01 A CwiWorldCongress2010 Documents

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Documents for the World Congress 2010

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CWI 10th World Congress 2010: World Relations, Document No. 1............................................................3 CWI 10th World Congress 2010: Asia, Document No. 2............................................................................13 CWI 10th World Congress 2010: Middle East, Document No. 3................................................................23 CWI 10th World Congress 2010: Latin America, Document No. 4..............................................................33 CWI 10th World Congress 2010: Europe, Document No. 5.........................................................................41 CWI 10th World Congress 2010: Eastern Europe & CIS, Document No. 6.................................................53
CWI 10th World Congress 2010:
World Relations,
Document No. 1
1. Capitalism from a social and economic standpoint has faced in the last three years one of its greatest crises in its history. If mass parties of the working class existed even the limited bourgeois workers parties of the past then, in all probability, left reformist, centrist and revolutionary ideas would now be widely discussed in society and particularly within the ranks of the organised working class and labour movement. 2. The absence of a mass point of reference for the undoubted seething anger of the masses has helped to blunt the challenge to capitalism in the short term. The bourgeois ideologists openly celebrate this outcome. They expected an ideological, industrial, social and political tsunami which would overwhelm them: There will be no more glad mornings celebrating the superiority of the unconstrained market, wrote the Financial Times. Now, the same journal proclaims the market (capitalism) is back. serious crisis, a force does not show an alternative to capitalism itself. During the 1930s devastating depression in the US, there were phases of growth from 1934 -37 for instance. But this did not eradicate mass unemployment nor lead to a new structural growth of the productive forces. Without the impetus provided by preparation for the Second World War and the war itself, capitalism would have been plunged back into a deeper crisis. 6. Unfortunately the working class, with a huge burden of decades of neo-liberalism on its back and hobbled by the lack of mass organisations and leadership, has not been able to put its stamp on the situation. There have been titanic battles Greece, France, Spain, India, South Africa, etc. with more to come. And what is striking about the current economic situation is that, despite this, capitalism, as we predicted, has not been able to stage a full recovery. On the contrary what growth has been recorded in the recent period, and then only in some countries, has been anaemic and has not in any way returned the economy to its position prior to the crisis. 7. The desperation of the capitalists and its empiricism and short-termism is demonstrated by the eagerness with which one months favourable economic statistics are seized on to indicate that a full return to economic health is imminent only for these hopes to be dashed when the next months figures show the opposite.
Economic Recession
3. Since 2007, world capitalism has been in the grip of what capitalist experts describe, with some relief, as the great recession. Through state measures of bailing out the banks quantitative easing together with other economic short-term measures they have managed to avoid, up to now, a repetition of the last Great Depression of the 1930s on a world scale. In reality, parts of the world in Europe, Spain with 20% unemployment, some countries in Eastern Europe are mired in a depression. The measures of Obama in America, for instance, have saved at least one million jobs. But still eight million workers have been ejected from the factories since 2007. 4. Unemployment stands officially at almost 10% but unofficially, with those who have given up looking for a job, part-time working, etc, the real unemployment or underemployment figure is 20%. Despite the much vaunted speculation and celebration in capitalist circles about economic recovery this remains elusive. 5. Marxists have always pointed out that capitalism will always recover if, in a crisis, even a
Double dip
8. In reality, most serious commentators have swung over to the idea that what they call the double-dip is now virtually inevitable. There is open discussion that the recovery is more like the proverbial dead cat bounce. It is now referred to as the Great Disappointment. Moreover, the bourgeois are completely divided as to how to tackle the huge state debts the debt overhang which is a consequence of the colossal bubbles in the financial and other sectors of the economy in the last 20 years. One British economist has written that this bubble was the biggest for 130 years. The Governor of the Bank of England, Mervyn King, said it was the largest ever and its consequences will be
CWI 10th World Congress 2010: World Relations, Document No. 1

tion of $50 billion. 12. This will, however, have only minimal effects. Trotsky pointed out that only the richest countries in reality only the US at the time with plump savings were able to afford the minimal measures of the New Deal. Now American imperialism, weakened economically, crippled by the twin deficits of the federal budget and of trade, is in no position to repeat the Roosevelt experience of stimulating the economy. In any case, as is now widely understood, Roosevelts priming of the pump was short lived between 1934 and 1937-38. Then the cuts to the pensions of the First World War veterans and other economic retrenchments began to undermine even the achievements of the New Deal. 13. Obama will probably face a hostile Congress, both in the House of Representatives and Senate, after November although the emergence of the Tea Party movement in the primaries could undermine the success of the Republicans. He could be prevented from carrying through further stimulus measures. However, like Roosevelt, whose popularity declined at one stage, Obama and the Democrats could make an electoral comeback. In fact, a right-wing House and Senate is likely to be heavily influenced by the lunatic right of the Tea Party. It could act as the whip of the counter-revolution. This may later benefit not just the Democrats in the run up to the next presidential elections, but would also prepare the way for movements, within the unions in particular, for a third party, a workers and left alternative.
with us for years to come. There is in fact an open split of an unprecedented character between the debt deniers and the growth deniers. This is a division between the Keynesian, in fact the quasi-Keynesian, school of economists and those who advocate, in effect, deflationary policies. Both are right in their criticisms of the other school we have dealt with this in other material and both are wrong in their different solutions to the crisis. 9. This in turn has provoked a political crisis for the bourgeois and their parties. The divisions between the capitalist parties and within them, in the US, Japan, in practically all the states of Europe, have widened considerably. The lack of confidence in all the major parties is mirrored in some countries like Britain and Australia in the phenomena of hung parliaments with no party able to govern alone and the emergence of unstable coalitions. Belgium has been without a government since April! In Japan, everyone demands their five minutes of fame as prime minister. This, in turn, reflects the organic economic crisis of Japan the further growth in the colossal state debt, with the deflationary tendencies of the last two decades still not purged from the system. 10. The massive and economically unsound financial bubbles of the last 20 years have left in their wake an organic and drawn-out crisis of capitalism. The accumulated debts of companies, of the state and of individuals mean that the economy of capitalism will be hobbled for a protracted period. Paul Krugman the foremost of the advocates of Keynesian measures is right when he says that to slash the deficits precipitately, as advocated by the ConDem government in Britain and others, will only enormously aggravate the situation in a world crippled by lack of demand. If the present policies of the European capitalists, and even Obama, up to now, continue, a long depression, similar to that which affected capitalism in the late nineteenth century is possible. 11. This is a manifestation of the Hoover economics of savage cuts of the US government and others following a 1929-style crisis. Obama, unlike Franklin Roosevelt, came to power not as the latter had done when the economy was emerging from the crisis but instead in the very midst of the crisis inherited from the Bush Republican administration. Therefore the measures of Obama in rescuing the banks and financial sector have had a minimal effect. Now in panic at the prospect of election meltdown in the November mid-term elections he has advocated a jobs programme, amounting to an injec-
Drawn-out crisis
14. The economic perspectives for capitalism are of a drawn-out crisis, to be precise a series of crises. The system has arrived at one of those points in history in which it is in an economic cul-de-sac. The crisis confronting the system is symbolised by the colossal liquidity, the accumulation of record profits not just by the banks but non-financial companies as well, despite at the moment having no profitable outlets! Fully an additional $2 trillion is sitting in the bank accounts of the major companies in the US. Additionally, there is $10 trillion hoarded by the rich which cannot, it seems, be invested with any guarantee of a reasonable return. Instead, capital has fled into government debt, as with Britain, despite its risky huge state debts. 15. Consumer spending has dropped in the US, as it has in Europe and Japan. A few bright spots for capitalism in Latin America, particularly Brazil, in Germany for special reasons, the

growth of China, Australia etc are the exceptions to the general picture which exists. Where there is limited industrial growth in Germany for instance this will in no way consolidate capitalism. 16. On the contrary, in Germany it is quite striking that the trade union leaders were advocating that the working class should tighten its belt because of the parlous economic situation are now echoing the demand for our share which workers are making. Moreover this growth in Germany does not mean that the economy has fully recovered from the crisis. Production has not yet reached its pre-crisis levels and the German bourgeois are still preparing to cut welfare, attacking the poorest sections of the population. This economic stagnation deflation may be added to by a bout of inflation in food prices and raw materials in some regions and countries.
The 4 to 5 million Iraqis forced to flee from their homes either to internal exile or abroad will be added to now as sectarian conflicts are likely to tear the country apart. 20. The CWI will work towards supporting all those working-class progressive and democratic forces in the country striving to rebuild the organisations of the working class, the trade unions. It will also support and fight for a genuine political voice of the working class in the form of a new mass workers party. The US consul in Iraq following the invasion was Paul Bremer who immediately introduced anti-working-class, anti-strike laws and banned the unions in the public sector. This underlined the fact that behind this intervention was not at all a liberal agenda but a ruthless capitalist, imperialist policy to grab the resources of the country, which necessitated the weakening of those forces the unions which could stand in the way of this. 21. This brazen, naked, cash calculation policy in the neo-colonial world was summed up by the comments of a senior Pakistani diplomat in relation to the future of Afghanistan: The Afghan government is already talking to all the stakeholders, [the Taliban]. The only stakeholders not consulted, of course, are the workers and poor of this ravaged country. 22. It is widely recognised that the Afghan conflict which has now lasted longer than American involvement in Vietnam is unwinnable. To begin with, this war was perceived by US imperialism and its allies as a war of the future with a minimum of military or civilian casualties. This would be possible because of the so-called revolution in military affairs following the end of the Cold War. But like Russias intervention in Afghanistan, this idea was smashed in Afghanistan and in Iraq. The situation necessitated the US and its allies to conduct a traditional counter-insurgency strategy. This led to the traditional policy of divide and rule, perfected by British imperialism. They fomented a sectarian civil war in Iraq and backed the majority Shias. This effectively led to the defeat of the Sunnis and in the process, by buying support from the Sunni chiefs, nullified the effects of Al Qaeda. 23. But the colossal expenditure of trillions of dollars in both countries has only led to a tacit defeat. There is now open recognition of the difficulty of promoting the hearts and minds strategy because of the total rejection by the Afghan people of the organically corrupt central government, its corrupt officials, as well as the foreign invaders. In despair, sections of the US
Iraq and Afghanistan

17. This is the background to a highly unstable scenario in the field of world relations. The dream of Bush, and the Neocons was symbolised by so-called liberal interventionist policies, first in Kosova and then much more devastatingly in Iraq and Afghanistan. The US maintained that it would be able to establish a unipolar world is buried under the rubble of those countries. Bush and Blair invaded Iraq against the background of shock and awe. Obama is trying to give the impression that the US is quietly pulling out of Iraq and liquidating this adventure. In reality the US will retain at least 50,000 troops either within the country or close by with the ability to intervene if necessary. 18. To this purpose a whole network of US bases which did not exist before the war have now been constructed to facilitate speedy incursions. Nevertheless it would appear to the peoples of the region and the US that the foundation stone of the war on terror brutal invasions certainly as far as US imperialism and its allies are concerned has ended. But if the USs vital interests are threatened it will not hesitate to intervene once more in the region, if able. 19. And the agonies of Iraq will not end. On the contrary the net upshot of the invasion and occupation as the CWI foreshadowed which led to the removal and execution of Saddam Hussein will only result in the creation of two, three or more Saddams, dictators, in the country. Iraqi democracy is a thin veneer, seeking to mask colossal divisions. The invasion unleashed sectarian tensions that had been kept in check by ruthless military means by Saddam.
establishment, led by its former ambassador to India, now openly advocate the partition of Afghanistan. 24. This would involve giving the south in which the Pashtuns are the majority independence from the north, dominated by ethnic groups apart from the Pashtun. This would have the additional advantage of exerting pressure on Pakistan and particularly on its intelligence agency the ISI, which created and supported the Taliban, to rein in its former protg. In any case the Taliban, although it has enjoyed military success with an increase of 50% in attacks on occupation forces in the last year, cannot because of the ethnic divisions in the country rule alone. On the other hand, as other bourgeois commentators have pointed out, the partition of Afghanistan is dangerous and could begin the process of ethnic and national unwinding throughout the region, affecting Pakistan, Iran, etc. 25. One thing is clear: imperialism cannot impose from the outside a lasting solution in either Afghanistan or Iraq. Indeed even with the reduced military presence on the ground domestic support in the occupying countries for the continuation of military intervention particularly of the US and Britain, which, per soldier deployed, has now lost as many as the Russians did in Afghanistan will evaporate. 26. The conclusion which the strategists of American imperialism are likely to draw from this is not that they will not or cannot intervene to safeguard their economic and military strategic interests in the future. They are still the strongest military force by a long way in the world. But the character of this intervention must change. It is unlikely now, even with a predominately professional military force, that the US will be able to undertake anything more ambitious than short-term military-police type interventions. Moreover, the support of allies, i.e. coalitionism, is now necessary rather than a unilateral approach in any large-scale actions. Soft power must be accompanied with hard power. 27. It is possible, for instance but not the most likely variant that together with the Israeli regime the US could still attack Iran. The consequences of this however would be incalculable worldwide, particularly in the Middle East. The European Union, which had ambitions to economically match the US and with this to enhance its own military prowess, has seen, those hopes evaporate as the economic crisis and consequent feebleness and widened national divisions have taken their toll.
China, Russia and their relations with the US

28. China is perhaps the only power which, at present, looks able to begin to match the US in the future and even then it is still puny militarily and economically in relation to the US at the present time. China on a per capita basis still has an income no greater than El Salvador in Latin America! Europes income per head is ten times that of Chinas. But it has moved from a predominantly land-based military force into building up the strength of its navy. 29. The Chinese regime will, moreover, not be hesitant to bolster its international presence with the use of military power should a situation warrant it in Asia in particular where locally it clashes with US imperialism, and in the future a resurgent Japanese military. The rising power of India will also come into collision with Chinas expansionary tendencies, particularly in its drive to acquire vital new materials such as oil and agricultural products. 30. Russia has also come into conflict with the US particularly in Central Asia which is considered by the new-born but unstable Russian capitalists to be their sphere of influence, the near abroad. The whole of Central Asia is at flashpoint. Suffering from terrible poverty, riddled with corruption and mass unemployment, and with a cocktail of unresolved national conflicts, the uprising in Kyrgyzstan can be repeated in other countries in the region. 31. Kazakhstan, the largest state in the region, is a prime candidate as the opposition to the dictatorship of Nazarbayev and his family coterie has grown and speeded up recently. An heroic opposition to the regime is spearheaded by the burgeoning forces gathered round the CWI, particularly in Kazakhstan 2012, the independent unions etc. The tremendous work within Kazakhstan together with the international pressure exerted on the regime must be maintained and stepped up. We must be prepared for abrupt changes, given the huge mass discontent which is bubbling to the surface. 32. A spat over Russian spies in the US more farcical than sinister produced tensions between the US and Russia. But in reality the US and Russia especially during the Obama presidency have been drawn closer together by a combination of factors. Russia has sought an accommodation with the US, especially through Russian President Medvedev, not least because of the weakened economic position of Russia arising from the economic crisis. Over-

dependence on exports of oil (less oil is now produced in Russia than in the 1970s), gas and raw materials meant that during this crisis Russia contracted economically more than any other G8 country, by 8% in 2009. Comparisons are now being drawn, within Russia itself, between the current situation and the period of stagnation under the Stalinist regime of Brezhnev. 33. Another consequence of the crisis is that the regime of Putin/Medvedev, with its authoritarian character, has come into collision more and more with the discontented masses of Russia. The diffuse opposition the organised expression of this is very limited at the present time. However the protests and demonstrations are finding a greater echo than previously amongst the mass of the population. 34. This summers unprecedented heat wave which was the hottest for 100 years combined with devastating forest fires enormously aggravated the gross deficiencies in the ability of the state to deal with catastrophes like this. Striking was the presence and effectiveness of CWI members in a protest against the opportunist attempt to build a road through the hitherto protected forest areas under the cover of this calamity. 35. One of the consequences of the fires resulting from the heat wave is that Russia lost 25% of wheat production. This will contribute to a sharp increase in food prices in Russia and worldwide. Combined with food shortages arising from droughts and floods in other parts of the world, this has meant a drastic reduction in food supplies which has led to significant growth in world hunger. In 2007-08, more than 100 million people were tipped into hunger by the economic crisis. In 2006, the number of undernourished people was 854 million. In 2009, it was 1.02 billion, the highest figure since records began. The hungry are not just in the neo-colonial world; over Christmas 2009, 57 million people in the US did not know where the next meal was coming from! Food riots broke out in Mozambique which will be repeated elsewhere in the next period, and maybe not just in the neo-colonial world. 36. The heat wave and fires in Russia have been mirrored in disasters in other parts of the world which, combined with the catastrophic floods in Pakistan, are amongst the worst natural disasters that the world has seen. A major cause of this is climate change due to environmental pollution and destruction. Natural disasters are inevitable. But the consequences can be enormously aggravated by the corrupt character and the incapacity of the regimes
which confront the consequences of these disasters. Even the most advanced industrial country in the world, the US, George W Bushs government, was profoundly affected by the Katrina episode. Five years after the event New Orleans has still not fully recovered from its effects. How much longer lasting then will be the effects of the crisis in Russia, in Pakistan and elsewhere in the course of this year?
Pakistan
37. History attests to the fact that natural disasters earthquakes, heat waves, etc are often the spark, the midwives for revolution or a revolutionary situation. Forty per cent of Pakistan was flooded at one stage with reports that some rich feudal landlords deliberately diverted floodwaters away from their land towards that of the poor. Syed Gillani, the Pakistani prime minister, was openly attacked and vilified as the rich continued to prosper while the masses suffered the unspeakable effects of the crisis. Even the military, because of its intervention to help the poor, enhanced its reputation. 38. The fundamentalists tried to capitalise on the crisis and have been partly successful because of the complete paralysis of the state. The Pakistani state was, in effect, washed away during the floods. The full consequences of these events will only be felt when the floods recede. It is a great source of pride that our organisation in Pakistan and the CWI, in the most difficult circumstances faced anywhere in the world, has risen to the occasion, has been involved in the collection of resources for the poor and working-class and has continued to act in a political capacity. 39. China has also faced the consequences of floods. However, while the state has not exactly shone in its performance during these events, nevertheless they have not had as serious consequences as in Pakistan. It is the social earthquake of the strikes in China this year which have had a more decisive effect on the situation. 40. Although the strikes broke out spontaneously and reflected the inhuman conditions in the gigantic factories especially on the eastern seaboard of China the regime, having opposed them at first, sought to accommodate itself to the situation. It was helped by the fact that the strikes broke out in foreign-owned factories in the first instance. Sympathetic noises came from the government, with even concessions about the need for trade unions. There was recognition, a hope, that if the workers gained wage increases which they did

ets of every American household. It will be the actions of this massive working-class, numerically the strongest industrial proletariat in the world, which will be decisive in shaping events in China. 46. The same applies to India, where the working class has re-entered the political arena with the recent general strike. In Sri Lanka, our section has played a decisive and heroic role in fighting the ethnically-based Rajapaksa regime, in reality a dictatorship with a thin veneer of democracy. 47. Despite its seeming strength, the government is propped up by Pakistan, India and China. This and the aura of victory in the civil war can sustain this government for a period. But the underlying condition of the masses has not improved. This will lead to an opposition movement at a certain stage.
this would increase the purchasing power of the masses and hence boost the internal market. 41. But in reality the Chinese regime, like any dictatorship, has also worked to furiously prevent the independent movement of the working class. The strikes are an indication of what is coming; they have not as yet developed into broad-scale movements with the working class testing out its strength in big struggles, creating organisations in the form of independent unions and preparing to energetically combat the employers and, behind them, the Chinese state. 42. But the strikes have an enormous symptomatic importance, a sign of what is to come. They bear some resemblance to the pre-1896 situation in Russia, which was characterised by individual and sporadic strike action before culminating in the strike wave of 1896 in St Petersburg. This in turn allowed the working class to find its voice and developing separate organisations. This in turn laid the basis for the subsequent explosive industrial and political development of the Russian working-class through the creation of a mass party, the RSDLP, the 1905 revolution and of course the great events of 1917. 43. Despite the seeming all-powerful strength of the state, the Chinese workers are set to upset the apple cart by their movement in the next period. The CWI is well-placed to participate in and play a leading role in this movement. The spectacular economic fireworks of China have done nothing to drastically improve the lot of the Chinese masses. The 130 million migrants who work in Chinas boom towns and cities take home as little as $197 a month, which is little more than one twentieth of the average monthly wage in the US. 44. The current shortage of labour strengthens the hand of the Chinese workers to demand increases. These appear to be quite substantial from 17 to 30% but are, in reality, percentages of very meagre wages. Even then, foreign capital, with the backing of the Chinese state, searches for even cheaper labour in the hinterland of China and in other parts of Asia: Vietnam, Laos, Cambodia, etc. 45. The actual share of the working class in total wealth has dropped dramatically in the last few decades. Wages were 56.5% of gross domestic product in 1983 (when the planned economy still existed) but were only 36.7% in 2005. This has provided a huge boost to the US which through a mass of cheaper goods exported to the US has, in effect, according to the Economist magazine, added $1000 a year to the pock-
Middle East
48. Another hotspot for imperialism is the Middle East. There is not one stable regime in the region. The Palestinian-Israeli conflict is as intractable as ever. But such is the outrage worldwide at the repression of the Palestinians by the Israeli state that capitalism, particularly Obamas administration, must be seen to be acting to try to resolve the situation. This led to the peace conference initiatives in Washington. But on the ground the polarisation between the Palestinians and the Israelis is as sharp as ever. 49. Pressure is mounting for some kind of resolution of the conflict. The outrage of the imprisonment of one and a half million people in the putrid and festering Gaza Strip has compelled the European powers witness the statements of Cameron and the Americans to be seen to be doing something. 50. The peace conference in Washington brokered by Obama is formally geared to laying the basis for a two-state solution. But this would require as a first step a building freeze, and then some dismantling, of Israeli settlements on Palestinian land in the West Bank and Jerusalem. But if Netanyahu conceded that, or even a continued freeze on building after the end of September when it is intended to run out, then the right would walk out of his government and it would collapse. There have even been voices raised recently surprisingly on the right in Israel for a common state which would draw in particularly the Arab Palestinians on the West Bank with Israel. 51. Gaza would, under this plan, be cut off,

isolated and probably forced into Egypt as a consequence of this perceived option. Sections of the Palestinians, largely the petty-bourgeois, have suggested the South African option. This involves giving up the two-state solution which is now seen as unobtainable by many because of Israeli intransigence and US impotence and replacing it with the demand for a common state of Palestinian Arabs and Israelis. Because of the greater birth rate of the Palestinians this would mean that they would form a majority within the state over time. It is reasoned that if a democratic Israel was to reject the demand for one person one vote, it would make Israel as massively unpopular as the apartheid regime in South Africa. 52. Some on the Israeli right, such as Arens, a former foreign minister for Likud, and even some of the settlers leaders on the West Bank, are, incredibly, attracted towards a solution of this character. However, they would exclude the one and a half million Palestinians in the Gaza Strip. Moreover, equal rights would only be introduced gradually. Such a solution is likely to be rejected by the overwhelming majority of Palestinians. It is therefore likely to be a nonstarter. 53. But nevertheless these developments indicate the attempts on the part of both sides to try and escape from the intractable existing situation. They will come to nothing as the Palestinian masses will not give up their demands for a separate state. Equally, the Israeli population will not accede to the demand that they form a possible minority in a common state. To do so would mean that they would take the place of the oppressed Palestinians; this would be inevitable on a capitalist basis. Our demand for a socialist, democratic Palestine and a socialist Israel linked to a socialist confederation of the Middle East retains all its validity. 54. The Middle East remains a powder keg that could explode at any time not excluding even a nuclear exchange between Iran and Israel. The US and Russia, recognising this, have led to attempts to create a nuclear-free zone in the region. This is partly aimed at cutting across Irans determination to develop nuclear energy and by implication nuclear weapons. In negotiations with Israel this would confirm the existence of their colossal nuclear arsenal something Israel has so far refused to do. 55. This, it is intended, will lead to Israel bargaining away its weapons for guaranteed peace. This is not likely to be realised, especially in the short term as the Israelis perceive that they are surrounded by a hostile population
of millions of Arabs who wish to see the state of Israel liquidated. Therefore rather than preparing for dtente Israel is still pondering a preemptive military attack on Iran in order to snuff out its nuclear plans and thereby further intimidate the Palestinian and Arab peoples. It is an open question as to whether such an attack could take place. But it cannot be completely discounted.
Egypt
56. While this conflict between the Arabs and the Israelis is important, it is not the only factor which must be taken into account in working out perspectives for this region. Much more than previously the economic situation is preparing here big social and political movements. In a
concrete example of workers unity across sectarian lines, teachers in Lebanon have conducted an ongoing struggle, gaining some victories from the government.
57. This is particularly the case in Egypt, the most important state alongside Israel in the region. Seismic shifts in this country are on the agenda. The 30-year reign of the Mubarak government is drawing to an end. In fact, many commentators compare the current situation in Egypt to what existed before the overthrow of the monarchy in 1952. The recent strikes are a symptom of the growing mass discontent. 58. Egypt is starkly divided between rich and poor. Egyptian nationalism perhaps the most powerful strain of Arab nationalism has dissipated as an organised force and the opposition now largely gathers around the Muslim Brotherhood. 59. The NDP Mubaraks party had its roots historically in Nasserism and the mass basis which it enjoyed. Nasser and his republican model were looked to throughout the Arab and neo-colonial world. Its promises of free health and education, land reform and jobs in state factories and offices lifted millions out of misery to, in the words of the Economist, near poverty. This was a step forward! The ideology of PanArabism, trumpeted by the 1952 coup leader Nasser, gave Egyptians pride of place in the Arab world. But, two presidents and four decades later, Nassers regime has changed into Mubaraks, one that encourages private enterprise and with it the mass impoverishment of the majority of the population. 60. Egypt, in the past and even today, has been bolstered by massive subventions from US imperialism. Nevertheless, Israels actions in Palestine have tended to undermine the Egyp-
10

area. Internally, however, the regime of Ahmadinejad remains highly unstable. The uprising of 2009 came very close to overthrowing the regime, as revelations subsequently demonstrated. It was revealed in June of this year that Ahmadinejad and the supreme leader Khameini had an aircraft ready to flee the country to Syria if they were unable to crush the mass movement. 65. After a long rule of a dictatorship, it is not unusual for the first attempts to unseat it to fail. Moreover revolution never develops in one act but as a process. The Spanish Revolution, let us remember, evolved over six to seven years between 1931 and 1937. The movement of 2009 was just the first stage. The second act will be resumed in the next period as the economic difficulties of the government have been compounded by the world economic crisis and its effects in Iran. Opposition has been aroused by the naked grab of former nationalised resources by the Revolutionary Guards, the Praetorian Guard which defends the regime. The CWI must follow these events carefully and seek to find a road to the best revolutionary elements that are looking for a clear programme and perspective.
tian regime. Caught between the pressure of Israel and the capitalist West, Egypt is in decline. Opposition now comes from the Muslim Brotherhood and figures like Mohammed el-Baradei, the former head of the United Nations nuclear authority who recently returned from the US to head middle-class opposition to the regime. 61. However he was denied headquarters, cannot raise funds and has difficulties in holding public meetings. In polls that were held this year for the upper house of parliament, the government claimed a 14% turnout but independent observers put it as low as 2.5%. This was poor even by Egyptian standards. A number of possibilities for the future are posed in Egypt. A mass uprising could blow the regime away with the main inheritors of what could follow, grouped around the Muslim Brotherhood. An Iranian-type development could take place. Mubaraks son is in place to succeed him. But a new strongman from within the regime could rule the roost such as the present head of internal security after Mubarak disappears from the scene.
Turkey
62. The commentators and the strategists of capitalism hope that a regime along the lines of Turkey will follow. This will be a regime formally adhering to democracy but in reality it will be a veiled dictatorship. But none of these scenarios would develop if the super-exploited Egyptian workers and peasants rose, developed trade unions (which already exist in embryo) and created a new mass party. Turkey itself is also a major player in the region now. It has swung over from support for Israel to putting its weight behind the Palestinian and Arab causes. Through the Ottoman Empire, it formerly dominated the region. 63. The whole region remains volatile. Conflicts including wars over water use could easily take place between Egypt and peoples of the drier states to the south that also draw on the water of the Nile. The solidarity of all African states and peoples which was common under Nasser has gone as the different national bourgeois pursue their own narrow interests. This makes it more likely that conflicts can take place between Egypt and sprawling African states which are perceived by the Arab elites as relative backwaters. 64. The main force to gain out of the Iraq and Afghanistan misadventures has of course been Iran. This has strengthened its regional preeminence and weakened the Sunni Arab states who are rivals in the struggle for influence in the
North Korea
66. North Korea remains highly unstable, with a high degree of danger for the capitalists. The death of Kim Jong-Il, the Supreme Leader, could trigger a collapse with millions of hungry North Koreans fleeing over the borders, which would in turn lead to the complete economic collapse of the South, put pressure on China and could lead to a big geo-political fallout in the region.
Whole planet involved

67. World relations is not a question, as was the case in previous eras, of one or two powers dominating the globe and the consequences that flow from this. Now it encompasses the whole of the planet. There is not one part of the world that is not affected by the economic crisis, by the environmental catastrophe that looms and by the general crisis confronting world capitalism. Therefore the broad developments in Africa, and Asia and Latin America are part of an analysis and discussion on world relations. But we will be producing for the Congress special material on these regions. Therefore we have not dealt with these areas in this document, except in passing as a means of illustrating the general processes.

68. But the most crucial aspect of world relations is of course the role of the working class, above all the vital issue of existing consciousness, how this is likely to change and in what direction. The unavoidable fact of nearly 30 years of neo-liberalism, reinforced by the hugely deleterious effects on the outlook of the working class by the collapse of Stalinism, is still the dominant factor. This, together with the absence of the subjective factor mass organisations and clear leadership holds back the working class from drawing all the political and ideological implications from the current devastating crisis. 69. In the immediate aftermath of the financial meltdown in 2007 the ruling class feared for the future of this system. They were right to do so given the devastatingly damaging effects of this crisis. We also entertained hopes that there would be the beginnings of a big change in the outlook of the working class and the emergence of a broad socialist layer. This undoubtedly has been the case as an almost visceral hatred of the rich, particularly the bankers and the financial sector, has developed in the wake of the crisis. This mood, after all, was crucial in bringing to power the Obama administration in the US. A clear anti-banker consciousness exists worldwide but particularly in the advanced industrial countries of Europe, Japan and America. 70. But this consciousness has not yet even developed into a broader, generalised, anti-capitalist consciousness which will begin to challenge the raison dtre of the system itself. The vital ingredients which would allow the masses to rapidly draw broad anti-capitalist and even socialist conclusions of mass organisations and mass leaders relentlessly exposing the system and fighting trade unions have been absent. Moreover, as the crisis has deepened, if anything the leaderships of the former mass organisations have moved further to the right. 71. Also, incredibly, some of the far left have followed suit. They have not boldly linked the idea of a socialist programme with the day-today demands of working class people, as the forces of the CWI have sought to do. Unfortunately, it has been virtually our forces alone who have proposed fighting transitional demands linked to socialist nationalisation and a break with capitalism, leading to the establishment of a democratic socialist society. 72. Up to now, neither the NPA in France, the IST, nor, it must be said, the Morenoites in Latin America have clearly posed things in the way that we do. In Greece, these different groups
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were behind the curve of what was required in an explosive, almost pre-revolutionary, situation. Only the forces of the CWI posed clearly the need for the cancellation of the debt, nationalisation of the banks and finance sectors as a step towards the socialist transformation of the commanding heights of the economy. 73. There is not one example from history in which the mass forces were created in the kind of conditions we confront today can be achieved without the necessary preparatory steps, many of them very small and at the time of seemingly little consequence. It is true that mass communist parties were formed in a number of countries Germany, France, Italy, etc. in splits from the old organisations of the working class, the social democracy, in the aftermath of the First World War. 74. But these old organisations no longer exist, as we, the CWI, foretold in advance. Even the new mass formation of the RC in Italy has largely disintegrated. This represents a reversal for the working class and genuine Marxism. This necessitated the adoption of the dual task which remains as a guiding principle of helping to create new mass organisations and retaining a Marxist nucleus within them. New organisations will not develop easily and evenly. Other forces can temporarily develop and step into the empty political space. 75. Witness the situation in Australia at the present time with the Greens. Because of the vacuum that existed, they have now gone from a very small force to a sizeable 11% of the votes in the recent general election. The leader of the Greens, from his party's point of view correctly, has drawn comparison between the growth and swing towards the Greens a greenslide now with the origins of the Australian Labor Party itself at the end of the 19th and beginning of the 20th centuries. He pointed out that the ALP had no federal deputies until 1901 but eventually grew as a force which was able to form a government. 76. This is a correct general analogy but of course the Greens themselves will be a soap bubble particularly when serious workers forces begin to develop in Australia. Nevertheless we must have the confidence to continue with our attempts to create our revolutionary pole of attraction but at the same time helping the best of the youth and workers, trade unionists, etc, into realising what they are instinctively striving for: to build a force which can act as a mass point of reference in the colossal struggles opening up. 77. Behind the bombast about a new period of
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the environmental catastrophe. We have carried material in previous documents and on our website for a programme on the environment, and all sections of the CWI are involved in important work on this crucial issue. An increase in the worlds temperature by 3 Celsius, scientists now reckon, will mean ultimately the melting of the Himalayan ice caps!
stability for capitalism the strategists of the ruling class are, in reality, insecure and fear for the future. They are correct to do so because we face one of the most disturbed periods in history. If capitalism could usher in a new period of economic stabilisation and then sustained growth then that would be cause for optimism for the defenders of the system. 78. But even the serious capitalist economists go to great lengths to warn that the pre-2007 situation will not return quickly, if ever. For instance, if the cuts of the Cameron government in Britain are fully implemented, a period of eternal austerity could follow. The idea that the private sector can fill the gap left by the elimination of one million public-sector jobs is a chimera. The British TUC says that in some areas in the best case scenario this will take at least 14 years and in some regions 24 years to materialise! 79. At the Jackson Hole gathering with Ben Bernanke in August mentioned above, two capitalist economists who had studied 15 previous post-1945 crises, both in individual countries and generalised world recessions, concluded that in the ten years afterwards in none of them did the level of employment and investment back into production reach their peak crisis levels for up to a decade after. This crisis the most devastating since the 1930s will leave millions of unemployed. Marxs idea of a reserve army of unemployed in capitalism derided by so many economists in the past could become a reality in the next period. 80. Sections of the working class, the most important productive force, cannot be fully integrated back into production. This goes alongside
The CWI
81. The CWI has come through intact from the isolation which arose from the collapse of Stalinism and the boom of the 1990s and the early part of this century. The relative quiescence which flowed from this meant that it was one of the most difficult periods in history for the genuine forces of Marxism, striving to avoid falling into the pitfalls of sectarianism or opportunism. It has been a considerable achievement to have maintained and built the CWI. Many lessons have been learnt, cadres have been formed and steeled together and now these forces are expanding. 82. Our task is to theoretically educate the new generation, fuse them with the experienced cadres and in this way produce a force which can lay the basis for participating in fact playing a crucial role in building mass formations. While not easy, the new situation opening up is much more favourable than the period we have gone through. We must have the necessary degree of determination matching this, of course, with the clarity of ideas and programme. This must be linked in turn to a meticulous approach to the building of the CWI. If we do this we can prepare the forces destined to play a vital role in the battle for socialism in the 21st century.
Asia,
Document No. 2
1. The Asia-Pacific is a vast area of the world with more than half the world's population distributed across a number of regions and sub-regions. It includes two of the BRIC so-called 'emerging' economies of India and China and also the 'advanced' capitalist countries of Australia and Japan. 2. The worst world economic recession downturn for decades has affected the countries in the region differently. Several have been badly hit, at least initially, by shrinking demand in the markets of Europe and the US. Most have so far not seen big drops in GDP but the full impact may yet to be felt. The governments of the region remain fearful of the kind of economic and social crises that followed the Asian financial crash of 1997. 3. The specifically 'Asian' crisis of that year entailed major economic and political crises in a number of countries. Huge sums were poured in by the IMF to shore up the economies of Thailand, South Korea, Indonesia and the Philippines. South Korea had already experienced 'the first-ever general strike against neo-liberalism' when it announced a programme of deregulation on December 24, 1996. The following year, a mass movement in Indonesia toppled the dictatorship of Suharto. A similar 'reformasi' movement developed in Malaysia, in spite of the protectionist measures taken by former prime minister, Mahathir Mohammad, much to the chagrin of the international capitalist class. 4. Trying to avoid the pitfalls that led to the 1997 crisis, many of Asia's capitalist countries accumulated capital reserves. The measures they took appear to have paid off. GDP growth rates have been only slightly punctured in most Asian countries. 5. Some economies in the region have been more badly hit than others. South Korea, an export-led economy and number 15 in the world, went into 'negative growth' last year as a direct result of the slow-down in world trade. It has picked up since then but to a growth of just over 2% per annum. The devastating floods in Pakistan have halved the growth rate in its already weak economy from 4% to approximately 2%. 6. Singapore, the biggest port in the world, saw a drop of around 12% in its GDP at the end of 2008, and then began to recover. The 20% drop in the third quarter this year is seen in itself as a sign of an impending double dip worldwide. The economies of Thailand and Taiwan also went into negative figures and rebounded. The feverish ups and downs of some of Asia's economies are symptomatic of unstable economic situations which can shake governments in the region. Indonesia swung sharply from nearly 4% growth at the end of 2008 to nearly 4% contraction at the beginning of 2009. 7. Other countries in the region, including India and China have sustained growth at the relatively high rates of 6, 8 and even 10% per annum. 8. Chinas economy is heavily geared towards exports to Europe and the US with whom it has massive trade surpluses. It has seen a certain dip in GDP expansion as trade has declined. But the massive stimulus package of 4 trillion renminbi (US$ 586 billion) last year, with its huge infrastructure projects, created some domestic demand along with the wage rises that followed the wave of strikes earlier this year. 9. Japan, on the other hand, has failed to get out of its two decades of stagnation despite massive attempts at pump-priming, minimal interest rates etc. Recently, the government ordered the central bank to intervene against speculation which was forcing up the yen. Later, in October, $60 billion was put in to the economy as a further attempt to boost jobs, growth and spending. 10. As in Europe and the USA, liquidity does not lead automatically to investment if there is uncertainty about returns on capital. Markets are vital. Shrinking export opportunities will impact on even the strongest Asian economies and may yet turn out to be the Achilles heel of the Chinese economy. The international campaign to get China to strengthen the renminbi is being ferociously resisted by the Chinese regime. A major contraction in the economy and the growth of unemployment and poverty can spell a new outbreak of revolt...this time political and threatening the very survival of the 'Communist', one-party dictatorship. Because of the effect of Chinas growing economy on keeping other economies in the region moving forward, if it slows down, they will also suffer grave eco-
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nomic and social effects.
CWI 10th World Congress 2010: Asia, Document No. 2

more tens of millions struggling for survival. Prices have been jacked up by shortages and speculation. Strikes at a time of national emergency, felt by all, indicate the desperation of organised workers, as well as their determination not to pay for the social or economic crisis in their country. 17. In India, inflation is the worst in any of the 'Group of 20' nations. It lies behind the opposition parties' opposition organised bandh (stoppage) in July of this year and the massive 100 million strong general strike in September ten times the turn-out on other occasions. The mighty Indian working class moving into action, is the key to the transformation of the lives of over a billion people. 18. There are more poor in six Indian states than in the whole of Sub-Saharan Africa and only a small layer in society has benefitted from the long-vaunted 'Shining' in India as a whole. No more than 10% - middle class and qualified workers have seen their lives improve. They have provided a market for some goods, but at the other end of the scale, subsistence farmers descend into despair. In the past decade 163,000 farmers across India, unable to sustain their families, have committed suicide.
11. The currency clash comparable to a small war that could escalate - is an attempt of the major powers involved to unload the cost of the crisis onto other shoulders. Potentially this could lead to a minor Smoot Hawley or a 'beg o' my neighbour' situation between the US dollar, the yen and the renminbi and affecting all the major economies of the world. China has warned the US it is not prepared to go down the road of Japan in the '80s when the Plaza Accord led to the revaluation of its currency and more than two 'lost decades' from which that country has still not recovered. China has warned the US that if they are forced into a significant revaluation, it could halt its massive growth and have worldwide economic repercussions. 12. The US is faced with a huge trade deficit and pressures from Congress for protectionist action to be taken. This situation could result in further exacerbation of this trade war and reinforce the recessionary-depressionary tendencies in the world that could plunge the Asia-Pacific region into the same kind of recession. 13. A number of attempts have been made over the years to form a trading block of Asian nations, like the European Union, including establishing a common currency. But if these have failed in periods of relative boom, the winds of recession will push each nation towards protecting its own industry and economy.
Where the CWI is

19. Stable growth rates by no means guarantee political stability and a deterioration will see deep-seated resentments expressed in mass revolt across the region. The opportunities for building the CWI in Asia are already great and will grow as the economic and social crises grow greater. We have made important steps forward in China, Hong Kong and Taiwan. In South Asia, our forces are concentrated in four countries Sri Lanka, India, Malaysia and Pakistan. 20. The rate of expansion of the Chinese economy is still phenomenal. This is because of the unique development and character of the present regime which combines an important capitalist sector with significant sections of the previous state-dominated economy remaining. What remains of the state and the economic capacity to intervene has been the major factor in China so far escaping the full effects of the world crisis. However, the economic bubbles in property, banking and other sectors could bring this to a juddering halt. This would end the special situation in Asia, where many economies have been buoyed by the demands of Chinas economy. It would have an immediate effect on Chinas ability to expand in other continents (South America, Africa) and would have big re-
Permanent crisis for workers and poor

14. Even apparently healthy figures for overall growth in GDP do not tell the whole story. In many of Asia's countries, the mass of the population has experienced no benefit. In fact they have slid further and further down the global scales of income, employment, health, nutrition and housing. Corruption is rife, press freedom rare. Even the so-called democracies, including India and Malaysia, use anti-terrorist and other repressive laws to suppress opposition and the workers' movement. 15. The fact that the economies of many Asian countries have continued to grow belies the fact that within every one of them the gap between rich and poor is widening. This is a world-wide phenomenon, but Asia has nearly 75% of the people in the world who are living below subsistence levels. 16. The 'natural' disaster of the floods in Pakistan, brought on by the dam-building and short-sighted irrigation schemes, has left yet

percussions on the stability of the already fearful Chinese regime. 21. Within China, the Chinese 'Communist' Party continues to ride a tiger. Even with the economy going forward, national and social tensions have intensified. Workers can feel justified in demanding a share of the increased GDP. If the economy slows down, it will become impossible to prevent revolt from below. Harsh sentences for 'dissidents', including the Nobel Prize winner, Liu Xiaobo, denial of media freedom and constant attempts to block internet communication indicate the fear of the regime. 22. The biggest threat has come from the courageous strike action taken earlier this year in the foreign-owned car and other factories. Attempts to get genuine elected representatives in the workplaces and independent unions will continue and spread to Chinese and stateowned enterprises. Sooner or later, the state will be forced to make concessions or face a mass revolt...or both! The regime was unable to suppress news of the slave-labour conditions at Foxconn which was causing an epidemic of suicides. It will not be able to hide the revolt that develops, at first in sporadic movements and then in a more generalised fashion. 23. The vengeance of the masses after decades of suppressed aspirations and deprivations in the name of 'socialism' and 'progress' will be unforgiving. The political shape it will take is as yet unclear. The regime encourages nationalist outrage against Japan or Taiwan but fears that 'patriotic' demonstrations on the streets can turn against them, as they have done in the past. 24. The Beijing regime also fears moves that challenge the authoritarian nature of the regime in Hong Kong and challenges to the bosses in Taiwan. The fight for socialist change in China and throughout the region has to be accompanied by a struggle for basic democratic rights as well as a clear programme on the national question and new forces of the CWI in China, Hong Kong and Taiwan have shown themselves to be courageous and dedicated fighters. 25. China has huge investments across most Asian countries. Its relationship with them, unlike with the US and Europe, is as a net importer sucking in the raw materials and components vital for its still expanding, export-driven economy. Its political and military influence grows in parallel with its economic power. 26. China is India's second biggest trading partner with $60 billion worth of bilateral trade. But it is also a rival for Foreign Direct Invest-
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ment, which has been falling in both countries in the recent period. India has a population nearly the size of China but an economy with little over a quarter its weight. Both are nuclear powers vying for political influence in Asia and the rest of the world. They have two of the worlds biggest armies, with almost four million troops between them.
Sri Lanka
27. As we have noted in our published material, India as well as China, played a decisive role in ending the 26-year long civil war in Sri Lanka and consolidating the Rajapakse regime which could consequently manage without either the financial, military or political support of western imperialist powers. 28. India already owned a large part of Sri Lanka's tea plantations. It has captured the market for cars, motor-bikes and three-wheelers. It has invested in the Tamil-speaking North where it is re-building the railway, developing an airport, building 50,000 houses and also a 500MW power plant inside a Special Economic Zone. It has imported 30,000 Indian workers to carry out the construction work. 29. China was Sri Lanka's biggest source of foreign funding last year with $1.2 billion. To build its mega-port at Hambantota, it has imported its own raw materials and what amounts to a slave labour force of 20,000 Chinese, mostly convicts. While these investments fuel a GDP growth in Sri Lanka of on or around 6% per annum, it also fuels inflation and provides few additional jobs for Sri Lanka's working class. 30. After the bloody defeat of the LTTE over a year ago, the Tamil people in the North and East are still living in atrocious conditions. Many are homeless and jobless. The Rajapakse government, leaning on ex-Tiger supporters, and even leaders, and bolstered by Indian involvement in the North, is swamping the Tamil homeland with Sinhala soldiers and settlers. In southern India - Tamil Nadu - there is still a burning resentment about the fate of the Tamil-speaking people in Sri Lanka. 31. As we have always maintained, if the national aspirations of the Tamil-speaking people in Sri Lanka are not fulfilled, the present sullen acceptance of their fate will eventually give way to a new upsurge of resistance, especially amongst the youth. But that is not the immediate perspective. The substantial vote for nongovernmental parties in the April elections this year were a small reflection of the resentment that can flare up in the future. Rajapakse's de-
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37. Rajapakse means literally 'the King Party'! With his brothers and other relatives firmly installed in power, Mahinda issued orders to clear more than 60,000 of the poorest people from the capital city, Colombo. They are being dumped in the countryside with no means of subsistence. This is a kind of social cleansing. 38. Since the Rajapakse government came to power, the biggest protest that has taken place was in Colombo in October against the imprisonment of opposition presidential candidate, former army general Sarath Fonseka. More than 10,000 people demonstrated and walked to Colombo main prison where Fonseka is being held. Fonseka was sentenced not by a normal court in Sri Lanka but by a special court martial appointed by president Rajapakse. 39. University students have come out in a fearless campaign against the introduction of private universities by the regime. Rajapakse has launched an all out war against the student movement using the police. Students have been arrested and hundreds suspended from the universities. In this situation a joint opposition has been set up - an action front to fight against the Rajapaksa governments military police dictatorship and defend the democratic rights of workers and students. 40. With prices still rocketing, with jobs failing to materialise and wages held down, sooner or later, the working class of Sri Lanka will come back onto the offensive. Only a mass movement can now bring down this dictatorship. Our United Socialist Party has been through one of the most difficult periods of its existence weakened in numbers but as strong as ever in political ideas and combativity and unsullied in its reputation for defending the rights of all workers and poor.
cision, to put the consolidation of his family's power ahead of a sorely needed national reconciliation with an aggrieved Tamil minority, is a decision Sri Lanka will repent at leisure. (Economist, 11 September 2010). 32. On a capitalist basis there is no solution to the national question in Sri Lanka. It is a challenge to our small forces, with the assistance of the International, to build points of support in the Tamil North and to rebuild our depleted forces in the South. 33. The CWI has long described the Rajapakse regime as a 'veiled dictatorship' or one with a fig-leaf of democracy. The ending of the war has seen not an easing but an intensification of the dictatorship. There are now more armed personnel on the streets of the capital than during the long years of civil war. The main opposition contender in the presidential elections, Fonseka, remains under arrest, facing enough charges to keep him locked away for the rest of his life. 34. The 'Eighteenth Amendment' to the country's constitution was rushed through parliament on September 8 a 'black day' for Sri Lankan democracy, marked by demonstrations on the part of all the country's opposition forces including, separately, the Sinhala-based JVP which was earlier in coalition with the ruling Sri Lanka Freedom Party. The JVP, still claiming to be Marxist but opposed to self-determination for the Tamil-speaking people, has lessened its Sinhala communal propaganda in an attempt to gather Tamil support - arguing that the LTTE did not win anything for them. 35. The main capitalist opposition United National Party is going through a major internal crisis at present. In the opposition movement which has developed it is offering no hope of a way out. In the vote on the eighteenth amendment in parliament it only abstained. Enough opposition parliamentarians voted with the government, either for money or personal advancement, to get it passed. Even the leaders of the rump left workers' parties voted for it against the decisions of their own Central Committees. 36. The amendment, allowing Mahinda Rajapakse to stand for president as many times as he likes, received the necessary two thirds majority but was not, as previously required by law, put to a referendum. Judges, clearly under the sway of the president, ruled it was not necessary. This amendment gives the president power over no less than 90 institutions and final authority over all appointments to the civil service, the judiciary and the police.
Pakistan
41. In Pakistan, the worst floods in living memory have exposed all that is rotten in the Zardari government. In a country of 170 million people, 40% are now below the poverty line. Inflation has rocketed to an average 20% but much higher on basic necessities. Eight million people at least are now totally dependent on hand-outs for survival. The economy has gone from 4% to zero growth and overall this year could fall by at least 2%. 42. Agriculture, in Asias third-largest grower of wheat and the fourth biggest producer of cotton, may decline by 20 to 30%. It accounts for over 21% of GDP employing nearly half of the country's labour force. According to a former finance

minister and top official of the World Bank, Shahid Javid Burki, Pakistan today is South Asias sickest economy and will remain that way unless the policy makers move decisively. 43. The Financial Times in September wrote that, Foreboding has intensified over the prospect of an impending military coup, a bloody revolution and parts of the country spinning out of control. The CWI has long pointed to an increased Talibanisation of the country. If the working class does not emerge as the main fighting force in Pakistan, there is a very real prospect of implosion and break-up of the country. 44. In a poll taken just before the Indus overflowed its banks, 95% of Pakistanis said that feudalism should be smashed. Seeing the way these super-rich landowners and politicians behaved during the flood crisis, very angry, revolutionary moods can and will develop again. Revolt can be further inflamed by the actions of the US military in relation to Afghanistan and of the Indian Army in attempting to crush the revolt in Kashmir. 45. Recent developments in Pakistan have shown that the weak capitalist regime is incapable of getting rid of feudal and pre-feudal relations there. The abject failure of the PPP government to organise effective relief for the 20 million people affected by the devastating floods has stored up new resentments and anger against it. It blatantly came to the aid of major land-owners while its leader, president Zardari, was relaxing at his Chateau in France. 46. The main opposition Pakistan Muslim League (N) of Nawaz Sharif has so far failed to offer any alternative or mobilise discontent against Zardari and the PPP during this crisis. Where religious charities step in with aid, they can win support amongst a population not generally attracted by their reactionary philosophies. 47. The Army, under Ashfaq Kayani, standing aside from politics since the departure of the Musharraf dictatorship more than two years ago, has also stepped in to give relatively efficient disaster relief. No one on the ground or abroad trusts the government to distribute aid given from within or outside the country. 48. The demand for non-payment of the $10bn IMF loan forms part of the massive propaganda campaign conducted by our section in Pakistan along with the demand for the debts of all small farmers and poor people to be annulled. It has been relayed in Europe through the parliamentary interventions of Joe Higgins, MEP. The CWI
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comrades of the SMP have carried out heroic work in the battle to give practical assistance to trade unionists and activists hit by the disaster. They have also organised support for a number of important strikes continuing in this desperate situation and put forward a fighting programme to bring down the Zardari government. 49. The army has been the real ultimate power in Pakistan throughout the 63 years since independence and directly ruling for half of that time. This is because of the basic unviability of the state since its construction. Although the present situation in Pakistan is desperate, the assumption of power by a military regime would not find favour with imperialism in the current international situation in which it would have difficulty justifying to world and domestic opinion support for dictatorial and semi-dictatorial regimes. The continuing crisis in Pakistan means that an attempt at military intervention, while probably not an immediate prospect, cannot be precluded. If it happens, however, imperialism would, of course, reluctantly acquiesce. 50. The devastation wrought by the floods will take years, if not decades, to overcome on the basis of the rotten feudal-capitalist system in Pakistan. Public ownership and socialist planning are put squarely on the agenda to take society forward. A further Talibanisation of the country, more bombs and bullets, a collapse of central authority, barbarism and a break up of the country are the grim alternative. 51. The CWI comrades in Pakistan have earned the greatest respect of the workers' movement in the country and of the International in the heroic work it has carried out. They have reached hundreds of activists and trade unionists whose lives have been ruined in the floods. They have also continued with great energy and determination to build the forces of the Socialist Movement Pakistan and the Progressive Workers' Federation. 52. In Bangladesh, the country that used to be East Pakistan, important developments have recently taken place and there are opportunities for building the CWI. Half the population lives in absolute poverty, on less than $40 a month. The ferocity of the recent clashes between striking garment-workers and the police is explained by the constant threat to their jobs from other, even lower-waged, economies in the region. (But in Laos and Cambodia, workers struck for higher wages following the example of workers in China's foreign-owned firms). 53. Bangladesh is under pressure from US imperialism to play its part in the war on terror by
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people are killed, they inevitably alienate the people whose rights they claim to champion. Such tactics also give the state an excuse to introduce special powers to deal with the 'insurgency'. In Chattisgarh, Jharkand, Orissa and West Bengal, thousands of police have been involved in an offensive against the 'insurgents' Operation Green Hunt - which often sees ordinary civilians killed and injured. 59. A conscious linking of the struggle in the country-side to that of the working-class of India's massive cities could provide an unstoppable force capable of transforming society, but that is not the approach of the Naxalites. In Orissa, where Vedanta's plans have actually met a reversal through mass action and a court decision, it has been mostly NGOs and activists, including supporters of ours, that have organised the resistance, trying to involve the local people to some extent. 60. In West Bengal, ruled for decades by the CPI(M), the recent deployment of state forces and thugs to bloodily disperse small farmers from the land they tilled has resulted in a dramatic fall in support for the CPI(M) in local elections and succoured the right-wing populist Trinamul. This year in the June municipal elections, the CPI(M) lost almost half the wards they had held and lost control of Kolkata. Next year they could well lose most of their seats in the State assembly. In Kerala, too, the CPI(M) has been drastically losing support. 61. The Stalinist two-stage theory is behind the policies of the Communist Party of India (Marxist) CPI(M) in the states where they hold power, especially West Bengal. They justify their attacks on the rights of workers and poor farmers setting up union-free Special Enterprise Zones and using armed thugs to clear land etc. on the basis of the need for 'industrialisation'/'modernisation'. They have courted not simply with 'good' capitalists, to use the Stalinist phraseology, but with very ruthless capitalists - conglomerates of the home-grown and foreign variety. 62. Central government in India is weak a conglomeration of parties the biggest being Congress under Sonia Gandhi. Manmahon Singh as prime minister is not popular. (India Today found just 1% of Indians would give him as their first choice for the job!). Singh and his finance minister, Pranab Mukherjee, have carried out only half-measures - failing to satisfy the big bourgeois and imperialism but leaving the overwhelming majority of the population in penury.
sending troops to Afghanistan. The government has recently removed all Islamic articles from the constitution and banned Islamic fundamentalist books from libraries. The Supreme Court has also banned the enforced wearing of the veil. At the same time the government has deployed the army to repress the port workers who were on strike in October 2010. For the first time since the new government came to power the right-wing opposition has been able to organise a shutter down strike (business stoppage). These significant developments reveal the explosive situation opening up in Bangladesh. 54. At the top, there is constant rivalry between two parties, whose differences on policy are hardly discernible and they have no solutions to the urgent problems facing workers and their families. Their frustration can quickly turn to anger and unrest that can begin to take on a revolutionary character.
India
55. Economic growth in India, has fallen back slightly, but remains at 8.5 - 9%. Certain layers of skilled workers have benefitted and seen their living standards rise...especially those in IT and back-room services for companies based in the US and Europe. This has had an effect on their consciousness, but the effects of the world recession are already being felt by these layers. 56. After the abandonment of the decades-long policy of self-sufficiency in the late 1990s, national and state politicians (of all hues) have looked to multi-national companies to develop the Indian economy, not without personal benefit to themselves. Bribery and corruption is rife, not least in the Communist Party of India (Marxist) - in power in West Bengal, Kerala and tiny Tripura - at least until the next round of voting! 57. They have given the green light to vast companies like the Korean-based steel company, POSCO, the bauxite-mining giant Vedanta and Indonesia's biggest conglomerate, the Salim Group in West Bengal to move in and destroy the homes and livelihoods of tens of thousands of poor farmers and Adivasis (indigenous peoples). They have destroyed forests and even mountains in the scramble for raw materials. 58. In many cases, the Maoists (or 'Naxalites') step in to try and get support. (200 of India's 626 districts are said to now be in their hands (compared with 56 in 2001).) They attack rich landlords and the police but when they de-rail passenger trains and ordinary working and poor

63. The main Hindu nationalist opposition, the BJP, has gone through a prolonged internal crisis after losing the last election. It has not been able, so far, to capitalise on anti-Muslim sentiments after the bombings in Mumbai and other cities by Pakistani-backed Islamic extremists, nor from the attacks in Kashmir and elsewhere against the Indian Army. 64. In Indian-occupied Kashmir, the 'intifida' has no leaders Maoist or Islamist. 700,000 Indian troops face mass stone-throwing protests, organised by SMS and Twitter. (Even the IOK Chief Minister, Omar Abdullah, has recognised that neither he nor the octogenarian separatist leader, Geelani, is in touch with the fighting mood of the youth.) The AFSPA (Armed Forces Special Powers Act) is used to protect the troops from from prosecution over their many gross violations of human rights. This angers the Azadi ('Freedom') fighters who have lost more than 100 of their number in two months of street battles after the upsurge in struggle from July 11. Developments in IOK were bound to increase tensions between the Indian and Pakistani troops either side of the Line of Control and can ignite political and social unrest on the Pakistani side. 65. The first-ever campaign in India expressing solidarity with the youth and workers in Kashmir was initiated by comrades of the CWI in Chennai with a leafletting campaign. Our comrades who have links with some of the youth in IOK have raised the vital need to struggle for a Constituent Assembly to brush away all the false friends of the workers and poor in the Kashmir Valley. 66. India is a country encompassing numerous nationalities and ethnic groups. It is made up of 28 states, in some of which a large part of the population is in favour of breaking away from Delhi-based rule. Much of the country is said to be already beyond the control of central government. A clear programme of socialist democracy that champions the right of all nationalities to self-determination is needed. Only such an approach could, as did that of Lenin and the Bolsheviks after October, cut across the fissiparous tendencies in Indian society. 67. The struggle for a new political voice for the working class and oppressed people of India is more urgent than ever. A more favourable period has already opened up for the CWI, which has now got a foothold in a number of cities and is beginning to become a national organisation.
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Malaysia
68. In Malaysia the CWI has developed a capacity to publicise our ideas and has started to build amongst layers of workers and youth from different ethnic and national backgrounds. The PSM, meanwhile, claims to have grown but has failed to mark itself out clearly from its allies in the Pakatan Rakyat (PR or People's Coalition) as a workers' socialist organisation. The PR forms the main opposition at national and local level and is made up of the PKR (Peoples Justice Party), PAS (Malaysian Islamic Party) and the predominantly Chinese DAP (Democratic Action Party). 69. After suffering heavy set-backs at the last general election, the government is not now too seriously challenged by this 'official' opposition. GDP growth is around 5 to 6%, mainly assisted by domestic economy activities encouraged by stimulus measures as well as the increased trade with China and other regional economies that has taken the place of the decline in trade with US. Now the PR coalition says that the prime minister, Najib Razak, and the ruling BN coalition (with UMNO still the dominant force) have stolen its policies. 70. This does not, of course, include the indirect renewal of favouritism for Malays a policy which sparked the Indian-based Hindraf movement at the end of 2007. The government has also given tacit support for ultra-right groups like PERKASA (empowerment) to champion Malay hegemony. This will further undermine the support of non-Malays for the BN, despite the government propaganda of One Malaysia and could be used to instigate racial clashes in the midst of worsening economic and political conflicts. The government's New Economic Model also involves privatisation, deregulation - i.e. wholesale liberalisation of the economy policies which the opposition coalition does not oppose. Their main emphasis is on government practices not being transparent and endemic corruption in government dealings. 71. The PKR leader - Anwar Ibrahim - is facing renewed court proceedings which could result in his imprisonment, as before. But, more likely is that the threat will be kept hanging over him to deter him from too bold an opposition when it comes to elections. The government also fears a repetition of the 'reformasi' movement which Anwar led during the late 1990s when thousands came onto the streets demanding an end to corruption and one-party domination in politics. 72. Najib has adopted a large stimulus pack-
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tial flashpoints. Fortunately fear of the consequences of open clashes holds back both sides. A collapse of the regime in the North of the Korean peninsula presents a potential nightmare for China but especially for South Korea. 78. This year, China became the biggest trading partner of Australia. Its continuing growth, partly due to stimulus measures, has so far cushioned the Australian economy against the worst effects of the world recession. This 'advantage' will not last for ever. The unstable hung parliament of Julia Gillard will arouse the anger of the electorate as it imposes its austerity measures, as in Europe and elsewhere. 400 Australian companies operate in Indonesia and mineral and energy companies extract big profits from there as well as from the Philippines and other neighbouring countries. This investment and trade will determine Australia's foreign policy in the event of any new phase of economic and social turmoil hits that country. 79. The stale-mate that has developed in Nepal clearly demonstrates that a revolution which stops half-way will not succeed in changing the conditions of the mass of the population. The Maoists, after gaining control of most of the countryside and the towns through mass struggle, were in a position to take power when they linked up with striking workers in the capital. The monarchy was removed and the 'classical' conditions existed for carrying through the socialist revolution. But the leaders saw the struggle for socialism as a later stage of the struggle. 80. Having allowed pro-capitalist and pro-Indian government politicians to recover, the Maoists are now in limbo. They were correct to oppose the proposals for the disbandment of their guerrilla forces, but posed no alternative which would take the struggle onto a socialist and internationalist plane. There is a need to organise democratically-elected committees in town and country for the running of society and appeal to the workers and poor of India and elsewhere in the region to support them, to organise and to follow suit. 81. A form of revolutionary civil war broke out in Thailand earlier this year, with some similarities to developments in Nepal. Although not fighting for years as guerrilla forces, like the Maoists, when the 'reds' came from the countryside and occupied the commercial centre of Bangkok for weeks, they held a continual parliament of the streets, and attracted layers of workers to their side. Thaksin Shinawat, the man for whom the reds were literally risking their lives, is a billionaire tycoon. His support
age and could even adopt Mahathir-style protectionist measures when the world crisis takes greater effect in Malaysia. Even less likely to do so is the ardent US trained neo-liberal, Anwar Ibrahim. As finance minister in 1997, he supported the International Monetary Fund (IMF) plan for recovery. He also instituted an austerity package that cut government spending by 18%. In the face of a slow-down in the economy, however, protectionist measures cannot be ruled out. Nor can the development of a new reformasi-type movement. 73. Najib could well decide to go for an early election while the going is good. The possibility is never far away of corruption and other scandals blowing up in the face of his apparently stable government that anyway involves considerably weakened coalition partners. The failure of the world economy to pick up will begin to have a major effect on the Malaysian economy. 60% of its exports to China are destined for the G3 America, Europe and Japan. 74. Foreign Direct Investment has not achieved the level it was before the 2008 global economic crisis and the competition for FDI among regional countries has become intense. The tendency for foreign investors to seek even lower-wage economies in the region will continue, in spite of the recent spate of wage increases won through strikes in Laos, Cambodia and Vietnam.
The region
75. Across Asia in the past, countries have experienced very different developments both under colonial occupation and since. Some, for special reasons that we have explained, have seen periods of very rapid development. Japan, on a capitalist basis, but without military spending and with huge assistance from the US, had a very high growth rate from the '50s to the '70s. China, on the basis of state ownership and the plan, is estimated to have reached more than 20% annual growth in a number of years during that same period. 76. In the later '70s and the '80s, when capitalism in Europe and the US hit its first post-war crises, South Korea and the other 'Tigers' experienced phenomenal growth. China's economy has powered ahead in the '90s and throughout the last decade. 77. Now, Japan, with its stagnating economy and struggling government, is no longer the second largest economy in the world. It has been overtaken by China. Heightened tensions between Japan and China over disputed waters and islands as well as over Taiwan, are poten-

stems mainly from the reforms he put through as president which benefited the poor farmers in the countryside. But his supporters brought the capital city to a halt and drew certain layers of the state forces to its side. 82. Behind the barricades there were long discussions on how to defeat the 'yellows', seen as representing the rich and privileged in society. Conscious revolutionaries would have encouraged a linking up of the struggles in the countryside with those of the working class in the cities to demand a workers' and poor farmers' government. The yellow-shirts, or Peoples Alliance for Democracy (PAD), themselves came to power on the basis of street demonstrations and airport blockades in 2008 and have no programme for taking Thai society forward. 83. The generals' junta in neighbouring Burma is backed by China, in trade and aid terms. Beijing turns a blind eye to the total lack of democracy, even in the 'election' of this year. But a new generation of fighters is undoubtedly in the making. As in other parts of the region, the apparently all-powerful regime, that hides away in its specially constructed administrative capital, Naypyitaw, could find itself facing not only new street demonstrations but strikes by workers. A revolutionary upheaval in Burma, with a leadership that has drawn lessons from the experience of 1986, could shake the whole region. 84. In Indonesia, the Yudhoyono government is setting as its main policy aims the eradication of drug crime and terrorism, but is losing the battle. The economy drags cautiously along, supported by both western and Australian imperialism. Accumulating foreign debt, Indonesia could fall quite rapidly into an economic downturn, breeding discontent and a new wave of mass protest in Jakarta, Surabaya and Jogjakarta as in the late '90s. Over half Indonesia's population is under 25. 85. The trade union and political organisations in Indonesia, struggling to unite against foreignowned and indigenous capitalists, and to build a
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workers' party, deserve the support of workers and socialists everywhere. But the best assistance the CWI can give is to warn against the dangers of unity for its own sake, and to help develop an independent class analysis and socialist programme. 86. Likewise in the Philippines. The new president, Benigno Aquino, is the son of Cory Aquino, who was propelled into the presidency in 1986 by the 'People Power' revolution that overthrew the Marcos dictatorship. 'Noynoy' is seen as a 'clean pair of hands' after the corrupt and ineffective 'reign' of Gloria Macapagel Arroyo, but his family is from the same elite in Philippine society. How far he will get in ending the major scourges of corruption, terrorism and mass poverty remains to be seen. (One of his first measures was to introduce the punishment of people who do not sing the national anthem correctly!) 87. The Philippines is one the Asian economies most affected by the collapse in 'remittances' from abroad. Poor families depended on the earnings of at least one of their number being able to get employment abroad. Now their jobs have disappeared as the recession has hit Europe, the US and the Middle East. Socialists and trade unionists in the Philippines, with their potentially powerful organisations, need to advocate decisive action against capitalism and landlordism no united front with the less corrupt layers of the ruling class but a clear socialist fight that can attract the radical young layers in the army who are repelled by elitism and exploitation. 88. Social, economic and political crises are developing throughout Asia. They underline the vital importance of the CWI's ideas and programme and the urgent task of developing the cadres for building future mass revolutionary parties. One major success for the socialist revolution in this highly combustible region, with the conscious intervention of our forces, can spread like the proverbial prairie fire. Our task is to prepare and work unstintingly for this goal.
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Middle East,
Document No. 3
1. The crisis of capitalism and the naked role of imperialism are graphically manifested in the Middle East. The region is blighted by imperialist military occupation, the national oppression of the Palestinians, Kurds and others, dictatorial regimes, endemic corruption, sectarian, religious, national and ethnic divisions, mass poverty and joblessness, and economic crisis and worsening living conditions. On the basis of the continuation of capitalism and imperialism, new wars and conflicts are bound to continue afflicting the region. A referendum in Sudan, due next January, regarding the mainly black African, Christian and animist South breaking away from the Arab and Muslim dominated North, is threatening to lead to renewed bloody conflict (2.5 million died in the countrys last civil war). 2. However mass resistance to authoritarianism and deteriorating living conditions is also an increasingly pronounced feature of the Middle East, as seen most spectacularly during the 2009 mass opposition movement in Iran. Most significantly from the point of view of the CWI, the recent period has also witnessed increasing workers struggles and efforts to build mass independent organisations of the working class in Egypt, Turkey, Lebanon, Algeria and elsewhere. In Egypt, the workers movement strengthened its forces in the last four years under conditions of martial law and oppression. In Turkey, 250,000 people took to the streets on May Day 2010 in Istanbul's Taksim Square the first time in 33 years following the heroic struggle of the Tekel workers. These developments are indicative of future mass workers struggles throughout the region, which will pose building a strong, independent workers' movement and formulating a class and socialist alternative to the current system.
regions financial institutions during the boom years meant the region was not as badly hit as in the West, at least in the first phases of the ensuing economic crisis. The 18 economies that make up the Middle East and North Africa (MENA) fared better than the US, which saw output fall by 2.4% in 2009, and compared to Europe, which contracted by 4.1% last year. However economic performance varied widely between the Middle Easts oil-producing and non-oil producing countries. 4. Some resource-poor countries have seen recent growth. Second only behind Qatar in the Middle East in terms of economic growth, Lebanons GDP improved by 9% in 2008 and 2009 and the country is forecast to expand by 8% in 2010. But these figures are deceptive. Lebanon is struggling to eradicate a debt mountain that stands at 148% of gross domestic product (GDP), the third-largest public debt in the world. Economists also warn of a possible collapse in the real estate sector bubble. 5. The steep fall in oil prices, from $145 a barrel in July 2008 to below $40 a barrel in early 2009 caused a slowdown in the economies of the six oil producing states in the region, known as the Gulf Cooperation Council (GCC). The total combined GDP of the GCC countries states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), which includes several of the worlds leading oil producers, fell a staggering 80% from 2008 to 2009. The GCC states were forced to increase state spending to run up budget deficits. 6. While GCC countries economies are expected to pick up in 2010 due to rising oil prices, it is not a uniform picture and general growth is undermined by several factors. The United Arab Emirates is forecast to lag behind its Gulf neighbours due to Dubais stagnating economy, following the spectacular collapse of its real estate boom. Continuing risk aversion by the banking sector and caution among consumers is threatening economic recovery in the GCC. 7. The severe 2000 / 2002 economic crisis in countries like Israel and Turkey anticipated the current global economic crisis and led to a more cautious approach towards de-regulation of the financial and banking sectors in these countries. The effects of the world economic crisis since
Economy
3. The ongoing world economic crisis will have a devastating effect on the living conditions of millions of people in the Middle East. Even before the crisis around 23% of the population of the region lived on less than $2 a day and six million people on or under $1 a day. While the ramifications of the world financial crisis on the regions major banks were profound, the more conservative approach of the
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CWI 10th World Congress 2010: Middle East, Document No. 3

ing the majority Shias), Iraq today has reached a grisly form of stability, with persistently high levels of violence and a hugely corrupt dysfunctional state. The security situation remains dire, with civilian casualties higher in Iraq than Afghanistan. This year has seen a new development to the violence, with over 700 people, mostly security personnel, killed in targeted assassinations. Political deadlock at the top, continued imperialist occupation and atrocious living conditions are fuelling mass anger, violent opposition and sectarianism. Baghdad is scarred by 1,500 checkpoints, as well as streets blocked off by miles of concrete blast walls. Sectarian outrages have returned, with scores of Christians and Shias in Baghdad massacred in the first weeks of November 2010. Since the 2003 US-led invasion, the Christian population fell from over 1 million to 500,000 and now a new exodus of this minority is likely. Unsurprisingly, few of the 2 million Iraqi refugees in Jordan and Syria are prepared to risk life by venturing home. Another 1.5 million, who fled their homes during the 2006/2007 sectarian pogroms, are internally displaced persons, many of whom are forced to live in squalid camps (and are now joined by a growing number of Iraqs economic refugees, including impoverished small farmers). 11. Iraq is described as looking increasingly like Lebanon, where each ethnic or sectarian community vies for a share of power and resources. The countrys unexploited oil reserves are amongst the largest in the world and its oil exports are calculated to quadruple over the next decade. Oil money amounts to $60bn in annual oil reserves for the state machine to hand out, mostly on the salaries of security forces and the civilian bureaucracy. Sunni, Shia and Kurdish leaders all want a share of the oil money and scarce jobs. The Sunni centre of Iraq fears a Shia revival - around 40% of the countrys oil surrounds the Shia city of Basra in the south. 12. Iran is attempting to broker a deal (also involving Syria and Lebanons Hezbollah) between Iraqs Nouri al-Maliki, who aims to be a second term prime minister, and the Iraqi Shia leader, Moqtada al Sadar. The US has, so far, failed to put together an alternative government. An unnamed Western official stated that a second term Maliki government on Irans terms would be nothing less than a strategic defeat for US imperialism, following a seven year war that cost more than $600bn, over 4,425 US troops lives and more than 30,000 injured. There is not even an attempt by the occupying powers to keep accurate documented figures of
2007 have been, so far, relatively limited in the Middle East (although for the mass of people there has been no improvement to their living conditions). The stimulus packages in the main capitalist countries had an effect in the region. The recovery helped the oil exporting countries and some other regional economies. Israel, in particular, is aided by its links to the US and the EU. But the economy in the region, as a whole, remains anaemic and very vulnerable to the unfolding global crisis. A double dip in the world economy or meagre growth, currency wars and growing protectionism will all prove disastrous for the economies of the Middle East. Saudi Arabia has already joined other countries in imposing new protectionist measures.
Mass unemployment
8. The economic crisis highlights the contradictions of over-reliance on hydrocarbon reserves in the Middle East. Many of the economies in the region are based almost completely on oil and have failed to diversify and to increase living standards. Resulting high unemployment is a constant feature throughout the region and a ticking social time-bomb. More than 30% of the regions estimated 350 million population is aged 15-29 and unemployment among this age group averages at 28%. The Middle East has the highest levels of youth unemployment in the world and two-thirds of the population is under 24. The World Bank predicts that 100 million jobs will need to be created in the region over the next 20 years just to accommodate those seeking to enter the workforce for the first time. 9. Mass unemployment has fed into rising mass discontent and sectarian tensions across the region. In the Gulf States, in particular, Shia Muslims are a long-discriminated-against minority in Sunni-ruled states. This is compounded by the ruling elites concerns over the rise of Shia influence in Iraq, Irans bid to become the dominant regional power and the relative strength of Shia Hizbollah in Lebanon. Playing the divide and rule card, Kuwaiti, Saudi and Bahrain authorities have all in recent months cracked down on their Shia populations, who are demanding more rights.
Iraq
10. Sectarian division also finds expression in the months-long failure to form a new government in Iraq following March 2010 elections. After 30 years of dictatorship, war, sanctions, imperialist invasion and occupation, and insurgency and sectarian civil war (with the US back-

civilian deaths as a direct result of the conflict. Estimates vary from anywhere between 100,000 to 600,000. Whatever the precise figures, it still amounts to mass slaughter of innocent Iraqis. 13. Despite Obama pulling out troops of Iraq, the US will retain at least 40,000 troops, building a string of US military bases and heavily arming the Iraqi state. But bolstering the Iraqi military in a situation of national, regional and sectarian divisions is fraught with dangers. A US military adviser, David Kilcullen, warned last year that Iraq was witnessing the "classic conditions for a military coup". As outlined already by the CWI, an outcome of the invasion and occupation is the possible creation of a number of Saddamtype dictators.
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guard its economic and military strategic interests. A US attack on Iran, possibly with Israeli co-operation (or a strike by Israel alone), remains a possibility. The social, political and military repercussions of such an attack would be enormous, in the region and beyond. Initially, a US/Israeli attack would cause an upsurge in nationalist outrage in Iran and also greatly inflame Arab nationalism, anti-imperialism and anti-Israeli sentiment throughout the region. Iranian Revolutionary Guards and Tehrans regional allies, like Hezbollah, could take military actions in retaliation. Under huge pressure from their own populations, Iran and the Arab oil-producing states could temporarily cut off or limiting their oil exports, adding another destabilising twist to the world economic crisis.
Regional balance of forces

14. The US-led invasion of Iraq hugely stoked up tensions in the Middle East and weakened the position of the most pro-US regimes. This was re-enforced by the popular anger over Israels military attacks against Lebanon in 2006 and Gaza in 2009, the Israeli commandos raid on a ship carrying aid to Gaza in 2010, and the ongoing oppression of the Palestinians. The ruling elites of pro-Western regimes, like Jordan, Egypt and Saudi Arabia, which are seen by the Arab masses as accomplices in this oppression, are increasingly hated by their own people. The ruling Hashemite family in Jordan have gerrymandered electoral constituencies ahead of Novembers parliamentary elections, ensuring that greater representation is given to thinly populated rural constituencies than to dense urban ones, where Jordanians of Palestinian origin dominate. 15. The consequences of the occupation of Iraq changed the balance of forces in the region, with Iran and the so-called Shia Arc bolstered. Furthermore, with a population of 72 million and the second largest armed forces in Nato after the US, Turkey is a growing regional power and aims to play a major role in the Middle East. The ruling AKP regime uses the countrys vital geo-strategic position to balance between the regions and the local and global powers. 16. As outlined in the World Relations document, imperialism cannot impose from the outside a lasting solution in either Iraq or Afghanistan. After the record of the Bush foreign policy years, the character of US imperialist intervention has had to change. Yet the US remains, by far, the worlds greatest military power and it will continue to intervene to safe-
Yemen and Somalia

17. The US is increasingly embroiled in Somalia and Yemen, without any perspective to resolve the crises. The US bank rolls the moderate Islamist regime of Sharif Ahmed, in Somalia, who imposes Sharia law, although his writ is no more than a few fly-blown streets in the capital (Economist, London, 18/09/10). In reality, big swathes of south and central Somalia are controlled by the Shabab (Youth) Islamist militia. Around 20,000 civilians have fled Mogadishu this year due to the conflict and several thousand have been killed or injured. The US is unwilling to invade the country again after its disastrous 1993 intervention but even a more aggressive US policy could backfire, making Somalia the next hotbed of global jihad. 18. The Yemen-based al-Qaida in the Arabian Peninsula (AQAP) is now considered by British intelligence services as great a terror threat as that emanating from Pakistan and Afghanistan. It is not difficult to see why Yemen has become a focus for jihadists The poorest country in the Middle East, with nearly half the population living on $2 or less a day, Yemen sits between some of the richest states in the world, including Saudi Arabia. Yemens oil accounts for 90% of its exports and three quarters of its revenues but todays mere trickle of black gold is estimated to run dry by 2017. Joblessness is at 35% and the 23 million population, half of which is below 24 years, is set to double by 2035. Under President Abdullah Salihs kleptocratic rule, Yemen has suffered separatist conflicts in the north and in the south. President Salih uses the al-Qaeda threat and the security situation to ruthlessly hunt down any separatist opposition in the south and to call for increased support from Britain and the US. Unwilling to commit troops to another potential military quagmire,
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21. No doubt, the Obama administration would like to see a deal made at the expense of the Palestinians, of course - to enhance and strengthen US interests, including the long-term position of Israel, its chief ally in the region. Netanyahu, buffeted by the various factions in the Israeli coalition government, including the ultra right wing linked to settlers, and within his own party, Likud, is not prepared to accede to US wishes, at this stage. However, Netanyahu may eventually yield to US pressure, which is backed up by sections of the Israeli ruling class that fear consequences of demographic trends, as well as the regional and international position of Israeli capitalism. 22. The Israeli ruling class is locked in a trap. They fear the demographic time bomb which could eventually see the growing Palestinian population inside Israel become a majority. Israels security minister, Barak, articulated the problem facing the ruling class in February 2010: "As long as in this territory west of the Jordan River there is only one political entity called Israel, it is going to be either non-Jewish or non-democratic. He went on, "If the Palestinians living in the West Bank could in the future vote in the elections in Israel then Israel will become a bi-national state. On the other hand, if the Palestinians could not vote, then we will become an Apartheid state... The alternatives compel us to constitute a border of a state which contains a Jewish majority and on the other side a Palestinian state". 23. The Israeli ruling class is fearful that giving any concession to the Palestinian masses will only reinforce the struggle against the oppression. But stepping up state repression will ultimately have a similar effect. 24. The rise of neo-liberalism in Israel was decisive in crushing the traditional base of support of the main political parties of the Israeli ruling class, eventually culminating in the total collapse of the Zionist Left camp. The Netanyahu government, confronted with the historical crisis of Zionism itself, is compelled even more then previous governments to be based on strong Israeli nationalism and militarism, as well as Islamophobia and anti-Arab racism. This has led to the inclusion of far right parties in the government and their growing influence in traditional main parties of the ruling establishment. Such a development means these parties are less reliable tools acting in the interests of the ruling class. 25. Israeli/Palestinian talks are currently on hold, following the re-starting of settlement building on Palestinian land on 27 September.
the US has sent $300m for half developmental, half military use to the Salih regime. Press reports claim that the White House is preparing to escalate its special operations intervention in Yemen, including more US military drone attacks. This will no doubt act as a recruiting ground for AQAP. However the Jihadists are less supported in the south of Yemen. Indeed most Yemenis care much more for land and money than they do for religion or ideology (Observer, London, 31/10/10). 19. In the context of worsening economic hardship, the political vacuum at the head of mass movements, the rottenness of the neo-colonial bourgeoisie and the anti-imperialist rhetoric of the political Islamists, the diverse phenomenon of political Islamism and terrorism will continue to have appeal amongst layers of the most alienated parts of the population in the region. But the masses also learn from their bitter experiences of political and radical right wing Islam, as mass opposition to the rule of Mullahs in Iran and the widespread repulsion to the sectarian atrocities of al-Qaeda in Iraq both show. The development of mass workers struggle and class radicalisation will see anti-capitalist and socialist ideas develop and act as a powerful poll of attraction to the masses, as well as a countervailing tendency to reactionary political Islam and terrorism. While this process will not be straightforward and will most likely also see the development of broader and confused trends, such as anti-imperialist pan-Arabism and pan-Islamism, and even the possible development of left Islamism, the mighty class battles ahead will lay the ground for the revival of the once powerful class and socialist ideas in the region. It is one of our tasks in this process to help the workers' movement to learn the lessons of the mistakes and betrayals of the former leaders of the communist parties and other mass organisations.
Palestine and Israel

20. To great media fanfare, President Obama convened new peace talks between Israeli Prime Minister Netanyahu and Palestinian leader Abbas in September 2010. The aim of the talks, a so-called two state settlement, would actually see the 1967 partition lines maintained, with Israel holding nearly 80% of the land, plus part of the West Bank. Palestinians would be given a small and unviable territory, with no right of return for refugees. Netanyahu has made clear that Jerusalem will remain under Israeli rule and will not be a shared capital and that any Palestinian state will be policed by Israel.

Even if Netanyahu, under intense US pressure, can placate the right wing enough to keep the current so-called talks alive(even bringing the Kadima party into the coalition) the Israeli ruling class will give away as little as possible and ensure there is no development of a genuine independent Palestinian state. 26. Amongst the Jewish population, a layer, especially of young people, is repelled by Netanyahus policies and the far right, and is starting to move into open opposition. Although still small in numbers, this trend is significant. 27. While Zionist nationalism is used to block the class struggle, particularly united struggles that can bridge the national divide, important fight-backs of the working class have taken place in Israel over the last few years. A massive strike of high-school teachers, which challenged the government in 2007, peaked with a mobilisation of 100,000 teachers, students and supporters in a solidarity rally, where the head of the union was forced by the mood to call for a wider struggle for a "welfare state". Even the Histadrut union federation grew in membership since 2006. From 1996 to 2004, the former Histadrut leadership was forced to head the biggest strikes in the history of Israel. Following the defeats of those battles, the new leadership has managed to impose an unprecedented industrial silence since 2005 (the high school teachers' union is not part of the Histadrut). They made rotten deals with the bosses and the government, under the guise of "national responsibility" However, as is already implied by a few small but significant examples of the bureaucracy being forced to let off steam in recent years (in some cases, due to the influence of the new workers' organization Power to the Workers - which the CWI assisted in establishing and building) the industrial quiet is bound to end and the grip of the bureaucracy to loosen. This will be especially the case when the Israeli economy is hit by recession, which can be expected to be sharper than the last slowdown in early 2009. To win future battles against the bosses, the Israeli workers will have to adopt a programme of solidarity and a united struggle of Jewish and Arab workers. This entails breaking from the ruling elites agenda of national oppression, occupation, colonizing settlements and militarist aggression towards the masses in the region. 28. For the moment, the craven Palestinian Authority (PA) leadership, under pressure from the US administration, is still desperately trying to keep talks going, as is the supine Arab League. The reality is that the current round of
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(non) talks will lead nowhere. While a very limited degree of further self-rule for Palestinians could be granted, at some point, even leading to the announcement of a so-called Palestinian state on the basis capitalism and imperialism no lasting or fundamental solution can be found to the Palestinian question or peace brought to the region. Moreover, such an announcement can serve as pretext for the escalation of repression against Palestinians living in Israel or a new military attack on Hamas in Gaza, where one and a half million people remain under brutal siege, with huge rates of poverty and joblessness. Conditions in the PA are barely much better. Palestinians living in Israel are increasingly alienated by discriminatory measures, and the brutal persecution and repression of any form of protest. This is compounded by physical attacks from the far-right, growing poverty and attempts by the Israeli state to alter the demographic balance to the detriment of the Palestinians. 29. The Israeli army continues to threaten to launch military attacks against Hezbollah in Lebanon. Indeed, more military conflict and wars are implicit in the situation. Like the Israeli attacks against Lebanon and Gaza, such conflicts will ignite huge anger and opposition in the Arab world and internationally. Instead of talks leading to peace and justice, the national question is becoming more intractable, leading to new mass movements and revolts of the oppressed Palestinians. Even the Palestinian ruling elite partially recognized this, with some of the national leaders echoing the accumulated mass frustration of the masses when they talk about the "struggle". Of course, these leaders try to use the threat of renewed mass struggle to increase pressure on Israel and the Western powers to make a deal with them. 30. Any significant gains for the Palestinians were won through mass movements, especially the first Intifada. The current developments lay the basis for new mass uprisings. The struggle for the democratic and social rights of Palestinians inside Israel is most likely be a focal point of a 3rd Intifada. The mass struggle of the Palestinians, as during previous uprisings, will find ready solidarity, both internationally and in the region, including amongst a section of Jewish workers and youth. However, without a leadership armed with a class approach, the mass movement can be end up deploying counterproductive methods of struggle, limiting its ability to undermine the brutal repression of the Israeli regime. A Marxist programme to solve the national question, on a class and socialist basis, is crucial for taking the struggle forward and to
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35. Whatever their sectarian differences, the Lebanese parties all share in common similar pro-capitalist economic and social policies. The important teachers struggle in 2010 showed that all the main parties do not serve the interests of workers and the poor. Workers entering into new industrial struggles, as they inevitably will due to the governments privatisation and cuts programme, will draw the conclusion that they need to unite to build the workers movement against neo-liberal policies and the need for a unified political alternative to poverty, sectarianism and war. By boldly developing its platform and forces, the CWI in Lebanon can play a key role in this process.
overcome a possible deepening of the national divide. 31. The Hamas regime in Gaza continues to partially channel Palestinians' anger at their terrible conditions. But its right wing political Islam agenda offers no viable alternative strategy for the oppressed Palestinians and is increasingly questioned by sections of the population of the Gaza. Indeed, Hamas has had behind the scenes negotiations with US imperialism and under its rule women are increasingly oppressed, as is any open opposition to Hamas. 32. It is only through united mass movements of the working class and poor in Palestine, and in Israel, as well, that a solution will be found; opposing national oppression, the bosses parties and imperialism; and bringing about real self-determination for Palestinians - for a socialist, democratic Palestine and a socialist Israel, as part of a equal and voluntary socialist confederation of the Middle East. 33. The principled political positions established by the forces of the CWI in Israel and Lebanon, often under very difficult objective conditions, are key in preparing the ground for future big steps forward for Marxism in the region.
Iran
36. Iran has benefited from the growing power of the Shias in Iraq and has widened its influence in the region, as was seen in Ahmadinejads October 2010 visit to Lebanon. Tehran aims to help create a Shia-dominated Iraqi government. This would enhance trade and economic co-dependencies between Iran and Iraq and act to help prevent Iraq from becoming a military threat to it again, as it was under Saddam, or being used as a launch-pad for a US attack. 37. Whatever the outside threats from imperialism, ultimately it is events at home that are crucial in deciding the fate of the ruling Iranian theocracy. Due to the bourgeois character of the opposition leadership and the lack of mass organisations of the working class, the 2009 Green mass movement was repressed and dispersed, for the time being, by the brute force of Ahmadinejads regime. But this momentous mass movement is just the prelude to the revolutionary mass struggles that will unfold in Iran. Millions came onto the streets after the June 2009 elections, which were widely perceived to have been rigged, despite brutal repression by the regimes Basij militia. There were reports of soldiers disobeying orders to attack protesters. 38. During December 2009, the consciousness of the movement developed way beyond that of their so-called leaders and there were reports of increased radicalisation among students. However, with the decline of the mass movement, radicalised consciousness fell back somewhat and Mousavi and Karroubi maintained their leadership role for the opposition. Yet, as events have already indicated, this can change again very rapidly on the basis of new mass struggles. 39. The main lesson of the failure of the mass
Lebanon
34. The complicated and highly unstable political situation in Lebanon dominated by pro-market sectarian-based parties and regional and imperialist powers interference - was shown by prime minister, Saad El Hariris volte-face, last September, over the 2005 assassination of his father, Rafik, a former five times prime minister. Saad El Hariri now says he was wrong to rashly accuse Syria for the car bomb that killed Rafik, a multi-billionaire businessman. The 2005 killing sparked the Cedar Revolution, backed by the West, which led to the withdrawal of Syrian peacekeepers after three decades of direct Syrian involvement in Lebanon. Saad El Hariri came to power during these events but he and his allies have only held slender parliamentary majorities. Pro-Syria Hizbollah (whose prestige was bolstered after the 2006 Israeli war against Lebanon), along with its allies, forced Hariri to share power in 2008. Since then, Hariris political alliances have weakened and his main outside backer, Saudi Arabia, improved its relations with Syria. Now the UN tribunal investigating the 2005 killing is reportedly pointing the finger of responsibility at Hizbollah or a rogue group from the organisation. Such a finding would be highly explosive and could trigger a new political crisis.

movement to topple the regime is the urgent need to build independent organisations of the working class. Such class formations would put forward democratic demands (which acquire a revolutionary character in such a situation) and class demands, and employ the weapons of class struggle, including the general strike, to ensure the end of the Mullahs reactionary regime. Middle class layers swung behind the 2009 mass movement and some sections of the working class, particularly public transport workers. But this potential lacked a far-sighted socialist leadership and was not developed into a general strike and a class movement powerful enough to topple the regime. 40. Although Ahmadinejad narrowly held onto power, his ruling faction has subsequently suffered internal factionalising, reflecting in part a worsening domestic economic and social situation. 41. Western-imposed sanctions are biting, although Iran remains the worlds fifth largest crude-oil exporter. But oil production is estimated to fall by 15% and exports by 25%, by 2015, according to the Economist (London) magazine. Ahmadinejads plan to cut consumer subsidies, which amount to a quarter of GDP, will see a sharp increase in food, fuel and transport prices. The prospect of continuing feeble economic growth, high joblessness and reactionary authoritarian rule, means the Iranian masses - having tasted mass struggle - are bound to take to that road again. 42. The mass opposition in Iran - confused and disorientated following the brutal crackdown understandably still has widespread illusions in bourgeois democracy, at this stage. This is to be expected given the legacy of three decades of theocratic oppressive rule, the cowardly character of the Mousavi opposition and the lack of a mass revolutionary socialist alternative. Yet sections of mass movement can rapidly overtake the limits of the Mousavi programme, which attempts to make deals with the regime. We saw during the 2009 movement how protests against the rigged elections developed into a struggle to bring down the dictatorship. The funeral of Ayatollah Hosein Ali Montazeri, at the start of 2010, turned into large anti-government protests, with unprecedented chanting against the hard-line supreme spiritual leader Khamenei. 43. The national question in Iran also threatens the regime. In the Kurdish areas, large May Day demonstrations and a general strike, which was called after the assassination of a Kurdish trade union activist (albeit on a pan-class basis),
29
showed the explosive character of the unresolved demands of the masses, including their national democratic rights. 44. The timing of future mass movements against the ruling Mullahs is, of course, impossible to foretell. But it is certain that having embarked on open struggle, albeit temporarily checked, the masses will again move to overthrow the fundamentalist regime. If the movement for democratic rights is linked to a mass struggle of the working class and the poor, the regime can be overthrown. The role of the working class will be decisive. Although attempts to organise independent unions or strikes are brutally suppressed, the Tehran bus workers and sugar mill workers in Haft Tapeh took courageous action in recent months. 45. Renewed mass movements in Iran will also have a huge influence on neighbouring countries and globally. This underlines the urgent need to develop the ideas and presence of the CWI in the Middle East, building on the marvellous work carried out where the CWI already exists. Socialists call on the Iranian working class and increasingly impoverished middle layers to act independently from the pro-capitalists opposition and ruling elite factions. It is necessary to learn from the bitter disappointment of 1979/80, when the new elite used revolutionary and religious phrases to seize and consolidate power. Todays opposition leaders would like to divert the potential revolutionary power of the masses with bourgeois democratic phrases and promises. Rebuilding the workers movement is a key task ahead for the Iranian masses. 46. Even if the Ahmadinejad regime is overthrown and replaced by a pro-democracy bourgeois regime - due to the pro-capitalist character of the opposition leaders who exploit illusions in Western-style parliamentary democracy and crucially because of the lack of a socialist alternative - new mass struggles by workers and youth will develop. Only a workers and poor peoples government can guarantee democratic rights and begin the transformation of the country by breaking the grip of the elite and capitalism.
Egypt
47. With its 85 million population, geo-strategic position in the Arab world, divided regime and growing opposition and industrial strife, Egypt is another key country for the developing class struggle in the region. Ageing president Mubarak has called parliamentary elections for as yet some unspecified date in late November.
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come repression and develop confidence and be drawn into the decisive task of building independent class organisations. 51. The pressure from the working class and the economic and social crisis is reflected in the sharp internal differences within the regime over the succession to President Mubarak. Parts of the ruling regime, in particular those representing the army and state bureaucracy, do not want Gamal Mubarak taking over. The regimes divisions are giving confidence to the Egyptian masses to push for democratic rights. The Muslim Brotherhood aims to be the main beneficiary of this process but it opposed many of the strikes in recent years. In reality, its leaders act as a safety valve for the ruling establishment, which has led to divisions with those layers in the movement that are based on more radicalised middle classes. 52. In the absence of mass class organisations, big layers of the Egyptian people look to Mohammad ElBaradei and his National Association for Change. ElBaradei is considered an outsider by the regime, which blocked his candidacy for the 2012 presidential elections. In response, ElBaradei leaned on popular discontent. He has called for reforms, to prevent a revolution of the hungry. He launched an election boycott campaign, tied to democratic demands, which attracts wide support from many layers in society. This underlines the vital importance of transitional democratic demands, linked to the socialist transformation of society, in Egypt and other Middle East countries. 53. ElBaradei is a somewhat accidental figure and it remains to be seen what course he will follow under the pressure of events. But it is certain that Egypt has entered a new stage of vital importance for the class struggle in the region. The regime is increasingly divided and losing much of its traditional support from the lower ranks of professionals and the state bureaucracy. Following the wave of industrial action, the 2012 presidential elections could become the main focus of opposition to the regime, with potentially explosive consequences. As with Iran in 2009, attempted rigged elections and state repression could be the catalyst for mass struggles that quickly develop into attempts to overthrow the regime. 54. All the despotic and authoritarian regimes of the region correctly fear mass opposition movements developing in Iran, Egypt and elsewhere, which would act as an inspiration to their own oppressed populations. However, unless the working class takes the leadership of such movements, with an independent class pro-
This is accompanied by placing barriers to opposition parties standing and general repression against activists, in particular against supporters of the Muslim Brotherhood. The regime has good reason to fear unfettered elections: the last parliamentary vote in 2005, despite blatant fraud and state violence, saw the Brotherhood win a fifth of seats while only contesting one third of them. Reflecting the increasing radicalised opposition throughout society to Mubaraks rule (and the planned nepotistic rule of his son, Gamal), divisions have opened up in the Brotherhood, with oppositionists decrying the organisations decision to stand in the elections as lending legitimacy to the electoral farce. A campaign to boycott the poll, led by Mohammad ElBaradei, a former head of the UN nuclear watchdog, gained almost 1 million signatures. 48. Egypts deteriorating economic and social situation and the recent years wave of strikes are the root causes of the increasing political turmoil and splits amongst the ruling elite. Workers and youth face a bitter future of growing unemployment and rising prices. Rising inflation eats into living standards and wages remain stagnant. Over 40% of the population live in poverty and nearly 30% of the population is illiterate. The gap between rich and poor has widened, with the rich living in luxurious gated communities and the poor in urban squalor. 49. Industrial action and workers protests began in December 2006, with an occupation by workers at the Mahalla textile factory (with 28,000 workers, it is the largest factory in the Middle East). The bosses and government were forced to concede better wages and conditions, inspiring others to strike too. Strikes against privatisation and for re-nationalisation are highly significant, as are efforts to create independent trade unions. The regime was forced to make concessions, including announcing an indefinite postponement of the privatisation programme of parts of the public sector. 50. Courageous and impressive steps have been taken to form independent unions under conditions of martial law. While the core of the mass strikes were mainly organised by blue collar workers (e.g. garment workers and aluminium factory workers), so far it has mainly been a layer of white collar workers who were able to take steps in the direction of creating new unions (e.g. real estate tax collectors who successfully established an independent union, teachers, education administration workers, real estate tax collectors and postal workers). However, new mass strikes and struggles will see other sections of the working class over-

gramme, mass opposition can take different channels. Without a socialist leadership, uprisings of the oppressed in the Middle East and neo-colonial world can manifest in acts of despair, such as food riots and looting. 55. It is clear that we have entered a protracted process of economic, political and social crisis in the Middle East. This will mean more conflicts and wars, as well as mass working class
31
struggles and revolutionary and counter-revolutionary movements. The ability of the working class to build and develop independent mass organisations, armed with socialist policies, will be the decisive factor deciding the outcome of this process. The CWI in the region, by boldly and skilfully developing its analysis, programme and numbers, will be presented with many opportunities to grow in the stormy period opening up.
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Latin America,
Document No. 4
Introduction
1. The growth in Latin America that preceded the international crisis helped to create the conditions for relative political stability in the majority of countries. The acute period of crisis and recession, starting in 2008, threatened to provoke a new wave of political and social turbulence, such as that which characterised Latin America at the turn of the century. Even though the process did not develop as it could have done (with the exception of the radical and massive general strikes in Guadalupe and Martinique in 2009), the relative recovery does not offer any guarantees of lasting stability or social peace. Instability is still the hall-mark of many countries and the possibility of a double dip in the crisis in Latin America would rapidly lead to the return of radicalisation and social and political polarisation. 2. Latin America has been an important arena for the resistance of workers and oppressed peoples against the neo-liberal attacks that marked the end of the 20th Century and the beginning of this century. The profound international crisis, which started in 2008, shifted the focus of international resistance to workers of the advanced capitalist countries, especially in Europe. 3. There are elements of a latin americanisation of Europe. However, this process does not necessarily imply the opposite - a Europeanisation of Latin America in the sense of it being transformed into the first world, as propagated by capitalist commentators. 4. The economic recovery in Latin America that started in the beginning of 2009 does not mean the beginning of the end of the regions peripheral character within international capitalism, that of a region subservient to imperialism. This is confirmed by the new relations of dependency developing with countries like China, which has not replaced the subordination to US and European imperialism. 5. With the second centenary of national political independence being celebrated in various Latin American countries, the impasse for the political alternatives that have developed in the last period, like Chavismo and Castroismo, the region is at a decisive conjuncture. The ad-
vance or retreat of the struggle for emancipation of the Latin American peoples will depend on the capacity of the working class and the oppressed peoples to build a socialist alternative.
The Crises and the limits of recovery

6. The epicentre of the international crisis of capitalism is not Latin America this time. This is an important difference in relation to the debt crisis in 1982 and the tequila effect resulting from the Mexican crisis in 1994, and the instability that persisted from 1998 to 2002. Those crises, especially the last of them, profoundly affected the countries of the region, provoking mass movements and served as a background to the toppling of governments in several countries and the rise of new governments that adopted an anti-neoliberal stance. However, the fact that the crisis has it epicentre in the advanced capitalist countries means that its more profound and severe than previous crisis and the generalisation of its consequences is inevitable. Latin America is not only already experiencing its effects but will tend to suffer even more profound contradictions in the future. 7. The exceptional growth cycle in Latin America 2003-2008, with an average annual growth rate of 5.5 %, was interrupted by the international crisis at the end of 2008. The year 2009 was marked by a fall of 1.9 % in the GDP of Latin America and the Caribbean, provoking recession, unemployment and a growth of poverty. Approximately 3 million Latin Americans lost their jobs in the first months of 2009. 8. However, in contrast to the previous crisis that hit Latin America (1998-2002), this time there has not been any break with the economic models, debt moratoriums or collapse of governments or regimes. The crisis has not yet provoked a situation like in 2001 that led to the collapse of De La Ruas government in Argentina and the economic model inherited from Menem. 9. During the crisis, the measures adopted by the majority of governments in the subcontinent followed the international pattern of state intervention to avoid a profound and lasting recession. Without this, the Latin American economies would have fallen into the abyss of a pro-
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CWI 10th World Congress 2010: Latin America, Document No. 4

US$ 10 billion per year in 2000, to more than US$ 100 billion today. There are estimates that China will overtake the European Union as the second biggest trading partner in the middle of this decade. Asia is already the main market for exports from Brazil and Chile, and second for Argentina, Costa Rica, Cuba and Peru, as well as being the third for Venezuela. 16. In general, trade with China reproduces the old neo-colonial formula of centre-periphery, with Latin America exporting primary commodity products and importing industrial products. Far from representing a qualitative leap forward for Latin America in world economy, the growth in trade relations with Asia and especially China is repeating the process of re-primarisation (dependency on commodity goods) of the Latin American economies. 17. While in 1999, commodities represented 26.7 % of the total sales from Latin America, in 2009 they represented 38.8 % of the total. Brazil alone supplies 45 % of all soya imported by China, apart from being a source of other agricultural products and iron. In the first four months of 2009, while Brazilian exports to the US fell by 37.8 %, exports to China grew 62.7 %, turning it into the main market for Brazilian exports. 18. At the same time, since 2005, the trade surplus that Latin American countries had with China was reversed. Today, manufactured products compose 93 % of all Chinese exports to the region, negatively affecting the development of local industry. 19. If trade with China provoked a boom for the primary product exports from Latin America, on the other hand, it also accelerates deindustrialisation, as a result of competition with Chinese manufactured products. The character of growth before 2008 and the recovery in the end of 2009 is of a retrogressive character regarding the emancipation of the Latin American peoples and economies. 20. The growth of China in the international scenario does not automatically mean the opening of growth for Latin American countries. While Asias share of world trade leapt from 6 % to 23 % between 1980 and 2008, the participation of Latin America remained stable (from 4 % in 1980 to 5 % in 2008). 21. The limited attempt by some of the Latin American national bourgeoisies to take advantage of the opportunities opened up by the triangle of trade between Latin America, the US and China is far from representing a stable route for national and social liberation for the
found and lengthy recession. 10. The countries that suffered most from the crisis were those with more links to the US economy, especially Mexico, but also Central American countries (mainly El Salvador, Honduras, Nicaragua and Costa Rica). Mexico experienced a fall in GDP of 6.5 % in 2009. However, Venezuela, directly affected by the volatility in oil prices and by an energy crisis, also suffered as a consequence of the world crisis. 11. Countries like Brazil, Chile and Paraguay had GDP falls in 2009 (-0.2 %, -1.5 % and -3.8 % respectively), but have a perspective for growth in 2010. Argentina, Uruguay, Colombia, Peru, Ecuador and Bolivia succeeded in maintaining small growth during 2009 with estimate for more growth in 2010. The 10 countries of South America combined had an average GDP fall of 0.2 % in 2009, and should see recovery, with growth of 5.2% in 2010. 12. The price for this apparent prosperity in midst of an international crisis is the inflow of volatile capital and the increased value of local currencies. This will have harsh consequences for the Latin American economies. In spite of high prices for commodity exports, the ongoing currency war tends to provoke important imbalances in the current accounts of the countries with higher growth. This scenario opens the way for a flood of imported products and a further de-industrialisation of the region. The timid measures adopted up to now by governments, like the increase in taxation on the inflow of foreign capital in Brazil and the interventions in the currency market by Colombia, Peru and several other countries, are not sufficient to contain the speculative attacks through currency trade. 13. Apart from the lack of competitiveness and the threat of deindustrialisation, the risk of the growth of speculative bubbles and the artificial growth of consumption, can lead countries in Latin America down the same path that ended up exploding into the international crisis.
New dependency in relations with China

14. Chinese growth, even during the height of the international crisis, was fundamental for the Latin American recovery. Latin American exports fell by 22.6 % in 2009, compared with the year before. The estimate for 2010 is a growth of 21.4 % in exports, propelled mainly by sales to Asia, especially to China. 15. Latin Americas trade with China leapt from

Latin American peoples. The re-primarisation of the Latin American economies is reflected in the strengthening of a dominating power bloc based on banks, agro-business and the export industry. There is no section of the bourgeoisie capable of breaking with this and assuming the leadership of a process of development on a national basis.
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The role of US imperialism and threats of coups

22. The presence of China in Latin America, however, does not counterpose the historical role of US imperialism in the region. The weakening of the US in the face the crisis and the fiasco in Iraq and Afghanistan has opened up some margin for manoeuvre for national bourgeoisies in trade relations and permitted advances in struggle and conquests for the working class and oppressed people in some countries. The emergence of governments like Chvez in Venezuela and Evo Morales in Bolivia are expressions of the limitations of the power of US imperialism. However, Latin America continues to be of strategic importance for US imperialism, and it will not just abandon its efforts to impose its economic and geopolitical interests Latin America. 23. The military coup against Manuel Zelayas government in Honduras in 2009 represents an important warning. This was the first coup for years that succeeded in revoving a government. Moreover, the limits of the political alternative represented by Zelaya and the lack of a leadership for the mass movement, opened up room for diplomatic manoeuvres from US, seeking an agreement with Zelaya out of the presidency. Zelaya took refuge in the Brazilian embassy putting pressure on Lula to adopt a rhetoric different from US imperialism. Yet the Brazilian government discouraged any movement of the masses in the struggle and supported a negotiated agreement with the putschists. 24. The attempts at a military coup sponsored by US imperialism have been seen in several other countries in the region since the end of the 1990s. The coup against Chvez in 2002 was defeated by a mass movement. The coup attempts against Evo Morales in Bolivia was also defeated by popular, indigenous and workers resistance with elements of a civil war developing in the Media-Luna. In both processes, the radicalisation of the masses was channelled into the electoral field. Chvez won consecutive electoral victories. In the same manner, Evo won a sweeping victory in 2009, assuring re-election with 64 % of the votes.
25. The example of a victorious reactionary coup in Honduras had echoes in the more unstable countries of Latin America. In Paraguay, there were signs of a possible coup against Fernando Lugo. In Ecuador the threat of a coup returned, more recently, in a more concrete manner. The attempted coup was obstructed by the mass movement and by international pressure, especially from UNASUR. 26. In spite of the polarisation and coup tendencies that are always present, especially in the countries where the bourgeois democratic political regime is more fragile, this not the currently the dominant feature of the situation. In the majority of countries the balance of forces in society, still marked by the mass struggles of this decade, does not favour this type of intervention. From the point of view of imperialism, there is still the risk that the whip of counter-revolution triggering a revolutionary response that they would loose control of. The creation of UNASUR (with more autonomy from the US than the OAS) and its role as mediator in the conflicts of Latin America, especially by Brazil, proved to be a more efficient way of controlling social crisis. This is the main strategy for the Latin American ruling classes and imperialism at this conjuncture. 27. This assessment does not underestimate the role of imperialism. It is an evaluation that avoids committing the error of most of the Latin American left, to give unconditional support to any policies adopted by governments that come into conflict with imperialism. Many times, an exaggerated threat of a coup is used as a smoke screen to hide the limits of and capitulation to capitalism of governments like Chvez, Correa or Evo Morales. It is necessary to condemn putschist actions and remain alert to existing coup threats. However, its necessary to show that the best way to defeat to putschists is not by seeking conciliation with those sectors or lowering the programme and moderating anticapitalist measures. 28. In spite of not basing itself only on putschist actions in the short term, US imperialism is promoting a low intensity war in some areas of Latin America. The US strengthened its military presence in Latin America. It has reactivated the Fourth Fleet to monitor the South Atlantic. It has organised joint military exercises with armies in the region. It has also established new military bases in Colombia and has plans for more in Panama. 29. The earthquake in Haiti in January of 2010 also indicated a new phase of US military presence in the region. The presence of UN troops
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(Bolivarian bourgeoisie), the right wing of Chavism, tend to seek a more conciliatory relationship with the opposition. The right wing opposition, however, is interested in a definite defeat for Chvez, aiming for 2012. This scenario points to the opening of a critical stage in the Venezuelan process, with an oscillation between radicalisation and capitulation before a strengthened right wing. 35. The key to the Venezuelan process continues to be the strength of the mass movement and the first signals of a process of recomposition of the workers movement in the last period. 36. The Venezuelan situation should serve as a warning to Bolivia. The government of Evo Morales and MAS got a large majority in the elections of December 2009 and April 2010. The vote for Evo and MAS reflected the desire of the masses to defeat the right wing putschists and intensify the economic, social and political changes. However, MAS hasnt used the broad majority to make a clear advance in an anti-capitalist direction. The government continues to favour transnational companies in oil and mining sectors, and continues to confront workers struggle, like the recent miners and teachers strikes, etc. The elections of 2009 and 2010 already indicated the heightened process of degeneration and bureaucratisation of MAS and the sectors linked to the government. Following the style of Brazilian PT and Venezuelan PSUV, the bureaucratic leadership of MAS made alliances with the right wing and imposed the list of candidates from above. 37. In contrast to Venezuela, Bolivia could follow the tendency of recovery after the crisis of 2008-2009 based on the same model of state stimulus and exportation of primary products. However, with a worsening of the world situation and internal contradictions, the deadlock that Chavismo is experiencing today can be repeated on Bolivian soil. 38. If what prevails in Venezuela and Bolivia are illusions in a mixed economy or state capitalism, trying to conciliate public interests with those of the capitalists, the result can only be more crisis and the threat of deep setbacks in the countries that took a vanguard position in the struggles of Latin American the last period.
in Haiti (Minustah) before the quake took the form of a foreign military occupation seeking to maintain by imperialism after the toppling of President Jean Bertrand Aristide. This action was not lead directly by the US but by Brazil together with other countries. This underlines the sub-imperialist role of Brazil.
Impasse in Venezuela and Bolivia

30. The dynamics of the political process in Venezuela are central for an evaluation of the balance of forces in Latin America. Chvezs government has turned into an international political reference point for many of those who fight for alternatives to neo-liberalism and capitalism. 31. The impact of the international crisis in Venezuela was devastating and, in contrast to the majority of the other countries in the region, Venezuela remained in recession in 2010, with the prediction of a fall of GDP by 3%. The situation for workers was severely affected. The social crisis cleared the way for increasing urban violence that reached extreme levels, with many comparing the situation in Venezuela to Mexico. 32. In spite of the heightened socialist rhetoric, the high level of bureaucratisation and corruption involving sectors of the government is yet another factor that undermines the support for Chavismo. The wave of killings and attacks, with almost total impunity, against trade union leaders and activists that dare to struggle independently, shows the weight of bureaucratic sectors and bosses in the government. As we have explained in our material the process in Venezuela has stalled and support for Chavez is being eroded. 33. In the elections to the National Assembly, the Chavistas got a majority of MPs, but for the first time not the majority of votes. In a scenario of prevailing social and economic crisis, if the right wing succeeds in sustaining a united front in a situation of further erosion of support for Chvez, this could open up a real threat in the presidential elections of 2012. However, the internal conflicts within the right wing opposition and the lack of an established figure capable of unifying them in the election are factors that should not be underestimated. 34. Faced with the election results, the reaction of Chvezs government was to radicalise the rhetoric and announce new nationalisations. In spite of that, the tendency is to a more open attitude towards negotiations with the opposition in the new parliament. The political sectors more linked to the so-called bolibourgeoisie
Capitalist restoration advances in Cuba

39. Cuba has not been immune from the global capitalist crisis despite still being dominated by a state owned and planned economy. The absence of workers democracy and planned eco-

nomic integration on a genuinely socialist basis, at least in Latin America, makes the Cuban economy vulnerable and dependent on the international capitalist market. Cuba depends largely on international prices and demand for its exports (of products and services). The steep fall in nickel prices, for example, had a big effect on the Cuban economy. The recession affected the tourist industry of the island as well as remittances from Cubans abroad. For a country that has to import 80% of the food that is consumed and also depends on imported oil, the situation is becoming critical. Added to that is the devastating effects of the hurricanes of 2008. 40. The new measures from Raul Castros government aim to cut public expenditure through firing, in the first stage, 500,000 public sector workers, which will be followed by new dismissals of a further half a million in March 2011. If the target is reached, it will mean the dismissal of about 20 % of all Cuban workers. The government will stimulate those workers to find work in the non-state sector of the economy, encouraging private cooperatives, family businesses and even handing over state businesses to workers to administrate as private businesses. The new private businesses stimulated by the government will be able to employ wage earners. These steps towards capitalist restoration pose a threat to the continuation of the planned economy.These are steps towards capitalist restoration along the lines of the Chinese road. 41. This petit-bourgeois social base together with the pressure of the world market will tend to strengthen the sectors of the bureaucracy that assume more explicitly a position in favour of capitalist restoration in Cuba and the adoption of the Chinese path. The problem is that there are not the objective conditions to allow a repetition in Cuba of what capitalist economists regard as the Chinese success. A capitalist Cuba will be more similar to its neighbours in Central America than to China. This and the threat of the return of the exiles will mean this is an extremely complicated process and is not yet complete and will witness many zig-zags in policy by the regime. However, the tendency towards capitalist restoration, if it develops is bound to have an effect on political consciousness, especially in Latin America. We need to be aware of this and explain what is taking place and why as well as explain our alternative. Yet these tendencies towards capitalist restoration are taking place against the background of growing capitalist crisis and an ascendancy in the class struggle internationally and are entirely different to the conditions which existed at
37
the time of capitalist restoration in Eastern Europe and the former Soviet Union. 42. The path to confront the international crisis, Cubas isolation and to expand the achievements of the revolution, goes in the opposite direction to the one adopted by the Castroist regime. It is necessary to attain genuine workers democracy, where the management of the economy, the state and society flows from the direct participation by all workers, with ample democratic liberties for workers, and not from an almighty bureaucratic layer. 43. To break the isolation and smash the blockade, the solution is not simply to build relations with bourgeois governments of various countries. There is already a section of imperialism that understands that the best form to defeat the Cuban revolution is by lifting the embargo and integrating Cuba into the capitalist world market. Many capitalists already see the perspective for huge profits in that. The relations established with governments like the PTs in Brazil can function as a mediator for private investments and business on the island. Instead of greater integration into the world market, the way out for Cuba is in proletarian and socialist internationalism, supporting revolutionary and anti-capitalist initiatives in Latin America and in the world.
The situation in the bastions of neoliberalism in Latin America

44. The most important Latin American country ruled by traditional neoliberalism is experiencing a profound economic, political and social crisis. The economic debacle in Mexico deepened the situation of severe social chaos, poverty and lack of perspective. A non-declared civil war involving narco-traffickers and the government, is taking place and reflects a social disintegration. The government has totally lost control of the situation in some regions. 45. This situation can spread to Central America, where the social situation is not much better, and also to Mexicos northern neighbour, the US. The corrupt state in Mexico is totally incapable of offering any solution. 46. The government of Felipe Caldern of the PAN (National Action Party, right-wing) took office in 2006, succeeding Vicente Fox, also of PAN. The electoral fraud that led to the defeat of the candidate of the centre-left opposition, Andrs Manuel Lopes Obrador (AMLO), of the PRD (Party of the Democratic Revolution) provoked a strong popular reaction against the government. However, Calderns government survived the mass movement against the elect-
38

what was destroyed in the earthquake of February 27th and also the fall of GDP in 2009. 52. However, the main impact on public opinion came from the marketing manoeuvres of Piera in the rescue of the 33 miners. In spite of Pieras marketing stunts, the repressive side of the government is exacerbating and the resistance against the government continues.
oral fraud, strong trade union struggles and the uprising with revolutionary characteristics in Oaxaca in 2006. This was mainly due to the fragmentation of the movement and the lack of a powerful political left alternative. 47. Colombia, under the new President, Juan Manual Santos, continues to be a fundamental bastion for US imperialism. Santos adopted an attitude of national unity in search for more cohesion between the sections of the bourgeois and toned down the militarist and anti-Chavez discourse of his predecessor. He re-established relations with Venezuela and was even received by Chvez in Caracas. This change reflected the effects of the international crisis. For Colombia it is essential to regain trade relations with Venezuela - bilateral trade fell by 60 % at one stage- during the international crisis. 48. At the same time, the policy of domestic repression, neoliberal politics and alignment with the US remains. The Colombian state is controlled by a mafia that remains in power. The new government, however, in contrast to Uribe, is looking for a degree of collaboration with the governments of Venezuela and Ecuador in its actions to defeat the FARC. 49. Peru, with president Alan Garcia from the APRA operates, together with Colombia, as a privileged ally of imperialism in South America. After attacks on workers, peasants and indigenous people, popular opposition to Garcia only grew. 50. Chile now is among the countries governed by the more openly neo-liberal right, after the election of the billionaire, Sebastin Piera, in January of 2010. This represents a setback for the working class. However, this does not mean that the new government represents a break with the policies of its predecessor, that of Michele Bachelet (Socialist Party) or the previous governments of Concertacin. During two decades, Concertacin implemented the neoliberal policies initiated during Pinochets dictatorship. The Chilean elections do not represent a turn to the right in society. It was the erosion of support for Concertacin and the lack of a clear left alternative that cleared the way for Piera in an election marked by abstention and protest votes. All of this in spite of a renewed upsurge of struggle from workers and youth in Chile after years of lull. 51. The new government has maintained its high levels of popularity due to the relative recovery after the crisis of 2008-2009. However, a good part of the recovery of Chilean GDP growth in 2010 represents the restoration of
Brasils new role

53. Despite remaining a country exploited by imperialism and having reinforced dependency on the exporting of primary goods, Brazil, together with Mexico, is the most developed and industrialised economy in Latin America. Of the 500 largest Latin American companies, 226 (45 %) are currently Brazilian. Brazilian multinational companies are developing a substantial presence in the economies of the neighbouring countries and Brazils political weight is increasing. Petrobras accounts for 17% of Bolivias GDP. 54. This economic base is reflected in the political sub-imperialist stance by the ruling class in Brazil. Lulas government stimulated an internationalisation of Brazilian companies and increased its political influence over other countries. 55. The situation in Brazil is crucial to the whole of Latin America due to its economic weight, but also because of the political weight of Lulism as a political alternative. Lulas government is presented by sections of the ruling classes as an alternative to extreme neo-liberalism on one hand, and to leftism on the other. The role of Lula as as an international firefighter is also a factor that serves the interests of imperialism and the ruling classes in Latin America. 56. Along with the economic performance, the level of popularity of Lulas government and the fact that he managed to get his successor elected, represents an important show of political strength that has turned into a reference point for other countries. The general elections in Brazil in 2010 were marked by a vote for continuity favouring the candidates of the coalition. 57. Dilmas government will have a majority in the federal Chamber of Deputies and, in contrast to Lula, also in the Senate. This will make it easier for Dilma to govern, even if she does not have the same authority as Lula. At the same time, the different interests of big corrupt bourgeois parties like the PMDB, will provoke political instability. Lula will continue to play a central role in the coming period, even outside government. There is almost a consensus about the

need for a brake on state expenditure in the next period. There is today almost a clamour from the bourgeoisie in favour of a new pension counter-reform, attacking mainly public servants, taking advantage of the present popularity of Dilma and so minimising opposition. In the same way, a hard fiscal adjustment will begin to be implemented. 58. The Brazilian working class was not paralysed by illusions in Lulism during 2010. Many struggles and strikes (civil servants and oil, metal and bank workers) mainly for economic demands took place and were relatively successful. Workers demanded their share of the economic growth. 59. The unity of trade union, popular and student movements, independent from the government and bosses, as well as the strengthening of a left political alternative in the country is essential for workers resistance. In 2010, almost two years of attempts to build a new trade union and popular Centre (federation) unifying Conlutas, Intersindical and other sectors ended without success. 60. In the political arena, the left also suffered some important setbacks and some advances. In contrast to 2006, this time there wasnt any Left Front unifying PSOL, the PSTU and the PCB. PSOL experienced an intense internal struggle. After an intense internal struggle, Plnio de Arruda Sampaio, aligned with the left in the party, was chosen as PSOLs presidential candidate. The delay from PSOL in presenting a left alternative together with PSTUs sectarianism thwarted the possibility of a Left Front. 61. Plnios campaign grew in support among the more active and conscious layers of workers and youth. Plnios profile and political platform was more advanced than the one PSOL defended in 2006. However, the electoral wave supporting Lula and the PT was too strong, especially in the face of the possibility of a victory for the traditional right, Serra. This led to substantial drop in votes for PSOL. 62. Plnios campaign served the purpose of oxygenating PSOL and opened up space amongst layers of youth and workers. It also helped to get PSOL to adopt more advanced positions. However, the electoral result will strengthen a majority in the party with moderate positions. The party will probably hold a party congress in 2011 and the paper of LSR, CWIs Brazilian section, calls for the strengthening a left pole in the party and a fight for a clear class and socialist programme for PSOL. Yet its future remain uncertain.
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End of the K Era in Argentina?

63. Argentina continues to have an important weight in Latin America. The mass uprising in December 2001, the so-called Argentinazo, was a landmark in Latin American resistance to neoliberalism. These events have marked the political development of the country since then. The governments of Nestor and Cristina Kirchner, with their own contradictions and characteristics, were the direct result of the balance of forces that emerged from those mass mobilisations and the crisis facing the bourgeois alternatives. In the absence of a workers and popular alternative, the Kirchners occupied the political vacuum and, even if they made concessions to the mass movements, tried to offer some kind of stability for the bourgeoisie. 64. The death of Nestor Kirchner could represent one more element in the development of the political crisis in the country that was initiated during Cristinas government, his successor. The CGTs bureaucracy, an important base of support for the Kircheners, lost prestige after the assassination of Ferreyra, a fact that opens the way for a wing more to the right of Peronism that reflects sectors of the bourgeoisie that are unsatisfied with the excesses of Cristina Kirchners government. 65. The finance markets enthusiastically greeted the death of Nestor Kirchner, the president responsible for one of the biggest debt moratoriums implemented by any country. In spite of the economic performance of the last years, big financial capital preferred a more reliable political alternative, less pressurised by mass movements.
A socialist alternative for Latin America

66. After almost a decade of crisis for neoliberalism, the rise of mass struggle and construction of electoral alternatives in many countries, Latin America is at a crossroads. The limits of the Chavista alternative and the regression in Cuba, as well as the growing conflicts and contradictions in the countries governed by explicit neoliberals, like Mexico, tend to create illusions in moderate alternatives like Lulism. The reproduction of the Brazilian model seams as a way out, both from the alleged radicalism of Chvez as well as the pro-imperialist neoliberalism of Caldern. However, this is an illusion. 67. Lulism adapted well to a particular economic and political context. However, none of the fundamental contradictions of Brazilian capital-
40

mass base in the different countries and the unity in struggle against capitalism and imperialism. This is what the sections and national groups of the CWI in Latin America struggle for. In our programme we stand for the building of a Socialist Federation of the Latin American countries, that can build continent-wide integration on the basis of solidarity and cooperation, for the benefit of the exploited and oppressed masses. This is the only coherent alternative.
ism have found a solution and new contradictions will emerge. As a pro-capitalist alternative, Lulism does not serve for the full emancipation of the workers and peoples of Latin America. 68. On the bicentenary of independence for many Latin American countries, the struggle for true liberation from imperialism and for social emancipation for the masses of workers, peasants and indigenous peoples, passes through the construction of socialist political tools with a
Europe,
Document No. 5
1. Millions involved in general strikes and demonstrations; deeply unpopular, often hated, governments - Europe is witnessing the re-entry of the working class and youth into struggle on a mighty scale. Against the background of economic turmoil and one EU emergency after another Europe is going through far-reaching upheavals. The continuing impact of the world economic crisis has produced one storm after another at both an all-European level and within different European countries. 2. The sheer size of some of the protests millions on strike in Spain in September, 3 and a half million demonstrating on the streets in France in mid-October, 300,000 marching in Lisbon in May are a reflection of the profound shake-up that Europe is now going through. While many trade union leaders attempted to limit these protests and prevent them developing into serious struggles, the mighty French movement against increasing the retirement age developed features of a pre-revolutionary situation. There a single spark could have unleashed a wider movement in a situation where opinion polls showed that 54% supported a general strike. Late November 2010 saw more protests with a general strike in Portugal and anti-cuts protest in Austria. 3. There is a worldwide crisis but there is simultaneously a deep rooted European upheaval symbolised by the fact that, amongst many capitalist commentators, questions over the future of the euro-zone, at least in its present form, are no longer taboo and are increasingly widely discussed. There is a new rhythm now, gone are the days of medium term stability or, in some countries, short term stability. Events rapidly follow one another - just as soon as one crisis is solved a new one develops. But most importantly from the point of view of the struggle against capitalism the working class has begun to actively come onto the stage, although this will not develop in a straight line. Despite only a minority actually going on strike the mass struggles in France, with eight days of action, were hugely supported and could have been victorious with a determined leadership. Now, in spite of the lack of success in stopping the new pension law, the movement entered more of a pause, rather than a retreat, in November. 4. Initially governments took urgent action to prevent the 2008 financial emergency leading to a meltdown of banks and markets that in turn could have produced a 1930s style disaster across the world. Only a few governments, like Ireland, fairly rapidly began direct attacks on living standards, although in the workplaces jobs were lost and incomes slashed as the economies shrunk. In Germany 2010s budget deficit is likely to be the highest ever. But then in 2009 and 2010 the combination of the end of the crisiss first phase and, symbolised in the Greek debt crisis, the pressure on governments from the financial markets to reel in the emergency measures and debt resulted in the start of brutal offensives by ruling classes and governments across Europe.
New wave of protest

5. This years determined attempts to cut living standards and turn the clock back provoked this start of a new series of class struggles in many countries, beginning in Greece. After the six general strikes in Greece the second half of 2010 saw strikes and mass protests pick up momentum in other countries, especially France, Portugal and Spain. In Italy there have been growing calls for a general strike while in Britain demands for active opposition began to develop from below and were enormously strengthened by Novembers 50,000 student protest. In Ireland an explosive mood is developing but it is possible that this will be first reflected in the result of the early elections. Central and eastern Europe countries have not been immune from protests with big demonstrations and strikes against wage and social cuts in the Czech Republic, Lithuania, Romania and Slovenia. In Romania the combined impact of capitalist restoration and now economic crisis have led 49%, according to a September 2010 poll, believing life was better before December 1989, despite 69% saying that before 1989 there was a lack of freedom. 6. 2010 saw youth in a number of countries begin to play an important role in the protests. The recent mobilisation of both university and school students in support of the French workers marked a new stage, while in Austria, Britain, Ireland and Italy large numbers of university students have also taken to the streets
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CWI 10th World Congress 2010: Europe, Document No. 5

widespread protests against and opposition to capitalism itself. But the logic of this crisis, the fact that, for many, living standards are falling with no early prospect of recovery will, alongside the activity of socialists, prepare the way for capitalism itself to be put into question. This questioning will extend to include existing political parties, institutions and structures. The old ways of doing things will be challenged by a situation of, at best, stagnant living standards and, at worse, plunges into poverty. Many of those who were encouraged or forced to go into self-employment or set up small businesses will be savagely squeezed and the workers movement needs a programmatic appeal to them in order to try to forestall some of these layers moving rightwards. A key for the future is that the experience of struggle will pose the question of how the capitalists offensive can be resisted and, as workers, youth and many sections of the middle class realise this system cannot now offer any imminent prospect of a better life, what is the alternative?
in opposition to education cuts. In Britain higher university fees and the ending of the small weekly grants to 16-18 year olds in education are provoking determined response from many school students. Youth have also played a key role in Germany in the mass protests against both the Stuttgart 21 railway station project and the resumption of the transportation of nuclear waste in November. 7. Throughout Europe most governments are deeply unpopular or even hated, despite the seeming exception of the re-election of Swedens conservative coalition which regained support just months before the election as the economy grew. In some countries it is not certain how long the government can survive. The spectacular 2008 crisis in Iceland, and the brutality with which its population was treated by Britain and the Netherlands, shattered the right wing government. In Ireland the government is barely staggering on while in Italy the break between Berlusconi and Fini has posed the possibility of early elections. In Greece, despite it breaking most of its 2009 election promises almost immediately, the Pasok government continues for want of an alternative. The unprecedented high abstention rates in the November local elections indicated both the opposition to austerity and the lack of a mass alternative to Pasok. 8. Capitalist commentators have made much of the fact that, unlike crises in the twentieth century which saw significant swings to the left, the first phase of this current capitalist crisis has seen in a number of countries right and far-right political forces gaining electorally. But as the number of general strikes and mass protests showed the workers movement is moving into action and this is already started to create an anti-capitalist mood. This will undermine the only positive note for ruling classes faced with multiple problems, namely absence of workers parties challenging capitalism itself. This is a result of continuing impact of the collapse of the Stalinist states, the swing to the right in the workers movements and the transformation of most of the former bourgeois workers and stalinist parties. 9. Although this effect of Stalinisms collapse and the subsequent anti-socialist ideological offensive has meant that, so far, the European ruling classes have not faced a determined challenge to capitalism itself, the crisis has already had profound effects. 10. This has meant that so far, despite hostility to the banks and the call that we are not going to pay for your crisis, there have not been
Fluid political situations

11. In this crisis period the lack of stable governments and the desire to incorporate the opposition can lead to either official or unofficial coalitions, including grand coalitions between majority parties or national coalition governments, to deal with emergencies. But capitalism is very flexible. In Belgium the lack of a new government since the June elections has not prevented the caretaker government indirectly carrying through attacks. 12. Elections, whether held on schedule or early, can now produce their own complications for ruling classes. 2010 saw the great difficulty in forming governments in the Netherlands and Belgium (the latter mainly due to the complications of Belgiums national question) and the first peace-time coalition government in Britain since the 1930s. These election results are the product of the breakdown in support of many of the traditional bourgeois, reformist and Stalinist parties plus the new volatile period. The crisis, and sometimes break-up, of many older parties, seen already in Italy and, to a lesser extent France, has simultaneously both opened the door and been the result of the rise of new forces of different characters. 13. While past opinion polls showed the possibilities for the NPA in France and Syriza in Greece, of the new left formations it has only been DIE LINKE in Germany that has been able to make a sizeable electoral impact. Although the NPA still has potential, mainly around its

sometimes verbal radicalism and Besancenots personal standing, it is far from certain that this will be translated into votes. But as we have seen previously in Italy, France, the Netherlands and Scotland electoral successes are by no means a guarantee of further development. Part of the reason for Syrizas poor showing in the 2009 Greek election, 4.6% compared with opinion poll ratings of around 18% at the beginning of 2008, was the lesser evil vote for Pasok. However, like many of the leaders of other new left formations, Syrizas leaders did not understand this vote or how Pasoks support would be undermined by the experience of it again being in government, and this is one reason, along with the Syriza leaders political turn to the right, for the turmoil which has engulfed Syriza in the last year. 14. The more volatile economic and social situation has meant that elections in many countries have witnessed the sudden rise (and sometimes rapid falls) of different bourgeois or petty bourgeois forces like Wilders PVV in the Netherlands, the FDP in Germany, the LibDems in Britain, NVA in Flanders and the Greens in both France and Germany. 15. However election victories do not necessarily mean sustained popularity even, as in Germany, where the economy has grown due to exports. There the year after the 2009 election saw a tremendous collapse in support for the CDU/CSU/FDP coalition and especially the FDP itself.
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for the euros crisis and demanding hand-outs from the rest of the EU. There was an element of truth that a sovereign debt crisis in Greece could prove to be the weak link that wreaked havoc especially in the euro-zone, but it soon became clear that there are a series of weak lines in what is a chain of crises. Thus the speculators and capitalist commentators talked of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) as the euro zones crisis countries. 19. However much of what the EU presented as the progress in the 2000s was, in fact, a vicious neo-liberal assault on many of the gains that the workers movement had previously won over decades. This was the essence of the Lisbon strategy. It was no accident that Schrders social democrat/green German government called its 2003 neo-liberal cuts package Agenda 2010. Largely because of the trade union leaders this offensive did have an effect in holding down living standards in many countries. In Austria the share of wages in its GDP fell from 62% in 1995 to 55% in 2008, while the poorest quarter of Austrian workers suffered a 12% real drop in wages. 20. These sort of successes, plus illusions in the euro and continued world economic growth, partly explain why EU leaders were caught completely unawares by the onset of this crisis, a crisis which has thrown huge question marks over the so-called European project and the survival of the euro currency zone in its present form. 21. While the international crisis that started in 2007 was the final trigger for the EUs failure to reach its 2010 targets, some European capitalist countries were already suffering from the global changes taking place in capitalism. Although this calamity caught practically all ruling classes and their politicians unawares, it was not some kind of freak event. Rather it flowed from the nature of capitalism itself and the character of the economic growth in especially the last two decades. 22. At the same time it also revealed the real character and limits of the EU. This is the significance of the new round of struggle between the EU powers and the now open debate on the euros future and discussion (and probably at least elements of contingency planning) of the possibility of at least one country being forced out of the euro-zone. But the discussion has not been limited to countries being forced out of the euro-zone but also, in an extreme situation, Germany pulling out.
Economic stresses
16. But Germanys economic growth, like that of other European countries, is fragile and may already be past its peak. The open speculation about the future of governments, the euro currency, the rivalries and shifting alliances within the EU plus the stepping up of protests are all harbingers of the turmoil ahead. 17. Thus 2010 has not turned out to be the year that the European ruling classes hoped for when they agreed the so-called Lisbon strategy in 2000. Instead the EU has faced one of its gravest crises yet as economic and political storms put the future of the current eurozone, and even the EUs present structures, into question. 18. The euro storm plunged the EU into bitter internal wrangles as national governments sought to vilify foreign forces or rival governments for causing the crisis. For a time Greece, and especially Greek workers, was the focal point of demonisation as both being responsible
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breakup would be extremely disruptive. But this in itself would not be enough to prevent, in a time of crisis, either a country, or a group of countries, leaving the euro-zone or, as Merkel threatened in March 2010, being thrown out. 27. Repeatedly there are tensions and clashes of interests between the different European countries, something which China is attempting to exploit by its offers to financial support to Greece and Portugal. At the same time, amongst the larger EU powers there is a struggle for the leading role, if not yet supremacy. A result of the crisis is that Greece and increasingly Ireland, as euro countries, are being placed under increasing control from the EU, in reality Germany, the strongest euro economic power. Both in Greece and Ireland there is resentment, with anti-imperialist elements, at what is correctly seen as a loss of sovereignty to the EU, ECB, IMF and money markets. Popular opposition will grow towards this and Marxists will strive to give this an anti-capitalist rather than mainly nationalist character.
Successive crises and the euros crisis

23. While May 2010s huge 750 billion euro rescue package brought to an end the immediate crisis provoked by the revelation of Greeces actual financial situation, this has only brought a temporary stability. Repeatedly since then sharp jumps in bond interest rates have indicated potential new crises, or the threat of crisis, as doubts resurface over individual eurozone countries finances. 24. Novembers renewed crisis around Ireland was partly triggered by Merkel forcing through in October an agreement that in future financial crises investors would have to take losses (haircuts) on their investments. The other EU countries were not in a position to challenge German imperialism which is the financial basis on which both the euro and EU depend. Merkel partly acted in order to forestall growing opposition within Germany to what was seen there as bailing out other countries. 25. However this October 2010 agreement speeded up, but did not cause, developments as finance markets quickly increased the interest rates they charged to lend to Ireland in an attempt to cover part of any potential future losses. Significantly while demanding that the working and middle classes suffer cuts, the financial institutions used their power to resist proposals that they should take any losses. The subsequent huge pressure on Ireland to accept a bail-out and even more austerity, plus the international supervision that went with it, reflected near panic. Many ruling classes feared that an Irish banking collapse could trigger a Lehmann style international crisis and/or that the crisis over Irelands debt could pretty soon put Spain under similar pressure. While bailout can be offered to small economies like Greece, Ireland and Portugal, a Spanish crisis could put the whole euro-zone in jeopardy. 26. But the euro-zones future is not only threatened by a renewed sovereign debt crisis. There are also the tensions brought about by the strains and imbalances with the euro system, a system which in many ways has worked to the advantage of German capitalism against several of its rivals. As the CWI argued before the 2002 introduction of the euro notes and coins, this situation puts into question how long the euro-zone can survive in its present form. Clearly the integration of the European economy has gone a long way and produced a situation where, alongside the immense political upheavals, a euro-zone reconfiguration or
New economic downturn

28. Already before Novembers storm it was clear that this years slight economic recovery, a mixture of a dead cat bounce and the continued growth in China, has not ended Europes turmoil. This was despite the fact that in a few countries, especially Germany, there are some who have hopes that the worst is over. However it is clear that this recovery is not firmly based or rooted in developments within the EU. Germanys heavy dependence on exports is particularly fragile and, if reversed, would have big effects as was previously seen in the dramatic 6.8% drop in its GDP between the spring of 2008 and 2009. Across Europe there has been a growth in precarious, temporary or limited contract jobs, part-time work and workers forced into self-employment, all of which are a far cry from genuine full employment. 29. For German workers this economic growth has had different effects. Within some sectors gains have been made, for instance in steel a wage increase of 3.6% and equal pay for shortterm contract workers, and also a few companies, especially in the auto industry, have implemented wage rises earlier than agreed in wage contracts. But most German workers have seen the lowest wage increases since 2007 and managements pressure inside workplaces continues to mount. Furthermore a majority of new jobs have been temporary, jobs that can be easily lost when the economy stops growing. Despite this the recent economic growth has

created some hopes that the worst is over, in Germany and some countries economically linked to it. In November 2010 35% of Germans feared unemployment, compared with 59% a year earlier. This is a reason why the governments new austerity measures, mainly aimed at the poorest layers, are not yet provoking largescale opposition. 30. But many countries in Europe are faced with far, far worse economic situations and, more importantly, no easy way out. 2009 saw huge GDP drops in the Baltic states (Latvia suffering the worse with 18%) and large falls in countries like Finland (8%), Ireland (7.1%) and Iceland (6.8%). As 2010 progressed the rate of growth in other European countries slowed down. 31. The unstable situation is a reason for the continued divisions within ruling classes over how far and fast to continue attacks on living standards and whether to take further measures to alleviate aspects of the crisis, 32. What is clear is that within the EU there is no basis for a sustained economic recovery, a situation worsened by offensives most governments have launched to implement austerity measures. This is being brutally seen in Greece and Ireland whose economies, in reality, are still declining, while countries like Portugal and Spain are not far behind. The British governments offensive is justified on the hope of an export revival but it is not at all sure that British capitalism can rebuild its non-financial sectors. Equally all the signs are that the world economy is once again slowing down and a double dip recession looms on the horizon. The prospects for the world economy are also key to Germanys economic perspectives as its rapid recovery in 2010 has been purely based on exports. A combination of a decade of holding down real pay and the rates of converting national currencies into the euro boosted German capitalisms competitiveness in both the eurozone and internationally. For example over 20% of German auto companies output is now sold in China and Germany could face stagnation at best if, as seems likely, the world economy slows down again. A more serious world downturn would produce again another rapid drop in German output and have huge political and social consequences.
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in many countries, hitting not only the working class and youth, but also broad sections of the middle class. For the first time since the 1930s wage cuts have been implemented in most European countries by direct pay cuts, like in Ireland and Greece, or reducing working with loss in pay or a combination of both. These attacks are not simply being carried out because of the drops in economic output, higher state borrowing and the ruling classs desire to maintain profits and minimise taxation. Under cover of this crisis the ruling class are continuing their offensive to force through the neo-liberal agenda aiming to weaken the working class, cheapen labour and cut social spending. Thus in many countries it is the weakest layers of society and poorest areas that are being hit hardest. 34. The hopes of many being shattered by job losses, cuts in services and, in some countries, the burden of debt taken on in the boom times to finance housing or everyday life. Increasingly European youth, now suffering mass depression-style unemployment are not seeing any secure future. Rather they face a prospect of a mixture of temporary jobs, unemployment, the increasing cost of education and mounting debt. This crisis is affecting countries in different ways. Some countries, like Greece, Portugal and many in eastern Europe, are facing fundamental crises as there are limited prospects for them under capitalism. In these countries, and others like Ireland, some of the more energetic layers may emigrate in the hope of finding a way out. But many youth will want to fight back. Significantly wider layers of youth, including some from the banlieues, joined in the autumn 2010 struggle in France showing the potential to draw them into the class struggle. 35. The past years have seen sharp shifts in consciousness. As the world crisis unfolded in 2007, 2008 and 2009 initially there naturally was a strong fear of the spectre of the 1930s and, in some countries, there were elements of a stunning effect as unemployment rose, reflected in some workers willingness to accept wage cuts. At the same time there was a wave of anger, especially at the banks, with protests centring around the call we are not going to pay for your crisis. However this first protest wave, lacking a socialist perspective, was dissipated to a certain extent in some European countries as hopes rose that government emergency packages would prevent a total disaster. Now there are renewed fears and anger, especially anti-banker, as the long term impact of this crisis in terms of living standards and prospects becomes clearer. This is creating the conditions for leaps in
Resisting ruling classes offensives

33. Symptomatic of the fundamental character of this economic crisis, the attacks and cuts are,
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ous campaign, something they were able to do because 2010s economic growth lessened the pressure on them. In Britain the TUC delayed holding a national demonstration as long as possible and then sort to tie it into a Labour Party election campaign. 40. This is why socialists, as part of the struggle to make existing trade unions into fighting organisations, strive to help build an active rank and file membership that can put pressure on existing leaders, be a base for a future militant leadership and, where necessary, take initiatives themselves. The bureaucratisation of the trade unions, the integration of many leaders into capitalism and legal restraints also prepare the way for the possibility of spontaneous movements erupting. However France, and other countries like Portugal and Spain, illustrate how pressure from below can force even right wing union leaders to lead at least some action, although how far they will be prepare to go is a different question. Such pressure can also produce a polarisation within the trade unions that can produce new leaderships or even splits. In the recent French struggles it was significant that the leftwing Sud unions, created in 1988, and the CGT, the oldest and largest trade union centre, were the most prominent in the protests. 41. The decline in trade union membership in most countries means that special bodies, like assemblies along with factory or action committees, need to be created to involve both unionised and non-unionised workers in the preparation and carrying out of struggles. But, as France has shown most recently, national struggles, especially against the government, need to be both co-ordinated and have a clear strategy, including when they develop spontaneously or from below. This, in turn, raises the question of who politically is guiding the struggle. Whether formally or not most of todays trade union leaders are members of the class collaborationist party and they need to be replaced by members of the class struggle party, the most conscious of which will be Marxists. 42. In many countries the ruling class have enacted new laws to limit trade union rights and the impact of strike action, like the incredibly complicated rules for strike ballots in Britain or Sarkozys laws to force the maintenance of socalled minimal service during strikes. Further anti-trade union measures can be introduced as part of the process of governments taking new, more authoritarians powers, to try to deal with future protests and struggles. But such class laws can only have an effect so long as workers
consciousness where the ideas of socialism will begin to revive within the workers movement and socialists will be able to get a wider audience for their ideas and proposals. 36. But, as the last years have again shown, the class struggle and protests do not unfold in a straight line. There can be temporary feelings of being overwhelmed by the crisis and that little can be done. Such moods will pass, but struggles themselves have a rhythm of advances, pauses and reflection before recommencing, perhaps in a new form. 37. Already since 2007 there has been a strong reaction and start of resistance to the crisis and the capitalists natural attempt to unload its costs off their shoulders. As the CWI has explained before, if there had been even strong reformist social democrat and Stalinist parties of the kind which continued to exist 30 years ago this crisis would have rapidly provoked questioning of capitalism itself. But what has saved capitalism, so far, has been the political weakness of the working class, a result of the past decades falling back in class consciousness, that has meant there has been no general counter-posing of socialism as the alternative to capitalism.
Trade Unions and the crisis

38. This has not been just because of the decay and transformation of the old reformist parties. For many years now most trade union leaders have sought to block trade unions playing a political role, especially challenging capitalism, despite the socialist roots and socialist objectives of many trade unions. The last decades saw a renewed integration of much of the trade union tops into bourgeois society, whether intertwined with the state or company managements. This left many of them completely incapable of giving any form of fighting response to this crisis. 39. Some trade union leaders, like those in Ireland, ended up accepting the ruling classs arguments and agreeing to wage cuts. But, because of the roots of the trade unions, they can still come under some pressure to at least make gestures as when the Austrian GB had to reverse its initial welcome to the governments 2011 budget. But the pro-capitalist elements always seek to limit struggle, whether it be the southern European trade union leaders striving to ensure that one day protests are safety valves rather than mobilisations for further struggle. The German DGB was pushed into organising weeks of action but strove to ensure that the protests were not the start of any seri-

do not feel the necessity and confidence to challenge them.
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General Strike back on the agenda

43. As Ireland has shown trade union leaders can delay, but not indefinitely prevent, workers taking action. This has already been shown by the way in which the question of the general strike has come back onto the agenda despite the attempts of many trade union leaders to avoid the issue. Already general strikes have taken place in countries like Greece, Portugal and Spain, and in Germany the issue of the right to call a general strike is sometimes raised by Lafontaine and the more leftward elements in DIE LINKE. Significantly in Spain and Portugal the trade union leaders were forced into calling a one day general strike by pressure from below and in Italy the call for a general strike was hugely popular on Fioms October demonstration in Rome. 44. For Marxists one day, two day or even three day general strikes are an important weapon to unify the working class and other oppressed layers, give confidence building demonstrations of strength and warn the ruling class, but they need to be part of a strategy to build the movement, not to be purely symbolic letting off steam. Otherwise they can be used to exhaust rather than mobilise. 45. The development of struggle can pose the question of an unlimited general strike, something that could even develop almost spontaneously in a situation similar to France 1936 and 1968. Clearly both the ruling class and most current trade union leaders would attempt to reach a deal to enable them to end such a movement. Even if such a general strike began more as a protest, the longer it continued the more it would challenge the government and pose the question of who runs the country. This, as France 1968 showed, quickly puts squarely on the agenda the question of the concrete programme and steps that the workers movement has to carry through in order to overthrow capitalism. 46. Currently even where there are parties that still formally talk of socialism or struggle this has been combined with a day to day reformist approach and, in the case of the Greek KKE, sectarianism that has helped prevent united struggles developing. These parties may, like DIE LINKE does in its draft programme, talk of socialism but in reality they have not counter posed socialism as the alternative to the mount-
ing misery of capitalism. In France the NPA while sometimes making radical sounding statements has not even lived up to its formal name and, in its day to day activity, not argued against capitalism itself. 47. This situation of mighty opposition to heavy attacks but no clear lead can, in the absence of a strong Marxist force easily lead to the growth of confused ideas. In cases of extreme desperation frustrated layers, especially of youth, could begin to undertake terrorist actions, something that has resurfaced in Greece.
The Far Right, Migration and Nationalism

48. A combination of the absence of a strong workers alternative, along with large scale migration in some countries, has given opportunities in different countries to a mixture of right wing populist, nationalist, far right and semi-fascist forces. Generally they base themselves on hostility to the elite, the fear of migration and nationalism. 49. In some cases, as in Austria, Hungary and the Netherlands, these forces have established significant, but unstable, electoral support, in the FPs case for a number of years now, and in Belgium and France it is possible that there will be a resurgence of the FB and FN. Having seen the massive problems that gripped the Austrian FP after Haider agreed in 2000 to join the government, they are, at this stage more cautious about getting drawn into office. Wilders PVV in the Netherlands is trying to avoid this danger by supporting, but not joining, the new VVD and CDA minority government. Jobbik in Hungary that won nearly 17% in the last election is also keeping out of government, at least for now. Chrysi Augis recent increase in votes in Greece is a symptom of the polarisation that social crisis can bring and a warning of how disappointment with governments, nationalism and the absence of clear socialist alternative can give the far right opportunities. At the same time successes for the far right can spur on significant counter-movements as has happened in Sweden since the Democrats secured election to the parliament. But, as Austria has shown, while these counter-movements can mobilise some layers, without a programme taking up the issues the far right exploit they will not necessarily undermine their support. 50. Migration has become even more of a powerful issue in this period of economic and social crisis. Already before the crisis hit migration from the new EU states and from outside
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election success of the NVA has raised the spectre of the possibility of a new national crisis in that country. In the Balkans there are still unresolved issues in both Bosnia-Hercegovina and Kosovo, plus the unresolved dispute between Greece and Macedonia. Greece is also involved in the dispute over the continuing partition of Cyprus since the 1974 Turkish invasion. 53. In central and eastern Europe there are a whole series of unresolved national issues, border questions and the rights of national minorities. The anger amongst its neighbours provoked by Hungarys decision to grant citizenship to those of Hungarian origin living outside the current borders imposed in 1919 by the First World War victors is one example of how these tensions can develop within the EU itself.
Europe had been a big issue in some countries. Apart from Germany, most large European countries have recently seen big population rises, Spain seeing the biggest increase from 39,803,000 to 45,989,000. This migration was encouraged by bosses looking for cheap labour but the unplanned capitalist system could barely cope with, resulting in mounting social issues like pressures on housing, services etc. The fact that Germanys population has started to slightly fall has not stopped a debate starting there after the recent publication of Sarrazins recent book on the integration and non-integration of Germanys migrant, especially Muslim, communities. These are issues that need to be dealt with in a way that both defends the migrant communities against attack and prepares the way for joint struggle by answering the fears and questions of all workers. Without a clear strategy of building workers united action against wage cutting and job losses the May 2011 opening of EU labour markets to citizens of all the EUs latest entrants can further fuel hostility to migrant workers a further boost. 51. Sarkozys attempt to head off the struggle against his pension changes by attacking Roma was a blatant divide and rule move which utterly failed. But these sorts of tactics, usually accompanied by nationalism, are to be expected. The earlier international bourgeois attacks on Greek workers were an attempt to both put pressure on the Greek population and to bloc an international response. It is clear that sections of the bourgeoisie attempted to do the same in regard to the French workers struggle to prevent the retirement age being raised from 60. Like with Greece there was a deliberate attempt at misinformation, but it was quickly clear that there was tremendous international solidarity with the French struggle, indeed many workers looked to France to set an example of defeating austerity measures and in some countries, like Belgium, took solidarity action. The September 29 ETUC protests were a small step in the right direction, but predictably these trade union leaders have not tried to build upon these protests. The CWI has already played an important role in raising clear demands that can be used to build an international fight back in which we can also build support for a democratic socialist federation of Europe, on an equal and voluntary basis, as the alternative to the capitalist EU. 52. In many countries national questions have resurfaced or are resurfacing with resultant tensions. In the Basque country the Northern Irish solution is being presented as the example for ETA to follow just as cracks are starting to show in Northern Ireland. While in Belgium the recent
Limits of reformism
54. The workers movement cannot ignore these questions which can come even more to the fore if it shows no general socialist way out of the crisis. 55. Reflecting the different objective situations consciousness in the different European countries is more differentiated now than at the start of this economic crisis. 56. There is the very real possibility of countries, especially some of the ex-stalinist states and the smaller countries, being plunged into a deep, fundamental, catastrophe. In such countries there would be outbursts of bitterness, anger and desperation, but at same time doubts about what can be done. The question would be posed of what future under capitalism such small states have. Already there is increased emigration from Greece, Ireland and Portugal, let alone Baltic and central European states etc., but unlike before, it is now not so easy to go to the US, South America or Australia. And of course a large global economic crisis would tremendously hit the big EU countries, especially Britain with its dependence on global finance and Germanys export based economy. 57. However answering the question of What can be done? is not simply required in small countries, it is needed in all countries. With the relentless propaganda that. there is no alternative, that the markets cannot be ignored and the fact that no capitalist strategists are even attempting to paint a bit of a rosy future the workers movement means that socialists need to give a clear idea of what would be immediately possible when capitalism is overthrown. Concretely it needs to be shown how living stand-

ards could be improved by using existing capacities and technologies once the rule of profit is broken, and then how a socialist society can offer a society which will genuinely be better tomorrow than it is today. This is one of the tasks of the transitional approach today. 58. The inevitable search for a way out of this capitalist morass and the limitations imposed by generally pro-capitalist leaders will inevitably lead to workers switching between, and combining, different fields of struggle and resistance protests, strikes and elections.
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of parties from either the Second or Third International which, despite their subsequent history, built their initial support on basis of clear opposition to capitalism, participation in struggle, striving for socialism and, in most cases, no compromise with the ruling class. In recent years many new formations developed in a completely opposite way with no clear opposition to capitalism, no clear class demands or strategy and a willingness to do rotten deals with the former reformist parties. 62. Partly this reflected the legacy, amongst the leaders, of the post-stalinist collapse, a lack of confidence and not having the perspective of building a mass workers party, rather seeing themselves as a pressure group. This is something clearly seen amongst the ex-LCR leaders heading the French NPA. It is also linked towards these groupings looking to governmental alliances with other forces, something which prepared the way for the Prcs collapse after its 2006-8 participation in a procapitalist government coalition. Today the Dutch SP is moving in a similar direction towards becoming the left in a government. In Germany a similar debate is taking place within DIE LINKE on strategic alliances with the SPD and Greens, and is a reason why its leadership are not really striving to build the party or lift its support above the 11.9% it won in 2009. 63. Understanding the electoral pressures of lesser evilism does not mean entry into rotten alliances or governments with pro-capitalist parties which the leaders of many of the new, or newish, left formations clearly aspire to. As these leaders do not seriously pose the task of building a party that can challenge capitalism and strives to win a majority of the working class, they do not have the perspective that the entry of the old parties into government will provide an opportunity to build, something that already has been repeatedly seen in different countries. Marxists need to explain, at least in their general propaganda, the need for a workers government that will transform society and counter-pose this to governments operating within capitalism. This has to be expressed in a way appropriate to the current situation in each country, generally in most countries at this stage Marxists putting this objective in terms of the need to build a workers movement that can defeat capitalism. 64. However the weakness of the new left formations does not mean that all of them have exhausted their potential. In France Besancenot, the NPAs public leader, recently still had a 56% approval rating in an opinion poll,
Lesser evilism and the challenge of building new workers parties

59. This is one reason why we have seen some of the former traditional workers parties win elections on the basis that they were an alternative, not so bad or a lesser evil, even though often very little positive was actually expected. This was the basis for Pasoks 2009 victory, the coming to power of the Icelandic social democratic/Green-Left coalition in early 2009 and, just before the crisis really hit, AKEL winning the Cypriot presidency in 2008. Today the Irish Labour Party and the PS in France have gained in opinion polls. 60. But this electoral recovery is not automatic, especially as these parties lose their base and roots within the working class. In Germany the SPD has, so far, not really gained from the crash in the Merkel governments support and is still losing members. This is a reflection that significant sections of the working class have not forgotten the SPDs record in government, especially Hartz IV, and illustrates the potential opportunity that left formations now have amongst critical and radicalised workers and youth. In Britain the Labour Party is slightly gaining as the ConDem coalition loses support, but it is handicapped by its record in government, its own call for national cuts (albeit slower) and the fact that at local level it is implementing cuts. This is why individual election successes for the old parties, like Pasok had in 2009, do not necessarily mean a sustained revival. 61. However, despite the opportunities that existed, recent years have seen many false starts for the new left formations that began to develop in a number of countries in the last two decades. Although the objective situation was difficult, it was mainly subjective weaknesses that lost opportunities. Generally their leaderships had a very different beginning from the founding
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some steps to alleviate a crisis. 68. The Prcs virtual collapse clearly has had a very negative effect, something that may also happen with Syriza in Greece. This is especially because the Prc had, at one time, real roots in the Italian working class and youth. Inevitably its collapse has produced scepticism about the possibility of building a new workers party and, amongst some, an opposition to trying to build a new party on the basis that they always fail. While understanding such moods, the CWI argues why a workers party is necessary while clearly stating that it must learn the lessons of the past and not be a Prc mark 2. The fact that the Fiom, the militant Cgil metal workers section, is now attracting support and membership applications from non-metal workers is a reflection of how sections of Italian workers are striving to find a weapon they can use to fight back. But the disappointment with the Prc, coming after the Pcis collapse, can also strengthen syndicalist tendencies amongst workers and anarchist ones amongst youth. 69. But it is not just in Italy that militant workers are searching for a way to fight back. In countries where they retained some support within the working class it is possible that some of the surviving former Stalinist can play a role in attracting and building from radicalising workers and youth. This seems to be happening in Spain with the IU. In other countries the situation is more complicated, especially with the KKE in Greece having the support of key sections of the working class but combining an utterly sectarian approach to other workers with a combination of nationalism, vague demands and glorification of Stalin. In French and Portuguese situation differ with the PCF in an uneasy front with PG (Left Party) while the PCP appears to be radicalising and opening up more for debate. 70. In this stormy situation, the debates and discussions on what the workers movement needs to do will provide wide opportunities for Marxists in different arenas, including newly active layers and amongst both the membership and those interested in the new or radicalising parties. Now significant layers of workers and youth are already being radicalised, moving into opposition to capitalism and open to, or even themselves drawing, socialist conclusions. This is creating the conditions in which Marxists can grow rapidly amongst them. Where no left formations currently exist Marxists will intervene in struggles and carry out activity to build their own forces while keeping in their programme the call for new mass workers parties.
something that still could be translated into concrete support for the NPA. But the policies of the present NPA leaders would mean that such support would not be used to lay the foundations for a new mass workers party, rather they strive to become a left group putting pressure on the PS and PCF. Already within the NPA an opposition, in which the CWI plays an important role has emerged to this strategy in the NPA, something similar to developments which have also taken place in other parties like the Prc, Syriza and DIE LINKE. 65. This stormy period means political instability and puts into question the longevity of governments. Many will have been elected because of opposition to previous governments or just hostility to rival parties. At present the lesser evils like Pasok have rapidly disappointed, something that could happen next in Ireland. In October Icelandic MPs fled from their parliaments backdoor to avoid protesters angry at the Social Democrat-Left Green coalitions austerity measures and failure to protect living standards. In Greeces November 2010 local elections it was only the hostility to the main right party that prevented Pasoks loss of more than half its actual vote resulting in a similar loss of actual seats.
Problems with new left formations and the opportunities for the CWI
66. While there is the potential for a mass left force to grow in Greece, the political weaknesses of the KKE, Syriza and ANTARSYA makes their future development and even survival uncertain. However even with a correct approach and a growth of a new left force a broad disappointment with a lesser evil government can open the doors to a temporary victory for more right wing parties getting into government. But this type of development would not prevent Marxist forces growing from the more radicalised layers. 67. It cannot be excluded that in extreme circumstances, like a collapse of the banking system, governments could be forced to take temporary, state capitalist, steps to alleviate crisis situations, although they would try to reverse such measures as soon as possible. Such steps would not alter the main strategy of the worlds ruling classes to lower living standards, but would be a short-term response to events. Emergency situations or explosions of anger could create situations with features similar to the mid-1930s with governments forced to take

71. There have already been mighty class battles, but in reality these are a prologue to what will happen in the coming period as it becomes clearer and clearer that capitalism cannot offer a better future. This is why the vision of what would be possible, not just economically but also socially, environmentally and culturally, if capitalism was overthrown is absolutely critical to building the socialist movement. The CWIs call for a democratic socialist federation of
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Europe is not simply an objective, it is the reason why we endeavour to link together the struggles in the different parts of Europe and build an international movement that can end capitalism in its historical birthplace. The crisis in capitalist Europe and the EU will put the question of the socialist alternative for Europe increasingly on the agenda of the workers and youth fighting the ruling classes offensive. November 23, 2010
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Eastern Europe & CIS, Document No. 6

Eastern Europe and the CIS (former Soviet States)
Twenty wasted years

1. Twenty years ago the Soviet bloc collapsed. For nearly a decade, economic collapse, worse in many countries than the depression of the thirties, with its associated crime waves, corruption and social degeneration devastated the region. The collapse of the ruble in 1998 and the rise of Ural Crude oil prices from $11 in 1998 to over $135 in 2008 laid the basis for nearly ten years of economic growth. A series of colour revolutions saw unpopular, undemocratic leaders ousted by mass movements. And then in 2008 the global crisis hit. 2. The whole region has been dealt a devastating blow with a 5.5% decline in GDP in 2009 (compared to 4% in EU and 2.5% in US). The three Baltic States have undoubtedly suffered the worst recessions in the EU, if not in the world, with their GDPs collapsing by between 13 and 18% in 2009 leaving them with unemployment levels of between 13 and 17%. The Ukraine too suffered a 15% drop and Russia 8%. The response of the governments has been to introduce sweeping budget cuts, so dramatic, in fact that in the Baltics even World Bank experts consider that no more money can be cut from the health and education sectors.
er and wealth, a decade of brutal ethnic wars in Tajikistan, between Armenia and Azerbaijan, in Georgia, in Russia (Chechnya), Moldova, Bosnia, Kosovo, Croatia and Slovenia resulting in over 400,000 people dead and 5 million refugees. But these were not the only deaths. According to the British Medical Journal The Lancet over a million men of working age in Russia died due to the economic shock of mass privatisation and shock therapy. 5. The decade of significant economic growth which followed 1998 was barely enough for most countries to overcome the consequences of the nineties. The combined GDP for the whole region was only restored to 1989 levels in 2005, although the situation was considerably better in the western part of the region. From 1988 to 2008, those Central European Countries that have joined the EU (Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia) experienced GDP growth of 51%. The Baltic states (Latvia, Lithuania, Estonia), which are also in the EU 45%, the non-EU Central European States (Albania, Bosnia, Croatia, Macedonia, Montenegro and Serbia) 46%. Russia, Ukraine and Belarus grew by 92%, the Caucasian states (Armenia, Georgia and Azerbaijan) by 155% and Central Asia (Kazakhstan, Turkmenistan, Tajikistan, Kirghizstan and Uzbekistan) by 126%. 6. The fastest growth was achieved by those economies with large amounts of raw materials (i.e. oil, gas, rare metals) or commodities (i.e. iron and steel, wheat, cotton) to export to the global market at a time when prices were rising. This confirms the prediction made by the CWI in the early 1990s; the restoration of capitalism in the region would lead to the destruction of its industrial base and leave it subject to the exploitation of natural resources by the developed countries and thus, extremely susceptible to the whims of global price fluctuations. 7. Growth for the rest relied on the increase in trade from East to West in the form of energy and commodity exports, and from West to East, in the form of the purchase of manufactured goods using the massively increased incomes from the sale of these commodities. At times this has had spectacular consequences. During the gas wars Russia cut off or threatened to
The legacy of capitalist restoration

3. In the late eighties, the regimes of the region were toppled like dominos by mass movements opposing the horrific excesses of the ruling Stalinist bureaucratic elite. If these movements had been armed with a programme for the political revolution against the authoritarian one-party states, the conditions could have been created for establishing a genuine democratic socialist federation of Europe. Instead, in the absence of working class political parties, they were hijacked by the very same ruling elite in alliance with pro-market forces, leading to the restoration of capitalism. 4. This led to economic collapse and, as the ruling elite split asunder in its squabble for pow-
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CWI 10th World Congress 2010: Eastern Europe & CIS, Document No. 6
pro European liberals, the masses are left with no voice. 12. Following the collapse of the Ukrainian economy in 2009, Yanukovich, who was defeated by the orange revolution, in 2005, was returned to power in 2010. He immediately started to wind the clock back in a more authoritarian direction. It is estimated that up to 80% of the population want rid of Georgias President Saakashvilli, who they blame for the war with Russia in 2008. Protests organised by the opposition in spring 2009 were not able to overthrow Saakashvilli because they did not present policies able to end the hardship of the masses. In Kyrgyzstan, a further revolutionary protest swept Bakiyev, the victor of the previous tulip revolution, from power.
cut off supplies through the Ukraine and Belarus, thus depriving Western Europe of 25% of its natural gas, until new prices for transit were agreed. In those countries bordering the richer West European Countries, the exploitation of cheap labour has also played a certain role. 8. Some of the poorest countries in the world are found in Central Asia. About 25% of the population in the region lives on less than USD 1.25 a day, 55% on less than USD 2 a day. The GDP per head in Kazakhstan is at least 5 times below the EU average in Tajikistan and Kyrgyzstan at least 20 times! With the exception of Kazakhstan, they have managed to maintain modest positive growth during the crisis (according to official statistics and CIA figures) not through any particular policies of their governments but solely because they are barely integrated into the world economy. Where global events have affected these countries, paradoxically this has had a positive effect during the crisis. In Turkmenistans case, (as far as the statistics can be believed as they are considered state secrets) oil and gas pipelines to Iran and China started operating in 2009 and this helped to maintain growth. Despite this, up to 60% of the population is unemployed.
From a decade of growth to a decade of crisis

13. When the global crisis hit, Romania, Hungary, the Czech Republic, Russia and Ukraine, accounting for 60% of the regions population suffered devastating declines. In response, governments have used the whole range of policies already seen on a global scale in an attempt to hold back the crisis. Banks have been nationalized in Kazakhstan, Russia, the Ukraine and Latvia. Huge stimulus packages have been used (for example 15% of GDP in Kazkhstan), often far exceeding in proportion that used in the US (7% of GDP). There have been massive currency devaluations in a number of countries (the Ukrainian hryvnia, Russian ruble and Polish zloty have all been slashed by 40%). Ten countries have had to seek help from the IMF in the form of stand-by loans and other financial institutions have also given large loans.
The rusting of the orange revolution

9. The driving force behind the colour revolutions was the huge discontent of the masses affected by the economic conditions, the corruption and lack of freedoms and, eventually the blatant attempts to manipulate election results. The tragedy is that there were no mass left organisations in these countries presenting a working class alternative. 10. Some on the left believe that the Western powers formented these revolutions through the establishment of an array of NGOs and anti-regime political movements. There is no doubt that the capitalists attempted to set the agenda and establish their own agents in the movement. But these events exploded into life because the objective situation demanded it and the masses were no longer prepared to tolerate the crimes of the elite. In the absence of a left alternative, the energy of the movement was derailed by a section of the bourgeois ruling elite. 11. Having used the masses as a stepping stone to power, the bourgeois then turned their back on them. Discontent in these countries is widespread. In Serbia, where political life is polarized between radical Serbian nationalists and
Governments in crisis
14. Governments in the region, at least those without oil and gas, have had less room for manoeuvre than their west European counterparts, as they have little money for stimulus packages, while austerity measures are extremely unpopular. Hatred is enhanced by the massive corruption and fraud scandals. Opinion polls indicate that 79% of Romanians, 79% of Lithuanians, 77% of Bulgarians and 76% of Latvians and Hungarians are dissatisfied with the functioning of their democratic systems. There is barely a country that has not suffered a change of government or major crisis in this period. 15. The government of Latvia has resigned and ruling parties have been thrown out in elections in the Czech Republic, Serbia, Slovakia and
Hungary. The ruling coalition in Romania collapsed. The results of Albanias 2009 parliamentary election are still disputed. In Bosnia, results confirmed an entrenchment of ethnic blocs. In Moldova, 3 parliamentary elections in 2 years have failed to end a stalemate over who forms the government. 16. The dominant feature, however, as in most other parts of the world, is the lack of independent parties representing the interests of the working class. Communist parties (under various names) can be found throughout the region. At best, they present a weak form of Keynesian politics, at worst they act as a conduit for Russian interests. The latter, sharing the neo-liberal political agenda of their west European counterparts, lack their history as former workers parties. More often than not, they lobby the interest of sections of the ruling elite. Typical is the Ukrainian United Social Democratic Party of oligarch Viktor Medvedchuk or the former Moldovan President, the Communist Voronin, who while privatizing the country also realigned it back with Moscow. 17. With no party prepared to challenge the existence of capitalism, the new governments end up following the logic of capital. In Latvia, in February 2009 the government of Godmanis was dissolved and replaced by the cabinet of Valdis Dombrovskii, with most of the former right wing ministers still in place and conducting the same fiscal austerity policies. Latvia has seen four more massive protests since then. In Kirghizstan, where the Bakiyev government was overthrown by a revolutionary movement, the new government consists of ministers from the former two regimes. The interim President, Rosa Otunbaevoy, managed to serve under not just Bakiyev and Akayev but under the Soviet regime too!
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19. Hungary was the first EU member to get assistance from the IMF in 2009. The government of the time, led by the Socialist Party, fully accepted the IMF conditions for the $18 billion loan. The working class areas of Hungary suffered most severely from austerity and with no mobilisation of a left wing opposition, the far right was able to capitalize on the opposition mood. The responsibility for this lies with both the Socialist Party and Fidesz. The former not only accepted the need for cuts, it then tolerated Jobbik, which it thought would undermine support for Fidesz. The latter, at local level, is prepared to form informal alliances with Jobbik, arguing that responsibility will moderate it. 20. In Russia, the government, while making the more extreme fascist groups illegal and complaining about marches by former SS soldiers in the Baltic states, tolerates large fascist marches in Moscow. There are several immigrants and anti fascists murdered every month and the police practically never take the perpetrators to court. In addition, big business and the Russian regime are increasingly using hired thugs to deal with opponents. The wave of attacks on activists and journalists in November is to warn activists to keep their heads down. 21. It is not enough to adopt a moral stand against the far right. It is even worse, as many anti-fascists do, to drop any political slogans in the interests of unity with pro capitalist parties against the fascists. The extreme right gains support precisely because of the economic conditions caused by capitalism and because there is no mass working class left wing alternative offered to show a way out. Only when the workers movement in these countries moves into organised opposition to the cuts and presents a clearly defined class alternative will support for the fascists be undermined.
The rise of the far right

18. The far right has made big gains in several countries. In Hungary, after winning seats in the 2009 European Elections, 16% of voters supported the ultra-right Jobbik party in the parliamentary election. Jobbiks leader openly parades his support for the fascist Hungarian Guards. In this period, these groups are not classical fascists, representing the mobilization of the petty bourgeois against the workers movement. They are extreme nationalists playing one national group against another in Hungary against the Roma, in Slovakia against the Hungarians, in Bulgaria against the Turks. In times of crisis, they will be used against protest movements.
Political turmoil a precursor of future events

22. There have been some spectacular precursors to a wider social explosion in the region. In Bulgaria, up to 75% of the population is estimated to be fed up with life in the European Union's poorest and most corrupt nation. This found expression in a riot in January 2009, when an anti government protest turned violent as youths threw snowballs at the police! (Snowballs were also thrown in Latvias capital Riga at about the same time but they were joined by cobblestones and the occasional Molotov cocktail). Within a month, the government was forced to take an emergency IMF bail-out loan of 7.5 billion euros and nationalize the countrys second
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strike. Romania, during the course of 2010 has seen several public sector strikes and demonstrations. Croatian trade unions are threatening a general strike over the new Labour Code and discontent at the economic situation. In September, 40,000 nurses, police officers and clerks marched in Prague to protest against a plan to cut public sector wages. In Slovenia, over half of public sector employees walked out in protest at government attempts to increase the pension age from 58 for men (57 for women) to 65 for all and a wage freeze until the end of 2011. At the same time, there has been a one month-long strike by 6000 members of the Police Trade Union. In October, unions in Slovakia organized protests over the austerity package. 27. Workers in Eastern Europe have little option but to resist the austerity measures. The scale of cuts is draconian. Workers in Romania face 10% wage reductions. In Latvia, wage cuts of up to 30% have been accompanied by wide spread school and hospital closures. In August, in the battle for Bauska, the national police were sent to break up a protest against a hospital closure because the local police were themselves taking part. 28. Following the shock therapy of the 1990s, workers have practically no social safety net. In a number of countries, the employers are using the crisis to step up an offensive against even those workers rights that do exist. In Russia, a new Labour Code has been proposed by the employers federation, legalizing a 60 hour working week. Pipelines, missiles and airspace 29. The region is riddled with geo-political contradictions, each of which remain unresolved as the different imperialist powers (the US, the EU and its constituent parts, Russia, China, and in some parts Turkey, Iran, Japan) continue to promote their own interests. 30. The control of oil and gas supplies is used as a bargaining chip by all sides across the region. Russia has the highest reserve of natural gas and the second highest reserve of oil in the world with Kazakhstan, Azerbaijan, Turkmenistan and Uzbekistan having significant amounts. Russia supplies 30% of the EUs crude oil, 22% of its hard coal and 30% of its natural gas, leading to conflict over the control of the energy transit routes. The EU, with US support, wants diversification of energy supplies away from Russia. It supports the Nabucco project to pipe gas from Central Asia through Turkey bypassing Russia into Bulgaria, Romania, Hungary and finally Austria. Russia,
largest bank, Parex. By the end of February the Prime Minister Ivars Godmaris had resigned and a new government was formed. In April 2009, youth in Moldova used twitter to organize mass protests against the election results.
Revolution and counter revolution in Kyrgyzstan

23. Neither twitters nor snowballs were suitable in Kirghizstan, when the government shot and killed dozens of demonstrators in April 2010. The masses replied with an armed uprising, which overthrew the regime. These remarkable events are a warning to the regions ruling elites that the people will only take so much before coming onto the streets. But the bloody events of July, when ethnic slaughter swept the south of the country, are a stark reminder of what happens if the working class does not offer a lead to the masses in an impoverished country. 24. The uprising was sparked of by the announcement of a doubling of electricity prices and a 5-10 times increase in heating costs in a country with deep poverty, with an average monthly wage of $30-50. In the absence of a revolutionary organization, the leadership of the uprising was taken by the bourgeois opposition. They made a priority of restoring order. With power and the resources of the country still in the hands of different sections of the ruling elite, it was practically inevitable that one section would attempt to whip up ethnic conflict to further their interests. The only solution that the new government could propose to end the horrific clashes that left hundreds dead in Osh, in June 2010, was to bring in either the Russian army or the OSCE (in this case, it would have meant Kazakh troops) as peacekeepers. If that had happened, they would inevitably have stayed, in effect as an occupying force. 25. There is an urgent need to take over all the natural resources of the country so they can be used for the benefit of all and to build workers organisations to unite workers and youth of all nationalities. The lesson of the Kirghizstan revolution is that until the workers and poor masses are organised and armed with a socialist programme, the revolutionary energy of the masses, which was demonstrated in April, will be exploited by different sections of the capitalist class in their own interests.
The workers movement stirs

26. The first signs on an awakening workers movement in the region can be clearly seen. Hungary has experienced an effective transport
wanting to diversify routes so it can dictate transfer fees to the Ukraine and Belarus, is promoting its own South Stream project from Russia across the Black Sea directly into Bulgaria, Serbia, Hungary and Austria. It also wants North Stream under the Baltic Sea bypassing Poland straight into Germany. 31. The political clashes between Russia and the Ukraine and increasingly also between Russia and Belarus are reflected to a large degree in the position of political parties in South Eastern Europe. Although Romania has planted itself firmly in the pro US-EU camp, Russia is attempting to win its support by offering a deal to allow part of the South Stream pipeline to transit the country. Russia is attempting to blackmail Bulgaria to stay in its camp. 32. The plans of the Bush administration to base missiles from the US-EU Defense initiative in Poland and the Czech Republic have been put on the back burner, although one launch site has been established in Poland, close to the Russian border. The argument that these were the best places to defend the US from Iran-based missile attacks was never convincing. Now Romania and Bulgaria are competing to provide bases for the missile shield. At the root of this dispute are crude economic interests, including the fact that Russian companies are the main contractors to build the Iranian nuclear reactors. 33. The imperialist powers cynically abandon any pretence at treating democracy and human rights as sacrosanct when their economic and military interests are at stake. They supported and encouraged the bourgeois opposition to the Kazkah and Azeri authorities until the latter succumbed to the demands of their oil companies. In Kazakhstan, this has entered the consciousness of a wide layer who complain that democracy has been sold for oil and gas. But airspace is another natural resource exploited by the imperialist powers, which tone down their already mild criticisms about the authoritarian regimes of Turkmenistan, Uzbekistan and Kazakhstan, as long as their military aircraft can cross the region on the way to Afghanistan. Russia acts in exactly the same way, using energy resources to blackmail neighbouring countries.
57
lines from Turkmenistan to Xinjiang. It has even done a deal with Nazarbayev for the lease of a million hectares of agricultural land to Chinese farmers. From the point of view of the regions authoritarian rulers, the Chinese are not only less concerned about human and democratic rights but are also seen as not as predatory as the Western-based multinationals. China is prepared to invest in the local economies, as well as build pipelines. In Turkmenistan, nearly 40 factories have been built with Chinese capital since 2000. But workers living in these areas are finding that Chinese managers are imposing Chinese work conditions. While this is fuelling support for the demand of nationalization, when a clear lead by the trade unions is given, in its absence it can also result in anti-Chinese pogroms, as happened recently in North Kazakhstan.
Strengthening of authoritarianism
35. With the mass of workers growing increasingly disillusioned with their governments, the ruling elite have felt the need to move in a more authoritarian direction, even in those countries that have, until recently, maintained large elements of bourgeois democracy. In Romania, President Bsescu acts in a classic Bonapartist manner, portraying himself as a champion of the people against "the corrupt political elite", parliament, media moguls and doubtful privatisations. During the 2009 presidential election, Bsescu proposed a referendum reducing the number of MPs by a third and abolishing the second tier of parliament. In neighbouring Hungary, the Fidesz government is introducing reforms making it more difficult for opposition parties to participate in elections and severely restricting press freedom. With the return to power of Yanukovich, in Ukraine, legislation in the direction of strengthening the role of parliament introduced after the2005 events is being reversed with the aim of introducing the Putin model of the power vertical.
Ethnic conflict and war

36. The experience of the Balkans, the Caucasus and Central Asia demonstrate that no form of peacekeeping troops or trust building measures can provide any long term solution to ethnic and national conflict, as long as the underlying causes are not resolved. There are plenty of danger zones that could burst out into hot war in the next period, in the same way as the South Ossetia conflict between Russia and Georgia or the ethnic pogroms around Osh in
China
34. The growing might of China, particularly in a period when the Western imperialist powers are facing major difficulties, is creating another source of conflict across the region. Hungry for new energy resources, China is building pipe-
58
Kirghizstan demonstrate. 37. The recognition of Kosova/o by the Western powers angered the Serbian government and the Serbian minority in Kosovo. In nearby Bosnia, the results of Octobers parliamentary election led to political deadlock after Muslims supported parties favoring a united Bosnia, Serbs backed nationalists urging secession, and Croats voted for parties seeking their own entity within Bosnia. 38. Even more alarming is the situation in Nagorno-Karabakh, scene of the 1992-94 brutal war between Armenia and Azerbaijan. Reuters warn of a looming war in the Caucasus following large scale military exercises by Armenian forces close to Azerbaijan army positions. In response the Azeri President Ilham Aliyev threatens to use the countrys powerful military capability to end the occupation of its territories. The number of breaches of the cease-fire agreed in 1994 is growing dramatically now the figure is over 150 a month. 39. The conflict between Moldova and the TransDniester region is also warming up. Following three inconclusive Parliamentary elections and the Twitter revolution, the Communist President Voronin resigned and Mihai Gimphu, leader of a pro-EU party was elected as acting-President. He argues there is no difference between Moldovans and Romanians (the issue that sparked the first TransDniester conflict) and has demanded that Russian troops withdraw from the region. 40. According to the last Minister of Nationalities of Russia, there are over 180 potential conflicts in the former USSR. The continued tension between Georgia and Russia, the dispute over the status of the Crimea in Ukraine, the spread of the Chechen conflict from Chechnya to the neighboring North Caucasian republics, and the Osh events, demonstrate that it is almost inevitable there will be more explosions of ethnic conflict. 41. In such a situation, it is essential not to succumb to chauvinist moods. The position adopted by many left organisations that the main imperialist force in the world is the US, and therefore, the workers movement should side with any force opposing the US, leads them into the wrong position of supporting Russian imperialism in the region. It is necessary to argue against support for any of the imperialist forces in the region, to argue for the unity of workers and the poor against the warlords and for an end to the capitalist system that divides people along ethnic lines.
Russia the tandem goes separate ways

42. Having initially deluded themselves that they could avoid the crisis, the Russian ruling elite now finds that economy is reeling like a boxer after a knock-out blow. In 2009, there was an 8% collapse. The Putin government reacted by devaluing the ruble by 38%, bailing out a number of key banks and launching a $500 billion stimulus package (7% of GDP). 43. The authoritarian nature of the regime offers opportunities to use methods not available to the capitalists in other countries. Regional governors and managers were ordered to prevent job losses. Rather than lay-offs, workers found their working week in many cases reduced to 1 day a week to keep them off the unemployed register. Up to 6 million migrant workers were sent home. When workers protested, Putin stepped in to order local managers to resolve the problems. 44. The figures for the Russian economy in 2010 indicate a certain picking up in the first half of the year, but a further weakening in the third quarter. Present trends suggest that the governments target of 4% growth will not be achieved. One thing most analysts are agreed on, however, is that it is unlikely that the economy will simply return to the period of almost feverish growth that preceded the crisis. 45. The Russian regime has been storing up problems that it can no longer resolve. Even compared to other countries in the CIS, the gap between rich and poor is extreme. The top 10% of the population is 17 times richer than the bottom 10%. There are now twice as many bureaucrats per head of the population than at the end of the Soviet period. The cost of the average bribe paid has risen by 50% in the last year. Federal budget revenues have declined by 25% over 2009-2010 and there are huge cuts in money available for education, health and social services 46. The heat-wave and widespread forest fires over the summer brought into the open all that is wrong in Russia today, and has made the splits within the ruling regime, once hidden from view, open for all to see. The sacking of the Moscow Mayor Luzhkov has opened up a Pandoras box of corruption and cronyism. 47. With parliamentary elections due in 2011 and a presidential election due in 2012, the regime is increasingly having difficulties in hiding the divisions within its own ranks. Supporters of conservatism, that is a continuation of
policies that are increasingly seen as having failed, are lining up behind Putin while the modernisers, who want even more neo-liberalism are pushing Medvedev. Although the contours of this conflict are becoming clear, it is impossible to predict in advance exactly how, and how far, it will unfold. 48. Undermining his reputation of being more liberal than Putin, since Medvedev was elected President in 2008, twenty journalists have been murdered or have died in mysterious circumstances. A significant number of these have died in the North Caucuses, underlying both the fact that the Chechen conflict has not been resolved, and the violent methods the regime uses in an attempt to put down opposition. Now brutal attacks are taking place on the streets of Moscow. The gunning down of the anti-fascist lawyer, Stas Markelov (who was once active in the YRE), and the wave of terror around the attempt to build a new road through the Khimkinskii forest, outside Moscow, demonstrate the lengths the regime is prepared to go to in defense of its interests. 49. While the mighty Russian working class has not yet put its mark on events, all the conditions are ripening for mass protests to develop. Since the start of the crisis, many lefts have been disorientated, have either abandoned the struggle or gone into coalition with the bourgeois opposition. Not only do they not raise a clear left wing programme, they try to stop others from doing so. As events in Kirghizstan, the Baltics, Romania and elsewhere demonstrate, it is inevitable the Russian working class will move into struggle. As events in Kazakhstan show, if left forces position themselves decisively with transitional demands as part of a socialist programme, they can quickly win a significant base in the working class.
59
by the money made by oil and gas transit incomes, to maintain at least minimum living standards particularly for the rural population. By 2008, Lukashenko had to lean more on foreign credit to plaster over the holes appearing in the state budget. Within weeks of the global crisis hitting the country, trade dropped by 30% (2009 compared to 2008) and the countrys external debt tripled to reach 45% of GDP by 2010. The standard measures of devaluing the ruble in Belarus by 40% and accepting a $2,5 billion IMF loan have barely eased the crisis and the IMF are already discussing a further input. Significantly, as a result of the crisis a new programme of mass privatization has been pushed through. 52. Aware that in such a situation the coming presidential election could provide a shock result, Lukashenko has brought forward the election to December. Desperately trying to shore up his support, he has increased wages in the state sector by 15%. The only way he can finance this is by turning on the printing presses this year, the monetary mass has increased by 21% whilst GDP volume has plummeted from 60 billion rubles to 48 billion. Inflation, which is already growing dramatically across the central and eastern Europe, has the potential to reach crisis proportions in Belarus.
Kazakhstan testing ground of resistance

53. Kazakhstan has a GDP greater than the rest of the Central Asian republics put together. Although, according to official (and CIA) statistics there has been no annual drop in GDP, the effects of the global crisis have been devastating. 54. The nationalisation of four key banks and a bailout of $3,5 billion could not prevent the economy collapsing into recession in the first half of 2009. The situation was only reversed by a $19 billion stimulus package (at 15% of GDP, proportionally twice as much as the stimulus package agreed by the US government) and a 20% devaluation of the Tenge. These policies have allowed those companies relying on exports of natural resources to maintain their profit levels, but this has been at the expense of the manufacturing sector, which has led to the closure of many companies and the cutting of wages. 55. The regime is under siege. Social protests occur on almost every issue. The most dramatic have been against the brutal regime of torture that exists in the prisons, where in several pris-
Belarus joining the mainstream

50. Since the collapse of the USSR, Belarus has been an anomaly. President Lukashenko, on coming to power in 1994 on a populist programme, stopped the further privatisation of industry, but not to protect the planned economy, which had already been destroyed with the break up of the USSR. Instead industrial organisations remained in state hands, but the managers run them using the normal rules of the market, fulfilling, when necessary, orders from the state, and after paying allocated amounts to the state budget, distributing profits as they see fit. 51. Lukashenko maintained his authoritarian rule by using these budget inflows, supported
60
they move into action. 60. As in Western Europe, workers are testing out the organisations that exist. The All European Day of Action on September 29th saw significant demonstrations in a number of East European countries. In Bucharest 30,000 marched, in Prague 40,000. But the ETUC bureaucracy, led by John Monks, is using these protests like a pawn in a chess game to pressurise the European elite to make some minor concessions. Monks argues that cuts will have to be implemented in the Mediterranean countries, Ireland, Hungary and the Baltics! Many workers will find that their determination to fight job and wage cuts is in opposition to the position of their leaders who believe that compromises on these issues are needed. 61. The oil and gas workers in West Kazakhstan remember that, not so long ago, the countrys natural resources were state owned and that work conditions were better. They quickly took the demand for nationalization with workers control into their arsenal. In Serbia too, a similar process has taken place. Throughout the summer of 2009, over 30,000 workers from about 40 companies took part in strike action over unpaid wages. In Russia and Ukraine, workers fighting for their jobs have demanded nationalization. 62. As they move into struggle, workers in the CIS and Eastern Europe face the task of either transforming existing organisations or establishing completely new ones during the struggle itself. Organisations, such as trade unions, even if they have played a militant role in the past, will be swept aside if they prove incapable of offering a strategy to fight for these radical demands. Our tasks in this situation include not only concretising and generalizing the radical demands that are thrown up, but in presenting a strategy for developing the movement. 63. With no clear alternative pole of attraction, the vast majority of workers remain, by inertia, in the trade unions that were inherited from the Soviet regime, usually led by members or stooges of management and without any structures for the involvement of members. In a number of cases, workers, who due to the cutbacks were forced into struggle, found themselves immediately in conflict with those trade union structures. In Kazakhstan, the Scientific Workers Union, fighting privatization, broke away from the official structures and acting as a pole of attraction for workers who genuinely want to struggle. Such new organisations can play a huge role in the future providing they avoid following the course of retreat and compromise,
ons inmates have cut their own stomachs open. Increasingly democratic rights are being attacked. A series of strikes have taken place, most notably by oil and gas workers, with most calling for renationalization under workers control. 56. The social base of the regime is becoming narrower. Power and wealth in the country is very much concentrated around the Nazarbayev family and clan. Having already lost the support of even part of his own family, the elite is beginning to split in preparation for the power struggle that is inevitable once Nazarbayev is no longer in power. This was reflected in the extraordinary saga in the summer, when the Health Minister, Zhaksylyk Doskaliye, was arrested. It was soon suggested he was involved in a coup plot, together with senior figures in the police. Whether or not there actually was an attempt to organize a coup, or whether this was raised by the regime to get rid of unwanted figures, is not so important as the fact that it shows how rotten and fragile the regime actually is. 57. The left in Kazakhstan, which is unified in the Kazakhstan 2012 organisation will play an extremely important role in this process. Kazakhstan 2012 is determined to avoid the pitfalls of watering down its demands to enable alliances with the bourgeois opposition or avoiding the raising of socialist demands for fear of frightening some supporters away. Its current role of mobilizing the various social protests together and building a strong independent trade union movement, place it in a strong position. The need for such an organization has already been demonstrated by events. So too has the need for the building of a strong Marxist cadre at the centre of Kazakhstan 2012.
Conclusion
58. The economic perspectives for the region are not good. Growth at the beginning of the decade was driven by a world oil price of over $100 a barrel and the countries of Central Europe relied on the strength of the European Union. Now a wave of budget cuts is sweeping across the East. Inflation, fuelled by rocketing food prices, is reducing the chances of a return to the pre-crisis levels of growth. 59. Workers, the rural poor and the youth, as well as a significant section of the petty bourgeois are being driven into struggle. By doing so, they have to stand up to growing repression, leaving aside the threat of sackings and evictions. Repression, rather than lessening the resolve to struggle, is radicalising new layers, as
proposing instead a clear programme and strategy. 64. Generalised explosions of discontent, similar to the coloured revolutions or the recent Kyrgyzstan events, are inevitable in the current situation. Mass dissatisfaction with living standards, repression, election fraud or even an industrial or environmental disaster, at certain stages, will result in mass protests and movements. In such situations, the left will often find itself competing with the bourgeois opposition for leadership of these movements. It will have the responsibility to expose the fraudulent content of any populist demands presented by the bourgeois opposition, whether they be on democratic rights, against corruption or on economic and social issues. It can do this not by dropping political demands or forming blocks with the bourgeois, but by instilling the demands of the movement with a class content.
61
65. The whole region is in ferment. The reawakening of workers and socialist movements in Western Europe will undoubtedly encourage those workers and youth in Eastern Europe looking for an alternative. The region has some heroic traditions from the Russian revolution to the struggles of the Hungarian and Polish workers against the Stalinist dictatorships. The way in which the demands for nationalization and workers control have sprung up again indicates that radical traditions will reemerge. 66. The CWI has gained some important positions in the region. If it acts in an energetic and decisive manner, if it succeeds in developing its own political cohesiveness and organization, it can develop quickly and help to arm the developing mass movements with the socialist ideas and strategy necessary to end the nightmare of capitalism, replacing it with a genuine socialist society.

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Documents for the World Congress 2010

CWI 10th World Congress 2010:

CWI 10th World Congress 2010: World Relations, Document No. 1

CWI 10th World Congress 2010: World Relations, Document No. 1

Iraq and Afghanistan

CWI 10th World Congress 2010: World Relations, Document No. 1

China, Russia and their relations with the US

CWI 10th World Congress 2010: World Relations, Document No. 1

CWI 10th World Congress 2010: World Relations, Document No. 1

CWI 10th World Congress 2010: World Relations, Document No. 1

CWI 10th World Congress 2010: World Relations, Document No. 1

Whole planet involved

CWI 10th World Congress 2010: World Relations, Document No. 1

CWI 10th World Congress 2010: World Relations, Document No. 1

CWI 10th World Congress 2010:

CWI 10th World Congress 2010: Asia, Document No. 2

Where the CWI is

Permanent crisis for workers and poor

CWI 10th World Congress 2010: Asia, Document No. 2

CWI 10th World Congress 2010: Asia, Document No. 2

CWI 10th World Congress 2010: Asia, Document No. 2

CWI 10th World Congress 2010: Asia, Document No. 2

CWI 10th World Congress 2010: Asia, Document No. 2

CWI 10th World Congress 2010: Asia, Document No. 2

CWI 10th World Congress 2010: Asia, Document No. 2

CWI 10th World Congress 2010: Asia, Document No. 2

CWI 10th World Congress 2010:

CWI 10th World Congress 2010: Middle East, Document No. 3

CWI 10th World Congress 2010: Middle East, Document No. 3

Regional balance of forces

Yemen and Somalia

CWI 10th World Congress 2010: Middle East, Document No. 3

Palestine and Israel

CWI 10th World Congress 2010: Middle East, Document No. 3

CWI 10th World Congress 2010: Middle East, Document No. 3

CWI 10th World Congress 2010: Middle East, Document No. 3

CWI 10th World Congress 2010: Middle East, Document No. 3

CWI 10th World Congress 2010: Middle East, Document No. 3

CWI 10th World Congress 2010: Middle East, Document No. 3

CWI 10th World Congress 2010:

The Crises and the limits of recovery

CWI 10th World Congress 2010: Latin America, Document No. 4

New dependency in relations with China

CWI 10th World Congress 2010: Latin America, Document No. 4

The role of US imperialism and threats of coups

CWI 10th World Congress 2010: Latin America, Document No. 4

Impasse in Venezuela and Bolivia

Capitalist restoration advances in Cuba

CWI 10th World Congress 2010: Latin America, Document No. 4

The situation in the bastions of neoliberalism in Latin America

CWI 10th World Congress 2010: Latin America, Document No. 4

Brasils new role

CWI 10th World Congress 2010: Latin America, Document No. 4

End of the K Era in Argentina?

A socialist alternative for Latin America

CWI 10th World Congress 2010: Latin America, Document No. 4

CWI 10th World Congress 2010:

New wave of protest

CWI 10th World Congress 2010: Europe, Document No. 5

Fluid political situations

CWI 10th World Congress 2010: Europe, Document No. 5