Work resumes in Sri Lanka’s free trade zones but thousands are sacked

Nandana Nannetti

Last week several big companies, including those in the free trade zones (FTZ), resumed work after being shut down for nearly a month as part of the pandemic lockdown. However, these companies have sacked tens of thousands of workers with the backing of President Gotabhaya Rajapakse and his government.

Rajapakse gave the green light for business to open, saying in an interview on April 20, it was necessary to halt the “collapse of the economy.” Like capitalist governments around the world, he said that threat to lives from the pandemic and the economy should be “balanced.”

The government is forcing workers back in unsafe conditions as the number of COVID-19 cases takes a sharp upturn. The figure has risen to nearly 700, some 300 of those in the last four days. The relatively low figures are because the government has limited testing, saying the situation is not so serious.

Prior to opening the factories, various industrialists declared that they would have to cut jobs by at least 30 percent as well as slash wages and pension funds.

Last week the presidential media division released guidelines for restarting businesses. These stated: “All the state departments, corporations, statutory boards and private sector industries, working places, fish, vegetables and retail stores can also be operated under strict regulations.”

It continued: “The head of each [private] organization has the freedom to decide who should report to work and the number of employees.” This means workers are completely at the mercy of management.

Sri Lanka has 15 FTZs where hundreds of thousands of workers are employed. According to the Investment Board, only 20 percent of factories were opened last week with reduced workforces.

When the government-imposed, country-wide lockdown was imposed on March 20, companies shut down suddenly. However, the government and employers tried to force FTZ workers to continue work. As concerns about the coronavirus spread and workers protested, forcing the closure of factories.

Tens of thousands of workers were stranded in the Katunayake, Biyagama, Mirigama, Horana and Seethawaka FTZs without transport to their hometowns. It was only after workers started protesting that the government arranged transport. Many workers had not even received wages for March and April when they ultimately returned.

Ignoring workers’ protests over non-payment of their wages, D. L. P. Samarasinghe, the Director of the Investment Board, said he could not do anything because “there is no proper complaint against not paying salaries.”

Minister Dinesh Gunawardena also refused to take action saying that proper steps would be only taken by the Labour Department after inquiries had been made.

When the Koggala Garment company—located in the Koggala FTZ in the island’s south—resumed work on April 20, the workforce had been drastically slashed. Previously it had employed about 1,500 workers but management recalled only 450 workers. Other workers were told not to report for work until further notice. There is no guarantee they will be reemployed.

Workers who reported for work on April 20 were not given their usual noon meal. The company’s excuse declared that it was to ensure the good health of workers.

As in most other companies, this factory employs many workers on a casual basis, depriving them of allowances received by permanent workers. Permanent workers were not given their April bonus and will have to wait till the end of the month to find out about their wages. Office staff were not called back to work.

Star Garment, which is one of the country’s oldest garment companies and started up in 1978, employs 8,000 workers in 10 factories, including in the Koggala FTZ.

Its branch in Pinnaduwa in Galle recalled 200 of its 300 workers to complete the unfinished work. They were also not given an April bonus.

About 800,000 garment pieces were being produced by this company, but it is now facing cancellations of orders. A similar situation faces other garment factories.

Vogue Tex, which started in 1984, employs more than 7,500 workers in seven factories. At one situated at Gonapeenuwala in Hikkaduwa, more than 1,000 workers are employed.

A female worker explained: “Work was stopped on March 19 and restarted on April 22. Only 250 were called on to work. Letters were sent informing workers who had worked less than six months and who were more than 50 years of age that they were fired. Most workers had worked there less than six months.

“Our monthly basic salary is 18,500 rupees (about $US95). The attendance allowance is 4,000 rupees. If one day's leave is taken, 1,800 rupees is deducted out of this allowance. If you take leave for two days the whole amount is slashed. If someone takes leave without giving prior notice, the attendance allowance is gutted.”

The government is ready to do everything it can to preserve the profits of investors including risking the lives of workers and their families.

Like investors in all countries, they are terrified that if they do not restart their business they will be driven to the wall in the competition on the international market.

Forty percent of Sri Lanka’s export earnings comes from the garment industry. The earnings in 2019 were $5.6 billion and the government projected this to rise to $8 billion in 2025. These calculations have now been shattered.

In an interview on Hiru TV, the chief marketing executive of Orange Apparel, Muditha Silva, said that garment companies lost some 350 billion rupees during the previous four months.

Insisting that workers must bear the brunt, he declared: “The government cannot deliver relief to people in the country that do not have something to eat. What it has to do is allocate financial assistance to the garment industry, without it being considered as a debt for at least six months.”

Trade unions are fully backing big business. On April 22, leaders of the Free Trade Zones and General Workers Union, the Ceylon Mercantile Union and the Janatha Vimukthi Peramuna-controlled, Inter-Company Employees Union (ICEU) met with labour ministry officials and employer representatives to discuss job and wage cuts. Union bureaucrats claim that they demanded compensation but company representatives have not agreed.

ICEU leader Wasantha Samarasinghe told Lankadeepa yesterday that companies are cutting jobs and wages drastically. However, far from mounting a struggle to defend jobs and wages, he declared that the government must provide funds to revive business. At least 300 billion rupees must be released and each company must be supported according to their annual turnover, he added.

In the name of protecting jobs, trade unions, which are thoroughly tied to the state and defend capitalism, are protecting big business.

BBC Panorama exposes government responsibility for UK health worker deaths

Thomas Scripps

Monday’s investigation by BBC’s Panorama, “Has the Government Failed the NHS?” was a staggering indictment of the Conservative government’s failure to provide health workers with personal protective equipment (PPE).

The documentary, with reporting by Richard Bilton, details the criminal lack of preparation for the pandemic reported by workers in the National Health Service (NHS) and public health experts. It exposes the Conservative government’s attempt to cover up its failings, which continue to put the lives of more doctors and nurses at risk.

Using documents from within the NHS supply chain, the investigation rips apart ministers’ claims to have provided 1 billion items of PPE in the last two months. More than half of these items are surgical gloves, with each individual glove counted as a separate piece of PPE in most cases. The second largest stock of items is for plastic aprons, described by one Accident and Emergency doctor as, “What you’d expect a dinner lady to wear … it does nothing.” Items like cleaning equipment, waste bags, detergent and paper towels are also counted as PPE in the official figures.

Panorama's Has the Government Failed the NHS

According to World Health Organization (WHO) guidelines on PPE, staff caring for COVID-19 patients should wear a full protective gown, gloves, face mask and eye protection.

Panorama cited the case of an NHS nurse in his fourth week on a ventilator, who fell ill with COVID-19 while working in Southend hospital. Its investigation found that the whole Mid and South Essex NHS trust, which runs several community hospitals and three major hospitals including Southend, received just 360 protective medical gowns in the five weeks before the nurse was hospitalised. This is less than 10 a day. An anonymous health manager explains, “The supply chain is erratic, unpredictable and incompetent. We might ask for 10,000 gowns and instead be sent 5,000 aprons.”

A video taken by a nurse shows boxes of out-of-date masks he and his colleagues are expected to use, some of which expired in 2016. “The sticker that they’ve covered up the out of date sticker with is out of date.”

Health workers in General Practice surgeries are told they only need plastic aprons and basic surgical masks.

The toll taken on the workforce is disastrous. The programme notes that nearly 100 NHS workers have died after falling ill with the coronavirus. Nursing Notes reports that, as of Tuesday morning, 140 health and social care workers are believed to have died of COVID-19. Referring to the government’s hypocritical praise for health workers, one intensive care nurse told Panorama, “calling us heroes just makes it okay when we die.”

Inadequate personal protective equipment donated to NHS staff

With a contempt for the value of health workers’ lives, the government announced on the day of the Panorama broadcast that they would pay just £60,000 to the families of NHS and social care workers killed by COVID-19. This filthy blood money barely amounts to two years’ wages for households which have lost, in many cases, decades of life of their loved ones. It will inevitably be used to undermine any future legal cases, which might be brought against government ministers for their endangering of workers’ lives.

As Panorama documents, the possibility existed to prepare a safe response to the pandemic. Irial Eno, a doctor, told the programme, “[The government] keep saying ‘this is completely unprecedented.’ It is unprecedented. But it wasn’t unexpected.” Bilton explains, “For almost a decade, [a pandemic has] been designated the greatest threat to Britain.” No action whatsoever was taken to address this threat.

The government’s 2009 pandemic guidance states that full protective gowns, the best type of facemask and eye protection are standard requirements for health care workers, who might be in contact with a virus during a pandemic. In the next 10 years, however, the government “didn’t buy any hospital gowns at all.” Even when government advisers warned gowns would be needed in the stockpile, none were bought. Nor was a single visor, swab or body bag. Over 20 million respirator masks are unaccounted for. There are 33 million on the original stockpile list, but only 12 million have been handed out. Bilton reports, “The government refuses to explain where the other life-saving masks might have gone.”

European Centre for Disease Control advise on the stockpiling of respirator masks, eye protection, gowns and gloves

The refusal to stockpile basic items required by health workers was part of the multi-billion pounds cuts programme of the 2010–15 Conservative/Liberal Democrat coalition. Between 2013 and 2016, as they enforced savage austerity to pay for the 2008–09 bailout of the bankers, the value of the national PPE stockpile was slashed by 40 percent.

Even at this stage, the investigation insists, the UK “still had time” to prepare its response “when COVID-19 first appeared.” At the start of February this year, the European Centre for Disease Control issued a warning on the coronavirus and advised the stockpiling of respirator masks, eye protection, gowns and gloves. Under its guidelines, the most serious cases of COVID-19 would require 20 full sets of PPE per patient per day.

The government failed to set supply chains in motion to provide these resources. Panorama shows a factory in Bolton which produces the protective material used to make gowns. They offered their services to the government and to Public Health England (PHE) but had heard nothing back in the 10 days that had passed when Panorama visited the site. By the time the investigation was broadcast, the factory was producing for the NHS via a private supplier, but the unused weeks meant the loss of a potential 300,000 gowns that were sold to the US. The NHS needs hundreds of thousands per day, but the government has made just over 1.3 million gowns available during the crisis.

A massive propaganda campaign was launched to keep these shortages concealed. Heads of Procurement at several NHS trusts spoke to Panorama anonymously. One said, “We’ve been told not to talk about the shortages outside of meetings. They don’t want people to know how bad it is.”

When the government realised the scale of the catastrophe they had prepared could not be kept under wraps, they moved to create a get-out clause. In January, COVID-19 was given the designation of a High Consequence Infectious Disease (HCID). The UK’s Health and Safety Executive states that all health care staff dealing with a HCID should be given respirator masks, full-face visors and gowns, meaning the government has a legal obligation to meet these criteria.

PPE gloves were counted as individual gloves rather than pairs by the government

Six weeks ago, Panorama reports, the government downgraded its designation of COVID-19. The UK now formally considers the COVID-19 coronavirus of less consequence than SARS, MERS and H1N1. At the same time, PPE guidelines were moved away from the WHO’s advice to the lower standard of gloves and less-protective aprons and surgical masks in all but the most dangerous situations.

Bilton reports, “It seems clear that the rules have been changed because of the shortages.” Sources in the scientific committee that made the decision to downgrade the classification told Panorama, “[I]t had to be a pragmatic decision based on the availability of PPE.”

Public health expert John Ashton explains, “COVID-19 is the biggest infectious disease to hit this country in the last hundred years. Why on earth shouldn’t it be in the most serious category?”

On the government’s response to the crisis, he says: “They failed to get a grip. They took advice from too narrow a range of people. And when things continued to escalate out of control, they started to spin the story to make out that—actually—they’d been following the science and everything that they did made perfect sense. I think it’s disgraceful.”

The tragedy unfolding in the NHS is repeated in care homes across the country. Millions of key workers in transport, food shops and logistics are suffering the same fate. Operation Cygnus, carried out in 2016 to model the effects of pandemic, predicted up to 750,000 dead.

The morning after Panorama was broadcast, Britain’s national newspapers carried headlines endorsing a rapid return to work, including “Turning the Tide,” “Hope in sight: talks this week of easing the lockdown” and “Time to fire up the engines, says PM.” The damning investigation barely received a mention. Meanwhile, the Labour Party and trade unions continue to work “constructively” with the government, demanding it map out an “exit strategy” from the lockdown.

Protester killed in Lebanon during riots against soaring food prices

Jean Shaoul

Lebanese armed forces have used live fire, rubber-coated rounds, and tear gas to disperse angry protesters, killing one man and injuring dozens more.

The shooting of 26-year-old Fawaz Fouad al-Samman occurred Monday night during the fourth day of nationwide demonstrations over the collapsing currency, soaring food prices and the government’s handling of the COVID-19 pandemic, which has claimed the lives of 24 people. Further clashes took Tuesday place after the funeral of the young man, whom protesters have called “the martyr of hunger.” The protests started in the northern city of Tripoli, Lebanon’s poorest, at the end of last week and spread rapidly across the country.

Defying the coronavirus lockdown, thousands of people blocked the main highways, setting fire to tyres, attacked banks and ATMs with Molotov cocktails and marched through the streets. Furious at the currency’s rapid devaluation, which has sent the US dollar soaring and halved the value of their wages and savings, they have accused the banks of helping a corrupt political class drive the country towards bankruptcy.

On Monday, men, women and children marched through the streets of Tripoli, where more than half the population are living at or below the poverty line, shouting “Revolution, Revolution” and attacking banks and shops, triggering clashes with the security forces.

There were similar protests in the capital Beirut and Saida in the south, where protesters shouted “Molotov, Molotov, instead of a candle, Molotov” outside a local branch of the Central Bank, as well as towns in the Bekaa valley, with angry clashes with the security forces taking place throughout the night. The exchange shops also closed in protest over the “insane chaos” of the exchange rate devaluation. The main focus of the protests is hunger. In one widely shared video, a protester shouts, “I’m hungry” in Arabic at a security forces member, who then replies, “I’m hungrier than you.”

The army for its part claimed that 40 soldiers had been wounded in Tripoli and other parts of the country when they were hit with stones thrown by protesters as they tried to reopen the blocked highways.

The protests had temporarily abated after the lockdown measures, bans on public transportation and night curfews imposed on March 15. They are a continuation of the widespread protest movement that started last October over deteriorating economic and social conditions, government corruption and sectarianism. Following the resignation of Prime Minister Saad Hariri, who is closely aligned with Saudi Arabia, and the continuing economic and political paralysis, his successor Hassan Diab, who is supported by Hezbollah, which is allied with Iran and Syria, defaulted on a $1.2 billion Eurobond amid the onset of the coronavirus outbreak, later extending the default to all overseas debt.

Any external loans to see Lebanon, one of the most heavily indebted countries in the world, over the crisis would be dependent upon the usual free market “reforms” that would plunge millions into destitution and require political alignment with the Sunni oil states against Iran.

Three days after the default, Diab declared a state of emergency, introduced lockdown measures to stem the spread of the coronavirus under conditions where there is little in the way of health care for any other than the ruling elite and dispatched the security forces to clear the protest camps in downtown Beirut.

The lockdown in Lebanon’s crowded inter-generational households serves not only to provide the ideal conditions for the rapid transmission of the virus but also to deprive most of the country’s already impoverished people of the means of their existence.

Last year, even before the onset of the pandemic, the World Bank estimated that 45 percent of Lebanon’s 6 million people lived below the poverty line and predicted the country’s impending bankruptcy would lead to a further rise to 50 percent in 2020.

More than 220,000 jobs have gone since the protests began in October. Social Affairs Minister Ramzi Musharrafieh admitted that up to 75 percent of the people are in need of aid, as people scrounge garbage dumps for food and beg passers-by for something to eat. The situation is even worse for Lebanon’s most vulnerable communities—refugees and migrant workers—the overwhelming majority of whom lack food, with many fearing eviction.

As inflation soared and food prices rocketed due to the de facto devaluation of the Lebanese pound, fears mounted of a food shortage. Diab announced some paltry measures to help some of the poorest families but could not secure his cabinet’s agreement on the terms, leaving people bereft of any means of subsistence. The crisis was further exacerbated by the fall-off in remittances from the Lebanese diaspora as the lockdowns and economic slump affected their jobs and wages.

For months, the banks—at the behest of the Central Bank—have limited the amount of withdrawals in both local and foreign currencies to $200 a week, with the latter being phased out almost entirely, and banned foreign transfers. This led to long lines outside the banks as customers pleaded to be allowed to withdraw their money. While the pleas of ordinary people fell on deaf ears, the rich nevertheless managed to transfer some $5.7 billion out of the banks, many of which are owned by prominent politicians, in January and February as a furious prime minister revealed over the weekend.

The Central Bank’s action was little short of outright theft. It served not only to discriminate against the smaller depositors in favour of the rich, but also against Syrians who kept their money in Lebanon, enormously exacerbating the economic crisis in Syria, which was undoubtedly one of its aims.

Last week, the Central Bank’s long-time director, Riad Salameh, who has implemented Washington’s financial sanctions against Hezbollah, issued a directive reversing its policy without any consultation with the government. Those with foreign currency deposits would be allowed to withdraw their money in Lebanese pounds at a value to be set by the commercial banks—expected to be even lower than the black market rate of 3,400 pounds to the US dollar, in contrast to the official and unobtainable rate, set in 1997, of 1,500 pounds to the dollar.

This de facto devaluation was in turn expected to trigger a rapid rise in prices as the newly available cash flooded the market amid a dollar scarcity. This is what happened on Friday, when the pound’s value started plummeting catastrophically, from the already low of 3,400 pounds to the US dollar to 4,000, a fall of nearly 17 percent. Over the weekend, Lebanon’s Central Bank intervened to prop up the currency, setting the exchange rate at 3,200 pounds to the dollar. All this has sparked a furious row between Diab and Salameh, with Diab suggesting that the bank governor had deliberately engineered the pound’s crash.

On Monday, the government’s last lifeline fell as Raymond Ghara, the energy minister, announced there were no commercially viable gas deposits in one of the 10 blocs claimed by Lebanon in the Levant basin. Successive governments have long hyped the prospect of finding gas as the solution to the country’s economic woes, although even if the exploration had been successful, it would take years to come on stream. As it is, the collapse in oil prices has all but scuppered the viability of Cyrus, Egypt and Israel’s gas fields and put paid to any hopes of exploring any of Lebanon’s other blocs.

Facing destitution with the onset of the lockdown, some workers started challenging the government in individual acts of defiance and isolated protests. On April 17, hundreds defied the 7 p.m. curfew in Tripoli and demonstrated to mark six months since the start of the mass rallies against government corruption and economic hardship. Angry protesters hurled rocks at the security forces, who used tear gas to disperse the crowds. Last week, protesters took to the streets to voice their disapproval of the government as parliament met for the first time since the coronavirus outbreak.

These initial protests have now morphed into a nationwide outburst of anger that the government, which represents the interests of Lebanon’s billionaires and upper echelons of its numerous sects, has neither the will nor the capacity to placate. While the government has allowed some businesses to reopen and shortened the night-time curfew, this will do nothing to alleviate the plight of millions of workers and their families.

With over 1 million coronavirus cases and 60,000 fatalities in the US, markets eager to get back to business

Benjamin Mateus

World Health Organization (WHO) Director-General Dr. Tedros Adhanom Ghebreyesus stated, in a briefing last week, “Make no mistake, we have a long way to go. This virus will be with us for a long time…while social distancing measures put in place in numerous countries to slow the spread of the coronavirus have been successful, the virus remains extremely dangerous. Current data shows that most of the world’s population remains susceptible.”

During Monday’s briefing, Dr. Mike Ryan, in response to a Brazilian reporter’s question on his country’s decision to ease restrictions based on figures that are clearly under-reported, stated that if countries begin the opening of their economies too quickly, it may have more dire consequences on the livelihood of the nation, as they would have to reimpose lockdown measures to mitigate a second acceleration of the outbreak.

Dr. Maria Van Kerkhove carefully noted that it was insufficient to base decisions to loosen these measures solely on the basis of case numbers and deaths alone. More importantly is the need to have a workforce in place to track contacts, to implement an expansive infrastructure to detect the location and movement of the virus, appreciate the status of hospitalization and critical care capacity, and have schools and workplaces reconfigured to begin slowly receiving people into these physical spaces. The entire population needs to be engaged, informed and cooperative with these processes. “It requires mental preparation,” Van Kerkhove said.

The director-general then added, in one of his rarer displays of measured bluster, that countries that have ignored the WHO’s advice have also been the ones hurt most by the pandemic. He repeated his prior admonition, in response to calls for his resignation over mishandling of the pandemic, that the WHO had made the highest declaration of emergency on COVID-19 on January 30.

At the time when the epidemic was predominately confined to Wuhan and Hubei province, there were only 82 cases outside of China, of which 10 were in Europe. There were no cases in Latin America or Africa. There were also no deaths outside of China. “Every country could have triggered all its public health measures possible,” he said. “I think that suffices the importance of listening to WHO’s advice. We advised the whole world to implement a comprehensive approach. Countries that followed these recommendations are in a better position than others. That is a fact.”

Globally the number of daily cases has been declining slowly since peaking at the beginning of the month and has now reached over 3.1 million cases. Nearly 1 million people have recovered from COVID-19. Similarly, the daily number of fatalities has seen a steady decline, with the number of total critical cases around 56,000. Country after country have been in some form of discussion to begin easing restrictions given these seemingly favorable developments.

However, as much as the response to the pandemic was of an improvisational character, the manner and approach to opening economies are disorganized, woefully unsystematic and grossly premature. Rather than heeding the advice of institutions like the WHO or their own public health officials and epidemiologists, the argument that the economy has suffered too much finds open and unapologetic expression among governors and political leaders.

The United States surpassed 1 million cases yesterday, with only 140,000 of its people recovered. Nearly 60,000 people have died, half in less than two weeks. Yesterday, there were again more than 25,000 cases and 2,500 deaths. Though states like New York and New Jersey find their number of cases and fatalities flattening or declining, several states have seen increasing daily trends, including Virginia, California, Illinois, Massachusetts, Maryland, Iowa, Minnesota and Delaware.

Illinois saw its single highest death toll, with 144 deaths reported in 24 hours, raising the state’s total deaths to 2,125. Many of these cases are occurring in northern Illinois and the Chicagoland area. Health officials say that the state has yet to approach its peak.

Iowa Governor Kim Reynolds has given some businesses in 77 of 99 counties permission to reopen, again with some caveats, which leave significant room for interpretation and are wholly unenforceable outside of large conventions and spectator events. Yet, the trend in daily cases has risen from approximately 100 per day two weeks ago to close to 400 per day. Nevertheless, the number of tests conducted daily has not increased dramatically, with rates of positive tests climbing.

There have been almost 6 million tests performed in the US, accounting for 17,688 tests per 1 million of the population. This week, the number of daily tests consistently approached near 200,000. Still, on average, 17.5 percent of all tests are positive, indicating that the US remains significantly behind on identifying the extent of the epidemic within its national borders. The White House’s health experts, Dr. Anthony Fauci and Dr. Deborah Birx, have expressed their concerns that adequate testing remains a necessary milestone in the White House’s phased approach to reopen the country.

In a bizarre exchange at Monday’s White House briefing, ABC’s Jon Karl asked Vice President Mike Pence, “You said, in March, we’d be at 4 million tests by the following week. We’ve just now got there in the last few days. So, what have you learned about what went wrong over the last month and a half or two months, and what’s going to go right now? What lessons have you learned from the mistakes?”

In a nonsensical and disingenuous response in the vein of Trump, Pence replied condescendingly, “I appreciate the question, but it represents a misunderstanding on your part and, frankly, a lot of the people in the public’s part about the difference between having a test versus the ability to actually process the test.” In the face of 60,000 deaths that need not have happened, in just one month, this response is not only insulting, but also shows callousness and disregard for the suffering of so many. This was not a benign slip of the tongue.

Global arms spending tops $1.9 trillion as fight against COVID-19 is starved of resources

Bill Van Auken

Amid the grim worldwide tally of over 3 million confirmed coronavirus cases and roughly 220,000 deaths—along with the scientific certainty that both figures grossly underestimate the real toll of the deadly virus—a report released this week provided another set of sobering statistics.

According to the annual report issued by the Stockholm International Peace Research Institute (SIPRI), global military spending has reached a new post-Cold War high, topping $1.9 trillion in 2019. This is a vast quantity of social resources that has been funneled into the preparations for a new world war, under conditions in which humanity is confronting the ravages of a global pandemic.

“This is the highest level of spending since the 2008 global financial crisis and probably represents a peak in expenditure,” Nan Tian, a researcher at SIPRI, told the AFP news agency.

A PSE&G utility worker watches military jets fly overhead. (Photo by Charles Sykes/Invision/AP)

As always, US imperialism led the surge in ever more obscene levels of expenditure on militarism, accounting for 38 percent of global arms spending. Washington’s military budget for 2019 (fiscal 2020) was $738 billion, a 5.3 percent increase over the previous year, and equal to 3.4 percent of US GDP. US military spending exceeded that of the next 10 highest-spending countries combined.

Driving this spike are the massive appropriations being made for the Pentagon’s nuclear triad—including new land-based intercontinental ballistic missiles, new long-range bombers, a new cruise missile and a new nuclear-armed submarine. There has also been a focus on producing new smaller, more “usable” nuclear weapons, bringing the threat of a catastrophic war ever closer.

The total figure given by the SIPRI does not include $12.6 billion appropriated to the National Nuclear Security Administration (NNSA), a semi-autonomous agency within the Department of Energy, for “Weapons Activities,” i.e., manufacturing, maintaining and modernizing US imperialism’s stockpile of nuclear missile warheads and bombs.

The immense sums being spent to modernize and develop the US arsenal are in preparation for what US strategy documents define as “great power conflicts,” with China and Russia first among the targets. The Pentagon expects to spend $500 billion over ten years in modernizing all aspects of the US nuclear triad.

US imperialism’s arms expenditures far exceed those of its “great power” rivals. In 2019, it spent well over two and a half times more than its chief economic rival, China, whose $261 billion military budget is the world’s second largest, and well over 10 times more than the supposed arch menace, Russia ($61.4 billion), which placed fourth on the list of top spending nations.

Washington’s immense military buildup enjoys the support of all factions of the US political establishment, proceeding under both Democratic and Republican administrations. Democratic opposition to Trump has never been based upon hostility to militarism; it has instead targeted his administration over its supposed reluctance to adopt a sufficiently aggressive posture toward Russia.

It is assured that both parties will provide ample support for the Pentagon’s latest budget request of $740.5 billion, which represents a $2.5 billion increase over the last year.

China’s increase in military spending has closely tracked the country’s economic growth, which means that, while it was 5.1 percent higher than in 2018, it was 85 percent greater than in 2010. It accounts for 1.9 percent of Chinese GDP, as compared to 3.4 percent for the United States.

Following the US and China, the third highest military budget was that of India, which climbed to $71.1 billion in 2019, a 6.8 percent increase over the previous year, and a 37 percent increase compared to 2010. The military buildup under the right-wing Hindu nationalist government of Prime Minister Narendra Modi dwarfs that of its regional rival, Pakistan, which spent $10.3 billion, 1.8 percent more than in 2018. The two nuclear-armed South Asian countries have repeatedly come to the brink of war.

Rounding out the top five in terms of military expenditures was Saudi Arabia ($61.9 billion), whose blood-soaked ruling monarchy spends the greatest share of GDP (8 percent) on arms of any country in the world. The lion’s share of this weaponry has been funneled into the kingdom by the US, which—under both Obama and Trump—has supplied the warplanes, missiles and bombs that the Saudi regime has used to wage a near-genocidal war against Yemen, killing over 100,000 and bringing millions to the brink of starvation.

Germany, while placing seventh on the list after France, had the distinction of achieving the highest rate of increase (10 percent) in military spending of any of the major powers. The coalition government in Berlin has deployed troops in multiple military interventions in Africa, the Middle East, the Mediterranean and Afghanistan. Seventy-five years after the defeat of the Third Reich and the end of World War II, the German ruling class is itself once again preparing for “great power conflicts.”

As this report documents the immense wealth that has been spent to prepare for and to wage global war, it is abundantly clear that the global coronavirus pandemic has deterred none of the major powers, least of all the US, from further escalating this buildup.

On the contrary, Washington has systematically weaponized the deadly virus, using it as an instrument for vilifying China and justifying a military escalation in the South China Sea. At the same time, it has tightened sanctions against Iran, which has faced one of the worst coronavirus outbreaks in the world, and sent warships against Venezuela, whose health care system is threatened with collapse, with the aim of advancing its agenda of regime change in both countries.

The continued spending of trillions of dollars on arms and war amid the present pandemic represents a crime against humanity.

While the Democrats and Republicans overwhelmingly approved the $738 billion for the Pentagon, they have systematically starved the Centers for Disease Control and Prevention (CDC), the principal US agency for combating pandemics, of funding, with its budget suffering a 10 percent cut over the last decade (FY 2010-19). These funding cuts played a major role in the government’s failure to prepare for the pandemic and its chaotic response to the outbreak once it began, sabotaging the agency’s rollout of testing for the coronavirus and translating into unnecessary and preventable deaths.

The CDC receives barely 1.5 percent of the funding that is lavished on the Pentagon. Meanwhile, the Trump administration is preparing to spend billions of dollars bailing out major arms manufacturers, even as tens of millions of laid-off workers are unable to secure unemployment compensation, facing the threat of hunger and homelessness, while small businesses, denied promised aid, confront bankruptcy.

The vast resources spent on weapons could provide the means for combating the pandemic and preventing working people from being driven into poverty.

As a recent report prepared by the Global Campaign on Military Spending pointed out, the $89 million being spent to buy a single F-35 fighter jet—the Pentagon projects purchasing as many as 3,000 of them—would fund 3,244 ICU beds for a year, while the $44,000 it costs per hour to operate these planes is roughly the equivalent of the average annual salary for a nurse across the OECD countries. Similarly, the price tag for one nuclear-capable Trident II missile—$31 million—would pay for 17 million N95 respirator masks.

The SIPRI report exposes the fact that roughly three decades after the dissolution of the Soviet Union and the end of the Cold War, US imperialism is fomenting a new arms race that threatens humanity with destruction in a catastrophic world war between nuclear-armed powers.

In the struggle for the control of resources, markets and sources of cheap labor, capitalist militarism continues to consume a colossal amount of resources, diverting them from achieving the essential rights of the masses of working people to livable incomes, education, health care and a decent life.

The contempt of the capitalist ruling class for the lives of workers all over the world is demonstrated in its back-to-work orders, issued as COVID-19 claims an ever-increasing number of victims, just as it is in their resort to militarism to achieve the geo-strategic and profit interests of the banks and corporations.

The only answer to the criminal drive to war that threatens all of humanity lies in the mobilization of the international working class against capitalism. Workers must fight for the expropriation of the vast arms industry without compensation and the confiscation of the obscene profits of its major shareholders so that these resources can be mobilized to combat the global pandemic and assure the social needs of the vast majority of the population. These indispensable demands are bound inextricably to the fight for the transfer of power to the working class and the establishment of socialism.

Round two of the “Paycheck Protection Program”: Another disaster for US small businesses and their employees

Barry Grey

The launch Monday morning of the second round of the US “small business” Paycheck Protection Program (PPP) was a debacle. Millions of family-owned entities, desperate for credit and tottering on the brink of permanent closure, were once again shut out from applying for, let alone receiving, government-backed forgivable loans.

As soon as the $310 billion program administered by the Small Business Administration (SBA) began taking loan applications at 10:30 am, its computer system, overwhelmed by the volume of requests, crashed.

Cynthia Blankenship, vice chair of Texas-based lender Bank of the West, told the Financial Times, “First the page would not load, and then it just showed us an error message.” The problems continued throughout the day. Blankenship said her bank was able to process only 15 applications.

TAB Bank in Ogden, Utah had prepared loan applications from 1,100 customers. Five hours after the start on Monday, the bank had gotten only seven loans processed.

The Washington Post quoted Paul Merski of the Independent Community Bankers of America as saying, “All of the reports I have around the country is that it’s been a disaster.”

The big Wall Street banks, which are making a killing off of the government loan program, having taken in $10 billion in fees in the first round, had warned the Treasury Department and the SBA that they had to prepare for a massive flood of loan requests, but nothing was done to avoid the logjam. The SBA said later on Monday that there were double the number of users accessing the system than one any day during the initial round of the program.

The banks have warned, moreover, that the $310 billion allotted for the restart of the program will likely be exhausted in less than a week.

The abortive start of the second round of the program immediately demonstrated that, like the first installment, part of the $2.2 trillion corporate bailout enacted in March, the vast majority of small businesses and their employees will receive little or nothing in relief from the economic collapse triggered by the coronavirus outbreak.

Big businesses were given top priority by the Wall Street banks administering program until the first allotment of funds ran out in less than two weeks. In round two, they will continue to grab a disproportionate share of the funds, while the vast majority of small firms, which employ 48 percent of the US labor force, will be left on their own.

The program, initially backed by $349 billion in taxpayer money, was presented by the media and both big business parties as a boon to businesses with fewer than 500 employees and their workers. Family-owned entities such as restaurants, beauty salons, barber shops, gas stations and small retail stores, as well as other small firms with little access to capital, could receive up to $10 million in government-backed loans that would be turned into grants if the businesses used 75 percent of the loans to rehire or retain their employees and spent the rest on rent and utilities.

Even if the reality lived up to the dishonest marketing spin, the program would do little to prevent a wave of small business bankruptcies and millions of job losses, since it is set to expire on June 30, many months before the economy can reasonably expected to recover from the steepest contraction since the Great Depression and the coronavirus pandemic is certain to continue causing death and sickness on a gigantic scale.

But even before the initial round of the program ran out of money on April 16, less than two weeks after it began, with only eight percent of small firms that applied for loans having received any money, it became clear that the entire operation was a corporate-government fraud.

Despite the fact that the CARES Act, passed last month with the unanimous support of the Democrats, did not require the SBA or the Treasury Department to disclose the identities of the firms receiving PPP loans, it emerged that billion-dollar publicly traded companies, including restaurant and hotel chains with thousands of employees, cruise ship lines, hedge funds, energy companies, medical device firms and other large businesses had received hundreds of millions of dollars in loans, while the vast bulk of genuine small businesses were shut out.

At his Monday press briefing, President Trump described the disastrous start of round two of the PPP as a “glitch,” and said the first round of the program had “worked out well.”

Indeed it had, for the banks and well-connected, large companies with hundreds of millions or billions in revenues and share values in the billions. Last week, press reports revealed that big restaurant chains such as Shake Shack, Ruth’s Chris Steak House, Potbelly Sandwich Shop, and J. Alexander’s had received loans totaling between $15 million and $20 million.

A group of hotel companies chaired by Monty Bennett, a Dallas executive and major Trump donor, received $53 million in loans. The firms control 153 properties, including luxury hotels such as the Ritz Carlton Atlanta.

Over the weekend, more damning revelations emerged. More than 40 hotels, including numerous Marriott and Hilton properties, received loans. AutoNation, Inc., a Fortune 500 company valued at $3 billion, the nation’s largest car dealership chain with 81 locations and 26,000 employees, received nearly $80 million from the PPP program.

The Los Angeles Lakers of the National Basketball Association, valued at $4.4 billion, received a loan for $4.6 million.

A number of large firms that have run afoul of the law were granted loans. MiMedx Group, an Atlanta-based medical device company with 700 employees, was approved for a $10 million PPP loan. Earlier this month, MiMedx entered into a civil settlement with the Justice Department, agreeing to pay $6.5 million to resolve allegations that it knowingly overcharged the Department of Veterans Affairs. Two of its former top executives were indicted last year by federal prosecutors in Manhattan on charges of accounting fraud. It was sued separately by the Securities and Exchange Commission and settled the case for $1.5 million.

Treasury Secretary Mnuchin as well as prominent Democrats, including Bernie Sanders and Elizabeth Warren, have feigned shock and horror over the insider dealing, corruption and lying in connection with the so-called “Paycheck Protection Program.” This is a fraud. They were perfectly aware from the outset that the program was designed, despite the deceptive marketing, to benefit big business and banks and shut down small business and their employees.

In fact, the provision in the CARES Act that allowed restaurant and hotel chains to evade the 500-employee limit, so long as none of their individual units employed 500 or more, was negotiated by Republican Senator Marco Rubio and Democratic Senate Minority Leader Chuck Schumer, known informally as the “senator from Wall Street.”

And all but one Democrat in both chambers of Congress—including Sanders and Warren—voted for the second round of the PPP last week, despite the stench of corruption and lying surrounding the program. House Speaker Nancy Pelosi hailed the bill’s passage as a “historic, bipartisan vote.”

That bill, with $174 billion in addition to the $310 billion for the PPP, did not allocate a penny to aid state and local governments facing massive deficits and preparing to carry out brutal social cuts. Nor did it provide any money for food stamps, under conditions where millions of laid off workers are running out of money for food and massive food lines are spreading across the country.

On the eve of the launch of phase two of the phony “small business” program, Mnuchin announced new guidelines that will supposedly exclude large publicly traded firms, as well as hedge funds and private equity firms, from participating going forward. He also called on big companies that received loans in round one to return the money, and a dozen or so businesses have complied. Among those who have refused to give back the money is Trump’s buddy Monty Bennett, the Dallas hotel magnate.

No one should be taken in by Mnuchin’s exercise in damage control. Behind the chaos and incompetence that abound in the PPP program is a deliberate policy, one that is shared by the entire ruling class and both of its political parties.

Under the cover of the pandemic, unlimited funds are being funneled to the corporate-financial oligarchy and the stock market, while unemployment benefits are withheld from laid-off workers and credit is denied to small businesses. The brutal aim is to use mass unemployment and the prospect of destitution, homelessness and hunger to force a section of workers back to work without any protection from the virus, while slashing wages, pensions and health coverage for the working class more broadly and eliminating millions of full-time jobs. Millions of small businesses are, in the process, to be driven to the wall while mega-companies gain an even greater stranglehold on the economy.

Millions of US workers blocked from applying for jobless benefits

Kevin Reed

While the US government has proceeded expeditiously to hand over trillions of dollars to the Wall Street banks and corporations, millions of workers who have lost their jobs during the COVID-19 pandemic have been blocked from applying for unemployment benefits.

A survey published Tuesday by the Economic Policy Institute (EPI) shows that the widely reported figure of 26.5 million workers who applied for jobless benefits over the past five weeks significantly underestimates the actual number of people who have lost their jobs since March 15.

The EPI survey reveals that for every 10 people who have successfully applied for unemployment benefits during the pandemic, three or four more tried to apply but could not get through to make a claim. An additional two people did not try to apply at all because the process was so onerous.

EPI summarizes the survey results in the following way: “When we extrapolate our survey findings to the full five weeks of UI [unemployment insurance] claims since March 15, we estimate that an additional 8.9–13.9 million people could have filed for benefits had the process been easier.”

The EPI further states: “These findings imply the official count of unemployment insurance claims likely drastically understates the extent of employment reductions and the need for economic relief during the coronavirus crisis.”

The inability of millions of workers across the country to even apply for unemployment benefits stands in stark contrast to the trillions of dollars that have been transferred from the US Treasury and the Federal Reserve to corporations, banks and the super-rich.

At present, the amount of “emergency assistance” provided to the corporations and banks by the US government—since President Trump signed the initial $2.2 trillion CARES Act on March 27—stands at between $4.2 and $6 trillion.

The denial of resources to unemployed workers while unlimited funds are made available to the ruling elite demonstrates that the officially stated purpose of the CARES Act—voted for unanimously by both Democrats and Republicans—as “fast and direct economic assistance for American workers, families and small businesses” is an utter fraud.

The unemployment benefits program included in the CARES Act has been, to a large extent, an elaborate exercise in deliberate mass deception. When Congress and the White House presented the additional 13 weeks of state-based unemployment insurance beyond the typical 26 weeks, plus an additional $600 weekly federal supplement through July 31, 2020, as a social safety net during the COVID-19 crisis, they knew very well that millions of unemployed workers would be unable to take advantage of it.

The Democrats and Republicans knew that many workers would not be able to get through to the antiquated systems in the state capitals across the country, which would be completely overwhelmed and unprepared for the number of people seeking to apply for benefits. They were counting on these systems being so backed up with delays and confusion that workers would give up and end up receiving little or nothing of the government money.

The banks, corporations and wealthiest individuals, on the other hand, were to get vast sums of money without delay.

In an example of the ease with which government money is flowing into the accounts of the largest corporations in America, the Washington Post reported on Monday that nearly half of the “payroll support fund” allocated to the airline and cargo industries had been disbursed. The Post report said: “As of this week, $12.4 billion of the $29 billion in grants has been paid out to 93 carriers to keep front-line workers on the job, Treasury officials said. In all, airlines and air cargo carriers are eligible for more than $50 billion in grants and loans.”

Additionally, the Federal Reserve will shortly begin buying $500 billion in bonds issued by large US corporations. Although this cash is being provided officially as a “financial lifeline” that is to be paid back, there are no provisions in the Fed’s credit program requiring companies to maintain jobs or restrict the funds from being used for executive compensation, stock buybacks or shareholder dividends.

The EPI survey, starting with 24.4 million people who applied for unemployment benefits between March 15 and April 18, shows that the actual number of unemployed workers in the US is somewhere between 33.3 and 38.3 million people. This means that between one-quarter and one-third of the workers who have lost their jobs during the pandemic (8.9 to 13.9 million workers) have been blocked from applying for benefits.

EPI explained the methodology behind its study: “To gauge how well the UI [unemployment insurance] system is handling the new caseloads, we used Google Surveys to ask 25,000 people, ‘Did you apply for unemployment benefits in the last 4 weeks?’”

EPI asked those who responded to this question which one of six different scenarios corresponded to their experience, such as, “I applied successfully,” “I tried but could not get through,” “I did not apply because it was too difficult.”

When added to the number of people who were officially without a job prior to the pandemic—7.1 million workers—the EPI survey results would put the jobless rate in the US at somewhere between 24 and 27 percent, eclipsing the highest rates of unemployment during the Great Depression of the 1930s.

In addition to jobless workers who have been prevented from applying for government assistance, a number of surveys have shown that substantial numbers of those who have successfully applied have not received any benefits.

A study by the Washington Post published on April 23 says that there is a backlog of three million unpaid jobless claims across the US, although “the true backlog is probably far greater.” A Pew Research Study showed that only 29 percent of the 7.37 million who filed for jobless assistance in March, or 2.1 million people, actually received the benefits.

Many states across the country are continuing to report “glitches” and “backlogs” in processing unemployment applications that have been successfully submitted. Among the states reporting delays in processing applications are:

• California: A report on Monday in the Los Angeles Times said that for Californians applying for unemployment assistance, “the last month has been a perfect storm of failures for a state government with a long history of technology problems.” Of the 3.2 million new unemployment claims filed in the last month, 76 percent of those applying have received benefits. This means that 768,000 applicants have not yet received an unemployment check.

• Florida: The state of Florida has published an online dashboard showing a total of 1.9 million applications for “reemployment insurance” since March 15. Because of confusion created by the state instructing applicants who had applied before April 5 to apply a second time, there are multiple applications in this total. Florida then reports 824,412 “Confirmed Unique Claims Submitted,” and of these, just 392,051 (47.6 percent) that have been paid any benefits.

• Oregon: A large percentage of the 300,000 unemployed in Oregon who have filed for government assistance have not received a check and cannot find out the status of their claim. The state’s antiquated systems have been overwhelmed by the volume of applications, and, according to a report in the Oregonian, thousands of workers have been given faulty information about their applications. “The department’s phone lines are overwhelmed, preventing callers from getting through,” the newspaper reports.

Amidst the dysfunction, chaos, incompetence and bureaucratic mismanagement of state unemployment programs in the US, there is a definite policy at work. The ruling class and both of its parties are intentionally withholding financial assistance from broad sections of the working class who are being devastated by the economic impact of the coronavirus pandemic, while offering up unlimited funds in the trillions of dollars to the corporate-financial oligarchy.

There is a deliberate policy of using mass unemployment and the prospect of destitution, homelessness and hunger to blackmail a section of workers into going back to work under unsafe conditions. This policy is, moreover, aimed at the imposition among all workers of a permanent restructuring of economic and class relations, such that full-time jobs, wages, health care, pensions and social services such as education are gutted.

It is becoming increasingly clear that the financial collapse of 2008 was a foretaste of the social and political assault on the working class that is now unfolding. At the same time, millions of workers all over the world are seeing the true reality of capitalism—the subordination of everything, including human life itself, to the ruthless drive of the parasitic elite to increase its wealth. The conditions are being created for revolutionary upheavals. The conclusion that must be drawn is the necessity for a unified international struggle of the working class to put an end to the capitalist system and establish socialism.

COVID-19: Calling an Olympic Truce on Global Conflict

Tanvi Kulkarni 

Calling for a global ceasefire on conflicts around the world, in March 2020, the Secretary-General of the United Nations, Antonio Guterres, said that the world is fighting a “common enemy” in COVID-19. However, this pandemic does not appear to have driven home the Secretary-General’s point, as war and armed conflict continue without pause in different pockets of the world and a global ceasefire is nowhere in sight yet. This article explores the logic, feasibility, and viability of a global ceasefire in a situation in which all bets are off.

Logic

A global ceasefire or truce essentially calls for a temporary cessation of armed conflicts around the world. It is governed by international humanitarian law and requires warring parties to pause active hostilities for a given period so that the international community can collectively address the most outstanding challenges they face at that time.

The logic of any ceasefire follows from the logic of war: the rationale or benefits from the ceasefire must be perceived to outweigh the costs of continuing aggression. In his March 2020 appeal to “pull back from hostilities” and “silence the guns,” Secretary-General Guterres expounded the immediate and long-term necessity for a global ceasefire.

The immediate logic is of course to have international attention and efforts converge to fight the spread of COVID-19 within and beyond national and local boundaries, prepare healthcare systems to cope with the pandemic’s onset and peak, and open corridors for health and economic aid to safely reach the most vulnerable of humankind, including children, women, the poor, those marginalised and displaced, and, in this case, healthcare professionals as well.

In war-ravaged places like Syria, Yemen, Afghanistan, and parts of Africa, where healthcare infrastructure has been significantly crippled by on-going conflict, and huge populations have been displaced, a pause in active hostilities is critical for facilitation of foreign aid. In his speech, the secretary-general also hoped that the cooling-off period offered by a global ceasefire could be used for diplomacy and building confidence, to pave the way for long-term conflict resolution.

Feasibility

It is not unusual for conflict belligerents to negotiate ceasefires for reasons other than crisis management or conflict resolution, such as religious, cultural, or humanitarian motivations. For instance, from 1965 to 1968, an unofficial ceasefire— the Tet Truce—was observed between the Viet Cong forces of North Vietnam and South Vietnam during the Vietnamese festival of Tet in February. Ramzan or Eid ceasefires have been observed occasionally in Afghanistan, Gaza, Syria, and Kashmir. After the 2004 Tsunami that hit in the Indian Ocean, the separatist Free Aceh Group (Gam) in Indonesia declared a unilateral ceasefire so that disaster relief could reach the rebuilding process.

An example that is analogous to a global ceasefire is the Olympic Truce. In 1993, the United Nations General Assembly adopted a resolution reviving the ‘Olympic Truce’; observed at the time of the Olympic Games in ancient Greece. In 776 BC, King Ifitos proposed a truce called 'Ekecheria' (Olympic Truce) for seven days before and after the Games so that sportspersons could travel without becoming collateral in the ongoing conflict between the Greek states. The modern Olympic Truce was adopted before the 1994 Winter Olympics and has been renewed before every Olympic Games. The truce facilitated humanitarian assistance to a conflict-ridden Sarajevo in 1994, and brought together the delegations of South and North Korea to march behind the flag of the Korean peninsula at the Sydney Olympics in 2000.

These examples, particularly the Olympic Truce, show that conflicting parties and countries can and have previously agreed to expressions of solidarity for a common cause. Given the multi-dimensional costs of armed conflict, a global humanitarian ceasefire during this pandemic, agreed to collectively by the international community, could bring much needed, albeit temporary, relief to governments and populations. The deadly conflation of war and pandemic allows governments to misrepresent or even hide information about one or the other. For instance, public memory about the Spanish Flu in Europe was weakened through heavy press censorship during the First World War, and led to the representation of pandemic deaths as war casualties.

A global ceasefire can avoid a similar fate in the time of COVID-19.

Viability

Whereas Guterres’ appeal has garnered a positive reception in many parts of the world,  fighting continues in Afghanistan, Libya, Myanmar, and Iraq. From March through April 2020, ceasefire violations have spiked on the India-Pakistan border in Kashmir amidst lockdowns imposed by both countries to tackle the pandemic.

It can be relatively easier to negotiate ceasefires than to sustain them. Temporary ceasefires are especially fragile. In the absence of formality, they can easily collapse. The local ceasefires declared recently have mostly been announced unilaterally, and could be violated as soon as one side sees benefit in an opportunistic strike. If the global ceasefire is to be a durable one, it should be endorsed by the major powers and monitored by an international body like the UN.  

The solidarity of the UN Security Council, which is responsible for international peace and security as per the UN Charter, is therefore crucial for a viable global ceasefire. The UNSC has been indecisive on the French proposal for limited ceasefires in conflict zones. Reports suggest that the US and Russia fear that a universal ceasefire would inhibit their counter-terrorism and counter-insurgency operations around the world. Current UNSC efforts to reach consensus on a global response to the pandemic have also been held up by the downturn in US-China relations. So far, politics has prevailed over the pandemic.

To rephrase Guterres, the fury of the virus also illustrates the folly of our times.