Three years after the appearance of the first signs of the present economic crisis, the world continues to suffer its expressions and effects. The disruption in the economy of the imperialist powers, of the developed capitalist states, as well as of the dependent countries is undeniable. Quite a few economists and publicists at the service of capital, at the first relative signs of recovery in one or another sector of the economy of the most developed capitalist countries, mainly the United States of America, proclaimed the end of the crisis and the beginning of the cycle of general recovery.
We can analyze this in two aspects, that referring to the cyclical crisis in the framework of the general crisis.
The cycles of recovery are now short, weak and fragile; we can see this with the example of the fall of 2008-2009. After this, the small recovery at the beginning of 2010 in a few months has become a fall again, as clear expression of the influence of the cyclical crisis on the general crisis of capitalism. This is why there will be broader and more disastrous effects, like an earthquake that will affect the economic, political and social life in the whole world.
However, the bankruptcy of the Greek economy and similar difficulties in Spain, Portugal and Italy show that we are living in a time of greater deepening of the economic crisis of capitalism, whose political and social consequences are clear and promise greater difficulties for the system.
The capitalist circles are constantly trying to show that this crisis had its origin in administrative errors, in fiscal mishandling and the lack of ethics in governmental and financial circles that caused economic deficits or speculation. What is certain is that it is a crisis of relative overproduction of consumer goods and its root cause is in the contradiction existing between the social character of production and private appropriation of the goods and wealth produced, which is the fundamental contradiction of the ruling capitalist-imperialist system. As we stated in the document approved by our Conference in November of 2009: “The crises are inevitable phases of capitalist development, they are inescapable consequences of the capitalist mode of production characterized by unequal and anarchic development due to the search for profits and the conquest of markets; … the crises are the culmination of the contradiction between the productive forces and the mode of production that is manifested with the outbreak of the crises”.
Measures without effective results
To deal with the enormous problems caused by the failure of the banks in the U.S. and other countries, the bourgeoisie initiated huge packages of state aid to the financial and industrial sector that added up to about $24 trillion dollars, that is, the equivalent of 40% of the world’s Gross Domestic Product. Thus it avoided what could have been a general bankruptcy of the financial system, it stopped the fall of the world economy and caused a small recovery beginning in the second half of 2009.1
However, this process is weakening and various analysts, including agencies such as the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD), have warned of its deceleration over the next months, until the end of 2011.
World growth, according to the IMF, will decrease to 4.3% in 2011, compared to 4.6%2 for this year. For the economists at the UN the data are less encouraging; in May of this year they forecast a growth of 3% in 2010 and of 3.1% in 2011, warning of the weakness of the recovery. The Institute of International Finance, which groups together the great banks of the world, as well as the investment bank J.P. Morgan and the consulting firm IHS Global Insight also forecast a steeper decline in growth than the IMF, alluding to the severe reduction in the stimulus for 2011, a smaller growth in the manufacturing sector, the fiscal consolidation in Europe and the fall in consumer confidence in the United States and Europe to justify their increasing pessimism.
The forecasts of the IMF regarding the U.S. economy speak of a growth of 2.9% in the coming year, compared to an expansion of 3.2% this year; for the euro zone their forecasts speak of an expansion of 1.3% in 2011, compared to 1% this year. The prognoses for Great Britain say that this year its GDP will grow 1.2% (0.1 percentage points less than the previous estimate) and the growth in 2011 will be 2.1%. Of Japan, the country that “has had the poorest economic performance” for several decades and that contracted 5% in 2009, the UN says that its growth, which will average 1.2% in 2010 and 2011, “will continue to lack luster”. The so-called “emerging” countries will have better results in 2010: Brazil will grow up to 6.5%, China will expand somewhat more than 11% and India 8.3%, according to indications by the OECD.
It is anticipated that the Latin American economies will grow 4.2% this year, influenced by the demand for their raw materials and the high growth in Brazil, while in 2011 the growth will be 3.9%. As to Africa, the increase of its exports and the price of its raw materials will allow an overall growth of 4.7% in 2010 and 5.3% in 2011, according to the UN.
According to the United Nations Conference on Trade and Development (UNCTAD), the flow of foreign direct investment (FDI) in the world during last the three quarters of 2009 was almost unchanged, but it improved considerably in the first quarter of 2010 without reaching the levels of 2007 and 2008. “During the last quarter of 2009, only a handful of economies, among which were China, Hong Kong and Ireland, received more FDI than what they recorded, on the average, in 2007 ", says the report. According to the document, between December 2009 and March 2010, 63 countries implemented some kind of safeguard or protection for FDIs.
The crisis is taking place throughout the world, although there are countries and even regions that have managed to “avoid” important recessive falls, like the so-called emerging countries that have enormous sources of cheap labor power for capitalist exploitation and raw materials used for international trade.
The weak recovery of the most developed economies is a warning of serious social problems: unemployment, decline in levels of consumption, increase in poverty. The 31 member countries of the OECD need to create 17 million jobs to return to pre-crisis levels of employment, in December of 2007, an impossible number to reach in a few years, and still less within the framework of the prevailing system.
With regard to the crisis revealed a short while ago in Greece, the subject of state debt has been called into question. Before this was seen as a problem of the dependent and less developed countries, but today it affects the imperialist countries and it reaches previously unseen levels in relation to the GDP. The national debt of the U.S.A. ($15 trillion dollars) is equivalent to 90% of its GDP, while its annual fiscal deficit has reached 11% of GDP. The data for the whole of Europe is less: the national debt represents 76.3% of the GDP and the annual deficit is 6.8%. However, several European countries, individually, have higher percentage indices than those recorded in the United States: Great Britain 79.1% and 11.5% respectively; Spain 64.9% and 11.2%; Greece 124.9% and more than 13%, although the origin of the debt in this case is different. It shows that the European countries have exceeded the maximum deficit of 3% that they committed themselves to in the Treaty of Maastricht that gave rise to the European Union and the euro zone.
This enormous indebtedness3 is causing havoc and is breaking out in the most vulnerable economies, as is happening in Greece and is threatening in Spain and Portugal, which are not able to make their payments and are on the brink of default, increasing the economic problems in all of Europe and the world. In these circumstances the center of the crisis has shifted to Europe, but it is not limited to there; it has not lost its international character and a clear demonstration of this fact is the collapse of Wall Street on May 6.4 For the U.S. financial groups the European events made their hairs stand up, since the ten largest banks of that country, among them Goldman Sachs and J. P. Morgan Chase have enormous investments in Portugal, Ireland, Italy, Greece and Spain.
The meeting of the G-20 in Toronto, Canada (July 2010) were held in this framework. It was a public scene of inter-imperialist contradictions, of the different points of view between the U.S. and the EU to get out of the crisis. The latter, according to German chancellor Angela Merkel, fought for economic adjustment, while Obama defended further “economic support” for a time, at the risk of causing “a new economic downfall”. After pointing out that the recovery is still “uneven and fragile”, that unemployment is still at “unacceptable levels” in many countries and that the social impact of the crisis continues to be notable, the G-20 committed itself to austerity. Their main objectives from here on will be to cut the public deficit in half by the year 2013 and, at the latest in 2016, to begin repaying the enormous accumulated debt, though each country would define the mechanisms for this. Of course, diplomacy was not absent in Toronto and therefore they also speak in the Declaration about continuing to apply the “stimulus measures” in order not to undermine the growth.
To resort to fiscal adjustment, in present conditions, again places the world economy on the brink of a recessive relapse. The best way to confront the fiscal deficit is with high rates of stable growth, but the austerity defined in Toronto will cause the opposite. The financial bourgeoisie is seeking to ensure the recovery of its investments, even at the cost of causing a fall in production and state tax collections.
The crisis has been going on for almost 4 four years and the economic recovery is extremely fragile and, even worse, there are indications that a new relapse is taking place. Paul Krugman, Nobel Prize winner for Economics, compared the present situation with the so-called “Long Depression” of the end of the 19th century. Krugman said: “We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost – to the world economy and, above all, to the millions of lives blighted by the absence of jobs – will nonetheless be immense.” When one defines an economic crisis as a Depression one is entering a terrain which world capitalism has not traversed in many decades. A situation of this nature will raise to new levels the class contradictions and confrontations as well as the inter-imperialist contradictions.
The United States of America
In February of 2009 Barack Obama got the U.S. Congress to approve a “stimulus package” that contained tax cuts of $288 billion dollars, spending for education, health care and unemployment benefits of $224 billion dollars and federal loans and contracts of $275 billion dollars. This took place when the U.S. GDP was slumping into a “free fall” (in the first quarter of 2009 it fell 6.4%5) and was able to reverse the tendency, to the point that in the last quarter of that year there was a positive growth. But one can see that the effects of those measures are reaching their limit and, without implementing similar measures, U.S. imperialism could sink into stagnation for a long time. The question is if the government and congress are willing and able to do it.
It was not only the huge state package that allowed for this recovery. Its situation as a hegemonic imperialist power enables it to extract surplus value from all over the world and, being the master of the dollar, imposed as a world currency;6 it can issue dollars without any control whenever it considers it necessary.
One must also add that the bourgeoisie could place the crisis on the backs of the workers. In the last quarters, total wages decreased by 5% while the GDP grew 3.2%. From this we can conclude that the level of capitalist exploitation rose, since the productivity of labor power grew by almost 9% thanks to the increase in unemployment and reduction of wages.7 At the present time, more than 40% of employees work in low-wage service jobs; 24% of workers state that they have postponed retirement plans in the last year; and more than 1.4 million filed for personal bankruptcy in 2009, 32% more than in 2008, and in March of this year more people in the U.S. filed for bankruptcy than in any month since October of 2005, when the terms of the U.S. Bankruptcy Law were tightened.8
The United States is facing a serious social problem: unemployment, according to official figures, affects close to 10% of the population,9 but some studies say that those figures are altered and that the real figures are five points higher. This is a great problem if one takes into account that the economy must create at least 125 thousand jobs a month, but with the present rate of economic growth it will not reach 100 thousand new jobs each month. During this recession 8 million private-sector jobs were eliminated, a problem that has burdened the U.S. for several years due to the relative de-industrialization that it has been facing for 25 years.
Poverty has spread, about 40 million people in the U.S. (that is, 1 out of every 8 inhabitants) receive food stamps and, although this number represents an all-time record, in the near future things will be worse: the Department of Agriculture stated that in 2011 more than 43 million people will make use of that program.
Beyond the small results obtained at the end of 2009, the state rescue failed: the U.S. economy has not gotten out of the crisis. The enormous State debt and its huge financial commitments can make the fiscal deficit reach 14% of GDP. In governmental spheres they are discussing how to face the present situation and they are talking of reducing the public expenses or doubling taxes. If the national debt represents 90% of GDP, the total debt (government, corporate and personal) is 360% of GDP, a level never before reached, even during the Great Depression. In the United States not only have industrial companies and millions of jobs been destroyed, but the greatest debt bubble in history has been created.10
Another indication is the budget deficit that this year will exceed $1.3 trillion dollars,11 a little less than the figure for last year, but still the second highest deficit in the last 65 years. The subject is so complex that, for example, last March the Detroit authorities issued 20-year municipal bonds with a value of $250 million dollars, to compensate for a budget deficit forecast to be $280 million dollars. They warned that if financial conditions did not improve the city “could have to declare bankruptcy”. According to information in EconomicPolicyJournal.com, 32 states lack the funds to pay for unemployment insurance and therefore the federal government has been providing the funds to meet that requirement.
If the data on the budget deficit and indebtedness are chilling, one should know that to “save” the U.S. requires $6 trillion dollars. These are not good signs. Nuriel Rubintz, a world-renowned analyst who foretold the 2008 crisis, says that one cannot hope for an improvement of the situation in the U.S. economy before 2013.
The crisis shook the U.S. economy profoundly, its economic model (large internal consumption at the expense of the trade deficit and indebtedness, relying on its monopoly of world currency and its large economy, thereby promoting the flow of international capital into the country) does not have a future.
The “currency war” and the “export quota” that the U.S. is trying to impose, mainly on China and Germany, are its “remedies” to confront its great problem.
The bankruptcy of this economic model will also diminish the opportunities to create artificial demand, besides other results.
The policies maintained for decades that aim to lower real wages are now facing new dilemmas.
The crisis of 2008-2009 in the U.S. not only acts on the relation of capital to labor, but also leads to changes and shocks in the position of all classes.
The relative “tranquility” prevailing within the U.S. for the last 40 years is completely a thing of the past; therefore we can foresee that the class struggle and internal conflicts are heating up again.
The U.S. can use its superiority in the world economy only at the expense of consuming today its opportunities for the future. A concrete example of this is that the U.S. has begun to inject $600,000 million dollars into the market.
However, in the intermediate term, this change will make it difficult to maintain the position of the dollar as a world currency, but in the short term it may provide an opportunity for the economy to take a breather and to maintain the dollar. But it is in a dangerous position, since this loss in function of the dollar as the international currency is only a question of time. The crisis of 2008-2009 has given a new impulse to the unequal development among the economies of the capitalist countries.
The European Union
The year 2009 marked a drop for the European Unión (EU), as its economy fell by 4%, the worst figure since the Second World War, and its industrial production declined by 20%, leaving its industry at levels of the mid-1990s. The growth forecasts, as we stated above, are for 1.3% in 2011, compared with 1% this year. Among the countries of the euro zone Greece is experiencing a deep crisis, Spain and Portugal have resorted to cost cutting measures to maintain growth, while Germany and France have recorded tenuous expansions.
In England, the government ordered a cut of 100 thousand million Euros from the budget for social services, which led 20 thousand student youth to hold large demonstrations.
Some analysts hoped that the slight growth that the region is experiencing will serve to generate new jobs; however, unemployment continues to grow and, in March, it reached 9.6% in the EU and 10.1% in the euro zone, the highest rate in twelve years. There are 23 million unemployed in the EU (7 million more than twenty years ago), of whom 15½ million live in the euro zone. These numbers are expected to grow.
The highest levels of unemployment are in Spain (19.7% in general and 40% among the youth) and Latvia 22.3%; the lowest figures are in Holland (4.1%) and Austria (4.8%). France is suffering 10.1% unemployment and Ireland 13.2%.
Germany with 7.3% is the only country that has registered a decrease in unemployment for the year due to a program of reduction in hours of work (which avoided massive dismissals) and because it is benefitting from the Greek crisis that, among other aspects, caused the fall of the euro, by which they increased their exports.
Some 8% of the European population have jobs that do not let them get out of poverty and 80 million live just above this threshold. According to measurements of Eurobarometer, one of every six Europeans has trouble making it to the end of the month, with problems of paying bills for services of prime necessity such as electricity, water or heating or even buying enough food. The same agency maintains that there is a perception of generalized poverty that feeds the fear of a gloomy future.
The outbreak of the Greek crisis increases this uncertainty, but mainly it allows the workers and peoples to see where the policies of both Social-Democratic and neoliberal governments have ked to over the past few years. It has also put on the agenda the debate over what the European Union is and who benefits from its existence.
The EU and the euro zone, instruments of the financial bourgeoisie to defend their space and to confront U.S. capital, have been shaken due to deep internal contradictions. They include countries with unequal economic development and productivity. For the less developed (like Greece, Portugal or Spain) their integration has meant de-industrialization and the growth of sectors subject to conditions of the moment (tourism, construction, trade), making them much more fragile faced with the crisis, while the largest economies (like Germany and France) benefitted, for example, by forcing an over-indebtedness on the former.12
The existence of the euro as a common currency without the unification of the countries (an impossibility within the framework of capitalism due to contradictions among the bourgeoisies) causes fights that some describe as insurmountable and that have been seen in abundance during the present crisis. The EU and the euro zone are at risk and to save them the bourgeoisie has put into effect a joint package of nearly a trillion dollars to maintain the euro, affected by a continuous fall on the international currency market. But it had no effect, as the initial demand for the currency lasted a very short time.
Given that situation, Jean Claude Trichet, President of the European Central bank, stated in an interview with the German weekly magazine Der Spiegel that Europe is “without a doubt, in its most difficult situation since the Second World War, perhaps since the First. We have experienced and are experiencing truly dramatic times”. With surprising sincerity, he added that the support package for the euro was “just to gain a little time”.
The imbalances among the capitalist countries of the E.U. has been exacerbated to such a degree that countries such as Germany and France have proposed a revision of the European Stability Pact that will affect the sovereignty of the other countries, because it would prevent those countries that receive financial aid from having the right to vote in the European Commission, which will have political consequences.
In a scenario of this nature, the EU (with the intervention of the IMF) has proposed anti-crisis measures that have the approval of budget cutbacks (that will increase unemployment) and attempt to place the crisis on the backs of the workers and peoples. The first plans, before the G-20 meeting in Toronto in July, were applied in Greece and Spain and the response of the workers has been outstanding.
Clearly the bourgeoisie did not expect such a response; in Greece the working class responded with several general strikes and in Spain the repudiation also showed a general combative spirit. The slogan “Let the capitalists pay for the crisis, since they and not the workers are the ones that caused it” is resounding throughout Europe and is an example for the workers and peoples of the world.
The so-called emerging countries
Even though the crisis of capitalism is world-wide, it is clear that there are countries that could avoid certain problems of the magnitude in which they appeared in the main capitalist economies. That is the case of some of the so-called emerging countries, among which the situation in China and India stand out.
The results of the world economic growth in 2009 (as well as the projections for this and the following year) would have been worse if it were not for the rate of growth of China, India and Brazil. Last year the Chinese economy grew by 8.7%, India by 5.6% and Brazil by 4.7%, according to IMF data. Among the member countries of the BRIC (Brazil, Russia, India and China), Russia was the only one that ended the year with negative growth, that is, it shrunk by 7.9%. One must emphasize the undeniable potential of the BRIC: it includes 40% of the world’s population, produces 14.6% of the world’s GDP and, in the last years, its rate of economic growth was about 10% annually.
China has the highest growth index in the world, which has averaged more than 9.5% annually since 1978, the year in which it began a program of macroeconomic reforms to put it further on the road to capitalism. That uninterrupted economic growth allowed it to surpass Great Britain and France in 2005, Germany in 2007 and recently Japan, becoming the second largest economy on the planet (after the U.S.) with the greatest reserves in the world. This growth has rested on two basic pillars: the presence of huge foreign investments and the exploitation of an inexhaustible source of cheap labor power.
As in the West, once the crisis broke out the Chinese government injected $600 billion dollars to support to the industrial, service and agricultural and sectors and to promote internal demand, with which it was able to maintain economic indicators similar to those of 2008. However, like India, its growth slowed; its exports (which generate 80% of its income) were reduced by 25% during the first half of 2009. This phenomenon has also taken place during this year.
It is a fact that the weak recovery of the world economy does not help to bring about a greater economic growth for this Asian country; but at the same time, its levels of growth have positively affected the global economy.
Now the government is combining two policies: the elimination of economic stimuli (in spite of which it is maintaining its growth13); and, the promotion of 23 large infrastructure projects in the less-developed provinces in its western region, at a combined cost of about $100 billion dollars.
China is the main creditor of the United States, but it also has an industrial apparatus dependent largely on foreign, mainly U.S., capital. It protects itself from the volatility of the international markets and therefore it does not allow its currency to be freely exchanged (unless it is for reasons of trade and direct foreign investment), which has been a point of contradiction with U.S. Imperialism.
At the present time, in the capitalist world there is not a locomotive as the U.S. was in the past, because of its great difficulties; on the other hand China cannot assume that role because despite its great economic development, its production is not dedicated to its internal market, but is mainly dedicated to export.
In India a growth of 8.3% is anticipated this year, according to the OECD, and the government hopes for a rise to 12% in 2012. The development of its economy is favored by the low cost of labor power, and it is concentrated in the service sector, the automotive industry and the production and export of software, holding first place in the export of these products and computer services. An important point is the activity of mergers and acquisitions of companies that in the first half of this year reached an unprecedented amount, $47.8 billion dollars, an amount that surpasses the previous maximum, in 2007, by 48%.
Brazil’s growth is also based on a cheap labor force and large foreign investments, particularly from the U.S. and in the last years from China, which became its largest trading partner in 2009.14
Russia, the world leader in export of raw materials and hydrocarbons, will have a growth of 5.5% for 2010 according to the World Bank, pointing out that this accelerated growth is conditioned by low initial indicators.
The economic crisis has again confirmed that these countries depend, to a great extent, on the more developed capitalist countries. The ambitious plans of the governments of these countries are in doubt in some cases and, in others, have not been reached.
Although the growth rate has also been losing steam in the so-called emerging countries, for the moment their declines are moderate and they are taking place from a relatively high point. In the global economy there are now two concerns: in the developed capitalist countries, they are worried about a possible relapse because of the slowness of the growth; in the emerging countries, they are worried about the possibility of overheating the economy because of their high levels of growth, that they could show itself in financial problems.
The fast growth rate of the emerging countries will cause a change in the relation of economic forces on a world level by 2030. According to a study by the OECD, its 31 member countries “will represent no more than 43%” of the world economy by that year, while they now represent 51% and in 2000 they represented 60%; for their part, the emerging countries will constitute 57% of world GDP by 2030.15 This change began in the last decade but it was accelerated by the present crisis.
Latin America and the Caribbean
The effects of the crisis in Latin America and the Caribbean were evident, since the data for 2009 show of a decrease of 1.8%. According to several studies, their recovery for 2010 and 2011 will be significant; for the two years it is expected that their GDP will grow at a rate of 4%, according to IMF estimates made in April, although this would not reach the level obtained in 2008 (4.3%). ECLAC [Economic Commission for Latin America and the Caribbean] is more optimistic and says that the growth for this year will be 5.2%, but for 2011 it will fall to 3.8%.
The unevenness in the growth of the countries of this region is high: Brazil, Uruguay, Paraguay and Peru are at the highest level, while Venezuela appears to be the only country in South America with a negative growth (–2.6%) for this year, a situation that it shares with some countries of the Caribbean and with Haiti that will fall by 8%, affected by the earthquake of last January.
The regional growth is maintained both by external demand and internal demand and the policies of state support. Given the dependent character of these countries, their recovery does not take place in correspondence with what is taking place in the more developed economies of the world that impose prices on raw materials and limits to the volumes of exports. The repercussions of the European crisis is manifested not only in the volume and price of the exports, but also in the amount of money sent home by the migrants. In Ecuador, for example, the amount sent home from Spain represents nearly 3% of the GDP of that country.
Latin America is an area of economic dispute, mainly among the U.S., the European Union and China. The U.S. has had and still has economic and political control of the region, but the changes taking place and those that are to come are clear. China is becoming the strategic partner for Latin America and, according to ECLAC, if it continues its rate of exports from the region to their main destination markets in the last decade, China could displace the European Union and approach the United States. In 2009, sales to China represented 7.6% of the total and it is expected that in 2020 they will represent 19.3% (for that year exports to the EU will constitute 14%), mainly at the cost of the persistent fall of sales to the U.S. that will diminish to 28.4% in 2020 from 38.6% in 2009.16 In regard to imports ECLAC thinks that China could surpass the EU and the U.S. in 2020 as the origin of imports to the region.
The investments that China is making in Latin America are enormous. In 2004 it announced investment projects of a total of $100 billion dollars by 2015, concentrated mainly in Argentina, Brazil, Chile, Colombia and Venezuela. The flow of Chinese capital to the whole planet increased and in the case of Latin America it grew some 70% in last the two years, according to official figures.17 The investment projects are concentrated in raw materials, exploitation of copper, petroleum, iron, in the transport sector and manufacturing industry.
Africa
The world-wide crisis of capitalism has led to an increase in hunger and poverty, in Africa in particular. According to a 2009 report of the United Nations Development Program (UNDP), of the 24 countries with the lowest rates of development in the world, 22 of them are African countries and all of them are sub-Saharan. About 16 million people live on less than $1.25 dollars a day.
However, for the IMF the economic recovery of the continent is showing a “good pace” overall, although to quite different degrees. For the countries of the Middle East and North Africa it forecasts a growth of GDP of 4.5% in 2010 and 4.75% in 2011, for which the increase in the prices of raw materials and greater external demand would cause an increase in production and exports.
This year sub-Saharan Africa could have a growth of 4% and in 2011 of 6%. This would be the result of the application of counter-cyclic policies and the “relatively limited integration of most low-income economies into the global economy and the limited impact on their terms of trade”.18 This being the case, it is not less certain that the problems of the world economy negatively affect the development of these countries.
Africa is a continent that is the object of great interest for the imperialist powers faced with the redivision of the world, its geostrategic position relating to the routes of distribution and transport of hydrocarbons to the imperialist metropolises makes this continent a zone of dispute.
The deepening of the crisis of the world imperialist system has the following consequences for the African continent:
1. – The sharpening of the contradictions among the different imperialist powers in looting Africa in the framework of the fight for the distribution of the world.
The old colonial powers, such as France, Great Britain, Spain and Portugal, are losing influence in the continent; the failure and crisis of neocolonialism, mainly of France, is clear and the neocolonial regimes established by France are suffering the rejection of the peoples.
U.S., imperialism, China and regional powers such as India, Brazil and Iran, are intervening significantly in the African continent.
2. – The African continent, which is rich in raw materials, oil, uranium, arable land, among other wealth, is a zone of great interest for the monopolies, if one takes into account that the relative weakness of French imperialism no longer leaves it with the means to apply its neocolonialist policy.
The crisis is striking the African States, forcing their corrupt leaders to hand themselves over to other imperialist powers, fomenting predatory wars that appear as inter-ethnic wars.
The African workers and popular movement is facing important struggles for their economic and political demands and is trying to overcome the weakness in the structures of the democratic and revolutionary movement.
Africa as a whole is bringing together conditions for the revolution, but the limited development of the subjective conditions does not yet correspond with the mature objective conditions. The formation and development of the Marxist-Leninist parties are an urgent necessity to push forward the struggle of the working class and peoples for their national and social liberation.
The workers and peoples are responding to the crisis by mobilizing
After using several trillions of state dollars (that is, resources that are the property of the workers and peoples) to rescue the financial sector and the industrial companies, now the bourgeoisie is picking the pockets of the workers with adjustment measures for the recovery of the system, in order to guarantee that the capitalists' businesses do not go into bankruptcy and to increase their profits.
Such packages correspond to the well-known neoliberal logic of the International Monetary Fund and World Bank applied for almost three decades, which have led to the greatest impoverishment of the working masses throughout the planet. But the European working class has responded by confronting the adjustment plans with general strikes and great mobilizations in Greece, France, Spain, Germany and Italy and is raising the slogan: “Let the capitalists pay for the crisis, they are the ones responsible for it, not the workers”.
At the present time the European workers movement is giving examples of its political recovery and is now a reference point of struggle for the workers of the world. These fights show the role of the proletariat which has the main contradiction with the capitalist system. There is also the fighting response of the immigrant workers – documented or undocumented – against the xenophobic and racist policies applied by the European Union, and who are also victims of the adjustment plans.
In the U.S. the protest of the immigrants is growing against the laws that penalize “illegal” workers, like the one approved in the state of Arizona. An important mass movement is being built around this – one that goes beyond the border of the U.S. – and that counts on the solidarity of the U.S. workers.
Mexico has been, and continues to be, the scene of massive protest actions of state and private sector workers, and of teachers in particular.
In the rest of Latin America, the struggle of the masses has similar and even greater significance. The recovery of the Argentine labor movement is well-known. In Chile the fight of the student youth against the plans to privatize education is growing, as is that of the teachers for similar reasons and for particular economic demands, the indigenous peoples are raising their voices and fighting to have their national rights respected. In Bolivia the struggle of the masses is moving in various directions: it is demanding that the government fulfill some of its promises that have not materialized and is confronting the conspiratorial and splittist movements and actions pushed by the oligarchy and U.S. imperialism. The Peruvian people are confronting a reactionary government that is wedded to the IMF, whose policy has cost the lives of several fighters. In Ecuador the people are disenchanted with a developmentalist government that has betrayed their aspirations and they are taking to the streets to confront it and to demand attention to their needs. Venezuela is the center of an acute political confrontation between the forces that support the government of Hugo Chavez in its progressive project and the right wing whipped up by Washington to put an end to the process. In Colombia there is also beginning a mass response to the policy of the reactionary group enthroned in the government that is seeking the support of the most backward forces of the planet on the basis of a criminal anti-insurgency policy.
The fight of the masses and the development of their consciousness have caused a change in the relationship of political and social forces in Latin America. An expression of this is the existence of some democratic and progressive governments that feel the pressure of the peoples to implement their proposals, they are striking blows at the ruling sectors and are adopting economic and political measures to break their dependency. Regarding this, united with the eagerness of some sectors to renegotiate the dependency, some initiatives are arising that affect some of the interests of the United States, such as the formation of UNASUR [Union of South American Nations] and ALBA [Bolivarian Alliance for the Peoples of Our America].
In Asia the struggle of the working class is spreading to several countries, particularly due to the miserable wages that they receive by exhausting work days. In China, Bangladesh, Cambodia, Vietnam, India, Indonesia, etc. millions of workers have mobilized or gone on strike in recent months. The textile workers of Bangladesh (who work for the transnational companies and are the worst paid in the world), after a long strike and violent protest demonstrations, have achieved a wage increase of 80%, which now allows them to have a minimum wage of $43 a month,19 although they wanted to get $75. In Cambodia the workers obtained an increase of 21% (from $50 to $61) after the pressure exerted by 273 of the most active unions that threatened to carry out a three-day strike in the whole industry. In Vietnam, hit by an inflation rate of 9%, last year there were 200 strikes and almost 10,000 workers at a Taiwanese shoe manufacturer went on strike. In Indonesia, in the beginning of the second half of this year, more than 40,000 textile workers carried out strikes in Bandung to oppose the increase in the price of electricity. In India, among the workers of Nokia (a Finnish firm), at Bosch (a German producer of auto parts), at Hyundai (from South Korea), at Volvo (from China) and at many more transnational companies the protests and unrest are increasing. Strikes and protests in China have involved millions of workers and won important wage increases20 that made some companies transfer their investments to other countries in the region – with even lower wages – where they are now also facing the fight of the proletariat against exploitation.
In Asia there are not only emerging economies, but also an emerging proletariat formed due to the movement of capital toward the region, which is now leading real social rebellions in some countries.
There are also big political and social conflicts in Africa. Reactionary regimes in several countries, supported by foreign governments, are carrying out criminal acts against their own peoples or fomenting ethnic conflicts in their own and neighboring countries. Fifty years after the beginning of the process of African decolonization, the development of capitalism on the continent has led to a new process of economic colonization. The eyes of the imperialist monopolies are on Africa to continue appropriating its mineral wealth and land, which is causing resistance and rejection by the workers and residents of the countryside.
As in the rest of the world, the African workers are also fighting. In Morocco, at the end of last year there was an important struggle of miners for wage increases. In South Africa, an indefinite strike paralyzed more than a million public workers, causing serious damage to the government of the African National Congress (supported by the revisionist Communist Party), there were also actions of struggle of 31,000 workers in the automotive sector. In Mozambique a popular revolt against the high cost of living, which lasted three days, beginning in the outlying areas of the capital, Maputo, reminded the whole country of the “hunger revolts” that took place in 2008. Similar actions took place in several countries, showing a continent in which the people are fighting against the crisis and for life.
One must emphasize that the youth contingent is present everywhere, in the midst of the general fights as well as raising their own demands. In Europe the youths are some of the main victims of unemployment; in the Americas they are active around the right to public education.
In general, throughout the planet the fight of the workers and peoples is gaining strength, causing changes in the relationship of political and social forces. The important thing is that in many places the revolutionary and socialist ideas are making headway and penetrating the consciousness of thousands of proletarian fighters. Their distrust in capitalism and the bourgeois politicians is growing and the search for economic, political and social change is taking shape.
Nevertheless, this does not mean that the bourgeoisie has lost the initiative. As in the past, faced with a crisis, sectors of the bourgeoisie are appealing to reformist talk and proposals; they speak against neo-liberalism and even against inhuman capitalism in order to continue to deceive the workers and to maintain the system of exploitation.
In the midst of the crisis and the discontent of the masses, social democracy is once again trying to present itself as an option “opposed both to a neo-liberalism that engenders more poverty and to Marxist socialism that eliminates democracy and the rights of the peoples”. The use of intermediate positions (the third way) has been a constant in the political history of the last century, and it is again trying to appeal to this. This third option has always been opposed to Marxist socialism and now the same thing is happening with proposals like those of the so-called “21st century socialism,” which is nothing more than a functional proposal of the prevailing system.
In these circumstances the ideological and political struggle is gaining strength that we Marxist-Leninist parties and organizations must carry out against social democracy, reformism and revisionism, which are trying to capitalize on the desire for change that is growing everywhere in the world. It is politically necessary to oppose these counter-revolutionary positions in order to advance in the process of the organization of the proletarian revolution.
The aggressive and rapacious policy of imperialism continues at a time of inter-imperialist struggles and confrontations
In the midst of the acute economic crisis that has overwhelmed the world, the inter-imperialist contradictions are present, not only in the methods that one or the other consider appropriate to avoid the problems but, mainly, because their desire for expansion and control of new markets and zones of influence defines the content of all their economic, political and military movements.
The United States of America continues to be the main imperialist power in terms of its economic, political and military capacity that, in the midst of opposed interests, has forced the other imperialist countries to support its political and military plans or to maintain a passive opposition, such as in the invasions of Afghanistan and Iraq. Its political control would not be possible without a powerful military apparatus in 140 countries of the planet, on more than 800 military bases.21
The aggressiveness of U.S. imperialism is its banner and it threatens to do the same to Iran and Korea as they did in Afghanistan and Iraq, it supports to the Israeli Zionism in its attacks on the Palestinian people.
Africa is a victim of U.S. imperialist aggression as well as that of the other imperialist countries of the EU and China. They stir up tribal and national conflicts and occupy territories and countries.
Latin America, considered the backyard of Yankee imperialism, is the object of threats and blackmail in order to totally subordinate the governments of the region and to stifle the patriotic and nationalist expressions that are running through the continent. It has put into action the Fourth Fleet of the U.S. Navy and has incited coups d’état.
The increase in U.S. military expenses, the development of science and technology directed at improving its military capacity, its self-proclaimed wish to maintain its world hegemony show that the ruling circles of the U.S. are determined to prepare a general military offensive.
Despite its military capacity, it is seeing its power and influence threatened by the action of other powers and blocs, such as the European Union and China. This latter is emerging forcefully and the U.S. is worried about that.22 In general, the so-called emerging countries are a cause of concern for the U.S., the EU and Japan. It is projected that, for the period 2020-2025, the share of the emerging countries in the World Gross Product will be almost 60%, of which 45% of that increase will be from Asia. This shows that there will be an important change in the relations of forces on a world scale in spite of the attempts of the imperialist forces to stop it.
Therefore the U.S. is forcing a redistribution of regions of domination and influence. The region of Eastern Europe, Western Asia and Central Asia has become a point of conflict among the U.S., Russia, the EU and China for control of energy resources. The U.S. is making investments there and providing economic and military aid to some governments that have been formed since the dissolution of the USSR. Other powers have done the same. Similar things are happening in the Middle East, a region trampled on by U.S. troops; also Africa, Yemen, Somalia and the Horn of Africa in general are “hot spots” of direct intervention by Yankee imperialism to control a region rich in petroleum and mineral resources exclude China and its European allies.
While the U.S. has established footholds in those parts of the planet, China is “quietly” expanding its economic presence in Latin America and Africa, at the cost of European and even United States capital. The EU is trying to extend its presence in Latin America (for which it is pushing for the signing of FTAs [Free Trade Agreements]) but it has run into the presence of a more agile and stronger competitor that is gaining ground.
The imperialist powers are fighting among themselves, but they are also collaborating with each other in many aspects and fields in order to impose the rules of domination of capital on an international scale, to confront the struggle of the peoples and what they call international terrorism.
For several years U.S. imperialism has been promoting the idea that the world is facing a war of civilizations, with which it is trying to justify its militarism and desire for world domination. The inter-imperialist contradictions are clearly visible on the planet; the great contradiction between the oppressed peoples and nations and imperialism; and the contradiction that characterizes the epoch, the one between labor and capital, between the working class and the bourgeoisie. All these are becoming sharper at the present moment; they are creating better conditions for the struggle of the working class and peoples and for the development of the revolutionary work that we Marxist-Leninists are carrying on for the triumph of the social revolution of the proletariat and the building of socialism.
The rule that imperialist capital has managed to establish throughout the planet, the proof of the cyclical crises of capitalism as intrinsic elements of that, the development of the struggle of the working class and peoples taking place throughout the planet confirm the Leninist analysis that we are living in the stage of imperialism and the proletarian revolutions. Therefore we reaffirm the strategic tasks that the international communist movement must fulfill and those that the political moment forces on us.
Our tasks
The reaction to the crisis has been expressed in numerous demonstrations of the working class and youth in the imperialist countries and in the whole world; although they have not gone beyond protests, the need for unity and organization, of building and strengthening their organizations, is growing.
The experience of the struggle of the masses nowadays shows us that the workers must turn their unions into centers of struggle and must form their political parties to confront the bourgeoisie and win victory. This reality places the responsibility on us to increase the level of work within the organizations of the working class.
The economic, political and social situation in the world today only confirms the state of decomposition of the capitalist system and the inescapable need to advance in the process of organizing the revolution to establish the society of the workers, socialism. We Marxist-Leninists take on this historical responsibility.
In seeking to fulfill this objective we are working to build a powerful revolutionary movement of the anti-imperialist and anti-capitalist masses, in which the working class plays the role of ideological, political and organizational leader.
The proletariat has the responsibility – and also the necessity – to attract to its cause the other working classes and strata and the oppressed sectors and peoples. Without this contingent it is impossible to defeat the forces that are the enemy of the revolution.
In all countries – and especially in the dependent countries – the banners of anti-imperialism must be part of our daily task. We are working to build a great anti-imperialist front that is seen in action, in the struggle, in the fight of the workers and peoples for independence, freedom, democracy and the satisfaction of their material needs and social welfare.
We are concerned about the unity of the working class, to impart a revolutionary content to its actions and struggles. It is the backbone of the fight against capital and for social transformation. We are working to build class-struggle unionism from the primary organization (the union, the first instrument of resistance of the working class), through union currents and with federations led by our parties. With this we are pushing forward the class struggle at all levels.
In the European countries, as well as in the United States and Canada, there is an important force: the immigrant workers. These, documented or undocumented, form part of the working class of each country in which they work and they are the object of super-exploitation by the monopolies. The particular policies that the governments apply towards them also deserve a specific response on our part.
By the very nature of the capitalist system and by the application of its neoliberal policies there is growing every day a sector who are homeless, landless and without jobs. These, who are considered marginalized, form a sector of the population ready to fight to assure their subsistence and they deserve our attention to give an organizational form to their dissatisfaction and struggle.
In all areas in which the struggle of the masses is taking place, the youth are playing an outstanding role: the young workers, the students, the national groups. Among the young people the ideas of change and the revolution penetrate more easily, but they can also be easy prey for the pacifist songs of the social-democratic bourgeoisie. The political organization of the young people, through the fronts of the parties themselves, is a high-priority task, as is also the work inside of the natural organizations of the masses.
A similar thing is taking place with the women’s movement. The tradition of the international communist movement to carry out special work directed towards women workers and the oppressed sectors must be studied and developed, to incorporate this sector, making up more than half the world population, into the revolutionary political struggle. In this work we must overcome the limits of gender demands (which the foundations and the NGOs raise insistently) to involve those actions in the anti-capitalist and anti-imperialist struggle.
Given the detrimental effects that capitalist exploitation causes on nature, the environmental movement is developing and calling into struggle important sectors of the population. Nevertheless, it is fundamentally oriented around positions that support the system itself. It is our duty to take part in it to orient it toward class and revolutionary positions.
It is duty of the communists, of the revolutionary proletariat, to wage the ideological struggle in opposition to capitalism, its evils and defects, and for the continued existence and validity of socialism. Nowadays from the various currents of reaction, they mainly proclaim the idea of the superiority of capitalism and as a result the obsolescence of socialism. It is up to our parties to unmask these views, to show the rapacious and oppressive nature of imperialism and capitalism, to demonstrate its evils and defects, its responsibility for the exploitation, oppression, hunger and misery of thousands of millions of workers, the looting of the natural resources of all countries, the appropriation of surplus value created by the workers of all countries, its militarist policy that is ravaging the five continents. On the other hand, it is necessary at all costs to promote the justice and validity of socialism, to show that it is the only real solution to the situation of the working classes and humanity.
At the same time we proletarian revolutionaries take up the task of unmasking and fighting the influence of the diversionary ideas that reaction and social democracy are spreading within the workers and popular movement, the proposals and practices of revisionism and opportunism.
This ideological and political fight must be developed in all fields, in the arena of theory, in the social organization and the fight for economic and political demands of the working masses.
We Marxist-Leninists have the duty to act on all the social sectors able to be incorporated in the revolutionary and progressive political struggle; we must be present, and with our class independence, in all political events that take place in each of our countries and internationally. In all these actions we work to raise the political consciousness of the working class and peoples, to organize them in various manners and at various levels. Above all we place at the center the building of the Party of the proletariat, an indispensable tool for leading the revolutionary process. We work for our parties to take root among the masses and for them to be sufficiently capable of leading the proletariat to power and building socialism.
That is our challenge and we commit ourselves to fulfill it.
International Conference of Marxist-Leninist Parties and Organizations
October of 2010
1The economic assistance left standing a series of banks and companies that pushed economic productivity down and prevent the recovery of their profits.
2The economic growth in Asia in the first half of the year had a strong impact on this 4.6%.
3 In the case of Japan it represents 200% of the GDP and is the highest figure for the developed capitalist countries.
4 On that date some securities lost more than 60% of their value, those of Accenture went from $40 dollars to one cent, those of Lear from $74 dollars to 0.0001.
5 By June of 2009, U.S. economic activity had contracted for four consecutive quarters, for the first time since the Great Depression of the 1930s. In that period the GDP fell 3.8 percent, something that had not happened in seven decades.
6More than 80% of the world trade is carried out in dollars.
7In 1950, the ratio between the payment for the average executive and the average worker was about 30 to 1. Since 2000, this ratio has increased to between 300 and 500 to 1.
8Global Research: http://www.globalresearch.ca/index.php?context=va&aid=19539
9In California there are counties with unemployment rates of 20%.
10Since 1970, neither demand nor employment would have grown in the U.S. without the aid of aggregated demand driven by indebtedness.
11In order to get an idea of what this means, if one spent a million dollars every day for 2010 years, this still would not reach a trillion dollars.
12More than 40% of the Greek national debt is in the hands of French and German banks, the rest is in the hands of other banks, some of which appear to be Greek but are controlled by French, German and U.S. capital.
13The growth estimates for this year vary between 9.5% and 11%. Either of these figures is high in the present situation.
14China has also become the largest trading partner for India and South Africa.
15Report of the OECD: “Perspectives on Global Development: Shifting wealth” http://www.oecd.org/document/12/0,3343,en_2649_33959_45467980_1_1_1_1,00.htm
16At the present time, for Brazil and Chile, China is the main trade partner.
17 China has invested more than $400 million dollars in Venezuela in infrastructure for 15 oil wells, gas production and improvements in railways and refineries.
18 Perspectives of the World Economy – IMF, April of 2010
19Prime Minister Sheikh Hasina Wajed had to recognize that the present minimum wage is “not only insufficient, but cruel”.
20The newspaper Global Times, of the Chinese Communist Party, warned that the strikes showed the necessity of “organized union protection", complaining that the “ordinary workers” have received “the smallest portion of the economic prosperity” from the opening of China to the world market.
21The U.S. has the largest military budget on the planet, almost as much as the rest of the world combined.
22We stated earlier that China has surpassed Japan, becoming the second largest economy on the planet.
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