International Meeting of Communist Parties at Kerala

11th International Meeting of Communist and Workers' Parties

The 11th international meeting of communist and workers' parties will be held on November 2009, India, Kerala and will be hosted by the Communist Party of India (Marxist) and the Communist Party of India .
A meeting of the Working Group of the communist and workers parties took place in Athens on 17th February 2009 hosted by Communist Party of Greece (KKE )on the margins of the 18th KKE Congress.
The meeting was attended by the members of the Working Group CP of Brazil, CP of Cuba, CP of Spain, Portuguese CP, CPBM Czech Republic, CPRF Russia, SouthAfrican CP, CP of India (Marxist), Lebanese CP and KKE and by representatives of CP of Canada, CP of Albania, WP of Belgium, Syrian CP, CP of Syria, PPPs Palestine, CP of Turkey.
The meeting discussed and decided on the topic, the date and the place for the 11th international meeting of communist and workers' parties 2009.
The 11th international meeting of communist and workers' parties will be held on November India, Kerala and will be hosted by the Communist Party of India (Marxist) and the Communist Party of India .
As far as the main topic of the meeting concerns the working group decided on the theme of " The international capitalist crisis , the workers' and peoples' struggle , the alternatives and the role of the communist and working class movement "
Furthermore, in face of the very dangerous situation created by the murderous attacks and war crimes by Israel against the Palestinian people the Working Group decided to convene a extraordinary meeting of communist and workers' parties in solidarity with the heroic struggle of the Palestinian people and the other people in Middle East in Damascus Syria on September 2009.
During the session of the working group representatives from the communist and workers parties from Palestine, Syria, Lebanon and from other parties from Canada, Europe, South Africa and India informed on the situation and the popular actions in the region of Middle East after the Israeli attacks on Gaza.
The parties saluted the heroic resistance to the aggressors and the great protest and solidarity movement and issued a solidarity statement appealing to continue and to amplify the action in support of the just struggle of the Palestinian people and the peace loving forces of Israel.
The participants underlined their commitment to the actions and struggles against the capitalist crisis, to the initiatives commemorating the 50th anniversary of the Cuban revolution and to the other initiatives decided at the 10th international meeting in Sao Paolo in November 2008.
The meeting of the Working Group of the Communist and Workers' Parties

REAL ISSUES

Time for change
RABHAT PATNAIK
Neoliberalism is in retreat and Election 2009 presents an opportunity to bury it and go for an alternative development strategy.

THE triumph of neoliberalism in India was never complete. The nationalised banks continued to remain state-owned; key public sector companies were not privatised; pension funds were not handed over to speculative finance capital; the currency was not made fully convertible; and the financial sector’s holding of foreign assets, other than the foreign exchange reserves of the Reserve Bank of India (RBI), continued to remain minuscule. In short, the two interlinked and mutually reinforcing processes underlying neoliberalism, namely, the dismantling of the public sector and integration with global finance, remained arrested.

This happened not for want of trying by the proponents of neoliberalism. Every means, fair and foul, was adopted, including crash measures, for insurance privatisation for instance, by a government in its last days that had even been reduced to a minority. But they floundered in the face of stiff opposition by the trade unions, especially those in the financial sector, by the political Left, and by the progressive intelligentsia. The glee with which the neoliberal establishment greeted the break between the Left and the United Progressive Alliance (UPA) and the alacrity with which it demanded that the neoliberal agenda should be rushed through after this break only underscore the significance of the Left’s resistance to neoliberalism. But even that resistance was not enough. Even the half-triumph of neoliberalism was enough to widen the hiatus in Indian society and shake modern Indian society to its very foundations.

The formation of a modern Indian nation out of an extraordinarily disparate population riven by millennia of caste, class, gender and other forms of oppression is one of the marvels of our times. It was made possible through the prolonged anti-colonial struggle that was founded upon an implicit “social contract”. This implicit “social contract”, which had been occasionally articulated earlier, notably in the Karachi Congress Resolution of 1931, was sought to be given expression to in the Constitution of the Republic. And central to it were: electoral democracy based on universal adult franchise, secularism, civil liberties, the end of caste and gender oppression, and the building of an egalitarian society. An economic regime that produces some of the world’s top billionaires at one end and thousands of peasant suicides on the other is a violation of that “social contract”; it endangers the foundation of the modern Indian nation. And neoliberalism constituted such a violation, above all by withdrawing state support from peasant and petty production.

Peasant and petty production can survive the onslaught of capitalism only through the active intervention of the state, and such survival must be ensured in a society like ours. The reason is not that the travails of the people in the process of transition from a declining petty production economy to an emerging capitalist one become unbearable when they are “between jobs”, and that the decline therefore needs to be fine-tuned. It does, but that is not the reason. The reason is that in the present conditions such a transition is simply not possible. The capacity of such capitalist development to generate employment is so low that not protecting peasant and petty production against displacement by such capitalist development can only produce a growing army of unemployed and underemployed paupers, that is, absolute immiserisation at one pole together with the growth of wealth at another.

Indeed the higher the rate of growth of the capitalist sector, the greater will be the scale of such absolute immiserisation, insofar as the higher growth impinges even more strongly on the petty production sector. The view that the solution to the persistence and even accentuation of poverty lies in the achievement of even higher rates of economic growth is thus erroneous; the higher growth itself can be, and has been, the cause of the accentuation of poverty.

The amelioration of poverty requires a state that prevents the decimation of petty production by capitalist development, that undertakes significant expenditure to provide welfare benefits to the entire working population and augment the social wage in both capitalist and non-capitalist sectors. The neoliberal state, by its very nature, cannot do this; indeed it does the opposite.

The term “neoliberal state” may cause surprise. After all, Nehruvian dirigisme and neoliberalism are often seen as two alternative possible policy sets that are available to the same state, that is, the same state is seen to be capable of pursuing either the one or the other. But this is a mistake. The transition from one policy to the other entails a change in the class configuration underlying the state, a change in the nature and composition of the dominant classes themselves, and hence also a change in the nature of the state. During the 1930s, for instance, when import-substituting industrialisation was undertaken in Latin America, replacing the earlier export-oriented strategy, this shift was accompanied by major political upheavals. It was not just a switch from one policy to another; this switch was part of a shift from one kind of state to another. The shift from Nehruvian dirigisme to neoliberalism in India was part of a worldwide shift from dirigiste to neoliberal regimes; in the advanced countries this shift was marked by the end of Keynesian demand management. This worldwide shift was the result of a process of “globalisation of finance”

Nation-states pursuing dirigiste policies had to bend to the caprices of international finance capital in order to prevent the flight of finance (unless they showed the political resolve to delink themselves altogether from the realm of globalised finance, which bourgeois states typically did not). Neoliberal policies, of “sound finance” (involving at best a small specified fiscal deficit); of trade and financial liberalisation; of rolling back the state from its interventionist role (except in the interests of finance capital); of privatising public sector units; and such like represented the interests and outlook of international finance capital.

Their pursuit accordingly entailed a shift in the character of the state, from one standing above classes and mediating between them (even while being a bourgeois state) to one that acted predominantly in the interests of the upper echelons of the bourgeoisie that was integrated with international finance capital. Expecting such a state to defend and protect petty production, to undertake welfare expenditure and to raise social wages, that is, to ameliorate poverty, is a chimera.

True, in India the transformation in the nature of the state was never complete. The framework of democracy constrained the march of neoliberalism, since within this framework the neoliberal agenda could never muster sufficient support for its total triumph; and yet this framework itself could not be jettisoned either. Notwithstanding all exhortations to “keep development above politics”, a euphemism for getting a consensus around the neoliberal agenda, such a consensus proved elusive. And yet even this half-triumph of neoliberalism, this semi-transformation of the state, was quite enough to do considerable damage, above all through its withdrawal of support to peasants and petty producers.

The cut in subsidies increased the input costs for the peasantry; the withdrawal from the goal of social banking reduced institutional credit to agriculture, throwing the peasantry back to the mercy of moneylenders for loans at exorbitantly high interest rates; the virtual winding up of extension services increased the peasantry’s direct exposure to, and dependence upon, multinational companies; trade liberalisation made the peasantry vulnerable to the vagaries of world market prices; the progressive dismantling of the domestic procurement mechanism removed even such protection as the growers of crops covered by the Commission for Agricultural Costs and Prices (CACP) could have got; and above all public expenditure deflation in the countryside reduced rural purchasing power drastically.

The upshot was not just agricultural stagnation and a decline in per capita foodgrain output in the period after the beginning of the 1990s; it was also a decline in per capita foodgrain absorption, which was even steeper than the output decline. The squeeze on purchasing power in rural India was so drastic that notwithstanding the declining per capita output, foodgrain stocks got built up whenever procurement operations were in force. And what was true of the peasants was equally true of other sections of petty producers as well. Squeezed between cheap imports on the one hand and rising input costs on the other, they experienced significant absolute impoverishment, to a point where their return per labour day fell below even the lowest minimum wage.

The tragedy, however, lies in the fact that the very same people who had been immiserised during the boom will get further immiserised during the crisis that is now upon us, the crisis that has been precipitated worldwide by the triumph of neoliberalism itself. The same neoliberal dispensation that had squeezed vast masses of the population during the boom has now precipitated a crisis in the course of which this squeeze will intensify.

But the crisis also spells the end of neoliberalism. It is obvious that the only way out of the global crisis is through fiscal stimuli in the form of increased government expenditures, which, to be effective, have to be coordinated across countries, and which, to be politically acceptable, have to be directed towards the welfare of the people. Such a coordinated stimulus, which would violate the tenets of “sound finance” and re-establish the proactiveness of the state, is obviously anathema for international finance capital and is being resisted by it. This resistance, however, only prolongs the crisis and strengthens the rejection of its ideology, neoliberalism, which is the cause both of the crisis and of its persistence. Neoliberalism clearly has reached the end of its tether.

In India, however, a novel effort is being made to rescue it. The government agrees that a fiscal stimulus has to be provided to get the economy out of the crisis, since all efforts at using monetary policy to revive demand have come a cropper. But in discussing the nature of this fiscal stimulus it emphasises larger “viability gap funding” for public-private-partnership (PPP) projects in the infrastructure sector. Larger government expenditure, in other words, should take the form of handing over larger amounts of funds to private capitalists in the name of developing infrastructure. Since PPP with viability gap funding was very much a part of the neoliberal agenda, this amounts to promoting neoliberalism even while apparently retreating from it, in a Keynesian direction, through having a larger fiscal deficit.

This strategy is not just futile in the present context, when the inducement to invest is so low that even larger government munificence is unlikely to help in inducing larger private investment, but also undemocratic, in a double sense. First, “infrastructure” being a portmanteau concept, promoting “infrastructure” development can mean anything from building a road in a village to building a five-star hotel; typically, the projects that are promoted in the name of “infrastructure” development prioritise the latter rather than the former, thereby ignoring people’s priorities. Secondly, the expenditure of public money is better done directly through a government accountable to the public than through transfers to private capitalists, the need for which is never established and the use of which is never monitored.

An appropriate fiscal stimulus, in the form of larger government expenditure on health, education, sanitation, drinking water, rural infrastructure, agricultural development, food security, and price support for the peasants and petty producers, will necessarily require controls over cross-border financial flows to prevent capital flight. It will also require an appropriate regime of protection which defends peasants and other primary commodity producers against the crash in world prices, which defends petty producers against cheap imports, and in general against the “beggar-my-neighbour” policies of other countries, and which ensures that the “leakages” of the impact of the fiscal stimulus are minimised.

All these entail a retreat from neoliberalism. But this retreat cannot be seen only as a temporary one. Overcoming the crisis has to be linked to an alternative development trajectory, a trajectory of peasant agriculture-led growth, which requires an economic regime altogether different from neoliberalism. The neoliberal regime, in other words, has to be buried for ever, which in turn is possible only if we shake off the hegemony of international finance capital. The struggle against neoliberalism, which had restricted its triumph to only a half-triumph, now needs to get intensified to roll it back altogether. •

REAL ISSUES

An Alternative Emerges
Prakash Karat

THE past one week has firmly established the fact that there is a viable non-Congress, non-BJP combination emerging to fight the forthcoming Lok Sabha elections. What is popularly known as a third front became a reality when seven parties shared a common platform at the massive rally organised in Dobbspet, near Bangalore, on March 12. The leaders of the Janata Dal (Secular), the AIADMK, the Telugu Desam, the Telangana Rashtra Samiti, the Bahujan Samaj Party, the CPI(M) and the CPI declared that they would work together to defeat the Congress and the BJP and to create a new alternative.

Three days later, on March 15, nine political parties met in New Delhi. Apart from the four Left parties, the TDP, the JD (S), the AIADMK, the TRS and the Biju Janata Dal discussed how to take forward the electoral understanding and seat sharing arrangements they had arrived at in various states. In a joint statement, they declared their resolve to work together to defeat the Congress and the BJP and to form an alternative government for the progress and welfare of the people. The meeting also discussed the policy issues that need to be addressed.

On the same day, the BSP president, Ms Mayawati, released her party's election appeal and called for the defeat of the Congress and the BJP and expressed her party's determination to work for a non-Congress, non-BJP government.

All these developments in the second week of March have dramatically confirmed what the CPI(M) has been maintaining: politics in India cannot be straitjacketed into a two-party system. Although the ruling classes of our country would like politics to revolve around a choice between two political parties, both of which represent their interests, this has proved impossible in practice. Both the major all-India bourgeois parties are unable to command a mass base and the support of the people in significant parts of the country. For instance, in the two major states of Uttar Pradesh and Bihar, the Congress and the BJP together cannot claim to represent even one-third of the seats to the Lok Sabha. In state after state, either the Congress or the BJP represents a minority force.

This inability to achieve numbers that are anywhere near majorities in parliament has compelled them to look for allies. So, they have settled for projecting a two-front system as an alternative – a Congress-led combination and a BJP-led combination.

The emergence of a viable non-Congress, non-BJP combination has caused consternation in the Congress and the BJP camps. While the Congress called the third front as the “biggest mirage of Indian politics”, the BJP has sought to dismiss the third front as a “nautanki” (drama). The BJP has greater cause for worry because, unlike in 1999 and 2004, many of the secular regional parties are no more willing to be associated with the BJP. They are finding their place in the non-Congress, non-BJP camp. The latest partner to break with them is the BJD in Orissa.

As for the Congress party, it fielded its senior leader, Pranab Mukherjee, to attack the concept of a third front. He harped on the fact that the front has not set out any programme, or, vision for government forgetting that the Congress created its front – the UPA – only after the elections in 2004. It is also a strange argument considering that the UPA itself is not going with a common programme or manifesto to the elections. The Congress, the RJD, the NCP and the DMK are all bringing out separate manifestos. So why is Pranab Mukherjee concerned about a common programme for the parties of the third front? Why did not the Congress consider a joint programme with its elusive ally, the Samajwadi Party? He even made the extraordinary claim that the parties of the third front were not even fighting enough seats to get a majority in the House. This is, of course, utterly inaccurate. The Left alone is fighting 150 seats and if the parties with which they have seat sharing arrangements or election alliances are taken into account, then their number is more than 50 per cent of the seats in parliament. If the seats contested by the BSP are taken into account, then the combine is fighting far more seats than the Congress party.

A Congress spokesperson has also charged that the formation of the third front will help the communal forces by dividing the secular votes. The fact is that the emergence of the alliance of the Left and the secular regional parties has struck a body blow to the electoral ambitions of the BJP. The BJP has been left with not a single ally in states like Andhra Pradesh, Tamilnadu and Orissa. The propagation of a two-party system by the Congress only helps the BJP instead of weakening it.

Both the Congress and the BJP are on shaky ground when they termed the third front as an unstable and unviable alliance. The reality is that both the UPA and the NDA are not durable alliances and that their fragility has come to the fore in the recent period. The Congress, after its Working Committee meeting in January, declared that it has no national level alliance and that it is going in for state level alliances only. This has undermined the very basis of the UPA. In turn, it has freed the UPA allies to look for different electoral partners in various states. Some of the non-Congress partners of the UPA are signalling that alignments will change according to the post-poll situation. The NCP president Sharad Pawar has, unlike the Congress and the BJP, stated that the third front cannot be written off. He has further stated that his party is not a bonded labourer of anyone. As for the NDA, it suffered a major blow when the BJD decided to break with it. Even the Asom Gana Parishad, which has entered into a seat adjustment with the BJP, has declared that it is not part of the NDA.

Although the Congress seems to have gained confidence after seeing the disarray in the BJP and its alliance, it is unwilling to recognise what is happening to the people and the country. One single instance should illustrate this point. The Congress party and the government are happy to claim that inflation is going down steadily. The inflation rate of the Wholesale Price Index is now below 4 per cent. But the prices of food items have increased sharply. According to the Price Monitoring Cell of the Department of Consumer Affairs, there has been a big surge in the prices of food items such as rice, tur, onions, sugar and tea. The wholesale price food index registered 7.5 per cent inflation for the week ending February 28. This price rise at the retail level increased manifold. According to these figures, the price of rice in Delhi rose by 22 per cent between March 2008 and March 2009; sugar went up by 47 per cent, tur by 31 per cent and onion by a whopping 111 per cent.

While the government takes satisfaction in proclaiming that the growth rate has slowed down only slightly, the reality is that lakhs of jobs are being lost due to the global recession and the economic crisis.

The agrarian crisis, price rise, unemployment and the falling living standards of the people are all being ignored by the Congress rulers. This is going to cost them heavily.

When the time of reckoning comes, the people have the choice to reject both the Congress and the BJP, which has similar economic policies, and to look for an alternative. The Left parties have set out a full-fledged alternative policy platform. The CPI(M) is working to see that the parties that have rallied around the banner of a third front come together on a common platform for pro-people economic policies, a firm defence of secularism, strengthening federalism and for an independent foreign policy. Such a platform offers a clear alternative choice for the people. In the coming days, during the election campaign, these alternative policies will be presented before the people.

REAL ISSUES

world of distress
UTSA PATNAIK
Depression in agriculture and farmer suicides continue, thanks to the misguided actions of Indian policymakers.
AS the outstanding Marxist economist Paul Baran had pointed out in The Political Economy of Growth, what is cooked in the kitchen is not decided in the kitchen. Similarly, what happens to agricultural producers is decided outside agriculture by public policy. The ruling party’s ‘Jai Ho’ campaign before the imminent general elections takes us back to the National Democratic Alliance’s (NDA) infamous ‘India Shining’ campaign of 2004 in the middle of acute agrarian distress and farmer suicides.

What is the situation today after five years of United Progressive Alliance (UPA) rule? Agrarian depression continues and farmer suicides are unabated not only in Maharashtra but in Chhattisgarh, Andhra Pradesh and Karnataka, to which weaver and textile worker suicides have now been added. Professor K. Nagaraj’s recent study of farmer suicides (“Farmer Suicides in India: Magnitudes, Trends and Spatial Patterns”) shows a higher incidence in States that produce export crops as well as certain tribal population-predominant States. Only Kerala has seen a drastic drop in farmer suicides by 2008 owing to swift measures taken by the Left Democratic Front government after coming to power in May 2006, though the very recent dip in export crop prices is again raising the spectre of renewed distress.

The public memory is surely not so short that the mephitic role played by Manmohan Singh as Finance Minister in the P.V. Narasimha Rao government in initiating the agricultural depression has been forgotten. Subscribing to the economic dogmas of international financial institutions (the International Monetary Fund and the World Bank) advising a cutback in state spending and a reduction of already meagre agricultural subsidies, from July 1991 a strongly contractionary, expenditure-deflating set of policies was put in place by Manmohan Singh, targeting mainly the unorganised sector – sharp reduction of Central and State government development expenditures, large cut in fertilizer subsidy, devaluation of the rupee, unrestricted primary exports, and so on. For the first time in 30 years, India’s per capita gross domestic product fell and the crude death rate rose in certain States. Financial sector reforms from 1994 redefined the priority sector for bank lending and squeezed out the peasantry from affordable bank credit, forcing them into the willing arms of usurious moneylenders who take Rs.3 to Rs.5 a month interest on Rs.100 lent in a year.

After a brief interregnum, the NDA government from 1998 pursued the same deflationary policies with equal vigour and by prematurely removing quantitative restrictions on trade, exposed our producers to the full fury of the global price declines that had started from the mid-1990s. Peasants who had borrowed to expand cash crops output expecting prices to be maintained became quickly insolvent. Farmer suicides started and they continue to this day after a whole decade has passed: they are only the tip of the iceberg, the most tragic expression of a vast submerged world of distress. The share of both rural development spending and infrastructure spending fell drastically in the 1990s, the steepest rate of fall being the one during the Congress rule up to 1996. The Central government’s total development spending registered negative annual growth over the entire 1990s after growing at a steady 6 per cent annually during the 1970s and the 1980s under the previous Congress and alternative governments.

Pious wish-list

All this is known and history, it might be argued. In recent years development spending has risen again, so why harp on the past? The point is, first, that a decade of relentless state attacks on farmers’ viability has had such deep and traumatic effects in raising unemployment, drastically lowering the output growth rate, depressing mass incomes and hence reducing the incentive to invest by the peasantry, that only a well-thought-out and coordinated set of measures can revive this sector, which supports over three-fifths of our population.

Second, the world recession has unleashed a second round of income-depressing factors on rural producers by contracting demand, both internal and external, and leading to a fresh round of price declines, problems which are not being addressed at all.

In the present situation, the extant pontifications of the experts on agricultural revival are grossly inadequate and express a pious wish-list rather than a concrete action plan. Such a plan has to include genuine debt relief measures for producers including the state taking over farmers’ debt to private moneylenders, crop valorisation, crop price stabilisation through revival of the commodity boards and their purchase function, and income generation to revive demand. Our policymakers still refuse to face up to the fact that it is their misguided actions alone that have created the present crisis.

How committed the UPA government has been to reversing agrarian distress can be judged from the fact that the Reserve Bank of India ended Rs.6,000 crore general line of credit enjoyed by the National Bank for Agriculture and Rural Development (NABARD) two years ago. This country is sitting on a mountain of reserves, which are being used by the RBI to support the United States’ balance of payments, while it refuses to support rural development banking in this country even to the most meagre extent.

On the supply side, primary export thrust to fill supermarket shelves in Northern countries has shifted 8 million hectares away from foodgrains, resulting in a drastic drop in per capita grain output. The Planning Commission economists are talking about above 4 per cent growth rate during the period of UPA rule by taking the initial grain output as 198.4 million tonnes in 2004-05, which happened to be a remarkably low output year (the previous year’s output was 213 million tonnes), and then comparing this very low output with a peak output of 230 million tonnes in 2007-08. Base year manipulation and taking trough to peak output to dress up the growth rate is an old ploy although it fools nobody; prestigious bodies like the Planning Commission should not stoop to such cheap tricks. The country last saw a peak output of 199.4 million tonnes back in 1996-97 and it is this which should be taken for comparison with the 2007-08 peak output. The peak-to-peak growth rate from 1996-97 to 2007-08 works out to 1.3 per cent per annum, well below the population growth rate of 1.8 per cent. Per capita output is falling faster than ever before.

In such a situation of output shortage, food price inflation should have started long ago if demand had been maintained, but in fact the inflation rate was at a historic low with the Consumer Price Index for Agricultural Labour rising only 11 per cent over the five years 1999-2000 to 2004-05. What explains this? A severe squeeze on aggregate demand of the mass of the population (at least 60 per cent of the total) has been engineered through the measures of income deflation.

Advanced countries with a history of centuries of colonial exploitation and parasitism have developed the bad habit of believing that other peoples’ resources can be appropriated by them as they please. They have been paranoid about China and India with their vast populations using up more of the world’s scarce resources as their per capita income rises. They have deliberately advised income-deflating policies for India and other developing countries, which depress mass incomes and purchasing power, thus reducing the rate of domestic absorption of even basic foodgrains to ease the diversion of land to export crops for filling up supermarket shelves in the global North. Unfortunately, China’s market-oriented reforms have had the same effect of displacing grain with cotton and commercial crops.

The success of these income-deflating policies appears to be not known to former U.S. President George Bush and economist Paul Krugman, who have been quick to blame India and China for the 2007-08 global price rise citing their high rate of per capita income growth which they say must be raising grain demand per head both for direct consumption and for use as feed to convert into animal products. They do not have the slightest idea of what has been going on owing to their ignorance of the factual position as well as theoretical misconception. The factual position is that far from a rise, there has been a sharp decline not only in per capita output, but also in per capita total (food plus feed grains) demand over the period of market-driven economic reforms in both countries, namely, the last 15 years. The income of the minority indeed has been rising fast but, at the same time, the income of the majority has been falling or stagnating. The rise in per capita total grain demand of the minority which is getting richer and demanding more animal products, that is, more feed grains, is being more than cancelled out by an enforced fall in per capita grain demand of the majority which is stagnating or getting absolutely poorer. The result is overall decline, increase in mass hunger. Stagnating income too will produce falling food intake when market pricing for health, education, and so on raises these costs forcing sacrifice of food spending.

What Bush, Krugman and indeed many of our home-grown economists suffer from theoretically is the fallacy of composition (in which the behaviour of the part, the rich minority, is assumed to be the same as the behaviour of the whole, the entire population). Market-oriented reforms worsen income distribution while they are assuming unchanged income distribution. The National Sample Survey data on consumption show that, between 1993-94 and 2004-05, over 60 per cent of India’s rural population has seen a substantial absolute decline in the intake of both cereals and animal products such as milk, eggs and meat, while the top 10 per cent registered a sharp rise in animal product intake though not in cereal intake. The average decline in nutrition is the result of these divergent trends and we see not only falling per capita calorie intake but also falling per capita protein intake. The Army has been obliged to lower its physical standards for male recruits in some centres owing to the shortage of candidates satisfying the previous standards. While woman and child malnutrition is much talked about, the reality is that the entire population save the very top groups is affected. The percentage of persons unable to obtain a daily energy intake of even 2,200 calories rose from 58.5 per cent in 1993-94 to 69.5 per cent by 2004-05 and the position now would be worse.

The Kerala model

What are the measures which should be taken by the new government which will assume office two months from now to reverse these alarming trends? Much will depend on the political complexion of the government and its commitment to improving welfare. The measures taken to counter agrarian distress by the government of Kerala after assuming office in May 2006 can serve as a model in many respects.

First, it speedily formulated The Kerala Debt Relief Commission Act, 2006, which was notified on January 18, 2007. Under this Act, applications for relief were invited from farmers unable to repay debt including from private moneylenders. This immediately put a stop to harassment of indebted farmers and the suicide rate dropped sharply.

The procurement price of paddy was substantially raised a whole year before runaway global price rise forced the Central government to raise procurement price of wheat. Suicides in paddy-growing areas stopped and paddy acreage has started slowly recovering.

The National Rural Employment Guarantee Scheme was implemented with vigour in the affected districts with strictly equal pay for men and women, and has helped to restore demand. The recent commodity price declines as the global recession has taken hold will again affect farmers badly, and to prevent fresh distress, budgetary allocation to the extent of Rs.10 crore, to be raised if necessary, has been made last month for a Commodity Price Safety Net which will meet the difference between falling actual price to the farmer and a ‘living price’.

There are many measures which a Central government can take and which are not within the purview of the States. First, the indiscriminate signing of free trade agreements without any consideration for their adverse impact on our producers has to stop, and tariffs have to be raised for sensitive products and quantitative restrictions imposed when necessary.

Second, the purchase function of the Commodity Boards (such as Spices Board, Tea Board, Coffee Board) were terminated years ago and they exist only in name. Effective revival of market intervention by Commodity Boards to purchase a substantial part of output put on sale at minimum support prices is essential for stabilising price to the grower without which there can be no revival of profitability or investment.

Revival of mass demand is needed with a big thrust on development spending and on employment guarantee, without which once more food stocks will build up in godowns instead of meeting the needs of the hungry as in 2002, and a rising share of food subsidy will go uselessly in holding stocks.

The Land and Livestock Survey of 2002-03, compared with 1999, shows an alarming loss of livestock with over nine-tenths of all farmers and an alarming rise in the proportion of zero or ‘nil’ operational holdings, from 19.8 per cent to 31.2 per cent at the all-India level, while for States like Andhra Pradesh and Kerala the proportionate increase is even more than this average.

Many of our progressive intellectuals writing on land holdings are so petrified that they refuse to mention the facts of these surveys and produce only a single cryptic sentence in their papers saying the two figures are not comparable. Non-comparability if it does exist, does not preclude the situation being even worse than the data indicate. Facts do not go away if one buries one’s head in the sand, and a much more mature intellectual stance of facing unpalatable facts boldly is needed for formulating practical measures to reverse the trend of asset loss and virtually unabated distress which are emerging from the data.•

OBAMA OR OSAMA

Who Is The Worse Terrorist, Obama Or Osama?

President Barack Obama is making the Afghan War Obama’s Afghan War. Careful analysis of UN mortality statistics reveals that 46,000 Afghans have died avoidably in the first 40 days of the Obama presidency, including 32,250 infant deaths due to US war crimes..

On 27 March 2009 Obama unveiled a new strategy for Occupied Afghanistan and robot-bombed Pakistan: "The situation is increasingly perilous. It's been more than seven years since the Taliban was removed from power, yet war rages on and insurgents control parts of Afghanistan and Pakistan… Understand that we have a clear and focused goal: to disrupt, dismantle and defeat al-Qaeda in Pakistan and Afghanistan, and to prevent their return to either country in the future…That's the goal that must be achieved. That is a cause that could not be more just."

Obama, who has already ordered a surge of more than 17,000 additional U.S. soldiers and Marines to Afghanistan, promised another 4,000 “trainer” troops, taking the total to more than 55,000. Another 30,000 soldiers from various allied and NATO nations, including 2,500 from Canada and 1,000 from Australia, are also deployed in Afghanistan (see Globe & Mail, 28 March 2009)

Now PM Rudd of close US ally Australia has indicated that the Australian Government will send more troops to Afghanistan: "Australia and the United States and our allies and partners and friends need a credible, long-term strategy capable of securing the strategic mission, and the strategic mission is all about denying Afghanistan as a state for free operation for terrorists to have safe haven and training grounds to launch attacks in the future."

The Australian Government’s position must be seen in the light of Australian voter opposition to war in Afghanistan as revealed by a Newspoll reported by The Australian newspaper: “nearly two-thirds of Australian voters now oppose sending more troops to Afghanistan” (The Australian, 24 March, 2009) and testament from the commander of the British forces in Occupied Afghanistan, Brigadier Mark Carleton-Smith, that military victory over the Taliban is "neither feasible nor supportable", a view supported by Australian defence Minister Joel Fitzgibbon.

The initial “justification” for the War on Afghanistan was refusal of the mostly Pashtun Taliban Afghan Government to hand over the US-alleged master-mind of the 9-11 atrocity, Osama bin-Laden, to the US, although the Afghan Government offered to such a hand-over to a third party, noting that the US refuses to hand over alleged US war criminals to the International Criminal Court.

War and occupation of other countries is strenuously avoided by decent people and decent societies and for good reason – post-war violent occupation of other countries is typically associated with massive numbers of violent and non-violent excess deaths (avoidable deaths, deaths that should not otherwise have happened).

War is only justified in circumstances of illegal invasion and occupation by another country.

National excess mortality (avoidable mortality, excess death, avoidable deaths, deaths that should not have happened) is defined as the difference between actual deaths in a country and the deaths expected for a peaceful, decently-run country with the same demographics. The UN Population Division provides regularly updated data enabling authoritative estimation of mortality, excess mortality and infant mortality (see my book “Body Count. Global avoidable mortality since 1950”: http://mwcnews.net/Gideon-Polya ).

1. Using UN Population Division annual mortality data one can calculate (as of March 2009) post-invasion excess mortality of 3.1 million persons for Occupied Afghanistan (using a base-line annual mortality rate of 4 deaths per 1,000 of population for a peaceful, decently-run country with the same demographics).

2. Using UN Population Division data one can estimate post-invasion under-5 infant deaths at 2.25 million of which about 90% (2.0 million) have been avoidable deaths.

3. For impoverished Third World countries, under-5 infant deaths are about 0.7 of the total excess deaths. Accordingly, one can also estimate post-invasion excess deaths as 2.25 million/0.7 = 3.2 million (see “Layperson’s guide to counting Iraq deaths”: http://mwcnews.net/content/view/5872/26/ ).

4. In Occupied Iraq post-invasion violent deaths have totalled 1.3 million as compared to post-invasion non-violent excess deaths of 1.0 million. Assuming that the violent/non-violent excess deaths ratio in Occupied Afghanistan is half that in Occupied Iraq, then the post-invasion violent deaths in Occupied Afghanistan would be 0.65 x 3.15 million = 2.0 million (see “Iraq invasion 6th anniversary. 2.3 million excess deaths”: http://mwcnews.net/content/view/29360/42/ ).

5. The latest data from UNHCR indicate about 4 million refugees from the Afghanistan War, the breakdown being 2.1 million (Pakistan), 0.9 million (Iran), 0.4 million returnees and internally displaced persons (Occupied Afghanistan) and 0.3 million (refugees from the Pakistan North West Provinces) (see UNHCR ).

6. The estimate of a current 327,000 “annual under-5 infant deaths” in Occupied Afghanistan (from UN Population Division data) is in exact agreement with the estimate of 327,000 annual under-5 infant deaths in Occupied Afghanistan from UNICEF (see UNICEF).

7. Deaths from the Afghanistan War must also include post-invasion global opiate drug-related deaths due to US Alliance restoration of the Taliban-destroyed Afghan opium industry from about 6% in 2001 to 93% in 2007 (see UNODC World Drug Report 2007). About 0.1 million people die from opiate drug-related causes each year (see Australian National Drug Research Centre) and hence about 0.85 million have died since the invasion of Afghanistan, of whom about 90%, i.e. 0.9 x 0.85 million = 0.8 million people, have died as a result of the huge expansion of the Afghan opium industry under US Alliance occupation.

8. US Alliance military deaths in Occupied Afghanistan total 1,122 (673 US and 449 from other US Alliance countries) (see: http://icasualties.org/oef/ ).

9. In 2005, of 18,347 deaths due to narcotics and psychodysleptics, 12, 262 were due to heroin (2,011) , other opioids (5,789) or methadone (4,462) (see US CDC) . Given the over 90% contribution of the US restoration of the Taliban-destroyed opium industry to world illicit heroin production, and the interconnectedness and effective indistinguishability of “Afghan-derived heroin” from the “pool” of other abusively-used opiates, one can accordingly crudely estimate 0.9 x 12,262 persons/year x 8.5 years = 93,804 US opiate drug-related deaths (0.9 x 2,011 deaths/year x 8.5 years = 15,384 heroin-related deaths) connected with the aftermath of the US invasion and occupation of Afghanistan

10. It can be estimated that there are about 426 opiate-related deaths annually in Australia (see: here) of which about 90% (383) are due to the US-responsible Occupied Afghan contribution to the world heroin market i.e. 383 x 8.5 years = 3,300 opiate-related deaths since the invasion of Afghanistan (the Australian Government has fatuously obfuscated this in detailed communication to me by saying that most of Australia’s heroin actually comes from places other than Afghanistan) .

11. The number of Western civilians killed by Muslim-origin non-state terrorists in the last 40 years totals about 7,000 (this including Israelis and ignores substantial evidence for US or US surrogate involvement in the 9-11 atrocity (see “US responsible for 9-11?”: http://mwcnews.net/content/view/22944/26/ ).

12. In shocking contrast to the numbers in #11, as of March 2009 in the Occupied Palestinian, Iraqi and Afghan Territories post-invasion non-violent excess deaths total 0.3 million, 1.0 million and 3.2 million, respectively; post-invasion violent deaths total about 10,000, 1.3 million and about 2 million, respectively (see #4 above); post-invasion under-5 infant deaths total 0.2 million, 0.6 million and 2.3 million, respectively; and refugees total 7 million, 6 million and 4 million, respectively – this constituting a Palestinian Holocaust, an Iraqi Holocaust and an Afghan Holocaust and a Palestinian Genocide, Iraqi Genocide and Afghan Genocide as defined by Article 2 of the UN Genocide Convention and egregious war crimes due in part to Occupier war criminal non-supply of life-sustaining food and medical requisites demanded unequivocally by Articles 55 and 56 of the Geneva Convention Relative to the Protection of Civilian Persons in Time of War (for detailed documentation of sources see “Iraq invasion 6th anniversary. 2.3 million excess deaths”: http://mwcnews.net/content/view/29360/42/ ).

What can we conclude from this tragic litany?

More Australians have died from opiates due to the US-restoration of the Taliban-destroyed Afghan opium industry (3,300) than the number of victims of the 9-11 atrocity (3,000). Should Australia demand that Obama hands over the responsible Americans to Australia for justice?

Vastly more global citizens (0.8 million) and US citizens (94,000) have died from opiates since the US invasion of Afghanistan and the US Alliance restoration of the Taliban-destroyed opium industry than those who died on 9-11 (3,000). Should the World demand that Obama hand over the American perpetrators for justice before the International Criminal Court?

There is universal detestation of paedophiles, but paedocides – those who kill children – elicit utter horror. From the above data one can estimate that 327,000 Occupied Afghan under-5 year old infants die each year under US Alliance occupation, 90% avoidably and due to US Alliance war crimes i.e. 0.9 x 327,000 = 294,300 avoidable Occupied Afghan infant deaths yearly, 806 deaths daily and 40 days x 806 infant deaths/day = 32,250 avoidable Afghan under-5 infant deaths so far in the first 40 days and nights of the Obama Administration.

32,500 Afghan under-5 infant deaths corresponds to 32,250/0.7 = 46,000 avoidable Afghan deaths due to Obama. With 46,000 Afghan avoidable deaths in 40 days to his credit, Obama has already vastly exceeded the US-alleged Muslim-origin non-state terrorist body count of 7,000 total Western deaths over 40 years.

Who is the worse terrorist, Obama or Osama? Obama already wins hands down as the worse terrorist by an enormous margin. With Obama backing continuing foreign occupations of Haiti, Somalia, Diego Garcia, Palestine, Syria, Iraq and Afghanistan, extending US bombing of Pakistan and now permitting US or Israeli bombing of Sudan, Obama is set to take over the mantle from George W. Bush for being the World’s worst terrorist.

Dr Gideon Polya, MWC News Chief political editor, published some 130 works in a 4 decade scientific career, most recently a huge pharmacological reference text "Biochemical Targets of Plant Bioactive Compounds" (CRC Press/Taylor & Francis, New York & London, 2003), and is currently writing a book on global mortality ---

Neo-Liberalism On The Brink Of Failure

Neo-Liberalism On The Brink Of Failure


Prabhat Patnaik



Neo-liberalism is in obvious retreat. Its three main components, viz. trade liberalisation, financial liberalisation, and enforcement of “sound finance” through the avoidance of significant fiscal deficits, are in the process of being negated everywhere. President Obama’s exhorting his countrymen to “buy American”, and wanting to penalise companies resorting to business outsourcing, are the first steps towards protectionism. The acquisition of State control over large chunks of the financial sector in the US and the UK reverses the trend towards financial liberalisation; and even “nationalisation”, in the sense of the total dispossession of current owners and large creditors, of financial giants, is being discussed as a condition for putting tax-payers’ money into capitalising them. Increases in fiscal deficits through various stimulus packages are much in vogue. Neo-liberalism at present is clearly passé.
The real issue however is whether this represents only a passing phase until the crisis has blown over and things have returned to “normal”, or the end of the road for neo-liberalism. The adherents of neo-liberalism believe this retreat to be temporary. They expect the financial sector, once “normalcy” has returned, to be re-privatised; they expect that Obama’s protectionist rhetoric will remain only rhetoric; and they expect fiscal deficits to narrow once the economies are out of recession. But even in their best-case scenario there can never be a return to square one. What the crisis has done is to demonstrate to everyone that the unfettered functioning of markets can bring disaster; hence even after the crisis is over, whenever it is, there will be much greater regulation of financial markets. The need for regulation is an issue on which both the Americans and the Europeans agree, notwithstanding their differences over whether the fiscal stimulus should get priority over regulation or the other way around. The crisis has certainly destroyed the credibility of the neo-liberal ideology; and this will have a lasting impact even in the best-case scenario for the proponents of neo-liberalism.
But in fact the crisis will not be over soon, and that is precisely because of the residual legacy of neo-liberalism, which is the ideology of international finance capital, whose hegemony, notwithstanding all the jolts it has taken, is not so easy to shake off. And, paradoxically, the lingering influence of neo-liberalism, derived from the continuing hegemony of finance capital, will threaten neo-liberalism to an even greater extent over time, precisely by making the crisis more protracted.


EXPAND PUBLIC EXPENDITURE

The obvious panacea for the crisis is the injection of demand into the system through public expenditure; the injection of liquidity alone is not enough, since both financial institutions and individual wealth-holders simply absorb all such injected liquidity, without stimulating private demand via easier credit. The reason for this lies in their excessively high liquidity preference at present induced by the crisis itself (some have called this situation a “liquidity trap”). And if such injection of demand through public expenditure is to be effective, then it is better done through a coordinated expansion of such expenditure across a host of major economies, rather than by individual economies in isolation. But international finance capital does not like such a coordinated expansion; not surprisingly, there is no sign of it. The US and China have announced fiscal stimuli, but the US stimulus is too small to make much difference to the world (and China is not yet in a position to make much difference anyway). Europe refuses to launch, let alone coordinate, any significant fiscal stimulus.
Finance capital’s antipathy towards any expansion of public expenditure, or indeed towards any assumption of a proactive role by the State, except when such activism is directed towards its own interests, is well-known. In 1929 when the Liberal Party leader Lloyd George, on Keynes’ advice, had asked for the launching of public works programmes, financed by government borrowing, for combating unemployment in Britain, the British Treasury, under the influence of British finance capital, had summarily turned it down. Likewise, all proposals for a coordinated expansion of government expenditure across major countries, mooted for instance by a group of German trade unions and also by Keynes himself, were shot down even in the midst of the Great Depression of the 1930s. Indeed, Keynes remained a neglected figure in his own country prior to the war. Even Roosevelt’s New Deal, which is often supposed to have been inspired by Keynesian ideas, was a pretty tepid affair in the beginning. The moment an increase in public expenditure, through a larger fiscal deficit, had started off a recovery in the US, Roosevelt, under pressure from financial interests, cut back the fiscal deficit, precipitating another recession in 1937, from which the US economy finally came out only when war preparations began towards the end of the decade.
Notwithstanding the availability of the Keynesian prescription, capitalism recovered from the Great Depression only through war preparations. Japan was the first to overcome Depression through the re-armament drive of its military-fascist regime, and was followed by Germany after the Nazi takeover. Liberal capitalist economies overcame Depression only towards the end of the thirties when they began arming against the fascist threat. And the reason for this persistence of Depression lay in the fundamental opposition of financial interests to enlarged public expenditure (an opposition overcome only under fascism where they directly control State power in alliance with fascist upstarts, and where larger public expenditure is in any case for militarism).
The reason for this opposition lies above all in the fact that any proactive role of the State in operating a capitalist economy undermines the social legitimacy of the capitalists: if the State can run enterprises effectively, if the State is required for the smooth running of the system, then why have capitalists at all? This question acquires even greater pertinence in the case of those capitalists who represent financial interests and constitute in Keynes’ words “functionless investors” anyway. Hence restricting the role of the State to merely promoting its own interests (whose promotion is made out to be necessary for society as a whole) is what finance capital always wants.
This opposition was overcome in the post-war years only because of a relative weakening of the position of finance capital. The war changed the correlation of class forces in advanced capitalism: there was a certain decline in the social and political weight of finance capital and a corresponding increase in that of the working class which marked the ascendancy of (old-style) Social Democracy and paved the way for the introduction of Keynesian demand management. But with the process of centralisation of capital giving rise to the formation of huge blocs of finance, and ultimately to the phenomenon of “globalisation of finance”, finance capital, in the new garb of international finance capital, re-acquired the strength to overcome Keynesian demand management and usher in the regime of neo-liberalism and globalisation. Finance capital’s opposition to State activism in short never disappeared even in the heyday of such activism.

CAPITALISM CHARACTERISED BY PARADOXES

This explains why international finance capital even at this moment is less than happy with fiscal stimuli in the form of larger State expenditure (which, for political acceptability at large, have to be directed towards the welfare of the people). It would rather have the State using public funds to “bail out” the financial system (without disturbing the position of the owners), until the next “bubble” comes along to initiate recovery. (It is instructive in this context that in India while the government has accepted the need for a larger public expenditure stimulus, it has deftly tried to use this stimulus for larger “viability gap funding” under PPP, i.e. for putting more public money in capitalists’ hands).
This opposition to fiscal stimuli will certainly delay recovery, which will prolong the distress of workers thrown out of jobs, and of peasants and petty producers suffering from adverse terms of trade. This will bring home to people in an even more stark fashion the bitter consequences of neo-liberalism, snuffing out any remaining chances of its making a comeback. Finance capital’s opposition to any abandonment of the neo-liberal tenets therefore will paradoxically undermine even further the prospects of survival of neo-liberalism. But then capitalism, not being a planned system, is always characterised by such paradoxes.
There is an even deeper reason, apart from the pervasive demand for “regulation” and the fact that the crisis is likely to be a protracted one, why neo-liberalism has reached the end of its tether. Any capitalist economy with “free” asset markets, especially “free” financial asset markets, is marked by the formation and bursting of “bubbles” in such markets. While the formation of “bubbles” strengthens the boom, the bursting of “bubbles” plunges the economy into a slump. It recovers from the slump only when some “external” source of demand, i.e. “external” to the regime of “free market capitalism” itself, happens to be present. Throughout its history therefore whenever capitalism has had such an external crutch, it has performed well on average, even as “bubbles” have been formed and burst, i.e. even through the phenomenon of the superimposition of “bubbles”. The booms in such situations have been pronounced, while the slumps have been relatively short or shallow, since the external crutch has been used to lift the system out of such slumps. On the other hand whenever such an external crutch is absent, the system witnesses Great Slumps following the bursting of “bubbles”.
In the pre-first world war period, capitalism had the crutch of the so-called “expanding frontier”. Millions of Europeans migrated to temperate regions of white settlement like the United States of America, Australia, New Zealand, Canada and South Africa, and captured land by driving away the original inhabitants. Their direct and indirect demands for goods and services in their new habitats, including for infrastructure, kept up the level of aggregate demand in world capitalism, and even gave rise to substantial capital export from the old capitalist countries, much of it financed through the extraction of surplus from tropical colonies like India.
This process came to an end with the first world war, so that the inter-war period may be seen as one where capitalism did not have any such external crutch. It had lost its earlier crutch but had not yet developed any new crutch. Not surprisingly, it experienced the Great Depression in this period. With the bursting of the 1920s “bubble”, the slump that set in could not be alleviated through recourse to any external crutch, since the old crutch did not exist and nothing new had taken its place.
Keynes’ prescription that State expenditure should provide a demand stimulus was an attempt to give capitalism a new “external” crutch. The prolonged boom of the post-war period was a result of the fact that the system had acquired this new crutch. But with the demise of Keynesian demand management, after the emergence of international finance capital and the institutionalisation of neo-liberal regimes, capitalism was once again left without an external crutch, exactly like in the inter-war period. Not surprisingly, with the collapse of the “bubble” of the 1990s, it is plunged once more into a Depression that is reminiscent of the Depression of the 1930s. Unless it can find a new external crutch, the system will remain submerged in crisis, with small ups and downs around a basically stagnant state.
Such a new crutch realistically can only be State expenditure, but within a new regime that overcomes the infirmity of the old Keynesian regime. For instance, the coordinated fiscal stimulus mentioned earlier may have to be institutionalised in some manner, so that it becomes a permanent feature of world capitalism rather than being merely an episodic arrangement to counter slumps. But capitalism is not a planned system; what new crutches become available to it is not simply a matter of developing some ideas and putting them into practice. As mentioned earlier in the context of the emergence of Keynesianism, the arrangements that come into being under capitalism are ultimately the outcome of class struggle; and where such struggle leads society, whether to a prolonged deadlock, or to some new capitalist arrangement, or even to a system beyond capitalism altogether, cannot be predicted beforehand. What is clear however is that the period of widespread acceptance of the neo-liberal capitalist arrangement is over.

A Year Of Progress Of Latin

2008 : A year of progress in Latin America and the Caribbean

Nidia Díaz

• THE year 2008 in Latin America and the Caribbean was marked principally by the consolidation and expansion of the various processes of social, political and economic transformation underway in the region. And it was characterized by the independent positions taken, including in defense of national sovereignty, which became evident at different points.

The regime of George W. Bush failed resoundingly in its attempts to frustrate these processes through pressure, threats, coercion, and the use of all kinds of violence and subterfuge, implementing conspiracies and plots with the complicity of their servants in the national oligarchies.

At the end of 12 months, the empire’s impotence is evident. Consequently, U.S. imperialism is harvesting its most resounding failures, which the outgoing administration must assume without wanting to, noting with displeasure the advance of democratization and attempts to find greater social justice and equity, and the fact that the plunder of natural resources and capitalism’s age-old predatory policy has been halted by new leaderships in power in several of our countries, placed there by the will of the immense majority of the electorate, as expressed at the ballot box.

In one way or another, at a slower or faster pace and always in line with the traditions, conditions and concrete situations of every Latin American and Caribbean country, the new processes of emancipation are fighting to open the way. This is not without facing the staunchest resistance from the exploiters, who will not hesitate to resort to extreme violence and make the peoples pay the highest price. What happened in the Bolivian department of Pando last September, when the opposition governor reacted to a peaceful demonstration by ordering a massacre, is evidence of that.

This progress is taking place in the midst of a profound international economic and financial crisis caused by the United States, accompanied simultaneously by an energy crisis, food crisis, abruptly higher or lower prices for energy, raw materials and food, and a widespread environmental crisis resulting from climate change and its accompanying natural disasters.

Even so, the balance of the year in this region shows results that are concretely positive and inspire hope for the future, demonstrating that confronting the empire and efforts to escape from dependence are possible, and yield benefits when progress is made in this consistent, firm and intelligent manner.

The prestige and moral authority of the nations of Latin America and the Caribbean are growing before the world’s eyes, and one example of that is the mandate of Miguel D’Escoto, former foreign minister of Nicaragua, as president of the UN General Assembly, where Washington’s criminal blockade of Cuba was once again resoundingly rejected. Meanwhile, the empire’s aggressive measures, such as the reactivation of the U.S. Navy’s 4th Fleet, are universally repudiated.

A summary of some of the most important events in the region over the year reveals the progress that has been made, gradually but surely, marking the aforementioned expansion and consolidation. This look back, which we have no doubt could include additional elements, covers all the sub-regions (South America, Central America, the Caribbean), together with specific situations in some countries in particular, and which should be mentioned in terms of giving a more complete picture:

• The creation of a United Nations of the South (UNASUR) as a mechanism of consultation and integration for all South American countries, without foreign intervention.

• Advances by the Bolivarian Alternative for the Americas (ALBA), with the entry of Honduras and Dominica and the approval of a common monetary zone as a preliminary step toward a common currency, with a view to achieving independence from the dollar.

• The Colombia-Ecuador conflict and action taken independently of the Rio Group, making it possible to avoid an armed conflict between the two countries in response to the violation of Ecuador’s territory by Colombian troops. It was a moment that evidenced the necessity of a mechanism free of the conditions of and dependence on the OAS or the USA.

• Cuba’s entry into the Rio Group, ratifying respect for, political authority and confidence in the Cuban Revolution and this group of nations’ independence in terms of foreign policy.

• The election of former bishop Fernando Lugo as president of Paraguay, ending 70 years of domination by the Colorado Party, including the dictatorship of Alfredo Stroessner and his participation in the criminal Operation Condor.

• Regional elections in Venezuela, confirming the United Socialist Party (PSUV) as the main political force in that country, after it obtained 5.5 million votes and the opposition lost 300,000 despite the empire’s sponsorship. The PSUV won 17 of the 22 governorships up for election and overwhelmingly won the immense majority of mayoralties.

• Municipal elections in Nicaragua, where the Sandinista Front won 105 of the 146 city councils up for election, removing important spaces on the political map of that Central American country from neoliberal right-wing forces.

• A recall referendum in Bolivia that ratified the majority support enjoyed by President Evo Morales, and broke up the conspiracy of opposition governors with the White House, thus clearing the way for the referendum that will decide on the Constitution.

• A new Constitution was passed by referendum in Ecuador.

• Generalized violence in Mexico; a record number of victims attributed to drug trafficking and organized crime, and the rise to national prominence of a giant mass movement against privatization of the oil industry.

• First Summit of the countries of Latin America and the Caribbean — without foreign participation — on integration and development, in Salvador de Bahía, Brazil, organized by President Lula Inácio da Silva as unequivocal proof of the region’s maturity in terms of finding solutions to its problems.

• 3rd Cuba-CARICOM Summit in Santiago de Cuba, as an expression of the strengthening of our country’s ties with its counterparts in the Caribbean.

• Visits by the presidents of China, Russia and Brazil (the latter twice) to Cuba, with important economic and political results.

• The strengthening of mutually beneficial relations among the Chinese, Russian and Iranian presidents and important Latin American counterparts.

• The expansion of health and education services, as part of the ALBA accords, to several countries in the region, even though they are not part of that new mechanism of integration.

The year 2009 will begin with more than a few questions concerning the new president of the United States, Barack Obama, and the implications of his mandate for Latin America and the Caribbean. The new year will test the question of whether or not Obama is capable of leading respectful, realistic policies on the region, or if he will repeat the old ways of arrogance, intimidation and plunder that have predominated in the conflictive relations between the powerful northern neighbor and the nations of Our America, up until very recently humiliated and scorned and reduced to the role of the empire’s "backyard."

Hopefully, the new White House incumbent will assume as his own policy the principle of José Martí that recommends "live with the times, and not against them." Only by recognizing that Latin America and the Caribbean are experiencing new times will he be able to articulate what is so necessary and what all aspire to: a neighborly relationship based on mutual respect and trust.

It will be a new situation for the region, one that should be followed very closely. •