Resolution for Concern No. 2
Four years since the eruption of the current global economic crisis the world capitalist system remains in the grip of the gravest crisis since the 1930s. The crisis continues to unfold because the basic contradictions in the capitalist system remain unresolved. Indeed, they are turning for the worse as the ruling classes try to overcome the crisis by intensifying the exploitation of working people’s throughout the world and pursue new opportunities for profit-taking through plunder of underdeveloped countries. Policies of privatization, trade and investment liberalization, denationalization, deregulation, and financial speculation are means to this end. There have been no measures at all to rein in the casino capitalism of speculation, high bank bonuses and lack of regulation. But the protracted crisis is also giving rise to more challenges to US hegemony and inciting more and more people to resist and wage class struggle against the monopoly bourgeoisie and local ruling classes.
Crisis of an economic system
The current global economic crisis is considered the most serious one both in terms of magnitude and scope since the Great Depression. The number of people living in extreme poverty has swollen by tens of millions worldwide as a result of the crisis. For the first time in history, the number of people experiencing hunger has risen to over 1 billion according to conservative estimates of the Food and Agriculture Organization (FAO) . It has cost trillions of dollars of public money to avert a complete collapse of the financial sector and yet the financial system continues to wobble.
Mainstream economists and corporate media have been claiming since last year that the world economy is on the road to recovery, citing positive economic growth, productivity increases, and a rebound in corporate profits. Yet even official figures cannot obscure the dismal outlook for the global economy over the foreseeable future, especially for the advanced capitalist countries.
Corporate profits, especially those of the biggest transnational corporations (TNCs), are indeed on the rebound but this has been achieved through the pillage of public resources in the form of bailouts together with aggressive cost-cutting measures, foremost of which is the laying off millions of people, reducing wages and other benefits and speeding up work. As a result productivity is up, profits are up but workers’ real incomes are declining alongside the spread of unemployment and underemployment.
There are now over 205 million workers unemployed globally according to the International Labor Organization’s official definition which obscures the true extent of joblessness. This does not count the millions more in precarious employment, with below poverty wages, no job security and little or no benefits. There are now more people unemployed and underemployed in the world than at any other time in history and even the most optimistic economists do not expect this level of joblessness to decline significantly over the next three years. Indeed, widespread joblessness and the threat of long-term unemployment is being used by capitalist bosses to pull down real wages and to beat down unions.
Although governments, even the US’, are talking about reforms to prevent the worsening of the crisis, they are not taking any meaningful measures to rein in the rapacity of CEOs, stockholders, and big investors. In fact they are caught in a bind by them. Whatever we are told to believe about reforms, it is clear now that they do not address the roots of this systemic crisis. The gravity of this crisis has revealed that the capitalist economic system is truly rotten to the core.
It is the working people that are bearing the brunt
The attack on working people by big business is made worse by austerity measures being implemented by governments. After spending trillions of dollars to bail out the biggest banks and corporate giants from the financial crisis of their own making, the governments of the advanced capitalist countries are saddled with increasing debts and deficits. Ordinary people are bearing the brunt through cutbacks in social services, higher taxes, layoff of public employees and vicious attacks on public sector unions.
For example, after handing over at least 3.3 trillion to the finance oligarchy through the US Federal Reserve, the US government is now proposing the largest spending cuts in US history — a reduction of $700 billion in domestic non-defense discretionary spending over the next ten years. This would slash social services, Medicare, social security, pensions, public sector employment and real wages.
Similarly, European leaders recently signed onto a “Pact for the Euro” which commits individual states to limit wage increases, restrain spending on public services, postpone the retirement age, strictly limit government borrowing, and collect more revenue through regressive consumption taxes. In Greece, wages of civil servants have declined by 30% in 2010. The European Union (EU) is imposing harsh austerity measures after the ‘German model’.
Beyond the borders of the advanced capitalist countries, the international finance oligarchy relies on the IMF to impose “fiscal discipline” on debt-saddled governments to ensure that they will be able to extract debt service payments “sustainably” over the long haul. The IMF has even called for two decades of “fiscal adjustment” — signalling a new neoliberal offensive to dismantle whatever remains of social entitlements and state-supported public welfare provisioning.
Latvia, Greece, Iceland, Ireland and Portugal have already implemented drastic austerity measures as conditions for obtaining rescue packages from the IMF-EU in recent years. But these have further slowed down economic activity so their debt burdens continue to grow and remain as unpayable as before. Sovereign debt defaults therefore remain imminent in many of these countries and threaten to spill over to larger economies such as Spain and the rest of the Eurozone. The monetary union slowly built up over the last half a century is now under threat of splintering. Migrant workers are being used as scapegoats of the jobs crisis; hence face increasing discrimination, xenophobia and racism.
Japan’s economy, already stagnant for close to two decades, must now grapple with the aftermath of the worst natural disaster in its history. The immediate damage caused by the earthquake and tsunami is estimated at 3-5% of its GDP but the ecological and economic impact of the subsequent nuclear disaster has yet to be fully evaluated. With much of its power sector out of commission, industrial and commercial activity is expected to contract further and remain depressed over the coming years.
With the advanced capitalist countries in depression, the emerging economies are presented as the beacons of hope for sustained growth and recovery for the global economy. More finance capital is therefore steering South — $825 billion in capital flows went to developing countries in 2010, an increase of 42% over the previous year. Financial investors are taking advantage of excess money supply (thanks to “quantitative easing”) and record low U.S. dollar short-term interest rates to snap up assets in emerging economies.
This is creating new credit and asset bubbles, particularly in Asian property markets, and forcing currencies in emerging markets to appreciate. This is fuelling a currency war and setting the stage for more financial convulsions which can be easily triggered by the sudden reversal of these hot money flows. Indeed, all previous booms in capital flows to developing countries eventually went bust, with severe and protracted consequences in the real economy. The 1980s third world debt crisis, 1997 Asian financial crisis, and of course the 2008 global financial meltdown were all preceded by a wave of financial capital flows.
Speculative capital is one of the reasons why prices of basic commodities like food and fuel are skyrocketing. Food prices have risen steeply, pulling tens of millions of people below even subsistence levels of existence especially in the underdeveloped countries where monopoly capital has destroyed domestic agriculture and food production systems over the course of many decades. This is pushing more people into destitution, especially in poorer countries where food and fuel account for over two-thirds of the consumption basket. These recent developments are swelling the number of destitute people trying to survive on less than two dollars a day, estimated to number 1.2 billion or over one-third of the global labor force in 2010 by the conservative reckoning of the World Bank.
With demand and prices for commodities on the rise, transnational corporations are frantically competing for and violently taking over vast tracts of land, forests and marine resources for the extraction and export of oil, food, minerals and other resources throughout Africa, Asia, Latin America and the Caribbean at an accelerating pace. This is happening both as the cause and the result of increasing ecological stress and resource scarcity, as evident in climate change, loss of biodiversity, land degradation, deforestation, water stress, and so on.
Over 20 million hectares of farmland — larger than the combined land area of Belgium, the Netherlands, Denmark and Switzerland — have been acquired or are in the process of being taken over by foreign investors at an accelerating rate since 2006 with the complicity of big landlords, compradors and client states. These farmlands are converted to cash crop plantations for export, biofuels production, special economic zones, or for industrial or commercial uses. This involves the violent dispossession and displacement of peasants, farmworkers, fisherfolk, herders, pastoralists and other rural communities from their means of existence. Labor and community organizers and activists are threatened, harassed, criminalized, illegally detained and even executed.
These investors are of course aided by their imperialist states and institutions. The International Finance Corporation, the World Bank’s private finance sector arm, is investing $300 million to promote primarily foreign mining interests in Africa. The 2008 EU’s Raw Materials Initiative calls on underdeveloped countries to grant the same access rights to raw materials as local businesses, and to avoid all forms of restrictions in the exportation of these resources. The US uses not just its economic power but naked aggression for grabbing resources and maintaining political dominance –invading Afghanistan and Iraq, setting up AFRICOM to intervene in the African continent, and now instigating military aggression with NATO forces in Libya.
Multilateral bodies and institutions, such as the G8, the G20, the Organisation for Economic Cooperation and Development (OECD) and international financial institutions, are now busy creating new opportunities for surplus capital desperately seeking new profitable investment outlets amidst the global depression. For instance the World Bank, the Asian Development Bank and other imperialist institutions are aggressively promoting private investments especially in infrastructure in underdeveloped countries which is expected to absorb around $1.2 trillion per annum in the coming years. To entice private capital to invest in big ticket items with long gestation periods, governments are sweetening the deal by removing environmental and social standards, providing tax breaks or through so-called public-private partnerships where monopoly profits are guaranteed. At the same time, these infrastructure projects are meant to facilitate the deeper penetration of monopoly capital into developing countries and their greater integration in the global market as suppliers of raw materials and low-value added goods.
All these measures are wreaking extreme havoc on the peoples’ social and material conditions of existence even in the wealthy countries. They are further concentrating wealth in the hands of the finance oligarchy but actually aggravating the basic contradictions in the world capitalist system.
This is happening since capitalists typically strive to maximize profits by investing in more equipment or new technology at the same time reducing wages and benefits of workers. But this same logic gives rise to the relative overproduction of commodities in the economy as the fall in the income of workers prevents them from buying their own products. This also prevents capitalists from realizing their profits, stalls the circulation of capital in the economy, and leads to bankruptcies and layoffs. This is what is called the crisis of overproduction which is an inherent tendency in the capitalist system and in fact is at the base of the protracted depression today. To boost aggregate demand in the economy without conceding a bigger share of the national income to working people, the ruling elites encourage the poor to spend more using debt. At the same time these financial capitalists resort to speculative trading of securities and other financial instruments to inflate the value of their assets.
As of 2007, the wealthiest 20 percent of mankind controlled nearly 83 percent of total global income while the poorest billion of the world population shared 1 percentage point of global income. The poorest 40 percent of the global population increased its share of total income by less than one percent between 1990 and 2007.
So as wealth is further concentrated in the hands of the few under imperialist globalization, the crisis of overproduction also turns for the worse as demonstrated by the current crisis.
Growing Challenges to US Imperialist Hegemony
As a consequence of the unprecedented economic crisis, there are profound shifts in the international political and economic order. While the US remains the dominant power in the world, the contradictions in this US-led international order are becoming increasingly acute and challenges to US hegemony are growing steadily.
The Bretton Woods institutions set-up to oversee the international economic architecture according to US designs is likewise under pressure. Rising protectionism in the US and the EU, and increasing assertiveness on the part of the emerging economies backed by majority of the Third World (G77) has dragged the World Trade Organization’s (WTO)Doha Round to its 10th year of stalemate. The international monetary system is also under tremendous pressure as the dollar continues its decline and major trading economies are now gradually diversifying their reserve currencies. A few countries are even floating proposals for an alternative to the US dollar as the global reserve currency. The establishment of the G20 as premier forum for international economic cooperation is further evidence of the shifting distribution of economic power and transformations in international economic relations in the world today.
Economic competition between the US and China is intensifying as the latter’s weight in the global economy increases. China is now ranked second in terms of GDP although 94th in terms of GDP per capita – below Ecuador and just ahead of Albania. It is now the leading exporter in the world and has $2.3 trillion in foreign exchange reserves – also the highest among all countries. Between 2000 and 2008, China’s total outward foreign direct investment (FDI) stock increased five times although this is still less than 5% that of the US and even less than 40% of the foreign assets of General Electric alone.
Nevertheless, while the growing economic weight and assertiveness of China and a handful of other developing countries have not yet fundamentally altered the dominant international order, they provide favorable conditions for the formation of alliances and constellations of forces that can pose challenges US, EU and Japanese imperialist interests. This is also true at the regional level where countries such as India, Iran, South Africa, Brazil, Venezuela and even Cuba have much greater economic and political clout than their global standing suggests.
For instance, the Bolivarian Alternative for Latin America and the Caribbean (ALBA) led by Venezuela and Cuba was established as a regional alternative to the US-led Free Trade Area for the Americas — right in “America’s backyard.” The ALBA explicitly rejects the tenets of neoliberalism and instead strives for social and economic development for the people through mutual cooperation rather than through market competition.
For many of the least developed countries, Chinese or Indian investments and trade provide alternatives to EU or US capital and markets. More poor countries now run to Chinese banks for loans than the World Bank in order to get better concessional terms without the onerous policy conditionalities of the latter. As profit-oriented ventures, these loans and investments from China, India, etc. certainly have negative social and environmental implications as well. Nevertheless they objectively provide greater elbow room for oppressed countries to assert their independence from their old colonial and neo-colonial masters.
But the most formidable strategic challenge to the dominant order comes from oppressed peoples themselves. In the face of worsening attacks on their social and material conditions of existence, the people are resisting around the world.
Protests and strikes have spread across Europe (Greece, Ireland to Latvia, France, the UK, Germany, Spain, among others) against layoffs, pension cuts and other austerity measures being imposed by governments. Millions of workers and youth have repeatedly flooded the streets of Greece to oppose the severe austerity measures being imposed by the government in behalf of the banks and other creditors. In the US, the labor movement is vigorously fighting union-busting legislation recently passed in Wisconsin and currently being discussed in other states such as Ohio, Michigan and New Jersey. More than 1,000 actions were held recently throughout the country, with at least one in every U.S. State, with the participation not just of public sector employees but the broader public which recognizes that this new attack on public sector unionism means the erosion of public services as well.
Likewise workers in Mexico are fighting new anti-labor amendments to their labor relations law. Workers in South Africa, Israel and Uruguay are fighting against privatization, job cuts and for union recognition. Workers in India, Sri Lanka, the Philippines and elsewhere have recently gone on strike over unpaid wages and benefits. Protests against rising food prices have been reported in Algeria, Morocco and Chile.
In South Africa, the whole public system was shut down due to a massive demonstration that can be considered one of the largest strikes against neoliberal policies in recent history. As food prices went up people walked down the streets, saying that they would not pay the price of the crisis created by imperialist globalization and the promotion of corporate rights over their collective and individual rights. In Mozambique, ten people were killed due to violent dispersal and counter attacks from the military forces of the fascist government. Notably, there are mass strikes against deteriorating quality of education in Burkina Faso. The people of Senegal have been waging huge demonstrations almost every day against the government that is passing on the brunt of the crisis onto the backs of the people.
Peasants, farmworkers, indigenous people and other rural communities continue to resist landgrabbing and other forms of development aggression. In many countries in the third world such as India, Nepal, Colombia, Philippines and others, the people are intensifying armed revolution to fight age-old feudal bondage, national oppression and imperialist domination.
In the Arab region, people’s longstanding anger against repression, corruption and foreign (particularly US) meddling has combined with worsening unemployment and deteriorating living standards to set off popular uprisings in one country after another against the ruling regimes. The brave people of Tunisia and Egypt have offered a beacon of hope to the region as they successfully toppled imperialist puppet regimes that had been toeing the line of imperialist globalization for decades.
The political crisis across the Arab region is still unfolding with the imperialist powers led by the US now conducting covert operations and/or waging overt military aggression under the pretext of humanitarian intervention. The real reason is either to help prop up their puppet dictators or ensure that regime change establishes fresh puppets still committed to foreign corporate control over oil and natural resources but with more “democratic credentials”. Nevertheless, the fact that democratic and patriotic movements have succeeded in toppling dictators backed by Washington in a region where US imperialism had long exercised hegemony is further evidence of the relative decline in US power.
The ever worsening crisis of the world capitalist system — with intensifying exploitation and oppression, more wars of aggression against the people and sharpening contradictions among the imperialist powers themselves — is indeed giving rise to more widespread mass uprisings and armed revolutions throughout the world.
The gravity and long duration of the current depression is a challenge and opportunity for the progressive forces and movement of people for national liberation, democracy and socialism to grow in strength and advance.
In this context, it is the duty of the ILPS to confront the challenges and seize the opportunities for advancing the peoples’ struggles against imperialist globalization in defense of the people’s right to political and economic self-determination and development, a healthy environment, and the dignity and future of our peoples.
We resolve to arouse, organize and mobilize people from the different continents and regions, foster solidarity among the various struggles and movements worldwide, and build a broad anti-imperialist united front. We commit ourselves and our respective mass organizations and other allied groups to engage in the following activities in the next three years (2011 – 2013):
Intensify mass protest actions and various forms of struggle for employment, decent incomes, better working and living conditions, access to social services and control over productive resources including land, seeds, water and forests.
Oppose the renewed neoliberal push for disemployment, austerity, privatization, liberalization and deregulation. Launch education and mass actions against international financial institutions, multilateral banks, the WTO, free trade agreements, the G8, the G20 and other international institutions in the service of monopoly capital.
Fight for the universal right to decent and productive work that ensures security and human dignity, but also work that is engaged in meeting social needs for the present and future generations, including access to food, education, health, housing, basic services and a healthy environment.
Resist imperialist plunder and destruction of the environment; land grabbing and other forms of resource grabs; and the privatization and commodification of nature. Strive to build alternatives to the current unsustainable mode of production and consumption that is destroying the basis for life on the planet.
Share information, experiences and updates on struggles taking place in different regions. Widely propagate these updates to generate awareness and support. Launch solidarity actions in support of particular national and regional issues and actions. Take advantage of online technology and social media for raising public awareness on issues of imperialist globalization and the socialist alternative.
Aggressively link up with other mass organizations, unions, associations and progressive individuals in Europe, Latin America, North America, Africa and the West Asia and invite them to the ILPS. Promote the ILPS as a global anti-imperialist alliance especially among different mass organizations in countries where mass struggles and liberation movements are emerging.
Specific resolutions and actions
Actively support and encourage others to participate in the RESIST campaign which aims to gather and disseminate critical analyses of the global capitalist crisis, peoples’ resistance and alternatives. This includes organizing and mobilizing for education seminars, public fora, conferences; contributing material for the RESIST website and newsletter; tapping progressive experts to contribute their views; and encouraging others to read as well as contribute to these resources. Also, produce and disseminate popular forms of campaign materials such as video documentaries, comics and other forms of visual arts that will aid in deepening people’s understanding of the roots and real solutions to the global crisis.
Campaign against austerity. Conduct social investigation, produce critical studies, organize seminars, conferences, day(s) of action, and other initiatives to confront the effects of the protracted depression and attacks on the wellbeing of working people.
Support and promote mass struggles now sweeping Europe, particularly in Greece, Iceland, Spain, Portugal, Ireland and other countries against austerity measures.
Campaign against privatization. Investigate, expose and oppose new forms of privatization such as public-private partnerships, etc.
Organize an international day of coordinated action against the upcoming G20 Summit in November 2011.
Support initiatives of countries that seek to develop national, sovereign development and South-South economic cooperation that challenges imperialist globalization
Solidarity campaign to support a worker’s cooperative whose members were recently laid off by and displaced from TRIUMPH International in the Philippines and Thailand.
Strengthen the commission’s coordinating group by getting more members, establishing regular channels of communication, discussing plans for implementation of the above resolutions, and regular follow-up.