Comrade Souren Bose was one of the leading comrades of the Naxalbari Uprising along with Charu Majumdar, Kanu Sanyal, Jangal Santhal, Khokan Majumdar and others from North Bengal. He joined CPI in 1940s, became part of CPI(M) when the party splitted in 1964, joined the inner party struggle against the neo-revisionist leadership, and after Naxalbari Uprising was active during the Coordination period, in the formation of CPI(ML) and in its First (8th ) Congress in 1970, in which he was elected as its PB member. As decided by the party he went to China in 1970, met leaders of the CPC including Chou Enlai, who made a scathing attack on the line practiced by CPI(ML), while upholding its formation as a historic step forward. He came back and handed over the written report of the conversation to com CM. But he was arrested soon and was in jail till 1980. On 17th August, 1997 he passed way at Mumbai where he had gone to attend a program of the CPI(ML) Red Flag (now Red Star), in the 4th All India Conference of which he was elected as its CRC member.
Though Janata Party came to power at centre in 1977, and soon CPI(M) led Left Front came to power in W. Bengal, com. Souren Bose like many other leaders of the CPI(ML) movement could come out from jail only in 1980. By that time the Naxalbari movement had splintered to many groups. Though their analysis of Indian situation, strategic line of democratic revolution and path of them were the same, they viewed each other with hostility because of sectarian influence. The atmosphere was suffocating, com. SB used to say. Because of this, large number of comrades from working class and peasantry who came out of jail got frustrated and became inactive. Though he had an idea of what was happening outside and since these divisions had their influence within the jails also, he had no idea to join any section without studying the situation. Though he later participated in the activities of some mass organizations linked to some groups, he did not become a member of any group. It was following a number of discussions with the comrades of the CPI(ML) Red Flag (now Red Star), from the beginning of 1994 and joint efforts to analyze the changes taking place in the country under neo-colonial situation after transfer of power as a part of preparing an agrarian program, he agreed with the general orientation of the organization and joined it by the end of 1995. It was when he was actively engaged in the re-organization of the movement, he left us, which was a great loss to the whole movement. In this issue we are re-producing the editorial and an article of com. KN on com. SB. Red Salute to com SB who remained a Bolshevik till his last day.
Compatriots, Friends and Comrades, our party, CPI (ML) Red Star from its proletarian internationalist positions, has repeatedly called for peaceful settlement of the border dispute between India and China and with other countries, which are leftovers from the colonial days through bi-lateral discussions with neighbourly spirit. But contrary to earlier reports, the border conflict has become more serious, with the air force of both sides also active in the region. Meanwhile there were reports that Indian Navy is asked to intervene if Chinese vessels are sighted in nearby seas. The Chinese spokespersons are repeatedly claiming that Galwan Valley belongs to them. India has repeatedly rejected it, and asks Chinese troops to withdraw from the disputed areas in the valley. The standoff started from the first week of May when Chinese troops were sighted there, according to Indian army. Then there were series of discussions up to corps commander level and it was told on 5th June that an agreement on de-escalation and disengagement is arrived at and it will be completed soon. On 12th June the Army chief said at Dehra Dun that disengagement is progressing well.
But on 16th June afternoon there were reports of death of two Indian jawans and an officer in the disputed area occupied by Chinese. By 9 pm the tally became one officer and 19 jawans, but all others of the battalion safe. Next day it was told 76 jawans were also injured, of them four seriously. Then we heard four officers and six jawans were handed over by the Chinese troops. There was absolutely no transparency even in such important questions. Meanwhile mud-slinging between BJP and Congress started on whether Indian area is under Chinese, and who surrendered to China more, which is still continuing in new forms. On 18th the external affairs minister of India told his Chinese counterpart that the Chinese troops had entered on the Indian side of Galwan Valley and tried to erect structures leading to the 15th clash.
But, in the 19th June all party meeting, after reports of defense and foreign ministers and queries raised by Congress and other parties, without answering any of the queries, surprising everybody present, PM Modi categorically stated that “nobody entered our territory and captured any post!” It was his conscious move to confuse the discussion without giving out facts. The Chinese side quoted Modi to justify their claim to Galwan Valley. On 20th, Indian side came out with an explanatory note rejecting Chinese claim and defending Modi’s statement saying “it was on the situation after the clash”. LAC has become very tense, with fears of new flare ups. Reports of tension in other hot spots also started coming out. On 22nd before going to Moscow, the defense minister Rajnath Singh issued a hawkish statement, if China acts, give fitting reply. Though their counterparts from China also were at Moscow, neither he, nor the foreign minister who attended the tripartite meeting with Chinese and Russian foreign ministers tried to take up the border question at political level.
After 23rd meeting of corps commanders, again reports came that consensus on disengagement is arrived at, but no time frame. On 25th diplomatic level discussion took place in which both sides agreed to implement the de-escalation. But latest reports from both sides show that the situation is becoming worse. Meanwhile, Phulwama style statements are issued by Modi that the blood of Bihari jawans will not go in vain, trying to incite Bihari pride to help him win the coming assembly elections there. As the satellite pictures of Chinese still occupying the post where the clash coming out, Modi is on the defensive! BJP is trying to overcome it by strengthening its “China Boycott” campaign, and digging deep in to Congress history to attack it.
As BJP as well as Congress are reducing the debate on the border question to who surrendered more to Chinese and mobilization of forces on both side increasing, there is a real danger of a flare up, with the RSS parivar organizing Boycott China campaign and provoking war mongering and jingoism.
This apprehension is strengthened as Modi govt has down-sized diplomatic relations with Pakistan. And Modi is not taking any steps to call for a foreign affairs’ minister level meeting, if necessary followed by a meeting between him and Chinese president Xi for a political solution to the Galwan issue. All the progressive forces should raise their voice, demanding a political solution through a Modi-Xi talk. The standoff should not be allowed to develop in to a border war, which will be against the people of India, as well of China who are suffering under the Covid19 crisis and economic recession. Mobilizing all progressive forces we should come out firmly against war mongering, which may lead to a border war
Labour Day is typically meant to highlight the protection of worker rights. This year, it came at a time when labourers are struggling to survive and their rights need protection more than ever. The heart-rending death of 16 workers who were sleeping on rail tracks, exhausted during their 700 km walk to home highlights the plight of workers today. In the US, more than 33 million people have lost their jobs in the past 7 weeks. This is already more than the loss in employment seen in the two years of the global financial crisis.
Back home, where workers have little social security, CMIE data suggests that more than a hundred million workers have lost employment, a vast majority from the unorganised sector. The figure is likely to be even larger given that it would be difficult to capture the employment status of the migrating workers. Workers are desperate. Not only have they lost their meagre income, but now their only options are to risk contracting COVID-19 or facing starvation. So, many of them set out to walk hundreds if not thousands of kilometres to return to their villages, carrying their few belongings, children on their shoulders and no food in their bellies. Some have already perished on the way. In Karnataka, they were not even being allowed to go back home, in a controversy that sparked allegations of bonded labour, forcing the government to quickly take a U-turn.
The pandemic has highlighted the real working and living conditions of most workers. The unfolding crisis does make one stop and wonder – how can this be the situation of most Indian workers, 70 years after independence? True, conditions are not what they were in 1947. There is more education and better health facilities. Child mortality has dropped and longevity has increased. Many of the poor own mobile phones and wear chappals. Electricity and tapped water have reached many villages. But this is expected in an economy where GDP has grown by 32.2 times and per capita income by 8.2 times since 1950, as some fruits of development trickle down to some of the marginalised.
Workers Suffer Indignity
What is missing though is a dignified life which should be the right of every citizen in a democratic country. The ruling class often ignores this and argues that the marginal improvement in the material conditions of many workers is enough. They even imply that the workers ought to be grateful for this slight betterment and portray it as the success of the prevailing unequal economic system. In the present ruling economic ideology, equity is not high on the agenda. The ruling elites thrive on the poor working and living condition of labour for their lifestyle and profits. Consequently, neither the state nor the businesses grant the workers their rights. For instance, large numbers do not get a minimum wage or social security or protective gear at worksites. They do not have security of employment, often wages are not paid in time, muster rolls are fudged, there is no
entitlement to leave, etc. Given their low wages, they are forced to live in squalid conditions with many sharing a small room in a slum. Water is scarce and drinking water more so. Access to clean toilets is limited and disease spreads. There is lack of civic amenities like sewage. Their children are often deprived of schools and playgrounds.
With COVID-19 as an excuse, state after state is reducing what little security was available to workers by eliminating or diluting various laws so as to favour businesses. In Uttar Pradesh, at least 14 labour laws like the Minimum Wages Act and Industrial Disputes Act are being suspended for three years in an effort to attract capital. Similar is the case with MP and Gujarat. The plea is that this is needed to revive economic activity. The chief minister of MP has said that this would lead to new investment in the state. Whether or not new investment will come at this time when businesses are unable to start or they face a situation of low capacity utilisation, what this would ensure is competition among states to relax and eliminate labour laws. Thus, the poor working conditions of labour will deteriorate further.
In India, workers are characterised as either organised or unorganised. Those in the former category work in larger businesses and have some formal rights (which are being diluted further) but often they find it difficult to enforce them. Increasingly the big and medium businesses are employing contract labour provided by contractors from the unorganised sector, rather than permanent workers. Businesses pay the contractors who then pay workers a part of the payment they receive. So, businesses claim that they are paying the minimum wage but the workers don’t get it. When even the minimum wage is inadequate for a dignified life, what the workers receive cannot ensure a civilised existence.
Most workers in the cities, where land prices and rents are high, are forced to live in slums mushrooming on vacant land or in urbanised villages with rudimentary facilities and massive overcrowding. Dharavi is an example of this. The organised sector workers have greater social security and receive a higher wage but even that is inadequate for a civilised life. The unorganised sector acts as a reserve army of labour keeping wages low in the organised sector also. Consequently, large numbers of the organised sector workers also live in slums like their comrades from the unorganised sector.
Pandemic Highlights the Workers’ Conditions
SARS CoV-2, the virus that causes COVID-19, spreads rapidly. Since neither a medicine nor a vaccine against it is available, a lockdown of the population is essential to slow its spread. But lockdown requires isolation and sanitation, which are not possible in congested areas in slums. Frequent washing of hands is required but how is that possible without clean water or soap? So, the miserable living conditions of a large number of workers have been sharply highlighted. If 5-10 people live in a room, how is isolation 24×7 feasible? Without physical isolation, the disease is bound to spread, as is the case in Dharavi. Further, they do not have the money to get tested or go to a hospital for treatment, so it festers. They are also poorly nourished so their resistance to the disease is less. They often have co-morbidities which makes them more susceptible to the disease.
A lockdown requires businesses to close and lay off workers or not pay them wages. This again highlights the insecure working conditions of workers. The workers have small incomes and little savings so they cannot stock up on essentials of life to survive weeks of lockdown. They, and if their family is with them, start to starve unless someone provides them with food. So, while a lockdown works for the middle classes and the well-off sections, it is next to impossible for the poor unless the state steps in and makes arrangements. There has to be free testing and hospitalisation, provision of essentials of life and clean water wherever the workers are. Furthermore, slums need to be decongested and made suitable for living with at least minimum facilities.
Not Just the Aurangabad Accident, 383 People Have Died Due to the Punitive Lockdown
From road and rail accidents to starvation, denial of medical care, police brutality, exhaustion and suicides, there have been hundreds of reported non-corona virus deaths. On 8th May, 16 migrant workers were crushed to death by a goods train when they were attempting to make their way to Aurangabad railway station with the hope of catching a train to their homes in Madhya Pradesh. They were walking along the railway track to avoid being thrashed by the police on the roads and with the knowledge that trains aren’t running. After walking for several hours, the workers were exhausted. They sat down to rest and fell asleep. An oncoming goods train ran over them at around 5.20 am. The migrants worked at a private steel company in Jalna in Maharashtra and had not been paid since the first lockdown began on March 24. Given the desperate situation and not knowing when they could work again, they wanted to get back home to be with their families and decided to walk in the hope of finding a train
In another incident on Saturday night, at least five migrant labourers were killed and 13 others injured
when a truck in which they were travelling overturned in Madhya Pradesh’s Narsinghpur district. The incident took place in Patha village in Narsinghpur. Around 18 labourers were travelling in a truck carrying mangoes from Telangana’s Hyderabad city to Agra in Uttar Pradesh. The workers killed in these two accidents are not the only people to have lost their lives during the lockdown due to reasons other than COVID-19.
In fact, according to researchers Thejesh G.N., Kanika Sharma and Aman, till Saturday, 378 people had died since the lockdown was imposed due to reasons other than the disease. Of them, 69 people died in rail or road accidents while walking to their homes – the only mode of travel available as public transport had been suspended by Prime Minister Narendra Modi’s government, which gave notice of only four hours before the first lockdown came into effect. Compiling information from news reports, the database put together by the group, which describes itself as “freelance scholars and student volunteers interested in action-oriented research, socio-economic rights and related issues”, shows that a large number of people have died due to reasons such as road accidents while walking back to their homes, starvation, denial of medical care, police brutality, exhaustion, suicides – all consequences of the lockdown. The database is updated every day and is available here.
The compilation began as a Twitter thread by Sharma on March 29. “Immediately after the lockdown, we began seeing a lot of reports of deaths. People dying while walking back home, women dying due to denial of health care. These deaths were very distressing,” Sharma, who is studying for a PhD in Sociology at Emory University
in Atlanta in the United States of America, told The Wire According to their compilation, the death of the 16 migrant workers in Aurangabad was the largest number of people killed in a single incident. On March 28, a few days after the lockdown, eight migrants returning home were killed in a road accident in Karnataka’s Raichur.
The largest number of reported non-coronavirus deaths (83) so far have been due to suicides for reasons such as fear of infection, alcohol withdrawal symptoms and due to loss of job. A large number of people have also died due to starvation, denial of medical care and exhaustion while walking home or queuing for ration or money. To put the information together, the researchers have set up Google alerts in different languages, including Kannada, Marathi, Odia, Telugu, Bengali, Hindi and English. “We do Google searches and people have also been sending reports to us. We verify them and volunteers help us translate them,” Sharma said.
The researchers only take into account those deaths which have been reported by ‘credible’ sources of news. “There are limitations. We can’t do ground verification. We would also be missing a lot of deaths. Local media reports may not be reaching us. Also, a lot doesn’t get reported,” she said. An 80-year-old man who lived near a bus stop in Tamil Nadu and was dependent on travellers for food died after the lockdown was imposed and there were no travellers. A 12-year-old girl died due to exhaustion after walking 100 kilometres with her parents who had left for home after the lockdown was extended for the first time.
US President Donald Trump has said it is a "badge of honour" for America to "lead" the world with 3.5 million confirmed Covid19 cases since it means the US is testing more people for the disease that has killed nearly 100,000 people in US alone, when at global level the number of confirmed cases has reached 60 million, with nearly 4 lakh dead by 23rd May. He thinks that, in a certain respect, as being a good thing because it means the testing is much better. "So when we have a lot of cases," he continued, "I don't look at that as a bad thing, I look at that as, in a certain respect, as being a good thing because it means our testing is much better." It is for people of US to decide whether such a fascist with Evangelical outlook should lead them! But there is a method in Trump’s madness! It serves his imperialist vision. In this manner he conceals the fact that though the WHO alerted all countries on 7th January about the dangerous spreading of Covid19, he did not bother about it till the number of patients crossed tens of thousands; he still protects the corporate houses and super rich private hospitals who refuse to help in providing affordable Covid-19 treatment to people; he also conceals the fact that it is the Blacks who are affected by Covid19 in larger numbers, and that more than 75% of dead are also Blacks who are below 20% of the population. So, without concrete steps to control the infection and to help the Blacks and other poorer sections, Trump is ending lockdown and opening all fields for helping production to catch up with rivals of US at the global market, with business as usual.
Modi is also following Trump’s ways faithfully, though on one count, on the excellence of testing done in India he has nothing to boast. At the same time, similar to US, the number of patients and dead have started galloping in India also. Like Trump, Modi also did not bother when WHO called for health alert and for starting preparations to combat Covid-19 which was spreading fast globally. Even after the first case was detected in India, though WHO had called for observation and testing/quarantine for all international passengers at airports, it was put in to effect from 12th march only. By that time 15 lakh passengers came through airports including those much maligned Tablighi Jamaat’s foreign guests without getting checked and tested. Till 24th March Indian companies were exporting ventilators, safety kits and testing kits and other medical requirements, none of which could be sufficiently procured even up to this time. Modi was busy with Delhi elections, suppression of anti NPR/NRC movement, toppling Congress govt in MP like BJP programs. Then the announcement to start 21 days lockdown from midnight of 24th March came just four hours before, without taking the state governments or the people in confidence. This abrupt order is entirely responsible for the still continuing colossal distress including hundreds of deaths due to starvation and accidents forced on the tens of millions of migrant workers.
When the first lockdown was declared, the covid19 patients were nearly 500.But when 60 days of lockdown is over, still Modi government could not provide adequate numbers of test kite, safety kits, ventilators etc. required for such a vast country. It is not ready to disturb the super rich private hospitals to provide Covid-19 treatment at affordable rates. Lockdown are allowed to be violated with immunity for Hindutva programs, No wages or allowance is given to the 400 million contract/casual workers who lost jobs and shelters and in acute distress. Adequate free ration was not given to all though FCI godowns are over full with food grains. In short, while announcing lockdown was needed, as WHO repeatedly announced, testing facilities and medical preparations were not sufficiently made. As a result, contrary to Modi government’s tall claims, by 24th May the number of patients and dead have jumped to 1,30,000 and about 3800, and fast increasing fast day by day.
Meanwhile, following Trump, without rectifying the gross mistakes and shortcomings which led to galloping impact of covid19 and acute distress to vast majority of the workers and oppressed sections, Modi also has ordered for easing out lockdown provisions, without taking the state governments in to confidence. By 1st June the lockdown may be withdrawn, with domestic flights and train services started, to begin economic activities fast. But what will happen to fighting the intensifying Covid19 spread? How its galloping numbers of patients and dead are going to be brought down? Who will give relief to the seriously impoverished the masses including the migrant workers many of whom are still on the roads or rails? There are no answers. At the same time, Modi government was using Covid-19 as a cover to spread Islamophobia and implement RSS agenda, It has intensified fascist state terror by leaps and bounds to suppress Kashmir people, Muslims as a whole, especially the students and youth who were active in the anti-NPR/NRC movement, to announce more and more reactionary orders for further plunder of the working class and peasantry, and to saffronise every section of the state apparatus. While it totally failed to control the spread of Covid19 or in helping the masses of the people from their acute distress, it is providing all incentives to the corporate forces and to the elite Brahmanical sections. Its crimes against the people are mounting.
Modi’s crimes against the people should be exposed and powerful movements should be launched to throw him out of power and to realize a people’s alternative with the working class in the forefront. This is the first and foremost task before all progressive forces
India is fast losing its friends in the neighbourhood. This time, the top priority project of Modi, a road to reach Kailash-Manasarovar in Tibet, is the prime reason for antagonizing Nepal and provoking border skirmishes with China. Government of Nepal has published a political map of the country which includes Kalapani, Limpiyadhura and Lipulekh as part of its sovereign territory based on 1816 treaty signed by British with then ruler of Nepal, through which the road goes. Nepal PM has asked India govt to remove “encroachments” from the area.
Indian army chief General M.M. Naravane’s remarks that the Nepali government had protested the inauguration of India’s link road to Mount Kailash in Lipulekh at the behest of China has united all sections of Nepalese society – including all the political parties in the opposition against it. India’s sovereignty over the Lipulekh Pass is yet to be established as it continues to be a disputed region. In the last 26 years of discussions, the Nepal-India Joint Technical Level Boundary Committee was able to settle nearly 97% of the border, but failed to resolve the dispute over Kalapani and Susta. In 2009, both sides had “agreed to resolve the long standing border disputes between the two countries at various places, including Kalapani and Susta through further discussions.”
The Lipulekh Pass, which lies at the centre of the current dispute, is situated at an altitude of 5,000 metres. Nepal claims that the Indian army has encroached 372 square kilometres towards Limpiyadhura from Kalapani since the 1962 Indo-China war. At that time, Nepal, as a friendly neighbour, granted permission to the Indian army to set up a camp in the region. Subsequently, despite several firm requests by Nepal to evacuate the camp, India continued the occupation. Reports from Nepal claim that Indians from UP and Bihar have encroached on over 60,000 hectares of land in 23 out of the 75 bordering districts. There is a great deal of hue and cry in Nepal over encroachment. As India refuses to even discuss these, and now has constructed the road stealthily, it has enraged the Nepalese people greatly. PM of Nepal, Oli’s words reflect it. The Indian army chief‘s comments not only wounded Nepalese national sentiment. It has dragged China also in to this dispute, and as US hurriedly came forward supporting India and accusing China, these border skirmishes have given an international character to the dispute. The Nepali prime minister’s harsh comment on India in Nepal’s parliament recently is an indication of a deepening sense of alienation. Under Modi, once again the army chief has made foray into external relations, worsening the situation. Is history is repeating? Was it not the arrogant treatment given to Chinese PM Chou Enlai by the UP CM Gobind Ballab Pant along with the enthusiastic interference by US president Kennedy worsened the Indo-China relations, abruptly ended the conciliation talks and led to India’s China War in 1962?
During the last six years, Modi govt has worsened relations with all neighbours with its arrogant, majoritarian Hindutva approach. So, all of them who had complaints about India’s expansionism and big brotherly attitude have moved away. In continuation to its reactionary, divisive internal policy based on hate politics, relations are spoiled not only with the neighbours, but with all the Arab countries. Its foreign policy is focused only on strategic junior partnership with US administration. Naturally, US exploit the situation, trying to provoke a proxy war between India and China, to settle its own contradictions with it. It shows how under Modi India is dragged in to a situation in which the Indian army may be used as cannon fodder in another conflict with China, to serve US interests. It is not patriotism Modi, it is treason! All progressive forces should create public opinion to prevent Modi playing another dangerous game, making people suffer for his follies
THE world order is changing. In fact it has continually been changing over the past 300 years due to the interplay of, among others, the expansion of capital throughout the world, the explosive growth of human technology, the conflict amongst the capitalist nations, the attempts of the USSR (up till the mid-1980s) to build a socialist block, the anti-colonial struggle, the struggle for universal suffrage, the Women’s Liberation movement and Third World national liberation movements fighting for a more egalitarian social order.
Over the past 30 years, three major changes have taken place across the world. The first among these is the implosion of the Western “middle class” which from the 1960s till the 1980s comprised not only the small businessmen, professionals and the managerial class but also a significant portion of the organized working class in the advanced countries of Western Europe, Japan and North America.
Paradoxically, it was the victory of the West in the Cold Paper presented at Socialism Conference in Kuala Lumpur in December 2018. War that has led to this implosion. The collapse of the Soviet Union in 1989 and the demise of a vastly different (albeit flawed) economic alternative to global capitalism meant that capital was able to move freely out of it’s safe havens in Western Europe, Japan and North America. This resulted in massive off-shoring of production to the Far East, China and the ASEAN region as global capital leveraged on the low wages in these regions to amass super profits. This off-shoring weakened the bargaining power of the working class and greatly undermined the union movement in the West. The conditions of employment of the blue collared working class in the advanced countries therefore deteriorated markedly and so did their share of national income.
This massive off-shoring of industrial production to China, Vietnam and other countries in the Far East and ASEAN led to the creation of super surpluses as the rate of exploitation of labour increased dramatically. A large share of this huge surplus went to the few hundred giant multinationals that control the technology and the marketing chains throughout the world – the so-called “supply chains”. However a smaller share of this surplus accrued to the governments and to the national bourgeoisie who collaborated with Tax evasion gets easier when one is super-rich! 11 the MNCs in the production of these enormous surpluses. This is the second important aspect of the recent changes in the World Order. The industrial capacity of the receiving countries – China, Vietnam, India – has increased by leaps and bounds. Their infrastructure has been modernized and there been significant technological transfers to the newly industrializing countries of Asia which now are rapidly acquiring the capacity to themselves pioneer new technological breakthroughs whether it be in artificial intelligence, biomedical research or rocket launchers for satellites.
In the meantime, the large MNCs prevailed on the governments of their home countries (largely the advanced countries) to use multi-lateral institutions like the WTO to liberalize global financial regulations to break down trade barriers (making it more difficult for developing countries to develop independent industrial capacity), make it easier for the MNCs to invest wherever they want, repatriate profits as they wished, create stronger monopoly rights over their “intellectual property rights” and enact measures to diminish the power of governments to discipline them (the ISDS mechanism). Much of these measures were couched in the argument that it is for the common good – that trade is good for all, that foreign investment in beneficial to the host country, that unhindered flow of capital is desirable and that the way forward is to develop a rules based system (the fact that these rules favoured the global super-rich was left unstated!).
The financial liberalization pushed through by neoliberal politicians and economic planners in the advanced countries has made the offshoring of profits easier. This is the third important aspect of the recent changes in the global economy and it has resulted in a drop in corporate tax collection the world over. In Malaysia our corporate tax has dropped from 40% of profits in the mid-1980s to its current 24%. Lim Guan Eng, our Finance Minister apologetically promised at the latest budget that Malaysia plans to reduce corporate tax rates even further in future budgets so as to keep up with Singapore (currently 18%) and Thailand (19%).
The constraints that nations face in taxing their corporations and the richest 1% has had the following consequences:
– The growth of budget deficits and government debt. Malaysia’s sovereign debt is now RM725 billion (June 2018) or about 51% of the Malaysian GDP. Interest payments on this debt will come to RM33 billion in 2019, this more than the total Federal Health Budget for 2019!2 The sovereign debt of UK is 86.6% of the UK GDP, Germany 64.1% of German GDP in 2017, USA 77% of US GDP in 2017 and Japan 254% of GDP.
– The institution of consumption taxes that burden the general public. More than 160 countries have implemented these at various rates – Singapore is at 7% while the VAT in Germany is 19% and in Sweden 25%. These taxes are regressive in that they constitute a much larger portion of the income of the poorer sectors of the population because these sectors consume a larger proportion of their income while the richer families either save or invest a large portion of their income (thus avoiding the consumption tax).
– Developed countries have been forced to reduce welfare benefits because their budget deficits do not permit them to be more generous.
– The capacity of national governments to engage in counter cyclic spending should a recession develop has been constrained by their huge sovereign debt. This means that usual Keynesian measure of “pump priming” is now more difficult to pull off. This makes the global economy even more vulnerable to serious contractions of aggregate demand.
– The growing income disparity between the top 1% and the rest of us. The sequestration of so much wealth in the top 1% has meant that the growth of aggregate demand cannot keep up with the growth in investment capital as the former depends on the 99% while the latter comes from the top 1%. So growth in the economy remains sluggish.
The declining economic situation and eroding living conditions of the white “middle class” in the US was a major factor propelling the rise of Trump with his promise of “Making America Great again”. Trump is a product of 12 the economic malaise affecting the advanced nations comprising the G7.
Trump – The Wrecking Ball
Trump has taken the position that the current world order is unfair to the US and that the US is being bullied by other nations through unfair treaties and international arrangements. He wants to tear up all such “unfair agreements”. He has refused to ratify the TPPA Agreement, questioned NAFTA and has taken the US out of the Climate Accords claiming that much of it is made up to disadvantage the US. He has commenced trade sanctions against China alleging that its trade surpluses with the US are due to unfair practices and that China has been “stealing” US technology and not paying for technology transfer. In effect he is challenging many of the multilateral agreements put together by neoliberal economists and politicians over the past 30 years.
But let’s be clear about this, he is not challenging the neo-liberal consensus of the past 30 years from a left or even a social democratic perspective. He is not calling out the super-accumulation of wealth by the global elite which comprises less than 0.001% of the population3 . Nor is he attempting to shift the distribution of income towards the 99% by strengthening the social safety net. Far from it! He has lowered the corporate tax rate in the US to 21% of profits, a big reduction from the 35% levied previously, and has waived penalties for previous attempts of tax evasion. He is trying his best to dismantle Obama Health Care. He has liberalized regulations regarding oil exploration and drilling.
His actions on the economic front seem to be predicated on the belief that excessive regulation by the government has suppressed the American entreprenual spirit. So what is required now (according to Trump) is to remove these troublesome regulations and allow American businesses to flourish as that will create wealth, economic growth and jobs – and make America Great Again. I would classify Trump’s economic policies infantile hyper-neoliberalism. “Neoliberal” because it seeks to remove all restrictions on business whether these restrictions are taxes, environmental regulations or international rules and regulations. “Infantile” because he willfully disregards any argument contrary to his stance – he does not engage in rational discourse but just flatly rejects even scientific predictions (eg on climate change). There is no doubt that his policies will exacerbate the situation of the bottom half of the US population including the white former industrial working class.
Trump may a buffoon, but he is an extremely dangerous one! There is the ever present danger that Trump’s “bull in a China shop” model of diplomacy might inadvertently result in armed conflict with Iran, North Korea or even Russia. And there appears to be very little that ordinary citizens in other countries can do to reduce that risk! Let’s hope that there are enough checks and balances within the US and the international system to prevent those conflicts from developing. The consequences of armed conflict involving nuclear armed states are quite dire!
China in the 21st Century
China is one of the bogeys that Trump has created to drum up support for his right wing populist policies. (The other bogeymen are Mexican, Manufacturing Jobs (% of Total) 13 non-white immigrants, Muslims and closet socialists in the US who are supporting Obamacare).
China has benefited greatly from the off-shoring of industrial production to China. To be sure, the MNCs that relocated production to China were no closet socialists with a hidden agenda of propelling China into the position of an economic super power – already China’s GDP exceeds the US’ if the higher prices of goods and services in the US is factored into our calculations. The MNCs have expropriated a major portion of the surpluses obtained from producing cheaply in China for the US and EU markets and they have made huge profits. But a significant portion (perhaps 30% – and this is my guestimate!) of the surplus was appropriated by Chinese actors. The government managed to appropriate a portion and use it for massive infrastructure improvement. There are now a few hundred dollar billionaires in China4 and thousands of dollar millionaires – they are the emerging Chinese bourgeoisie, many of who collaborated with the MNCs, but are now sufficiently empowered to strike out on their own. But there is also a huge industrial working class that has grown under oppressive conditions and which is already resisting its super-exploitation!
Trumps sanctions on Chinese exports to the US will tend to raise the costs of consumer goods in the US. This will probably lead to substitution by goods imported from other lower cost producers such as Mexico, Vietnam and Malaysia. It is unlikely that the trade sanctions are going to promote import substitution within the US and significant growth of employment growth in the US as there are other low wage countries that can fill the demand for these goods, and the MNCs which control the supply chains will utilize these alternative countries.
It also appears quite unlikely that US sanctions will bring China to its knees! The proverbial cat is out of the bag! The past 40 years have led to the massive development of China’s industrial capacity, technological expertise and infrastructure. No amount of sanctions can undo these advances. Of course, the loss of the US markets will be a major challenge to the Chinese regime, as China’s total exports in 2017 came to USD2.26 trillion or 17% of China’s GDP (nominal). Of this 2.26 trillion, USD 0.5 trillion were exports to the US. US trade sanctions will hurt, but China will come out of this confrontation even stronger as it has a huge domestic market and a well-balanced industrial sector.
Trump’s sanctions will probably have the unintended effect of forcing China to disengage economically from the US and maybe the EU as well. A downturn in the economy due to loss of the US export markets and the resulting spike in unemployment will be profoundly destabilizing for China. It is unlikely that the Chinese government will allow that to occur. It is probable that the government will adopt Keynesian policies and legislate that wages be increased across the board in China so that aggregate demand, economic growth and employment opportunities are maintained. That might also help to reduce class tensions in China – China’s huge proletariat that is labouring under oppressive conditions is getting increasingly restive, and it is being supported by youth who are armed with Marxist concepts. The Chinese state does have a much tighter grip on power than the average state in Europe, but it may see the wisdom of attempting to co-opt the industrial proletariat by moving towards a West European type of Welfare State.
China will also try to increase its markets in the rest of Asia, Africa and in Latin America. (The late Samir Amin argued that developing countries need to form regional blocs and “de-link” from the exploitative “Triad”) It appears that Trump’s antics might accelerate that process which might over the next 20 years see a more independent and economically more resilient China!
What Does All of This Mean for Malaysia and Other Developing Countries?
In the short run, there might be a recession as the Trade War between the US and China takes effect. A significant portion of Malaysia’s ex- 14 ports to China are part of supply chains that end in the US or EU consumer markets.
– But we might see relocation of industries from China to ASEAN so as to circumvent the sanctions. The potential benefits to ASEAN member economies can be augmented if there is an ASEAN wide agreement to abstain from the race to the bottom so that we can together bargain that a larger share of the value added in ASEAN countries accrues to ASEAN either as wages or as taxes.
– If China decides to adopt a policy of stimulating aggregate demand by mandating wage increases across the board in China, it will create room for the ASEAN countries to do the same so as to deepen the regional ASEAN market and wean ourselves off the ailing consumer markets of the West. We need to mobilise our societies around this demand.
– The questioning of the neoliberal consensus by Trump opens the door for the developing countries to renegotiate other aspects of this “consensus” including
- conditions for capital transfer in and out of countries
- provisions for companies to pay taxes to countries based on the actual creation of value in that country. Loopholes that allow companies to under declare their earnings must be identified and closed.
- the closure of tax havens
- the renegotiation of Intellectual Property Rights from the standpoint that human knowledge represents our collective commons. Rich companies cannot be allowed to ring fence what is actually the product of human effort and ingenuity through the ages!
- Better balance between the growth of investment capital and the growth of aggregate demand. ie Better wealth distribution
- The right to work. Which means available work has to be shared with everyone by reducing the duration of the working week. But the hourly wage rate needs to go up many times over for workers to sustain themselves and their families. This means that the rate of profits have to be reduced.
Malaysia is already active in various international fora – we are a vocal member of the “Like Minded Developing Countries”5 in the Climate Change negotiations for example. We need to continue these initiatives and might find that significant portions of the populations of the advanced countries are with us on some of these issues as they too are now on the receiving end of capitalistic greed!
The “unipolar world” of the past 30 years is going to become more multipolar as China and the other members of BRICs grow economically and this will increase policy options for smaller developing countries. But we must not imagine that it will re-create the situation of the post World War II period where the existence of a non-capitalist USSR created significant policy space for developing countries. China today is a far cry from the USSR of that period. It would be unrealistic to hope that Chinese capitalists will be more benign and more progressive than US, EU or Japanese capitalists.
And What of the Malaysian Left?
There are a lot of opportunities for the Left the world over, as the deficiencies of uncontrolled capitalist development are so clear for all to see. Objectively speaking we should be well placed to put forward an alternative narrative, rally people around us and make a bid for state power. But are we equal to this task?
One of the important prerequisites for gaining political traction would be to convince people that we have a workable, realistic alternative that is better for the 99% than the programme being put forward by the Pakatan Harapan government. And this alternative we are proposing must seem WORKABLE and reasonable in their eyes. But all too often we see slogans from a different era about smashing the capitalist state which some in the anarchist fringe would identify with, but which does not at all impress the majority that the Left has a workable solution. And we still hear calls from some progressives influenced by the analysis of the Labour Party analysts from the 1967 - 1969 period (when many of the more seasoned Labour Party leaders were detained) that the struggle for cultural equality should be elevated as the prin- 15 cipal objective of the progressive movement in Malaysia at this point in time.
If we want to move our agenda forward in Malaysia we need to answer some crucial questions honestly. Questions such as
- Can Malaysia to disengage from the global economy to pursue an independent “socialist” economy given that we are so deeply integrated into the global economy – the value of our exports is about 70% of our GDP! And there is no longer a Soviet bloc that will be prepared to accept all our exports.
– Or do we have to formulate a trajectory where we have to, for the immediate future at least, remain within the global capitalist system, while trying to redistribute income to the poorer half of the population and create democratic spaces for people to learn and practice the skills necessary for self-governance? And at the same time work in multi-lateral international institutions to control transfer pricing, tax evasion, regulate capital flows and reclaim knowledge as the common property of humankind.
- How do we overcome 60 years of race based politics and build a multi-ethnic people’s movement that will provide both the electoral and the popular support for the changes we want to bring?
– Would classifying cultural oppression of the minority ethnic groups as the “Primary Contradiction” help us in building this broad multi-ethnic movement of the Malaysian Marhein? Or would we be shooting ourselves in the foot?
- What is our position on Political Islam? (This question has been around since the time of Tan Malaka who argued in the mid-1920s that the Left needs to accommodate political Islam if it wishes to make headway in the Malay Archipelago.) Are we going to insist that our People’s Movement must be completely “secular” given the reality that in a survey in 2017, more than 70% of Malays answered saying their religion, Islam, is a more important component of their identity than ethnicity or nationhood?
– Or do we recognize that upholding Islam can be a legitimate component of an anti-imperialist stance, and that there are different strands within political Islam, some of which are more tolerant of diversity and are based on universal principles, and try to work together with the more progressive strands?
- Working within the capitalist system creates many “moral hazards” for individual leaders as well as for the party as a whole. What can we do to reduce the risks of being coopted by the corporations – what are the institutional measures we can adopt that will serve as a check and balance for our leaders and for ourselves?
A discussion of these 4 topics has been underway in the PSM ever since its inception 22 years ago, and we are slowly getting some clarity on these issues. But there are still many divergent views among others in the larger Malaysian Left.
We in the Left really have to get our act together if we want to make an impact on the political process in Malaysia. As Marx said, “the point is to change the world”. The crucial question is – how do we engage with our people such that we can build the critical mass to together steer our society towards a better future?
- A good exposition of this subject can be found in John Smith’s Imperialism in the 21st Century. Monthly Review Press.
- Malaysian Treasury Website
- As of 2018, there are over 2,200 US dollar billionaires worldwide, with a combined wealth of over US$9.1 trillion, up from US$7.67 trillion in 2017. According to a 2017 Oxfam report, the top eight richest billionaires own as much combined wealth as “half the human race”. Wikipedia Nb: 2200 is 0.000031% out of 7 billion.
- China produced 2 new billionaires a week last year according to Swiss banking giant UBS. Star 27/10/2018.
- In the United Nations Framework Convention on Climate Change discussions, the countries that grouped themselves under the “Like Minded Developing Countries” tag were Algeria, Bangladesh, Bolivia, China, Cuba, Ecuador, Egypt, El Salvador, India, Indonesia, Iran, Iraq, Jordan, Kuwait, Malaysia, Mali, Nicaragua, Pakistan, Saudi Arabia, Sri Lanka, Sudan, Syria, Venezuela and Vietnam.
(Jeyakumar Devaraj Member of Socialist Party of Malaysia (PSM) Central Committee. Paper present at Socialism Conference in Kuala Lumpur in December 2018)