WW News Service Digest #353
1) Fidel Castro: Anatomy of world economic crisis
by WW
2) Causes of Jamaican turmoil, part 5
by WW
-------------------------
Via Workers World News Service
Reprinted from the Nov. 29, 2001
issue of Workers World newspaper
-------------------------
Fidel Castro lays it out
ANATOMY OF WORLD ECONOMIC CRISIS
[Following are excerpts from a Nov. 2 television address on
the present international situation, the economic and world
crisis, by President Fidel Castro of Cuba.]
To characterize the current situation, one could say, by way
of a very brief summary, that in the mid-1990s, when
globalization was extending around the planet, the United
States, as the absolute master of the international
financial institutions and through its immense political,
military and technological strength, achieved the most
spectacular accumulation of wealth and power ever seen in
history.
But the world and capitalist society were entering into an
entirely new phase. Only an insignificant part of economic
operations were related to world production and trade. Every
day $3 trillion were involved in speculative operations
including currencies and stocks. Stock prices on U.S.
exchanges were rising like foam, often with no relation
whatsoever to the actual profits and revenues of companies.
A number of myths were created: there would never be another
crisis; the system could regulate itself, because it had
created the mechanisms needed to advance and grow unimpeded.
The creation of purely imaginary wealth reached such an
extent that there were cases of stocks whose value increased
800 times in a period of only eight years, with an initial
investment of $1,000. It was like an enormous balloon that
could inflate to infinity.
As this virtual wealth was created it was invested, spent
and wasted. Historical experience was completely ignored.
The world's population had quadrupled in only 100 years.
There were billions of human beings who neither participated
in nor enjoyed this wealth in any way whatsoever. They
supplied raw materials and cheap labor, but did not consume
and could not be consumers. They did not constitute a
market, nor the almost infinite sea fed by the immense river
of products that flowed, in the midst of fierce competition,
from factories that were ever more productive and created
ever fewer jobs, based in a privileged and highly limited
group of industrialized countries.
An elementary analysis was sufficient to comprehend that
this situation was unsustainable.
Nobody seemed to realize that any apparently insignificant
occurrence in the economy of one region of the world could
shake the entire structure of the world economy.
THE FANTASY FALLS TO PIECES
The architects, specialists and administrators of the new
international economic order, economists and politicians,
look on as their fantasy falls to pieces, yet they barely
understand that they have lost control of events. Other
forces are in control now. On the one hand, those of the
large and increasingly powerful and independent
transnationals and, on the other, the stubborn realities are
waiting for the world to truly change.
In July of 1997, the first major crisis of the globalized
neoliberal world erupts. The tigers fall to pieces. Japan
has still not managed to recover, and the world continues to
suffer the consequences.
In August of 1998 comes the so-called Russian crisis.
Despite this country's insignificant contribution to the
worldwide gross domestic product, barely 2 percent, the
stock markets of the United States were badly shaken,
dropping by hundreds of points in a matter of hours.
In January of 1999, only five months later, the Brazilian
crisis breaks out.
An all-out joint effort by the G-7, IMF and World Bank was
needed to prevent the crisis from spreading throughout South
America and dealing a devastating blow to the U.S. stock
markets.
This time, the inevitable has happened: the crisis began in
the United States, almost imperceptibly at first. Beginning
in mid-2000, the first symptoms began to be observed, with a
sustained decrease in the rate of industrial production.
U.S. CRISIS BEGAN IN MID-2000
In March of that year, the so-called high-tech NASDAQ index
had already begun to drop.
At the same time, the trade deficit showed an enormous
growth, from $264.9 billion in 1999 to $368.4 billion in
2000.
In the second quarter of the year 2000, the gross domestic
product registered growth of 5.7 percent; in the third
quarter, it grew by only 1.3 percent.
Industrial sector production began to fall in October of
2000.
Nevertheless, at the end of the year 2000, opinions on the
prospects and forecasts for the world economy were still
rather optimistic. But reality soon reared its ugly head.
Since the beginning of 2001, the IMF, the World Bank, the
Organization for Economic Cooperation and Development (OECD)
and the European Commission, along with private
institutions, have been obliged to downwardly adjust their
growth predictions in the various regions of the world for
2001.
In May, the IMF forecast 3.2 percent worldwide growth in
2001. For the United States in particular, projected growth
was 1.5 percent, and 2.4 percent for the Eurozone. Japan was
facing its fourth recession in 10 years, leading to a
prediction of 0.5 percent negative growth for the same year.
IMF Managing Director Horst Kohler, during a speech to the
United Nations Economic and Social Council (ECOSOC) in
Geneva, on July 16, 2001, stated, "Growth is slowing
throughout the world. This may be uncomfortable for the
advanced economies [the developed and wealthy countries],
but it will be a further source of hardship for many
emerging markets and developing countries [the poor and
underdeveloped countries], and a real setback in the fight
against world poverty."
Production has dropped in the majority of the Southeast
Asian countries, with the exception of China, and in Latin
America, too. According to the World Bank, growth in
Southeast Asia, which had begun to recover after its
dramatic fall in 1997, would decline from 7.6 percent in
2000 to 4.5 percent this year, while Latin America's growth
would be around 2 percent, one half of the growth registered
in 2000.
Other institutions also made predictions. The Economist
magazine estimated in April that world growth in 2001 would
be only 2.7 percent, in contrast to the 4.6 percent growth
registered in the year 2000, while world trade would grow by
3.5 percent, compared to the 13.4 percent growth in 2000.
With regard to the Eurozone, the OECD, in its quarterly
report issued in early May of 2001, estimated that the
European Union would experience growth of 2.6 percent, a
figure 0.5 percent lower than its initial projection.
On Sept. 10, just one day before the events in New York and
Washington, the IMF analyzed the evolution of growth
predictions for the world economy and for the economies of
the United States, Europe and Japan.
[Here Castro cites figures showing falling growth rates from
autumn 2000 to September 2001: the growth rate of the world
economy declined from 4.2 to 2.7 percent; the U.S. economy
from 3.2 to 1.5; Japan, from 1.8 to 0.2 percent; the
Eurozone, from 3.4 to 1.9.]
Without exception, the three major centers of the world
economy saw their growth rates fall simultaneously, dropping
to less than half of initial figures over the course of less
than a year. In the case of Japan in particular, growth
dropped to almost zero.
THE EMPLOYMENT SITUATION
At the end of the year 2000, the unemployment rate in the
United States was only 3.9 percent. By August 2001, it had
risen to 4.9 percent.
Today, Nov. 2, the official figure was released: it is 5.4
percent. In just one month, 415,000 jobs were lost.
The increase of the unemployment rate is irrefutable
evidence of the deterioration that the U.S. economy had been
suffering prior to the terrorist attacks.
It should be kept in mind, as an important precedent, that
over the last 50 years, when the unemployment rate has
reached 5.1 percent, this has coincided with the beginning
of a recession.
In August, industrial production fell by 0.6 percent as
compared to July. Over the previous 12 months, industrial
production had shrunk by around 5 percent. August was the
11th consecutive month of economic contraction.
The figure registered in August is very close to the lowest
level reached since 1983.
Also registered in the month of August of 2001 was a budget
deficit of $80 billion.
That same month, Democratic members of Congress were already
pointing out that predictions indicated that the government
would have to use Social Security money to finance current
expenditures.
During the second quarter of 2001, U.S. imports shrank by
$13.9 billion, while the low level of trade activity in the
rest of the world led to a $9.1-billion reduction in
exports.
Stock values on the main indexes have suffered the following
decreases in 2001: Dow Jones, 18.06 percent; NASDAQ, 66.42
percent; Standard and Poor's, 28.48 percent.
This means the loss of trillions of dollars in less than a
year.
The Federal Reserve has lowered interest rates nine times in
2001. The goal in doing so is to lower the cost of money,
boost consumer confidence and thus promote economic
activity. This frantic frequency clearly reflects
desperation.
DECLINE IN EUROPE AND JAPAN
Industrial production in the European region experienced a
sustained decline in the first quarter of the year 2001 that
obliged companies to reduce staff, and this, in turn,
reduced consumption, thus creating a vicious downward
circle.
Investment and consumption are depressed, aggravating the
trend towards recession.
The European Commissioner for Monetary Affairs has stated
that the European economy will grow by only 1.5 percent this
year. Meanwhile, the six most prestigious economic research
institutes in Germany have predicted that their country's
economy will grow by 0.7 percent this year and 1.3 percent
next year, and announced that the German economy is on the
verge of a recession. This will have a strong negative
impact on the rest of Europe, given that Germany is
considered the region's "economic motor."
The decrease in industrial production that began in March
reached 11.7 percent by August. This phenomenon of six
consecutive months of decline in industrial production has
not been witnessed in the Japanese economy since the period
from December of 1991 to May of 1992, and it places
industrial production at the lowest level of the last seven
years. This means an even worse crisis than the financial
crisis of 1997-1998, according to Japanese analysts.
Japan's trade surplus decreased 48 percent in July of this
year.
As a defensive measure, companies are cutting staff, leading
to a rise in the unemployment rate, which reached an all-
time high of 5 percent in August of this year, something
never before seen in Japan.
CRISIS IN LATIN AMERICA
In August, the Economic Commission for Latin America and the
Caribbean (ECLAC) reported that the region's economy would
grow by only 2 percent in 2001, a mere half of the growth
registered the previous year.
According to ECLAC, this is the result of the worldwide
economic weakening and instability in a number of the
region's key countries: Peru and Uruguay will experience no
growth; Brazil has been affected by a scarcity of fuel
supplies, which has hit its productive activity, and by an
almost 40-percent devaluation of its currency this year; and
Chile's economic reactivation has come to a halt. In the
case of Mexico, a feeble economic growth of 0.13 percent is
predicted for this year, and 1.74 percent for 2002. The
government had originally forecast 4.5 percent growth in the
gross domestic product for 2001, but it has downscaled that
figure a number of times due to the slowdown in the world
economy, and particularly that of the United States.
ECLAC estimates that unemployment in the region will reach
at least 8.5 percent.
As can be seen, the economic crisis is not a consequence of
the Sept. 11 attacks and the war against Afghanistan. Such
claims could only be made out of total ignorance or an
attempt to hide the real cause. The crisis is a consequence
of the resounding and irreversible failure of an economic
and political conception imposed on the world: neoliberalism
and neoliberal globalization.
The terrorist attacks and the war did not give rise to the
crisis, but they have considerably aggravated it.
- END -
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From: <[EMAIL PROTECTED]> (WW)
Date: keskiviikko 28. marraskuu 2001 05:24
Subject: [WW] Causes of Jamaican turmoil, part 5
-------------------------
Via Workers World News Service
Reprinted from the Nov. 29, 2001
issue of Workers World newspaper
-------------------------
Causes of Jamaican turmoil, part 5
'SLAVE DRIVER, THE TABLE WILL TURN'
By P. Chin
The following is the fifth and final
part of this series. Read the first four installments at
www.workers.org.
The labor uprising of 1938 was a highly significant focal
point in Jamaican history. It represented a leap from
cultural resistance against colonial domination to armed
struggle by an organized working class conscious of the need
to take direct action.
The rebellion erupted within the context of the capitalist
depression that started with the stock market crash of 1929.
While the sinking economy caused hardships in the United
States and the other industrialized countries, in Jamaica
these hardships were magnified a million-fold. As
unemployment, poverty, hunger and hopelessness surged, the
British colonial regime used the threat of force, coupled
with oppressive laws like the "Masters and Servants Act," to
keep the workers in line.
Unrest in the British colonies, which spread across the
Caribbean, exploded in Jamaica three years later. "The road
to revolution had been marked out," wrote Eric Williams,
starting with a sugar strike in St. Kitts in 1935 and ending
in Jamaica. ("From Columbus to Castro: the History of the
Caribbean")
Property relations remained basically the same after the
labor revolt with the virtually all-white big landowners
remaining at the pinnacle of power. But the rebellion forced
concessions from London that helped birth the nationalist
movement. "These limited gains of the masses provided the
stepping-stone for the aspiring petty bourgeoisie who
desired to participate more fully in the perverse capitalism
which colonialism had introduced," explains Horace Campbell
in his book "Rasta and Resistance from Marcus Garvey to
Walter Rodney."
"For a short period of the history of Jamaica, black people
were willing to allow the black nationalism and race
consciousness of Garveyism and Rasta to take second place to
the strident Jamaican nationalism of the People's National
Party," Campbell continues. "Out of the bonds of conflict
and cooperation the organization of the middle class emerged
in the form of two principal parties, both with mass working
class support."
Alexander Bustamante and Norman Manley had emerged from the
labor uprising as leaders. The former, who had sided with
striking workers against the police, formed the Bustamante
Industrial Trade Union. Jamaica's first major vehicle of
mass protest to fight for higher wages and other labor
rights, the BITU soon grew to encompass 60,000 dock and
sugar plantation workers, as well as unskilled urban
laborers.
Bustamante would then launch the Jamaica Labor Party from
the BITU's base with business-sector support in 1944 after
universal adult suffrage was granted. A popular, charismatic
labor leader, though politically conservative, Bustamante
wielded tight authoritarian control over the BITU and the
JLP.
The People's National Party, Jamaica's first political
organization, was launched by Manley and a coalition that
included other intellectuals of mixed race, former
supporters of Marcus Garvey, activists from the New York-
based Jamaica Progressive League who had returned home, and
Jamaican youths with an affinity for Marxist ideas. Its
focus was on winning universal adult suffrage and self-
government.
Like the BITU, "the 1938 riots spurred the PNP to unionize
labor, although it would be several years before the PNP
formed major labor unions," notes the Library of Congress
Country Study on Jamaica. "The party concentrated its
earliest efforts on establishing a network," it continues,
"both in urban areas and in banana-growing rural parishes,
later working on building support among small farmers and in
areas of bauxite mining."
Campbell explains that it was the PNP's Marxist core that
gave the organization credibility among the poor.
In 1952 Manley expelled the Marxists from the PNP and the
party moved more towards the center. This followed electoral
defeats, coupled with the anti-communist McCarthyite
inquisition after World War II. The left wing of the party
had worked to internationalize the union movement through
the Caribbean Labor Congress, and it also controlled the
Trade Union Congress. After the expulsions, Manley summoned
his son Michael from Britain to organize the more
conservative National Workers' Union.
During the 1944 to 1962 period of constitutional
decolonization, the two parties shared power. Unionized
labor rapidly became an integral part of the JLP and PNP.
"During the transition from colonialism to neo-colonialism,"
notes Campbell, "nepotism, political violence and
victimization became entrenched as a part of the Jamaican
political culture."
It was also during this period that the movement for the
West Indies Federation was dealt a fatal blow when Jamaicans
heeded Bustamante's call to vote against it in a referendum.
Jamaica was granted political independence in 1962 against a
backdrop of high unemployment and discrimination against
dark-skinned Jamaicans, who made up the vast majority of the
poor. Post-independence economic policies followed the old
colonial formula, and the unionized work force was forced to
defend its right to strike and to collective bargaining.
POLES OF WEALTH & POVERTY
In the decade before independence there had been an
unprecedented displacement of the population generated by
the discovery of bauxite and the penetration of foreign
capital. U.S. and Canadian multinationals replaced weaker
British enterprises. The imperialists reaped huge profits
from mining bauxite, opening hotels and establishing import
substitution industries.
While these businesses boomed, the distribution of wealth
became even more lopsided, with the minority white and mixed-
race part of the population benefiting at the expense of
dark-skinned Jamaicans.
An unprecedented number of small farmers had been relocated
to make way for the bauxite mines, and the country became
more dependent on imported food. Unemployment also soared
since the new industries did not absorb the huge numbers of
displaced people. Tens of thousands migrated to Jamaica's
two urban centers and overseas. At this time repatriation
became central to Rastafarian doctrine, the slogan being
"Africa yes, England no."
Cultivation of the ganja herb became more commonplace as
small farmers sought to subsidize their meager incomes. When
police raids criminalized ganja growing, a new stratum of
traders took over. Jamaica's link to the United States
facilitated the growth of organized crime connected to guns
and ganja. This led to the emergence of a layer of
unemployed young people in the cities called "Rude Bwoys"
who, lacking work and other avenues of constructive self-
expression, turned to crime as enforcers in the drug trade.
Drawn to consumerism through cultural penetration by the
United States, gangs battled each other for dominance over
party-affiliated neighborhoods. The JLP and the PNP used
these bands for intimidation and warfare and violence became
a growing part of trade-union activity and the political
culture.
In December 1978 Dr. Trevor Monroe founded the Workers Party
of Jamaica, a Marxist formation formerly known as The
Workers Liberation League. Monroe, who had previously been a
senior lecturer at the University of the West Indies, has
since renounced Marxism, and the WPJ is defunct. He now
serves as a PNP government-appointed member of pariliament.
Before then, the JLP and PNP had joined forces to crush the
Garveyite People's Political Party founded by Milliard
Johnson. In 1986, the Jamaican-American Party was
established by James Chrisholm. Enjoying little or no
support among the masses the group, which advocates
statehood with the United States, is not perceived as a
threat to the two-party system.
In 1972, the PNP, led by Michael Manley, seized power from
the JLP in a landslide election victory supported by young
people and Rastas. One of Manley's allies was reggae
superstar Bob Marley who, along with Peter Tosh, Jimmy
Cliff, Burning Spear and others, helped popularize reggae
music with its pulsating message of social protest.
But Manley's tenure was riddled with contradictions as he
sought a "third way" between socialism as practiced in Cuba,
for example, and capitalism. He believed that the rich could
be "persuaded" to return without a struggle some of the
wealth stolen from the working class. In addition, while
declaring that Jamaica was not for sale, Manley allowed
Washington into the country under the guise of the "war on
drugs."
This facilitated the CIA's establishment of the Ethiopian
Zion Coptic Church in Jamaica. This phony Rasta church is
really a big capitalist enterprise involving farms, cattle,
rice fields, deep-sea fishing boats, and reportedly ganja.
As small farmers tried to scratch a living from the
hillsides, the Coptics were allowed to buy huge tracts of
fertile land.
The CIA's principal aim was to cause confusion among the
Rastas who symbolized cultural resistance to colonial
domination. By advocating the legalization of ganja, the
Coptics were able to attract young "brethren" into their
ranks. They were also used in a campaign to paint Marcus
Garvey as an anarchist and fanatical anti-communist.
When Manley moved too close to socialist Cuba, the African
liberation struggle and the Soviet Union, it was easy for
the CIA to destabilize his regime. He had, in effect, let
the fox into the chicken coop.
Over the years political violence resulting from competition
between the two major parties and acts of desperation
classified as criminal behavior have surged, rooted as they
are in the deep social stratification involving race, color
and class. Given the unjust disparities, the violent events
of this year come as no surprise.
Numerous strikes and protests have shaken the island since
independence, including demonstrations that erupted in
Jamaica and across the Caribbean after Guyanese scholar
Walter Rodney was banned from returning to Jamaica in 1968.
The Black power advocate and Marxist had worked with the
Rastas and other groups of poor laborers, as well as leftist
students at the university.
After Rodney's banning this small group of leftists
published "Abeng," a newspaper that sought to bring a
materialist perspective to Jamaican history, as did the
Workers Liberation League. However, like "Labour Weekly," a
Marxist periodical published in 1938 that questioned
Jamaica's path of development, "Abeng" and the WLL did not
have the resources to match those of the state and the
middle-class intelligentsia. As a result, the working class
ended up putting its faith in the idealistic underpinnings
of the two major political parties and their trade unions.
The Jamaican people have a deeply rooted legacy of
resistance to exploitation and oppression. Their struggle
for sovereignty, economic justice and dignity is far from
over. It's hard to imagine that it won't erupt again,
especially as the capitalist world economy contracts.
In the words of Bob Marley who exhorted us to free our minds
from mental slavery, "Slave driver, the table will turn.
Catch a fire and you will get burn. ..."
