cwi: international conference – World Relations and Economy

“Another such victory as this and we are finished”

cwi international conference.

World relations and economy

“Iraq is still at the centre of world politics and the Bush Administration is heading for disaster. To quote King Pyrrus: ‘Another such victory as this and we are finished.’”

These were the opening comments of Peter Taaffe during the discussion on ‘World Relations and Economy’, at the 21-26 November meeting of the International Executive Committee (IEC) of the Committee for a Workers’ International (CWI).

Peter explained that the neo-cons in Washington thought the victory of the US superpower over Iraq would transform the Middle East in their favour. They expected a so-called “democratic revolution” in the region. Cheap oil would help boost a world economic recovery.

Now all their plans are in ruins. The Iraqi resistance grows every day. Oil prices have increased. The costs of occupation are now a colossal $87 billion. Six months after Bush claimed combat was “over” the US is desperately looking for other countries to bail it out. But there will be big problems convincing other states. Japan declined sending a force and South Korea will only send troops to “quiet areas”.

The Whitehouse is talking about changing tactics, to allow an “invited presence” in Iraq rather than an occupation. Even if there is to be involvement by the UN or NATO in Iraq it will not change fundamentally the imperialist occupation. In Kosovo, protests recently took place against UN colonialism.

Allowing ‘governance’ to Iraq is a charade. All important decision making will stay in the hands of the US.

Iraq continues to be looted by US imperialism, Peter said. Unemployment stands at 70-80%. Furthermore, the occupying forces use brute mass repression, destabilising the country. Elements of former Ba’athist personnel, tribes and significant sections of the Sunni population make up the resistance, which is likely to spread.

Many commentators now conjure up the ghosts of Vietnam. Across the Midde East there is massive latent support for the resistance. Madeline Albright, the former Secretary of State under Bill Clinton, admitted that the “bottom has fallen out of support for the US in the Middle East.”

Bush has ordered the coffins of US soldiers killed in Iraq to be flown back to the US at night to avoid publicity. No wonder there is contempt by US soldiers towards the “chicken hawks” like Rumsfeld, who send young Americans to die for big business interests in the Middle East.

The US administration holds up Afghanistan as the model for Iraq to follow but Afghanistan is in turmoil. It is ethnically divided and the Taleban are resurgent.

Likewise, Iraq is divided between Shias, Sunnis and the Kurds. The break-up of Iraq is possible over time. This will have huge consequences for the region. It will not be lost on the masses in the neo-colonial world, if the US is seen to cut and run from Iraq.

Peter said the regime in Saudi Arabia is on a knife edge. There is massive support for Bin Ladin in society and in the state. This was shown by the recent horrendous car bombs in Riyadh. Unemployment levels are high and unrest is growing. Feeling the ground shifting beneath them, the ruling princes introduced a so called “Riyadh Spring”. This promises limited democratic rights, including municipal elections next year. But it is a matter of too little too late for the mass of youth and poor. Saudi Arabia faces further domestic conflict and perhaps a bloody civil war, such as we have seen in recent years in Algeria.

The US is confronted with the possibility of the extreme Islamists taking over Saudi Arabia. This would be a disaster for imperialism. The Kingdom is essential for future US oil needs. Peter predicted an almighty fight amongst the powers and China for oil resources will take place in the Middle East and Central Asia, a version of the 19th Century ‘Great Game’.

Relations between the imperialist powers are worsening. The EU Defence Force (EDF) plan is causing conflict with the US. The EU powers want the EDF to play a role in Europe and “out of area”. Bush’s poodle Blair plays an ambivalent role in this dispute.

Sharon’s Berlin Wall

The Iraq adventure has reinforced Israel’s oppression of the Palestinians. There is now a bloody stalemate between the two sides. Sharon claimed a victory over the Intifada but there was no defeat inflicted.

The political differences between Israelis and Palestinians are deeper than ever before, leading to a waning in support for a two state solution. Opinions have hardened. The building of “Sharon’s Berlin Wall” has entailed a land grab of 30% of Palestinian territory and is causing huge resentment and anger.

Some Palestinians now call for one state believing they will eventually become the larger population by 2020 and, in this way, win statehood. This perspective is completely wrong. It would only result in civil war, as both sides would fight for land and resources.

Peter pointed out that there can be no solution under capitalism, which will always mean shortages, joblessness and a struggle over resources. Only a socialist Palestine state, and a socialist Israel, as part of a voluntary socialist federation of the region, can solve the national question and transform living standards.

Despite the carnage, there are clear social and political developments which point to a class alternative in Israel and Palestine. This is paralleled in the Arab world.

A poll conducted by Al Jazeera television found that 70% of people across several Arab states believed their regimes worse than life was under former colonial powers.

Social and economic upheavals have rocked Israel. Sharon is one of the most vicious proponents of neo-liberalism on the planet but this is partly obscured by the national conflict.

World economy in a cul-de-sac

Turning to the world economy, Peter asked is there the possibility of global growth, as some commentators claim?

The most important point is that all sectors of the world economy are in a cul-de-sac. Japan languishes in recession, with a partial recovery in some sectors. The US remains the world’s powerhouse. Its third quarter growth is 7.5%. But the growth in jobs is not in the manufacturing industry.

Of course, there will be short term periods of growth but the long term cycle is one of depression for world capitalism.

Compared to the 1990s the present growth figures are not substantial. The US economy was given a boost by Bush’s tax cuts and also interest rates were cut. But the underlying problems remain. The US growth during the 90s was at the cost of a massive spiralling of the trade deficit. Furthermore the federal budget has grown.

China and Japan have filled the gap in the federal budget, buying US Treasury bonds. But for how long can the US economy go on like this? How long will overseas economies plug the gap?

On top of the devaluation that has already taken place the US dollar is now low against the pound. Only 74% of capacity is utilised during this upturn in the economy, the lowest level since the 1970s.

Social problems are worsening in the US. Three million jobs have been lost under Bush and poverty levels are worse than they were in 1965.

Bush is facing growing unpopularity at home. 54% of the population disagree with his handling of the situation in Iraq. The Democrat presidential front runner, Howard Deane, appeals to a new mood of opposition.

Commentators like Michael Moore call for a vote for the Democrats, describing the party as “the lesser evil”. Socialists can understand this sentiment amongst many US workers who are appalled by the Bush regime, but we cannot support it. While there are differences between the two main US parties, the Democrats, like the Republicans, are a party of big business and act in its interests.

Unfortunately, there is no mass workers’ party in the US, or serious attempts, at the moment, to create one. The CWI believes it is correct to call on Ralph Nader to stand for president while pointing out the limitations of his policies. Nader acts as a pole of attraction to many workers and youth. A rash of strikes in California also point towards the urgent need to create an independent workers’ alternative in the US.

China to the rescue?

Can China rescue world capitalism, Peter asked, as some commentators hope? It acts as a huge magnet for capitalism, and is the fifth largest recipient of foreign direct investment. Its share of global exports stands at 6% (3.9% in 2000). Rapid growth rates mean its gross domestic profits are now worth 11.5% of those of the US.

However, foreign companies own large parts of industry in China, which means there is a huge export of profits.

Like Japan in the 1980s, China suffers from massive overcapacity. The domestic market – low paid workers and peasants–is not capable of buying the goods produced. It is true that China has the advantage over its regional competitors in terms of the software high tech industry. But, based on low wages, China’s exports are cheaper while imports are expensive.

Talk of China catching up with the US is hugely exaggerated. The gap between Germany and the US in the 1950s was smaller than the gap between China and the US today.

Rapid growth has created many problems, in urban areas and between town and country. The last five years has seen an extra 200 million jobless people in the rural areas. Another 8 million jobs per year are needed to absorb those losing jobs in the state sector.

The political and social situation in China is volatile. The ruling elite is terrified of another Tiananmen Square type uprising. They want a controlled move to the market economy and pliant political forces. But a smooth transition to capitalism will not be possible. The process will bring huge dislocation and social explosions.

Of course, Peter said, it is wrong to take from this that world capitalism has no escape route. It will always try to find a way out, unless the working class internationally moves to overthrow the system and to put socialism in its place.

The economic growth of countries like China and India has a huge influence on industries in the West. Many jobs, such as those in the service industry, are going to the neo-colonial world.

China is emerging as a political power. It intervenes in the region, helping, for example, the US in its relations with North Vietnam.


Bush was forced to back off from confrontation with North Korea and is now adopting a multilateral approach. However the Washington neo-cons still dream of an invasion into Iran following next year’s presidential elections.

This is a very different situation than Iraq, however. Iran has four times the land mass of Iran and three times its population. There is a pro-Western sentiment amongst the opposition to the rule of the Mullahs, but this would quickly turn to Iranian nationalism if the country was threatened seriously by the US.

The architecture of world relations is changing dramatically, as it did post 1917, post 1945 and post 1989. The aggressive approach of US imperialism is creating a massive anti-capitalist movement, which is starting to intersect with the organised working class.

Relations between the powers are in a state of flux, Peter said. President Putin and the ruling elite in Russia feel they got nothing out of playing along with US interests. The US now has military bases in Uzbekistan. Russia is responding by re-establishing bases close by. Central Asia will become the focus of almighty struggles.

The Putin administration acts in a Bonapartist manner, lashing out demagogically at oligarchs, like Khordovsky. Putin leans on the anti-big business mood of the Russian working people to do this but offers only more hardship for the masses.

The Kremlin regime has taken over some companies in its dispute with the oligarchs. But this does not mean a return to Stalinism – a totalitarian regime presiding over a nationalised and centrally planned economy. Rather, it is a form of state capitalism, which partially indicates the massive hatred by the population for the results of capitalist restoration.

Only the socialist transformation of society – a return to the days of Lenin and Trotsky – and a democratically planned economy, run and controlled by the working class, can show a way out of the horrors of life in the former Soviet Union.

For the people of the neo-colonial world, life gets harder. A government official in Malawi recently attacked the effects of globalisation on his country: “We have opened our economy, that’s why we are flat on our backs.”

In the advanced capitalist states, the mood of youth and working people against globalisation and neo-liberalism grows stronger. The British Prime Minister Tony Blair was forced to bend to the popular mood and part-renationalised the railways. Frederick Engels described this type of process as an indication of the “invading social revolution”.

Unfortunately many of the leaders of the anti-capitalist movement are at this time moving to the right. They do not provide policies and a programme to show a way out. Nevertheless up to 100,000 demonstrated during the European Social Forum, in Paris, in November. This shows the potential to build a campaigning anti-capitalist movement that unites youth and working people on a large scale.

Working people urgently need their own independent political organisations – mass workers’ parties. At the same time, it is vital to build the forces of the CWI, a clear Marxist banner, internationally.

The last decade has not been easy for socialists – due to the ideological retreat of much of the Left and the triumphalism of pro-capitalist forces – but we are now in a new and favourable situation for the growth of the CWI.

Discussion on World Relations

Peter Taaffe’s speech was followed by a wide-ranging and in-depth discussion.

Per from Sweden talked about the growing number of attacks on US forces. The US Empire is overstretched in political and economic terms. There are now 130,000 troops in Iraq a fraction of the numbers Rumsfeld claimed would be needed. Important strikes and demonstrations against occupation have taken place in Iraq but the working class is not yet at the forefront of resistance.

Petr from the Czech Republic made parallels between Iraq and the Vietnam War, which also saw US imperialism bogged down in an unwinnable conflict.

Belgian IEC member, Bart, said only 50% of phones in Baghdad worked. A UN occupation of the country would not stop the plundering of Iraq by Western big business.

Andros from Greece discussed when and how the US could exit Iraq. Without US troops support, a pro-US Iraqi regime could not last. The longer the US remains in Iraq the greater will be the instability. If the superpower were to leave it will be seen by the masses in the neo-colonial world as a major victory.

Iraq will continue to be a major de-stablising factor in the Arab and Muslim world. The situation in Iraq has some similarities with Vietnam but there are important differences. For example, religion plays a vital role in Iraq.

Niall from the CWI said we should recognise that US imperialism has suffered big setbacks in Iraq. Bush would prefer a phased withdrawal of US troops and the formation of a stable, pro-US regime. But there were enormous obstacles in the way of this plan, which probably means the US will be forced to stay for some time.

A CWI member from Israel spoke about the fragile situation in many Arab states, which the Iraq war worsened. An anti-Establishment mood is growing in Jordan. The ruling monarch, King Hussein, is ridiculed for speaking English better than Arabic.

In local elections, in Israel, the government party Likud lost control of important cities. This reflects anger amongst workers at plans to privatise the post office, railways, docks and two hospitals.

Unfortunately the leaders of the trade union federation, the Histraduth, have shown they will not put up a consistent resistance to the attacks. But dock workers have taken action against the pro-government findings of the Labour Court. Also, fourteen workers’ committees have written to the General Secretary of the Histraduth stating they will organise strikes against cuts and privatisations despite the rulings of the Labour Court.

Swedish IEC member, Per-Ake, also commented on Iraq. Aron, from Germany, spoke about the world economy. A representative from Kazakhstan described how US and Russian imperialism, and other powers, are embroiled in a struggle for resources in Central Asia and the Caucuses.

Anthony from Australia explained that, unlike Bush and Blair, John Howard, the Australian Prime Minister, has managed to remain high in the opinion polls following his gun-ho support for the invasion of Iraq. Howard used the war and the so-called “threat of terrorism” as a pretext to increase Australian imperialist expansion in South Asia, sending troops to the strife torn Solomon Islands during the summer. But Howard’s luck will run out. Recently there were large demonstrations against Bush’s visit to Canberra. Working people are also incensed at the Liberal government’s attacks on Medicare and plans to hike up student fees.

Rob from Moscow discussed Putin’s rule in Russia. The Kremlin plays off various neighbouring states and the big powers in an attempt to bolster the president’s office. There is increasing competition with the US. US firms are behind plans to build a major oil pipeline from Azerbaijan to Turkey.

Russian plans a “mini economic union” with the Ukraine, Byelorussia and Kazakhstan. At the same time, there are great tensions between these countries. For example, the Russian government started to build a bridge linking Southern Russia and the Crimea, which will deprive the Crimea of $5 million in customs duties. Anti-Russian feelings run high in parts of the Ukraine. Earlier this year, firebombs were thrown into a Lvov bookshop selling Russian language literature. These types of incidents can spark off serious conflicts.

The arrest of the oligarch Khordovosky in Moscow is linked to the coming Russian presidential elections. Putin runs what commentators call “a managed democracy”. Khordovosky is a former young Stalinist apparatchik who used his position to steal great wealth from the state. Putin wants the market economy to be more “controlled”.

Peter from Belgium echoed these points, stating that Putin leans on the hatred of working people for the oligarchs. Putin will sacrifice members of the ruling elite in order to maintain the capitalist system as a whole. Peter also described the role of populism, of the left and right varieties, in the former CIS and in Latin America.

Clare from the CWI spoke about North Korea. The US administration is backing away from an open confrontation with the North Korean regime.

On Russia, Clare quoted recent opinion poll findings that found 71% of respondents said that if they had lived at the time of the Russian Revolution they would have actively participated with the Bolsheviks. Russian workers do not want a return to Stalinist totalitarianism, but they reject capitalism and many are searching for an alternative system. This will make democratic socialism very attractive in the future. But Russian workers need their own independent party.

US IEC member, Philip, said the situation in Iraq has had a big impact on the domestic situation in the US. A profound change in mood is taking place, with opposition to occupation and the Bush administration growing. Four hundred US troops have been killed in Iraq and 5,000 wounded. People think the situation will only get worse. US citizens have a low tolerance for US troop casualties in foreign conflicts. The events of S11 have not erased the “Vietnam Syndrome” from the memory of the US working class.

Relative of US soldiers in Iraq are speaking out against the Iraq quagmire, demanding troops are brought home. Around 40-50,000 demonstrated against US policy in the Middle East on 25 October in Washington. The anti-war/anti-occupation movement is on a larger scale than at a similar stage in the Vietnam conflict. The next major demonstrations take place on 20 March 2004, one year after the start of the Iraq war. There are also important strikes in the US. A grocery store strike in California involves 70,000 workers. This is a major battle to defend healthcare benefits and is popular with the public.

The Bush administration was forced to back down over some of its anti-working class policies. Plans to deregulate the media industry and to change overtime working rules met with widespread resistance. Congress was forced to throw the measures out.

Bryan, also from the US, said on average each job lost in the US under Bush meant the loss of $35.000 per year. Each new job created is only worth, on average, $15.000 per year. The pro-big business magazine ‘Newsweek’ warned: “President Bush’s ethos of rewarding the rich is creating class consciousness in the US for the first time in years.”

As an indication of the new mood, Michael Moore, the well known radical satirical writer and film maker, attracts mass audiences at his meetings in working class areas of the US.

Austrian IEC member, Sonja, spoke about the rise of racism in Europe, which is partly due to the lack of a mass left alternative.

Swedish IEC member, Elin, commented on the situation in the Americas, as did Andre from Brazil. Anti-imperialist moods and populist movements have grown in Latin America. We should recognise their significance but also their limited programme and ideas.

Summary of discussion

Lynn Walsh said there was general agreement concerning the main issues discussed – Iraq, the role of US imperialism, and the world economy.

The CWI perspectives for Iraq – including that the US would become bogged down in Iraq and the country would not see an economic transformation or genuine democracy – are borne out to a greater extent than we had expected. Some sections of the US ruling class are coming to the same conclusions. A recent editorial in the New York Times refers to the “Iraq quagmire”.

There are important similarities and differences in regards the Iraq and Vietnam conflicts. Both saw US imperialism use pretexts for invasion – the Gulf of Tonkin incident, in the case of Vietnam, and the lies about Weapons of Mass Destruction, in the case of Iraq.

The Bush administration made premature claims of victory in Iraq. They did not expect to meet such ferocious resistance and hostility from Iraqis.

Paul Bremmer, the US appointee trying to run Iraq, repeated a phrase first used during the Vietnam conflict, claiming his aim was to “win hearts and minds” of Iraqis. The next day US forces carried out indiscriminate heavy bombings against “pro-Saddam elements.”

The so-called “Iraqisation” of the situation is an attempt to draw in different Iraqi groups to form a US-selected legislative assembly. The new body will “invite” US forces in Iraq. But the invitations of a stooge government will not make the presence of imperialist forces in Iraq anymore palatable for the Iraqi people. Iraqisation will not succeed anymore than did so-called “Vietnamisation” decades ago in South East Asia.

The neo-cons are discredited by their Iraqi policy. They said they would smash the Iraqi regime of Saddam, which they did. Rumsfeld, however, claimed that only 20,000 troops would be needed to control Iraq, instead of the over 100,000 US soldiers are now installed.

US plans to create a “democratic Iraq”, to extract cheap oil and to use Iraq as a bridgehead to further US aims in the region have failed. The doctrines of the “pre-emptive strike” and “shock and awe” were meant to intimidate so-called “rogue nations”. But the US faces big complications concerning Iran and North Korea and the US was forced to rethink its approach to these states.

The aggressive attitude of US imperialism can be seen in a National Security Statement produced for the Whitehouse, last year. It showed the Bush regime aimed to intimidate big power rivals, in particular, the EU. The report said the European powers would be forced to accept US domination of NATO and the military aims and objectives of the US. But events have not worked out this way. In fact, conflict between the US and European powers, like France and Germany, have intensified.

The Bush administration is also facing growing opposition at home, including in Congress. Democrat Senator R. Boyd voted against the $87 billion grant to the US occupation in Iraq, saying that the money would be used to shore up a disastrous intervention, which was “a colossal mistake.”

Brizinsky’s warnings

A former aide to ex-US President Jimmy Carter, Zbignew Brizinsky, recently wrote a devastating critique of the Bush foreign policy in the International Herald Tribune (IHT). He said: “US military power is at is zenith but its political standing is its nadir.”

He went on to say that as far as US imperialism is concerned, “failure is not an option” in Iraq. If the US is forced out of Iraq, Brizinsky warns, it will be a disaster and would limited imperialism’s ability to use its awesome power. If US troops were prematurely withdrawn it could lead to an implosion in the region.

Lynn commented that it is very difficult to estimate what will happen in Iraq, given the many volatile factors involved, such as military and political issues, and the domestic situation in the US.

The US has much less room for manoeuvre regarding Iraq than even a few months ago. The superpower faces a complicated and unstable situation in the Middle East.

Bush was forced to step back on many fronts. From a situation where he was threatening to provoke a conflict with North Korea, Bush has now accepted the EU and China mediating in the crisis. Iran has signalled it would accept the EU as an intermediary in negotiations concerning its supposed “nuclear arms capacity”. In a rebuff to the US, the EU resists US demands to bring Iran “to account” in front of the UN.

The Washington administration is also in disarray over Israel/Palestine. The so-called “Road Map” to peace is now a dead letter.

In his IHT article, Zbignew Brizinsky calls for the “internationalisation” of the occupation in Iraq. He wants the UN to take a leading role to get the US off the nook. It remains to be seen whether the UN wants to accept this offer, given objections by member states on the Security Council. Even if the UN played this role it would not make a fundamental difference; the presence of imperialist forces under the UN flag or any other name will still be an oppressive occupation in Iraq.

NATO and the EU are split on the Iraq issue. The Madrid Conference on Iraq illustrated that many powers are not prepared to underwrite the occupation.

Important strikes and demonstrations of workers and the unemployed have taken place in Iraq. But it is difficult to estimate the strength of the organised working class at this stage. Political representation for the working class is very weak. In the case of the Iraqi Communist Party (ICP), workers are misled. The ICP stands for so called “liberal democracy” and takes part in the stooge government.

The resistance to the occupation is causing US imperialism huge problems. There are elements of Iraqi nationalism in the resistance but the opposition does not have the left, radical character of previous mass movements and national liberation struggles in the neo-colonial world in the 1950s and 1960s.

Referring to points made by IEC comrades in the discussion on the character and strength of Islamic forces in Iraq, Lynn said these groups are clearly well-organised and large. At the moment, Shiah Islamic forces are not heavily engaged in fighting the occupation. Most resistance takes place in the Sunni Triangle part of the country. But it is likely that the Shiah forces, representing the majority religion in society, will emerge as the most powerful opposition.

However, the strength of Islamic forces is not just decided by the situation in Iraq. Their development also depends on events in the Middle East as a whole. A movement of the working class in key countries like Egypt will have a huge effect on the rest of the Arab world.

Can the US economy recover?

Turning to the world economy, Lynn asked, will a recovery in the US be sustained? In August there was a $50 billion capital inflow into the US. Many commentators claim this shows an upturn and that the rest of the world still has confidence in the US economy.

We should be very cautious about these claims, Lynn argued. To begin with, he said, it is necessary to examine what the present growth is based on.

The Bush administration is trying to boost the US economy. Bush’s third quarter tax rebate amounts to $600 for each person eligible. The richest 10% got a rebate of $28,000. Further stimulus is given by state expenditure, which rose by 27% in the last fiscal year, the lax money supply and low interest rates. Last year, arms spending increased by a massive 27%.

During September to October, there was a 120,000-125,000 increase in employment in the US. But many of the jobs pay less that in manufacturing. There are still nine million people jobless. Around four and a half million hold part time jobs and cannot find full time posts. Under Bush, the number of those living in poverty has increased by three million.

The dollar has fallen sharply in the last few days. Over the past decade the strong dollar was overvalued by up to 20%. This was needed to attract foreign goods at cheaper prices. But it led to a huge trade deficit, which by present trends could reach $550 billion.

A falling dollar will have drastic effects on the US and world economy. Historically a decline in the dollar has resulted in serious convulsions in the financial markets. The German Central Bank recently said there is “a 15% chance” of the euro collapsing. At present, the high euro, combined with the stability and growth pact criteria, are strangling recovery in the EU.

A lowering dollar will hit countries that export to the US, as their goods become more expensive. But it will also damage the US domestic market. The heavy dependence on imported clothes, electrical goods etc, inside the US means a falling dollar, and consequently more expensive imports, will sharply raise the cost of living for working people.

The lower dollar will also be disastrous for the Euro zone market, which is stagnant. Japan, suffering long-term stagnation, would also be hit by the lower dollar, despite its 1-2% growth figures for this year.

These factors would reverse the capital inflows into the US, adding to deflationary pressures.

The estimated 20-30% devaluation needed to balance the current account deficit could lead to stagnation or even a slump.

At best, the US economy and the world economy, in a period of long term stagnation, will experience a cycle of weak booms, not massive upturns, followed by slumps.

The rise in unemployment and the squeeze on incomes in the US is creating enormous anger and the development of class consciousness. But it has not had direct political expression because the unions are tied to the Democrats. Nevertheless, the conditions are maturing for a massive movement of the working class.

The Democrat frontrunner for presidential elections, Howard Deane, taps into working class anger at the policies of Bush. However Deane’s recent policy statements show he has moved to the right.

It is not clear whether Ralph Nader will run for president. If he does, it would be a positive step for the working class. Nader’s candidature would attract the most radical workers and youth. It would also provide an arena for socialists to participate in, putting forward the call for a new party representing workers’ interests and a socialist programme.

Even if Nader does not run, the stage is set for big movements of youth and workers in the US that will pose the need for a political alternative to the big business parties and capitalism.

Commenting on China’s economy, Lynn said the figures for growth are very impressive. But a huge proportion of exports from China are profited by US owned companies. The Chinese economy is dependent on huge capital inflows. Foreign Direct Investment in 2002 stood at $50 billion. These inflows are supplemented by massive expenditure by the Chinese state. Four state banks control 66% of all investments. If the state budget deficit is added to the non-performing loans, they make up 80% of the country’s gross domestic profits.

In many respects, the Chinese economy is a bubble economy. It is based on the super-exploitation of cheap labour. There is serious over-capacity and over-investment in the high tech sectors. The country’s huge debts are approaching crisis levels.

Lynn concluded the discussion on World Relations and Economy by outlining the potential for explosive movements of the working class, youth and oppressed internationally. The task of the CWI is to build a socialist alternative; to show a way out of the misery, chaos and wars of capitalism.

Part Two of the cwi IEC meeting reports will look at current events in Europe

Special financial appeal to all readers of

Support building alternative socialist media provides a unique analysis and perspective of world events. also plays a crucial role in building the struggle for socialism across all continents. Capitalism has failed! Assist us to build the fight-back and prepare for the stormy period of class struggles ahead.
Please make a donation to help us reach more readers and to widen our socialist campaigning work across the world.

Donate via Paypal

Liked this article? We need your support to improve our work. Please become a Patron! and support our work
Become a patron at Patreon!

Be the first to comment

Leave a Reply

Your email address will not be published.


December 2003