Archive for category: India
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On November 26, the biggest one-day general strike in the world happened in India where over 200 million workers paralyzed the country and refused to work. Supported by 10 central trade unions and over 250 farmers organizations, the strike led to a near total shutdown in multiple Indian states.
The strike was bolstered by mass actions taken by farmers across the country, 300,000 of whom marched on New Delhi and shut down the streets, fighting for the repeal of three pro-corporate farming bills that passed Parliament earlier this fall.
Tomorrow, Tuesday December 8, Indian farmers plan to strike again. Since November 26, thousands of farmers have occupied several critical borders of Delhi, refusing to leave until the government repeals the three new laws. After the failure of the fifth round of talks, farmers unions have put out a call to shut down the country and escalate the pressure on Delhi. This upcoming strike has been supported by a coalition of opposition parties, ranging from the Congress to Aam Aadmi Party and Dravida Munnetra Kazhagam, all who see BJP as a threat to their own power. The Left Front, which controls some of the biggest trade unions, has also announced their support for the strike and will be holding demonstrations tomorrow. While the strike will be large, it is limited to farmers unions and a few other sectors and participation is not expected to be as high as it was on November 26th.
The strike has also been endorsed by the ten largest trade unions in the country. Workers in commercial transportation and banking have announced work stoppages and solidarity actions. Public transportation in Delhi, where much of the fire is currently being concentrated, is also likely to take a hit as a sector of transit workers have announced that they’re going on strike.
In order for farmers and workers to win their demands and deal an effective blow to the Modi government, it is essential that the working class enter the scene more actively and force an indefinite strike. Organized workers in strategic sectors, such as transportation, mining, banking, etc., need to once again go on a coordinated strike, bringing the whole country to a standstill. Worker demands including halting the privatization of public services, a more coherent Covid-19 response, and stimulus money and free meals for needy families across the country need to be met. As Modi ramps up nationalist rhetoric and turns a blind eye to violence against minorities — in effect condoning it — while continuing to openly support the interest of capitalists, Indian workers must fight, knowing that the state is not on their side and the only way to affect change is to shut the economy down.
Over the last two weeks, farmers have continued their pressure on the Modi government, refusing to concede their demands as they occupy key borders and roads leading up to the country’s capital. They have refused to accept the empty words offered by Modi and his cronies, and have pledged to continue this pressure until the government rolls back the new agricultural laws. To escalate this pressure, to win the demands not only of the farmers, but much needed relief for all the working and toiling masses, it is imperative that the working masses actively enter the scene with their tools of strikes and pickets and push for an indefinite general strike. Workers need to go beyond the Stalinist trade union leaderships, who continue to act as a conservative force and call for single-day strikes so workers can let off steam, but are unable to force the hand of the state and score real victories.
The current protests by farmers against the Modi regime have been one of the most powerful movements against the Modi regime. The strike on December 8 is the second general strike in India in two weeks, indicating a movement among the worker and peasant masses of a break with the Modi regime. To not only deal it a definitive blow, but also realise their own power, it is imperative that workers and peasants fight together, using the advantages of their strategic position.
Farmers sit at the Singhu border in New Delhi on December 1, 2020, to protest against agriculture reform laws. | Vipin Kumar/Hindustan Times via Getty Images
India says its new laws will modernize agriculture. Farmers say it will cause their ruin.
More than 200,000 Indian farmers and their supporters have occupied the streets of New Delhi for days in protest against three new agriculture reform laws, blocking major highways into the capital city and vowing to remain camped there until the laws are repealed.
The legislation, enacted by Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) in late September, aims to deregulate India’s agricultural industry in a move the government says will both provide farmers with more autonomy over choosing prices and make the agricultural sector more efficient.
Under the new policies, farmers will now sell goods and make contracts with independent buyers outside of government-sanctioned marketplaces, which have long served as the primary locations for farmers to do business. Modi and members of his party believe these reforms will help India modernize and improve its farming industry, which will mean greater freedom and prosperity for farmers.
A watershed moment in the history of Indian agriculture! Congratulations to our hardworking farmers on the passage of key bills in Parliament, which will ensure a complete transformation of the agriculture sector as well as empower crores of farmers.
— Narendra Modi (@narendramodi) September 20, 2020
But the protesting farmers aren’t convinced.
Although the government has said it will not drop minimum support prices for essential crops like grain, which the Indian government has set and guaranteed for decades, the farmers are concerned they will disappear. Without them, the farmers believe they will be at the mercy of large corporations that will pay extremely low prices for essential crops, plunging them into debt and financial ruin.
“Farmers have so much passion because they know that these three laws are like death warrants for them,” Abhimanyu Kohar, coordinator of the National Farmer’s Alliance, a federation of more than 180 nonpolitical farm organizations across India, told me in an interview. “Our farmers are doing this movement for our future, for our very survival.”
Partha Sarkar/Xinhua via Getty Images
Indian farmers sit at the border between New Delhi and Haryana state, India, on December 1, 2020.
The distressed state of farmers in India is cause for concern. A 2018 study by India’s National Bank for Agriculture and Rural Development found that more than half of farmers in India are in debt. More than 20,000 farmers in the country died by suicide from 2018 to 2019, and though there is considerable debate, several studies suggest that farmers’ indebtedness has been a major factor.
In comments made November 30 from the banks of India’s sacred Ganges River, Modi sought to reassure farmers that the new laws would benefit them. “These reforms have not only served to unshackle our farmers but also have given them new rights and opportunities,” Modi said.
Ritesh Shukla/NurPhoto via Getty Images
Indian Prime Minister Narendra Modi speaks at Bhaisasur Ghat on the banks of the Ganges River as he attends the Dev Dipawali festival in Varanasi on November 30, 2020.
Modi has blamed India’s opposition parties, which have been speaking out strongly against the bills, for agitating the farmers by spreading rumors.
“I know that decades of falsehood do put apprehensions in the minds of farmers, I want to say this from the bank of Mother Ganga — we are not working with the intention of deceiving. Our intentions are as holy as the water of the river Ganga,” Modi said.
The farmers, who are mostly from the nearby Punjab and Haryana regions, began marching to New Delhi by the thousands in tractors and cars on November 26 to demand the prime minister repeal the laws. They were met by large numbers of police in riot gear, who used tear gas, water canons, and batons to keep the protesters at the border of New Delhi and Haryana state.
Protest against Farm Laws in India. Water canons used against farmers in Haryana India pic.twitter.com/446hbrPBhJ
— News Kashmir 24/7 (@newskashmir24) November 26, 2020
Protests restarted November 27, but following the clashes, authorities allowed the farmers to enter New Delhi and peacefully assemble at an approved location later that evening.
Some of the iconic pictures from the organic and massive protests led by Farmers in India today. Even though the central government tried everything to scare them off, the Farmers bravely faced it to register their opposition to the pro-corporate, Farm Bills. pic.twitter.com/04z6jG8e0n
— Kawalpreet Kaur (@kawalpreetdu) November 27, 2020
A delegation of farmers held talks on December 1 with BJP officials, including Minister of Agriculture Narendra Singh Tomar, but the negotiations were unsuccessful.
“The government did not agree to our points and rejected our demands outright,” Chanda Singh, a member of the farmers’ delegation, told Al Jazeera, referring to the farmers’ insistence that the three laws be repealed. “We will continue our protest unless our demands are met,” Singh said.
Tomar, however, appeared to have a more favorable view of the talks, telling Indian news agency ANI that the meeting went well. Another round of talks with a greater number of farmers is scheduled for December 3.
Whether those talks will appease the concerns of the farmers, though, remains to be seen.
“In Western countries agriculture is a source of business, but in India, agriculture is a source of livelihood,” Kohar, the National Farmer’s Alliance coordinator, told me. “In India, crops support their living.”
Some experts say the laws are “a necessary tough call,” but farmers aren’t convinced
Agriculture plays a crucial role in the Indian economy, as nearly 60 percent of India’s 1.3 billion people depend on farming for their livelihoods. But farming is also incredibly unproductive, as the sector accounts for only about 15 percent of India’s GDP.
By allowing farmers to sell to whomever they want, the government hopes to attract private business to agriculture, which will benefit some farmers.
“It’s a necessary tough call,” said Sadanand Dhume, a resident fellow at the American Enterprise Institute and an expert on South Asia. “This should’ve been done 20 years ago. It’s a small part of a much larger and much more complex solution to a problem.”
The problem, Dhume explained, is that there are simply too many farmers in India. He and others have argued that the country should make a similar transition away from farming to manufacturing, like China did.
But so far, India has not been able to generate the kind of manufacturing growth needed to support millions of farmers in their transition to new work. Manufacturing accounted for only about 17 percent of India’s GDP in 2020.
As Dhume said, “If the economy were creating jobs, then there wouldn’t be as much anxiety. In India, because job creation has been so weak, the thought of losing the guarantee is unsettling for farmers.”
Part of the farmers’ fear is also due to the urgency of the current moment, when the economic impact of the Covid-19 pandemic has made farmers even more alarmed. The Indian economy shrank 7.5 percent from July to September compared with the same period in 2019. A June survey by the All India Manufacturers Organization found that more than a third of small- and medium-sized businesses were making plans to close, despite receiving aid from the government.
Mayank Makhija/NurPhoto via Getty Images
Farmers rest inside a tractor trolley on December 1, 2020, near a roadblock at the Delhi-Uttar Pradesh state border in Ghazipur, India.
The farmers, who have brought enough supplies with them to last for at least six months, are determined to stay until Modi’s government repeals the new farm bills and enshrines the minimum support price into law, among other demands.
“We want everything in writing,” Kohar said.
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On Thursday, some 200 million workers held a one day general strike in India. This massive day of action was called by 10 trade unions and over 250 farmers organizations and was accompanied by massive protests and a near total shutdown of some Indian states. According to the call put out by unions, the general strike was organized against “the anti-people, anti-worker, anti-national and destructive policies of the BJP government led by Prime Minister Narendra Modi.”
Their demands included:
- The withdrawal of all “anti-farmer laws and anti-worker labour codes”
- The payment of 7,500 rupees in the accounts of each non-tax paying family
- Monthly supply of 10 kg of food to needy families
- The expansion of the MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Act of 2005) to include 200 workdays each year, higher wages, and the Act’s extension to urban industries
- Stop the “privatisation of the public sector, including the financial sector, and stop corporatisation of government-run manufacturing and service entities like railways, ordnance factories, ports, etc.”
- The withdrawal of the “draconian forced premature retirement of government and PSU (public sector) employees”
- Pensions for all, the scrapping of the National Pension System and the reimposition of the earlier pension plan with amendments
Workers in nearly all of India’s major industries — including steel, coal, telecommunications, engineering, transportation, ports, and banking — joined the strike. Students, domestic workers, taxi drivers, and other sectors also participated in the nationwide day of action.
In addition to the demands of the nationwide strike, certain sectors made industry-specific demands to fight back against the government’s attacks to their industries that affect the entire working class in India. For example, bank employees are fighting against bank privatization, outsourcing, and for a reduction in service charges and action against big corporate defaults.
Other industries framed their demands in the context of the government’s appalling response to the pandemic and economic crisis hitting India. As the Bombay University and College Teachers’ Union’s statement stated:
This strike is against the devastating health and economic crisis unleashed by COVID-19 and the lockdown on the working people of the country. This has been further aggravated by a series of anti-people legislations on agriculture and the labour code enacted by the central government. Along with these measures, the National Education Policy (NEP) imposed on the nation during the pandemic will further cause irreparable harm to the equity of and access to education.
The general strike occurred in the context of the devastation brought about by the coronavirus pandemic in India. India has more than 9.2 million people infected with Covid-19, the second highest count in the world. Since the pandemic began, nearly 135,000 have died, according to official data. It is likely the numbers are much higher. Added to this are the millions of people who have lost income and who now face increased poverty and hunger, in a country where even before the pandemic 50 percent of all children suffered malnourishment.
The pandemic has spread from major cities such as Delhi, Mumbai, and other urban centers to rural areas where public health care is scarce or non-existent. The Modi government has handled the pandemic by prioritizing the profits of big business and protecting the fortunes of billionaires over protecting the lives and livelihoods of workers.
To stand up against these attacks — many of which began even before the pandemic — farmers and rural workers have been protesting for several months. They joined the national strike this week, staging actions across the country. Small farmers from three major agriculture-based states in India marched all the way to Delhi to protest laws passed by Modi’s government that would allow for larger corporate freedom and industrial farming. They were met with tear gas and brutal repression by the police upon entering Delhi.
The nationalist and right-wing government has used the pandemic to intensify its persecution of Muslims and migrant workers. In New Delhi in April, migrant workers returning home after being stranded by the nation-wide lockdown were brutally hosed down with bleach used to disinfect buses.
Modi has also escalated his nationalist rhetoric, especially against China, in an effort to capitalize on the trade war between the U.S. and China and deepen its strategic and military cooperation with the United States.
In the midst of the misery created by decades of neoliberalism and exacerbated by the pandemic, union leaders called the strike to allow workers to express discontent against the government. This one day strike demonstrated the anger of the working class and unity of farmers, workers and students. However, a one day general strike is not enough to impose all of the ambitious demands put forward by workers and farmers. The working class of India must fight to expand the strike, against the Stalinist-led union leaders of the Centre of Indian Trade Unions (CITU) and the All-India Trade Union Congress (AITUC), who try to reign in the anger of the working class with merely symbolic demonstrations.
Without a doubt, this massive coordinated action shows the great potential for unity in action of the Indian working class and farmers. It serves as an inspiration for workers all over the world to use one of our greatest tools against the capitalists: the strike.
Contraction of 7.5% in three months to September follows record fall the previous quarter
When the climate crisis is referred to as anthropogenic, I tend to think of two related but separate phenomena. On the one hand, there is the increase in greenhouse gas emissions since the Industrial Revolution which has contributed to a rise in global mean temperatures, leading to more extreme weather around the world. On the other hand, there are the man-made structures —physical, administrative, societal — which conspire to turn ‘weather events’ into catastrophes.
Cyclone Amphan, the most powerful storm to hit the Bay of Bengal in the 21st century, made landfall on 20 May. Videos from the ground showed apocalyptic scenes – winds of up to 185km per hour battering settlements of makeshift homes into oblivion, a terrifying five-metre storm surge, rivers overflowing their embankments. By the time it had made its way from the southern districts of West Bengal, including the capital Kolkata, through to northern Bangladesh and lost its intensity, it had left a trail of devastation in its path. Whole villages had been flattened, entire districts flooded, countless trees uprooted, many crushing cars and buses, power lines being toppled, leaving millions without electricity, as well as an incalculable number of deaths to wildlife and livestock.
The Bengal Delta is home to nearly a quarter of a billion people. A vast area of low-lying land on the Eastern side of the Indian Subcontinent, where the great Ganges, Brahmaputra and Meghna rivers and their thousands of tributaries flow into the Bay of Bengal, it is no stranger to powerful storms, yet this time things were markedly worse.
The world was two months into the COVID-19 lockdown when Amphan hit. In India this had caused a particularly acute crisis among the country’s 200 million migrant labourers and informal-sector workers – some of the most economically precarious people in the world, perpetually on the brink of destitution. When the central government announced a total lockdown on 24 March without plans to compensate workers for lost wages or provide them with food rations, millions found themselves stranded with no work and nowhere to stay, and had to make their way back to their home villages by foot. Some collapsed and died on the roadside. West Bengalis who survived the long trudge did so only to find themselves on Amphan’s frontline.
This triple threat of cyclone, coronavirus and a pre-existing socioeconomic crisis exposed deep fault-lines in the already fragile micro-economy of Bengal, not least in relation to the question of food security.
As with severe storms and floods, Bengal has a long-standing and intimate relationship with hunger and famine. While most people think of the famine of 1943, this was merely the last of numerous devastating famines during the period of British rule in India, many of which affected Bengal most adversely.
The first of these, in 1770, not long after the Battle of Plassey, resulted in the deaths of around 10 million people, around a third of the population of Bengal. It was partially the result of a directive by the British to stockpile up to six months’ worth of rice for their troops – in response to fears of shortage after crop failure due to a bad monsoon – carried out through martial appropriation from often impoverished peasants. The East India Company, having acquired revenue collecting rights from the Mughal court in Delhi, maintained, and even raised, tax rates as profound hunger descended upon the region.
As Vinita Damodaran notes, prior to British rule, the local economy of Bengal had developed many coping mechanisms to withstand crop failures. It was the erosion of this traditional way of life, with the advent of industrialisation and colonial rule, which turned what was essentially a local problem of scarcity into wholesale disaster. The area previously grew a variety of crops such as wheat, barley millets and poppy, both for subsistence as well as to safeguard against dependency on a single crop.
When the British arrived, they saw a vast region of fertile alluvial soil with a great capacity to generate surplus agricultural produce, leading to a change to monocultures of rice, as well as cash crops like indigo which have no nutritional value. Areas of Bihar and Bengal had artificial irrigation systems to reduce the impact of a shortage of rainfall, but these fell into disuse and disrepair under the British, as the local zamindars (landlords and revenue collectors) began shirking their responsibilities for their upkeep.
In Poverty and Famines (1981), Amartya Sen wrote that ‘starvation is the characteristic of some people not having enough to eat. It is not the characteristic of there being not enough to eat.’ Famines happen when an entire nexus of relationships he terms ‘entitlements’ (such as the ability to purchase, grow, or exchange one’s labour for food) finds itself in a configuration wherein large numbers of people are no longer able to procure food. These conditions manifested themselves time and time again over the course of the next 127 years, resulting in no less than twenty-five officially recorded famines in India.
As the British made further incursions into the countryside and forests of Bengal, they rapidly increased the commodification of land and natural resources, wreaking havoc on the traditional way of life and critical sources of food security, particularly for the tribal people who had previously resisted the worst effects of famine. This culminated in the famine of 1896–97, the worst since 1770, during which time the Bengal Famine Code was published as a guide for colonial administrators to identify signs of imminent famine. It included protocols such as regular reports on grain conditions, market prices and public health.
All such indications and protocols were entirely ignored in the 1940s, however, when British rule in India, particularly in Bengal, ended as it began – with a devastating famine which took the lives of between 2 and 3 million people. Janam Mukherjee states in Hungry Bengal (2015) that the prevalent narrative among Indian nationalist historians of the Famine of 1943 being entirely the fault of the British is too simplistic, and that it was the result of far more complex structures also involving the actions of wealthy Indians. While this is indeed the case, there can also be no doubt that decisions taken by the Churchill War Cabinet in response to the advance of Japanese forces played a major contributing role.
There was a combination of the relocation and storage of grains to be used for troops fighting in World War Two; a policy of denial, or scorched earth, whereby the British made vast tracts of agricultural land unusable in case the Japanese were to break their lines and enter India; and panic stockpiling, which made the price of rice shoot up drastically. Thus, when millions of the rural poor began flooding into the streets of Kolkata in late 1942, they were dying of starvation not due to a lack of availability of food so much as their own lack of ability to acquire it. This was compounded by the indifference not just of the British, displaying their Malthusian contempt towards the local population, but also the Indian capitalists who were making record profits in war industries, nationalist leaders more interested in their own political fortunes than the fate of the poor, as well as upper caste and economically secure Bengalis who saw the poor only from the distance of a profound class disparity.
And so, as we return to the present situation in Bengal, in the midst of COVID and the aftermath of the cyclone, prospects for food security look uncertain once again. ‘A survey was conducted by six non-governmental bodies between 28 April and 2 May to gauge the impact of the COVID lockdown on workers, mostly in rural India,’ Kasturi Basu tells me. Basu is an independent filmmaker and community organiser with Humans of Patuli, one of many activist groups which have emerged in order to provide relief to vulnerable people during lockdown.
The survey covered 5,000 families in 47 districts spread over 12 states in India. The results showed that 50 per cent of the families had reduced the number of daily meals, 68 per cent had cut down on food consumption, 84 per cent had fallen dependent on public distribution of rations, and 12 per cent depended on food distribution by volunteers and charity-based initiatives.
Encroaching seawater from the Amphan storm surge has also left great tracts of arable land salinised and therefore unusable for agriculture for several years to come. Additionally, India’s GDP has taken a tremendous hit of 23 per cent, and the entire country is facing its worst unemployment crisis since the 1970s. In communities like those in the Sundarbans – the world’s largest mangrove forest situated on the Bangladesh/West Bengal border, which in the decade since 2009’s Cyclone Aila has seen a great out-migration of working age people, particularly to South India, in search of gainful employment – the crunch is sure to be felt more severely than in most places.
To make matters worse, the state elections in West Bengal are due next year, and Narendra Modi’s far-right BJP have been making a concerted effort to come to power there for some time. Should a Hindu nationalist government which has shown a flagrant disregard for people’s lives be in charge of the state of West Bengal, which has a sizeable impoverished Muslim population and shares a long border with the Muslim-majority Bangladesh, at a time when up to 18 million people will potentially be made into refugees by rising sea levels alone, the possible results are almost too bleak to consider.
The worst outcomes of climate change will not arise from extreme weather events themselves, but rather from how capitalist societies fail to deal with them, and instead make them worse. When the Green Revolution came to India in the 1960s, at first in Northern India, and then later to the East, one of its express goals was the prevention of future famines. In some respects, the introduction of high-yielding variety seeds and a public distribution system of rations for the rural poor was successful, resulting in a sharp increase in food production by the 70s, which in fact outpaced population growth.
However, the reality remains that malnutrition is endemic throughout India, particularly in West Bengal. This is partially due to the fact that the Green Revolution prioritised the caloric intake of food over other nutrition, leading many people to subsist on a rice-only diet, one which has very little nutritional value. It is also due to the fact that even today, after all these years, many of the rural agricultural poor in Bengal have not been able to break out of the cycles of debt which have kept their lives perpetually balanced precariously on the edge of subsistence and hunger.
As with the industrialisation of India during British rule, similarly with the Green Revolution and later India’s market liberalisation, the changing economy and ecology of modernity has touched the population of Bengal with great unevenness.
‘Famine in the modern world often result when a structural order, already dependent on keeping a significant segment of its population perpetually on the verge of starvation, is confronted with a sudden shock such as war, natural disaster or economic crisis’, Janam Mukherjee tells me. ‘In that sense, one can’t say that famine ever really “ends” until the structures of disempowerment out of which mass starvation emerge end – because shocks and crises WILL come. Nowhere is that a more important lesson than in Bengal.’
Accurate data is difficult to ascertain in such a place, due to its sprawling landscape and the lack of infrastructure in the countryside, however present signs do not look at all hopeful for those living on the brink of destitution. We have countless history books from which to know the signs of an oncoming famine, but the real question is, when one does arise again, will anyone bother to take note before it’s too late?
Aranyo Aarjan is a London-based writer and core organiser with Global Justice Rebellion, a climate justice activist collective.
Here we are, on the 30th of April, with a recession around the world, where there are now millions of cases of coronavirus which has hit almost all regions, making it a pandemic. We also have an increasing number of deaths, particularly in the United States and Europe. The number of cases is also increasing in other parts of the world — in Latin America, Asia, and to some extent, also in Africa. Clearly, the disease is spreading across the world and it is not over yet. We need to analyse what it means and also how it is impacting the economy.
With this particular virus, the question that is often asked is if it is really like a flu or if it is no worse than a flu. We have the flu every year, at least in the northern hemisphere and also elsewhere, usually in the winter period. Lots of people die from the flu, particularly elderly people and influenza remains, among other diseases, important contributor to annual deaths in the world. Some people argue that the current coronavirus is much like the flu. The first thing to say is that all these pathogens including flu have become much more prevalent in the last decade or so because of the increasing connection between the human beings into the remote parts of the world including forests, which are home to wildlife, particularly wildlife that has held many of these pathogens for thousands of years.
Now through the inexorable expansion of human activity — logging, fossil fuel, exploration, urbanisation in general — these wildlife species carrying these pathogens have come much closer in contact to human beings. It is spreading through industrial farming of animals in closed areas, which has led to these pathogens transmitting themselves from the wildlife to industrial farmed animals into human beings. We know this particular virus started, it seems, in a wild life market or at least in an area around the wildlife market in Wuhan in Hubei province in China. This is not just the case of China but elsewhere also with the development of markets. But why are there wildlife markets? Often because poorer people find it difficult to get food from the industrial farming process and they look to other ways to provide them with sufficient food. Wildlife catching has also become a market under capitalism and has become more prevalent which has led to the risk that these pathogens will spread in human beings as they clearly have done.
And it is not like the flu. We look at the infection rate of COVID-19, its 2-3 times more infectious that the annual flu. It incubates over a longer period which is dangerous because it means we don’t know it is happening until it has already hit us and it has spread around. The hospitalisation rate for COVID-19 is much greater than it is for flu, maybe 6 or 7 times more. As far as we can tell, the fatality of infected people on a global scale is coming in after the lock down at about 1%, maybe a little less. But if the pathogen was to spread to the mass of the population at a 1% mortality rate, at a rate of infection 6-10 times more than the annual flu, then millions of people are likely to die.
Now, this disease and other pathogens have been brought to the attention of the governments around the world for some time. We can go back several years but the WHO has been warning the danger of these pathogens turning into pandemics around the world and infecting human beings. But governments have really ignored this. They have taken the chance that nothing is going to happen, and it is not going to be dangerous and they don’t need to prepare or spend any money on it. Just only in September the UN Global Preparedness Monitoring Board pointed out that preparation by governments is totally inadequate and a pandemic is coming, and unless they do something about it and get ready, the health systems are going to be overwhelmed and could escalate into a disaster. Well, here we are just a few months later in the middle of such a disaster.
At the same time, it is worth considering that over the last 10 or 15 years when these pathogens have become much more serious and spread on a pandemic basis, nothing is really being done to use resources to find out more about them and to prepare the vaccines that could save us from serious illnesses and diseases around the world. Vaccine is obviously the answer but there is no vaccine for this virus. A universal vaccine for influenza — that is to say, a vaccine that targets the immutable parts of the virus’s surface proteins — has been a possibility for decades, but never deemed profitable enough to be a priority.
Big pharma does little research and development of new antibiotics and antivirals, although this is what benefits public health. Of the 18 largest US pharmaceutical companies, 15 have totally abandoned this field. Heart medicines, addictive tranquillisers and treatments for male impotence are the profit leaders and very little attention is given to defences against hospital infections, emergent diseases and traditional tropical illnesses. Hence, part of the problem has not only been that the governments did not care, but also that research has not been done by the big capitalist pharmaceutical companies around the world because it is not profitable.
Sober-minded epidemiologists suggest that somewhere between 20% to 60% of the world’s adult population could catch this virus. The death rates are very dependent on the level of lock down, but is certainly coming in at around about 0.5 – 1% of everybody who is infected probably by the time we get to the end of it. While the exact death rate is not yet clear, the evidence so far does show that the disease kills around about 1%, making it ten times more lethal than the annual flu.
That sort of level of cases and hospitalisation is overwhelming or likely to overwhelm most healthcare systems in the world as is proved to be the case, because they will have no capacity for dealing with this. No testing, no contact and trace, and no ICU beds sufficient to deal with a huge increase in the number of people becoming ill and needing hospital treatment, particularly old people who can hardly move very much. Since there is no vaccine to combat it, nor any approved therapeutics to slow the course of its toll on the human body, current the situation could continue for some months or even longer ahead. Here is a graph (Fig. 1) which makes the point clearer.
Fig.1: Mortality Rates
The blue part of this graph is the normal annual mortality rate in various countries. And you can see how many people died in a year per thousand population in these countries. If this pandemic is allowed to spread without any containment, any control or without any protective measures, then the number would more than double in many countries or at least double the amount of people who would die. Depending on how far up the dotted white bit you can go to the top, you could have 35 – 50 million deaths in this pandemic. But of course, that is not what has happened. Health systems and governments everywhere have desperately tried to contain the impact of the pandemic. The little red block (in the graph) shows how successful they have been. If you take Spain or Italy, you can see they have not been that successful and the number of deaths has been way above the normal rates. In fact, only this week, figures are now coming out across the board in many parts of the world how much increase there has been in excess deaths over the normal annual deaths, even with the lock down and containment policies.
Another argument presented often is that only the old and the sick die from this pandemic. 80% or more deaths are above 70 years and if you are a child up to 9 years there are no deaths. Right up until you get to 50 or so, number of deaths are very less, even among those hospitalised. Vast majority of people infected would show no symptoms at all and if they do it is very mild. So, what is all the fuss about, is the argument.
Let us leave aside the question of whether it is right to let the old and the sick die, which within the financial circles I work in, a lot of financial executives and people who advice governments and so on, quietly and privately, seem to agree upon. They argue that if all the old people and sick people died from the pandemic, we can boost productivity, because these people cost us money and they produce nothing. In some ways it would be better if they were “culled” from the world, so that we have a more productive human population. This is an old theory of Thomas Malthus from the early 19th century, that there was no way to improve the lot of the majority of people, because there were too many people and it was better to let plagues and other things “cull” all the unfit and you would have a more productive workforce. And that had to be done progressively.
This disgusting and grotesque theory still has an echo, even now, among people who claim that it does not matter if the old and sick die and we should do little about it and let the young people just be infected. However, that is not a view that is possibly politically acceptable for any government, and moreover health systems would be overwhelmed, disrupting their ability to deal with existing patients and people with other illnesses; and probably causing an increase in such secondary mortality rates (and this time in younger fitter people too), especially in countries more severely affected.
The efforts therefore have been to try and “flatten the curve”, as it is called. In other words, if you look at this graph (Fig. 2) the black line tells that if nothing is done, you are going to have a massive increase in the number of beds that you need compared to the red line at the bottom which is what most countries have got. There is a massive difference.
Therefore, you have to contain this in some way otherwise there will be people dying in beds outside hospitals all over the place. Containment can mean anything from social isolation, isolating and quarantining infected people and shielding the old, going further and start closing schools and universities down, to going all the way down to a total lock down of all economic and social activity and movement which is represented by the blue line that is the flattened curve. The latter means that the infections are reduced, spread out over a longer period and hospitals can therefore cope and therefore not many people will die. But of course, going all the way into a lock down is a serious disaster. If a country had full testing facilities and staff to do ‘contact and trace’ and isolation; along with sufficient protective equipment, hospital beds including ICUs, then containment along these lines would work — without significant lockdown of the economy.
Only a very few countries have been able to achieve enough testing. Countries that have done the best have used contact and trace and so on, and have been able to suppress the spread of this infection and reduce the cases. Some of the biggest countries of the world have done the least testing and are at the bottom of the table, as they did not have such testing facilities, and therefore have been unable to operate any testing basis. Also, they have not had the required hospital space because most health systems in the last 30 years have drastically reduced their spending on facilities and staffing in order to save money for governments so that they can spend it on other things such as weaponry or helping capitalists profit. They are not prepared to provide decent healthcare across the board. As a result, there is no spare capacity. Any crisis like this then just becomes overwhelming.
The only solution then is to flatten the curve by a huge lock down of everything that is moving. This graph (Fig. 3) produced by another Marxist economist in Greece, demonstrates the trade off now between lives and livelihoods as a result of this crisis. The more you flatten the curve on the health front (red to blue on the top part), the more likely you are to widen and increase the negative curve below for the economy (red to blue at the bottom part). Heavier the lock down to flatten the curve, the more you are going to have a recession and a collapse in the economy.
Lock down and economic slump
We are currently in a lock down and a slump. We just had figures earlier this week showing the United States down around about 5% in the first quarter and we have not even gone into this quarter which is going to be much worse. Europe too is down by 3 – 5 % depending on the country and we are going to see even worse figures. 2.7 billion workers are now affected by full or partial lock down measure, representing around 81% of the world’s 3.3 billion workforce, and they are now facing a massive reduction in their income and employment. Any sort of measure we have had from the IMF, World Bank, OECD and the private forecasters are projecting anywhere around a 5% reduction in the global GDP this year which will be way more than the global recession of 2008.
That was called the Great Recession, this will be even greater in its damage to the world economy. Outputs in most sectors will fall by 25% or more according to OECD, and the lock down will directly affect sectors amounting up to one third of GDP in the major economies. For each month of lock down, there will be a loss of 2% in annual GDP growth. This short could exceed any collapse in global output that we have seen in the last 150 years! IMF projects that over 170 countries would experience negative per capita income growth this year. This is how severe the situation is.
Of course, the hope is that the collapse will only be short. Just a couple of quarters and then everything will be brought into control and we can recover and go back forward. The stock market in the US is rocketing upwards for two reasons; i) US Federal Reserve has intervened to inject humongous amounts of credit through buying up bonds and financial instruments so that banks and institutions can keep their heads above water and, ii) they believe that this lock down will be over soon and then world economy will recover and it will be back to business as usual. We will see whether that turns out to be the case over the next few months. This is in stark contrast with the figures we are seeing about the collapse in the real economy in terms of national output, investment and employment, in all sectors. But the stock market thinks things will soon be fine and they are looking over the drop into the next mountain hoping everything will be up and away again.
The current situation is one of a huge supply shock. The following figure shows (Fig. 4) that this is not a financial collapse of the banks and the financial institutions like we had in the Great Recession. It starts on the other end, as a supply collapse. We have this so-called exogenous shock. I don’t think it is a shock because we should have predicted these pandemics and done something about it, but it led to a shutdown of normal life and manufacturing. This huge supply shock has now spread to demand because if you are locked down at home, you cannot spend any money or perhaps you haven’t got any money to spend. This demand shock could feed through eventually into a financial collapse with companies that cannot sell going bust and then banks who lend them money also getting into trouble. At the moment the central banks are trying to shore-up that bottom block (on financial shock) in this figure. But they have not been able to do anything about the demand shock or the supply shock which exist.
Above all, what this demonstrates, to bring a short quote from Marx, is that what matters in an economy is the workers working. As Marx said: “Every child knows a nation which ceased to work, I will not say for a year, but even for a few weeks, would perish” (Marx to Kugelmann, London, July 11, 1868). This is obvious now.
I live in the UK and work in the financial circles and I was trying to ask myself what are the important things that make our economy work and keep us going forward? Who are the workers that matter? Workers that matters are the health workers, the teachers, the drivers, the manufacturing workers, service workers of all sorts, retail shops and so forth. What occupations do not matter? Finance executives, real estate executives, hedge fund managers, advertising executives and marketing executives. When all these people stop work, we would not even notice. But when the workers that matters stop work, we really do notice. It is something worth remembering when you are thinking about who creates the value in our world, in order to provide for the things, we need and the services we require.
As mentioned, we have this massive lock down across the world and a huge loss in production in most countries if not all. The red section in the below graph indicates the loss of production that is taking place now. Even if the economy starts recovering in 2021, this loss can never be recovered. Once you have that loss of output, employment and incomes, the gap remains permanently. It is like digging a hole in a ground that you can never fill again. You just have to climb over to the other side and the hole is still there. All those resources are being lost to people around the world particularly the people who needed it the most, the poorest people.
In particular, it is the so-called emerging markets that are taking a real tumble. For the first time, since records have begun, the total amount what is called the emerging markets or developing markets in the world are going to see a slump, on average across the board. That includes China and India, for the first time. If we take out China and India out of the emerging markets, we get a relatively low growth rate. But now even including them, we are going to have a slump in this year coming through as a result of this collapse in the world economy and lock downs.
There has been a massive flight of capital away from the poorer countries (Fig. 6) who depend, in the capitalist system, on the inflow of capital from the big companies and financial institutions. The investors have taken all their money back to where they brought it from and something like a 100 billion dollars have disappeared from the emerging economies. This means they have no credit and facilities in order to expand and it adds to the danger of their own currencies, financial institutions and companies collapsing as a result of flight of the private capital, which is not being replaced by any public capital. The IMF and the World Bank is giving some money, but on the whole, there is no international coordination from the richer countries to help the poor counties in this crisis. They have just been left to fend for themselves and indeed the only way they get some money is by taking out more debt and loans which could put them in even more difficult problem later on as we shall see.
Millions of jobs have disappeared globally according to the ILO. The COVID-19 crisis is expected to wipe out 6.7% of working hours globally in the second quarter of 2020 – an equivalent of 195 million full time workers. The labour income loss is around 3.5 trillion dollars (maximum) in 2020. Hence, huge amounts of people are going to be pushed back into poverty. According to Oxfam, under the most serious scenario – a 20% contraction in income – the number of people living in extreme poverty would rise by 434 million to 932 million worldwide. The same scenario would see the number of people living below the US$ 5.50/day threshold rise by 548 million people to nearly 4 billion. Even at more acute level, we are entering a real danger of millions of people just being hungry, starving to death, in a way that should not happen in 21st century. It happens anyway as we have seen in years before (Fig. 7), but we are going to see a doubling of the number of people who are basically in a position of starvation over the next year or so.
There are some who argue that the lock down is solely to blame for the economic crisis. But we ought to realise that the capitalist economy on a global scale was not doing very well even before we got to this pandemic. It was on a sharp slowdown. Europe was more or less stagnant, Japan was in recession, many important economies in the global south like Argentina, Mexico, Turkey and South Africa were in a slump already and even the US was beginning to slow down to a very low rate.
It has been the longest expansion in the history of the US economy since the Great Recession ended in 2009 but it has also been the weakest expansion. Growth has hardly been more than 2% in the US, less in Europe and Japan, and only the emerging economies like India and China has had a reasonable growth rate. Most emerging economies have also had a very poor growth rate compared to the position before 2009. So this has been a very weak growth and it was beginning to come to an end. It was on a cliff edge.
From the graph (Fig. 8) we see that growth was beginning to slowdown, both in emerging and advanced economies, and then we had the pandemic and now it has just dived off the edge of that cliff. But it was already reaching there. I want to make that point because some claim that it was all just a bolt out of the blue. It is not, as most economies were getting weaker and they were not ready to deal with this pandemic.
If we take the US, something like a 10% fall in GDP over the next year or so as a result of the pandemic would happen at the minimum. That will be the largest decline since 1930’s and way more than anything seen even in the Great Recession of 2008-09 (Fig. 8).
Why have most major economies been weak? The answer in my view, something which I am always trying to bring home to people in my work, is that underneath the movement of outputs and incomes, the key question for a capitalist economy is whether it is profitable to produce, invest and employee people. That is the only reason they produce things. The big motor car companies around the world do not produce cars just because people want them, but they only produce if it makes profit for them to do so. That is the nature of the capitalist economy. They compete with each other to get a bigger share of the market and bigger amount of profit and they use their workforce to try and keep the cost production down as much as possible in order to make a profit, to accumulate that profit, partly to reproduce new things but also to have a good life and be a billionaire.
So, profitability is key to capitalism. Below figure (Fig. 10), shows the profitability of major economies over the last 50-70 years. You can see that on the whole profitability is really quite low compared to what it was back in the 1960’s. There was a big fall followed by some recovery during the last 30 years and workers really had to take a hit for it.
Now profitability was extremely weak as we led up to this crisis, and it suggests that they were in no position to cope with a major collapse in the health systems and economies. In fact, if we look at total global corporate profits (Fig. 11)and not just the amount of profits per investment (i.e. profitability), we see that the total amount of profits had ground to a halt in the major economies as we entered the pandemic. The world economy was already about to enter a slump of some proportion but now of course the pandemic has worsened the slump.
A part of the problem to overcome the low profitability was that the companies were borrowing more, increasing their debt, taking loans from the bank and trying to keep going particularly the smaller companies which had to take a lot of debt compared to the sales that they were making in order to keep moving. And that has increased the weight of burden on them. If anything should go wrong, they are left with huge amounts of debt. They have to pay and if they default, not only these companies will be in trouble but also the lenders. Emerging markets have seen a dramatic increase in debts while the growth has been slowing down. The point where the two curves intersect in the (Fig. 12) shows that most emerging economies are in serious trouble as a result of the pandemic.
Figures for India (Fig. 13) shows a sharp drop in profitability of Indian capitalist sector post-independence till the early 80’s followed by a recovery through globalisation and expansion of neoliberal policies. But also, since the Great Recession, levels of profitability have been generally depressed although in the first couple of years of the Modi administration there was a recovery as they applied measures to try and boost capitalist profitability at the expense of workers. But on the whole, the profitability is nowhere near as it used to be in the 1960s in India.
This means that even a country like India, which has been one of the more successful expansive emerging economies, has faced the same difficulties when it comes to profitability. We see that in the dramatic slump in the growth rate from 6-7% claimed by the government back in 2016-17 – although many argue these figures are not accurate. But now, even in the official figures growth just before the pandemic had dropped quite significantly to 4.7%, a very low figure by Indian standards over the last 10-15 years.
Here is a measure by the IMF only this last week (Fig. 14) where they expect India’s growth rate of 4.2% in 2019 to drop to 1.9% this year. I think that is probably optimistic but nevertheless that is a demonstration of how severe the effect of the pandemic, lock down and the collapse of the global economy is hitting India. Of course, they expect a recovery in 2021 but one has to wait and watch how it turns out. The green line in the graph shows how much has been already lost in the Indian economy as a result of this crisis.
Fig. 14: India’s GDP Forecast
Risk for India
The risk for India from COVID-19, according to me, still persists. Yes, it may be less than in other countries but even so, if 65 percent of the population gets infected without any vaccine or a lock down, even with a lower death rate (assuming 0.3% similar to Germany) because of the younger population, still 2 million people could die from this pandemic. Remember, only 0.8% of the population may be above 80 (nearly 75% are below 40), but they still face the real dangers of the pandemic. When people are so poor, it increases the likelihood that they will be infected and suffer severe illness or death from the disease. Many Indians, although young, if they are poor and are unable to have good diets or maintain a healthy distance, then they are also liable to be severely impacted by the virus. The rate of heart diseases in India is almost twice that of Italy and the prevalence of respiratory diseases is one of the highest in the world. India is also home to one-sixth of the total diabetic population in the world which increases its vulnerability of Indians.
Thus, India is not safe from the pathogen and anyone who says otherwise is not looking at the facts. Latest figures on the daily COVID-19 deaths in India shows that it is not really coming down at the moment. There is gradual increase in the number of infections and deaths per day and it is well up from where they were a month ago. There has been no mass testing in India and there are very few respiratory systems (40,000 for a total population of 1.3 billion), isolation beds (1 per 84,000 people), doctors (1 per 11,600 patients) and hospital beds (1 per 1826 people). Therefore, things are not under control in India yet.
India’s and upper-middle-class may be comfortably barricaded inside their capacious homes but the poorest and most vulnerable slum-dwellers live cheek-by jowl and are extremely vulnerable to contracting the infection. Not just the slum-dwellers but also the ordinary working people in Indian cities who have to live and work in small spaces are also at severe risk or catching the virus or losing their jobs. Sky high urban real estate prices mean plenty of working-class families, even those with two earning members, can only afford the tiniest of homes. India is one of the most unequal countries in the world when it comes to wealth.
Top 1% own more than 50% of the India’s personal wealth, and the top 10% hold almost 80%, which is only beaten by countries like Russia and Thailand on this list. India is more unequal in terms of wealth compared to the US which is the worst of the advanced capitalist countries. Number of people living in slums is over 100 million which is way more compared to other countries in South and Southeast Asia. This population is at risk at all times in this crisis.
What is the Indian government doing about this crisis? Here is a quick look at the figures from IMF (Fig. 15)which shows how much each country is spending both in providing loans and equity injections to banks and companies (in grey) and how much it spends in providing support for the households and health systems (in orange). India is right down at the bottom in terms of government spending. Only South Africa which is in a serious economic situation is lower than India in this graph according to the IMF.
The Modi government is spending little on the emergency. It has a combined state and central fiscal deficit hitting 10% of the GDP as against the budgeted 6.5% and is unwilling to borrow any more for emergency funds. That is because there is a huge debt to GDP ratio and at 70%, this is about the highest in its peer group. After this crisis you can expect the government to attempt to squeeze back the increase in debt that has taken place. The government needs to spend more but it is spending less than 1% of GDP currently on the crisis. I would leave this to you whether Kerala is doing better in terms of healthcare because it is what we are hearing in the Western media. According to reports the state is has the best healthcare system in the country and they have kept the mortality rate low and recovery rate high.
What is to be expected?
Finally, I would like to discuss what is going to happen. Are we going to return to normal after a few quarters as the stock exchange in the US believes? Here (Fig. 16) is an indication of how far away now the US economy is from its previous trends in the 20th century. When the Great Recession hit in 2008-09, the real GDP per capita fell and the recovery was much slower than the trend and there is no sign that it returned to trend at all during the period 2010-2020.
Similar trends were reported by the World Trade Organization (Fig. 17) which show that the trajectory of world trade fell after 2008 and after the slump they set on a new trajectory which was lower and weaker than the original trajectory. And with this pandemic we are going to slump again and quite like will have new even lower trajectory of world trade. When we come out of this crisis many economies, particularly those that depend on world trade – manufacturing and, selling commodities and services – would be severely affected and if there is no restoration of the global value chains, there will be no return to normal trajectory and we could remain on this low trajectory forever or at least till the foreseeable future.
That is why I consider the last ten years before the virus as a long depression as it was marked by low growth, low productivity and low wages in many countries. It looks as though we are about to enter another leg of this long depression. In the 19th century there was a long depression that lasted for about 20 years from 1870’s to the 1890’s (Fig. 18).It seems to me that we are about to enter another leg of depression that could last for another 10 years with low productivity, suppressed wages, weak growth, low investment, lack of jobs and training, and low income. The public sector will be under tremendous pressure to be squeezed by capitalism to pave a way out of this pandemic. That is the situation we are likely to enter in the next period.
To sum up just a few lessons we have learned.
First, it is capitalism that has generated this crisis and not nature as such. It is a combination of industrial farming, climate change and all the other things that have produced this pandemic.
Second, the market has failed to cope with this pandemic. Everywhere governments based on capitalist markets have failed abysmally, whether it is their pharmaceutical companies or their health systems marked by fund cuts. They have had to interfere in the most emergency and direct ways rather than prepare for this.
Third, COVID-19 has exposed that it is the workers who are most exposed to this infection. It is those workers whose jobs that are most undervalued by this system who we rely on the most, and not the ones making money on the stock market.
Fourth, with the total failure of private healthcare and big pharma, what we need around the world is coordinated free public health system, with mass public investment in research and production of medicines and vaccines, to ensure that these pandemics when they come again can be dealt in a much more efficient way with minimal loss of life.
Fifth, instead of bailouts of big business and banks, which is what the big economies around the world are starting to do, we need to take over these companies and plan them so that they don’t go back to the “normal’ of being driven solely by profitability.
Sixth, it is staggering to me that a company like Amazon, which is now making huge amounts of money, ten thousand dollars a second by delivering things around the vast economies is not publicly owned. This is a company that requires control by democratic decisions of the people. Besides, key services like mail, broadband, and social media should be public operated to meet the need of the people and not just make profits for the few.
Finally, above all, the debts of poor economies should be cancelled and profits from tax havens should be moved out in to governments so that profits of big MNCs can be used to improve and maintain public services.
These are the lessons we can learn from this crisis. This is not going to be an easy period and we are not going to come out of it very quickly. We in the labour movements and working people must recognise the things that we need to do and struggle for, once the lock downs and the pandemic is over, as capitalism will try to return to business as usual.