In 2011, Foreign Policy magazine named him one of the world’s top 100 global thinkers.

Published on

This dream of a hasty pivot away from oil is a response to the long-term depression of prices in the oil market, as part of the larger world recession that has put this oil-producing economy on shaky ground. The runaway deficit is also forcing the regime to cut subsidies and implement austerity measures that will only provoke more instability as Saudi workers are asked to foot the bill. All of this while the regime is still embroiled in the costly wars in Syria and Yemen.

Saudi Arabia is the world’s largest exporter of petroleum, and the state is heavily reliant on oil revenues. The state charges no income tax, and oil revenues normally account for upwards of 80% of the state budget, 45% of GDP, and 90% of export earnings. This cash cow allowed the backwards Saudi ruling class to reach dizzying heights of luxury and debauchery over the last century, living the life and renting out entire hotels in France for family vacations. All of this without ever making any real productive investment in the country. Manufacturing stands at a measly 10% of GDP, and even this insignificant number is the result of a previous government plan to “diversify” the economy. Most of that “diversification” is anything but: much of that manufacturing is in the petrochemicals industry.

Now the Sauds are in serious trouble. Oil prices have fallen from a high of $114 US a barrel in June 2014, down to $46.23 a barrel today. Even that is the highest it’s been in six months, provoked by a raging inferno that has closed much of Alberta’s tar sands in Canada. Hence the country’s deficit rose to $98 billion in 2015, up from $15 billion in 2014, and the government was forced to seek an $8 billion loan to help reduce the gap. For the first time, fuel and energy subsidies have been seriously scaled back and major cuts have been introduced, on the prince’s initiative. The beginning of the year saw the declaration of a 50% increase in fuel costs, $0.91 per litre, up from $0.60 per litre. The government has also declared its intention to introduce a value added tax of 5%.

With his father King Salman in ailing health, 30 year-old Prince Mohammad Bin Salman is de facto ruler, and he has pursued an aggressive economic and geopolitical policy to try to shore up the country he presumes he will one day officially lead, as well as his own position within it.

It is in this context that Vision 2030 has been thrown into the mix. It is not at all the original thoughts of Prince Mohammad, but entirely plagiarized. Its source is a paper produced in December 2015 by the consulting firm Mckinsey, which he hired. This original paper, Saudi Arabia Without Oil: The Investment and Productivity Transformation, calls for the usual recipe for countries in economic crisis. In other words, a programme of austerity and privatization.

The privatization is the golden parachute Bin Salman hopes will save the kingdom’s finances. The idea is to launch an Initial Public Offering of around 5% of the oil company Saudi ARAMCO, which they ambitiously estimate is valued at $2 Trillion. This partial sale of public shares in the company would raise billions of dollars, but is a drop in the bucket that only buys time considering the scale of the deficit. Moody’s already announced a review to consider downgrading Saudi debt in March of 2015. Other aspects of the plan are completely unrealistic. It calls for the private sector to increase from 45% to 65% of the economy, and for the kingdom to be able to “live without oil” by 2030. Where will all this new revenue be coming from? A massive sovereign wealth fund is to be set up from the IPO, and foreign Arabs and Muslims will have a “green-card” type system to be able to stay in Saudi Arabia on a longer term for the first time, and have some rights to own property and therefore invest. At the same time, it calls for a development of a national defence industry, raising the proportion of arms produced in the country from 2% to 50% by 2030. This is all wishful thinking, but the radical changes are required to make the attempt will be sufficient to raise the masses in protest against it. Already the cuts in fuel subsidies introduced in the new year have led to the removal of one minister after widespread dissatisfaction.

Further seeking to reduce the kingdom’s reliance on the oil market, Bin Salman sabotaged the Saudi representative at the Opec summit this weekend. Iran has come back onto the oil market after sanctions were lifted, and any deal to reduce oil production would have required an exemption allowing Iran to retake its seat at the cartel’s table with the same share of production as before sanctions. Ali al-Naimi, oil minister for the past two decades, went into the meeting very much prepared for a deal with Iran as well as for an overall cut that would attempt to raise prices again.

Instead, al-Naimi’s legitimacy was called into question by the Russian delegate as the prince very publicly rejected the very deal his representative was in the middle of negotiating. The deal fell apart and there will be no cut in production. The Oil Minister was replaced on Saturday by the Prince’s stooge Khalid al-Falih, chief of ARAMCO, and the post renamed Ministry of Energy, Industry and Mineral Resources. This firing through the media was an intentional insult, to strike a blow against Iran and against his own enemies in the old guard in Saudi Arabia and show who’s in charge. The signal sent: we can suffer low prices to weaken Iran. The other message being that the Prince is now firmly in control. The same Prince the German BND intelligence agency called dangerous for pursuing “an impulsive policy of intervention” across the region.

Prince Mohammad’s adventures abroad are costly, and introducing austerity while continuing to pour money and arms into these wars is a recipe for class struggle. Trouble lies ahead for this millennial jack-of-all trades who has also plunged the country into wars in Syria and Yemen in his attempts to push back against Iran’s rising influence in the region. Ironically, by concentrating all the major roles in his own person, Defence Minister, Chair of the Council for Economic and Development Affairs, and Deputy Crown Prince Bin Salman makes the links between the waste and slaughter of war abroad and the austerity at home an evident one. There is nothing subtle about it. For decades, the royals survived by financing others to do their dirty work, never gambling the kingdom in direct war. Salman bucked this trend and launched “Operation Decisive Storm” in Yemen, as well as the massive financing and arming of Jihadists in Syria. That style will do him no favours as he takes control of the country. Vainly republishing the austerity paper as his own initiative, for example, will also mean the inevitable hate that it incurs will be forwarded to the correct address. No faceless “experts” to hide behind. The same will go for directly taking control of one government department after another. But what comes down on the prince’s head will be brought down on the head of the whole wretched family he will come to represent.

When the people of this desert kingdom finally present their bill, “Saudi” Arabia will be no more, and the dissolution of the Saud family’s rule will be a quake felt all around the Arabian peninsula and the world. The turbulent times the kingdom is experiencing now are just a faint echo of what is to come.

Beef is a cheaper, protein-rich source of food for those who cannot afford the more expensive foods like goat meat, bird meat, and sea food. The ancient inhabitants of the Indian subcontinent were known to be eating beef even during the Vedic Period. Beef is regularly consumed by Muslims, Christians, Dalits, OBCs, Scheduled Castes, Scheduled Tribes, and other communities across the country, including groups in the North East. In Kerala, 60% of the population (including Muslims, Christians, and Hindus) relishes beef. In West Bengal, over a hundred tonnes of beef is consumed daily. The BJP-ruled state of Goa consumes about forty tonnes of beef daily; which is a glaring irony, as the BJP-ruled states of Madhya Pradesh, Rajasthan, Gujarat, Maharashtra and Haryana have enforced a ban on the possession and consumption of beef.

During the Constituent Assembly Debates of 1946-49 that were held for drafting and framing the Constitution of India, the rightwing Hindu fanatic members in the Assembly used pressure tactics to force the incorporation of a ban on cow-slaughter in the Constitution, by browbeating and cajoling their moderate fellow-members. To put pressure on Prime Minister Jawaharlal Nehru, false rumors were spread to portray him as a beef-eater. Religious sentiments and emotions were openly brought into play by the proponents of Hindutva, to prevail over the moderate members in the Assembly. It became quite clear that the demand for a ban on cow-slaughter was a clever ploy to stealthily introduce the Brahminical order of domination by upper-castes, promote the Hindutva agenda, and, dilute the secular aspects of India’s Constitution. Though Dr. Ambedkar made an attempt to re-draft and dilute the proposed wording of Article 48, the pressure from the Hindutva fanatics was overwhelming. Finally, he worked out a compromise for the inclusion of a ban on cow-slaughter in the ‘Directive Principles’, rather than in the text of the Constitution.

And thus, Article 48 in the ‘Directive Principles’ was written under the innocuous title, “Organization of agriculture and animal husbandry”. The relevant portion reads as follows,

Note that, Article 48 does not call for a ban on slaughter of cattle that have ceased to be of use as milch and draught cattle.  Also, though the real reasons and motivations behind Article 48 were clearly political and religious in nature, this fact has not been mentioned at all. Instead, the provision for prohibition of cow-slaughter was inserted and rationalized by couching it in economic terms.

Still not satisfied, various cow-protection groups continued to pressure the central government over several years, demanding a nationwide ban on cattle-slaughter. In November 1966, they staged a massive protest before Parliament, and clashed with the police, resulting in the deaths of 10 persons. The then Prime Minister Indira Gandhi sacked Home Minister Gulzarilal Nanda, who subsequently crossed over to the anti-cow-slaughter camp.

Sadly, over a period of 47 years, even the Supreme Court of India changed its stand, apparently, in keeping with the fascist times that we are living in. Earlier, in 1958, in a case concerning the constitutionality of cow-slaughter in Bihar, Uttar Pradesh, and Madhya Pradesh, the apex court had ruled that, keeping “useless cattle” alive would be a “wasteful drain” on the nation’s cattle feed, and, if slaughtered, the beef would serve as food for the poor. However, in 2005, in a similar case, concerning the constitutionality of cow-slaughter in Gujarat, the court disregarded its own earlier judgment, and ruled in favor of a total ban on the slaughter of cows and their progeny, regardless of whether the animal is useless or useful.

It is unfortunate that the law banning the slaughter of cattle has provided Hindu rightwing extremists with a convenient weapon to attack innocent people, and even murder them, by spreading rumors accusing them of possessing, or eating beef, especially if they happen to be Muslim. In the recent past, there have been incidents of lynching of innocent citizens on the mere suspicion that they were stocking beef, or smuggling cattle into neighboring states. Attacks on Muslim citizens (and Christian churches too) have increased after India’s Hindu rightwing party – the BJP, was elected to power at the centre in May 2014, with the Hindutva icon Narendra Modi appointed as the Prime Minister of India.

In March 2015, even the President of India Pranab Mukherjee chose to swim with the Hindutva current, by giving his assent to the Maharashtra Animal Preservation (Amendment) Bill, 1995, which his predecessors had wisely kept pending for 19 years. According to the amended law in Maharashtra, anyone found to be selling beef, or in possession of it, can be jailed for five years, and fined Rs 10,000 (In Haryana, the jail term is ten years). Obviously, these draconian laws have been enacted with the purpose of harassing and subjugating India’s beef-eating populations.

Not to be outdone, some Jain community leaders too have been stirring the communal cauldron, along with the ruling BJP in Maharashtra. In September 2015, a ban was imposed on the eating of chicken, buffalo and goat meat in Mumbai and the Mira-Bhayander municipal corporations. This was done by citing a Supreme Court judgment of 2008, that granted municipal corporations the power to impose a ban on meat slaughter during the Jain festival of Paryushan, (applicable to localities with a large Jain population). But surprisingly, no such ban was imposed on the consumption of fish and other seafood.

To make matters worse, the beef-ban has resulted in galloping inflation, with prices of other meats, eggs, pulses, and even vegetables, soaring across the country. This has affected even vegetarians. The booming export of carabeef (buffalo meat) continues to enrich the wealthy meat exporters in India. But there is no relief for the country’s poor and middle-classes, who are forced to pay higher and higher prices for their daily food.

India’s poor farmers too have been severely hit. The country has about 80 million old and unproductive cattle. Earlier, a farmer could sell such cattle for about Rs 25,000 per animal. But now, with the more stringent laws banning cow-slaughter, the farmer is unable to sell his cattle, as there are no buyers. The added burden of maintaining such cattle (about Rs 100 per day) is too heavy on the poor farmer, who is left with no choice, but to abandon them.  Already over five million stray cattle have been abandoned by their owners. Reportedly, the beef-ban has led to increase in cattle-smuggling, and, spurred a huge underground business, giving rise to about 30,000 illegal and unlicensed abattoirs across India.

The multiple misfortunes of bad weather, crop damage and insufficient agricultural incomes have forced farmers to commit suicide across India, and especially in Maharashtra, at a shocking rate. During the last 21 years (since 1995), more than 300,000 farmers have committed suicide across India, of which Maharashtra alone accounts for about 62,000 deaths. During the period 2004-15, the average of such deaths in Maharashtra was about 10 farmer suicides per day. The Maharashtra government’s decision to ban beef has affected nearly two million people (majority of them are non-muslims) whose livelihood depends on the business of cattle-slaughter and related products. Mumbai alone has lost business worth Rs 500 million daily.

In the domestic hide industry, the ban on cattle-slaughter has affected the livelihoods of an estimated 2.5 million poor people across India – mostly Scheduled Castes and Dalits. To add insult to injury, the government has allowed the import of cow/bull hide with zero per cent duty. Who are the ultimate beneficiaries of such motivated decisions? It also makes one wonder about the judiciary’s motivations in pronouncing judgments that unduly favor the rightwing BJP / Hindutva fascists.

The laws banning the slaughter of cattle vary from state to state across India. Of India’s 29 states, 24 have imposed restrictions and penalties of varying degrees, on the slaughter of cows and other bovine cattle. Obviously, the cows and bulls would be transported, (legally or illegally), to another state (or to a neighboring country) for slaughter, and export of beef. The beef ban is designed to further enrich the already wealthy beef exporters, while depriving millions of poor beef-eaters across India. The majority of meat exporters and owners of modern abattoirs are non-Muslims, some even operating under different company-names in different countries. As also, those in the business of dealing in related materials like bone, leather, horn, animal blood, offal, and other raw materials. The blood, offal, bones and tallow are used in making chemicals, medicines and soaps.

The key-accused in the Muzaffarnagar riots – BJP’s MLA Sangeet Singh Som, who once led the frenzied anti-beef protests, is himself the founder of one of India’s leading halal meat export companies – Al-Dua Food Processing Private Ltd. He is also an additional director in Al-Anam Agro Foods Pvt. Ltd. Some other prominent names in the business are: Arabian Export, of Deepak Tijori, Al Kabeer Exports, run by Atul Subberwal, Al-Noor Export, of Ajay Sud, Mahesh Jagadale and Co, Sujata Bones, of MK Deore, Dode Industries, Fine Exports, SK Leather, Ramesh Juneja & Sons, Bharat Leather, Woodland, Raymonds, Datta Soap, BS International, Sixth Sense, Natural Craft, Bounty Fashion Export, Kochhar Brothers, Ravi Exports, Kalia International, and Hindustan Unilever Ltd. – all engaged in beef and the business of associated raw materials and products. Some of those associated with the trade have different names and identities for different countries and regions. Like, Al Kabeer is ‘Samurai’ in Japan, ‘Falcon Foods’ in the UK, and ‘Tayebat Al Emarat’ in the UAE. It also owns other brands like Tabarruk, Cascade and Coral Reef.

The ban on cow-slaughter and eating of beef amounts to a slow, creeping form of genocide inflicted upon the poor people of India, by causing malnutrition, debilitation, and their attendant ills. The ban violates Article 21 of our Constitution that guarantees two rights – the Right to Life; and, the Right to Personal Liberty. It is high time the Government of India took urgent steps to lift the ban on cow-slaughter.

इंग्लैण्ड, आइसलैंड, ब्राज़ील, रूस, चीन, भारत, पाकिस्तान, मध्य-पूर्व आदि सभ देशों के धनिकों के नाम इस सूची में दर्ज हैं । अमिताभ बच्चन से ले कर डेविड कैमरून तक, फुटबाल खिलाड़ी लिओनेल मैसी से लेकर अदाकार जैकी चैन, रूसी राष्ट्रपति पुतिन से लेकर चीनी पार्टी के मेंबरों के नाम, सबके सब इन खुलासों के ज़रिए नंगे हुए हैं । इन खुलासों के सामने आने के बाद कई देशों में लोग इन राजनेताओं के खिलाफ सड़कों पर आ गये हैं । आइसलैंड के प्रधानमंत्री सिगमंडर गन्लाउगसन को तो जन-दबाव के चलते अस्तीफा देना पड़ा । इसी तरह इंग्लैण्ड में भी डेविड कैमरून को कटघरे में खड़ा करने के लिए लोगों का दबाव बढ़ता जा रहा है।

चूँकि इस सूची में अमेरिका के किसी भी प्रतिनिधि का नाम नहीं आया और जिस तरह मीडिया रूस और चीन को ख़ास तौर से निशाना बना रहा है, उस से इन खुलासों के पीछे के राजनीतिक हितों के बारे में भी सवाल उठने शुरू हो गये हैं। बहरहाल, हित चाहे जो भी हों, इस सूची ने पूँजीवादी ढाँचे की एक और घिनौनी सच्चाई को व्यापक करने में सहायता की है।

इस समय पूरे विश्व में 90 से अधिक ऐसे देश हैं जिनके अन्दर विश्व के परजीवी पूँजीपति अपना पैसा निवेश करते हैं और यह खुलासे केवल एक छोटे से देश पनामा के हैं । ऐसे देशों को ‘टैक्स हैवन’ कहा जाता है, मतलब कि इन देशों के अन्दर टैक्स-दरें बेहद कम हैं, इसीलिए विश्व के सब बड़े पूँजीपति, फ़िल्मी हस्तियाँ, खिलाड़ी, तस्कर आदि, अपनी कमाई को इन देशों में गुप्त रूप से जमा करते रहते रहते हैं । इस कारोबार को सुचारू रूप से चलाने के लिए कई फर्जी, कागज़ी कम्पनियाँ बनाई जाती हैं जिनमें यह पैसा ‘निवेश’ होता है । ‘मोसाक फोंसेका’ एक ऐसी ही कंपनी है जिसका काम अन्य कम्पनियों की पैदावार करना है! मतलब, पूँजीपतियों के पैसे को फर्जी कंपनियों के माध्यम से ‘निवेश’ करवाने के तरीके ईजाद करना है। इस सारी प्रक्रिया को पूँजीवादी न्याय व्यवस्था बिलकुल जायज मानती है,उदाहरण के लिए, पाकिस्तान के प्रधान मंत्री नवाज़ शरीफ का नाम आने के बाद उसका बचाव करते हुए पाकिस्तान के सूचना मंत्री ने कहा कि, “सब को अधिकार है कि वह अपनी संपत्ति के साथ जो मर्ज़ी करे… यह पाकिस्तानी कानून के अनुसार व अन्तराष्ट्रीय कानून के अनुसार कोई अपराध नहीं है”। इस मंत्री ने पूँजीवादी व्यवस्था की क्रूर सच्चाई को बड़े सीधे-स्पष्ट तरीके से बयान कर दिया।

इस पूरे मामले से दो बुनियादी सवाल उभर कर सामने आते हैं । पहला यह कि आर्थिक संकट के इस दौर में विकसित देशों की सरकारें खर्च घटाने की नीतियों को लागू कर रही हैं, स्वास्थ्य सुविधाओं पर खर्चा लगातार कम किया जा रहा है, बच्चों के लिए प्राइमरी स्कूल खोलने से सरकारें इनकार कर रही हैं, पेंशनों पर हमले किये जा रहे हैं, लाइब्रेरियाँ बंद की जा रही हैं और सरकारी इमारतों/संग्रहालयों को भी नीलाम किया जा रहा है, और यह सब पैसे की कमी के बहाने किया जा रहा है । टैक्सों का बोझ आम जनता के ऊपर लादा जा रहा है । वैसे तो पहले ही आमदनी के ऊपर लगने वाले टैक्स से सरकार की आय बहुत कम होती है, ऊपर से यह धनी पूँजीपति इसी टैक्स को बचाने के लिए अपनी पूँजी इन ‘टैक्स हैवन’ में ‘निवेश’ करते हैं । एक तो पहले ही सरकार उनको तमाम तरह की रियायतें देने के लिए आम जनता के टैक्स में से बड़ा हिस्सा खर्च करती है और जब इन सहूलतों का इस्तेमाल करके यह पूँजीपति बड़े मुनाफे कमाते हैं तो उसमें से टैक्स देना भी गवारा नहीं समझते!

‘टैक्स जस्टिस नेटवर्क’ के एक अध्यन के मुताबिक इस समय विश्व-भर की कुल संपति का 8.13% हिस्सा इन टैक्स हैवन्स में लगा हुआ है जो तकरीबन 30 खरब डालर बनता है और इस आँकड़े में भी लगातार इजाफा होता जा रहा है । यदि इस आँकड़े को सन्दर्भों में रखकर देखें तो बेहतर समझ आयेगा –

* यदि पूरे विश्व में से गरीबी को ख़त्म करना हो तो 20 साल तक के लिए सालाना तकरीबन 175 अरब डालर की ज़रूरत पड़ेगी। इस तरह कुल खर्चा (लगभग 3,500 अरब डालर) टैक्स हेवन्स में पड़ी संपति का तकरीबन नौवां हिस्सा ( 1 खरब = 1,000 अरब) ही बनता है ।

* यदि विश्व में से भुखमरी को ख़त्म करना है तो हर साल तकरीबन 30 अरब डालर की ज़रूरत है, मतलब इन हेवन्स में लगी रकम का 1,000 वां हिस्सा ।

* विश्व की 40% आबादी के पास पीने वाले साफ़ पानी की भी सुविधा नहीं है । विश्व के सभी लोगों को साफ़ पानी मुहैया करवाने का खर्चा 10 अरब डालर सालाना है, मतलब टैक्स हैवन्स में लगी रकम का 3,000वां हिस्सा ।

लेकिन ये सभी सिर्फ आँकड़े हैं जिनके साकार होने की गुंजाइश इस पूँजीवादी ढाँचे के भीतर नहीं है क्योंकि स्वास्थ्य सुविधाओं को मुनाफे पर बेचकर, लोगों को बीमार रखकर ही तो यह मुनाफे पर टिका प्रबंध चल रहा है । इस लिए शासक वर्ग खुद कभी यह सारे खर्चे करेगा, इसकी कोई संभावना नहीं क्योंकि ऐसा होने से पूरे पूँजीवादी ढाँचे की बुनियाद हिल जायेगी।

दूसरा सवाल जो इस पूरे मामले में से उभरा है वह है इस समस्या के समाधान का । कई लोगों का मानना है कि अमीरों के ऊपर टैक्स दरों को बढ़ाकर और सख्ती के साथ वसूलने का नियम बनाकर इस समस्या को सुलझाया जा सकता है । लेकिन आज के वैश्वीकरण के इस संकटग्रस्त दौर के अन्दर ऐसी कल्पना करना भी बेकार है। अमली तौर पर ऐसी किसी योजना की अव्यवाहिरिकता हमारे सामने फ्रांस की मिसाल के रूप में मौजूद है । फ़्रांस के राष्ट्रपति फ्रांस्वा ओलान्दे ने 2012 के अपने चुनाव प्रचार के दौरान यह वायदा किया था कि वह चुने जाने पर उन पूँजीपतियों के ऊपर 75% टैक्स लागू करवायेगा जिनकी आमदनी 10 लाख यूरो सालाना से अधिक है । पूँजीपतियों की ओर से यह कहकर दबाव बनाया गया कि ऐसा होने की सूरत में वह फ्रांस में अपने व्यापार को बंद करके अपनी पूँजी दूसरे देशों में ले जायेंगे । इस दबाव के चलते पहले तो ओलान्दे इस दर को 50% पर ले आया और अंतत: इस पूरी योजना को ही ठन्डे बसते में डाल दिया।

इसका मतलब यह हरगिज़ नहीं कि अमीरों के ऊपर अधिक टैक्सों की माँग नहीं उठायी जानी चाहिए । ऐसी माँग बिलकुल उठानी चाहिए लेकिन साथ ही साथ पूँजीवादी ढाँचे के भीतर इसकी सीमा को भी समझना चाहिए । इसी तरीके से ही यह ढाँचा लोगों के बीच से अपनी सार्थकता खो देगा । चूँकि मौजूदा समय में बड़े स्तर पर कोई सच्ची क्रन्तिकारी पार्टी मौजूद नहीं है जो इस मुद्दे की अगवाई कर सके, इसीलिए इन खुलासों के बाद कुछ ख़ास नहीं बदलेगा। जिनके नाम इस सूची में आये हैं, उनमें से एक-दो को छोड़कर (और शायद वह भी नहीं!) किसी का बाल भी बाँका ना होगा और टैक्स से बचने का यह कारोबार पहले की तरह चलता रहेगा, ना केवल पनामा में ही बल्कि सभी जगहों पर । लेकिन इतना तय है कि आज के समय में यह पूँजीवादी ढाँचा जितना संकटग्रस्त है, यह लगातार ऐसे मौके देता जा रहा है जिनका इस्तेमाल इस को इसके अंजाम तक पहुँचाने के लिए किया जा सकता है । आज ज़रूरत है ऐसी क्रान्तिकारी ताकतों की जो ऐसे मौकों को समय रहते सँभाल सकें और लोगों के बीच इस गले-सड़े ढाँचे को और नंगा कर सकें।

फोटो: इंडियन एक्सप्रेस

Published on: May 29, 2016 @ 18:58

There are two important factors that have driven the big majority of bourgeois politicians in Brazil to move to remove Dilma, one is the serious economic crisis gripping Brazil and the other is the ongoing investigation into 60% of the present MPs in Congress, the Brazilian Parliament. By impeaching Dilma and putting her on trial, they hope to bury the investigations and escape being put on trial themselves. But first let us outline the economic crisis.

The Economic Crisis

Brazil was not affected in the same way as Europe or North America by the 2007-08 crash. In 2008 growth was 5.1%, which slowed sharply to -0.1% in 2009, and then recovered significantly to 7.5% in 2010. This followed developments in China, where in 2009 there was a significant slowdown in the rate of growth, then on the back of a massive public spending programme and huge pumping of credit, the Chinese economy recovered very quickly. This had the effect of shielding many parts of the world economy from the fallout of the European and North American crises. This explains the continued growth in many Latin American countries, Brazil in particular, who were trading on a big scale with China.

Until recently Brazil was booming, with an average GDP annual growth rate of 3.5 percent between 2000 and 2013, with the high point of 7.5 percent in 2010. This all ended in 2013 when the Brazilian economy came to a sudden halt with growth of only 0.1%, followed by a fall of 3.8% last year, with 2016 expected to produce a further fall of 3.5%.

In September of last year Brazil’s debt was downgraded to the level of junk by Standard & Poor’s, raising fears that Brazil could default. In response to this, the government announced a further package of austerity to the tune of $17 billion, on top of what it had already announced earlier in the year. In these conditions the Real fell by 30% against the dollar, fuelling inflation which rocketed to 7.4%. This has been eating away into workers’ real purchasing power. This high level of inflation means the Central Bank cannot ease up on the interest rate, which is what companies would require to facilitate lending and investment. In fact investment has been falling throughout this period. Thus, the only answer the government could come up with was to massively cut public spending and increase taxation, further exacerbating the economic slowdown.

While the economy was booming, the PT government could make some concessions, as could the bosses. The boom allowed the trade union leaders a certain room for manoeuvre as the bosses could afford to make bigger concessions than they would have otherwise been able to afford. With an expanding economy and with the PT in government that could reach deals with the unions, the right wing could tolerate the government, which, however, they never considered their own.

The economic turnaround in the economy has been dramatic. In the Sao Paulo region alone, an area with 40 million inhabitants, over 4000 factories have closed since this crisis erupted, with the announcement of the closure of this or that factory a daily news item. Official unemployment at the beginning of 2014 was 4.8%, but now it has shot up to 10.9% (March 2016) and is expected to continue rising to over 11% by June of this year.

China’s Slowdown Impacts on Brazil

The connection of the Brazilian economy to China has been like a double edged sword. On the one hand Brazilian exports to a booming China, plus Chinese investment into Brazil, were major contributing factors to Brazilian growth. But the flipside to this was also an opening up of the Brazilian market to cheaper, more competitive Chinese goods. The penetration of Chinese goods into the Brazilian market grew significantly from the mid-2000s onwards, and in some sectors this has led to the closing down of domestic producers with the consequent loss in jobs.

China has also been squeezing Brazilian producers out of their traditional Latin American markets such as Argentina and Chile. This has affected a range of industries and not just low-tech or labour-intensive products, but also high-tech sectors, such as electronic goods, mobile phones, etc.

“The Confederação Nacional da Indústria [the Brazilian bosses’ union] reports that over a quarter of Brazilian firms face competition from Chinese products in the domestic market, and that this rises to over 40% amongst large firms. More than half of Brazilian exporters compete with Chinese products in their export markets.” (Brazilian Manufacturing in the Face of Chinese Competition).

In periods of expansion, even countries with a lower level of labour productivity could find room in the world market for their exports, but in the period of severe global decline, the fittest survive and the others go to the wall. China in 2014 had a 7 percent rate of growth in productivity – it was 9.5 percent average between 2007-2012 – while Brazil only achieved 0.3% in 2014, down from 1.8 percent in 2013. [Source: Productivity Brief 2015]

This poses a huge dilemma for the Brazilian bourgeoisie. If they are to remain within the world market as an exporter of industrial goods they must cut back on the cost of production. For Brazilian capitalists to be more competitive in the world market they need to increase productivity through increased investment and so-called “reforms”, as The Economist has posed it, of “badly needed economic reforms”, by which they mean destroying the gains of the Brazilian working class won in decades of struggle.

China’s rate of investment last year – although beginning to fall – was around 46% of GDP, while in Brazil it was less than 20%. This reveals the weakness of the Brazilian bourgeoisie relative to the Chinese. At this rate the productivity gap between the two countries will increase even further, exacerbating the problems of the Brazilian capitalists.

The problem is that in conditions of declining markets, i.e. falling sales, the incentive to invest is even weaker. Therefore, the Brazilian bourgeoisie are forced to unload the burden of the crisis onto the shoulders of the Brazilian working class, which means attacks on wages, conditions, hours, etc., as well as an attack on the “social wage”, with cuts in spending on healthcare, pensions and education. This in effect means squeezing more out of the working class, extracting more surplus value, with a transfer of wealth from the workers to the capitalists.

This is an important element in understanding the impeachment procedure. Given what the conditions of the world market impose on the Brazilian capitalists, they require a hard-line, right-wing government, which does away with the niceties of negotiating with the trade unions. The bourgeois are on a war footing against the workers of Brazil. They are intent on taking away everything they have conceded in the past. This opens up a period of renewed and intense class struggle in Brazil.

Burying Corruption Investigations

As we pointed out above, the economic crisis, however, is not the only reason that has pushed the Brazilian bourgeois politicians to move rapidly to remove the PT from office. There is another very good reason: most of them are under investigation for one form of corruption or another in the famous Car Wash (Lava Jato) investigations of the Supreme Court.

Eduardo Cunha, a PMDB MP and Speaker of the Parliament, after facing investigations for corruption, together with many other MPs, had asked the government to put a halt to the investigations, but Dilma could not do this as it would have totally exposed her in the eyes of her own electoral base. Cunha did not make it any easier for Dilma with his constant reactionary outbursts, such as his homophobic statements about gays being part of the “devil’s work”. He is in fact an extreme evangelist reactionary. It was because of Dilma’s refusal to put a halt to the ongoing investigations against corrupt MPs that these reactionaries decided to move against her.

The line of the PT leaders was that a “coup” was being prepared, with the end of democracy, and that everyone should unite against “fascism”, against a return to dictatorship. Dilma’s impeachment was not a “coup d’etat”, as some have claimed. This was merely an attempt of the PT leadership to rally support for the government from within the labour movement. There is no fascism here and no impending end to bourgeois democracy. It is a manoeuvre within the institutions of the bourgeois state, which is seen by the masses as undemocratic. It is the bourgeois freeing itself of the PT in government in a moment in which they thought the collapse of popular support for Dilma would make this easier.

In reality the call for unity against fascism was an attempt to rally forces around the Dilma government and to allow her to continue with her anti-working class austerity measures, a programme that she was not elected on. She stood on one programme and once elected carried out the exact opposite. This exposes the sham of bourgeois democracy: you can promise one thing and then once elected carry out the opposite and the masses have no way of controlling the government.

This explains why the masses were not with Dilma. On March 18th there were up to 400,000 on the streets of Sao Paulo against the so-called “coup”, against impeachment, but those same masses were not supporting the government. March 18th was a reaction against the March 13th right-wing mobilisation for impeachment. It was counter-revolution on the streets provoking the forces of revolution. The anti-impeachment movement reflects a burning hatred of the workers and poor for the right wing, which has been constantly provoking them.

The right wing had the legal “technicalities” to proceed with impeachment. Last year Cunha, using his position as President of the Congress, asked Brazil’s Audit Court (TCU) to look into whether Dilma had “lied” about the 2014 budget deficit, and whether she had used money from state owned banks to cover the deficit, thus hiding how big it actually was.

This is why the right wing bourgeois parties were angry. By fiddling with the deficit figures, Dilma could present the economy as being in a healthier condition than it really was, and she used this in the 2014 presidential election campaign to narrowly defeat Aecio Neves.

The Audit Court declared that Dilma had in fact “lied”, and this gave the Congress the technical excuse which allowed impeachment to proceed. Interestingly, the Supreme Court is investigating whether Dilma actually took bribes from Petrobras, the big state-owned oil company, to fund her election campaign, but will only release its findings later this year. This would be a far more serious issue, but it is not being used in the impeachment proceedings. One is justified in speculating that the reason for this is that the big majority of MPs who voted for impeachment are themselves involved in this kind of corruption, so why lift the lid on this cesspit which might then attract attention to all the other similar cases the MPs are involved in?

The irony of this situation is that the PMDB, Temer’s party, was Dilma’s biggest government ally. Cunha is also of the PMDB. This party was presented by the PT leaders as a “progressive” party that the workers could trust. It shows that the bourgeois have decided they no longer need the services of the PT leaders and now that they have become unpopular, they are accordingly booting them out of office.

The point is that they could have found such a technicality to proceed against Dilma long ago. So why is it that is precisely now that all the bourgeois parties, both in government and in opposition, have decided to move in this direction? There are two very good reasons. One is the recent economic slowdown in Brazil and the other is to cover up a much bigger and more important corruption scandal that involves around 60% of the present MPs who sit in the Congress.

Thus, as Dilma could not play their game of covering up the corruption investigations against them, they have moved for very good personal reasons, to save their own political careers, in an attempt to cut some deal that will eventually bury the whole investigation.

Dilma’s and Lula’s Growing Unpopularity

What has added to the resolve of the right wing to remove Dilma has been her massive collapse in popular support, which ironically is due to her attempt to meet the demands of the bosses by imposing austerity.

In her 2014 election campaign Dilma, with the help of Lula, had tacked left, donning red T-shirts, and raising a left rhetoric against the right wing. To win the second round in October 2014 the PT leaders presented a left face, coming out against privatisations and so on. They claimed jobs, wages and social benefits were under threat if the right wing were to win the elections.

But once elected – with a slim majority – Dilma moved very quickly to implement austerity and carried out precisely what she had warned the right wing would do! Dilma started applying the programme of the bourgeoisie. She brought open representatives of the bourgeois into the government, such as Levi, a Bank director.

Impeachment is therefore not a move against “a Left government” acting in the interests of the working class. Dilma was already carrying out austerity. Last year she explained the need for a generalised belt-tightening. The budget deficit had reached 6.75% of GDP, doubling on the previous year, and she explained the need for cuts in public spending and that, “we must divide part of this effort between all sections of society.” In reality, this meant making the workers and poor pay.

Within just a fortnight of being elected – in October 2014 – she did a 180 degree turn and popular support for the government collapsed. According to the polling agency Datafolha, Dilma’s approval rating fell from 42% in December 2014 to 23% in March 2015, and the most recent popularity rating (March of this year) put her at a mere 11%.

While Dilma was announcing the need for austerity, a Supreme Court justice published the names of politicians to be investigated in connection with a huge bribery scheme at Petrobras, including many MPs and Senators, most of them connected to the government. This was also to involve Lula directly, who was caught in the corruption scandals.

The truth is that there was no real legal case against Lula in terms of direct involvement in corruption, but a judge went to the press, making statements on the case, and also had CEOs and other important company leaders arrested, and then offered them a deal that if they collaborated – i.e. if they accused the right people – they would get lower sentences. So they made confessions involving Lula. It was an absolute scandal in terms of due legal procedure, even from a bourgeois point of view.

Thus, in March of this year, Lula was taken into custody in a dramatic manner for questioning rather than being summoned, which would have been the standard procedure. Lula had, however, sought to be nominated minister by Dilma as a legal means of avoiding investigation. This gave the impression he did have something to hide and that he was using this as a ruse to escape justice.

It is worth noting, however, whether he has accepted bribes directly or not, that since Lula left office in 2011 he has made at least $20million in “conference fees”, in the same manner as Bill Clinton and Tony Blair who, once out of office, went around the world giving speeches in exchange for hundreds of thousands of dollars in fees. This is a “legal” means by which the bourgeois pay for services rendered by these politicians. It means Lula has accumulated huge personal wealth on the back of the movement of the Brazilian workers who built the PT from nothing out of the powerful movement of the engineering workers in the late 1970s. In these conditions, Lula’s popularity was also dented, although now that the right wing have manoeuvred so blatantly against the PT, Lula could be brought back in at a later stage and used in future attempt to calm the movement of revolt from below.

Background to the Present Scenario

This is the background to the impeachment proceedings. It was in conditions of a sudden sharp economic downturn and the falling popularity of Dilma, in early 2015 that the push for impeachment began. This was just a few months after her election victory. The first indication of how things were going to pan out for Dilma came on February 1st of last year when Eduardo Cunha defeated the PT’s candidate for President of the Congress.

This was still in the early stages and the main bourgeois party, the PSDB was not yet campaigning for impeachment. Their position was to wear down Dilma up to the 2018 elections and then go for an electoral victory of the right wing, which would have legitimised in parliamentary terms the formation of a right-wing government. They were thinking of a Venezuelan scenario, where eventually the right wing could “legitimately” win the elections.

This was in line with the position of the imperialist powers and also reflected the views of the more intelligent and farsighted section of the Brazilian bourgeoisie. The imperialists were concerned that impeachment could unleash forces from below. This has been confirmed by the widespread student movements that have been taking place before, during and since the April 17th vote. There have been protests in Sao Paulo of up to 20,000 and in Rio de Janeiro 100 schools were occupied by students, teachers and parents. In Sao Paulo during demonstrations eggs were thrown at the PSDB governor Geraldo Alckmin, an individual who is also connected to the arch-reactionary Catholic Opus Dei.

In the period between April and September of last year, the bank owners were also against impeachment, as were the industrialists in important cities like Sao Paulo and Rio de Janeiro, as they considered it “irresponsible”. However, things changed very quickly as Brazil’s economic crisis worsened, forcing the bosses to prepare for a serious offensive against the working class.

The fact is that the Brazilian bourgeoisie had lost control of their own political representatives, their MPs and parties. But eventually the Brazilian bourgeoisie was also forced to come down on the side of impeachment, although the imperialists through their mouthpieces such as the Financial Times, The Washington Post and so on continued to oppose impeachment and were very critical of the Brazilian politicians. They see impeachment and removing the present government as provoking the masses, taking away any legitimacy from any future government of the right wing, and raising forces from below.

In the meantime, the economic crisis continued to worsen, and the right wing came out blaming Dilma. This is the worst recession in Brazil since the 1930s. This further strengthened their resolve to go for impeachment. More and more right-wing politicians started to push for impeachment, for example Aecio Neves, the PSDB candidate in the 2014 presidential elections.

By the middle of 2015 street protests began to be promoted and organised by the right wing, through their control of the media. A big media campaign was launched about “corruption” and then the PSDB MPs also started shifting in favour of impeachment, and by September/October the whole party had shifted fully in favour. The official impeachment process thus began in December 2015.

It is important to pose the question: what layers of society are supporting impeachment? Those on the pro-impeachment demonstrations were mainly the base of the right-wing parties, middle class layers, extreme right-wing elements and so on. The social composition of the right-wing demonstrations was highlighted by polls carried out which revealed that less than 5% of participants earned less than five times the minimum wage.

The mood among the working class, on the other hand, was revealed in San Bernardo, a traditional metalworking industrial heartland, in the Volkswagen, Ford, General Motors, FIAT and other plants. In the workers’ assemblies two resolutions were put to the vote, one against impeachment and loss of democratic rights, which got unanimous support, and another in defence of the Dilma government, which was booed and whistled down. Not one factory assembly came out in support of the government. This confirms the correctness of the stance of the Marxists of the Esquerda Marxists in opposing impeachment while not giving any support to the government.

This stance of the workers can easily be explained if one remembers that Dilma had been cutting unemployment benefit, attacking pensions – increasing massively the number of years a worker has to work in order to be entitled to a pension – and cutting back on social security and healthcare!

Impeachment Proceeds

On April 17 the Congress voted by a big majority to impeach the sitting president Dilma Rousseff. The proceedings were orchestrated by Eduardo Cunha, the President [Speaker] of the Congress, an extremely corrupt politician. Prosecutors leading the Lava Jato (Car Wash) investigation into a huge bribery scheme at state-oil company Petrobras claim they have proof that Cunha had secret Swiss bank accounts to hide away large sums of money he had received in bribes.

Not long after the vote to impeach Dilma in the Congress, on May 4th, Brazil’s Supreme Court then suspended Cunha from his position as he is charged with “corruption, intimidation of lawmakers, obstruction of justice and abuse of power”. What is to be noted here is the role of the Judiciary throughout this whole process. They could have removed Cunha long ago, but they decided to leave him in place until he had pushed through impeachment in the Congress.

Cunha was then replaced by the deputy Speaker Waldir Maranhão who is also under investigation by the Supreme Court for money laundering and taking bribes, and being involved in the Petrobras scandal. Maranhão belongs to that minority of bourgeois politicians who came out against impeachment. He had ignored his own party line when he voted on 17 April against impeachment. This underlines the divisions that exist within the ruling class of Brazil.

On Monday, May 9th, Maranhão announced the annulment of the April 17th impeachment vote arguing there had been irregularities during the voting procedure. This sent Brazilian markets into a panic, with the Real falling by 4.6% on the day, and the Ibovespa stock benchmark falling by as much as 3.5%. This revealed that investors – or rather speculators – want to see the PT out of office as soon as is humanly possible, and any delay in the impeachment process could jeopardise this! Brazilian media began reporting that Maranhão had been pressurised by his centre-right Progressive Party, claiming that it had threatened to expel him if he did not revoke Monday’s annulment of the April 17th vote. Maranhao then did another about turn and revoked the previous annulment, all without explaining why!

In a last minute attempt to stave off impeachment, Dilma turned to the Supreme Court on Tuesday – again trying to involve the Judiciary – calling on it to block the scheduled Senate vote, but although the Attorney general had called on the Court to annul impeachment, it refused to do so and upheld the parliamentary proceedings, leaving the road to impeachment open.

Dilma will now be suspended while her trial proceeds and her deputy, Vice-President Michel Temer will take over as acting president, who will also nominate his own government. Opinion polls have shown that if Michel Temer were to stand in elections only 2% of the population would vote for him. He is a man of the super-rich and is hated by the mass of workers and poor in Brazil. The removal of Dilma, in spite of her widespread unpopularity, will be seen as completely illegitimate, and any government led by Temer will be seen as not having the democratic mandate of the people.

This is a very dangerous position for the bourgeois, and explains also the divisions among them. The economic situation requires stringent austerity measures, far worse than anything that has been introduced so far. In such a situation they require a government with the authority to proceed without unleashing class conflict from below. The advantages of the PT in government was its ability to hold back the working class, but in the recent period it had lost the authority it had within the wider layers of workers and poor. To have a government that is perceived by the working masses and poor as being illegitimate will make it far more difficult for the ruling class to proceed as it wishes.

This explains also the conflict between a wing of the Brazilian ruling class and the imperialist bourgeoisie which has been consistently against impeachment. The imperialists understand the powerful forces that could be unleashed from below, of the workers, the youth, the unemployed, the homeless, the landless peasants, once they perceive the government in office not be “legitimate”. This also highlights the fact that while Brazil remains an economy dominated by the major imperialist powers, it also has a local bourgeoisie – albeit a very corrupt one – which has its own particular interests. And this conflict of interests is an important element in understanding Brazilian politics today.

Something Moving on the Left

So what we have is a PT in long term decline, as the popularity ratings reveal. Many workers and youth are disgusted by what it has done in government. The party that was to defend them has turned on its own social base. This explains the present weakening of the PT both in terms of its active membership and its wider support within the working class.

The tragedy of all this is also that the trade union CUT leaders have not mobilised the workers. They have been collaborating with the government. The Congress vote to impeach Dilma in April pushed them – together with the PT leaders – to raise the idea of organising Workers’ Assemblies on May Day, but they then pulled back and preferred to go for rallies that were more like festivals and concerts.

Lula himself has been actively working to demobilise the anti-impeachment movement and has been particularly concerned about worker mobilisations. His line, and that of the PT tops, is one of conciliatory class collaboration and not class struggle. And they continue with this policy even when the bourgeois go for them personally!

It is clear that the workers and youth of Brazil are drawing conclusions from all the recent events. Brazilian capitalism is in crisis and is attacking the working class. The reformist leaders not only have failed to stop this, but have actually been instrumental in carrying out the attacks. Now they are discredited and the bourgeoisie is looking for another means of governing the country.

In these conditions we will see the bourgeois attempt to use the openly right-wing parties, some of them with direct links to the military dictatorship that came to power in 1964. This, however, will produce an equal and opposite reaction to the left, with worker and student protests erupting all over the country. Already yesterday, we some huge mobilisations, particularly of the youth, which are a taste of what is to come.

This opens room to the left of the PT, with widespread radicalisation taking place among workers and youth. But what force can fill the vacuum? At the moment the one party that has the potential to fill it is the PSOL, a left-wing breakaway from the PT, which in recent years has won some reasonable results such as the 28.15%, won by the PSOL candidate in Rio de Janeiro in 2012. The PSOL currently has five federal deputies. The Esquerda Marxista, the IMT in Brazil, is committed to strengthening the PSOL as a left alternative to the PT in decline. This can only be done by convincing the PSOL as a whole of the need for a total break with capitalism.

Greece shows how a small party on the left can be suddenly catapulted into becoming the main party of the working class. This is what happened with Syriza. But Greece also shows what can happen when such a party in government attempts to run the system, rather than abolish it. The bourgeois will prepare traps for the PSOL, which it must avoid at all costs. That is what the Marxists will be explaining patiently within its ranks.

This is the beginning of a new period, a new process that will see a sharp turn to the left of the most advanced layers, a situation in which the ideas of Marxism can gain an echo within the working class and youth. The comrades of the IMT in Brazil, the Esquerda Marxista are intervening in these events with their banners, slogans, leaflets and journals, taking the ideas of Marxism into the movement. When the situation changes so sharply, ideas that in the past struggled to make headway within the labour and youth movements, will now become very relevant and a powerful Marxist force can be forged in these conditions.

Photo: CNN

Published on: May 13, 2016 @ 05:21