Book Review : Megathreats
Tony Saunois reviews ‘Megathreats: The Ten Trends that Imperil Our Future, and How to Survive Them’ by Nouriel Roubini Capitalism’s ‘Megathreats’ Many bourgeois economists have tended to put a gloss on the deep systemic crisis facing world capitalism. They have often seized upon this or that marginal piece of “good” news to empirically conclude that this or that problem has been fixed – until the next one arises. Now faced with the convergence of a series of multiple crises – both economic and political – many have finally been compelled to catch up with what the CWI has argued – that a devastating situation confronts global capitalism. At the World Economic Forum in 2023, 66% of a group of private and public sector economists thought there was likely to be a global recession in 2023. They echo the pessimism of the ruling class about the future of their system. Two in five bosses of global companies fear their businesses will be unviable within a decade. Following the WEF, the IMF, World Bank and some commentators have tried once again to argue that things are not so bad, basing themselves on empirical evidence that, for example, inflation has not risen by as much as they originally feared. There are, however, some notable exceptions to the empiricism of many bourgeois economists. Nouriel Roubini is one of them. Not a Marxist, but as a young man drawn to economics through his studies of Marx, before discovering Keynes, Roubini has been consistent in looking deeper into the underlying trends taking place within the capitalist economy and concluded that “we totter now on a precipice, the groundbreaking beneath us … New warning signs look clear and compelling. Economic, financial, technological, trade political, geo-political, health, and environmental risks have morphed into something much bigger. Welcome to the era of megathreats; they will alter the world we thought we knew.” Roubini has on occasion stood out against the “conventional wisdom” of the majority view of capitalist commentators. He was ridiculed when he warned in 2006 of an impending financial crash that hit in 2007/8, as the CWI had also anticipated. Later, he cautioned, like the CWI, of the threat of stagflation/inflation, in 2021, before the current global spike in prices. Previously dismissed as a “dissident” bourgeois economist, dubbed ‘Dr. Doom’, many of Roubini’s warnings are now commonplace. Roubini’s latest book, ‘Megathreats: The Ten Trends that Imperil Our Future, and How to Survive Them‘, is a devastating exposure of global capitalism today and a warning of what the future holds should it continue. Roubini covers many issues; political, economic, environmental, and geopolitical, all of which it is not possible to comment on in a single review. Much of what his book contains is not new, especially for the CWI and our supporters. Often the economic material is somewhat dense yet it is illuminating about the scale and depth of the multiple crises global capitalism faces. The publication of such a work by a bourgeois political economist at this conjuncture is very significant. It is a serious attempt at contemplating how economic, geopolitical, political, environmental, and technical trends and events are likely to impact society in the coming years. Yet it is one thing to diagnose the sickness and an entirely different proposition to finding a cure. As a bourgeois political economist, Roubini remains imprisoned within capitalism and his limited proposed solutions to stave off the “dystopian” world he anticipates offer no lasting alternative or way out of the systemic crisis that exists. The world, he correctly says, now faces a series of interconnected multiple crises, which are converging, as the CWI has argued. The “ten megathreats” that Roubini identifies – debt crisis; private and public policy failures; demographic sea changes, easy money; stagflation; deglobalisation; Artificial Intelligence; the new “cold war” and the environment – are all central aspects of the current crises unfolding. Debt crisis The explosion of global debt is a crucial factor in how the economic crisis is to unfold in the coming years. Debt crises have rocked the neo-colonial world in previous periods of capitalist turmoil, especially in Latin America in the 1980s. However, there is a critical difference in this crisis, which will partly shape the era we are now in. That is the massive growth of debt that exists in the major imperialist powers. The US is already the largest global debtor – to the tune of 50% of GDP, or US$13 trillion in foreign liabilities. By the end of 2021, global public and private debt was well over 350% of global GDP. Now it is even higher. Should the average pace of debt growth for the last 15 years continue, it will amount to a global debt of US$360 trillion – up US$85 trillion from its current levels. Debt levels of such a magnitude are unrepayable. Yet servicing them, especially when interest levels are increased also becomes impossible and triggers economic and social upheavals not witnessed for a generation, such as we have seen in Sri Lanka. This will be repeated in a series of countries in the coming period. Pakistan is possibly the next candidate. The United Nations expects 70 countries in Asia, Africa, and Latin America will default in the next few years. Neither China nor the US will escape from a debt crisis. Although the imperialist countries, unlike the neo-colonial world in Asia, Africa, and Latin America, have the greater facility to manage it and take measures to ‘kick the can’ down the road. However, even they run the risk of facing a major debt and financial crisis. Yet just as the debt question is exploding as such a critical issue, many on the “left” put to one side the demand to refuse to pay the debt, nationalize the banks and introduce capital controls. This issue is critical and not just in the neo-colonial world – it is now a factor in imperialist countries, as well. Roubini identifies the toxic consequences of the debt bubble but we will search in
Malaysia: Fractured political parties head into general election as economy worsens
In the midst of monsoon season which is expected to cover 25% of the landmass in Malaysia with heavy floods, the Prime Minister dissolved the parliament and directed the Electoral Commission to schedule a general election in the coming two months. Although the current coalition government could constitutionally stay in power until July next year, they are unable to maintain unity, which resulted in the early dissolution of the parliament. However, it is highly unlikely that the next general election will contribute towards solving the current crisis and establishing a stable government. The underlying weak economy has resulted in deep divisions amongst the mainstream political parties. These parties have splintered into various groupings and are establishing new formations. The ruling Barisan Nasional (BN) will have to compete with their current partner in the coalition government, Perikatan National (PN), and the opposition Pakatan Harapan (PH). For some leaders of UMNO (the main component party of BN), like the party president Zahid Hamidi, not winning the next general election is not an option. Over the past four years, many of the upper leadership of UMNO have been exposed as corrupt and are facing court cases that could result in imprisonment. Even the former PM, Najib Razak, could not escape prison sentence and is currently serving his time. UMNO leaders with corruption scandals are hoping against all odds that they will fare well in the coming election. In reality, BN, and in particular UMNO, do not have the support they once enjoyed and might not be able to get an absolute or even a simple majority in the coming general election. Their component parties are still weak and are not popular amongst their bases, and the factional splits over the years have significantly weakened the coalition. A big section of the population will reject and be disgusted with the prospect of corrupt leaders from BN taking over the government, once again. This is especially the case as they are failing to address the increasing economic burden facing society as the government of the day. At the same time, voters might also not be motivated enough to vote for the opposition, which performed miserably during their two years in power. Weak Opposition The opposition Pakatan Harapan (PH) is coming off a back-to-back defeat in two elections which saw them lose control of two state assemblies to Barisan Nasional (BN) recently. These defeats indicate that they have not been able to gain any popularity since the collapse of their government at the beginning of 2020. During their reign, PH politicians did not fulfill most of their electoral promises, including their 100-day programme, which was a part of their election manifesto. Furthermore, they continued BN’s economic policies, which are geared towards neo-liberalisation. Under PH, the working class and the masses did not see any improvement in their living standards, while the capitalist class made huge fortunes. Like Barisan Nasional, the Pakatan Harapan is also facing internal turmoil and splits. The Justice Party President and the de-facto PH coalition leader, Anwar Ibrahim, are facing opposition inside his party. This is preventing him from making alliances with figures such as the former PM Mahathir Mohammad, who played a role in the collapse of the previous PH government. A camp led by mostly younger members of the Justice Party, including Anwar’s daughter, Nurul Izzah, is arguing to forgo any hope to win the next general election and to focus on strengthening their coalition for the following term. They are betting that the following election will be winnable after they have the luxury of presenting themselves as a strong opposition. Pakatan Harapan politicians are focusing solely on anti-corruption messaging in their political campaigns heading up to the elections. So far, they have not taken up any economic issues, such as the rising cost of living, lack of job opportunities, and climate catastrophes, which are affecting millions of lives. The post-pandemic economy has not recovered as planned. Both the ruling nor the opposition parties do not have any solution for the rising inflation and weakening of the Ringgit currency. The masses will be faced with cuts in public services and subsidies in the coming months, as the national debt and deficit increase. Even with a change in leadership, there is no reason why Pakatan Harapan will behave any differently if they were to be ushered back into power. Pakatan Harapan politicians, just like BN or PN politicians, are mostly in favour of safeguarding capitalist profits, instead of tackling economic and social issues facing the people. They often went out of their way to destroy ordinary people’s lives to introduce policies favouring the capitalist class in the past. The masses need an alternative to what is already out there. There will be many parties posing themselves as the new progressive force like MUDA (new youth-based party), but they are also nothing but a different version of one of the mainstream parties which exist today. It seems like there is a new party formed every few months but none with a program that clearly addresses the demands of the ordinary masses. Additionally, there are also new right-wing forces and ultra-nationalists who will try to gain support by dividing the people along racial lines. Socialist Alternative Political parties such as PSM (Parti Sosialis Malaysia) have a national profile and are often seen as a party that are willing to struggle for the oppressed. Unfortunately, they do not possess the political clarity to be able to hold an independent perspective, which is of utmost importance if they were to be accepted as viable leadership for the struggling masses. At this crucial time, the PSM leadership is not offering the masses an alternative and they continue to align themselves with the PH coalition. Although the PH has shown repeatedly that they are not any different from BN or any other capitalist representatives in terms of their economic orientation, PSM leaders are still eager to enter into a political pact with them. The PSM wants to
How did Marcos Jr, son of an infamous dictator, win the Philippines election?
In a landslide victory, Ferdinand Marcos Jr., better known as Bong Bong Marcos or simply BBM, is to become the new president of the Philippines in late May. The son and namesake of the infamous dictator, Ferdinand Marcos, managed to get 31 million votes, more than double the amount of his closest rival and current vice-president, Leni Robredo. This will be the first president to receive a majority of votes (just over 50%) since his father supposedly won with a 53% majority over Corazon Aquino in the highly controversial and disputed election of 1986. The dictator Marcos was then ousted by the masses just a few months from that election in a series of popular demonstrations known as the ‘People’s Power Revolution’. Alongside today’s President Marcos, Sara Duterte, mayor of Davao city and daughter of the outgoing President, also won a majority of the electoral votes to become vice president. Although touted as a presidential candidate herself in the years leading up to this election, Sara Duterte decided to throw her weight behind Marcos and they successfully captured both the president and VP posts. This is seen as the coming together of two political dynasties with an agenda to establish a powerful control over the politics of the country. This election result will serve the outgoing president, Rodgrigo Duterte, enabling him to maintain a certain amount of power in the Philippines government. This is crucial for his political survival, as numerous human rights and other organisations are waiting to bring him to the courts and tribunals on charges of the widespread extrajudicial murder of criminals throughout the six years of his presidency. Rehabilitation of a dictator By winning the presidential election with a landslide, Bong Bong Marcos has finally fulfilled his long time aim to rehabilitate his late father’s image. BBM has never acknowledged any of his father’s crimes or expressed remorse. The Marcos family has been working quietly for many years to gain back political ground in the Philippines. It has slowly managed to crawl back to power by denying all of their corruption and heinous crimes against humanity. Furthermore, if not for the intervention of Duterte, BBM would not have been able to stand in the election due to an outstanding criminal charge for tax evasion. Throughout his presidency, Duterte had used the support of the Marcos family, who had political influence in the north of the country, to bolster his power in Congress. In return, Duterte provided the Marcos with political and economic favours to further increase their power. In 2016, the body of Ferdinand Marcos, the dictator and known kleptocrat was transferred from a burial site in Hawaii to the Philippines, despite heavy objections by numerous human rights groups. He was buried in the Libingan ng mga Bayani (Cemetery of the Heroes) as part of a Marcos rehabilitation campaign. ‘Team Marcos’, using expensive political campaign experts and thousands of online ‘trolls’ and independent bloggers, put over an alternative version of history, where the martial law period under his father’s presidency is pictured as a golden era for the people of the Philippines. Throughout the political campaign, BBM avoided mainstream media organisations and opted to give all his interviews to bloggers. He campaigned almost exclusively on social media platforms, managing to avoid any hard-hitting questions about his father’s legacy and his own plans and policies for the people of the country. Role of social media Most mainstream media and politicians opposed to Marcos are blaming social media for the victory of BBM and Sara Duterte. Although they play a big role in elections nowadays, they are not the main cause of the decision made by millions of voters. Politicians like BBM and Sara are not too dissimilar from Donald Trump or Narenda Modi, in noticing a growing distrust amongst the population with the traditional mass media which is either state-owned or closely linked to the state. People are generally aware of the role of the state media, which continues to manipulate the truth in favour of their political allies. Due to this, more and more people are opting to get their political news from social media sites, such as Facebook and Twitter, which are seen as independent, if not totally reliable. Furthermore, in a society with no real democracy, social media is the only way to voice their concerns and grievances. Having seen this phenomenon all over the world, BBM and Sara decided to focus all of their efforts on social media campaigns. The Philippines population is much more ‘tech savvy’ since the Covid pandemic forced them indoors and to work remotely. Even the older generations were forced to learn to communicate through the internet. This also greatly aided the BBM and Sara campaign. However, this phenomenon alone cannot explain the victory of Marcos and Sara since their strongest support is in rural areas where technology is not as common as in urban areas. Team Marcos is projected to dominate the less developed and poor regions of Southern Philippines known as Mindanao, except in one city and two provinces. Also, other candidates who invested heavily in social media campaigning, like the presidential runner up, Leni Robredo, and the former actor, Isko Moreno, did not do well. Alternatives The successful candidates claimed to have the political will to establish law and order, reduce poverty and wipe out weak and corrupt elites. Although void of any concrete programme, they claimed to have the ‘political will’ that other politicians supposedly lack to deliver on their promises. Although coming from a political dynasty, Duterte managed to portray himself as an ‘outsider’ from rural Mindanao, capable of disrupting the so-called political elites which have dominated Philippines politics for decades, without any benefit for the majority. Now, by vowing to continue all of Duterte’s economic and political policies, BBM and Sara are following in his footsteps but portray themselves as political ‘outsiders’. Since the masses overthrew the dictator Marcos in 1986, none of the subsequent presidents or governments has managed to lift
One year after the military coup in Myanmar, mass resistance continues
2022 has seen great courage by the Myanmar people, who remain steadfast against the coup carried out by the military Tatmadaw regime. The news of Aung San Suu Kyi’s four-year prison sentence was received with widespread scepticism, and the detention of the 75-year-old leader is seen as nothing but dirty tactics by the regime. This marks the latest development in the ongoing crisis. Aung San Suu Kyi’s jail sentence did not come as a surprise for millions who are struggling in the country’s chaos, an end to which is not visible. The protest movements that erupted subsequently were mostly made up of the younger generation. This time, the youth and the wider masses have sworn not to budge and make any compromises on the demand to remove the military regime from power. Protest slogans like “Make sure this is our last revolution!” and also “The revolution will succeed!” show the mood of the masses. However, the concrete development of the class struggle will produce factors that are beyond the anticipation of the masses. The ongoing struggle has already produced exhaustion which has enveloped some sections of society, who are increasingly becoming desperate due to the difficulties that plague their lives. Therefore, it is important for young people and revolutionaries in Myanmar to understand the intricacies and concrete situation so that we can navigate the struggle towards a precise perspective and, at the same time, lead to actions capable of fully liberating the people. Economic chaos The global health and economic turmoil are also affecting Myanmar’s economy. The political coup d’état and the Covid-19 pandemic have dragged down Myanmar’s economy from bad to worse. The World Bank estimates around 18% to 30% of the country’s economic contraction is due to the dual crises which swept Myanmar by storm. The value of the currency, the Kyat, against the US dollar has already fallen by 23%. Exports have fallen by 18% while imports have plummeted by 26%. In the agricultural sector, rising costs and credit barriers will cause a 10% devaluation and will have a significant impact on farmers. The worsening uncertainty and instability have further exacerbated the current situation in Myanmar. It has disrupted the conduct of business, employment processes, consumption, investment and even trade taking place in the border areas. As reported by the International Labour Organisation and the United Nations Development Programme, a crisis that covers a wide range of issues will result in a doubling of the poverty rate in the region. The regime’s ‘Myanmar Economic Recovery Plan’, which is largely based on documents and plans of the previous government and the National League for Democracy (NLD), has also failed to strengthen the government or the country’s situation. The act of mortgaging assets worth $140 million and the implementation of various other forms of intervention also cannot guarantee effective stability under the leadership of a government that is vehemently opposed by the people. The people’s struggle The people’s struggle which began at the start of the military coup with symbols of Aung San Suu Kyi has now extended to a more formidable political movement: namely to abolish all forms of military control and domination. The regime’s failure to control the country has taken many by surprise. The new generation does not want to allow any form of political domination by the military. However, the regime continues to kill, torture and arrest the people who continue to rise up against them. To date, the junta has killed nearly 1,500 residents, over one hundred have been tortured to death, and nearly 11,300 have been arrested. We can expect these atrocities to continue and, with that, the anger and determination of the people to abolish Tatmadaw’s power will also grow stronger! Recently, videos and images of the Tatmadaw’s brutality surfaced on social media. For instance, the video of Tatmadaw soldiers killing innocent protestors, including children, in Kyimyindaing and Sailingyi townships showcased the arrogance and level of brutality of the regime, which is willing to go to any length in order to control the populace. Attacks on the People’s Defence Force (PDF) were also launched using gun-powered helicopters, fighter jets and drones. Villages and residences were destroyed by bombs and airstrikes, forcing tens of thousands of people to flee to save themselves. The People’s Defence Forces have also retaliated and caused a few headaches to the military regime. The announcement made last September by the National Unity Government (NUG), organised by the opposition political forces, of a ‘national uprising against military rule’ has led to an escalation of armed conflict between the PDF and the regime. In November, Thein Aung – the chief financial officer of Mytel, a telecommunications company owned by the junta – was shot dead in his residential area. Incidents like this are part of the ‘Operation Swallow’ campaign which has killed two hundred figures involved with the Tatmadaw. So far, more than 1,000 soldiers have been killed in battles and attacks carried out by the PDF. Is the military apparatus becoming weaker? The PDF counterattacks have certainly annoyed the Tatmadaw regime, especially when it is becoming difficult to recruit new soldiers, so much so that it had to recall retired military personnel back to duty. The rate of demoralisation among low-ranking soldiers began to increase. This has further intensified the efforts and campaigns of the people to convince the soldiers to disobey the orders of the leadership and, together with their weapons and military skills, to go down to fight with the people’s movement. But it must also be acknowledged that these campaigns have not yet led to significant changes. Tatmadaw’s military also commands great economic power, and the regime is strengthening its cooperation with the two big military powers, China and Russia, which market and sell their weapons to the regime. Thus, according to the arguments made by the CWI previously, the perspective of leadership and tactics of the PDF coalition and armed ethnic organisations remains an important question in Myanmar. The CWI has argued that a
Malaysia: Government loses majority, but same coalition maintains power
On Friday 20 August, Ismail Sabri was chosen by Malaysia’s king to be prime minister – the country’s third in three years. The 17 month-old government of the ‘National Coalition’ (PN – Perikatan Nasional) under Prime Minister Muhyiddin Yassin collapsed when 15 MPs from UMNO (United Malays National Organisation), which was part of this coalition, withdrew their support. Sabri got the support of 114 out of the 222 members of parliament. His contender, Anwar Ibrahim from the Coalition of Hope (PH – Pakatan Harapan) only managed to gain the support of 105 MPs. Now the same PN coalition parties have supported Ismail Sabri as a compromise candidate. He was just promoted to deputy prime minister in July as Muhyiddin sought to woo support from UMNO MPs, when some were unhappy with Muhyiddin. This was mainly to avoid the return of a PH government which had lasted for only years and collapsed in early 2020. Now, with Ismail Sabri as Prime Minister, UMNO is back holding the premiership. It had held power since independence from British rule in 1957 until it was ousted in the 2018 general election by PH over various corruption scandals – including the infamous IMDB (Malaysia State Development Fund) case – and the people’s anger against the deteriorating social and economic conditions. Clash in PN as pandemic worsens The PN coalition government was formed in March 2020 after the PH coalition collapsed when some of its MPs withdrew support. At that time, some MPs in UMNO, including former PM Najib Razak, who were facing court cases, hoped that Muhyiddin would help them to get rid of the cases taken out against during the PH government. But Muhyiddin used the court cases to divide UMNO. Now there are two main factions in UMNO – the Ismail Sabri faction, who were supporting Muhyiddin, and the faction of UMNO President, Zahid Hamidi, and Najib, who were against the PN and Muhyiddin. Although a majority of MPs is supporting the Ismail government, it will be another unstable government. The clashes within UMNO will continue along with those between the UMNO leadership and Muhyiddin’s party, Bersatu (Unity). After hanging on to power for as long as he could, Muhyiddin was under pressure to announce his resignation from the post of prime minister and declared on 16th August that the entire cabinet was ceasing to function. In order to keep himself in power, Muhyiddin had even declared a six month State of Emergency – the only government in the world to do so during the pandemic – and effectively postponed Parliamentary sessions which would have given room for the opposition parties and political rivals to challenge him. This move ultimately backfired when it was clear that Muhyiddin and his cabinet had failed to control the rise in Covid-19 cases, to give sufficient welfare for the affected population and to restore economic activities. The 2,000 cases per day at the time of the emergency announcement rose 10 times to 20,000 cases a day in August, causing widespread panic about the level of congestion in public medical facilities. Muhyiddin had managed to keep his enemies at bay by using the emergency decree, supported by the country’s royal head of state. But he was pressured to re-convene Parliament at the end of July. Witnessing the rampant rise in Covid-19 cases, even the monarch had no choice but to pressure Muhyiddin to compromise and reconvene the parliament. The long-awaited session began at the end of July with the opposition determined to dethrone Muhyiddin and his PN coalition from power. However, the entire parliamentary session was a sham and was orchestrated to avoid any proposal for a vote of no confidence in the government by the attending MPs. The government declared the State of Emergency officially over without proposing a vote in Parliament. Muhyiddin and the PN then ended the parliamentary session after just four days, blaming a few Covid-19 cases amongst the Parliament staff. This move to avoid any challenge inside the Parliament by using bureaucratic means was not received well by the public who started to criticise the government openly in social media sites. The youth and opposition parties organised protests. A gathering of over 2,000 youth in Merdeka Square on 31st July demanded that Muhyiddin step down immediately. The opposition parties staged a march towards the closed Parliament, only to be stopped by the police out in force. With no options left, Muhyiddin desperately tried to offer a bipartisan alliance with the Pakatan Harapan opposition, hoping to secure his position as PM for a little longer. However the opposition party, with their own political ambitions, flatly rejected this offer. UMNO, who had previously supported Muhyiddin and was part of the Perikatan Nasional government had already withdrawn their support and declared it would oppose them in coming elections. With the Islamic conservative PAS (Parti Islam Se-Malaysia) as the only other major party to support Muhyiddin, it was not possible for the PN to find a simple majority of 111 seats in Parliament. Fragile political situation The PH who formed the previous government and now the opposition has over 100 MPs who support their leader, Anwar Ibrahim for the prime ministerial post. But not enough to form a government and even less than the support Muhyiddin enjoyed previously. Having lost a number of MPs to the ruling Bersatu party, Anwar cannot rely on enough support to become PM. Anwar has indicated that he is willing to make an unholy alliance with long-time political rivals in UMNO in order to secure himself as the next premier. But the UMNO leadership persuaded its Annual General Meeting earlier this year not to support Anwar for the post. However, in next period, nothing can be ruled out and in the capitalists’ constant quest for political power, unforeseen alliances could emerge. UMNO, having lost their political dominance to PH in the previous election, was still the largest party with the biggest share of MPs. However, a large number of their MPs
Indonesia: Millions rise against oppressive law
Since Monday, 5th October, when Indonesia’s President Jokowi announced the Job Creation Act or ‘Omnibus Law’, Indonesian youth and working class, together with other sections of society, launched a massive protest nationwide. The government’s move, aimed at making capitalist investment easier – eroding workers’ rights and neglecting environmental health – has angered millions of Indonesians. More than 5,000 students from 300 universities sparked the movement by gathering and marching to the Presidential Palace in protest against the new law. The Indonesian Confederation of Trade Unions (GSBI) affirmed its support and more than one million workers under their umbrella left their factories and workplaces to join the growing protests across Indonesia. Workers and young people from Lampung, Bandung, Tangerang, Makassar, Yogyakarta, Surabaya, Palembang, Jakarta, Semarang, Cikarang, West Papua and other places, have taken to the streets to defend their rights from the attacks by the government and the employer class in Indonesia. The protest continued to spread to other areas in the following weeks and still continues to grow. Deteriorating economic and social conditions The Omnibus Law was tabled in Parliament as long ago as September last year but was not passed due to strong protests from the youth and the students heroically going into the streets. Two people were killed and hundreds more seriously injured in clashes between Indonesian youth and government security personnel. This did not dampen the fighting spirit of the youth and the working class who have waged a determined struggle to defeat the government’s agenda. However, President Jokowi and his cabinet in the coalition government have now used the emergency situation due to Covid-19 to pass the law in a hurry. In a situation of a health crisis, where more than 12,000 people have been victims of the pandemic, the Indonesian government did not expect there would be a massive street protest as a direct reaction from the people to the passing the Omnibus Law. But, as witnessed for more than three weeks now, the threat of Covid19 has not succeeded in weakening the fighting spirit of the Indonesian youth and workers. The actions of the students and calls to take to the streets are a symbol of protest against the Omnibus Law – the response comes from millions of working class and ordinary people being gripped by deteriorating living conditions. Just as in September, last year, Indonesian authorities are again using violent force against the working class and the youth who participate in any of the numerous protests or strike actions nationwide. Peaceful demonstrations organised by ordinary people have become a battleground with the authorities using excessive force to try and break the protests. More than ten thousand youth and workers have been detained by government forces. Hundreds have been hospitalised due to severe injuries. Indonesia is facing the worst Covid-19 crisis in the Southeast Asia region and the situation is getting worse every day. Millions of workers in the formal and informal sectors have lost their jobs and the country’s economy is heading for a worse recession than in the 1997 financial crisis. The IMF initially predicted back in June that Indonesia’s GDP would shrink by 0.3% over the year. It has been forced to adjust its forecast after a dramatic increase in Covid 19 cases. Around 340,000 people have been infected and there is an average of 4,000 new cases daily. Now the IMF expects Indonesia’s GDP to decline by at least 1.5% – five times greater than its initial forecast. In the second quarter of this year, Indonesia’s GDP declined by 5.32% and most economists are estimating an inevitable recession before the end of the third quarter of 2020. The failure of the Jokowi leadership Jokowi originally appeared in the Indonesian political arena as a progressive figure and as the hope of the Indonesian people (often compared to Obama by the mainstream media). He has disappointed the majority of the population so far. His government has only given priority to rich capitalists to the point of neglecting the lives of millions of poor people who do not get to enjoy the fruits of their own labour and the productivity of the country. The introduction of the Omnibus Law reveals the market-friendly nature of Jokowi’s government, which allows capitalists to maximise their exploitation of the environment and the labour power of the Indonesian masses. Despite Jokowi’s propaganda about economic development, the working class and ordinary people are constantly facing deteriorating living conditions. Prior to the arrival of Covid-19, President Jokowi had already become less popular, especially among the poor population. He did not get a large majority in the 2019 general election. With the government’s failure to tackle the Covid 19 pandemic effectively, the people’s anger can no longer be suppressed. The move to try again to pass the oppressive Omnibus Law has sparked mass protests and struggles in every corner of the country. With a population of over 260 million people, the Indonesian coalition government has only allocated a total of 63.9 billion US dollars in Covid-19 emergency assistance. Comparatively, the amount is less than the expenditure for such funds of smaller countries in the region like Malaysia and Singapore. Furthermore, even seven months into the pandemic, due to various technical and bureaucratic issues, only about 20% of the aid has been successfully channelled to the people who need it. Public health infrastructure in Indonesia is facing a crisis in the lack of supplies of health equipment and medical staff to deal with Covid19 cases which have doubled in just six weeks. Lack of PPE, treatment centres, ICU beds, testing kits, medical personnel, emergency equipment, such as ventilators and so on, are causing chaos, especially in places with a high number of infected cases, such as Jakarta. Covid-19 has resulted in four million job losses which are contributing to the rising poverty rate in Indonesia, which was already over 10% even before the pandemic. Yet the richest people in Indonesia have managed to increase their wealth without any obstacles. The fifteen
Thailand: Youth rising against unpopular junta regime
Since the beginning of this year, Thailand has witnessed the rising up of youth and students who have launched massive protests in several major cities, colleges, and universities. Although initially only concentrated in certain higher education institutions, the protests have already begun to spread to the streets and are attracting layers of ordinary working people into action. This movement was interrupted temporarily at the beginning of the Covid19 pandemic in March and has resurfaced with a renewed vigour since the start of July. The reaction from Thai youth and students was sparked when the military-controlled government banned one of the opposition political organisations, the Future Forward Party, which had garnered the support of the youth in the last general election. Although this was the trigger for the latest democracy movement in Thailand, the country had already been in a prolonged political crisis for almost two decades. Since the military coup in 2006 that toppled the rule of Thaksin Shinawatra, the Thai ruling class has not succeeded in establishing a stable government through a fair election. Background Glancing back at their history, Thailand has been riddled with numerous political crises. since the ‘Siamese revolution’ of 1932 that established a constitutional monarchy. It has experienced 12 successful coups and 7 coup attempts. The ruling class in Thailand has repeatedly failed to build a stable capitalist economic system under a strong governing structure. Thailand was never actually colonised by any colonial power. The monarchy managed to maintain its power for generations by cooperating with the colonialists to establish a system of capitalism that obeys the free market and the rules set by the great colonial powers. Due to this, the national bourgeoisie of Thailand is of a weak character, without a strong platform and unable to bring the population out of the clutches of feudal backwardness. In many ways, the interests of the Thai national bourgeoisie are interwoven with the interests of the monarch, but at the same time also subordinate to the will of international capitalists. In order to compensate for their weakness, the ruling class of Thailand made use of military power and the national symbolism of the monarchy to try and establish stable governments. Nevertheless, succeeding Thai governments have repeatedly exhibited internal contradictions and often faced opposition from ordinary people. Conflicts In the last 15 years, Thailand has experienced two separate military coups. The first was when the Thaksin Shinawatra government was overthrown in 2006 and the second when the government led by Thaksin’s sister, Yingluck Shinawatra, was overthrown in 2014. The political figures who fell victim to military repression, such as Thaksin and Yingluck, are representatives of neo-liberal capitalists who are hostile towards the crony capitalists under the control of the military and the monarchs. They represent entrepreneurs who are aiming to build a capitalist structure free from the clutches of the monarchy and the military which is widely seen as hindering the economic development of Thailand. Meanwhile, the monarchy and the military bureaucracy who are in control of some parts of the economy, are in a prolonged struggle to safeguard the interests of their own cronies and the privileges they have managed to secure. In the conflict between two different capitalist representatives, Thaksin and Yingluck together with their Pheu Thai Party made use of populist slogans to gain the support of the Thai people, especially from the rural communities. They promised various infrastructure reforms for the poor and provided various forms of aid or gifts in the form of money payments, computers, household appliances, food items and so on during their rule. As a result, this political wing had managed to garner support from the poor, especially in large numbers from farmers in northern Thailand. Supporters of Thaksin and Yingluck are dubbed the ‘Red Shirt’ movement and in the past launched huge protests that temporarily crippled the Thai economy. This mass movement was seen to be growing again in the wake of the political coups against both the Shinawatras. But it was successfully controlled by the monarchy and the military by the use of various anti-democratic measures including violence. The traditional political representation of the monarchy and the military bureaucracy is the Democratic Party led by former prime minister Abishek Vejjajiva. Since losing power in the 2005 election, the military bureaucracy has tried several times to reinstate the Democratic Party back to power, but they have failed to gain electoral support among the people. As a result, the military has been forced to hold power for a prolonged period of time. In addition, they have also implemented major adjustments to the national constitution to ensure military-bureaucratic control over Thailand before holding any new elections. Followers of the Democratic Party are known as the ‘Yellow Shirts’ and have the support of the middle-class population, mostly based in Bangkok. They have even managed to organise a few mass actions in the capital in the past. However, their grass-root support is nowhere as great as that of the ‘Red Shirts. Their strength is still dependent on nationalist propaganda that elevates the monarchy and military institutions. Army coup In 2014, after the victory of the Pheu Thai Party and Yingluck being named prime minister, the Thai army, under the command of General Prayut Chan Ocha, launched a coup d’ Etat. It took over the Thai government under the auspices of the National Council of Peace and Order (NCPO). Despite promising an early general election, it has taken five years before the Thai people could engage in any electoral exercise. During this time, the junta government has re-written the constitution, introduced several laws that suppress the democratic rights of the people, and created a complex electoral system which unfairly favours the military bureaucracy. The junta government has also used its power to ban some opposition organisations, arrest hundreds of activists, and suppress the media from speaking out against any military repression. After waiting for five years, finally, the Thai election took place last year – 2019. Various manipulations and dirty tactics were
Malaysia: ‘1MDB’ corruption scandal shows need to get rid of capitalist system
On 28 July, Malaysians heard the news that former Prime Minister Najib Razak was found guilty on seven counts of abuse of power, breach of trust and money laundering. He was sentenced to 12 years in prison and a fine of 210 million Ringgit. The notorious ‘1MDB’ corruption case is continuing, and also involves Najib’s wife, Rosmah Mansor. Although Najib is no stranger to corruption cases, the news came as a shock to political analysts. They had concluded that the case would be dropped by the new Attorney General who is influenced by politicians of the formerly ruling party – UMNO – and close to the former Prime Minister. Another former UMNO prime minister, Mahathir Mohammad, also tried to convince Malaysians that the charges against Najib would be dropped by the new government. After years of being shocked by the scale of the 1MDB scandal, which became sensational news around the world, Malaysians could finally feel relieved that the country’s legal institutions had decided to impose heavy penalties on Najib who stole from the ordinary people. But Najib’s decision to take the case to the Court of Appeal has raised concerns that it is still possible for him to escape without any punishment. Furthermore, the real motives for the Perikatan Nasional (PN) government that wants to see Najib punished need to be scrutinised, as the new government is also controlled by corrupt and unethical politicians. Perikatan Nasional The sincerity of the PN government in fighting corruption in Malaysia is still suspect. Immediately after taking office earlier this year, all important positions in the judiciary (courts), legislature (parliament) and executive (cabinet) were replaced with new appointees of the new rulers. All the ‘puppets’ of the previous Pakatan Harapan government have been replaced with ‘puppets’ that would be obedient to Perikatan Nasional politicians. The BN, PH and now PN governments have never even tried to create independent institutions which are not easily influenced by any stakeholders. Instead, they have all used the existing undemocratic structure to achieve their own political ambitions. Utilising corrupt and untrustworthy state institutions, the PN government has got charges dropped against several high-profile individuals, such as Musa Aman, the former Sarawak State MP, Menteri Besar, who was involved in a corruption scandal in the logging industry. Najib Razak’s stepson, Risa Azis, who was reported by the US government Department of Justice to be clearly involved in the 1MDB corruption scandal, was also released without imprisonment. There are many other UMNO members also facing corruption charges, including party president, Zahid Hamidi, who is currently under investigation. At the moment, it is still unclear whether Najib has been made the main fall-guy, letting other individuals involved in corruption scandals during their rule off the hook. The Perikatan Nasional government has begun to crack down on several non-governmental organisations that have brought the 1MDB scandal and others to public attention. Activists and leaders of organisations, such as the ‘Center to Combat Corruption and Cronyism’, have been called in to be questioned by the police simply for criticising the PN government. Any criticism of the new government is immediately met with threats from the authorities. Several journalists and news media were also targeted. Recently, the government has launched a criminal investigation into the Al-Jazeera news channel, which has exposed the cruel crackdown on migrants by the Malaysian authorities during the Covid-19 emergency. The PN government is also using the ongoing chaos due to the pandemic to try and strengthen their position in power. If the PN government survives the political crisis now developing, it will try to use the existing emergency situation as an excuse to introduce new laws that favour the ruling administration. But, with the deteriorating global economic situation, any government will face challenges that have never been faced before and can create divisions among the existing ruling layer. The Perikatan Nasional took power by using the ‘back door’. It did not come in through winning a general election. It is an unstable government. The PN government is made up of elements which have different agendas. The PN has not succeeded in strengthening its position in parliament or increasing its support from the people. The news of Najib being sentenced to imprisonment began to create disruption in the PN coalition. Some politicians close to Najib began to distance themselves from the prime minister, Muhyiddin Yassin. Najib still has considerable influence in UMNO – the largest party in the PN coalition. Imposing the prison sentence on Najib is very difficult for Muhyiddin, as he needs support from UMNO to strengthen his position as prime minister. But his government has to convince ordinary people that it is committed to fighting the rampant corruption among politicians who are mostly from the previous BN government. The mood of the masses In 2018, the majority of Malaysians decided to reject the corrupt practices in the country’s political system by casting their votes for PH (Coalition of Hope) that promised reform and justice. The people’s anger over the corruption involving BN politicians, especially the 1MDB corruption scandal, led by prime minister Najib, were the PH’s main propaganda at the time to gain people’s support. The BN government, the longest-running ruling government in the modern world, finally collapsed after more than six decades in power. This outcome was well anticipated by the current PM, Muhyiddin, who split with UMNO to join the Bersatu party in the opposition camp. The calculated move to convict Najib of criminal activity had to be taken in order to win the trust of working people, even risking division within the PN coalition. The imposition of punishment on Najib is seen as a desperate move by the unstable government to try to gain the support of the people. This political game does not guarantee any meaningful change for the lives of millions of working people. It is just a manipulation of their sentiments and an effort to divert people’s attention from the economic crisis ahead. Pakatan Harapan failed the people The PH
Malaysia: Covid-19 takes toll on economy and government
During the spread of coronavirus into Malaysia in the middle of February, the ruling government – the Pakatan Harapan (Coalition of Hope) – which was in power for one and a half years, collapsed. A plot was orchestrated when some politicians in the PH government staged a ‘coup’. With the help of opposition parties, they formed a new government, Perikatan Nasional (PN) (National Coalition), with Muhyiddin Yasin as the Prime Minister. Initially, Muhyiddin and the PN leaders used the Covid19 pandemic as a pretext to stop any kind of ‘politicking’ or protest against this new government and even a one-day parliamentary sitting that they convened ended without allowing any debates. These ‘coup stagers’ hoped that with the PN in power, they could gain more privileges and scope to plunder government wealth. Now, this so-called ‘backdoor’ government, which was formed three months ago, on the 2 March, with only two seats more than the Coalition of Hope PH, is facing big uncertainties due to the severe impact of the pandemic on the economy. These are expected to lead to another political rupture, sooner rather than later. Unemployment increasing Since 18 March, Malaysia has been under lockdown to control the spread of Covid-19 but from 12 May almost all of its economic activities have been allowed to operate under certain lockdown conditions. Until now, 115 people have died out of almost 8,000 cases, with a 75 per cent full recovery rate. The public health system, on which around 50 per cent of the population still depends, is still reliable, with some reasonable quarantine and treatment facilities to act on the infected cases. However, in the last few weeks, the cases infecting the migrant workers and refugees have been increasing. This is because of their deplorable living conditions – cramped and crowded into single housing units that have poor hygiene. The employers simply hire migrant workers for very low wages and long working hours for ‘dangerous, dirty and difficult’ work in construction, on the plantations and in the agricultural sector. But they have long been undermining their rights for decent living and working conditions, and this has been happening with the knowledge of the government. There are almost two million documented migrant workers and another one to two million undocumented migrant workers and refugees living in the country. How far they have been affected by the virus is still unclear. The circumstances are similar to those in Singapore where the migrant workers have been most vulnerable to the virus. This could develop in Malaysia since many migrant workers are still not screened for the virus and the employers are not willing to pay for the screening cost. If there is the likelihood of a second wave of infection, it could further endanger the economy and affect the livelihood of people more severely. Currently, the economy is heavily dependent on commodities-based industries and low value-added industries, which hire low-skilled and semi-skilled workers earning low wages. The prolonged lockdown is going to affect the economy. Although to a certain extent the government has been able to contain Covid-19, the impact of the virus on the economy has been overwhelming. The country has been losing RM2.4 billion (USD600 million) income daily because of the lockdown. Since it began, the PN government has unveiled three stimulus packages totalling RM266 billion (USD60 billion) but its effects seem temporary merely to sustain the domestic economy to a certain extent. Some amounts from this stimulus package were channelled to low-income and middle-income people to increase their purchasing power. But the amount is not sufficient to cover their living costs for the coming months when they are going to feel more pressure with increasing unemployment, retrenchment and reduced household incomes. A recent survey showed that the unemployment rate has been increasing, and economists have predicted that 2.1 million people (16 per cent of the workforce), mostly self-employed, have been out of work, so far. Many workers have been facing a substantial drop in their wages – some even up to a 90 per cent drop, especially in the informal sectors. If each worker has an average of four family members to feed, that means eight million Malaysians could be in a dire condition. The Malaysian Employers’ Federation (MEF) has also threatened that there could be another two million retrenchments in June following the holiday of Eid al-Fitr. The MTUC (Malaysian Trade Union Congress), which has around 800,000 members and various unions under its coalition, did not counter the retrenchment threats of the MEF by campaigning and mobilising its members to pressure the government and employers to save the jobs and wages of workers. Impact on the economy The tourism industry, which of late has relied on tourists from China, has been one of the key economic activities of the country. The lockdown has therefore badly affected the service industries, such as hotels and aviation. Some prominent hotels in cities are now closing down, and many workers in the hotel industry are being retrenched. The pandemic has also brought the property market to a halt, with a 10 to 15 per cent drop in prices in April this year. The pandemic has badly affected other major industries such as oil, gas and manufacturing and commodities such as palm oil and rubber. Chinese investments in Malaysia have been increasing since the announcement of the Belt and Road Initiative (BRI), in late 2013. In the last ten years, China has been the largest trading partner, surpassing the US. The controversial BRI projects became the basis of hostile anti-China rhetoric on the campaign trail for the 14th General Elections in 2018, in which the PH defeated the BN (National Front) after it had been 60 years in power. Last year, the PH government under Mahathir revived some major projects with China that had been suspended for financial irregularities when they came to power in 2018. One of the projects was an East Coast Rail Link (ECRL), in which a Chinese company expected to finance
Malaysia: ‘Coalition of Hope’ collapses as racial tension and economic uncertainty mount
On Monday, 24 February, the prime minister of Malaysia, Mahathir Mohamad, submitted his resignation to the country’s king, opening the way for enormous confusion as to what will follow. The reasons for Mahathir’s decision seemed to be linked to his reluctance to hand over to Anwar Ibrahim as agreed before the coalition was elected. But now it appears that the two leaders have been meeting with each other to try and agree a common position while a number of parliamentary representatives have resigned from their two parties. Uncertainty reigns. A new coalition may be cobbled together or an emergency general election may have to be called. The background to the present crisis is outlined in the article below, written just days before it erupted.Socialistworld.net The Pakatan Harapan (‘Coalition of Hope’) government came to power in the May 2018 general election after for the first time successfully unseating the National Front (Barisan Nasional) which had been in power for 60 years. Prior to being elected, in their manifesto the PH politicians had promised many things to create a ‘New Malaysia’. They would implement policies such as removing road tolls, increasing the minimum wage to 1,500 Malaysian Ringit (RM) (equivalent of $360), reducing oil prices, providing free education for all, reducing the cost of living and many other promises that have failed to be fulfilled. When the majority of the people voted for the PH, they really hoped for them to improve the country’s economy and people’s living standards, create more democratic rights and change government policies, ending privileges based on race to establishing equal rights based on needs. However, after over a year and a half, the right wing populist coalition government has failed to live up to its promises and most of the time has succumbed to pressure from big businesses. The ordinary people, frustrated by the betrayal of the new government, began to fall victim to racist and religious propaganda, played up by opposition politicians from UMNO (United Malay Nationalist Organisation) – the main party in the BN, and PAS (the Malaysian Islamic Party). In order to gain the support of the Malays or ‘Bumiputra’ (‘Sons of the soil’) who are the largest ethnic group and account for 60 percent of the population, UMNO and PAS propagate the idea of Malay hegemony and privilege and stir up hostility against the minority ethnic groups of Chinese and Indians. Growing dissatisfaction with government The continual defeat of the PH candidates in the last five by-elections reflects the dissatisfaction of the people against the government that is failing to realise the people’s hopes for better and more secure living standards. Many of the social welfare funds are seen as inadequate to raise the living standards of millions of working class people who are facing a rising cost of living. No attempt is made to tap the huge profits of big businesses with progressive taxes that could ease the burdens of the working class and ordinary people who are continuously burdened by household debt which is almost 83 percent of GDP. Some of the government’s measures supposed to address the problem of unemployment for young people and graduates are seen as giving an advantage to private companies to pursue a low wage policy with their workers. The high cost of housing means that millions of people are unable to own their own house. Although the total value of unsold houses has surpassed RM20 billion ($4.9 billion), housing developers are continuing to build only high-cost and luxury homes. The government’s measures to reduce the price limit of property available for foreign investors and buyers from RM1 million ($240,000) previously to RM 600,000 ($146,000) are aimed at helping rich developers. They are not making any effort to reduce housing prices or regulate the profitability of developers. In October 2019, the government launched the ‘Vision of Equal Prosperity’ (‘WKB’) 2030 to replace ‘Vision 2020’ inspired by Mahathir Mohamad, when he was prime minister for the Bahasa Nasional government in the 1990s. ‘Vision 2020’ aimed to “make Malaysia a fully industrialised and developed nation by 2020, which includes not only economics, but also political, social, spiritual, psychological, as well as national and social unity”. After thirty years of ‘Vision 2020′, the income gap between rich and poor has actually grown. The project has failed to achieve its goals, especially that of ensuring a fair and equitable distribution of national wealth. The relation of workers’ total income to GDP is still low at 35.7 per cent, compared with the bosses’ income of 61 per cent of GDP. For RM4,000 worth of production, workers in Malaysia receive only RM1,360 ($330) in wages compared with workers in the United States, Australia, Germany, Singapore and the United Kingdom who can earn around $500. Severe inequalities Seventy five percent of Malaysians cannot even find RM1,000 for emergencies and most Malaysians will run out of money in a week if they lose their source of income. Half of Kuala Lumpur households with families of four people, earn less than the equivalent of $1,280 a month, and the living wage is supposed to be at least the equivalent of $1,590 to cover their living costs. Only three million out of the 14.5 million workers in Malaysia have enough retirement savings. The inter-state development gap is also growing, with 40 per cent of GDP concentrated in Kuala Lumpur and Selangor and only 25 per cent of GDP produced in the five poorest states – Kelantan, Kedah, Pahang, Sabah and Sarawak. The monthly income gap between the highest 20 per cent of households and the lowest 40 per cent has significantly increased over the past 27 years. In 1989,it was the equivalent of $470 and continually increased to $2,480 in 2016. The monthly income gap between the Malay and Chinese ethnic households in 1989 was RM 497. In 2016, this gap increased nearly 4 times to RM 1,736. This is one of the reasons why racial prejudice is out of control, and as long as