FALSE SENSE OF RECOVERY AT G-20 SUMMIT IN PITTSBURGH

By Prof. Jose Maria Sison
Chairperson, International Coordinating Committee
International League of Peoples’ Struggle
3 October 2009

The leaders of the imperialist powers and the world’s other big economies concluded their G-20 summit in Pittsburgh, USA and declared the capitalist world economy on the path to recovery. They praised themselves for arresting economic decline and stabilizing financial markets, and for starting a reform process towards “strong, sustained and balanced growth in the 21st century”. Again they asserted that the crisis was only due to reckless and irresponsible financial behaviour. Since steps have begun to be taken to rein these in they reiterated the promise that capitalism will bring development to billions of people in the world.

But these are all self-serving declarations diverting from the profit-driven laws of motion of capitalism and the gross reality of how billions of working people around the world are oppressed and exploited, denied real development, and driven into deeper suffering and backwardness. The global economy and the people are still in deep and acute crisis. Financial and industrial profits have momentarily risen in relation to their steep declines since last year – but this is only because of the unprecedented state bail-outs to monopoly capital, cost-cutting in the form of massive lay-offs and squeezing more surplus from the employed workforce.

Global output continues to contract, factories are still closing, millions of jobs are still being lost, millions are losing their homes, and family incomes and welfare continue to plunge. Conservative estimates are that the intensified crisis will see 50-100 million additional jobless aside from increasing the number of “working poor” to some 1.4 billion worldwide. This additional misery is on top of how even before 2008 there were already – again by conservative estimates – some 3.1 billion people poor, two billion without access to clean water, one billion going hungry every day, and 200 million outright jobless. Every year around 25 million people were already dying from curable diseases and 500,000 mothers dying during pregnancy and childbirth.

The touted beginnings of recovery are in any case a false dawn. They are largely hype to try and promote investor confidence and the illusion of market stability. The estimated US$10.8 trillion worth of stimulus so far are financed by soaring government debt which ominously creates problems in the near future. The US federal government alone already has US$11.8 trillion in debt even as it faces a deficit of US$1.8 trillion just for 2009 and trillion-dollar-plus deficits every year for at least the next decade.

Desperate fiscal stimulus programs are everywhere driving huge public deficits in the major imperialist powers. They are for instance to the order of 13.5% of gross domestic product (GDP) in the US, 11.6% in the UK, 7.4% in France and 10.3% in Japan – the highest seen since the Second World War. Even China’s vaunted economy and accumulated finance are at their limits. These are dangerous conditions for the people. At the very least the people will see education, health, housing and welfare services cut to give way to massive public debt service. But also very alarming is the menace of widespread defaults and financial meltdown with no more possibility of further state-driven bail-outs.

The G-20 declared their agenda to be coordinating policies for economic recovery, financial regulatory reform, and charting a course for high, sustainable and balanced global growth. In reality they are seeking ways to secure monopoly capital’s profits in the wake of the world capitalist system’s deepest global depression in nearly a century. The leaders tend to be preoccupied with using state power and public finance to generate bigger bubbles for the benefit of the monopoly bourgeoisie, especially the finance oligarchy. They have united on further shifting the burden of the crisis to the people of the world,

The G-20’s members include the United States of America (US), United Kingdom (UK), Canada, France, Germany, Italy, Japan and Russia – the members of the G-8 – with China, India, Indonesia, South Korea, Argentina, Brazil, Mexico, Saudi Arabia, South Africa, Turkey and Australia. They account for 80% of world trade, 85% of the world economy and two-thirds of the global population. Also involved are the heads of the International Monetary Fund (IMF), World Bank (WB) and World Trade Organization (WTO).

The imperialist powers have made headway in their efforts to advance their self-interest at the expense of the world’s workers, peasants, fisherfolk, urban poor, indigenous peoples, women and youth. The summit concluded with the leaders agreeing to expand the G-20’s role and making it more central to international economic policy-making. The US in particular has pushed for the IMF and WB to have a greater and resurgent role in advancing the imperialist agenda, especially in the over 170 underdeveloped countries outside the G-20.

When the G-20 was set up after the so-called Asian financial crisis in 1999, it was mainly a forum for finance ministers and central bankers. The intensification of the current global crisis last year however has seen the G-20 become conspicuously active with the world’s big powers aiming for a new way to craft global economic policies. Its first ever summit with heads of state was held in Washington in November 2008, followed by another in London in April 2009 and then this just concluded one. The scheduled summits in Canada in June 2010 and Korea in November 2010 will mean an unprecedented five top-tier meetings within just two years.

The international financial institutions (IFIs) are being rejuvenated to give imperialism more teeth in enforcing their will. The IMF has been formally tasked with ‘monitoring’ economic policies, especially of countries outside the inner circle of imperialist powers, and over US$500 billion has been added to its resources for imposing conditionalities. The WB and other regional development banks are meanwhile expected to become more aggressive in pushing the ‘free market’ and corporate plunder under cover of ‘development’ issues such as climate change, clean and renewable energy, and food security. Imperialism’s increasing attention to the global climate crisis and the food crisis is ominous and the capitalist drive for profits will only worsen these crises.

The G-20 is also seeking to increase the perceived legitimacy of the IMF and WB through supposed reforms such as increasing a little the persistently minority voting shares distributed to under-represented countries like China. This puny adjustment is calculated to enhance the long-discredited interference of the aforesaid institutions in the underdeveloped countries and to conceal the overwhelming control by the imperialist powers. Among all the big powers, the US i has the sole veto power and greatest control over the IMF and the WB.

The G-20 is not and can never be about radically overhauling the world and national economies in order to meet the needs of the people. It cannot but persist with peddling “free market globalization” to misrepresent monopoly capitalism and the illusion that opening up to foreign investment and trade are the keys to domestic growth and development. There certainly are such new catch phrases as seeking a “balanced and inclusive” global economy with “multiple poles” of growth. But these are only the latest rationalizations for prying open domestic energy, natural resource and infrastructure sectors, for promoting profit-seeking monopoly interests, and for pushing so-called regional integration.

There has also been the ritualistic expression of commitment to free trade and open markets and in particular to trade liberalization through a conclusion to the WTO’s Doha Round of talks. Yet the imperialist powers as ever remain two-faced and push for opening up the backward economies while taking for themselves as much trade and financial protectionist measures as they deem necessary. In any case, although the WTO remains a key instrument for imperialist economic aggression the US appears to have somewhat less enthusiasm for it because it is faced with demands by major member states that it cannot meet and because it can use bilateral and regional trade agreements

The G-20 cannot but recognize the worst aberrations and excesses of capitalism’s irrational and destructive financial system. The leaders have made much of trying to curb these through tougher financial supervision, discouraging excessive leverage and risk-taking, regulating derivatives trading and policing tax havens. But the deadline they set for themselves is 2010 or later, confirming the lack of real commitment to rein in finance capital.

In any case, even if they adopt new regulations, these cannot solve the deeply-seated economic and financial crisis. The history of capitalism has seen that seeming unity and disciplines always eventually give way to the intrinsic compulsion for profit and inter-imperialist competition through any and all means possible.

It is likewise with the destructive competition between the major capitalist economies. The G-20’s call for “coordinated policies” and evening out the “lopsided global growth model” acknowledges how countries will advance their interests as they see fit even if these exacerbate the intrinsic anarchy of the system. Monopoly capital will invariably always seek to boost profits using the entire range of economic powers of states including their budgets, exchange rates, monetary and debt policies.

Self-interest sets limits to such supposed “coordination” and hastens the onset of new and worse episodes of crisis. Indeed it is even likely that the inevitable failure to coordinate will be used as justification for retaliatory protectionism and economic policy counter-maneuvering. The civility during the G-20 summit barely hides the intensifying rivalries and competition for the world’s finite raw materials, cheap labor, markets and areas of investment. The struggle for a redivision of the world among the imperialist powers is being sharpened by the worsening global economic and financial crisis.

The deteriorating social and economic conditions of the world’s working people over the last decades and the even more severe decline since last year expose how world capitalism is fundamentally flawed. The foundations for a world economy that promotes the well-being of the people have to be built. This cannot happen through the world capitalist system, the G-20 or any mechanism controlled by the imperialist powers such as the IMF, WB and WTO. If anything, these schemes for intervention and influence have to be done away with.

The G20 leaders are now foolishly talking about “exit strategies” from pseudo-Keynesian stimulus spending and a return to neoliberal reliance on “private sources of demand”. The G-20 seeks a return to the most unbridled and brazen forms of capitalist exploitation and plunder that have brought about the current grave crisis. On the other hand, the people of the world are driven by the crisis to assert their sovereignty in crafting development, and investment and trade policies, and in regulating capital flows in their favour. The only acceptable reform of the global financial system is one that supports domestic industrial development, that is not designed to drain backward economies of scarce capital, that cancels burdensome debt and that promotes development-oriented trade on equal terms with other countries.

Our economies must serve the needs of the people and not be geared merely towards generating profits for monopoly capital. In the capitalist countries, jobs must be created , incomes increased and consumption revived rather than bail-outs poured out to the monopoly bourgeoisie. Production must be restored based on expanding the people’s incomes and capacity to consume and on sustaining this by keeping them productive in a well-balanced economy. In the vast number of backward countries the struggle remains to develop national economies, involving the balanced development of both industry and agriculture. At the same time, the basic demand for social and economic justice must be met in terms of fair and decent wages, land reform, food self-reliance, adequate livelihood, social benefits and expanded social services.

The mass protests leading up to and during the G-20 summit that breached the fences of iron and steel underscore the extent of social discontent and readiness of the people to fight against exploitation, oppression, discrimination and all forms of social injustice. A week before the summit there was the “National March for Jobs” in Pittsburgh with thousands of workers, healthcare activists, unemployed and homeless from across the US.

The International League of Peoples’ Struggle (ILPS) congratulates the mass mobilizations against the G-20 in Pittsburgh led by the US-based alliance of grassroots organizations Bail-Out the People Movement (BOPM). BOPM marched and sponsored “A Global Week of Solidarity with the Unemployed” which included protestors camping out in a make-shift tent city dubbed “Bail-Out the Jobless, a Tent City dedicated to the Unemployed, the Homeless, the Hungry, and the Poor of the World”. Also noteworthy were mass actions at US embassies and national workers’ conferences on the G-20, such as in the Philippines and elsewhere. Mass protests such as these are among those giving the greatest hope for fundamental social change.

As the crisis of the world capitalist system worsens, we can expect ever larger and more militant forms of popular resistance. It is important to keep on conducting campaigns of education and information on the G-20 and the entire scheme of monopoly capitalism against the people of the world. We must build on our achievements in mass mobilization and we must further develop our political and organizational strength in preparation for mass actions in the next summits in Canada in June 2010 and Korea in November 2010.

As the imperialist powers are redoubling their efforts to preserve global capitalism, then more so must the people become ever more resolute and effective in waging militant anti-imperialist struggles for greater freedom, democracy, social justice, development and international solidarity and peace. The progressive mass movements and revolutionary forces of the people of the world are steadily gaining strength in the struggles for national and social liberation and are making advances towards the ultimate goal of liberating mankind from imperialism and all reaction..###