COVID-19 will compound catastrophic impact of Saudi Arabia’s war on Yemen

Jean Shaoul

Yemen officially reported its first case of COVID-19 on Friday, raising the spectre of calamity in the poorest country in the Middle East. Its health care system has been destroyed by five years of war waged against the country by a Saudi-led coalition backed to the hilt by Washington and London. Its people are starving, and cholera, an entirely treatable disease, and more recently dengue fever, is widespread.

The deadly virus may well have spread more widely, given the fragile state of Yemen’s infrastructure and at least 4,934 cases and 65 deaths in neighbouring Saudi Arabia, and 4,521 cases and 25 deaths in the United Arab Emirates (UAE), both of whose forces have been fighting in Yemen.

The COVID-19 announcement came as UN humanitarian agencies are slashing their aid programmes, which include assistance for health, sanitation, water, malnutrition and the fight against cholera in the country, because of lack of funding. The UN’s World Food Programme, which feeds more than 12 million Yemenis a month, said it was halving aid to areas under Houthi control because donors, notably the US, have cut their funding, claiming the rebels are diverting and weaponizing aid.

USAID has cut its funding for north Yemen by $200 million annually in a bid to force Houthi rebels, who control Yemen’s most populous region in the country’s north including the capital Sanaa and are on the point of defeating Washington’s Saudi-led proxies, to agree a ceasefire.

Lise Grande, the United Nations’ humanitarian coordinator for Yemen, said that the cuts “could not have come at a worse time, with COVID-19 threatening.” She added, “If there is one country that cannot deal with a coronavirus outbreak, it is Yemen. The health system is fragile and, in many cases, broken. And after five years of war, the immunities of the population are some of the worst in the world. Yemenis are starving. We fear people are going to die of cholera and now we’ve got coronavirus.”

More than 110,000 Yemenis have lost their lives and hundreds of thousands more have been wounded since the Saudi monarchy invaded the country in March 2015 in an attempt to reimpose the unelected puppet government of President Abd Rabbuh Mansur Hadi, now holed up in Riyadh. Saudi-led coalition airstrikes—more than 257,000 in the five-year war—initially targeted Yemen’s military establishment, but have since hit civilian targets, including homes, hospitals, schools, buses and weddings, accounting for more than two-thirds of Yemen’s civilian casualties.

None of this would have been possible without US and UK weapons, training, intelligence, aerial refueling, and Special Forces support to the Saudi monarchy and its de facto head Crown Prince Mohammed bin Salman, as well as political and diplomatic cover at the United Nations. While the United Nations Security Council—where both Washington and London wield a veto—has imposed sanctions against the Houthi rebels, it has not approved a single resolution condemning Riyadh’s mass killing spree.

The Trump administration has backed the war in Yemen as part of its efforts to forge an anti-Iranian alliance made up of the Saudi monarchy, the Persian Gulf Sunni oil sheikdoms and Israel, branding the Houthi rebels as an Iranian “proxy force.”

The House of Saud intervened in Yemen, which along with Djibouti controls the southern entrance to the Red Sea through which much of the region’s oil exports are shipped, to prevent the emergence of any government on its southern border it doesn’t control. It also fears that the Houthis might provide a political template for its own oppressed Shia minority in its main oil producing region to emulate.

The war has produced the world’s worst humanitarian catastrophe. At least 14 million Yemenis are on the brink of famine, while 80 percent of the country’s 24 million people are reliant on food aid. Save the Children estimated last year that at least 75,000 Yemeni children under the age of five have starved to death since the onset of the war. Nearly 3.6 million people have been displaced by the conflict.

Meanwhile, the country has been ravaged by the worst cholera epidemic on record, with an estimated 1.2 million people infected and at least 2,500 deaths, and most recently by dengue fever in Hadramawt province. Dengue fever’s symptoms are similar to COVID-19, but without testing, it is hard to tell the difference. This is due not only to the destruction wreaked by the Saudi bombing campaign, but its punishing air, sea and land blockade of the country aided by the US Navy.

Despite the expenditure of enormous firepower, the Saudis have achieved none of their objectives and are on the brink of defeat, with the Houthis close to driving Saudi ground forces out of the oil- and resource-rich border province of Marib. Meanwhile, the Houthis have fired missiles at Riyadh.

The Saudi-led coalition, codenamed Operation Decisive Storm, comprising the Gulf States, Sudan and Morocco as well as mercenary outfit Academi, formerly Blackwater, has disintegrated. Qatar was suspended in 2017 following Riyadh’s fallout with Doha, while Morocco and the UAE withdrew their troops last year, followed by Sudan’s military-led transitional government that replaced the ousted dictator Omar al-Bashir pulling out its 30,000 troops in December.

The cooling of relations between Saudi Arabia and the UAE has been crucial, with Abu Dhabi announcing the withdrawal of its troops from Yemen last July. This gave succour to Islamist forces in the Southern Transitional Council seeking an independent southern state of Yemen, which would facilitate the UAE’s own influence over the Red Sea and access to the Horn of Africa where it has considerable commercial interests. There have been reports of secret talks between the UAE and the Houthis.

Abu Dhabi has toned down its condemnation of Iran, releasing $700 million of frozen funds to Tehran in October and shipping multiple batches of medical equipment in March to Iran.

Iran has seen the region’s worst coronavirus outbreak, with 4,585 reported deaths, part of a broader humanitarian crisis as a result of US sanctions. Last September’s attack on Saudi Arabia’s Aramco oil facilities, blamed on Iran despite the Houthis claiming responsibility, exposed Riyadh and Abu Dhabi’s vulnerability in the event of a US-led war with Iran.

The UAE has also sought to improve relations with Syrian President Bashar al-Assad, which is backed by Iran, reopening its embassy in Damascus in December 2018. It views his regime as a bulwark against Turkey, which backs the Muslim Brotherhood along with other Islamist forces it considers as hostile. Abu Dhabi Crown Prince Mohammad bin Zayed went public in his support for Assad, calling him on March 27 to voice his support for the Syrian people.

At the same time, Riyadh precipitated a catastrophic fall in oil prices, following a failure of the OPEC producing countries to agree a cutback in production, as it sought to hold onto its market share and push out its competitors in Russia and the US. But with oil providing the main source of government revenues, the fall in oil prices along with global demand plummeting by 30 percent as the economy moves towards a slump, the Saudis’ international bonds as well as those of Saudi Aramco plunged, with the Saudi riyal falling sharply against the US dollar. Riyadh’s move provoked fury in the US, where the US shale producers face bankruptcy.

Increasingly isolated and with opposition to the disastrous war in Yemen and a deteriorating economy mounting, the Saudis announced a unilateral, two-week-long ceasefire ostensibly because of growing concerns over the spread of the coronavirus, in an effort to bring the Houthis to the negotiating table. They pledged $500 million for the UN’s humanitarian response plan for Yemen and a further $25 million to help Yemen deal with the pandemic but said nothing about ending its blockade.

US Secretary of State Mike Pompeo hailed the move, tweeting, “Pleased to see the Saudi-led Coalition’s announcement of a unilateral ceasefire in #Yemen” and urged the Houthis to “respond in kind.” The Houthis dismissed the cease-fire announcement as a “political and media manoeuvre.”

At Thursday’s G20 summit, Saudi Arabia, Russia and other members agreed to cut production by a record 9.7 million barrels per day, with other members agreeing to buy up crude to fill emergency stockpiles and cut new oil supplies, in a bid to revive the oil market, although this is nowhere near enough.

As COVID-19 pandemic surges across India, business presses for quick return to work

Wasantha Rupasinghe & Keith Jones

Indian Prime Minister Narendra Modi is to deliver a speech to the nation today, Day 21 in the three-week, all-India anti-coronavirus lockdown he announced without warning—and, as it quickly emerged, serious forethought or planning—on March 24, less than four hours before it came into effect.

In recent days, Modi and his Bharatiya Janata Party (BJP) government have signaled that the lockdown will be extended past Tuesday throughout or, at least, across large swathes of what is the world’s second most populous country. However, the government has also indicated that it may announce widespread exemptions for sections of manufacturing and other commercial activity.

During the shutdown, the number of COVID-19 cases and deaths has surged. On Monday, Indian authorities said the previous 24 hours had been the deadliest yet with 51 deaths, bringing total fatalities to 324. The number of confirmed COVID-19 cases was given as 9,352. But by the end of Monday, the media reported that confirmed cases had spiked by a further thousand to 10,440, and that there had been at least 34 additional deaths.

Over the past week, India’s confirmed COVID-19 infections have increased by almost two-and-a-half times, while deaths have more than tripled. However, Indian authorities have barely tested 200,000 people in a country of 1.37 billion people, leading most health experts to conclude that the true number of infections is far higher.

At least seven states, home to more than a quarter of India’s total population—Odisha, West Bengal, Maharashtra, Telangana, Karnataka, Tamil Nadu and Punjab—have announced that they are extending the current lockdown of all but “essential” services and businesses until the end of April. Of the seven only Karnataka is currently ruled by the BJP.

India’s workers and toilers find themselves caught between a rock and a hard place, due to the criminal negligence of the Modi government and the Indian elite.

The highly contagious and potentially lethal COVID-19 constitutes a grave menace. Widespread poverty—a recent government study found more than 90 percent of Indian children aged five or less are undernourished—India’s dense population and its dilapidated to non-existent public health infrastructure make India especially vulnerable to the coronavirus pandemic and a potential catastrophic loss of life.

However, the BJP government’s lockdown was implemented without any thought or care as to how hundreds of millions of workers and toilers with little to no savings could survive three weeks without any income, or how families lacking running water and living five or more to a room could regularly wash their hands and practice social distancing.

The result has been a social calamity. The most poignant expression of this has been the plight of the migrant workers employed as day-labourers in construction and sweatshop manufacturing in India’s cities. With the government-ordered lockdown, many migrant workers lost both their income and their lodgings, either because the latter were connected to their employment or because their landlords expelled them since they could no longer pay rent.

Left to fend for themselves and with all public transport halted, millions of migrant workers sought to walk back to their native villages, where they hoped to find food and shelter with kith and kin.

Underscoring the haphazard character of the government’s actions, only after this mass migration had been unfolding for several days did authorities recognize that it threatened to spread the coronavirus from urban to rural India, where the majority of the population still lives and where health facilities are all but non-existent.

Its response was characteristically brutal. Security forces were ordered to prevent the migrant workers from crossing state boundaries. Millions of migrant workers have now been herded into makeshift internal refugee camps, with most state governments relying on NGOs to provide them with food, drinking water and sanitation. Needless to say, these poorly serviced camps risk becoming centres of illness, including COVID-19.

Summarizing the sentiments of millions of workers who have been confined to these camps for the remainder of the lockdown, Neeraj Kumar asked the Indian Express, “Why is the government treating us like criminals?” Kumar, who is now under lockdown in a camp in Uttar Pradesh’s Bahraich District, wanted to know when authorities will “release” them.

The hastily organized shutdown and the government’s even more improvised, thin gruel 1.7 lakh crore rupee (US $22.5 billion) relief package has pushed hundreds of millions of workers and toilers toward a social abyss.

Unemployment in urban areas, reported the Centre for Monitoring the Indian Economy last week, is now in excess of 30 percent and in rural areas more than 20 percent.

In announcing the lockdown, Modi, whose Hindu supremacist government has ruthlessly implemented the agenda of big business—austerity, privatization, and the promotion of precarious contract-labour jobs—made a show of instructing the state governments to ensure larger Indian firms keep paying their workers regular wages during the lockdown. Predictably this has proven a cruel hoax.

A survey by Safe in India, an NGO focused on improving occupational health and safety, found that 79 percent of workers employed in the Gurgaon-Manesar industrial belt, an auto-manufacturing centre in the northern state of Haryana, had received no pay.

According to a report published by the Scroll.in website, a rapid assessment survey conducted by another NGO, Jan Sahas, found that 80 percent of the country’s migrant and daily wage workers feared that they would run out of food before the end of the lockdown. “Nearly as many also worry that they will not be able to find work once lockdown ends” and over 40 percent of migrant workers surveyed had already run out of all food supplies. Jan Sahas also found that a “large number” of workers would be denied access to the BJP government’s relief package, because they lacked a ration card or due to some other technicality.

Big business is anxious for the lockdown to end so that it can return to ruthlessly sweating profits from workers, and the Modi government as always is anxious to do its bidding.

The Times of India, citing “official sources,” reported on April 12 that the central government “in consultation with states is moving to restart economic activities in a graded manner in what is seen as a nuanced change in strategy from saving lives a month ago to saving lives as well as livelihoods now in the fight against the pandemic.”

The government’s Industry Ministry has been pressing for production to resume in at least fifteen sectors, including the auto, steel, telecom equipment, agro-chemical, rubber, and construction industries.

The head of the Federation of Indian Export Organizations (FIEO) welcomed a memo sent by the Industry Ministry to the Home Ministry pressing for the early resumption of production. “Opening of all export industries,” said FEIO President Sharak Kumar, “large as well as MSMEs (micro, small and medium enterprises) including SEZs (special economic zones) and EOUs (export-oriented units), will help the exporters execute whatever little orders remain with them after huge cancellations in the last two months,” and convince overseas buyers that the situation is fast “normalizing” in India.

Government and industry claims that workplaces can be made safe by reducing the number of employers per shift and maintaining social distancing are a fraud. India’s employers are notorious for their indifference to safety concerns. A 2017 study, for example, found that there are 37 fatalities per day just in the construction industry.

As for the BJP government, it has sought to change India’s labour laws to prioritize company “self-reporting” on their compliance with them, including with health and safety regulations. Moreover, in the face of the coronavirus pandemic New Delhi took no steps to ensure health workers would be provided with the personal protective equipment (PPE) needed to protect themselves, their patients, their families and the broader public from the potentially lethal COVID-19.

To facilitate employers quickly ratcheting up production, at least initially with less than full staff, the Modi government is reportedly preparing to invoke “exceptional circumstances” to modify the Factories Act by decree. It wants to empower companies to force workers to work 12 hours per day, six days a week, or a total of 72 hours per week, and do so without paying stipulated overtime rates.

Canada’s coronavirus wage-subsidy tailored to propping up business, not protecting workers’ incomes

Roger Jordan

Canada’s parliament held a special one-day session Saturday to rush through legislation authorizing the Trudeau Liberal government’s 75 percent wage-subsidy program for businesses impacted by the coronavirus crisis.

As with the other financial and economic measures the Liberals have taken in response to the pandemic, the subsidy package was supported by all parties in parliament, from the Conservative Official Opposition to the Greens and New Democrats.

The $73 billion Canada Emergency Wage Subsidy program will pay 75 percent of an employee’s normal wage, up to $847 per week, for companies that suffered or will suffer a 15 percent decline in revenue decline in March and a 30 percent decline in subsequent months.

The program is backdated to March 15 and is slated to last a total of three months. However, it will not begin to make payments to employers for another four to six weeks. Consequently, workers will not receive any money until mid or even late May.

The wage subsidy is being universally touted by the political establishment and corporate media as necessary to save jobs and help struggling small businesses cope. The reality is that business groups lobbied strongly for it, and the program has been expressly tailored to meet the needs of the largest and most profitable corporations, which are anxious to keep their workforces largely or wholly intact. Large companies, including Canadian subsidiaries of global players like the automakers Ford, GM, and Fiat-Chrysler, will be able to avail themselves of the program, using state funds to meet their payrolls.

Moreover, while providing no more than stopgap relief for workers, the Liberals’ wage-subsidy program provides the government with much needed political camouflage. It serves to obscure that the principal aim of the government’s package of COVID-19-triggered emergency economic measures has been to bail out the banks and financial markets, so as to safeguard the wealth and investments of Canada’s capitalist elite.

Nothing in the wage-subsidy legislation prevents companies from using the government aid to impose huge wage cuts, since there is no requirement for the remaining 25 percent of pay to be topped up. Nor is there any mechanism to stop companies laying off their workers when the wage subsidies end.

Prime Minister Justin Trudeau, in his House of Commons address introducing the legislation, sought to cast himself as a military commander-in-chief leading a united nation into battle. While conceding the fight against the coronavirus is not a “war,” Trudeau cynically invoked the Canadians fighting on the “front lines” in homes, hospitals, and the community. He compared their resolve to that of the thousands of Canadians who fought and died 103 years ago this month in the First World War Battle of Vimy Ridge—which was subsequently hailed as a great Canadian victory as part of the Canadian ruling elite’s drive to impose conscription in the face of mass opposition.

“As Canada confronts this crisis,” intoned Trudeau, “we are all called to serve, to fight for and alongside each of our fellow citizens …. Our job as Canadians is to uphold the dignity and sanctity of every single human life, whether they be rich or poor, young or old, ailing or healthy. That is our duty—without reservation.”

Leaving aside the nauseating combination of nationalist and militarist demagogy, which until only a few years ago was reserved to the likes of former Conservative Prime Minister Stephen Harper, Trudeau’s pompous invocation of national unity is a lie. Every step taken by his government, with the support of the opposition parties, has served to protect the interests of the banks, super-rich, and major corporations, while placing the working class and the overstretched health care system on rations.

To date, the government, the Bank of Canada and other state institutions have funneled some $650 billion into the hands of the banks and big business, through a myriad of measures. These include a $200 billion Bank of Canada program to purchase risky state and corporate debt, a Canada Mortgage and Housing Corporation scheme to buy $150 billion in bank mortgages, a halving of the big banks’ capital requirement, which immediately swelled their balance sheets by $150 billion, and billions of dollars’ worth of tax deferrals.

While no resources are being spared for the banks and big business, close to 6 million workers have been forced to apply for miserly government assistance, whether in the form of Employment insurance or the new Canada Emergency Response Benefit (CERB). CERB recipients are to receive a piddling $2,000 per month for a maximum of four months, a sum that does not even cover the average cost of a single-room apartment in many major urban centres. Moreover, due to a series of loopholes and bureaucratic requirements, conservative estimates suggest that hundreds of thousands of workers are not yet entitled to any government assistance.

These meagre rations were implemented in close consultation with the trade unions, which like the NDP have seized on the coronavirus crisis to shift further to the right and deepen their already close collaboration with the Trudeau government. Canadian Labour Congress President Hassan Yussuff, who appealed for a “collaborative front” with the employers, held a series of closed-door, corporatist deliberations with the Trudeau government and the Canadian Chamber of Commerce in the first two weeks of March to help formulate Ottawa’s response.

Virtually nothing has been done for the dilapidated health care system. The Trudeau government has announced just $3 billion in additional health spending, two thirds of which will be funneled through for-profit companies that have promised to make face masks, ventilators, and other medical supplies, but have offered no time scale for this urgently required equipment. Meanwhile, health care workers in hospitals, clinics and long-term care facilities are being forced to work with no or inadequate personal protective equipment (PPE), putting their lives, those of their families and patients at risk, and governments across Canada are continuing to ration COVID-19 tests, often denying then even to frontline medical workers.

To talk under these conditions of upholding the “dignity and sanctity” of all life, “rich or poor,” is a criminal fraud. If Trudeau’s wish to serve as the nation’s commander-in-chief were to be granted for a moment, he and his ministers would have to be court martialed for treason.

The ruling elite’s attitude to the health of the population was summed up Sunday by Minister of Employment, Workforce Development, and Disability Inclusion Carla Qualtrough. Referring to her previous role as Minister for Public Service Procurement between 2017 and November 2019, she told Global News that while her department was “very focused…on defence procurement, on getting the coastguard the ships they need, on getting the navy”—i.e. on building up Canadian imperialism’s war machine—replenishing Canada’s stockpiles of PPE “was not a top priority.”

Even as Trudeau offered his sermon of consolation to the nation, big business and sections of the political establishment continued their campaign for a precipitous “reopening” of the economy under conditions of a raging, out of control pandemic. Two days before Trudeau addressed parliament, the Ontario government set up a committee for economic reconstruction tasked with preparing a plan for the lifting of restrictions on “non-essential” businesses. Meanwhile, Quebec Premier Francois Legault, egged on by province’s main employer organization (the Conseil du Patronat), argued in his Thursday and Friday coronavirus updates that there would be little risk to public health if work resumed forthwith in construction and other industries.

The great political lie that the ruling elite’s response to the coronavirus crisis is being carried out to protect “all Canadians” is facilitated by the so-called opposition parties in parliament. In Saturday’s debate, Andrew Scheer for the Conservatives, Yves-Francois Blanchet for the Bloc Quebecois, Jagmeet Singh for the New Democrats, and Elizabeth May for the Greens all praised the wage subsidy bill and the government’s response to the COVID-19 pandemic more generally . May and Singh, in particular, emphasized their happiness with their parties’ close cooperation with the Trudeau government.

Where criticisms were made, they were hollow given the joint participation of all the parties in the decades-long assault on universal public health care and on workers’ jobs and living standards. Scheer criticized the Liberals’ slow response to the pandemic, pointing out that up until early March, the government was still claiming that the threat posed by COVID-19 was low. Conservative Senate leader Don Plett attacked the government for being “asleep at the wheel” for its refusal to implement stricter travel controls on incoming passengers from China.

The Canadian government’s failure to respond in a timely manner to the coronavirus, which resulted in two vital months being squandered, is clear for all to see. But its principal failings lay, and continue to lie, in its refusal to mobilize society’s resources, beginning with the vast holdings of the corporate elite, to bolster the health care system, and to supply medical workers with the necessary equipment and protective gear to allow them to provide care, while keeping themselves, their patients, and family members free from infection. More fundamentally, these failures are bound up with all of the parliamentary parties’ prioritization of private profit over human lives.

This criminally irresponsible policy can only be reversed by the independent intervention of the working class. Workers must take up the fight for full wages for all those laid-off or unable to work because of the pandemic, including gig economy and contract workers. Essential workers must be provided all the PPE and other equipment they require to work in a safe environment, and billions must be poured into strengthening the health care system. There must be no return to work until the pandemic is controlled and the equipment, staff, and systems are in place to ensure systematic universal testing, contract-tracking, and timely care for all who need it.

These immediate demands are incompatible with the current social order, which is based on securing corporate profits at the expense of human life. The struggle for their implementation must therefore be linked to the fight for a workers’ government committed to socialist policies.

The impact of the pandemic on childcare in the US: A social catastrophe affecting generations

Nick Barrickman & Linda Rios

The coronavirus pandemic has exposed the complete inability of the capitalist system to serve the basic requirements of society at every level. In addition to the death and destruction of human life taking place across the planet, the capitalist system must be particularly indicted for the detrimental impacts upon the youngest and most vulnerable.

The broader impact of such a crisis on the childcare system is impossible to calculate. In the case of small childcare business owners, many will be followed by a trail of debt which will haunt them for years to come. Parents, under immense economic and social pressure to return the work, will find limited options for childcare available. Families will be uprooted, deeply affecting young lives in the process.

The impact of the COVID-19 pandemic on early childhood development

Early childhood development programs which serve children at pre-Kindergarten ages (0-5 years of age) are vital to the cognitive and social functioning of the young in the first stages of their lives.

According to the federal government, there are roughly 21.4 million pre-Kindergarten children and 1.7 million healthcare workers in the United States. Reports from the Hunt Institute show that as of last week, 17 states in the US have closed all childcare facilities for fear of contagion. All other states still allowing such facilities to remain open are doing so at risk to their staff and the families they serve.

As the pandemic has forced governments to enact social distancing protocols, many teachers and businesses have sought to maintain relationships with their students through online instruction. In early childhood development, such a medium holds little value.

An article published in March by the National Association for the Education of Young Children (NAEYC) CEO, Rhian Evans Allvin, titled “Making Connections: There’s No Such Thing as Online Preschool,” plainly states: “The reality is that there is no online equivalent to preschool.”

The article references a 2015 National Research Council report on childhood development which establishes “the first eight years [as] a profound developmental period that impacts the whole life. Crucial, complex areas of development include the relationship between language and mathematics, self-regulation, social and emotional development, responsible decision-making, physical development, self-management, and relationship skills.”

For a child, such a period of life requires the most attentive care. A child’s future development may be forever altered amid a COVID-19 pandemic, in which they are forced to remain indoors in isolation due to social distancing, or are forced to keep physically separate from peers and adults in public.

“For my older son, online classes have already started [but] I haven’t heard anything yet from my younger son’s teacher,” a mother in California with school-aged children from told the World Socialist Web Site. “My younger son thinks that school at home is the new norm now, he doesn’t really understand what’s going on. He might end up repeating the third grade if he has a difficult time,” she said.

Childcare Providers

In addition to the impact on the individual child, an entire social ecosystem has been upended by the crisis. In a comment to Education Dive, NAEYC head Allvin stated that over 70 percent of child care facilities in the US shuttered within a single week last month. “We’re in a position that so many providers are making decisions about whether they lay off their staff,” she said, that schools can’t “even start to wrap their heads around making content available for families.”

Allvin’s estimate does not include smaller entities and organizations which provide child care outside of the NAEYC accreditation system. An article in the Connecticut-based Greenwich Times notes: “myriad small-business childcare providers… that are not incorporated into school readiness programs, and are therefore cut off from subsidy funding,” are being excluded from the various state-level support programs.

A 2019 report produced by Child Care Aware of America found that in over 20 states a majority of childcare establishments were home-based. Lacking corporate sponsorship, such facilities have been forced to consolidate expenses and focus simply on keeping their businesses open for the duration of the pandemic. “There’s no corporate entity—it is just us,” stated Allison Morton, owner of Portland, Oregon-based Small Wonders to USA Today.

According to the National Women’s Law Center, 30 percent of America’s childcare providers will be forced to go out of business after a closure of two weeks or more. Furthermore, a NAEYC survey found that 63 percent of childcare providers would go out of business after a month.

The recently-passed Coronavirus Aid, Relief, and. Economic Security (CARES) Act provides merely $3.5 billion to cover childcare costs for “essential workers” and support some childcare providers, but is totally inadequate to cover the costs of a $99 billion industry in which most providers normally operate on a shoestring budget. The $350 billion Paycheck Protection Program (PPP) contained in the bill will be on a “first-come, first-served basis,” states the same article in USA Today. Smaller businesses, lacking paid accountants and other financial advice, are at a disadvantage in securing such loans.

For many smaller businesses which operate based upon payment from families rather than state-provided subsidies, the impact of the coronavirus will lead to bankruptcy as working parents—themselves in dire financial straits after going a lengthy time without working—will not be able to afford to re-enroll their children.

Childcare Workers

Before the COVID-19 pandemic, early childhood caregivers represented one of the lowest paid and most exploited sections of the working class. According to Vox, the average hourly wage within the childcare industry is $10.82. “We’re overworked, we’re underpaid, and we don’t even exist,” remarks Miren Algorri, a childcare provider from Chula Vista, California, of her situation.

Teachers and childcare staff can hardly afford the cost of a doctor’s bill, and are even less likely to be able to afford the cost of a major medical emergency. As in many industries, coming to work during an illness rather than staying home to recover while forgoing a paycheck is a regular part of daily existence. Likewise, many parents, knowing the health hazards which are posed in a preschool environment, will decide to withdraw their child, leading many facilities to cut staff hours due to a lack of enrollment.

“Inside a preschool, a virus can spread like wildfire,” Suzanne, a childcare worker from San Diego, California, told the WSWS. “We encourage teachers to ‘scan’ the children in the morning at drop-off; if the child appears unwell, we tell the parent the child has to go home, but if it’s the middle of the day, it’s much harder to get hold of parents and parents are much more hesitant to pick up their child. They’ll say ‘I’m working right now, I can’t come get them’ or parents will try to bring in their child the next day while they are still exhibiting symptoms.”

While some facilities have continued providing childcare services to workers deemed essential, state regulators have sought to roll back staffing requirements and other safety regulations in order to allow providers to remain open at minimal costs. In the name of “offering necessary regulatory flexibility,” the New Jersey Department of Families and Children last month waived requirements that childcare facilities hire qualified staff while allowing schools to eliminate fire drills, limits on class sizes, and other rules. After outcry from childcare providers, the state was forced to reinstate its previous standards.

As the COVID-19 pandemic cuts deeper into the heart of modern society, the necessity for independent rank and file organizations representing the interests of all working people becomes all the more imperative. While essential workers such as health care workers and workers in logistics, transport, grocery and other industries deal with the COVID-19 pandemic, childcare professionals are tasked with the critical job of caring for their children, posing the objective need for the class unity of all workers involved in the vital tasks of social life.

As the pandemic exposes the failure of capitalism to address society’s basic needs, the working class must step in to pose a revolutionary challenge to the profit system through the strategy of international socialist revolution.

Transit agencies and governments continue to expose workers and riders to coronavirus pandemic internationally

Sam Dalton

Mass transit systems across the globe are in acute crisis in the midst of the COVID-19 pandemic. While service continues at varying capacities internationally, the deadly conditions facing transit workers and the vulnerability of mass transit systems have impacted nearly every corner of the planet.

The increasing number of deaths and threatened collapse of transit systems are not, in the final analysis, primarily the result of the lethality of the COVID-19 virus, but rather the outcome of an ill-prepared and criminal response by the ruling class to a foreseeable public health crisis.

In the United States, at least 61 transit workers have died from COVID-19 at the epicenter of the pandemic in the New York City, as well as four school bus drivers. In Philadelphia, at least three transit workers have died from the virus. Across the country transit workers have died in Chicago, Boston, Detroit, Philadelphia, Cincinnati, St. Louis, Newark, Austin, New Orleans, and in Washington state, Virginia, and Connecticut. Given a scarcity of information and the failure to report deaths outside hospitals in the US, the number of fatalities and geographical extent of the crisis is likely much greater.

A similar situation exists in Europe. In the United Kingdom, at least 14 of 28,000 Transport for London (TfL) workers have died from the virus. Régie Autonome des Transport Parisiens (RATP) has confirmed the deaths of at least three of its 63,000 workers.

These deadly conditions and the contempt for workers’ safety are provoking intense anger and a growing rebellion, with wildcat strikes or job actions having taken place by transit workers in Detroit, Birmingham, and San Diego, and bus drivers threatening to strike most recently in Los Angeles.

Transit workers in all corners of the globe are being forced to interact with hundreds and thousands of individuals on any given day and in most places continue to work without basic personal protective equipment (PPE). Conditions in New York are only a foreshadowing of the deaths that will result from an uncontrolled spread of the virus in underdeveloped countries, or the premature slackening of social distancing being planned in the advanced economies.

In the US, Europe and elsewhere, the response of governments has been guided by an overriding consideration: the defense of corporate and financial profits.

The crisis threatens the wider collapse of mass transit systems, many of which were already in dire straits due to decades of systematic attacks on funding from capitalist governments the world over. Huge declines in ridership as a result of the pandemic, the cessation of fare collection, and the knock-on effects of the crisis on other forms of revenue mean that transportation systems are facing collapse. As millions of essential workers, including health care workers, are forced to rely on mass transit to get to work, the social consequences of any such collapse would be catastrophic.

Following an 87 percent decline in ridership in March from the same period last year, the Metropolitan Transport Authority (MTA) in New York, which employs 72,000 workers, saw its bond rating downgraded by S&P Global amidst what MTA Chairman Patrick Foye described as the authority’s “biggest liquidity crisis ever.” Already $44 billion in debt, the operation of the MTA has been increasingly subordinated to the profits of its bondholders in recent years. While the MTA is unable to provide its workers with basic PPE, in 2019 over 16 percent (or $2.6 billion) of its operating budget was spent on repaying bondholders.

Fare revenue has collapsed throughout the US. Other forms of income for transit authorities, such as sales taxes in Illinois, payroll taxes in Portland, Oregon, and parking fees in San Francisco, have also rapidly declined. Overall, transitcenter.org estimates that US transit systems face a deficit of $26-40 billion.

In Europe, French RATP ridership is down 70 percent. Tube ridership in London was down 88 percent and bus usage down 76 percent, according to Transport for London (TfL) data. TfL’s best case scenario estimates it will lose £500 million in income due to the crisis.

The response of transit authorities and unions to the deaths of workers internationally has been one of criminal indifference. The veneration of workers and crocodile tears shed for those who have died are cynical attempts to mask this callousness. In reality, the primary concern has been to keep workers on the job and convince them that working conditions are safe, despite the failure to provide basic safety equipment.

On April 10, the WSWS reported that following the deaths of 14 London bus drivers, TfL and the Unite union released a joint statement, declaring, “PPE should be reserved for those working directly with people experiencing COVID-19 [i.e. health care workers].” The claim that it is impossible to provide all essential workers with protective equipment—even as trillions are being handed over in a matter of weeks to the major corporations and banks—is a brazen lie and an attempt to pit workers against each other.

In France, RATP President Catherine Guillouard gave an interview on Saturday to France3 in which she praised transit workers fighting “on the frontline of the COVID-19 crisis.” Despite the fact that the lockdown in Paris began almost a month earlier on March 16, the RATP only began to distribute surgical masks to its employees on April 8. Transit workers in other French cities continue to work without any PPE whatsoever. The dangers facing French transit workers are a direct result of the Stalinist Confederation of Labor’s isolation of a six-week transit strike in December and January.

In New York, the MTA, working alongside Transportation Workers Union (TWU) Local 100, initially tried to placate workers’ anger with the provision of surgical masks. Following more outrage, the limited provision of N95 respirator masks finally commenced late last week. Similar measures were taken in Boston by Carmen’s Union Local 589, which represents 6,000 transit workers.

The response of the TWU is a continuation of the role it played in facilitating further attacks on workers in the sell-out contract it pushed through in January. The TWU was silent as MTA Chairman Pat Foye, echoing president Trump’s remarks, attempted to distract from the blood on his own hands by discrediting the World Health Organization (WHO) in a letter to the New York Times defending the MTA’s response.

Despite the TWU’s failure to demand mass testing for workers and its celebration of the provision of inadequate PPE, TWU Local 100 President Tony Utano hollowly declared that “we will come out stronger with tighter bonds after we defeat this evil virus.”

Mass transit systems provide conditions for the virus to rip through large sections of the population in a very short time. Their continued operation without adequate safety measures has already led to thousands of unnecessary deaths, and will no doubt contribute to many more unless workers take matters into their own hands. The failure to protect the masses from the threat of COVID-19 is not the product of a few bad apples in positions of power in the transit agencies, the unions or in government. The incompetence and criminality of the response reflects the bankruptcy of the capitalist class, which subordinates the welfare of billions to its insatiable desire for profit.

The crisis engulfing international mass transit, intensified by the COVID-19 pandemic, is one of the sharpest expressions of the wider conflict between the profit interests of a tiny minority of oligarchs and the life-and-death needs of the working class, the vast majority of society.

What is required is a unified movement of workers across national borders, independent of the trade unions and capitalist political parties, in a struggle for the immediate redirection of resources away from the corporations and towards combating the pandemic and ensuring the safety of the population. This must be carried out as part of the fight for socialism, including the placing of the major corporations, transit systems, and other vital infrastructure under the democratic control of the working class, in order to run them to meet social need, not private profit.

Turkey’s COVID-19 prison amnesty excludes political prisoners, journalists

Baris Demir

Turkey has one of the world’s fastest-spreading coronavirus epidemics, with over 52,000 cases and 1,100 deaths since the first case was diagnosed on March 10. A new bill proposed by the ruling Justice and Development Party (AKP) and its government coalition ally, the Nationalist Movement Party (MHP) brings a partial amnesty to some prison inmates. This comes amid fears that Turkey’s spiraling epidemic could lead to mass deaths if COVID-19 spreads across the prisons.

As many as 90,000 prisoners, roughly one-third of the total, could benefit from the bill, but tens of thousands of political prisoners are excluded, as they have been charged on fraudulent “terrorism” charges. These detainees, including journalists critical of the government, whose trials continue without any concrete evidence, will not be eligible for the amnesty.

The Turkish government is thus taking as an example the British government, which is refusing to release WikiLeaks founder Julian Assange as it releases thousands of prisoners.

In 1998, as mayor of Istanbul, President Recep Tayyip Erdoğan was imprisoned and banned from political activity for four months for inciting religious hatred after he read a poem by Ziya Gökalp. However, he returned to politics in 2002 thanks to a special law supported by the Republican People’s Party (CHP). Today’s amnesty, had it been implemented in 2002, would not have amnestied Erdoğan himself.

Fearing the constitutional court will annul sentences or apply the amnesty to all prisoners in accordance with the principle of equality in the constitution, Erdoğan’s government insists that the bill is not an amnesty but only an “execution arrangement.” This arrangement also paves the way for arbitrary prison sentences for articles or social media posts criticizing the government.

During the pandemic, Turkish prisons have become very dangerous. Overcrowding, insufficient ventilation, lack of sunlight, common toilets and bathrooms, insufficient access to hygienic products and cleaning of dining halls and kitchens, inadequate medical staff, long waiting times for medical treatment, all make it easy for the virus to rapidly spread across an entire prison population.

The crisis in prisons is an international phenomenon. With COVID-19 cases already detected in several Turkish prisons, last week prisoners revolted in the southeastern city of Batman because they are not included in the execution bill. Iran has already released 70,000 in an attempt to prevent the spread of COVID-19, while prison protests and riots have erupted in Italy and Colombia.

The opposition CHP’s mild criticisms of the bill have focused on promoting trust in the state. CHP spokesperson Faik Öztrak complained, “You arrange a remission on execution because of an epidemic. You keep journalists in prisons, you release the thieves. This is clearly political opportunism. ... With the execution arrangement, those who accept bribes will go out; those who report bribery will go to prison.”

CHP officials hypocritically criticize the bill under the mask of democracy, but they are complicit in the AKP’s police state policies. In 2016, the CHP voted for an AKP-backed constitutional amendment stripping the Kurdish nationalist Peoples’ Democratic Party (HDP) deputies of parliamentary immunity. As a result, former HDP leaders Selahattin Demirtaş and Figen Yüksekdağ and several former HDP deputies are still in prison. Nonetheless, the HDP unhesitatingly formed an alliance with the CHP in the last year’s local elections.

In a statement, the HDP, together with various smaller petty-bourgeois parties, reacted to the bill as follows: “The right to health and life of prisoners is supposed to be secured by the state and the government. However, the new regulation proposed by the government shows that the AKP-MHP bloc only thinks of those close to it in this respect. The rights of the opposition members are openly violated. ... Imprisoned politicians, former members of parliament, mayors, journalists, academics, students and citizens who have used their right to freedom of expression in the social media are excluded from this regulation.”

This simply covers up the reactionary record of the Kurdish nationalists themselves. The People’s Protection Units (YPG), the main US proxy force in Syria, holds political prisoners in northern Syria in appalling conditions. Alleged Islamic State (ISIS) fighters and their families are kept in prison camps in horrific conditions, without sufficient food, on the orders of Washington and the other NATO imperialist powers.

According to 2020 data, there are a total of 282,703 prisoners in 355 prisons in Turkey. T24 reported that about 37,000 were jailed on “terrorism” charges, according to the Ministry of Justice statistics. In Turkey, it mostly means non-violent political offences.

When Erdogan’s AKP came to power in 2002, the number of prisoners in the country was just 60,000. While the total population increased less than 20 percent from 65 million in 2002, the prison population almost quintupled. The AKP has built 178 new prisons in this period and 61 new prisons are expected to open in 2020.

The turn towards a mass jailing policy is in line with the AKP’s long-standing drive toward a police state, authoritarian rule at home targeting the working class, and involvement in imperialist wars across the Middle East.

As the WSWS stated in 2017: “Erdogan’s attempt to seize dictatorial powers flows from the war drive with which the imperialist powers responded to the Egyptian Revolution. Under pressure from NATO, the Turkish ruling class abandoned Erdogan’s ‘zero problems with neighbors’ policy and backed imperialist wars for regime change in Libya and then in Syria, initially using Al Qaeda forces as proxies.”

After the defeat of their Al Qaeda proxies in Syria, the imperialist powers settled on working with Syrian and Iraqi Kurdish nationalist groups, instead of the Islamist Free Syrian Army.

The AKP government saw this as a fundamental threat to Turkey’s territorial integrity and stepped up its offensive against Kurdish nationalist groups, ending the “peace process” with the Kurdistan Workers Party (PKK). As a result, thousands of Kurdish politicians, including lawmakers, mayors, and journalists, were imprisoned.

The Syrian war also led to a major shift by the AKP toward a rapprochement with Russia and China, igniting a bitter conflict with the US administration and its European allies. In July 2016, a section of Turkey’s military launched an abortive putsch out of NATO’s Incirlik air base, encouraged by Washington and Berlin.

After the coup attempt, Erdoğan imposed a state of emergency and set about drafting a new constitution to consolidate his power. Some 150,000 public servants and soldiers have been dismissed from their jobs and more than 500,000 people were arrested. More than 30,000 people are in prison, most of whom did not participate in the coup. Hundreds of critical journalists and academics were jailed or forced into exile.

According to a recent Journalists’ Union of Turkey (TGS) report, there are 85 journalists in Turkish prisons, though the real number may be well over 100.

Class conscious workers will defend the rights of political prisoners and journalists. During the pandemic, measures must be taken to protect all prisoners and other vulnerable sections of society. Political prisoners and imprisoned journalists should be released immediately.

German airline Lufthansa receives multibillion-euro bailout, prepares to cut 18,000 jobs

Dietmar Gaisenkersting

Lufthansa, Europe’s largest airline, is exploiting the coronavirus pandemic to implement long-planned attacks on their workforces. Almost all sections of the Cologne-based airline will be impacted.

Due to the travel restrictions imposed in an effort to slow the spread of the coronavirus, global air travel has virtually come to a standstill. Around 700 of Lufthansa’s 763 planes have been taken out of service. Lufthansa has requested or plans to request short-time work for 87,000 of its 135,000 workforce.

Lufthansa airplanes parked at the Willy Brandt Airport (AP Photo)

The company has said nothing about the amount of state support it has received from Brussels, Berlin, Vienna and Bern. But according to trade union sources, the airline is receiving assistance amounting to hundreds of millions of euros per month. The Süddeutsche Zeitung reported on April 6 that loans of up to €10 billion were being discussed.

In a company press release on April 7, Lufthansa noted that it would take months for the travel restrictions to be lifted, and years before the demand for flights reaches pre-crisis levels. Therefore, the board “adopted wide-ranging measures to reduce the capacity of air travel and administration over the long-term.”

Planes will be taken out of service at Lufthansa Airlines, Lufthansa Cityline, and EuroWings. Lufthansa added that the “already initiated restructuring programmes at Austrian Airlines and Brussels Airlines will be intensified due to the coronavirus crisis.” At these airlines, as well as Swiss International, the size of the fleet will be reduced.

The daily Die Welt cited a company spokesman as stating that the airline would end up cutting 10 percent of its capacity. With a combined fleet of 763 aircraft, this would mean the elimination of between 70 and 80 planes. According to Die Welt, a rule of thumb in the airline industry states that around 220 jobs are connected to each large passenger plane, from the crew to caterers and ground staff. This would translate into the loss of between 15,000 and 18,000 jobs.

The subsidiary GermanWings is shutting down operations entirely, eliminating 1,400 jobs and grounding 30 planes. For 18 years, the airline was Lufthansa’s most important budget carrier, or, to put it more accurately, low-wage carrier. For the past four years, it was no longer an independent airline, but was gradually integrated into the Lufthansa subsidiary EuroWings. GermanWings flew the domestic routes for EuroWings.

The plan now is to integrate all EuroWings’ partner airlines under the EuroWings umbrella. This is due to the fact that at EuroWings, which is based in Austria, the wages and workplace benefits are much lower than those at Lufthansa and even GermanWings.

The Independent Flight Attendants’ Organisation (UFO) trade union, together with the services union Verdi, agreed a contract for EuroWings employees based in Germany last year that permits shifts to last up to 14 hours. Employees face wage cuts if they get sick, because Austrian contract regulations apply to their agreement.

Striking Lufthansa flight attendants in Frankfurt in early November 2019

The current round of attacks on thousands of jobs is just the beginning, with Lufthansa’s board declaring that this is a “first restructuring package.” This suggests that further attacks are to come.

The Cockpit Association (VC) trade union and UFO pointed to the “indecent proceedings at GermanWings” in a press release last week. They knew what was coming, because Lufthansa had refused to sign contracts that had already been distributed for short-time work, which included a job guarantee. Lufthansa deliberately avoided applying for short-time work at GermanWings and continued to pay wages in full so it could evade the job protection requirement. The following day, the announcement of the job cuts and winding up of GermanWings was made.

The well-rehearsed show then commenced: the company announced job cuts and the unions protested against them. Shortly thereafter, both parties reported the “success” that the job cuts will not result in “compulsory redundancies.”

On behalf of the employer, Lufthansa announced last Tuesday that it would seek to offer “further employment within the Lufthansa Group for as many as possible,” i.e., not everyone. The unions launched a toothless protest with an online petition to the board. VC president Markus Wahl accused Lufthansa chief executive Karsten Spohr of seizing on “a favourable situation” to “push ahead with the restructuring of the company at the expense of the workforce.”

By this point, UFO had already announced its willingness to do precisely that in partnership with the board. Spokesperson and former union head Nicoley Baublies said that no flight attendant would have to leave “if clever collective solutions are achieved and we exploit natural attrition.” The union is ready to enter talks soon, added Baublies.

One day later, new UFO President Daniel Flohr expressed his satisfaction to the daily Junge Welt that more than 11,000 people had signed the petition “for the retention of flights at GermanWings.”

“In addition, the trade union protest immediately resulted in compulsory redundancies being abandoned and the workers should keep their jobs,” Flohr claimed, however, no details have been presented in writing.

The policy of the trade unions is the direct product of their pro-capitalist orientation. UFO and VC were established and expanded due to widespread anger among workers at the close ties between Verdi and other unions affiliated with the German Trade Union Confederation (DGB) to management. For example, Verdi official Christine Behle is deputy chairwoman of the company’s supervisory board.

But UFO and VC identify just as much with the company’s concerns as Verdi. As soon as Lufthansa offers the smallest indication that it is prepared to negotiate with UFO and VC, the union representatives throw themselves at the company’s feet. This is because their top priority is to be recognised by the board as a trade union rather than waging a genuine struggle against it. When they organise strikes or other job actions, they always do so only against one part of the company, making it easier for the board to compensate for any lost revenue by deploying strike-breakers.

The most recent strike was a three-day stoppage by GermanWings flight attendants over the New Year. The outcome of this strike was that Lufthansa accepted talks, which resulted in a joint statement of intent at the end of January. Both parties, i.e., the company and UFO, “agreed to a multi-part procedure to resolve the conflict,” including a “major” arbitration process, “until the conclusion of which labour peace will prevail at Lufthansa.”

As recently as March 16, representatives of UFO and other unions spoke at an “air travel conference” in Berlin on how the airlines could make it through the coronavirus crisis unscathed. “To an unprecedented degree, employer associations, trade unions and other industry representatives were in agreement today that the emergency measures adopted by the government were welcome, but far from sufficient,” Baublies, who participated on behalf of UFO, enthusiastically reported.

“Profession-based unions with their detailed knowledge of the branch can now use their advantage and will fight to ensure that the particular requirements of the airline sector are protected and special problems resolved,” added UFO president Flohr.

Three weeks later, Europe’s largest airline then announced how it intends to resolve those special problems: with a multibillion-euro bailout from the government and billions more in savings through the elimination of up to 18,000 jobs.

Pandemic Economic Relief: For Elites or Commons

Zia-ur-Rahman

Every crisis is boom for some and bane for others. Over $8 trillion economic package have been announced by north American and European nations plus $1 trillion by Japan whereas total known lobal gold reserves amounts to $9.5 trillion. But where this money will go: business elite or commons. Is this helicopter money as discussed in economic textbooks or win for proponents of Modern Money Theory (MMT). Is this pandemic provide hidden refuge to coming recession as envisaged by analysts from mid-2019? Will it provide another quantitative easing for financial and capital markets in advanced countries? Bailing out the falling markets to continue the ponzi scheme of elites not contravene the basic principles of market economy for unregulated entry and exit of business based on success and failure.

This look more like continuation of crony capitalism arising out of neoliberals’ economics. In the end it will socialism for elite and market capitalism for poor. Neoliberalism initiated by Reagan and Thatcher should explain why healthcare in US fails to coup with pandemic which was first officially announced by China on 8th January. Healthcare sector in US has 20 percent share in  GDP. Why healthcare system consisting of cabal of pharma, insurance, and healthcare need financial rescue despite their size? In US they will be getting $180 billion out of free pie.

The Committee for a Responsible Federal Budget, a non-profit group that tracks US budget deficits, scored total spending under the rescue bill at approximately $2.3 trillion. Here is a look at where most of the money will go, according to the budget watchdog:

HEADS	AMOUNT  (IN BILLIONS)
Lending for large businesses, governments	$ 510
Small business loans and grants	$ 377
Direct payments to most Americans	$ 290
Cuts to business taxes	$ 280
Expanded unemployment benefits	$ 260
Funding for hospitals, healthcare	$ 180
Support for state, local governments	$ 150
Transportation, public transit	$ 72
Social safety net, food and housing	$ 42
Federal emergency disaster assistance	$ 45
Increased spending on education	$ 32
Reductions in individual taxes	$ 19
Other spending	$ 25

Unequal largesse to common is evident in only one head: tax cuts. Tax cuts to business amounts to $280 billion whereas reductions in individual taxes which includes dirty rich elite is paltry $19 billion which is 6.8% of what big businesses will avail. Out $2,282 trillion $1,379 or 60% went to business in way or another and booty for commons was just $569 trillion or 25%.

As in the bailout of banking sector in 2007-8 mortgage cost of Cantillon effect should not be ignored. Richard Cantillon was an economist in the 18th century France who mainly wrote about money and how it circles around the economy.

The so-called Cantillon effect describes the uneven expansion of the amount of money. If a central bank pumps more money into the economy, the resulting increase in prices does not happen evenly. The Austrian economist Friedrich August von Hayek compared this monetary expansion with honey. If you pour honey into a cup, it won’t spread out evenly. It will clump in the middle of the cup first before spreading out.

Same with money: in case of a monetary expansion, the ones who profit from it are the ones who are close to the money. “Close to the money” in this case means everyone who can access the money right at the beginning, i.e. big companies, banks, etc. They get loans and make investments. Prices then start to rise even though the rest of the population has not received any of the new money yet. This part of the population usually is not the one with too much money. Nonetheless, they have to pay the higher prices even though they have not profited from the increase in money at all. And they will never profit from it in the same way as the ones who received the money first. The result is a redistribution from the poor to the rich. Even John Maynard Keynes who was in no way opposed to government intervention and central banks accepted the Cantillon effect as a valid problem.

A very vivid example of Cantillon effect is recent sugar scandal in Pakistan, in which four out of five beneficiaries were close to power corridor in Islamabad. Even in the relief cash and non-cash distributions relief distributions beneficiaries are those who are close to Men in Power (MiP).

The package worth 900 billion rupees ($5.66 billion) was approved in a Cabinet meeting chaired by Prime Minister Imran Khan and also attended by army chief Gen. Qamar Javed Bajwa. It includes 200 billion rupees ($1.25 billion) for low-income groups, particularly laborers, 280 billion rupees ($1.76 billion) for wheat procurement, apart from a significant reduction in petroleum prices. Speaking to journalists in the capital Islamabad, Khan said over 5 million people will be provided a monthly stipend of 3,000 rupees ($20) for the next four months. This amount to Rs.60 billion or 30% of the package.

Also, loan interest payments for exporters had been deferred temporarily, while a package of 100 billion rupees ($63 million) was provided to support small industries and the agriculture sector, he added. So, businesses will be getting 50% of the package. Great divide of neoliberal fascism where businesses are more important than who work for it.

Economic policies should be made in concert with administrative policies otherwise benefits are uneven to different strata of population and detriment to commons. Economists in Pakistan should now move beyond neoliberal, neoclassical, and Keynesian mindset to more innovative solutions targeted to well-being of commons.

Instead of dishing out money to business elites, GoP should also contribute to some percentage of the salaries of workers on the basis of delayed interest free loan and collateral should be the equity of the corporate units. This should also be after due diligence that the corporate need emancipates from ‘shutdown’ and not from absence of risk management on the part of business which is their corporate responsibility. If a business has failed to manage its risk it should face financial slap on wrist as per market mechanism. Looming crisis was evident from de-globalization, global oil crisis, falling demand, accumulatio and rise of gold prices, liquidity crisis in US bank and repo markets. A good business should have anticipated it and have developed plan B.

Covid-19 is a tragedy of the common-but we can collectively mitigate the tragedy. This contagion has provided us a rare opportunity to move from economics from “me” to economics of “us”. This provide economists at IBA to pioneer in innovatively designing an economic system for “us”. Not recommending but citing as an example the work of Elinor Ostrom, the recipient of 2009 noble prize in economics, we should provide academic and intellectual environment to design innovative economic paradigm from over-obsessed focus on “self-interest” to economic models of “collective well-being”. This is the time we move from economics of 1% to economics of 100%. In Pakistan, it is the society which is bailing out commons not business elite or government.

Lastly, government should prioritize agriculture sector instead of construction, as food self-sufficient is vital in pandemic crisis and surplus can be stored and export after supply chain is re-established and supply deficiency will exist until the next cultivation period. Agriculture has large poverty-stricken population which income depend upon completion of harvest and they should have priority income relief program. Rural areas have almost no philanthropy support as urban dwellers have.