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From The Socialist newspaper, 4 September 2013

When the world economic crisis makes landfall in South Asia

Clare Doyle, Committee for a Workers' International (CWI)

Until recently, the 'emerging' economies of the BRICS - Brazil, Russia, India, China and South Africa - were growing at a steady rate. China, in particular, appeared to be defying the economic laws of boom and slump.

Many have argued that these countries could help keep the world economy afloat as deepening crises afflicted Southern Europe and the USA. The dramatic slump in Brazil and India's growth rates and the slowdown in China's economy, have put an end to that illusion.

China, whose 'turbo-charged' economy saw it overtake Japan to take second place to the US in GDP (total output), is now a cause of grave concern both to its ruling clique and capitalists internationally.

While China is heavily involved in major capital expenditure in some countries for strategic as well as economic reasons, the shrinking of its exports is already having an effect on economies to which it has out-sourced certain basic manufacturing and from who it draws its raw materials.

India - the third largest economy in Asia - has seen its growth rate fall from 10.5% in 2010 to 3.2% in 2012. Malaysia's economy, heavily dependent on trade with China, has slowed to a 4.1% increase this year.

Many Asian countries initially benefited from the downturn in productive (profitable) investment elsewhere in the world. Large amounts of 'idle' capital, earning little or no interest in the banks of countries involved in quantitative easing, flowed into Asia as speculative 'investment'.

Historical precedent

The Financial Times commented that Asia's local currency bond markets "have bloomed since the global financial collapse of 2008 unleashed easy money... spilling out of the US and Europe. What happens when interest rates eventually start to rise, particularly in the US? How much of that money will turn around and flee?"

Will there now be a new 'Asian crisis' as severe as, or even more severe than, that of 1997-98? Will South Asia's governments be able to weather the storms to come?

The 1997-98 Asian crisis saw the currencies of countries such as Thailand plunge, and hundreds of thousands of jobs and livelihoods being massacred.

Revolutionary upheavals against International Monetary Fund (IMF)-imposed policies saw the overthrow of the hated dictator, Suharto, in Indonesia.

In Malaysia a mass movement for democratic reform threatened the decades-long rule of the BN (National Front), dominated by the United Malays National Organisation (UMNO). South Korea saw new general strikes similar to those against neoliberal attacks introduced at the end of 1997.

Then, the IMF doled out huge loans to beleaguered countries to prevent collapse and revolution. In the case of South Korea it was a massive $57 billion.

None of these movements found a voice and political line that could complete the revolutionary processes that had begun. In Indonesia, some left groupings fostered illusions in the democratic credentials of Megawati Sukarnoputri, who would proceed to rule on behalf of big and international capital in alliance with generals of the old regime.

In Malaysia, the popular leader of the 'Reformasi' movement, Anwar Ibrahim, had been a part of UMNO in government with Mahathir Mohammed. As a US-trained neoliberal economist, he did not want (and still does not want) a movement which would organise to end capitalism.

The Committee for a Workers' International (CWI - the socialist international organisation to which the Socialist Party is affiliated) at the time argued for the fullest support for, and involvement in, these movements, fighting for basic democratic rights and freedoms, but also, arguing - along the lines of Leon Trotsky's theory of 'Permanent Revolution' - for the need to rid these neocolonial economies of the domination of home-grown and multinational capitalism.

Clear socialist policies were needed, based on the understanding that only the working class, with the support of the urban and rural poor, could establish genuine democracy and transform the lives of the overwhelming majority of the population of the region.

As the cold winds of world recession 'hit landfall' in Asian countries, similarly tumultuous movements will develop. Given the further inter-twining of the world's economies, India and Pakistan, which escaped the worst of 1997-98, could be engulfed this time.

The IMF is unlikely to step in to the same extent as it did then to help governments faced with revolutionary upheavals.

Initial outbursts of anger and desperation could broaden into generalised movements in which impoverished youth and workers will seek revolutionary solutions. No Asian country at the present time can claim to have a viable, confident and stable government.

Neocolonialism

In most Asian societies, many other basic democratic rights have never been established. The emerging capitalist classes have not been strong enough to carry through thorough-going land reform or clear away the remnants of feudalism.

In China, it took the 'deformed workers' state' of Mao Tse Tung to preside over this task. What was done in earlier centuries by the emerging capitalist classes in the revolutions of England, France and elsewhere, still remains to be completed in most Asian countries.

As in other continents, many of Asia's nations were artificially created by colonial powers. People were left as oppressed minorities within the borders of Burma, Thailand, Sri Lanka. Only workers' parties heading socialist governments will be able to satisfactorily resolve the issues of the rights of minority nationalities and the task of setting up mutually cooperative confederations of nations.

Direct rule by imperialism ended decades ago across the whole of Asia. It has been replaced by that of regional powers such as China and India who vie for strategically and economically advantageous concessions in Sri Lanka, Burma and elsewhere.

Giant multinational companies scour the region for markets, for cheap labour and for maximum rates of profit. In most of the world's poorest countries, multinational monopolies dominate the market for seeds, fertilisers, washing products and retailing. Unilever has 57% of its global sales in 'emerging markets', Colgate 53% and Proctor and Gamble 40% (Financial Times 29/7/13).

Clothes and footwear giants like Primark, Gap, Reebok and Adidas make huge profits out of Asian labour. Outrage at working conditions in places such as the Rana Plaza complex in Dhaka, which collapsed killing more than 1,300 low-paid workers, has been expressed on the streets in mass demonstrations and strikes.

At the expense of millions of poverty-stricken workers at home and abroad, local tycoons such as Tata, Mittal and Ambani have done so well over the decades since 'independence' from colonial rule, that their steel, car and mining conglomerates now straddle the world in their endless search for profits.

Democracy?

A glance at any South Asian country will confirm an enormous, unbridgeable 'democracy deficit'.

In India - 'the world's largest democracy' - votes at elections are bought and sold. Substantial election 'goodies' are handed out by state or national governments and even by opposition parties, at election time. State-wide fiefdoms are held by Chief Ministers along with their cronies.

The promise of many political leaders to eliminate the iniquitous caste system remains unfulfilled and tribal peoples have their precious land wrenched from them by governments and conglomerates working hand in hand (except where determined mass protests have been able to block their plans).

Sri Lanka is the most dangerous country in which to be a journalist, according to 'Reporters without Borders'. The country's military continues to seize and 'settle' Tamil land in the North and the president's brother, Defence Minister, Gotabaya Rajapakse, declares that 'human rights are not for us'!

Sri Lanka's civil war was drowned in the blood of tens of thousands of Tamils by the Sinhala chauvinist, nepotistic dictatorship of Mahinda Rajapaksa.

Neither of the main powers vying for profitable investment opportunities and political influence in Sri Lanka - China and India - is unduly bothered by the lack of democratic rights in the country. However, the first, at least partial, general strike in many years which took place in June this year is a warning to the apparently all-powerful regime.

'Second world'

Malaysia, a South East Asian country sometimes deemed to be part of the 'second' and not the 'third' world, encompasses three main ethnic groups. The ruling BN government, which bases itself on the Malay majority, claims to have won yet another general election in May.

Chinese voters, a quarter of the total in Malaysia, moved away from the BN in protest at its continuing pro-Malay policies. The majority of Malaysia's Indian voters have generally voted for the opposition Pakatan Rakyat (People's Alliance).

In the month or so before the general election there was a $2.6 billion 'deluge' of social handouts to poor families. Other sweeteners were given to the whole electorate. In spite of this, the ruling BN alliance was almost certainly defeated; it claimed victory, in spite of widespread allegations of vote-rigging.

Angry, radicalised youth immediately came onto the streets to declare the government illegitimate; some of their leaders were arrested.

A new political force is needed in Malaysia, as elsewhere in the region to channel the anger of youth and workers into a struggle for the socialist alternative.

CWI Malaysia in its widely sold publication Workers' Solidarity has a thoroughgoing list of democratic demands and proposals on wages, housing, jobs for young people, the nationalisation of banks and major industries with democratic workers' control and management.

When the economies of Asia are battered by the economic storms to come, all parties will be severely tested. Those who claim to represent workers but who are not prepared to take up an all-or-nothing struggle against capitalist and imperialist domination, will be found lacking.

The development of a new workers' force, based on a fighting, class programme, is the over-riding task of socialists in India, Pakistan, Malaysia and Sri Lanka but also in other parts of the region.

Momentous events impend throughout Southern Asia, not least in the smaller economies of Burma, Nepal, Vietnam and Cambodia. All the old 'certainties' will be challenged and the CWI will have a huge responsibility to develop the fighting capacity of the working class throughout the region.

A minority today who see the need for a thoroughgoing programme of socialist change have been 'swimming against the stream'. The wave of mass upheavals, in Asia and elsewhere in the world, against capitalism in all its guises, will 'lift them on its crest' as Trotsky wrote.

From the wavering Yudyohono in Indonesia, the unstable alliance in Pakistan and the effete government of Singh in India, to the illegitimate Najib Raziv government in Malaysia and the brittle dictatorship in Sri Lanka, none of these corrupt cliques presents a picture of stability in the region. Far from it; the coming storms will see them replaced by not one or two but many governments of crisis, until a party with a programme of socialist change can take the reins of power and inspire a revolutionary wave across Asia, and the rest of the world.

India

India is characterised as "the worst performing emerging market economy since the turn of the year" (Guardian, 7 August) with growth coming to a standstill in the second quarter.

Mass poverty and deprivation is synonymous with India. "Four hundred million Indians have no electricity... Immunisation rates for most diseases are lower than in sub-Saharan Africa. Twice as many Indian children (43%) as African ones go hungry... A pitiful $39 per person per year [is spent on] public health compared with China's $203 or Brazil's $483" (Economist, 29 June 2013).

The gap between the mass of India's nearly 1.3 billion people and the tiny handful of super-rich grows ever wider. A few individuals from rich family dynasties have amassed vast fortunes. According to Forbes magazine, Mukesh Ambani is worth $20 billion and steel magnate, Lakshmi Mittal, $16 billion.

A new middle class has developed but they are already finding their expectations thwarted by the slowdown in the economy.

The overwhelming majority of India's population continues to eke out a squalid existence on miserly incomes in the face of rampant inflation.

The Congress-led government in Delhi is crippled by indecision and corruption. Its writ does not run across whole regions of the country, where Maoist (or Naxalite) guerrilla forces have made themselves more popular by at least fending off rapacious landowners and multinational companies.

Prime Minister Manmohan Singh is floundering between the pressures from abroad to introduce neoliberal 'reforms' and the pressure from below in the run-up to elections in 2014.

There is now even the possibility of the widely discredited right-wing nationalist BJP returning to power under the leadership of arch-reactionary Narendra Modi. Modi is still loathed by millions as the 'Butcher of Gujarat', responsible for the communal killings of more than 2,000 Muslims in 2002. In many states his party is also mired in corruption. But as the FT puts it: "If the sense of a government vacuum from the Congress continues, more and more people will just be willing to take a risk with him" (10/6/13).

In February the biggest-ever general strike in history took place - more than 100 million workers on strike for two days. The demands of the strikers included an end to crippling price rises and a living wage for all.

The mass 'Communist' parties retain a certain support among workers and even poor farmers. The CPI(M), however, has been badly damaged by its loss of power in West Bengal, where it had ruled for decades. It suffered electorally for its brutal attacks on workers' and poor farmers' livelihoods, sacrificed on the altar of both Indian and foreign-based capitalism.

It will be hard - though not impossible, in the absence of other mass workers' parties - for the CPI(M) to regain support there and elsewhere as long as they adhere to the treacherous Stalinist policy of 'stages' - establishing capitalism, only later to fight for socialism

Pakistan

The almost permanent crisis that constitutes life in Pakistan illustrates starkly the need for workers to move directly against feudalism and capitalism at one and the same time. Political and personal life is plagued by power cuts, bomb attacks, collapsing services and paralysis in government.

The Nawaz Sharif government faces intractable problems - a failing state, a weakening economy, right-wing Islamic terrorism and the powerful centrifugal forces that threaten the break-up of the nation.

The Pakistan economy is dangerously unstable and unviable. A new loan from the IMF of $5.3 billion comes with demands for "financial discipline" ie no subsidies for the poor.

The once mighty Pakistani People's Party (PPP) has entered a period of possibly terminal decline.

The military, which controls large parts of the economy and society from behind the scenes, has not taken direct control. This does not rule out such a development again in the future, as political and social crises develop.

The full version of this article can be read on www.socialistworld.net

The Committee for a Workers' International (CWI) is the socialist international organisation to which the Socialist Party is affiliated. The CWI is organised in 45 countries and works to unite the working class and oppressed peoples against global capitalism and to fight for a socialist world.

For more details including CWI publications write to:

CWI, PO Box 3688, London E11 1YE.

email cwi@worldsoc.co.uk

The CWI website contains news, reports and analysis from around the world. www.socialistworld.net

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In The Socialist 4 September 2013:


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Don't fall for the shares-for-rights scam

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International socialist news and analysis

When the world economic crisis makes landfall in S Asia


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1993: BNP racists forced off Brick Lane


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Police spies and the workers' movement

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Miliband expected to promise repeal of bedroom tax

NHS: action to improve care

Lift the ban on campaign stalls in Newham, east London

Burston strike school celebrated

London protest against attack on Syria

Bristol TUSC - we're fighting the cuts

Socialism 2013

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