percent in many suburbs of Stockholm, Gothenburg, and Malmö, where most immigrants live. In Bergsjön, a suburb of Gothenburg, 69 percent of students leave school without a qualification and are effectively condemned to joblessness.

Polls suggest that support for the Social Democrats will fall on Sunday to less than 25 percent, the worst result since 1917. A measure of the collapse in support for Sweden’s traditional party of government is that as recently as 1994, the party obtained well over 40 percent of the vote. Now, even with the support of the Greens and Left Party, the “left block” will likely struggle to reach 40 percent on Sunday.

The opposition Alliance is also polling around the 40 percent mark. The Moderates, the largest of the four Alliance members, which advocates further tax cuts for big business, an intensification of the government’s hardline anti-refugee stance, and deeper cuts to welfare, is garnering around 18 percent support. The Center Party, which has its traditional base in rural areas but has sought to attract a wider base of support by raising certain environmental issues, is set to secure 12-13 percent. The smaller Liberals and Christian Democrats are expected to pass the 4 percent threshold required for parliamentary representation.

Over the past four years, Stefan Löfven’s Social Democrats have led a minority coalition with the Greens, which has relied on informal support from the Stalinist Left Party in parliamentary votes. However, the decline in support for the Social Democrats meant that even this three-party coalition could not secure a majority in parliament. Löfven, who first came to prominence due to his role in enforcing pay cuts and reduced working hours following the 2008 economic crisis as the leader of the IF Metall trade union, has only remained in power due to the tacit acceptance of the right-wing Alliance parties. Following the 2014 election, the Alliance struck a deal with Löfven that committed the government to fiscal restraint and the opposition to abstaining on government budget proposals.

The so-called December Agreement was reached in behind-the-scenes negotiations after the Alliance parties united with the Sweden Democrats to block the Social Democrats’ first budget and threaten a snap election. It was cynically portrayed as a means of stopping the rise of the far-right and offering political “stability.” The deal effectively ensured that the far-right party’s refugee policies became government policy. It also continued to enforce the regressive tax regime and spending restraint on public services imposed under Reinfeldt between 2006 and 2014, while handing Löfven the majority he needed to press ahead with an anti-refugee clampdown and military spending hikes.

The December Agreement formally collapsed in the autumn of 2015 after the smallest member of the Alliance, the socially conservative Christian Democrats, withdrew, but this changed very little. The Alliance parties continued to effectively endorse the Social Democrats’ right-wing agenda by agreeing that each Alliance party would table their own budget proposal in parliament, ensuring that none of the four would secure a majority.

The leading conservative parties openly backed the government on critical votes. In late 2015, Löfven fully embraced the Sweden Democrats’ vicious anti-immigrant line when his government ordered the effective closure of Sweden’s borders to asylum seekers. In a dramatic reversal of the country’s relatively open asylum policy, the Social Democrat-Green coalition imposed temporary residency permits for refugees and invested hundreds of millions in accelerating the asylum process to increase deportations.

Last year, Löfven’s Social Democrat-Green coalition concluded an agreement with the Moderates and Centre Party to hike military spending by over 8 billion kronor ($1 billion) between 2018 and 2020.

In March 2017, the Social Democrat government reintroduced the draft, and made no secret of the fact that this was a step in the preparation for Swedish involvement in a major war.

The Social Democrats, Greens, and Left Party, no less than their right-wing opponents, are fully committed to Sweden’s close alliance with US imperialism and NATO. Under successive governments, the Swedish army has been integrated ever more into NATO command structures, although the country retains its formal opposition to joining the military alliance.

The ruling elite is determined to continue to pursue its right-wing agenda following Sunday’s vote, but is concerned that the electoral vote may produce an unstable outcome. If both official blocks obtain around 40 percent of the vote and the Sweden Democrats take 20 percent, none of the traditional coalitions will be able to form a government.

One possibility that has been raised is that Löfven could seek support from the Center and Liberal parties. Alternatively, a significant section of the Moderates is pushing for direct collaboration with the Sweden Democrats. During the Moderate-led Alliance’s second term in office between 2010 and 2014, the Sweden Democrats backed the government on 80 percent of parliamentary votes.

Whatever the composition of Sweden’s next government, it will preside over a further shift to the right in Swedish politics characterised by intensified attacks on refugees and social spending, and an explosion of militarism.