The 2022 Giving Slump Exposes the Fragility of Top-Heavy Charity

Helen Flannery

This week, the Giving USA Foundation published Giving USA 2023: The Annual Report on Philanthropy for the Year 2022. The numbers were bad. Really bad.

2022 was, as the Chronicle of Philanthropy wrote, “one of the worst years in philanthropy history.” Steep revenue losses more than wiped out the giving surges of the previous two years, leaving charities in an even worse position than in the years before the pandemic.

The Giving USA analysts attribute the slump primarily to two factors: small-dollar donors giving less because of high inflation, and major donors giving less because of the poor performance of the stock market.

What we would say is that the declines of 2022 reveal just how fragile we have allowed our philanthropic ecosystem to become. For the past couple of decades, wealthy donors have taken more and more control over our charitable sector, while increasingly distressed households of everyday Americans drop off the donor rolls. This has always posed great risks not only for charities, but also for our society as a whole. And, unfortunately, the consequences may now be catching up with us.

In the past, big giving camouflaged an increasingly top-heavy charitable system

Giving USA is the most comprehensive analysis available of national U.S. philanthropy, and is an invaluable compendium of otherwise inaccessible giving data. According to this year’s report, the total amount given to charity in 2022 was $499 billion. This was a 3.4 percent decline from the previous year, or a 10.5 percent decline when adjusted for inflation.

This is bad enough. But most of the charitable giving in this country comes from individuals — as opposed to corporations, foundations, or bequests — and giving from individuals declined almost twice as much in 2022 as overall giving. Individual giving was just $319 billion in 2022, a decline of 6.4 percent from 2021, or a 13.4 decline when adjusted for inflation.

Nearly every year for the past couple decades, Giving USA has been able to report record levels of dollars being poured into charitable coffers. But underneath that positive story lay a disturbing, relentless trend. More and more charitable dollars were coming from wealthy donors, and fewer and fewer were coming from lower- and middle-income donors — a trend we call “top-heavy philanthropy.”

Top-heavy philanthropy poses at least two huge risks to charities.

One is that it makes charities vulnerable to donor fickleness and donor control. When nonprofit organizations depend on a small number of very wealthy donors for a big chunk of their fundraising dollars, they must work harder to ensure those donors keep giving. They may even find themselves compromising their activities or their missions to keep the major-giving revenue streams flowing.

The other is that it actually means less money for charitable programs. When wealthy people give, they tend not to give directly to working nonprofits, but to intermediaries like private foundations and donor-advised funds. This means that even as the number of dollars given to charity has technically gone up, charities on the ground have seen less and less of it.

Organizations are even more dependent on major donors than ever

Even before 2022, as charitable dollars were going up, donor numbers were going down. According to the Lilly School of Philanthropy’s Philanthropy Panel Study, the percentage of American households that give to charity slipped from 65 percent in 2008 to just below 50 percent in 2018 (the most recent year available). This is nearly a quarter of giving households gone in just 10 years.

And not only are everyday donors dropping out of the donor rolls, but they’re giving a smaller proportion of money to charity as well. The best indicator of this is what has happened to individual giving as a percentage of people’s disposable income — since the extra money a person has available to spend during the year largely determines how much that person gives to charity. Individual giving as a percentage of disposable income has been remarkably consistent; over the past 40 years; it has rarely strayed from a narrow range of 1.8 to 2.2 percent. But according to the most recent edition of Giving USA, it fell to just 1.7 percent in 2022. This is the lowest it has been since 1995.

In other words, in 2022, average Americans gave the smallest chunk of their disposable income to charity than they had in almost thirty years — smaller, even, than during the recession of 2007-2008.

This means that giving from individuals is making up a smaller and smaller slice of the total charitable pie — and the steep declines in individual giving in 2022 have accelerated this trend. In 1992, individual giving accounted for 78 percent of all giving. By 2022, according to Giving USA, donations from individuals had fallen to just 64 percent of all charitable revenue. As this happens, private foundations and corporations make up an increasingly large share of U.S. giving each year.

Top-heavy philanthropy means more money diverted from working charities

To make matters even worse, when more charitable revenue comes from wealthy donors, working charities actually receive less money. This is because when wealthy donors give, they tend to give disproportionately less to working charities, and disproportionately more to intermediaries like private foundations and donor-advised funds.

In 2022, for example, of the $13.96 billion given to charity by the top six mega-donors listed in Giving USA, at least 73 percent of it — $10.14 billion — went to private foundations. Five of these six donors gave all of their 2022 giving to foundations.

With only a five percent payout requirement for private foundations and no payout requirement at all for donor-advised funds, the dollars going into them quite often have a hard time finding their way out. This means that the recent record-breaking levels of charitable revenue are, more and more, being funneled away from charity and into intermediary investment portfolios where they may stay for years.

As of 2021, more than a third of individual giving was diverted into intermediaries — up from just 5 percent 30 years ago. Individuals donated $326 billion to charity in 2021, but $50 billion of that money went to private foundations, and $73 billion went to donor-advised funds. And the trend has been going relentlessly upward, particularly in the past five years.

This spells trouble for charities — and all of us who depend on their work

The relentless decline in individual giving and the shift towards intermediaries have been a painful one-two punch for working nonprofits. They have been taking in smaller and smaller portions of the donations that come in. They have been increasingly at risk of losing significant chunks of funding if one or two major donors lose faith with them. And their major funders have been exercising increasing control over their programs and even their missions.

And, if anything, these trends appear to be moving at light speed in the wrong direction. According to reporting by the Chronicle of Philanthropy, a full 5 percent of all individual giving came in the form of mega-gifts of $500 million or more, and a full 3 percent of total giving came from “just six individuals and couples” — meaning that organizations are even more dependent on the ultra wealthy. And more than three-quarters of private foundations plan to give the same or less in 2023 than they did last year — meaning that charities won’t be able to turn to foundations to make up for losses in individual giving.

The coming decade will be a critical one. National and global challenges such as climate change, crumbling infrastructure, and widening economic inequality demand our urgent attention. And the institutional expertise and skill of our nonprofit sector could help immensely with all of it — but not if it is hamstrung by declining support and autonomy.

We have the power to reverse these trends. If our working charities walk on many legs — if they can rely on the support of a broad, stable donor base — they will be more representative, more effective, and better able to weather storms like this. We must take the steps to make that possible.

Scottish further education college staff strike against job losses

Steve James

Further education (FE) lecturers in Glasgow and Edinburgh are on strike this week. Lecturers at City of Glasgow College (CoGC), in Scotland are in their fourth week of strike action against management's decision to remove 175 mostly teaching posts, of which up to 75 will be compulsory redundancies.

Staff at the college are striking four days a week.

CoGC is the largest college in Scotland, with 27,000 students and claims to be capable of catering for 40,000. Eight thousand students graduate each year. The compulsory sackings from the 1,200 staff are the first in the institution's history.

According to Educational Institute for Scotland-Further Education Lecturers Association (EIS-FELA), as well as job losses students at the college will have less time with lecturers, many of whom will have additional classes. More cuts are planned next year. The college, with an annual income of around £93 million and facing a budget shortfall of £6 million, has already dispensed with nearly all its Learning Support lecturers for students with additional needs.

The strikes at Edinburgh College also against job losses. The college has over 29,000 students across four campuses. Staff were told in February that as many as 186 staff were being targeted for redundancy, while courses were threatened with being cut. Workers held two days of strikes in February. Despite savings having being made elsewhere, threats of job losses remain. In March, EIS-FELA said 98 percent of cuts had already been made but that management were pressing ahead for sackings. Six workers are currently still facing the sack.

The funding crisis at the colleges is directly due to the actions of the Scottish National Party (SNP)/Green government in Edinburgh. Annual funding for 2023/24 for the entire sector, which employs 14,000 teaching and support staff in 26 colleges, has been frozen at the same level 2022/23 despite inflation running at around 10 percent. All are seeking, one way or another to pass this cut on to staff and students. A token “additional” £26 million allocated last year to mitigate the blow was suddenly withdrawn by the Scottish government this May.

All colleges are impacted. Staff at Dundee and Angus College have been informed by local management that up to 32 jobs could be lost, about 5 percent of the teaching staff, to save £2.5 million this year. Courses are likely to be curtailed, including dance, cookery, construction and science. Compulsory redundancies are to begin at the end of June. Jim Metcalfe, principal of Fife College, which caters for 20,000 students, told the Dundee Courier in May, “The whole college sector in Scotland is facing some significant cuts to core funding and they should not be underestimated.” Staff are currently balloting on local industrial action.

Forth Valley College, with 13,500 students in campuses in Falkirk, Stirling and Alloa announced in May its intention to cut courses, including evening classes, and lose up to 13 full time posts. A consultation process on the redundancies was due to be completed this month.

The University of Highlands and Islands, facing a £3 million shortfall, announced in May it intends to cut 50 jobs and reduce courses at its Perth campus. As of May 30, the college announced it was working closely with “our recognised trade unions and employee representatives” and had extended the consultation process until September. Approval for an “enhanced voluntary severance scheme” was being sought, while the fate of the onsite nursery is in question. Across the colleges, up to 80 counselling jobs are due to be axed in July.

Staff at all 26 colleges are working to rule in pursuit of a pay claim beyond the sub inflation deal currently being offered, for last year's pay round, by the Scottish government through the employers' group, College Employers Scotland. A miserable offer of a 2 percent pay rise was rejected late 2022. Such is the level of foot dragging by EIS-FELA that FE staff were only balloted on industrial action this March. On a 53 percent turnout, 78 percent supported strike action and 94 percent supported action short of a strike.

A campaign based only on a boycott of student assessments and a work to contract was eventually launched in May. EIS-FELA announced then that any escalation of the action would only be considered in time for “the new academic year in August”, over a year after the claim should have been resolved.

June 1, College Employers Scotland, made a “full and final” pay offer to both lecturers in EIS-FELA and support staff in the Unison, Unite and GMB unions. The two-year offer included a flat rate £2,000 rise for all staff this year, followed by a mere £1,500 next year. Both sums are under the real and projected rates of inflation even for the poorest paid workers. While the offer was rejected by EIS-FELA President, Anne Marie Harley, as “completely unacceptable”, like the trade union apparatus during recent strikes in the sector across Britain and internationally, its strategy is to fragment lecturers and staff. By keeping the struggles in one college separate from every other, isolating FE staff separate from related struggles in the universities, schools and every other sector of public and private workers, while adhering to the slowest possible timetable, EIS-FELA hope to exhaust opposition to the SNP’s cuts.

EIS-FELA has only allowed isolated local industrial action against compulsory job losses, taken no action at all against other cuts and “voluntary severance” schemes. These invariably are an opportunity for managers to bully those they wish to drive out. Instead, EIS-FELA have encouraged a feeble email and letter writing campaign, encouraging workers and college students to write to their local members of the Scottish parliament. They claim that appeals to the same Scottish government that is implementing the cuts can change its attitude and encourage it to provide “emergency funding.”

Crucial cover for both the EIS-FELA leadership and the government is provided by the pseudo-left groups.

An article in Socialist Worker June 1 on the CoGC dispute contained no criticism of EIS-FELA or the government. Ritchie Venton of the Scottish Socialist Party (SSP) went further. Venton tweeted of the CoGC dispute “It's beyond time the First Minister and Scottish Government stepped in to end this mayhem, telling [CoGC] Principal Paul Little; halt the redundancies, stop the assault on education - or get out!” By focusing on Paul Little, on a salary of around £200,000, Venton erased the role of SNP/Greens in gutting further education on behalf of big business.

Former SSP MSP, Frances Curran, currently a CoGC lecturer, took the same line. Speaking to the Stalinist Morning Star, she claimed Little's drive to sack 100 workers was somehow at odds with the policy of the Scottish government. Little, claimed Curran, “has totally ignored the ministerial letter directing colleges to work with trade unions and take not of the Scottish government's Fair Work agenda.” In other words, cuts and job losses are fine, so long as the trade unions agree to them, and the government is not held responsible.

Brazil’s Lula tries to revive South American alliance ahead of BRICS summit

Guilherme Ferreira

Since taking office earlier this year, Brazilian President Luiz Inácio Lula da Silva (Workers Party - PT) has been trying to revive the “active” foreign policy that characterized his first two presidential terms (2003-2010). He is advancing the slogan that “Brazil has returned” to the international arena after years of isolation under former president Jair Bolsonaro.

Through the ten international visits that Lula has made so far, including to the United States, China and, more recently, to France, the Brazilian leader has sought to promote the narrative that the current geopolitical hegemony of the US and Europe must be overcome by a “multipolar world.” 

South American Presidents and officials during a meeting in Brasilia on May 30. [Photo: Ricardo Stukert/Presidência da República]

As part of this campaign, Lula convened on May 30 a summit in Brasília with presidents and officials from the 12 South American countries, evoking the revival of the Union of South American Nations (UNASUR). Created in 2008, the UNASUR marked the original “Pink Tide” of bourgeois nationalist governments in Latin America that posed as left-wing. Dismantled in the second half of the past decade, after several right-wing governments came to power in the region, the Union has regained members after “Pink Tide” representatives were elected in countries such as Argentina and Colombia.

The economic, social and political conditions for this attempt to reestablish UNASUR, however, are very different from those of 15 years ago. The early years of the 21st century in Latin America were marked by the commodities boom driven by China’s growth, leading the Asian country to overtake the US and become the leading trading partner of the largest economies in the region by 2009.

Today, an ongoing COVID-19 pandemic has further intensified acute social inequality in South America. The US-NATO war against Russia in Ukraine has also placed increasing economic, political and social strains on the entire region. While virtually all South American presidents face explosive domestic crises, including tensions with the military, they face the challenge of maneuvering between their trade relations with China and, to a lesser degree, Russia, and the growing pressures of imperialism.

In his opening speech to the South American summit, Lula declared: “I have the firm conviction that we need to revive our commitment to South American integration.” The Brazilian President recalled other regional integration initiatives in the 20th century, such as Mercosur, among Argentina, Brazil, Uruguay, and Paraguay. He stressed, however, that with UNASUR, “we have advanced in the institutionalization of our relationship.”

Besides encouraging trade among the region’s countries, Lula stressed UNASUR’s role in articulating the interests of “global South” with “meetings with the Arab and African countries.” According to him, this stance would contrast with today’s “global governance forums,” such as the World Trade Organization, which benefit the rich countries.

The Brazilian president exalted South America’s economic potential, with its 4-trillion-dollar GDP and its 450 million inhabitants who constitute an important consumer market. In terms of natural resources, he claimed that the continent has the “largest and most varied energy potential in the world,” large food production, a third of the world’s freshwater reserves, rich biodiversity and critical minerals “essential for the latest generation industry.”

Lula described these resources as “solid assets” in the context of “today’s systemic threats,” such as the climate crisis, and argued that South America can assume a leading role in the “world in transition.” To achieve this, he claimed, “It is not necessary to start over from scratch. UNASUR is a collective heritage.”

Despite of Lula’s boasting, the South American summit held by the PT has shown that establishing regional unity will prove no simple task. Any reference to UNASUR in the meeting’s final resolution “had to be removed so that it could be approved,” Folha de São Paulo reported. The document ended up presenting vague assertions about the importance of South American integration for the “construction of a peaceful world,” along with other generalities.

An open stance against UNASUR came both from the right-wing president of Uruguay, Luis Lacalle Pou, and the pseudo-left president of Chile, Gabriel Boric. Lacalle Pou said: “enough of institutions,” and rejected “ideological clubs that only live as long as there is coincidence of ideologies.” Chilean Chancellor Alberto Van Klaveren declared a preference for “cooperation on specific issues” over “emphasis on formal institutions” such as UNASUR.

This divergence reflects the existence of major international questions standing in the way of the relations among the South American regimes, that were also expressed in the polemics regarding the participation of Venezuelan President Nicolás Maduro in the summit. The day before its opening, Lula held a bilateral meeting with Maduro. This marked the official re-establishment of diplomatic relations between the two countries, broken by Bolsonaro when he recognized Washington’s puppet, Juan Guaidó, as Venezuela’s official leader.

Maduro and Lula at the May 29 bilateral meeting [Photo: Twitter/Ricardo Stukert]

Boric and Lacalle Pou openly criticized Lula for calling the accusations of “anti-democracy and authoritarianism” on the part of the Maduro regime a “narrative” directed against Venezuela. Both the Chilean and Uruguayan presidents have expressed full support for the NATO-led war against Moscow. For his part, Maduro, even before the war in Ukraine, had declared “full support [for Russia] to dissipate the NATO threats.” 

In a press conference, Lula called the meeting with Maduro a “historic moment” that will increase the integration of Brazil and Venezuela. Maduro, in turn, emphasized Lula’s criticism of US sanctions against Venezuela, saying, “The world that is being born should not be marked by sanctions and pressure from the dollar.” To build this “new, multipolar world,” he expressed the desire that Venezuela join BRICS. Lula said he is “favorable.”

The South American summit in Brazil was held amid the annual meeting of the New Development Bank (NDB), known as the BRICS Bank, and the preparations for the bloc’s annual summit to be held in August in South Africa. The central themes of these meetings were the possibility of creating a single currency for the bloc, expanding trade between countries in alternative currencies to the dollar, and increasing the membership of the NDB and BRICS.

In addition to Venezuela, more than 20 other countries have already expressed interested in joining BRICS, such as Argentina, Algeria, Turkey, Syria and Iran; and the NDB has already begun its expansion with Uruguay, the United Arab Emirates, Bangladesh, and Egypt joining in 2021.

An article in the Chinese Global Times about the BRICS foreign ministers’ meeting explained the bloc’s “attractiveness” by blaming “the US’ increased abuse of its dollar hegemony at the expense of many developing nations,” adding that its “sanctions on other countries have also caused massive damage to many developing countries.”

In another article, the Global Times charged that the US “has long treated Latin America as its ‘backyard,’ and has been actively trying to sabotage normal, win-win cooperation between China and Latin American countries.” However, it continued, “economic hardship due in no small part to the toxic policies of the US” has led Latin American countries “to expand cooperation with China.” This includes Honduras recently joining the Belt and Road Initiative, the billion-dollar deals Lula struck in early April on his visit to China, and agreements with Argentina on lithium mining to expand China’s electric vehicle production.

US concern about the Chinese influence in Latin America has been vocalized in recent months by the head of the US Southern Command, Gen. Laura Richardson. In an interview with BBC Brasil in late May, she said, “The Chinese are our main competitors in the region.” Richardson said she was mainly concerned by the “dual (civilian and military) use” of Chinese structures such as ports, 5G telecom networks, and the space base in Argentina, as well as what she called China’s “trap loans” that have already led 21 of the 31 countries in Latin America to join the Belt and Road Initiative.

As the growing US escalation of the war in Ukraine and the increasing provocations against China over Taiwan have shown, Washington will not peacefully accept China’s increasing its influence in the Latin American region.

IMF deputy chief outlines “uncomfortable truths” about inflation and financial instability

Nick Beams

International Monetary Fund deputy head Gita Gopinath has added her voice to those warning that inflation may persist longer than expected and the interest rate hikes by central banks could set off a crisis for heavily indebted countries and the financial system more broadly.

IMF Deputy Chief Gita Gopinath [Photo by Scottish Government / CC BY-SA 2.0]

Gopinath’s warnings came in a major speech in which she pointed to “three uncomfortable truths” delivered to the annual forum conducted by the European Central Bank in Sintra, Portugal earlier this week.

She said policymakers could be faced with a stark choice between lifting interest rates in the so-called fight against inflation and risking a financial crash in heavily indebted countries. The crisis would not be confined to indebted emerging market countries but could extend to Europe where government debt levels have increased.

“We are not there yet, but that’s a possibility,” she told the Financial Times. Under these conditions it may be necessary to ease back on rate rises.

The first uncomfortable truth, she said, was the recognition that “inflation is taking too long to get down to target … and that means we risk inflation getting entrenched.”

Accordingly, central banks may have to adjust their monetary policy to “account for financial stress.” But there would have to be a “high bar” before central banks pulled back on rises.

As with all representatives of finance capital, Gopinath made it clear the IMF has its eyes firmly fixed on wages, even though their rate of increase is well below inflation. The ECB “should be prepared to react forcefully” to persistent inflation despite the risk of weaker growth and “much more cooling” in the labour market—a code phrase for rising unemployment.

She noted that while the ECB had raised its base interest rate by 4 percentage points in a year—the most in its history—economic activity had slowed only modestly, and unemployment was low.

Wages were rising, she said, but not enough to reverse the “sharp decline” in real wages over the past two years. Gopinath did not refer to why, largely because it would be politically inept to point to the critical role of the trade union bureaucracy in imposing sub-inflation wage agreements.

However, there are fears as to how long this can continue.

“What is worrisome is that sustained high inflation could change inflation dynamics and make the task of bringing down inflation more difficult. Given the massive decline in real wages since the pandemic, some wage catchup is to be expected,” she said.

Gopinath echoed a point raised in the annual report of the Bank for International Settlements that reductions in government spending could be used to ensure that wages struggles do not escalate, enabling interest rate hikes to be eased to avert financial instability.

As usual, this program was couched in terms aimed at trying to obscure its essential class dynamic.

“Some side effects of fighting inflation with monetary policy [the dangers to financial stability] could be reduced by giving fiscal policy a bigger role. Indeed, economic conditions call for fiscal tightening. It could help cool demand and reduce the need for rising interest rates, especially if done in concert by a broad group of countries,” she said.

In other words, use government spending cuts to slow the economy and put downward pressure on wage demands so that interest rate hikes could be less than they otherwise would need to be.

The second uncomfortable truth was that the central bank’s anti-inflation policies—lifting interest rates— could endanger financial stability.

“If inflation persists and central banks need to tighten more than markets expect, today’s modestly tight financial conditions could give way to a rapid repricing of assets and a sharp rise in credit spreads,” she said, citing the recent experiences of financial turbulence caused by higher rates in South Korea, the UK and the US.

If financial stresses remained modest, central banks should not have too much difficulty in maintaining stability but not if the crisis broadened, she explained.

“The situation becomes much more difficult if financial stresses threaten to morph into a systemic crisis. Critically, forestalling a crisis may go beyond what central banks can do alone. While they can extend broad-based liquidity support to solvent banks they cannot support insolvent banks, firms or households,” she said.

The fact that the IMF has raised the issue of insolvency, albeit in a somewhat guarded manner, is indicative of the discussion going on behind closed doors in the major financial and economic institutions, notwithstanding the repeated assertions following every bailout operation, that the banking system is “sound” and “resilient.”

The third uncomfortable truth was that there were more upside risks to inflation than before the pandemic. Not least, this is because of the changes in the economy it had caused, with the result that supply shocks will persist.

“Despite a considerable easing of pandemic-related supply pressures, the restructuring of global supply chains that was intensified by the pandemic and the war, coupled with geo-economic fragmentation, may cause ongoing disruptions to global supply,” she said, as many countries were turning to inward looking policies that led to rising production costs.

The effects of climate change were “also likely to amplify short-term fluctuations in inflation and output.”

Gopinath left no doubt about what the policy response to such developments, expressing in their own way the worsening crisis of the capitalist profit system, had to be deepening attacks on the working class to make it pay.

Central bankers had to respond “more aggressively” if supply shocks were broad-based and act in the same fashion if there was a strong economy and “workers are less willing to accept real wage declines.”

PSOE-Podemos enforcement of EU “Let them drown” policy kills another 37 migrants in Spain

Santiago Guillen

Migrants from Eritrea, Libya and Sudan crowd the hold of a wooden boat in the Mediterranean sea, about 30 miles north of Libya, Saturday, June 17, 2023. [AP Photo/Joan Mateu Parra]

The European Union’s brutal Fortress Europe policy enforced by the Socialist Party (PSOE)-Podemos government against migrants and refugees attempting to reach Europe through the Atlantic route has claimed another 37 migrants, including at least a baby, several children and two teenagers.

They were part of a group of 61 people who were sailing in a rubber boat on their way to the Canary Islands. Only 24 have survived. Forcefully returned by Morocco to Cape Bojador, on the Saharawi coast, four have been hospitalized.

On the afternoon of June 20, family members of the migrants who were heading towards the Canary Islands raised the alarm that their boat was in distress. They contacted the NGO Caminando Sin Fronteras (Walking Without Borders), which immediately requested their rescue from the Spanish emergency services.

Though the maritime area falls under Spanish jurisdictional waters and a boat from Maritime Rescue was only an hour away, Spain delegated the rescue operation to Morocco. As a result, the boat drifted for about 12 hours until it sank. When a Moroccan boat arrived, it could only rescue survivors.

The only action taken by the Spanish rescue services was to contact a nearby container ship and ask them to monitor the boat. However, the container ship was too large to perform a rescue operation. Merchant ship captains are prohibited from carrying out such operations.

Helena Maleno, spokesperson for Caminando Sin Fronteras, explained, “They redirected a cargo ship that had been blocking the rubber dinghy for hours, just to protect themselves and avoid taking responsibility in case the migrants drowned. People were in a state of panic, exhausted, on an empty rubber dinghy. It’s the same as in Greece, Italy and Spain, and it reflects the European politics at the borders. It’s torture and death.”

She said, “Spain has become Greece, and this is repeated every day at the European borders.”

Caminando Fronteras already pointed out in its 2022 report published in January that “The omission of the duty of relief has become a key tool in migration control on the Euro-African Western Border.” This terrible conclusion shows that the refusal of the Spanish and Greek governments to rescue boats in danger with migrants is not an isolated event or a mistake but a deliberate policy of letting migrants drown in accordance with the “Fortress Europe” doctrine.

The EU’s brutal anti-migrant policy has left tens of thousands dead. In the Mediterranean, it claimed at least 1,200 lives in 2022, adding to the horrifying tally of almost 25,000 deaths since 2014. In the Atlantic, where desperate migrants must travel hundreds of kilometers for days, if not weeks, on makeshift boats, this route left at least 1,784 migrants dead only in 2022, according to Caminando Sin Fronteras. In total, 2,390 people have died trying to reach Spain.

This latest crime resembles the one off the coast of Greece when the Greek Coast Guard capsized the fishing boat Adriana with some 750 refugees aboard, of which only 104 were found alive. It is one of the worst crimes in the Mediterranean’s history.

According to witnesses, the Greek Coast Guard threw a rope to the refugee boat and initially tried to tow it away. When this apparently did not succeed, the Coast Guard boat first made a sharp turn to the right and then to the left, causing the boat to capsize. The Coast Guard thus deliberately risked the deaths of hundreds of refugees, if not intentionally caused them.

Over the last four years in Spain, repression and violence against migrants has been spearheaded by the PSOE-Podemos government. It is no different from policies advocated by the Spanish neo-fascists of the Vox party or other European far-right parties.

In fact, last April Spanish Prime Minister Pedro Sánchez traveled to Rome to meet with neo-fascist Italian Prime Minister Giorgia Meloni. The two agreed to escalate anti-migrant policies, with Sánchez declaring: “Many countries have recognized that illegal immigration is a European problem that requires a European response of a political nature.”

Sánchez stressed the importance of the Migration and Asylum Pact, which was approved earlier this month. Under its terms, EU interior ministers have effectively abandoned the right of asylum for refugees. Refugees are now to be interned in detention camps at the EU’s external borders in the future, their asylum applications to be decided in a fast-track procedure and then deported to almost any third country.

The PSOE-Podemos government has passed a threshold that would previously have been unthinkable except under far-right regimes. It was only after the “Left Populist” Podemos party took office that the Spanish government sent the army against refugees in Ceuta and interned migrants in concentration camps in the Canary Islands.

The latest implementation of the brutal “let them drown” policy takes place a year after the PSOE-Podemos government in collaboration with Rabat committed a massacre against refugees in Melilla leaving 37 dead.

The Moroccan Gendarmerie, working with the Spanish police and Civil Guard, attacked 2,000 desperate refugees who tried to climb over the fence separating Morocco from Spain’s African enclave, Melilla. Tear gas, rubber bullets, falls from the fences and stampedes resulted in at least 37 deaths, according to the UN, and 77 deaths, according to the Moroccan Association for Human Rights.

Spanish security forces allowed the Moroccan gendarmes to act on Spanish territory, where several of the deaths occurred. They also collaborated in preventing the migrants from receiving medical assistance.

Podemos remained silent on the massacre. Two days after the killings at a press conference, Podemos Minister for Equality Irene Montero refused to take a position on the massacre, despite being asked by journalists five times. It later emerged that her silence had been agreed upon between the PSOE and Podemos.

Podemos then refused a parliamentary inquiry into the massacre, joining the PSOE, the right-wing Popular Party (PP) and Vox. Subsequently, the PSOE-Podemos government lobbied NATO to classify migration as a “hybrid threat,” comparable to terrorism and food insecurity.

This was yet another demonstration of the pro-capitalist and pro-imperialist politics of the PSOE-Podemos government, which delivered millions of euros in weapons to the Ukraine and deployed troops on the borders with Russia to promote the war that NATO is waging out against Moscow.

The fact that Podemos, which is now part of the electoral platform Sumar for the July 23 general elections, has enforced the EU’s murderous policy to the last days of its interim government testifies to the reactionary character of the PSOE-Podemos government. It is also carrying out police crackdowns on metalworkers in northwestern Spain and imposing draconian minimum service requirements to try to block mass strikes taking place across Spain.

Kremlin allows Wagner to continue operations in Belarus as Prigozhin defends coup attempt as legitimate “demonstration”

Clara Weiss

Members of the Wagner Group military company load their tank onto a truck on a street in Rostov-on-Don, Russia, Saturday, June 24, 2023 [AP Photo/Associated Press]

In the days following the collapse of a coup attempt by the fascistic warlord, ex-convict and billionaire Evgeny Prigozhin and his mercenary Wagner army, the Kremlin has made clear that it will allow the insurrectionists to continue their operations in neighboring Belarus.  

In his first address to the nation after the coup attempt on Monday, Vladimir Putin denounced the coup plotters, without naming Prigozhin, for having “betrayed their country, their people.” He claimed that the actions of the armed forces and a “consolidation of all of society” had ensured that bloodshed was prevented.

He said, “This outcome—fratricide—is precisely what the enemies of Russia wanted: both the neo-Nazis in Kiev and their Western backers and various kinds of traitors to the nation. They wanted that Russian soldiers kill each other, that servicemen and civilians die, so that in the end Russia would lose and our society fall apart, drowning in blood and internecine strife.” 

Yet having effectively accused Prigozhin and Wagner of playing into the hands of Kiev and NATO and seeking to provoke a civil war, Putin then went on to praise the Wagner mercenaries for their “courage in battle” in Ukraine and invited them to “continue their service for Russia by entering a contract with the Ministry of Defense and other security agencies, or by returning to their loved ones. Who wants—can go to Belarus.”

The president of Belarus, Alexander Lukashenko, has since confirmed that Prigozhin is in Belarus and that his fighters are welcome to set up their camps there. “Please, go ahead, we have a fence, everything’s there. Put up your tents. We’ll help with whatever we can.” 

While some reports indicate that Wagner fighters in Russia will have to hand over their weapons to the Russian National Guard, those reports have not been confirmed. The vast majority of Wagner’s equipment and supplies over the years have been delivered by the Russian army. Russian media suggests that Wagner is continuing to openly recruit in many Russian cities.

Remarkably, Putin’s statement was released after Prigozhin published an 11-minute audio recording on his Telegram channel, defending his coup attempt as a legitimate “demonstration.” In the recording, Prigozhin claimed that he never wanted to challenge the government but only the military leadership, prove its ineffectiveness and prevent the “destruction” of Wagner, which had earlier been ordered to subordinate to the command of the army. On its Telegram channel, Wagner has since effectively threatened that it will resume not only operations but also the coup attempt. On Tuesday, it published a video with men displaying tank shells and shouting, “We never get tired of repeating! We’ll be back! And again!”

Putin’s statement also came after Foreign Minister Sergei Lavrov announced in an interview with “Russia Today” that on Monday Russian intelligence agencies are looking into the involvement of Western spies in the coup attempt.

Also on Monday, US President Joe Biden met with NATO leaders to, in his words, coordinate “our response and …. what to anticipate.” Biden then said, “We made clear that we were not involved. We had nothing to do with it. This was part of a struggle within the Russian system.”

Workers can believe Biden’s statements no more than any other of the countless lies that the US president has spouted about the war or any other aspect of his policy.

Prigozhin launched his coup attempt on Friday with a clear appeal to a substantial pro-NATO section of the Russian state and oligarchy. Ex-oligarch Mikhail Khodorkovsky, a central figure in these regime change operations, called upon people to “take up arms” to support Prigozhin. On Tuesday, Khodorkovsky posted a message on his Telegram account, stating that the most important thing about the coup attempt was that it “happened” and that Prigozhin initiated it by denying that NATO had anything to do with the war in Ukraine. 

However, as the World Socialist Web Site stressed in its statement on the failed coup attempt:

That the coup was prepared with some significant level of NATO involvement is clear enough. But to portray the coup as primarily the product of a CIA conspiracy would be to ignore the real divisions that exist in the Russian regime and the social interests that determine its policies. Prigozhin’s coup attempt exposes above all the bankruptcy of the Putin regime itself, out of which Prigozhin himself emerged. 

This assessment has been fully borne out. On Tuesday, Belarusian President Alexander Lukashenko gave a press conference, telling reporters how he brokered a deal with Prigozhin, Putin and the head of the FSB, Alexander Bortnikov, on Saturday. Lukashenko recounted events as follows:

“Putin told me: ‘Look, Sasha [affectionate for “Alexander” in Russian], it’s no use. He [Prigozhin] doesn’t even pick up the phone, he doesn’t want to talk to anyone.’”

When Lukashenko asked Putin for Prigozhin’s phone number, the Russian president replied, “Most likely, the FSB has his phone number.”

According to Lukashenko, Prigozhin “instantly picked up the phone. We talked the first round for about 30 minutes in foul language [mat’]. Extremely foul language. There were 10 times more obscene words than normal vocabulary (I analyzed that later).” 

When Prigozhin demanded that a meeting with Putin and for the Kremlin to “give up” Russian Defense Minister Sergei Shoigu and Russian Armed Forces Chief of Staff Valery Gerasimov, Lukashenko replied:

“I say, ‘Zhenya [affectionate for “Evgeny”], no one will give you Shoigu or Gerasimov, no one, especially in this situation. You know Putin as well as I do. He won’t talk to you on the phone, let alone meet with you in this situation.”

“They want to strangle us! We’ll go to Moscow!”—Prigozhin replied. 

“I say, ‘Halfway there, they’ll just crush you like a bedbug. … Think about it, I say. I told Putin, too: ‘We can whack him. It’s not a problem. If not at the first try, then at the second...”

Lukashenko held another six or seven conversations with Prigozhin, who eventually agreed to give up his demands but was concerned what would happen to him and his fighters: “We stop—they’ll start pummeling us.”

Lukashenko responded, “They won’t. I guarantee you. I’ll take care of that.” 

Lukashenko “took care of that” by speaking with Alexander Bortnikov, the head of the FSB, whom Prigozhin had apparently desperately tried to call before and telling him: “you have to pick up the phone if Prigozhin calls.” After negotiations with Bortnikov, Prigozhin felt assured that neither he nor his fighters would be “whacked” and announced a retreat.

This is the language, method and mindset of gangsters. While Lukashenko’s account is no doubt only a small part of the truth, it is a good deal of the social truth behind the coup and its collapse. Whatever their violent infighting, Prigozhin, Putin and Lukashenko are all the despicable social products of the Stalinist bureaucracy’s destruction of the Soviet Union in 1991, which gave rise to a criminal oligarchy whose entire social existence and wealth are bound up with the systematic plunder and looting of the wealth created by the working class. 

While Wagner was only formed in 2014-2015, the rise of private armies as major players in Russian politics was also intimately bound up with the restoration of capitalism. In the 1990s, during the so called “oligarch wars,” virtually every oligarch maintained his own private security or paramilitary unit. Overwhelmingly recruited from veterans of the special military forces and the secret service FSB, these private armies helped individual oligarchs seize control of critical companies and raw material resources and “neutralize” (and often kill) other rivals among the oligarchs and mafia.

Today, the private security sector encompasses about 23,000 firms and employs an estimated 700,000 people. Like Wagner itself, dozens of such private armies have been deployed in various wars abroad. The majority of them are largely supplied with equipment from the state and army and are closely interwoven with state security and military structures.

Political Crisis in Peru

Jan Lust

Since the impeachment of Peru’s president Pedro Castillo on 7 December 2022, Peru has attracted the attention of policy makers all over the world. The massive protests that followed Castillo’s detention resulted in dozens of deaths, mainly caused by bullets from the army or the police. In this article, we discuss the origin and evolution of the political crisis in Peru and its economic effects.

The victory of the Left in the Peruvian presidential elections of 2021 was a historical electoral result for the progressive forces which is only comparable with the electoral successes in the 1980s.

The electoral win did not come as a surprise because, since the presidential elections of 2006, the results for the Left have been remarkable, especially in the southern regions (the focus of the current protests). In the 2016 presidential elections, the Left obtained about 20% of the valid vote. With a minimum of 45,000 votes, the presidential election of 2021 was won by Castillo, a former strike leader of primary and secondary school teachers.

Castillo and the Opposition

While the triumph of the Left might not have come as a surprise, the radical character of the winning candidate certainly was. Castillo was a member of the political party Peru Libre, a declared Marxist-oriented political organization. The party’s goal is to convert Peru into a socialist country. Since the 1980s, the decade of left-wing oriented terrorism, any reference to socialism has been stigmatized by the Right and transmitted to the population through their communication channels. This policy is called terruqueo and is now used against the protesters who daily oppose the current government.

From the very start of his presidency, Castillo faced ferocious opposition from the majority in Congress to any proposals that would harm the political and economic status quo. The first victim of the offensive of the Right was the Minister of Foreign Affairs Héctor Béjar, who dared to initiate a process that would lead to an independent foreign policy. Pressure from the Right forced him to resign. Proposals to change the tax system, elaborated in cooperation with the IMF, to be applied to the mining industry in order to increase tax revenue, were derogated by Congress.

During his 17 months as president of Peru, Castillo was not given a real opportunity to govern, as almost every week one of his ministers was threatened to be ousted by Congress. For different reasons, in his first year as president, Castillo appointed 58 ministers, replacing a minister every nine days. The ongoing political instability contributed to economic instability, causing capital flight, a fall in the exchange rate, and inflation.

The Right considered President Castillo a permanent threat to the interests of the major businesses in the country. However, he was, in fact, definitively not a threat. His governments did not introduce changes in the country’s economic, social, and cultural policies. While a second agrarian reform was announced (the first reform was introduced during the military regime of General Juan Velasco in the 1970s), it was never implemented. Foreign policy was business as usual, and the repressive forces used the same repressive logic as in previous governments. Only in the case of labour were some changes starting to be discussed. The Ministers of Economy and Finances were adherents to Keynesian or neoliberal economic thinking. As a matter of fact, the lack of a political vision for the future of the country, expressed in policies, proposals, and political strategies, manifested itself in the absence of any political, economic, social, and cultural changes that were led or initiated by the Peruvian State.

December 2022: Impeachment

The supposed threat that Castillo symbolized formed the principal reason for the Right to continuously search for reasons to impeach him. This opportunity came on 7 December 2022 with Castillo’s failed attempt to dissolve the Parliament, to establish an emergency cabinet, and to call for new parliamentary elections. The new parliament would have created a new constitution, another major threat to the interests of the principal corporations in the country (extractive industries, finance, and communication).

The impeachment and imprisonment of Castillo gave rise to massive protests against the government of the first female president in Peruvian history, Dina Boluarte. Boluarte had been his vice president and just like Castillo a former member of Peru Libre. While Castillo had resigned from the party, Boluarte had been expelled from the party, already before the December 2022 occurrences. Political differences with the party were the principal reasons why they both left the party.

Although Boluarte has a left-wing background, just like previous presidential candidates that were elected on a relatively progressive electoral platform such as Alberto Fujimori (1990) and Ollanta Humala (2011), they turned right. The Boluarte regime can be considered an authoritarian right-wing government. Its cabinets are made up of liberal and center-right individuals. The massive repression and dozens of deaths caused that the protesting population accused the current president to be a murderer. Even a Dina Boluarte “is a murderer” song was created and is chanted during the demonstrations (Dina asesina, el pueblo te repudia).

The population demanded new general elections and a Constituent Assembly. A part of the protests also demanded the release and restitution of Castillo.

These demands for new elections and a Constituent Assembly are not surprising if one takes into consideration that the economic model and the neoliberal constitution of 1993 have not fulfilled the socioeconomic perspectives of the mass of the population. In 2011, the poverty rate stood at 27.8%. In 2021, this was still 25.8%. The rates of underemployment were respectively 51.1% and 47.4%. In 2010, the Gini index was 45.5. Ten years later, the Index had only slightly reduced to 43.8. Castillo succeeded in winning the presidential elections of 2021 because he captured the vote of the dissatisfied masses, unhappy with the neoliberal extractive development model in place, the corruption scandals of the previous years, and the fact that individuals living in the popular districts have been the most affected by COVID-19.

The protests were initiated and led by the inhabitants of the southern regions of the country (Puno, Ayacucho, Andahuaylas, and Cusco). The principal electoral bases of the Left and Castillo are located precisely in these regions. Other reasons for the leadership of these provinces in the protests are their identification with Castillo and the overt racist attitude of leading individuals in Congress during Castillo’s months in government.

The protests were met with repression, resulting in the death of sixty citizens, many of whom did not even participate in the protests. However, the repression did not stop the protests. Since Castillo was ousted by Congress, protests have been organized almost every day. It started in the south and rapidly expanded to the rest of the country. Regularly, major demonstrations take place in Peru’s capital city, Lima.

The impeachment of Castillo and the reduction of the former governmental party Peru Libre to the role of a small opposition party in Congress was definitively in the interest of the principal business groups. There was no insecurity anymore regarding the economic course of the government. Directly at the start of her presidency, business expressed their trust in the new president.

The continuing protests against the government, a consequence of the unwillingness of the government and Congress to move the general elections to the first half of 2023 and their refusal to organize a referendum on the question of a new constitution, is having a negative impact on the economy. The reluctance of the Right regarding elections and a referendum might have been caused by the fact that it is fragmented and is not able to present a unified candidate. The protests are helping to unite the Left.

Business is beginning to reduce its expectations of the current government, as it has not been able to solve the crisis. Roadblocks have caused scarcity in some regions and led affected mining corporations to suspend their activities because they were not able to transport their products. And now, even the transport sector is planning strikes to demand the resignation of President Boluarte. Latest polls show that the majority of the population wants the President and Congress to resign and new elections to be held as soon as possible. In fact, worldwide, Peruvians are showing themselves to be against the regime.

The police and military repression of the social protests, the massive detention of protesters, the arbitrary detention of supposed leaders of the protests, the attacks on the independent press, and the massive deployment of police forces, only seen in police states, is starting to isolate the regime internationally. Critique on the handling of the crisis and the violation of human rights denounced by the presidents of Colombia (Petro), Mexico (AMLO) and Chile (Boric) has created diplomatic tensions. Petro and AMLO have even been called persona non grata, Peru’s ambassador has been retreated from Bogotá, and the ambassador of Mexico has been expelled from Lima.

The international diplomatic tensions might have a negative impact on the development of the Pacific Alliance, a free trade alliance between Peru, Colombia, Chile, and Mexico. The suspension of Peru might even be expected. Apart from the mentioned Latin American presidents, the United Nations and the United States are also starting to get worried about what is going on in Peru.

The Peruvian government and Congress have been turning the political crisis that started on 7 December 2022 into a political, economic, and social drama. It has even become an issue in the international political arena. Peru is turning authoritarian and undemocratic. It seems that the country is returning to the darkest episodes of the 1990s. The police and the armed forces are on a permanent state of alert.